Slide 1: 2006 First Half Results
2006 First Half Results July 28, 2006 Olivier Bazil 1
Slide 2: Disclaimer
Disclaimer This document has been prepared by Legrand S.A. (“Legrand”) solely for use at its meeting with investors held on July 28, 2006. This document must be treated confidentially by attendees at such presentation. The information contained in this document has not been independently verified an
Slide 3: Key Facts
Key Facts Robust increase in net sales Vigorous growth in adjusted operating income Doubling of free cash flow 3
Slide 4: Robust Increase in Net Sales
Robust Increase in net Sales driven by Like for Like Growth and Acquisition-led Expansion Net sales €m 1900 1893 +20% 1583 1400 1st Half 2005 1st Half 2006 4
Slide 5: Vigorous Growth in Adjusted Operating Income
Vigorous Growth in Adjusted Operating Income in all Geographical Zones Adjusted Operating Income (1) (1) €m 350 326 +23% 265 230 1st Half 2005 1st Half 2006 1. Figures restated for accounting entries with no cash impact relating to the acquisition of Legrand France in 2002 5
Slide 6: Doubling of Free Cash Flow
Doubling of Free Cash Flow driven by Strong Operational Performance and Good Capital Employed Management Free Cash Flow (1) (1) €m 180 179 +157% (2) 70 50 1st Half 2005 1st Half 2006 1. Free cash flow: cash flow from operations – change in working capital – capex + net proceeds from sale of fixed as
Slide 7: Strong 2006 First Half Net Sales driven by Like for Like Growth and Acquisition-led Expansion
Strong 2006 First Half Net Sales driven by Like for Like Growth and Acquisition-led Expansion €million 1st half 1st half Total Scope of Like for like Currency By destination 2005 2006 Change consolidation growth effect France 450.6 492.4 9.3% 5.5% 3.6% 0.0% Italy 326.9 374.6 14.6% 5.1% 9.0% 0.0% Res
Slide 8: Active Acquisition Driven Growth
Active Acquisition Driven Growth Close to €50m revenue added through 3 acquisitions since January 2006 #1 in China in audio and video door entry systems 2005 net sales : €15million 900 people of which 200 sales force Growth Markets #1 in Brazil in consumer units and industrial enclosures 2
Slide 9: Strong R&D commitment
Strong R&D commitment Close to 5% of sales invested R&D 48% of capital expenditures dedicated to new products (vs 40% in H1 05) About 1,800 people dedicated to R&D 4,500 active patents More than 20 new product ranges launched in the first half of 2006 R&D R&D cash cash expenses expenses an
Slide 10: More Than 20 New Value Added Product Ranges launched in the First Half of 2006
More Than 20 New Value Added Product Ranges launched in the First Half of 2006 Control and Command Energy Distribution VDI Cable Management 10
Slide 11: Trading-up in Italy: Luxury and Technology as Growth Drivers: Axolute
Trading-up in Italy Luxury and Technology as Growth Drivers: Axolute Multimedia Station Touch Screen Scenario Touch Style Switch Axial Switch 11
Slide 12: Trading-up in the US: From Home Automation…
Trading-up in the US From Home Automation… US US sound sound diffusion diffusion market market in in $M $M US US home home theater theater market market in in $M $M US US home home automation automation market market in in $M $M CAGR 36 % CAGR 14 % CAGR 39 % 300 140 60 250 120 50 100 200 40 80 150 3
Slide 13: Trading-up in the US: …to Aesthetic Value Added
Trading-up in the US …to Aesthetic Value Added Decorative wiring device ranges growing twice as fast as standard lines Sales Sales of of decorative decorative vs vs standard standard wiring wiring device (index) device (index) 400 320 CAGR 22 % 240 160 80 1999 2000 2001 2002 2003 2004 2005 Deco St
Slide 14: First Half Year P&L Vigorous Adjusted Operating Income Growth
First Half Year P&L Vigorous Adjusted Operating Income Growth IFRS, €million 1st half 2005 1st half 2006 % change Net sales 1,582.6 1,893.3 19.6% Gross profit 785.6 953.5 21.4% As % of sales 49.6% 50.4% (2) Adjusted(1) operating income 264.7 326.4 23.3% As % of sales 16.7% 17.2% Accounting entries r
Slide 15: Very Strong First Half Year Cash Generation
Very Strong First Half Year Cash Generation IFRS, €million 1st half 2005 1st half 2006 % change Cash flow from operations (1) 227.0 338.9 49.3% (2) As % of sales 14.3% 17.9% Change in working capital requirement ( 99.4 ) ( 100.3 ) Net cash provided by operating activities 127.6 238.6 87.0% As % of s
Slide 16: Optimized Balance Sheet combining Leverage and Investment Grade Rating
Optimized Balance Sheet combining Leverage and Investment Grade Rating Leverage IFRS, €million As of June 30, 2006 Total equity 1980 Net financial debt 1,938 As % of total equity 98% As % of last twelve month EBITDA 2.7 x Investment grade rating S&P BBB- Moody’s Baa3 Fitch BBB- 16
Slide 17: Conclusion
Conclusion Very strong first half in terms of sales, profitability and cash generation Fast running business model With current inflation in raw material prices significantly less favorable than anticipated, (1) Legrand confirms its 2006 targets 1. Please refer to page 67 of the Note d’opérati
Slide 18: Agenda and Contacts
Agenda and Contacts Agenda Agenda Contacts Contacts Tuesday October, 31 2006 : 2006 Investor Relations: nine month results François Poisson tel : + 33 (0)1 49 72 53 53 Thursday February, 8 2007 : 2006 fax: + 33 (0)1 43 60 54 92 full year results 18
Slide 19: Appendix
Appendix 19
Slide 20: Net Sales by Destination
Net Sales by Destination €million Q1 Q2 1st half Q1 Q2 1st half 2005 2005 2005 2006 2006 2006 France 225.6 225.0 450.6 246.6 245.8 492.4 Italy 165.4 161.5 326.9 193.1 181.5 374.6 Rest of Europe 146.3 157.2 303.5 192.5 197.3 389.8 USA/Canada 129.2 157.2 286.4 161.8 173.5 335.3 Rest of the World 99.1
Slide 21: Net Sales By Origin
Net Sales By Origin €million Q1 Q2 1st half Q1 Q2 1st half 2005 2005 2005 2006 2006 2006 France 251.8 257.5 509.3 283.6 284.9 568.5 Italy 167.7 165.5 333.2 202.9 191.5 394.4 Rest of Europe 140.6 150.7 291.3 180.5 183.6 364.1 USA/Canada 130.5 158.6 289.1 163.6 176.8 340.4 Rest of the World 75.0 84.7
Slide 22: 2006 First Quarter Net Sales by Destination
2006 First Quarter Net Sales by Destination €million Q1 Q1 Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 225.6 246.6 9.3% 4.9% 4.2% 0.0% Italy 165.4 193.1 16.7% 4.6% 11.6% 0.0% Rest of Europe 146.3 192.5 31.6% 18.1% 10.5% 0.8% USA/Canada 129.2 161.8 25.2%
Slide 23: 2006 First Quarter Net Sales by Origin
2006 First Quarter Net Sales by Origin €million Q1 Q1 Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 251.8 283.6 12.6% 5.2% 7.0% 0.0% Italy 167.7 202.9 21.0% 5.9% 14.3% 0.0% Rest of Europe 140.6 180.5 28.4% 16.6% 9.1% 0.9% USA/Canada 130.5 163.6 25.4% 4.8%
Slide 24: 2006 First Half Net Sales by Origin
2006 First Half Net Sales by Origin €million 1st half 1st half Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 509.3 568.5 11.6% 5.7% 5.6% 0.0% Italy 333.2 394.4 18.4% 7.0% 10.6% 0.0% Rest of Europe 291.3 364.1 25.0% 17.4% 6.0% 0.5% USA/Canada 289.1 340.4 17
Slide 25: 2006 Second Quarter Net Sales by Destination
2006 Second Quarter Net Sales by Destination €million Q2 Q2 Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 225.0 245.8 9.2% 6.0% 3.0% 0.0% Italy 161.5 181.5 12.4% 5.6% 6.4% 0.0% Rest of Europe 157.2 197.3 25.5% 19.9% 4.5% 0.2% USA/Canada 157.2 173.5 10.4% -
Slide 26: 2006 Second Quarter Net Sales by Origin
2006 Second Quarter Net Sales by Origin €million Q2 Q2 Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 257.5 284.9 10.6% 6.1% 4.2% 0.0% Italy 165.5 191.5 15.7% 8.1% 7.0% 0.0% Rest of Europe 150.7 183.6 21.8% 18.1% 3.0% 0.1% USA/Canada 158.6 176.8 11.5% -0.3%
Slide 27: 1st Quarter P&L
1st Quarter P&L IFRS, €million 1st quarter 1st quarter % change 2005 2006 Net sales 765.6 940.6 22.9% Gross profit 386.1 475.2 23.1% As % of sales 50.4% 50.5% Adjusted(1) operating income 131.7 163.5 24.1% As % of sales 17.2% 17.4% Accounting entries relating to the acquisition of Legrand France (25
Slide 28: 2nd Quarter P&L
2nd Quarter P&L IFRS, €million 2nd quarter 2nd quarter % change 2005 2006 Net sales 817.0 952.7 16.6% Gross profit 399.5 478.3 19.7% As % of sales 48.9% 50.2% Adjusted(1) operating income 133.0 162.9 (2) 22.5% As % of sales 16.3% 17.1% Accounting entries relating to the acquisition of Legrand France
Slide 29: Reconciliation of Cash From Operations with Net Profit
Reconciliation of Cash From Operations with Net Profit IFRS, €million 1st half 2005 1st half 2006 Net profit 60.8 64.6 Depreciation and amortization 127.2 120.8 Loss on extinguishment of debt 0.0 109.0 Change in other non-current assets and liabilities and deferred tax 10.5 2.0 Share of loss/(profit
Slide 30: Change in Scope of Consolidation
Change in Scope of Consolidation 2005 Q1 1st Half 9 months FY Van Geel 12 months Zucchini 6 months On Q 6 months 9 months 12 months TCL only in BS(1) ICM Group only in BS(1) Cemar Shidean 2006 Q1 1st Half 9 months FY Van Geel 3 months 6 months 9 months 12 months Zucchini 3 months 6 months 9 months 1