Legrand Sa · EURONEXT:LR

Legrand Sa — Shareholder Meeting (May 2017)

66 slides from Legrand Sa's shareholder meeting presentation, May 31, 2017

  1. Slide 1: Combined General Meeting of Shareholders

    Combined General Meeting of Shareholders May 31, 2017

  2. Slide 2: Agenda

    AGENDA 1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS P. 3 2 SOLID INTEGRATED PERFORMANCE, 2016 TARGETS FULLY MET P. 30 3 COMPENSATION AND GOVERNANCE P. 41 4 OVERVIEW OF RESOLUTIONS P. 58 5 STATUTORY AUDITORS’ REPORTS P. 62 6 Q&A P. 64 7 VOTE OF RESOLUTIONS P. 65 2

  3. Slide 3: A value-creating model attentive to all stakeholders

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS 3

  4. Slide 4: 7 major product categories

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS ENRICH ELECTRICAL AND DIGITAL BUILDING INFRASTRUCTURE 7 major product categories USER ENERGY BUILDING CABLE DIGITAL UPS INSTALLATION INTERFACE DISTRIBUTION SYSTEMS MANAGEMENT INFRASTRUCTURES COMPONENTS  Switches  Distribution  Lighting  Trun

  5. Slide 5: Ongoing enrichment of Legrand's accessible market

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS ONGOING ENRICHMENT OF LEGRAND’S ACCESSIBLE MARKET Development of Expansion of Legrand’s accessible market new business segments(1) Long term megatrends (in €bn) (in % of sales) SOCIAL TECHNOLOGICAL >90 >33% MEGATRENDS MEGATRENDS  Fiber optics 

  6. Slide 6: A balanced profitable development

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS A BALANCED PROFITABLE DEVELOPMENT 2016 Key figures Net sales Adjusted(1) operating margin Employees €5bn 19.5% 36,000 Net sales breakdown Net sales by geographic region Net sales by end markets United Titre du graphique States Industrial 25% Tit

  7. Slide 7: A value-creating development model (1/5)

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS A VALUE-CREATING DEVELOPMENT MODEL (1/5) Organic growth Profitability and Market share cash generation Acquisitions 7

  8. Slide 8: A value-creating development model (2/5): innovation driven organic growth

    1 A VALUE-CREATING MODEL ATTENTIVE A VALUE-CREATING DEVELOPMENT MODEL (2/5) TO ALL STAKEHOLDERS INNOVATION DRIVEN ORGANIC GROWTH Cash R&D expenses Capex €248m invested in 2016 €161m in 2016 Nearly 50% dedicated to new products nearly Buildings including showrooms & greenfields 2,200 employees in 201

  9. Slide 9: A value-creating development model (3/5): targeted acquisitions

    1 A VALUE-CREATING MODEL ATTENTIVE A VALUE-CREATING DEVELOPMENT MODEL (3/5) TO ALL STAKEHOLDERS TARGETED ACQUISITIONS Continuity of acquisition policy over the long run  Companies with robust market positions and/or targeted technological expertise  Bolt-on acquisitions of complementary companies

  10. Slide 10: A value-creating development model (4/5): strengthening market shares

    1 A VALUE-CREATING MODEL ATTENTIVE A VALUE-CREATING DEVELOPMENT MODEL (4/5) TO ALL STAKEHOLDERS STRENGTHENING MARKET SHARES Increase of the share of sales made with products #1 or #2 on their markets ~ 53% ~ 68% 2006 2016 10

  11. Slide 11: A value-creating development model (5/5): profitability and cash generation

    1 A VALUE-CREATING MODEL ATTENTIVE A VALUE-CREATING DEVELOPMENT MODEL (5/5) TO ALL STAKEHOLDERS VALUE-CREATING PROFITABILITY AND CASH GENERATION Adjusted(1) operating margin Normalized(2) free cash flow as % of sales as % of sales ~ 47 % 19% 13% (average between 2006 and 2016) (average between 2006

  12. Slide 12: Our stakeholders: essential partners for value creation

    1 A VALUE-CREATING MODEL ATTENTIVE OUR STAKEHOLDERS: TO ALL STAKEHOLDERS ESSENTIAL PARTNERS FOR VALUE CREATION     12

  13. Slide 13: Our stakeholders: essential partners for value creation

    1 A VALUE-CREATING MODEL ATTENTIVE OUR STAKEHOLDERS: TO ALL STAKEHOLDERS ESSENTIAL PARTNERS FOR VALUE CREATION Value creation(1) Stakeholders Sales (a) €5.0bn Customers Purchasing (b) €2.4bn Suppliers Employees Development investment  R&D investments  Industrial investments Added value 25%  Acqui

  14. Slide 14: Our stakeholders: Customers

    1 A VALUE-CREATING MODEL ATTENTIVE OUR STAKEHOLDERS: TO ALL STAKEHOLDERS ESSENTIAL PARTNERS FOR VALUE CREATION  Customers    14

  15. Slide 15: Eliot program (1/2): enriched offer of connected products

    1 A VALUE-CREATING MODEL ATTENTIVE ELIOT PROGRAM (1/2) TO ALL STAKEHOLDERS AN ENRICHED AND CONSISTENT OFFER OF CONNECTED PRODUCTS Eliot-4 product segments Comfort Safety & Security Energy Assisted efficiency livinfg 15

  16. Slide 16: Eliot program (2/2): Celiane with Netatmo

    1 A VALUE-CREATING MODEL ATTENTIVE ELIOT PROGRAM (2/2) TO ALL STAKEHOLDERS “CELIANE WITH NETATMO” Legrand key Expansion of business innovation fundamentals environment  « Open innovation » & partnerships  Design quality and easy-to- install products  Quest for added value  Integrate new technolo

  17. Slide 17: New digital tools for more value added

    1 A VALUE-CREATING MODEL ATTENTIVE NEW DIGITAL TOOLS FOR MORE TO ALL STAKEHOLDERS VALUE ADDED 2016 data  Digital communication  104 million pages viewed  Nearly 30 million visits on the Group’s websites  26.5 million video views on Legrand Youtube channels  More than 12,300 followers on Twitter

  18. Slide 18: More than 90 showrooms and training centers

    1 A VALUE-CREATING MODEL ATTENTIVE MORE THAN 90 SHOWROOMS, AND/OR TRAINING CENTERS OPEN TO TO ALL STAKEHOLDERS CUSTOMERS OVER THE WORLD Innoval - Limoges (France) Le Lab By Legrand - Paris (France) Bticino Milano - Milan (Italy) B Inspired - Brussels (Belgium) Dallas Market Center - Dallas (USA) Exp

  19. Slide 19: Our stakeholders: Suppliers

    1 A VALUE-CREATING MODEL ATTENTIVE OUR STAKEHOLDERS TO ALL STAKEHOLDERS ESSENTIAL PARTNERS FOR VALUE CREATION   Suppliers   19

  20. Slide 20: Associate suppliers in value creation

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS ASSOCIATE SUPPLIERS IN VALUE CREATION Responsible purchasing Partnership  ISO 9001 certification  Responsible Supplier Relations certification since 2012  60% of group panel purchasing from suppliers that share Global compact’s values  Syste

  21. Slide 21: Our stakeholders: Employees

    1 A VALUE-CREATING MODEL ATTENTIVE OUR STAKEHOLDERS TO ALL STAKEHOLDERS ESSENTIAL PARTNERS FOR VALUE CREATION    Employees  21

  22. Slide 22: Support the development of diversified teams

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS SUPPORT THE DEVELOPMENT OF DIVERSIFIED TEAMS A resolutely international Group Initiatives 2016/2017 Priorities (workforce breakdown, 2016 data) Socle Benefit Group workforce United States  Respect human rights (assessment, 10% prevention) Franc

  23. Slide 23: Shareholders, lenders, civil society

    1 A VALUE-CREATING MODEL ATTENTIVE OUR STAKEHOLDERS TO ALL STAKEHOLDERS ESSENTIAL PARTNERS FOR VALUE CREATION     Shareholders, lenders, civil society 23

  24. Slide 24: Legrand is attentive to shareholders (1/4): communication

    1 A VALUE-CREATING MODEL ATTENTIVE LEGRAND IS ATTENTIVE TO SHAREHOLDERS (1/4) TO ALL STAKEHOLDERS COMMUNICATION WITH SHAREHOLDERS Information Learn more about us  Quarterly earnings releases  Site visits (France only)  Toll-free number  Dedicated shareholders’corner on Legrand website  Letters

  25. Slide 25: Legrand is attentive to shareholders (2/4): change in stock price

    1 A VALUE-CREATING MODEL ATTENTIVE LEGRAND IS ATTENTIVE TO SHAREHOLDERS (2/4) TO ALL STAKEHOLDERS CHANGE IN STOCK PRICE SINCE THE IPO (1) 70 +211% 60 50 40 LEGRAND in € 30 CAC 40 20 +3% 10 - Aug.13 Aug.16 Apr.06 May.14 May.17 Dec.06 Sep.07 Dec.09 Sep.10 Nov.12 Feb.15 Nov.15 Jun.08 Mar.09 Jun.11 Mar.

  26. Slide 26: Legrand is attentive to shareholders (3/4): total shareholder return

    1 A VALUE-CREATING MODEL ATTENTIVE LEGRAND IS ATTENTIVE TO SHAREHOLDERS (3/4) TO ALL STAKEHOLDERS TOTAL SHAREHOLDER RETURN SINCE THE IPO (1) Dividend per share Earnings per share TSR(3) +9%(2) +8% +14% per year (2006-2016 CAGR) (from April 6, 2006 to May 19 2017) (2006-2016 CAGR) 1. April 2006. 2. I

  27. Slide 27: Legrand is attentive to shareholders (4/4): 2016 proposed dividend

    1 A VALUE-CREATING MODEL ATTENTIVE LEGRAND IS ATTENTIVE TO SHAREHOLDERS (4/4) TO ALL STAKEHOLDERS 2016 PROPOSED DIVIDEND Dividend per share(1) Payout(2) €1.19 56% 1. Subject to the approval of shareholders at the General Meeting on May 31, 2017, payable June 6, 2017 Distribution conditions for the 2

  28. Slide 28: Legrand a civil society partner

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS LEGRAND A CIVIL SOCIETY PARTNER A local player in France Legrand Foundation NGO  Participating in the promotion  Local commitment in areas  Electriciens Sans Frontières: of electrical engineering and where Legrand is present historical partne

  29. Slide 29: Lenders and countries

    1 A VALUE-CREATING MODEL ATTENTIVE TO ALL STAKEHOLDERS LENDERS AND COUNTRIES A long-term relationship of trust with Contribution to countries group’s lenders  Nearly €1bn in net debt at the end of 2016  2016 income tax rate of 33%(1), consistent with the Group’s geographical exposure  Maturity of

  30. Slide 30: Solid integrated performance, 2016 targets fully met

    2 SOLID INTEGRATED PERFORMANCE, 2016 TARGETS FULLY MET 30

  31. Slide 31: Integrated performance: 2016 financial and non-financial targets met

    2 SOLID INTEGRATED PERFORMANCE, INTEGRATED PERFORMANCE: PROFITABLE AND SUSTAINABLE GROWTH 2016 TARGETS FULLY MET 2016 FINANCIAL AND NON-FINANCIAL TARGETS MET Indicators 2016 2016 Targets(1) achievements Organic(2) growth -2% to +2% +1.8% X Adjusted operating margin before acquisitions(3) 18.5% to 1

  32. Slide 32: 2016 change in net sales

    2 SOLID INTEGRATED PERFORMANCE, 2016 TARGETS FULLY MET 2016 CHANGE IN NET SALES € million 4,810 5,019  Organic(1) growth: +1.8% Growth w/o FX: +6.5% Total growth:  External growth: +4.7% +4.3%  Exchange-rate effect: -2.1% 2015 2016 1. Organic: at constant scope of consolidation and exchange rates

  33. Slide 33: Acceleration of growth excluding FX effect in 2016

    2 SOLID INTEGRATED PERFORMANCE, 2016 TARGETS FULLY MET ACCELERATION OF GROWTH EXCLUDING FX EFFECT IN 2016 Indicators 2015 2016 Organic growth ( 1 ) +0.5% +1.8% External growth +1.5% +4.7% Growth excl. FX effect: +2.1% +6.5%  Acceleration of Legrand's two growth drivers in 2016 1. Organic: at consta

  34. Slide 34: 2016 annual results

    2 SOLID INTEGRATED PERFORMANCE, 2016 TARGETS FULLY MET 2016 ANNUAL RESULTS In € millions 2015 2016 change Net sales 4,810 5,019 +4.3% Adjusted(1) operating profit 930 979 +5.2% Net income excluding minority interests 551 567(2) +3.0% Free Cash flow 666 673 +1.1% 1. Operating profit adjusted for amor

  35. Slide 35: Accelerating the pace of acquisition in 2016

    2 SOLID INTEGRATED ACCELERATING THE PACE OF ACQUISITION IN 2016 PERFORMANCE, 2016 TARGETS FULLY MET (€400M INVESTED VS. OVER €200M IN 2015) Business Country Annual sales Lighting solutions United States ~$105m Lighting control United Kingdom ~£24m Audio/video infrastructure United States >$20m 8 acq

  36. Slide 36: 2017 first quarter results

    2 SOLID INTEGRATED PERFORMANCE, 2016 TARGETS FULLY MET 2017 FIRST QUARTER RESULTS In € million Q1 2016 Q1 2017 Change Net Sales 1,190 1,319 +10.9% Adjusted(1) operating profit 227 259 +14.5% Net income excluding minority interests 127 149 +17.0% 1. Operating profit adjusted for amortization of reval

  37. Slide 37: Acquisitions announced since the beginning of 2017

    2 SOLID INTEGRATED PERFORMANCE, 2016 TARGETS FULLY MET ACQUISITIONS ANOUNCED SINCE THE BEGINNING OF 2017 Business Country Annual sales of (1) Lighting solutions United States ~$200m Audio/video infrastructure United States ~$23m Lighting solutions United States ~$15m (2) UPS(3) Italy ~€60m  3 acqui

  38. Slide 38: Non financial performance (1/2): 2014-2018 CSR roadmap

    2 SOLID INTEGRATED NON FINANCIAL PERFORMANCE (1/2) PERFORMANCE, 2016 TARGETS FULLY MET REMINDER: 2014-2018 CSR (1) ROADMAP  4 focus points – 21 priorities  5-year horizon  Stronger commitment of managers 1. CSR: Corporate Social Responsibility. 38

  39. Slide 39: Non financial performance (2/2): 2016 CSR achievements

    2 SOLID INTEGRATED NON FINANCIAL PERFORMANCE (2/2) PERFORMANCE, 2016 TARGETS FULLY MET 2016 CSR (1) ACHIEVEMENTS  Legrand ahead of its CSR(1) roadmap in 2016 with all focus points above 100% achievement rate 2016 objectives: achievement rates by focus point Users 2016 CSR(1) Society roadmap Employe

  40. Slide 40: Performance under control through a solid risk management system

    2 SOLID INTEGRATED PERFORMANCE, PERFORMANCE UNDER CONTROL 2016 TARGETS FULLY MET THROUGH A SOLID RISK MANAGEMENT SYSTEM AUDIT COMMITTEE Group risk committee Subsidiaries’ self-assessment Risk mapping Annual audit planning Internal control framework Group compliance Internal auditors committee Local

  41. Slide 41: Compensation and governance

    3 COMPENSATION AND GOVERNANCE 41

  42. Slide 42: Compensation and governance

    3 COMPENSATION & GOVERNANCE COMPENSATION AND GOVERNANCE  Say on Pay: Executive Director’s compensation  Underlying principles of compensation policy  Ex-post vote: compensation due or allocated in respect of 2016  Ex-ante vote: compensation applicable in respect of 2017  Governance  Board of D

  43. Slide 43: Compensation and governance: Say on Pay

    3 COMPENSATION & GOVERNANCE COMPENSATION AND GOVERNANCE  Say on Pay: Executive Director’s compensation  Underlying principles of compensation policy  Ex-post vote: compensation due or allocated in respect of 2016  Ex-ante vote: compensation applicable in respect of 2017 43

  44. Slide 44: Underlying principles of compensation policy

    3 COMPENSATION & GOVERNANCE UNDERLYING PRINCIPLES OF COMPENSATION POLICY Profitable growth and sustainable value creation at the heart of compensation policy  Acknowledgement of the principles set out in the Afep-Medef Code  Underlying principles of compensation policy:  Balanced overall compensa

  45. Slide 45: Underlying principles of compensation policy: 3 components

    3 UNDERLYING PRINCIPLES OF COMPENSATION POLICY: COMPENSATION & GOVERNANCE 3 COMPONENTS FIXED Compensating the level and scope of responsibilities COMPENSATION Determined fairly and competitively ANNUAL VARIABLE Encouraging the achievement of the company’s COMPENSATION annual financial and non-financ

  46. Slide 46: Underlying principles: absence of other compensation components

    3 UNDERLYING PRINCIPLES OF COMPENSATION POLICY: COMPENSATION & GOVERNANCE ABSENCE OF OTHER COMPENSATION COMPONENTS Other compensation components Undertakings set out in article L. 225-42-1 of the French Commercial No director’s attendance fees Code No exceptional compensation No “golden handshake” N

  47. Slide 47: Ex-post vote: Executive Director's compensation in respect of 2016

    3 EX-POST VOTE: EXECUTIVE DIRECTOR’S OVERALL COMPENSATION COMPENSATION & GOVERNANCE IN RESPECT OF 2016 FIXED COMPENSATION €625,000(1) Paid in respect of 2016: €1,160,000(1) ANNUAL VARIABLE COMPENSATION €535,000(2) Overall total: €1,819,375 LONG-TERM Performance shares: COMPENSATION €659,375(3) OTHER

  48. Slide 48: Ex-ante vote: compensation attributable in respect of 2017

    3 EX-ANTE VOTE: OVERALL COMPENSATION ATTRIBUTABLE TO THE COMPENSATION & GOVERNANCE EXECUTIVE DIRECTOR IN RESPECT OF 2017 FIXED COMPENSATION €625,000(1) ANNUAL VARIABLE Target value: 80% of fixed COMPENSATION compensation(2) Demanding performance conditions LONG-TERM Target value: 120% of fixed COMPE

  49. Slide 49: Ex-ante vote: 2017 annual variable compensation

    3 EX-ANTE VOTE: EXECUTIVE DIRECTOR’S 2017 ANNUAL VARIABLE COMPENSATION & GOVERNANCE COMPENSATION Min Target Max ADJUSTED OPERATING MARGIN EXCLUDING ACQUISITIONS 0% 32% 48% QUANTIFIABLE: ORGANIC GROWTH IN PERCENTAGE OF SALES 0% 12% 18% ¾ of annual EXTERNAL GROWTH 0% 8% 12% variable INCLUSION OF LEGRA

  50. Slide 50: Ex-ante vote: long-term variable compensation (performance shares)

    3 EX-ANTE VOTE: EXECUTIVE DIRECTOR’S LONG-TERM VARIABLE COMPENSATION & GOVERNANCE COMPENSATION (PERFORMANCE SHARES) Conditions of the 2017 Performance share plan External financial performance(1): 1/3 Between 0 and 150% 3 of the initial allocation, performance depending on the attainment conditions

  51. Slide 51: Compensation and governance: Governance

    3 COMPENSATION & GOVERNANCE COMPENSATION AND GOVERNANCE  Governance  Board of Directors membership  Board of Directors assessment 51

  52. Slide 52: Board of Directors: international, balanced, mainly independent

    3 BOARD OF DIRECTORS: MEMBERSHIP THAT IS INTERNATIONAL, COMPENSATION & GOVERNANCE BALANCED, AND MAINLY INDEPENDENT 10 Board members including one Lead Director 4 nationalities 70% independent directors 50% Male/Female directors 52

  53. Slide 53: Board of Directors: varied and complementary skills

    3 BOARD OF DIRECTORS: A STRATEGIC ROLE RELYING ON VARIED COMPENSATION & GOVERNANCE AND COMPLEMENTARY SKILLS 3 skill sets among Board members Strategic 53

  54. Slide 54: 4 specialist committees supporting the Board

    3 COMPENSATION & GOVERNANCE 4 SPECIALIST COMMITTEES SUPPORTING THE BOARD OF DIRECTORS Each Committee is chaired by an independent Director Nominating Compensation Audit Committee Strategy & CSR(1) & Governance Committee 3 members Committee 100% independent Committee 3 members 4 members 100% independ

  55. Slide 55: Board of Directors: proposed renewal of mandate

    3 COMPENSATION & GOVERNANCE BOARD OF DIRECTORS: PROPOSED RENEWAL OF MANDATE Legrand Outside Legrand  Independent director  Marketing VP at Printemps (since 2013) (since 2013)  Member of the Compensation Committee  Executive Committee Member at Printemps (since 2015) (since 2015)  Board member a

  56. Slide 56: Board of Directors: subject to annual assessment

    3 BOARD OF DIRECTORS: SUBJECT TO ANNUAL ASSESSMENT ACCORDING TO COMPENSATION & GOVERNANCE A THREE-YEAR CYCLE, SUPERVISED BY THE LEAD DIRECTOR FORMAL ANNUAL ASSESSMENT ACCORDING TO A THREE-YEAR CYCLE, ALTERNATING BETWEEN: - external assessment - internal assessment including assessment of Directors’

  57. Slide 57: Board of Directors: attention to market recommendations

    3 BOARD OF DIRECTORS: CAREFUL ATTENTION PAID TO MARKET COMPENSATION & GOVERNANCE RECOMMENDATIONS Legrand ranked in the 1st quartile of the CAC 40 Governance index 2017 Complies with all Bronze Governance Award recommendations in for Board Membership the Afep-Medef Code(1) Corporate Governance Grand

  58. Slide 58: Presentation of resolutions

    4 PRESENTATION OF RESOLUTIONS 58

  59. Slide 59: Resolutions for the Ordinary General Meeting

    4 PRESENTATION OF RESOLUTIONS RESOLUTIONS FOR THE ORDINARY GENERAL MEETING  Resolutions 1 to 3: Resolutions on the approval of financial statements, the appropriation of earnings and the distribution of dividend  Resolution 4: Resolution on ex-post Say on Pay (opinion on compensation due or alloca

  60. Slide 60: Resolutions on the purchase and cancellation of company shares

    4 RESOLUTIONS ON THE PURCHASE AND CANCELLATION OF PRESENTATION OF RESOLUTIONS COMPANY SHARES  Resolution 9: Authorization granted to the Board of Directors to allow the Company to trade in its own shares  Resolution 10: Authorization granted to the Board of Directors to reduce the capital stock by

  61. Slide 61: Resolution on powers to effect formalities

    4 PRESENTATION OF RESOLUTIONS RESOLUTION ON POWERS TO EFFECT FORMALITIES  Resolution 11: Powers to effect formalities 61

  62. Slide 62: Statutory auditors' reports

    5 STATUTORY AUDITORS’ REPORTS 62

  63. Slide 63: Statutory auditors' reports

    5 STATUTORY AUDITORS’ REPORTS STATUTORY AUDITORS’ REPORTS  For the Ordinary General Meeting:  on annual consolidated and parent-company financial statements  on regulated conventions and commitments  on the report of the Chairman of the Board of Directors on corporate governance and internal con

  64. Slide 64: Q&A

    6 Q&A 64

  65. Slide 65: Vote on resolutions

    7 VOTE ON RESOLUTIONS 65

  66. Slide 66: Disclaimer

    DISCLAIMER The information contained in this presentation 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, accuracy, completeness or correctness of the information or opinions contained herein

Legrand — Shareholder Meeting (May 2017) on 6ix