Legrand Sa · EURONEXT:LR
Legrand Sa — Shareholder Meeting (May 2009)
74 slides from Legrand Sa's shareholder meeting presentation, May 26, 2009
Slide 1: Annual General Meeting of Shareholders, May 26, 2009
Résultats annuels 2008 11 février 2009 Annual General Meeting of Shareholders May 26, 2009
Slide 2: Agenda
Agenda 2008 highlights and Legrand’s resilient profile - G. Schnepp Selecting a strategy to deal with the crisis - O. Bazil Financial results - A. Burel Dividend, Q1 09 results and targets - G. Schnepp Sustainable development / Corporate governance - G. Schnepp Presentation of resolutions - G. Schne
Slide 3: 2008 Highlights and Legrand's Resilient Profile
2008 Highlights and Legrand’s Resilient Profile Gilles Schnepp Chairman & CEO
Slide 4: Key Topics
Key Topics 2008 performance and stock price Legrand business assets Innovation strategy and adaptability Financial structure AGM 2009 4
Slide 5: 2008 Performance
2008 Performance Change in net sales Resilient adjusted EBIT margin in €m as % of sales 4 202 4 129 17.5% 16.6% +1.8% or -0.1% LFL(1) 2007 2008 2007 2008 Healthy free cash-flow generation Net income excl. minorities In €m in €m 553 430 421 350 2007 2008 2007 2008 AGM 2009 5 1. Like-for-like: at cons
Slide 6: Change in Share Price
Change in Share Price(1) Change Legrand CAC 40 Last 6 months +20% +2% Legrand share price (in €) Last 12 months -22% -34% 28 Since IPO -25% -38% 24 IPO at 19.75€ 14.8€(1) 16 3236pts(1) 12 8 apr-06 oct-06 apr-07 oct-07 apr-08 oct-08 may-09 Legrand share (10-day moving average) CAC 40 (10-day moving a
Slide 7: Legrand's Key Assets
Legrand’s Key Assets Business mostly linked to renovation and inflow of orders from a very large number of customers Efficiency of trading-up strategy Expanding long-term markets worldwide AGM 2009 7
Slide 8: 80% of Sales from a Very Broad Market
80% of Sales from a very Broad Market, by Nature less Subject to Sudden Change than Project-driven Business Legrand’s organic growth compared with project-driven business growth France, Italy and United States since 1992 30% 20% 10% 0% 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Slide 9: 60% of Sales from Renovation, more Resilient than New Construction
60% of Sales from Renovation, more Resilient than New Construction and First to Bounce Back Volume growth for renovation and new-construction market France and Italy, since 1991 10% 8% 6% 4% 2% 0% 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 -2% -4% -6% -
Slide 10: Efficiency of Trading-up Strategy in 2008
Efficiency of Trading-up Strategy in 2008 Adding aesthetic appeal, comfort and Increased safety and sophisticated functionalities improved productivity for installation +5% growth in Céliane sales in +12% mix effect with the launch France in 2008 of new GFCI in the US in 2008 +6% growth in Axolute s
Slide 11: Efficiency of Trading-up Strategy in Q1
Efficiency of Trading-up Strategy in Q1 09 Positive trend in product mix Impact on sales of trading up in France and Italy: More than 1 point of growth Example of Axolute (worldwide) 52% of sales with electronic and home automation functionalities(1) 22% of sales with high-end finishes (2) 1. In 200
Slide 12: Selecting a Strategy to Deal with the Crisis
Selecting a strategy to deal with the crisis Olivier Bazil Vice Chairman & COO
Slide 13: Selecting a Strategy to Deal with the Crisis
Selecting a Strategy to Deal with the Crisis Adapt successfully, whatever the change in the economic environment Innovate to seize growth opportunities in a structurally attractive market AGM 2009 13
Slide 14: Adaptation – Adjust Cost Structure to Pace of Sales
Adaptation – Adjust our Cost Structure to Pace of Sales (1/3) Q3 08 Q4 08 Q1 09 LFL(1) change in sales 0% -6% -15% LFL(1) change in production and SG&A expenses (excluding R&D) -1% -7% -14% 1. Like-for-like: at constant scope of consolidation and exchange rates AGM 2009 14
Slide 15: Adaptation – Lean Manufacturing
Adaptation – Lean Manufacturing: Productivity & Reduction in Capital Employed (2/3) 30% of floor area freed in Zucchini’s plants, allowing re-organization of production and the sale of a building 30% floor area freed in Mexico for new production Before After AGM 2009 15
Slide 16: Adaptation – Optimization of Capital Employed
Adaptation – Optimization of Capital Employed (3/3) Capex under control WCR(1) adjusted to business trends (as % of sales) (as % of sales) 4.1% 3.8% 12.6% 12.1% 2003-2007 average 2008 2003-2007 average 2008 AGM 2009 16 1. WCR: Working Capital Requirement
Slide 17: On-going Investment in Innovation (1/7)
Innovate to Seize Growth Opportunities On-going Investment in Innovation (1/7) R&D expenses CAPEX for new products in €m in €m 183 66 158 60 Average 2003-2007 2008 Average 2003-2007 2008 AGM 2009 17
Slide 18: An Efficient Worldwide R&D Organization (2/7)
Innovate to Seize Growth Opportunities An Efficient Worldwide R&D Organization (2/7) Cash outlays on R&D Significant contribution of new as % of sales products to total sales 5% 4% 4% Close to investment in R&D holding high, 40% of sales from new products(1) 4 to 5% in 2008, 2007 and 2006 of sales 2
Slide 19: Main New Products Announced in Q1 09 (3/7)
Innovate to Seize Growth Opportunities Main New Products Announced in Q1 09 (3/7) Arteor: a new wiring device range LCS 2: a new Voice-Data-Image for international markets solution for commercial applications Logix: new cable management/wiring DMX3: new power circuit-breakers for device system emerg
Slide 20: New Markets to Prepare for the Future (4/7)
Innovate to Seize Growth Opportunities New Markets to Prepare for the Future (4/7) Sustainable construction In-home support Protecting the environment & Ageing population combating global warming Autonomy, security, social bonding Financial and environmental drivers Strong prospects Green Building d
Slide 21: In-home Support and Assistance (5/7)
Innovate to Seize Growth Opportunities In-home Support and Assistance (5/7) Impaired mobility Impaired vision Easy-to-handle outlet Lever switch No contact switch Circular lighting Color contrast Experience in France: handicap « partnership » network Specialist input in partnership with CREE, leader
Slide 22: Energy Savings: Residential Buildings (6/7)
Innovate to Seize Growth Opportunities Energy Savings: Solutions for Residential Buildings (6/7) Ending energy waste with home automation Heating controls Up to Lighting controls 10% energy savings Turning off appliances on standby AGM 2009 22
Slide 23: Energy Savings: Non-Res. Buildings (7/7)
Innovate to Seize Growth Opportunities Energy Savings: Solutions for Non-Res. Buildings (7/7) Reduce energy consumption in lighting Up to 55% energy savings 40% energy savings Lighting management with absence detection and brightness threshold -11% energy savings Presence detection by brightness thr
Slide 24: 2008 Financial Results
2008 Financial Results Antoine Burel CFO
Slide 25: 2008 Annual Results – Rise in Net Sales
2008 Annual Results – Rise in Net Sales Group total €4,202m in 2008 -0.1% LFL(1) in 2008 of which -6.3% LFL(1) in Q408 Rest of Europe: €955m -2.2% LFL(1) in 2008 France: €1,001m of which -9.6% LFL(1) in Q408 -1.0% LFL(1) in 2008 of which -5.4% LFL(1) in Q408 Italy: €715m -0.7% LFL(1) in 2008 of whic
Slide 26: 2008 Performance
2008 Performance Growth in net sales Resilient maintainable adj. EBIT in €m margin (1) (as % of sales) 4 129 4 202 +1.8% 17.7% 17.7% or -0.1% at constant scope of consolidation and exchange rates 2007 2008 2007 2008 Healthy free cash-flow generation Robust net profit excl. non-recurrent items (2) In
Slide 27: Financial Structure
Financial Structure Significant headroom for covenant compliance Net debt / maintainable EBITDA (1) As of Dec. 31, 2008 Threshold 2.0 < 3.5 Financing resources over the long-term 100% of net debt backed by credit lines running through to 2013 at the earliest and 2025 at the latest 1. Defined as per
Slide 28: Dividend, Q1 09 Results & Targets
Dividend, Q1 09 Results & Targets Gilles Schnepp Chairman & CEO
Slide 29: Dividend Proposal for 2008
Dividend Proposal for 2008 Operating margin stability Dividend per share(1) maintained: Healthy free cash- €0.70 flow generation 1. Subject to the approval of the General Meeting of shareholders on May 26, 2009 AGM 2009 29
Slide 30: Q1 09 Performance
Q1 09 Performance – Healthy Capacity to Adapt and Performance in Line with Targets Growth in net sales Resilience of the maintainable Adj. EBIT (2) in €m (as % of sales) 1 049 901 18.2% 15.9% -14.9% LFL(1) Q108 Q1 09 Q1 08 Q1 09 Net debt reduction Free cash-flow in €m 1 862 1 840 Free cash flow -22
Slide 31: 2009 Targets
2009 Targets Considering these results, and assuming economic conditions do not deteriorate further, Legrand confirms its target for a recurrent adjusted operating margin of at least 14% in 2009. AGM 2009 31
Slide 32: Sustainable Development
Sustainable Development Gilles Schnepp Chairman & CEO
Slide 33: Sustainable Development at Legrand
Sustainable Development at Legrand – A Natural Application of our Corporate Values Environment Social / Societal progress Business Make management of the Care in managing expertise Ensure profitable, lasting environment an integral part and employees’ career and responsible business of plant managem
Slide 34: Environmental Commitment: Business Sites
Environmental Commitment Business Sites that Respect the Environment Controlling the direct environmental impact of operations 2007 2008 Targets for 2010(1) ISO 14001 - Regulatory compliance 73% 81% > 70% certification of sites - Control of environmental risks - Improving environmental performance E
Slide 35: Environmental Commitment: Eco-designed Products
Environmental Commitment Eco-designed Products Factoring in the environment… …over the entire product life cycle Choice of raw materials Exhaustion of natural resources Production Fight against greenhouse effects Distribution Total energy consumption Use End of life treatment Targets and resources c
Slide 36: Promoting Safety and Health at Workplace
Social / Societal commitment Promoting Safety and Health at Workplace Esculape project: Implementation of a Health & Safety management system in accordance with ILO-OSH 2001(1) 2007 2008 Targets for 2010(2) Risk assessment Percentage of Group workforce 77% 88% > 80% covered by formal risk assessment
Slide 37: Commitment, Recognition, Visibility
Commitment, Recognition, Visibility Participation in the UN Global Compact - and encouragement for suppliers to join – Our suppliers that had signed up by the end of 2008 represented close to 60% of our purchases Agreement with Électriciens Sans Frontières (Electricians without Borders) Legrand shar
Slide 38: Corporate Governance
Corporate governance Gilles Schnepp Chairman and CEO
Slide 39: Efficient Structure Ensuring Effective Corporate Governance
Efficient Structure Ensuring Effective Corporate Governance Board of Directors 7 meetings in 2008 Self assessment of board’s operations (attendance rate: 84%) Chairman Honorary Chairman Vice-Chairman Legrand Group Gilles Schnepp François Grappotte Olivier Bazil Directors named at Wendel’s proposal A
Slide 40: Strategy Committee
Efficient Structure Ensuring Effective Corporate Governance Strategy Committee 5 meetings in 2008 4 members: Jacques Garaïalde – Chairman Olivier Bazil Jean-Bernard Lafonta replaced by Frédéric Lemoine from May 5, 2009 Gilles Schnepp Review of annual budget and targets for economic results Review of
Slide 41: Audit Committee
Efficient Structure Ensuring Effective Corporate Governance Audit Committee 4 meetings in 2008 3 members: Gérard Lamarche — Chairman (independent director) Arnaud Fayet Jacques Garaïalde Quarterly, half-yearly and annual review of draft financial statements Review of internal and external control pr
Slide 42: Nominating and Compensation Committee
Efficient Structure Ensuring Effective Corporate Governance Nominating and Compensation Committee 2 meetings in 2008 4 members: Jean-Bernard Lafonta – Chairman, replaced by Frédéric Lemoine from May 5, 2009 Jacques Garaïalde Edward A. Gilhuly Gérard Lamarche (independent director) Proposals to the B
Slide 43: Compensation linked to performance – Gilles Schnepp
Compensation linked to performance Gilles Schnepp – Chairman and CEO € 2007 2008 %08/07 2009 %09/08 Fixed salary 498,000 550,000 550,000 0% -14% Bonus (1) 597,600 392,500 (3) Attendance fees 20,000 20,000 0% (3) Benefits in kind (2) 3,808 3,919 2% (3) Total 1,119,408 966,419 -13% Number of stock opt
Slide 44: Compensation linked to performance – Olivier Bazil
Compensation linked to performance Olivier Bazil – Vice-Chairman and COO € 2007 2008 %08/07 2009 %09/08 Fixed salary 471,000 520,000 520,000 0% -14% Bonus (1) 565,200 372,000 (3) Attendance fees 25,200 25,200 0% (3) Benefits in kind (2) 3,667 4,380 19% (3) Total 1,065,067 921,580 -13% Number of stoc
Slide 45: Compensation linked to performance – Top management
Compensation linked to performance Members of top management (about 100 people) Fixed compensation of all members of top management frozen for 2009 Variable compensation and allotment of stock options and free shares: In line with market standards: a benchmark is defined each year performed by an ou
Slide 46: Compensation linked to performance – Other management
Compensation linked to performance Other members of management (about 1000 people): International plans for employees of subsidiaries around the world Allotments linked to Group’s performance Allocation in respect of the Number of Beneficiaries 2008 financial year Stock options Free shares France 34
Slide 47: Presentation of resolutions
Presentation of resolutions Gilles Schnepp President and CEO
Slide 48: Resolutions: financial statements and dividend
Resolutions relating to the approval of the financial statements, the appropriation of earnings and the distribution of dividend No.1: Approval of the Company’s financial statements at December 31, 2008 No.2: Approval of the consolidated financial statements at December 31, 2008 No.3: Appropriation
Slide 49: Resolutions: agreements and commitments
Resolutions relating to the agreements and commitments within the scope of articles L.225-38 and L.225-42-1 of the French commercial code No.4: Agreements within the scope of article L.225-38 of the French commercial code No.5: Commitments within the scope of L.225-42-1 of the French commercial code
Slide 50: Resolutions relating to share buybacks
Resolutions relating to share buybacks No.6: Approval of a share buyback program No.7: Authorization to cancel shares purchased pursuant to the share buyback program AGM 2009 50
Slide 51: Resolutions relating to financial delegations
Resolutions relating to financial delegations No.8: Issuance of shares or securities with preferred subscription rights maintained No.9: Issuance of shares or securities with preferred subscription rights waived No.10: Power to increase issue amounts in the event of excess demand (greenshoe) No.11:
Slide 52: Resolution relating to the appointment of a director
Resolution relating to the appointment of a director No.16: Appointment of a director No.17: Powers to effect formalities AGM 2009 52
Slide 53: Report of the Statutory Auditors
Report of the Statutory Auditors Dominique Descours, Deloitte et Associés Gérard Morin, PricewaterhouseCoopers
Slide 54: Report of the Statutory Auditors
Report of the Statutory Auditors Report on Company’s financial statements Report on consolidated financial statements Special report on regulated agreements and commitments Report on the Chairman of the Board’s report relating to corporate governance and internal controls Special reports on financia
Slide 55: Questions from the floor
Questions from the floor Ci legrand
Slide 56: Vote on resolutions
Vote on resolutions Jean-Luc Fourneau Company Secretary
Slide 57: Vote on the first resolution
Vote on the first resolution Approval of the Company’s financial statements at December 31, 2008 AGM 2009 57
Slide 58: Vote on the second resolution
Vote on the second resolution Approval of the consolidated financial statements at December 31, 2008 AGM 2009 58
Slide 59: Vote on the third resolution
Vote on the third resolution Appropriation of earnings AGM 2009 59
Slide 60: Vote on the fourth resolution
Vote on the fourth resolution Agreements within the scope of article L.225-38 of the French commercial code AGM 2009 60
Slide 61: Vote on the fifth resolution
Vote on the fifth resolution Commitments within the scope of article L.225-42-1 of the French commercial code AGM 2009 61
Slide 62: Vote on the sixth resolution
Vote on the sixth resolution Approval of a share buyback program AGM 2009 62
Slide 63: Vote on the seventh resolution
Vote on the seventh resolution Authorization to cancel shares purchased pursuant to the share buyback program AGM 2009 63
Slide 64: Vote on the eighth resolution
Vote on the eighth resolution Issuance of shares or securities with preferred subscription rights maintained AGM 2009 64
Slide 65: Vote on the ninth resolution
Vote on the ninth resolution Issuance of shares or securities with preferred subscription rights waived AGM 2009 65
Slide 66: Vote on the tenth resolution
Vote on the tenth resolution Power to increase issue amounts in the event of excess demand (greenshoe) AGM 2009 66
Slide 67: Vote on the eleventh resolution
Vote on the eleventh resolution Exception to conditions for the determination of the issue price in case of issuance with preferred subscription rights waived AGM 2009 67
Slide 68: Vote on the twelfth resolution
Vote on the twelfth resolution Capital increases through incorporation of reserves, profit, premiums or other items AGM 2009 68
Slide 69: Vote on the thirteenth resolution
Vote on the thirteenth resolution Issuance of share or other securities in favor of participants in employee share- ownership programs of the Company or group AGM 2009 69
Slide 70: Vote on the fourteenth resolution
Vote on the fourteenth resolution Issuance of shares or other securities providing access to share capital as consideration for contributions in kind to the Company AGM 2009 70
Slide 71: Vote on the fifteenth resolution
Vote on the fifteenth resolution Total limit on delegations of power under the 8th, 9th, 10th, 11th, 13th and 14th resolutions AGM 2009 71
Slide 72: Vote on the sixteenth resolution
Vote on the sixteenth resolution Appointment of a director AGM 2009 72
Slide 73: Vote on the seventeenth resolution
Vote on the seventeenth resolution Powers to effect formalities AGM 2009 73
Slide 74: Disclaimer
Disclaimer This document has been prepared by Legrand S.A. (“Legrand”) solely for use at its shareholders’ meeting held on May 26, 2009. This document must be treated confidentially by attendees at such shareholders’ meeting and may not be reproduced or redistributed to any other person. No represen