Legrand Sa · EURONEXT:LR
Legrand Sa — 9M 2006 Earnings Presentation
33 slides from Legrand Sa's earnings presentation, Oct 31, 2006
Slide 1: 2006 Nine-Month Results
2006 Nine-Month Results October 31, 2006 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 October 31, 2006. This document must be treated confidentially by attendees at such presentation. The information contained in this document has not been independently verified
Slide 3: Key Facts
Key Facts Healthy rise in net sales Robust growth in adjusted operating income Sharp surge in net income Steep increase in free cash flow 3
Slide 4: Healthy Rise in Net Sales
Healthy Rise in Net Sales (1) driven by Like for Like Growth more than Doubled by Acquisition-led Expansion Net Sales (1) Strong like for likegrowth combining 3200 +18% price increase and volume growth: + 7.3% (1) Like for like growth more than doubled by acquisition led expansion: +9.1% €millio
Slide 5: Robust Growth in Adjusted Operating Income
Robust Growth in Adjusted Operating Income in all Geographical Zones Adjusted Operating Income(1(1)) 600 Increase in gross profit led by strong +23% sales and productivity gains. Raw material and component price rise offset by increases in sales prices €million 481 390 Ongoing initiatives for
Slide 6: Sharp Surge in Net Income
Sharp Surge in Net Income Net Income (1) (1) 150 +78% Strong growth in operating income Sharp decline in financial expense €million Foreign exchange gains 147 82 0 9M 2005 9M 2006 1. Group share 6
Slide 7: Steep Increase in Free Cash Flow
Steep Increase in Free Cash Flow Driven by Rise in Cash Flow From Operations and Firm Capital Employed Management Free Cash Flow (1) (1) 400 Strong increase in cash flow from +70% (2) (3) operations led by good operating performance : +37.5% €million Working Capital Requirement under control : 1
Slide 8: Strong Growth in the 2006 First Nine Months
Strong Growth in the 2006 First Nine Months Group €2,782m in 2006 First Nine Months +18.0% reported growth (1) + 7.3% LFL growth France €706m in 2006 first Rest of Europe €587m in nine months 2006 first nine months + 9.2% reported growth + 28.9% reported growth + 3.2% LFL(1) growth + 7.3% LFL(1) gro
Slide 9: Acquisition of Vantage
Acquisition of Vantage Strategic acquisition : home automation is a key growth driver First class market position: #2 for top-of-the-range lighting control in the US 6 new product ranges launched in the first nine months of 2006 Round out Legrand’s worldwide home automation offering $20mil
Slide 10: Active Commitment to Acquisition-driven Growth
Active Commitment to Acquisition-driven Growth More than €60m revenue added through 4 acquisitions since January 2006 #1 in China in audio and video door entry systems 2005 net sales : €15million 900 employees, including 200 sale force #1 in Brazil in consumer units and industrial enclosures
Slide 11: Strong R&D Commitment and New Product Launches continue
Strong R&D Commitment and New Product Launches continue R&D R&D cash cash expense expense and and investments investments Capex Capex dedicated dedicated to to new new products products 140 50 +26% +10% €million €million 41 130 33 118 100 0 9M 2005 9M 2006 9M 2005 9M 2006 More than 40 new product
Slide 12: First Nine Months P&L
First Nine Months P&L Robust Growth in Adjusted Operating Income IFRS, €million 9 months2005 9 months 2006 % change Net sales 2,357.5 2,781.7 18.0% Gross profit 1,160.2 1,395.7 20.3% As % of sales 49.2% 50.2% (2) Adjusted operating income(1) 390.1 481.2 23.4% As % of sales 16.5% 17.3% Accounting ent
Slide 13: Robust Cash Generation in First Nine Months
Robust Cash Generation in First Nine Months IFRS, €million 9 months 2005 9 months 2006 % change Cash flow from operations (1) 346.4 476.4 37.5% (2) As % of sales 14.7% 17.1% Change in working capital requirement ( 80.2 ) ( 83.5 ) Net cash provided by operating activities 266.2 392.9 47.6% As % of sa
Slide 14: Balance-Sheet Optimization maintained
Balance-Sheet Optimization maintained combining Leverage and Investment Grade Rating Leverage IFRS, €million As of Sept 30, 2006 Total equity 2075 Net financial debt 1847 As % of total equity 89% As a multiple of last twelve month EBITDA 2.5 x Investment-grade ratings S&P BBB- Moody’s Baa3
Slide 15: Continued Delivery on Commitments Made at IPO
Continued Delivery on Commitments Made at IPO An An attractive attractive industry industry Unique Unique strengths strengths Enhanced Enhanced business business model model Resilient Global pure player Growth initiatives Growing Strong local and global Cost optimization Fragmented lea
Slide 16: Conclusion
Conclusion Continued strong performance in terms of sales, profitability and cash generation Ongoing delivery on commitments made at IPO In view of these good results and taking into account less favorable market conditions in the US going forward, Legrand expects the 2006 full-year rise in adjus
Slide 17: Agenda and Contacts
Agenda and Contacts Agenda Agenda Contacts Contacts February, 8 2007 : 2006 full year Investor Relations: results François Poisson tel : + 33 (0)1 49 72 53 53 May, 3 2007 : 2007 first quarter fax: + 33 (0)1 43 60 54 92 results May, 15 2007 : Annual General Meeting of Shareholders 17
Slide 18: Appendix
Appendix 18
Slide 19: 2006 First Nine Months — Net Sales by Destination
2006 First Nine Months — Net Sales by Destination €million 9 months 9 months Total Scope of Like for like Currency 2005 2006 Change consolidation growth effect France 646.2 705.5 9.2% 5.8% 3.2% 0.0% Italy 462.3 525.8 13.7% 5.2% 8.1% 0.0% Rest of Europe 455.7 587.3 28.9% 19.7% 7.3% 0.4% USA/Canada 45
Slide 20: 2006 First Nine Months — Net Sales by Origin
2006 First Nine Months — Net Sales by Origin €million 9 months 9 months Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 735.7 822.3 11.8% 5.9% 5.6% 0.0% Italy 472.6 553.8 17.2% 7.4% 9.1% 0.0% Rest of Europe 436.0 545.5 25.1% 17.8% 5.8% 0.4% USA/Canada 461.0
Slide 21: Net Sales by Destination
Net Sales by Destination €million Q1 Q2 Q3 9 months Q1 Q2 Q3 9 months 2005 2005 2005 2005 2006 2006 2006 2006 France 225.6 225.0 195.6 646.2 246.6 245.8 213.1 705.5 Italy 165.4 161.5 135.4 462.3 193.1 181.5 151.2 525.8 Rest of Europe 146.3 157.2 152.2 455.7 192.5 197.3 197.5 587.3 USA/Canada 129.2 1
Slide 22: Net Sales By Origin
Net Sales By Origin €million Q1 Q2 Q3 9 months Q1 Q2 Q3 9 months 2005 2005 2005 2005 2006 2006 2006 2006 France 251.8 257.5 226.4 735.7 283.6 284.9 253.8 822.3 Italy 167.7 165.5 139.4 472.6 202.9 191.5 159.4 553.8 Rest of Europe 140.6 150.7 144.7 436.0 180.5 183.6 181.4 545.5 USA/Canada 130.5 158.6
Slide 23: 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 24: 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 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.
Slide 27: 2006 Third Quarter — Net Sales by Destination
2006 Third Quarter — Net Sales by Destination €million Q3 Q3 Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 195.6 213.1 8.9% 6.5% 2.3% 0.0% Italy 135.4 151.2 11.7% 5.5% 5.9% 0.0% Rest of Europe 152.2 197.5 29.8% 21.0% 7.1% 0.2% USA/Canada 171.1 163.6 -4.4%
Slide 28: 2006 Third Quarter — Net Sales by Origin
2006 Third Quarter — Net Sales by Origin €million Q3 Q3 Total Scope of Like for like Currency 2005 2006 change consolidation growth effect France 226.4 253.8 12.1% 6.2% 5.6% 0.0% Italy 139.4 159.4 14.3% 8.2% 5.6% 0.0% Rest of Europe 144.7 181.4 25.4% 18.6% 5.5% 0.2% USA/Canada 171.9 166.7 -3.0% 2.4%
Slide 29: 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 operating income(1) 131.7 163.5 24.1% As % of sales 17.2% 17.4% Accounting entries relating to the acquisition of Legrand France (25
Slide 30: 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 operating income(1) 133.0 162.9 (2) 22.5% As % of sales 16.3% 17.1% Accounting entries relating to the acquisition of Legrand France
Slide 31: 3rd Quarter P&L
3rd Quarter P&L IFRS, €million 3rd quarter 3rd quarter % change 2005 2006 Net sales 774.9 888.4 14.6% Gross profit 374.6 442.2 18.0% As % of sales 48.3% 49.8% Adjusted operating income(1) 125.4 154.8 (2) 23.4% As % of sales 16.2% 17.4% Accounting entries relating to the acquisition of Legrand France
Slide 32: Reconciliation of Cash From Operations with Net Profit
Reconciliation of Cash From Operations with Net Profit IFRS, €million 9 months 2005 9 months 2006 Net profit 83.9 148.5 Depreciation and amortization 191.2 178.1 Loss on extinguishment of debt 0.0 109.0 Change in other non-current assets and liabilities and deferred tax 17.5 8.4 Share of loss/(profi
Slide 33: 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