Legrand Sa · EURONEXT:LR
Legrand Sa — Shareholder Meeting (June 2006)
49 slides from Legrand Sa's shareholder meeting presentation, Jun 7, 2006
Slide 1: General Meeting of Shareholders
Legrand General Meeting of Shareholders Wednesday, 7 June 2006 1
Slide 2: Disclaimer
Disclaimer This document includes summarized information taken from (i) the Legrand prospectus (the "Prospectus") which received the approval of the Autorité des marchés financiers (the "AMF") on 22 March 2006 pursuant to visa n° 06-082 and which comprises the registration document filed with the AM
Slide 3: Agenda
Agenda Legrand today Financial summary Shareholders, corporate governance and sustainable development Q&A session Presentation of resolutions and vote 3
Slide 4: Legrand today
Legrand today 4
Slide 5: Legrand today: strategy and strengths
Legrand today Strategy Strategy and and development development Growth initiatives Legrand’s Legrand’s strengths strengths Cost optimization Capital efficiency Global pure player An An attractive attractive industry industry Strong local and global leaderships Resilient Geographic / product Growing
Slide 6: Our product and solution offering
Our product and solution offering Targeting residential, commercial and industrial buildings Communication Communication Security Security Comfort Comfort 1. Control & Command (44% of sales)1 2. Cable Management (22% of sales)1 3. Energy 4. VDI / datacom & Distribution related products (23% of sales
Slide 7: Solutions for housing: wiring devices
Solutions for housing Control and connection to power Wiring devices 7
Slide 8: Solutions for housing: VDI / datacom
Solutions for housing Control and connection to data VDI / datacom 8
Slide 9: Solutions for housing: safety
Solutions for housing Safety of people and property 9
Slide 10: Solutions for housing and the home office: home automation
Solutions for housing and the home office Home automation Comfort, safety and communication 10
Slide 11: Solutions for housing and the home office: cable management
Solutions for housing and the home office Cable management Overhead, perimeter, floor 11
Slide 12: Solutions for housing and the home office: energy distribution
Solutions for housing and the home office Energy distribution Protection against electrical hazards 12
Slide 13: Solutions for the commercial sector and industry: wiring devices
Solutions for the commercial sector and industry Control and connection to power Wiring devices 13
Slide 14: Solutions for the commercial sector and industry: VDI / datacom
Solutions for the commercial sector and industry Control and connection to data VDI / Datacom 14
Slide 15: Solutions for the commercial sector and industry: safety
Solutions for the commercial sector and industry Safety of people and property 15
Slide 16: Solutions for the commercial sector and industry: cable management
Solutions for the commercial sector and industry Cable management Overhead, perimeter, floor 16
Slide 17: Solutions for the commercial sector and industry: energy distribution
Solutions for the commercial sector and industry Energy distribution Protection against electrical hazards 17
Slide 18: An Attractive Industry Offering Resilience and Growth
An Attractive Industry Offering Resilience and Growth 18
Slide 19: Barriers to entry
Barriers to entry National standards / Local preferences Brand loyalty / No significant new player in Longstanding commercial the market for 20 years relationships with installers Non-deflationary industry Breadth of product line Technology 19
Slide 20: Limited cyclicality through balanced exposure
Limited cyclicality through balanced exposure Our Our €50bn €50bn industry industry Legrand’s Legrand’s balanced balanced exposure exposure Global geographical diversity Rest of Europe USA / Canada 21% 19% Rest of the World Italy 15% 19% France 26% Exposure to new construction New and renovation mar
Slide 21: Innovation: low voltage is the best place to be
Low voltage is the best place to be Positive market dynamics fuel growth Smart Electrical Solutions and Services Innovation Integrated Systems Enhanced Functions Standard Products No Electricity Supply Value added 21
Slide 22: Legrand's Strengths
Legrand’s Strengths 22
Slide 23: The only pure player in low voltage with global scale
The only pure player in low voltage with global scale International ABB Sales Schneider €18bn Sales Legrand €12bn Divisions of Large Siemens Industrial Companies Local Specialists Sales €79bn Gewiss Thomas & Betts Eaton Hager Matsushita EW Sales Sales €9bn Cooper €12bn Leviton Local Hubbell Panduit
Slide 24: Global and local leaderships
Global and local leaderships Global Global leaderships leaderships Local Local leaderships leaderships Global #1 in 2 product families #1 in at least one product family in over 24 countries 18% market share in Wiring Devices Europe: including France, Italy, Spain, Russia, Poland, etc. 15% market sha
Slide 25: Acknowledged know-how in terms of acquisitions
Acknowledged know-how in terms of acquisitions Historically, acquisitions have provided around 50% of our top line growth More than 100 acquisitions over the last 50 years In-depth knowledge of potential targets Proven ability to integrate successfully and realize synergies Strict financial criteria
Slide 26: Over €300m revenue added through 8 acquisitions since January 2005
Over €300m revenue added through 8 acquisitions since January 2005 TCL #1 in China in wiring devices Shidean #1 in China in audio and video door-entry systems Growth Markets Cemar #1 in Brazil in consumer units and industrial enclosures OnQ #1 in the US for residential structured wiring Van Geel #1
Slide 27: Strategy and Development
Strategy and Development 27
Slide 28: Local front offices and a global infrastructure
Local front offices and a global infrastructure More locally focused than diversified competitors — more global scale than local competitors Previous Previous Model Model New New Enhanced Enhanced Model Model A federation of local businesses Global infrastructure Local responsibility for: 5 global i
Slide 29: Growth drivers: premium growth regions
Growth drivers: “premium growth” regions Emerging countries 19% of 2005 revenue Asia, Eastern Europe, +16%1 growth in 2005 Latin America, Africa/Middle-East • 38% of 2005 revenue • +16%1 growth in 2005 USA / Canada 19% of 2005 revenue Sustained market +16%1 growth in 2005 growth and benefits from tr
Slide 30: Growth drivers: premium growth products
Growth drivers: “premium growth” products New product introductions drive growth Home systems Premium Premium Growth Growth VDI • 36% of 2005 revenue Products Products • +16% growth in 2005 Energy Distribution Cash R&D expenses1 ~ 5% of sales • 30 new product ranges launched in 2005, vs. 9 in 2003 4
Slide 31: Cost initiatives: ongoing efficiency improvements
Cost initiatives: ongoing efficiency improvements Infrastructure established – benefits continue apace “Make or Buy” Industrial divisions Relocation of production Globalization Purchasing organization Internationalization 31
Slide 32: Capital discipline yielding high cash flow
Capital discipline yielding high cash flow Optimized Optimized capex capex 7.5% 4.0% Higher Higher cash cash flow flow generation generation €m 547 Average 1996-2002 Average 2003-2005 Capex as a % of sales 317 Optimized Optimized working working capital capital 20.6% 13.8% Average 1996-2002 Average
Slide 33: Financial Summary
Financial Summary 33
Slide 34: 2005 Performance
2005 Performance 34
Slide 35: Strong top line like-for-like growth momentum
Strong top line like-for-like growth momentum Group €3,248m in 2005 + 6.6% LFL in 2005 + 16% LFL over 2 years France €857m Rest of Europe €692m USA/Canada €618m + 5.0% LFL in 2005 + 10% LFL in over 2 years + 5.4% LFL in 2005 + 12.3% LFL in 2005 + 20% LFL over 2 years + 27% LFL over 2 years Italy €60
Slide 36: Strong growth and improved profitability
Strong growth and improved profitability Key figures IFRS, € million 2003 2004 2005 Revenue 2,762 2,926 3,248 % growth 6.0% 11.0% Adjusted1 EBIT 366 473 509 Margin 13.2% 16.2% 15.7% Free Cash Flow2 175 362 328 % of revenue 6.3% 12.4% 10.1% Since 2003: 18% revenue growth 39% adjusted EBIT growth 250
Slide 37: 2006 First Quarter Performance
2006 First Quarter Performance 37
Slide 38: Strong top line like-for-like growth
Strong top line like-for-like growth Group: €941m in Q1 2006 + 10.1% LFL in Q1 2006 + 17% over 2 years France €247m Rest of Europe €192m USA/Canada €162m + 4.2% LFL in Q1 2006 + 9.0% over 2 years + 10.5% LFL in Q1 2006 + 9.8% LFL in Q1 2006 + 20% over 2 years + 23% over 2 years Italy €193m + 11.6% L
Slide 39: Growth and improvement in cash generation
Growth and improvement in cash generation IFRS, € million 1st quarter 2005 1st quarter 2006 Net sales 766 941 % growth 23% Adjusted1 EBIT 132 164 Margin 17.2% 17.4% Free Cash Flow2 - 25 15 As a comparison with the first quarter of 2006: + 23% revenue growth + 24% adjusted EBIT growth 1. Excluding go
Slide 40: Attractive capital structure to create shareholder value
Attractive capital structure to create shareholder value An optimum capital structure Value creation opportunity through leverage Investment grade rating High free cash flow to finance growth and pay dividends 40
Slide 41: Shareholders, Corporate Governance and Sustainable Development
Shareholders, Corporate Governance and Sustainable Development 41
Slide 42: Shareholding
Shareholding Success of the Initial Public Offering: offering over-subscribed by approximately 30 times Strong increase in share price: + 15.4% since the IPO on April 6, 2006 Shareholders Shareholders Share Share price price since since IPO IPO Public Legrand's share price in € 19% Wendel Investisse
Slide 43: Corporate Governance
Corporate Governance Board of directors 11 members including 2 independent directors 3 committees Audit committee Nominating and compensation committee Strategy committee Internal control complies with the most demanding international standards External control: 2 statutory auditors 43
Slide 44: Sustainable development
Sustainable development Charter of Fundamental Principles Strong, shared values: ethics of behavior, customer awareness, resource enhancement, innovation Stepped-up commitment to safety Management unit dedicated to risk prevention Charter for Risk Prevention Deployment of safety management system (r
Slide 45: Questions & Answers
Questions & Answers 45
Slide 46: Presentation of Resolutions and Vote
Presentation of Resolutions and Vote 46
Slide 47: Resolution #1: Exceptional distribution of €0.41 per share
Resolution #1 Exceptional distribution of €0.41 per share for each of 269,693,376 shares making up Legrand share capital for a total €110,574,284.16. This amount will be taken from “retained earnings”. 47
Slide 48: Resolution #2: Granting of powers to accomplish formalities
Resolution #2 Granting of powers to accomplish formalities 48
Slide 49: Legrand
Legrand 49