Legrand Sa · EURONEXT:LR

Legrand Sa — Debt Investor Presentation (May 2023)

52 slides from Legrand Sa's debt investor presentation, May 22, 2023

  1. Slide 1: Updated Sustainability-Linked Financing Framework

    Updated Sustainability-Linked Financing Framework May, 2023 1

  2. Slide 2: Agenda

    Agenda Updated Sustainability-Linked Financing Framework 1- A unique business model 2- 2023 First-Quarter Results 3- Legrand CSR/ESG approach & strategy 4- Updated Sustainability-Linked Financing Framework 5- Ratios and transaction overview 6- Appendix Ronan Marc Olivier Le Floc’h Corporate Vice-Pre

  3. Slide 3: A unique business model

    11 Highlights A unique business model 3

  4. Slide 4: Legrand key figures

    Legrand key figures As of December 31 st, 2022 4 MAIN END-MARKETS SALES AROUND MORE THAN €8.3 38,000 300,000 EMPLOYEES PRODUCT billion WORLDWIDE REFERENCES REVENUE BREAKDOWN PER REGION OPERATING IN AND SOLD IN MORE CLOSE TO THAN 5% 90 170 OF SALES ALLOCATED TO R&D COUNTRIES COUNTRIES 4

  5. Slide 5: A unique business model

    A unique business model Focused on value creation Vast addressable Large exposure to PURE PLAYER specialist MARKET LEADERSHIP market with numerous DIVERSE geographies in electrical and digital with close relationship to building infrastructure OPPORTUNITIES and to BUOYANT the whole value chain FOR A

  6. Slide 6: Integrated value creation over 5 years - Financial metrics

    A unique business model Industry-benchmark integrated value creation over 5 years - Financial metrics ADJUSTED EBIT ADJUSTED NET PROFIT TOTAL SALES TREND FREE CASH FLOW ON SALES ATTRIBUTABLE TO THE GROUP >+50% ~20% +83% +49% of sales in value in value in value (average (2022 vs. 2017) (2022 vs. 2017

  7. Slide 7: Largest product offering on the market (1/2)

    A unique business model Only pure player with the largest product offering on the market (1/2) Remote monitoring and Electrical installation control Make power available Electricity distribution management of all kinds of infrastructures Provide a secure, stable & Protecting electrical Measure and c

  8. Slide 8: Largest product offering on the market (2/2)

    A unique business model Only pure player with the largest product offering on the market (2/2) Structured cabling systems Distributing audio Datacenter “white space” Supplying power to installation and video signals infrastructure organization workstations Ensuring that people can Lighting managemen

  9. Slide 9: Giant in profitable niches: leadership positions across the globe

    A unique business model Giant in profitable niches: leadership positions across the globe NORTH & CENTRAL AFRICA & % sales EUROPE SOUTH AMERICA ASIA PACIFIC AMERICA MIDDLE EAST #1 or #2 62%(1) 77%(1) 88%(1) 40%(1) 30%(1) • #1 in wiring • #1 in PDUs • #1 in wiring • #1 in modular • #1 in wiring devic

  10. Slide 10: Only global pure player in electrical & digital building infrastructure

    A unique business model Only global pure player in the electrical & digital building infrastructure industry NEARLY 100% OF SALES IN BUILDINGS(1)… …DRIVEN BY MEGATRENDS % SALES Demographics Electrification Residential <40% secular trends Urbanization Rising middle classes Datacenters ~14% Buildings

  11. Slide 11: Core infrastructure products & faster expanding segments

    A unique business model Legrand offerings: core infrastructure products & faster expanding segments CORE INFRASTRUCTURE PRODUCTS FASTER EXPANDING SEGMENTS Datacenter solutions 14% Energy Connected efficiency Products 67% 22% 14% of 2022 sales 33% of 2022 sales (17% overlap) Provides brand awareness,

  12. Slide 12: Focus on faster expanding segments

    A unique business model Strengthened growth profile: focus on faster expanding segments 2015 2022 MID-TERM 18% 33% 50% of sales of sales of sales Maintained momentum on faster expanding segments in 2022 paving the way for mid-term objectives 12

  13. Slide 13: Sustainable sales: environmental emergency

    A unique business model Sustainable sales: environmental emergency GREEN BY USAGE Energy efficiency programs acceleration 22% of overall sales in 2022 ~75% in 2022 (1) sustainable sales GREEN BY DESIGN & PROCESS to 80% by 2030 Carbon footprint active reduction Carbon footprint commitments impacting

  14. Slide 14: Organic growth through ongoing investment in R&D

    A unique business model Organic growth through ongoing investment in R&D SUSTAINED & CONSISTENT R&D PIONEERING PRODUCT INNOVATION ~5% Incara power in furniture Smarther AC thermostats of sales on the long run New connected Nexpand cabinets user interfaces 14

  15. Slide 15: M&A: numerous opportunities & successful docking

    A unique business model M&A: numerous opportunities & successful docking MARKET STRUCTURE CLOSE CONTACTS SELECTIVE APPROACH DOCKING PROCESS ~5 companies acquired Close to 3,000 small and ~300 companies in the Highly industrialized on average per year mid-sized companies Group’s pipeline process over

  16. Slide 16: Successful acquisitions strategy

    A unique business model: successful acquisitions strategy ~€5.6bn (1) invested in 60 (2) acquisitions made since 2010 totaling ~€2.8bn(2) annual sales S ECULAR SEGMENTS ADJACENT SEGMENTS F ASTER EXPANDING SEGMENTS USER INTERFACES AUDIO-VIDEO INFRASTRUCTURE DATACENTER SOLUTIONS & INSTALLATION COMPONE

  17. Slide 17: Initiatives to enhance productivity

    A unique business model Operating performance strengthened further through initiatives to enhance productivity ONGOING OPTIMIZED INDUSTRIAL FOOTPRINT ACTIVE PLATFORMIZATION INDUSTRY 4.0 DEPLOYMENT (80% OF MAIN SITES) 17

  18. Slide 18: Ambitious mid-term targets (1/2)

    A unique business model Ambitious mid-term targets (1/2) (1) FINANCIAL TARGETS… ...WITH A BALANCED CAPITAL ALLOCATION Over a full economic cycle and excluding a major >1/2 of free cash flow invested in bolt-on acquisitions, economic slowdown, the Group aims for: whilst preserving a solid balance she

  19. Slide 19: Ambitious mid-term targets (2/2)

    A unique business model Ambitious mid-term targets (2/2) (1) EXEMPLARY AND AMBITIOUS ESG APPROACH ...UNDERPINNED IN THE SHORTER TERM FOR THE MID- AND LONG-TERM… BY A 5TH CSR ROADMAP 2030 ambitions built on 3 pillars A new roadmap for 2022-2024 focused on key topics and deployed through 4 pillars and

  20. Slide 20: 2023 First-Quarter Results

    12 Highlights 2023 First-Quarter Results 20

  21. Slide 21: 2023 first-quarter results

    2023 first-quarter results Strong growth in sales / very robust growth in results & cash generation Q1 2022 Q1 2023 TRENDS SALES 1,972 2,150 +9.0% (IN €MM) (organic: +7.4%) ADJUSTED OPERATING MARGIN 20.3% 22.2%(1) +1.9 points AS A SHARE OF SALES NET PROFIT ATTRIBUTABLE TO THE GROUP 258 331 +28.0% (I

  22. Slide 22: 2023 full-year targets

    2023 full-year targets (1) Unchanged In 2023, the Group is pursuing its profitable and responsible development laid out in its strategic roadmap(2). Taking into account the world’s current macroeconomic outlook, with confidence in its model for creating integrated value, and excluding impacts linked

  23. Slide 23: Legrand CSR/ESG approach & strategy

    123 Highlights xxx Legrand CSR/ESG approach & strategy 23

  24. Slide 24: CSR, a core part of the Group's integrated performance

    Legrand CSR/ESG approach & strategy CSR, a core part of the Group’s integrated performance to fuel growth… CLOSE TO CLEAR CSR, QUALITY REPORTING 20 YEARS COMMITMENT ON CSR & GOVERNANCE A SIZEABLE PART OF OUR AND SUSTAINABILITY PROCESSES INCENTIVE SCHEME AUDITED RESULTS • CSR department created • CSR

  25. Slide 25: Board governance as one of its pillars

    Legrand CSR/ESG approach & strategy … with Board governance as one of its pillars SEPARATE INDEPENDENCE AND COMPLEMENTARY CORPORATE GOVERNANCE DIVERSITY STRONG INVOLVEMENT EXPERTISE STRUCTURE • Separation of duties • 83%(1) independent board • 24 meetings in 2022 • CEOs or former CEOs of between non

  26. Slide 26: Strong extra-financial results over 5 years

    Legrand CSR/ESG approach & strategy An effective impact: strong extra-financial results over 5 years SCOPES 1&2 (CURRENT) CO2EQ EMISSIONS REDUCTION MANAGERIAL POSITIONS HELD BY WOMEN (K TONS) 28.5% 24.4% 178 -34% 22.1% 14.8% 118 +6.4 PTS +9.6 PTS HAY 14+ HAY 20+ 2017 2022 2017 2022 2017 2022 26

  27. Slide 27: A strong CSR governance

    Legrand CSR/ESG approach & strategy A strong CSR governance BOARD OF DIRECTORS EXECUTIVE COMMITTEE Takes into account the social Directs and validates the and environmental CSR strategy and monitors challenges in the Group’s how initiatives are CARBON STEERING COMMITTEE activity implemented Defines

  28. Slide 28: Strong CSR accountability through aligned incentives

    Legrand CSR/ESG approach & strategy Strong CSR accountability through aligned incentives MANAGERS(2) LTIS ALIGNED A BROAD-BASED INCENTIVE PROGRAM WITH GROUP’S KEY TARGETS 1/3 Organic growth 20% Close to of country director 12% 1/3 Adjusted EBIT margin Managers bonus linked to with LTIs(1) local CSR

  29. Slide 29: 2022-2024 CSR Roadmap: short-term plan for long-term ambitions

    Legrand CSR/ESG approach & strategy 2022-2024 CSR Roadmap : a short-term plan for long-term ambitions 29

  30. Slide 30: 2022-2024 CSR Roadmap: driver supporting mid-term ambitions

    Legrand CSR/ESG approach & strategy 2022-2024 CSR Roadmap: a driver supporting our mid-term ambitions Clear, quantified & ambitious on 4 fronts: climate, circular economy, diversity & inclusion, responsible business Focusing on actions that matter and have significant impact Will mobilize the entire

  31. Slide 31: 2022-2024 CSR Roadmap: main areas of action

    Legrand CSR/ESG approach & strategy 2022-2024 CSR Roadmap: 4 main areas of action 31

  32. Slide 32: CSR Roadmap: 4 pillars & 15 priorities

    Legrand CSR/ESG approach & strategy 2022-2024 CSR Roadmap(1): 4 pillars & 15 priorities guiding our actions RESPONSIBLE BUSINESS DIVERSITY AND INCLUSION • Customer satisfaction • Legrand business ethics • Gender diversity commitment (compliance) • Diversity & Inclusion labelling • Employee developme

  33. Slide 33: CSR Roadmap: 2022 achievement rates

    Legrand CSR/ESG approach & strategy 2022-2024 CSR Roadmap: 2022 achievement rates RESPONSIBLE BUSINESS DIVERSITY & INCLUSION 127% 131% 123% 2022 CSR roadmap 79% achievement 148% rate CIRCULAR ECONOMY CARBON FOOTPRINT 1st year of our 2022-2024 roadmap 33

  34. Slide 34: CSR Roadmap: focus on promoting diversity & inclusion

    Legrand CSR/ESG approach & strategy 2022-2024 CSR Roadmap: focus / promote diversity & inclusion Diversity is a priority of Legrand’s workforce policy. Following on from previous CSR Roadmaps and to contribute to the goal of gender equality (SDG 5), Legrand has set itself the target of 30% of manage

  35. Slide 35: CSR Roadmap: focus on reducing carbon footprint

    Legrand CSR/ESG approach & strategy 2022-2024 CSR Roadmap: focus / reduce carbon footprint Legrand is committed to achieve collective carbon neutrality by 2050, reducing GHG emissions with a trajectory aligned with the most ambitious Paris Agreement target 1.5°C pathway, approved by the Science Base

  36. Slide 36: Updated Sustainability-Linked Financing Framework

    4 Updated Sustainability-Linked Financing Framework 36

  37. Slide 37: Rationale for updating

    Enhanced Sustainability-Linked Financing Framework Rationale for updating To connect funding strategy with broader sustainability objectives… • Integration of new KPIs core to the 2022-2024 CSR roadmap i.e. suppliers’ carbon engagement and gender diversity • Extending the Framework to social themati

  38. Slide 38: Enhanced Sustainability-Linked Financing Framework Overview

    Enhanced Sustainability-Linked Financing Framework Overview An enhanced Sustainability-Linked Framework with 4 KPIs addressing Legrand most material ESG topics Inaugural 2021 Framework... …complemented in 2023 with 2 KPIs KPI3: Key Suppliers’ engagement based on two indicators : Framework i. Count o

  39. Slide 39: KPI 1 & KPI 2: Absolute GHG emissions

    Enhanced Sustainability-Linked Financing Framework KPI 1 & KPI 2: Absolute GHG emissions – Applied on the existing 2031 bond KPI 1 KPI 2 Absolute Scope 1 & 2 GHG emissions related to the Absolute Scope 3 GHG emissions(1), which account for Definition Definition Group’s own activities(1) 95% of total

  40. Slide 40: KPI 3: Key Suppliers' engagement

    Enhanced Sustainability-Linked Financing Framework KPI 3: Key Suppliers’ engagement The assessment is based on the two following indicators: Observation 31 December, 2024 Definition ➔ Count of engaged suppliers (number of suppliers) Date ➔ Amount of their engagement (ktCO2eq) ➔ Within purchasing fam

  41. Slide 41: KPI 4: Proportion of management positions filled by women

    Enhanced Sustainability-Linked Financing Framework KPI 4: Proportion of management positions filled by women Share of Hay Grade 14+ management positions filled by women Observation Definition 31 December, 2024 11,523 identified managers in 2022 Date ➔ Hay Job Evaluation methodology: industry-recogni

  42. Slide 42: Second Party Opinion

    Enhanced Sustainability-Linked Financing Framework Second Party Opinion “Sustainalytics is of the opinion that the Legrand Sustainability-Linked Financing Framework aligns with the five core components of the Sustainability-Linked Bond Principles 2020” KPIS STRENGTH SPTS AMBITIOUSNESS KPI 1 Very Str

  43. Slide 43: Ratios and transaction overview

    ¢¢© 5 Ratios and transaction overview 43

  44. Slide 44: Solid financial structure & cash generation

    Ratios and transaction overview Solid financial structure & cash generation Ratios Free Cash Flow 55% 2,5 x 18% € 1200m 16% € 1100m € 1000m 50% 2,0 x 14% € 900m 12% € 800m 45% 1,5 x 10% € 700m € 600m 8% € 500m 40% 1,0 x 6% € 400m 4% € 300m 35% 0,5 x € 200m 2% € 100m 30% 0,0 x 0% € 0m FY 2019 FY 2020

  45. Slide 45: Healthy and well-balanced debt profile

    Ratios and transaction overview Healthy and well-balanced debt profile (1) Average In €M maturity 700 New EUR of gross 6y SLB debt(2) 600 4.4y LEGRAND’S 500 400 Amount of BOND gross debt(2) & NEU MTN 300 €4.8bn 200 MATURITY PROFILE 100 Amount of 0 net debt(3) 2023 2024 2025 2026 2027 2028 2029 2030

  46. Slide 46: Sustainability-linked bond transactional overview

    Ratios and transaction overview Sustainability-linked bond transactional overview ISSUER Legrand SA ISSUER RATINGS A- (stable) by S&P EXPECTED ISSUE RATINGS A- by S&P RANKING AND FORMAT Senior unsecured, Reg S dematerialised bearer USE OF PROCEEDS General Corporate Purposes TENOR 6-year (May 2029) C

  47. Slide 47: Appendix

    6 | Appendix Oi legrand’ 47

  48. Slide 48: Well recognized CSR performance

    Well recognized CSR performance Legrand’s extra-financial performance awarded by international ESG indexes and ratings 48

  49. Slide 49: Extract - previous Sustainability-Linked Financing Framework (1/2)

    Extract - previous Sustainability-Linked Financing Framework 1/2 49

  50. Slide 50: Extract - previous Sustainability-Linked Financing Framework (2/2)

    Extract - previous Sustainability-Linked Financing Framework 2/2 50

  51. Slide 51: Investor Relations contacts

    INVESTOR RELATIONS LEGRAND Ronan MARC Tel: +33 (0)1 49 72 53 53 ronan.marc@legrand.com PRESS RELATIONS TBWA Corporate Tiphaine Raffray Mob: +33 (0)6 58 27 78 98 tiphaine.raffray@tbwa-corporate.com 51 51

  52. Slide 52: Disclaimer

    Disclaimer The information contained in this presentation, unless differently specified in the sustainability-linked financing framework, has not been independently verified and no representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, accur

Legrand — Debt Investor Presentation (May 2023) on 6ix