Legrand Sa · EURONEXT:LR
Legrand Sa — Investor Day (September 2021)
118 slides from Legrand Sa's investor day presentation, Sep 22, 2021
Slide 1: Legrand's 2021 Capital Markets Day
Legrand’s 2021 Capital Markets Day September 22 nd , 2021 ¢¢© 1
Slide 2: Introduction
INTRODUCTION ¢¢© Benoît Coquart, CEO 2
Slide 3: Improving lives by transforming the spaces where people live, work and meet
Improving lives by transforming the spaces where people live, work and meet, with electrical and digital infrastructures and connected solutions that are simple, innovative and sustainable 3
Slide 4: 2020/2021 demonstrated the strengths of the Legrand model
2020/2021 demonstrated the strengths of the Legrand model 2021 will equal or exceed 2019 level TOTAL SALES ORGANIC SALES TRENDS 2019 2020 E2021(1) 2019 2020 E2021(1) €6.6Bn €6.1Bn ≥ €6.7Bn +2.6% -8.7% ≥ +10% ADJUSTED EBIT ON SALES CSR ROADMAP ACHIEVEMENT RATE 2019 2020 E2021(1) 2019 2020 E2021(1) 20
Slide 5: Legrand is perfectly positioned to benefit from next cycle: industry
Legrand is perfectly positioned to benefit from next cycle Structurally sound industry boosted by exciting megatrends + LOW-RISK INDUSTRY SECULAR TRENDS NEW TRENDS STRATEGIC INDUSTRY more resistant to electrification, energy efficiency, strategic & low energy economic cycle with demography, digitali
Slide 6: Legrand is perfectly positioned: unique profile
Legrand is perfectly positioned to benefit from next cycle Unique profile with proven strategy, assets & results ONLY BUILDING CRISTAL CLEAR STRONG ESG ACCOUNTABLE & POLICY & VALUE RESPONSIVE PURE PLAYER GROWTH STRATEGY CREATION ORGANIZATION with significant size, organic and inorganic with predicta
Slide 7: Legrand is perfectly positioned: clear roadmap
Legrand is perfectly positioned to benefit from next cycle Clear roadmap to enhance Legrand model and make the most of the cycle BOOST TOPLINE GROWTH FOSTER “ASSETS” & PURSUE OUR LEADING PROCESSES ESG JOURNEY enhancement of traditional solid cost management, CO trajectory, inclusion & ² growth lever
Slide 8: Mid-term targets will translate into significant value-creation
Legrand is perfectly positioned to benefit from next cycle Mid-term targets will translate into significant value-creation SALES GROWTH PROFITABILITY CONSISTENT LEADING ACCELERATION BEST-IN-CLASS FREE CASH FLOW +5% to +10% ~20% adjusted Oper. Margin Average 13% to 15% of sales (average per year excl
Slide 9: Executive Committee
Legrand is perfectly positioned to benefit from next cycle Executive Committee Benoît Coquart Karine Alquier-Caro Bénédicte Bahier Antoine Burel Jean-Luc Cartet CEO CPO CHRO Deputy CEO, COO EVP APMEASA Virginie Gatin Gloria Glang Franck Lemery John Selldorff Frédéric Xerri EVP CSR EVP Strategy & Dev
Slide 10: Accelerating value creation
Legrand is perfectly positioned to benefit from next cycle Accelerating value creation o Unique model focused on value creation o Further enhancing growth model o Examples of geographical initiatives o Optimizing resources, fostering talents o Ambitious mid-term targets 10
Slide 11: Unique model focused on value creation
UNIQUE MODEL FOCUSED ¢¢© ON VALUE CREATION Benoît Coquart, CEO Franck Lemery, CFO 11
Slide 12: Agenda
Agenda Unique model focused on value creation o Unique business model o Growth-oriented strategy o Efficient organization & processes o Solid value creation 12
Slide 13: Largest product offering on the market
Unique business model Largest product offering on the market Remotely control and manage all Control electrical installations Make power available Ensure the flow of electricity infrastructure Provide secure, stable & Measure and control power Protect electrical installations Recharge electric vehic
Slide 14: Largest product offering on the market (2)
Unique business model Largest product offering on the market Distribute audio Organize a datacenter’s white Install structured cabling Supply power to workstations and video signals space infrastructure Regulate temperature Secure buildings Manage and optimize lighting Welcome and screen visitors an
Slide 15: Solutions for homes
I MPROVING LIVES W ITH SIMPLE , INNOVATIVE & SUSTAINABLE SOLUT IONS FOR HOMES , 15 15
Slide 16: Solutions for offices
I MPROVING LIVES W ITH SIMPLE , INNOVATIVE & SUSTAINABLE SOLUT IONS FOR OFFICES S, 16 16
Slide 17: Solutions for hospitality
I MPROVING LIVES W ITH SIMPLE , INNOVATIVE & SUSTAINABLE SOLUT IONS FOR HOSPITALITY DESIGN 17 17
Slide 18: Solutions for nursing homes for the elderly
I MPROVING LIVES W ITH SIMPLE , INNOVATIVE & SUSTAINABLE SOLUT IONS FOR 18 NURSING HOMES FOR T HE ELDERLY 18
Slide 19: Solutions for datacenters
I MPROVING LIVES W ITH SIMPLE , INNOVATIVE & SUSTAINABLE SOLUT IONS FOR 19 DATACENTERS 19
Slide 20: Only global pure player in electrical & digital building infrastructure
Unique business model Only global pure player in the electrical & digital building infrastructure industry N EARLY 100% OF SALES IN BUILDINGS (1) … … DRIVEN BY MEGATRENDS (3) % SALES 10% of the world population has no access to electricity ELECTRIFICATION World energy consumption will grow Residenti
Slide 21: Core infrastructure products & faster expanding segments
Unique business model Legrand offerings: core infrastructure products & faster expanding segments CORE INFRASTRUCTURE PRODUCTS FASTER EXPANDING SEGMENTS Datacenter solutions Energy efficiency Connected 69% of 2020 sales 31% of 2020 sales Provides Provides brand awareness, customer loyalty, steady gr
Slide 22: Best of breed across all competitive landscapes
Unique business model Best of breed across all competitive landscapes L EGRAND C OMPETITIVE ADVANTAGES Size & Small / mid Financial size buildings capabilities positioning SPECIALISTS ELECTRICAL GIANTS Process Adaptation to Small to mid size local players Management customers Diversified multi-busin
Slide 23: Giant in profitable niches: leadership positions
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 64%(1) 76%(1) 85%(1) 41%(1) 36%(1) • #1 in wiring • #1 in PDUs • #1 in wiring • #1 in modular • #1 in wiring devices
Slide 24: Strong benefits provided to the entire value chain
Unique business model Strong benefits provided to the entire value chain L EGRAND B ENEFITS TO C USTOMERS Technology & Requested by depth of customers offerings DISTRIBUTORS SPECIFIERS Design Easy to & Architects, opinion leaders Electrical, specialist, DIY, retail distribute “look and feel” interne
Slide 25: R&D driving product innovation
Growth-oriented strategy: driving organic growth R&D driving Product Innovation SUSTAINED & CONSISTENT R&D PIONEERING PRODUCT INNOVATION Average(1) R&D to sales: 4.7% Surface mounted sockets Connected video door entry systems Datacenter Cabinets Linkeo Cabling solutions LCS3 program Indigo Clean lig
Slide 26: Pricing power driven by customer loyalty
Growth-oriented strategy: driving organic growth Pricing Power driven by customer loyalty and satisfaction SUSTAINED POSITIVE PRICING PRICE NOT THE TOP FACTOR OVER TIME FOR DECISION MAKERS Average(1) pricing effect on sales: +1.5% NOT TOP OF MIND FOR 1. Average from 2010 to 2020. 90 2. Based on a st
Slide 27: Changes in mix driving higher value per unit
Growth-oriented strategy: driving organic growth Changes in Mix driving higher value per unit (“trading up”) CONNECTED DOOR-ENTRY SYSTEMS CONNECTED USER INTERFACES X3.3 X4.2 Céliane with Netatmo Wireless & battery-less 300 EOS X4.2 with Netatmo (Advanced connected X3.3 offering and (Advanced connect
Slide 28: M&A momentum: numerous opportunities
Growth-oriented strategy: M&A momentum 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 on average per year over Highly industrialized process mid-sized companies Group’
Slide 29: M&A momentum: acquisitions 2010 to 2020
Growth-oriented strategy: M&A momentum 50 Acquisitions from 2010 to 2020 (~€5.0Bn spent, average inorganic growth +4.2% / year) SECULAR SEGMENTS ADJACENT SEGMENTS FASTER EXPANDING SEGMENTS User Interfaces AV infrastructure Datacenter solutions Energy efficiency Modular UPS Power management solutions
Slide 30: Example of value accretive transactions
Growth-oriented strategy: M&A momentum Example of value accretive transactions DATACENTERS AV INFRASTRUCTURE ASSISTED LIVING (PDUS & BUSWAYS) LEADERSHIP #1 #1 #2 POSITION North America & China North America Europe Revenue Synergies Anticipating FOCUS Value Creation Europe and Rest of the World Megat
Slide 31: Relevant & responsive organization close to markets
Efficient organization & processes Relevant & responsive organization close to markets GLOBAL BACK-OFFICE LOCAL FRONT-OFFICE Back-office Grow market share • Innovation, R&D, purchasing, manufacturing, supply chain • animation of the local value chain (customers) • close watch and relationship with p
Slide 32: Strong accountability through aligned incentives
Efficient organization & processes Strong accountability through aligned incentives MANAGERS (2) LTIs ALIGNED A BROAD-BASED INCENTIVE PROGRAM WITH GROUP’S KEY TARGETS 1/3 Organic growth Close to 15% 1/3 Adjusted EBIT margin Managers with LTIs(1) 1/3 CSR achievements A clear and effective set of resp
Slide 33: Solid value creation: sales growth
Solid value creation Sales growth (2020 vs. 2015 base) T OTAL GROWTH O RGANIC GROWTH Legrand Benchmark(1) Legrand Benchmark(1) +27% -6% +3% +0% OF WHICH EUROPE(2) OF WHICH EUROPE(2) +10% -8% +6% +6% OF WHICH NORTH AMERICA / AMERICAS(3) OF WHICH NORTH AMERICA / AMERICAS(3) +99% -5% +5% -2% 1. Average
Slide 34: Solid value creation: EBIT & free cash flow
Solid value creation EBIT & free cash flow HIGH LEVELS OF PROFITABILITY ON AN STRONG LEVELS OF FREE CASH FLOW ALL-IN EBIT LEVEL (% OF SALES) FOR SELF-FINANCED DEVELOPMENT (% OF SALES) (1) (1) Sustained levels of high value creation per point of growth 1. Benchmark companies for this page: ABB, Eaton
Slide 35: Enviable ESG track record
Solid value creation July 2020, Legrand aligns with 1.5°C Enviable ESG track record Paris agreement 122% SBTi commitments • 80% of total products achievement in (approved (revenue) sustainable by 2014-2018 in July 2021) design and/or by usage Creation of a • 1/3 of key positions held • Three focal a
Slide 36: Track record in share price evolution compared to peers
Solid value creation Track record in share price evolution compared to peers(1) SHARE PERFORMANCE SINCE IPO(2) S HARE PERFORMANCE SINCE D EC . 31 ST 2015 (3) CAGR TSR(4) CAGR TSR(4) +393% +124% +14% +14% +196% +87% +42% +26% 1. Benchmark: ABB, Eaton, Hubbell, Schneider and Rexel. 2. Trend from April
Slide 37: Unique model focused on value creation: conclusion
Unique model focused on value creation Conclusion Vast addressable Large exposure to PURE PLAYER specialist in MARKET LEADERSHIP market numerous DIVERSE geographies electrical and digital building with close relationship to the infrastructure OPPORTUNITIES and to BUOYANT whole value chain FOR ACQUIS
Slide 38: Further enhancing growth model
¢¢© Further enhancing growth model Benoît Coquart, CEO Gloria Glang, EVP Strategy & Development 38
Slide 39: Agenda
Agenda Further enhancing growth model o Key megatrends shaping the future o Traditional growth levers enhancements o Faster expanding segments 39
Slide 40: Key megatrends: secular trends
Key megatrends shaping the future Secular trends DEMOGRAPHY URBANIZATION RISING MIDDLE-CLASS Population growth drives Better living conditions, work opportunities, Willingness to pay more for increased consumption & incomes, drive higher quality, aspirational products, infrastructure spending increa
Slide 41: Key megatrends: top-of-the-agenda trends
Key megatrends shaping the future Top-of-the agenda trends BUILDINGS OF TOMORROW ENVIRONMENTAL URGENCY HEALTH AND WELL BEING “Smart-Connected-Simple-Safe” products Smart Green Buildings Decarbonization Wellbeing in buildings, a key factor of and applications becoming a must Expectations from all sta
Slide 42: Key megatrends: post-covid accelerating trends
Key megatrends shaping the future Post-covid accelerating trends DIGITAL LIFESTYLE HYBRID WORKPLACES ONLINE Digitalization combined with evolving Office layouts need to be adjusted Online shopping & sourcing lifestyle creates (meeting rooms, social distancing) Increases need of available connectivit
Slide 43: Finetuning of our growth leverage
Traditional growth levers enhancements Finetuning of our growth leverage 2020 MID-TERM Innovation and R&D % R&D cash / sales ~5% ~5% % Sustainable offerings / sales >70% ~80% % R&D dedicated to software & firmware >15% >25% Expand geographical presence % of sales with leadership positions(1) ~2/3 ~2
Slide 44: Innovation and R&D: software & firmware
Traditional growth levers enhancements Innovation and R&D: software & firmware RESOURCES SOFTWARE FOR PRODUCTS SOFTWARE FOR BUILDING CYCLE % of R&D people dedicated to Embedded into our connected Adapted to the needs of the software and firmware ranges: Eliot program economic channel >40 families ou
Slide 45: Expand geographical presence: examples
Traditional growth levers enhancements Expand geographical presence: examples M&A: O RGANIC : A CQUISITION OF ENSTO B UILDING S YSTEMS IN 2021 P ROGRESSIVE OPENING OF OFFICES IN A FRICA Full range of electrical & 20 digital infrastructure products Sales Very strong local brand 11 ~€120mm equity amon
Slide 46: Channels to market: e-commerce
Traditional growth levers enhancements Channels to market & customer experience: e-commerce LEGRAND E-COMMERCE SALES(1) SHARE OF LEGRAND E-COMMERCE SALES Share of E-commerce PROFESSIONAL DISTRIBUTION ON-LINE PURE PLAYERS DIRECT SALES in Group sales >15% 75% 16% 9% ~10% • Multiple actions to • Focus
Slide 47: Faster expanding segments: our mid-term targets
Faster expanding segments Our mid-term targets 2020 MID-TERM 31% 50% of sales of sales Datacenter 12% Connectivity (Eliot) 13% Energy efficiency programs 19% Overlap -13% 47
Slide 48: Faster expanding segments: case studies
Faster expanding segments Case studies DATACENTERS ELIOT (CONNECTED PRODUCTS) ENERGY EFFICIENCY C LIENT C LIENT C LIENT Ficolo, a Finnish based datacenter company 25 Martin Place, Sydney Australia Global innovation center of Korean-owned owning 3 datacenters and a connectivity hub multinational info
Slide 49: Datacenters: key highlights
Faster expanding segments - Datacenters Key highlights ACHIEVEMENTS STRATEGIC POSITIONING To grow our exposure to a booming vertical by focusing on individual product categories with strong added value to customers X2From 6% in 2017 to 12% of Group sales in 2020 % of Group sales in 4 years OUR VALUE
Slide 50: Datacenters: 2020 key figures
Faster expanding segments - Datacenters 2020 Key figures LEGRAND SALES BY GEOGRAPHY LEGRAND SALES BY SPACE 7% Grey Room 18% 64% Rest of the North & World Central America 18% Europe 93% White Space / IT 50
Slide 51: Datacenters: large product offering for grey / white space
Faster expanding segments - Datacenters A large product offering covering most grey / white space needs Building Grey Room White Space IT where where Construction IT active devices back-end infrastructure is located IT equipment is placed Datacenter Construction Transformer Switchboard High Amperage
Slide 52: Datacenters: all types of datacenters
Faster expanding segments - Datacenters … and all types of datacenters 55% of the market Market Hyperscale Colocation Colocation Colocation On premise On premise Micro Hyperscale, Other Wholesale Retail Large Small Datacenter Trends PoP(1) E E E E Decision End-user or End-user Contractor & Integrato
Slide 53: Datacenters: potential outside North America & in grey space
Faster expanding segments - Datacenters Significant potential to expand outside North America & in the grey space NORTH & CENTRAL AMERICA EUROPE REST OF THE WORLD 18% Of Area Sales 5% 11% Of Area Sales Of Area Sales White Space only 80% White Space 90% White Space Market Share >10%(1) Market Share <
Slide 54: Datacenters: growth priorities
Faster expanding segments - Datacenters Growth priorities TECHNOLOGY INVESTMENTS DEPLOY BACK-OFFICE TO REMAIN “BEST OF BREED” PROVIDER PURSUE COMPLEMENTARY M&A & FRONT-OFFICE PLATFORMS Legrand Datacenter Solutions (LDCS) Example deployed in ~40 countries One of the main American third-party provider
Slide 55: Eliot (connected products): key highlights
Faster expanding segments - Eliot (connected products) Key highlights ACHIEVEMENTS STRATEGIC POSITIONING Program to connect our existing product offerings, in order to leverage IoT and to enhance customer experience >40 OUR VALUE PROPOSAL Connected products • Simple to install & use families out of
Slide 56: Eliot: 2020 key figures
Faster expanding segments - Eliot (connected products) 2020 Key figures SALES BY VERTICAL SALES BY APPLICATION SALES BY GEOGRAPHY 7% 17% 40% 34% 29% 13% Healthcare & Rest of North & Commercial Datacenter Safety assisted living the World Central America & security 37% 23% 57% 43% Residential Comfort
Slide 57: Eliot: examples of connected solutions
Faster expanding segments - Eliot (connected products) Examples of connected solutions COMMERCIAL & DATACENTER SMALL COMMERCIAL & RESIDENTIAL Intelligent PDUs Cloud Drivia with Netatmo Céliane with Netatmo solution user interface solutions UPS systems Digital Lighting 300 EOS Smart thermostats Emerg
Slide 58: Our priority: democratize connected building
Faster expanding segments - Eliot (connected products) Our priority: democratize connected building (1) • Suitable for big buildings (cost, complexity) Connected • Trend: connectivity & cloud added to legacy product architecture BAS & BMS(2) Integrated functions & • CAGR + Legacy protocols, gateways
Slide 59: Increase in connected offerings penetration rate
Faster expanding segments - Eliot (connected products) Increase in connected offerings penetration rate provides large mix opportunities HIGH PENETRATION(1) IN NICHES MASS OPPORTUNITIES(1) User Interfaces 100% Thermostat 2% Wiring Devices BAS & BMS(2) Protection 100% Assisted Living 2% Panels Power
Slide 60: Residential and small commercial ecosystem
Faster expanding segments - Eliot (connected products) Residential and small commercial ecosystem E XISTING P LANNED P OSSIBLE CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Heavy load Switch Shutters Outlets management Air quality PRODUCTS CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL En
Slide 61: Datacenters & large commercial ecosystem
Faster expanding segments - Eliot (connected products) Datacenters & large commercial ecosystem EXISTING PLANNED POSSIBLE CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL Lighting controls Emergency & management lighting Busways Metering P RODUCTS CONFIDENTIAL CONFIDENTIAL CONFIDENTIAL CONFIDENTI
Slide 62: Eliot: growth priorities
Faster expanding segments - Eliot (connected products) Growth priorities PURSUE GEOGRAPHICAL EXPANSION LAUNCH ADDITIONAL PRODUCTS & CATEGORIES PROVIDE ENHANCED EXPERIENCE EXAMPLE EXAMPLES EXAMPLES Legrand countries selling 2021 / 2022 Launches App Refresh / Progressive integration connected User Int
Slide 63: Energy efficiency: key highlights
Faster expanding segments - Energy efficiency Key highlights ACHIEVEMENTS STRATEGIC POSITIONING To leverage Legrand assets to help customers reducing drastically the energy consumption of their building OUR VALUE PROPOSAL >10m tons(1) CO 2 • For all buildings including small / existing buildings sav
Slide 64: Energy efficiency: 2020 key figures
Faster expanding segments - Energy efficiency 2020 Key figures LEGRAND SALES BY VERTICAL LEGRAND SALES BY GEOGRAPHY 44% 30% 14% Commercial Datacenter Rest of the World 26% 50% 36% Residential Europe North & Central America 64
Slide 65: Datacenters: potential energy savings
Faster expanding segments - Energy efficiency Datacenters: potential energy savings (1) STEP OFFERINGS EXAMPLES APPLICATIONS POSITIVE IMPACT(1) • Metering of IT devices in the white room with smart PDUs • Monitoring of the energy supplied to racks From 5% to 15% Measuring with connected busbars Aver
Slide 66: Commercial: potential energy savings
Faster expanding segments - Energy efficiency Commercial: potential energy savings (1) STEP OFFERINGS EXAMPLES APPLICATIONS POSITIVE IMPACT(1) Tailored From 25% to 35% solutions Average energy Smart management of hotel rooms functions saved per year(1) Guest room management (access, heating, electri
Slide 67: Residential and small commercial: potential energy savings
Faster expanding segments - Energy efficiency Residential and small commercial: potential energy savings (1) STEP OFFERINGS EXAMPLES APPLICATIONS POSITIVE IMPACT(1) Measuring ~10% & load Average energy Remote or local tracking and monitoring of energy shedding saved per year(1) Drivia with Netatmo c
Slide 68: EV charging: comprehensive platform
Faster expanding segments - Energy efficiency EV charging: comprehensive platform covering all applications INDIVIDUAL INDIVIDUAL SHARED WORKPLACE ON STREET INFRASTRUCTURE HOME HOME RESIDENTIAL LEISURE, RETAIL, (ACCESS) HOSPITALITY AC(1) < 4kW AC(1) 3-7kW AC(1) 3-7KW AC(1) 7-22KW DC(2) 50-180KW DC(2
Slide 69: Energy efficiency: growth priorities
Faster expanding segments - Energy efficiency Growth priorities LEVERAGING STIMULUS PLANS INTERNATIONAL DEPLOYMENT & REGULATION OF PROGRAMS PURSUE COMPLEMENTARY M&A Example: Example: smart thermostats Example: Distant energy consumption monitoring in Front-running Dutch player in charging non-reside
Slide 70: Environmental urgency is about sustainable products
Sustainable sales Environmental urgency is about sustainable products GREEN BY USAGE Energy efficiency programs acceleration 19% of overall sales in 2020 ~70% in 2020(1) SUSTAINABLE SALES GREEN BY DESIGN & PROCESS to 80% by 2030 Carbon footprint active reduction Carbon footprint commitments impactin
Slide 71: Multiple new opportunities beyond faster expanding segments
Multiple new opportunities beyond faster expanding segments Examples in a “post covid” world HEALTH & WELL-BEING WORK FROM EVERYWHERE Example: Assisted living Example: Potential for value creation in residential & commercial BASIC:$400 UPSELL: >$1,400 #2 $100 $150 $25 $50 $30 $50 + Structured Wiring
Slide 72: More than €30Bn new complementary markets identified
Additional market expansion opportunities More than €30Bn new complementary markets identified 2020 MARKET MID-TERM MARKET MID-TERM GROWTH €100BN > €160BN CORE INFRASTRUCTURE ~ GDP PRODUCTS €100BN > €130BN FASTER EXPANDING SEGMENTS • Datacenter solutions • Connected > GDP • Energy Efficiency NEW CAT
Slide 73: Examples of geographical initiatives
EXAMPLES OF GEOGRAPHICAL INITIATIVES Frédéric Xerri, EVP Europe John Selldorff, CEO North & Central America Jean-Luc Cartet, EVP Asia-Pacific Middle-East Africa South America 73
Slide 74: Europe: key figures
Europe: key figures Introduction METRICS(1) 2020 SALES(3) BREAKDOWN 10% Other Europe SALES(2) HISTORICAL PERFORMANCE New Economy 37% France €2.4Bn 2018 2019 2020 5% Russia 39% Organic Sales(3) +5.5% +3.3% -7.9% Of Group variation in % 17% Other Mature Total Sales(3) Europe By geography(3) variation
Slide 75: Leading the smart home revolution in Europe
Initiatives in Europe: leading the smart home revolution Remarkable acceleration in Europe >5%(2) 33% 3.2mm ~1.5mm of Europe Netatmo sales devices with users(1) sales from activated(1) professional smart home(1) channel(1) CAGR +54% +35% +19% +71% 2018-2020 1. Till end of 2020. 2. Eliot: 15% of Euro
Slide 76: Combined B2B and B2C approach
Initiatives in Europe: leading the smart home revolution Combined B2B and B2C approach Bought & installed by Bought & installed by AN ELECTRICIAN AN END-USER B2B B2C 76
Slide 77: Innovation with new categories every year
Initiatives in Europe: leading the smart home revolution Innovation with new categories every year 2018 2019 2020 2021 2022 User interfaces Thermostats Electrical panels Door entry systems Door locks Outdoor cameras New generation EV charging & door bells thermostats stations 77
Slide 78: Geographical expansion: user interfaces products
Initiatives in Europe: leading the smart home revolution Geographical expansion: user interfaces products Cumulated # of countries and ranges in Europe 43 39 (World: ~90) 23 (World: >70) 17 (World: 44) # countries 3 (World: 33) (World: 5) # ranges 6 10 12 13 18 2018 2019 2020 2021 2022 78
Slide 79: Strong awareness & customer support
Initiatives in Europe: leading the smart home revolution Strong awareness & customer support 30,000 62,000 52mm reached impressions trained installers(1) YouTube & installers(1) BUY NOW Facebook(1) 1. Till end of 2020. 79
Slide 80: Home+ Apps: a solid interface
Initiatives in Europe: leading the smart home revolution HOME+ Apps: a solid interface Home + Control « Everything works perfectly » 4.2 « Easy step-by-step configuration App Store and device connection » Home + Security « Super useful on a daily basis! » 4.5 « It works wonderfully. App App Store fr
Slide 81: Tight link with end-user
Initiatives in Europe: leading the smart home revolution Tight link with end-user CREATE RELATIONSHIP LOYALTY AND REPEATED SALES On-boarding with In-App news Upsell and Cross sell through easy customer journey “Explore main product “Celebrate product activation “Enlarge your ‘with Netatmo’ installat
Slide 82: North and Central America: key figures
North and Central America: key figures Introduction METRICS(1) 2020 SALES(3) BREAKDOWN 3% 1% 26% Mexico Central Building SALES(2) HISTORICAL PERFORMANCE America Control Systems & 29% Electrical Wiring €2.5Bn Architectural Lighting Systems 2018 2019 2020 Organic Sales(3) 41% variation in % +4.2% +2.5
Slide 83: NCA: from mandatory energy codes to green buildings
Initiatives in NCA: driving energy efficiency Electrical market: from mandatory energy codes to demand for green buildings Mandatory energy codes Demand for green buildings Analog sensors Systems Intelligent systems & analytics 2010 2020 83
Slide 84: Building systems performance in North America
Initiatives in NCA: driving energy efficiency Building systems performance: remarkable acceleration over the last 4 years in North America CONNECTED BUILDINGS REMOTE DATA DRIVEN SERVICES VERTICAL MARKET BREAKDOWN 8% 43% 10 to 30% Healthcare Office Energy Savings Measure & verify energy Commercial Ch
Slide 85: Customer case: large midwestern engineering firm
Initiatives in NCA: driving energy efficiency Building systems customer user case: large midwestern engineering firm Historical Data + Analytics + Customer Engagement = ENERGY SAVINGS LIGHTING RUN-TIME REDUCTION: 25k Square meter 32.8% Commercial office building Energy saving measures implemented vi
Slide 86: Electrical wiring systems performance
Initiatives in NCA: driving energy efficiency Electrical wiring systems performance: exceptional user experience and energy saving DELIVERING THE EXPERIENCE BUILDING BLOCKS TO ENERGY SAVINGS WITHOUT CONNECTED DEVICE GROWTH COMPROMISING THE USER EXPERIENCE CONNECTED DEVICE Guest Experience UNIT GROWT
Slide 87: Customer case: large hotelier
Initiatives in NCA: driving energy efficiency Electrical wiring systems customer user case: large hotelier HOTELIER REALIZING ENERGY SAVINGS WHILE ELEVATING THE USER EXPERIENCE Loyalty driven by catering to the guests individually while supporting sustainability and wellness as cornerstones to finan
Slide 88: Datacenter market: energy demand outpacing computational growth
Initiatives in NCA: driving energy efficiency Datacenter market: energy demand outpacing computational growth RACE TO REDUCE ENERGY IMPACT REAL-TIME METERING: OF IT DEMAND GROWTH CRITICAL SOLUTION ENABLER 1500 24 Energy savings while maintaining reliability 1250 18 Resize UPS + cooling 1000 Chart /
Slide 89: Datacenter infrastructure with real-time metering growth
Initiatives in NCA: driving energy efficiency Datacenter performance: strong growth of infrastructure equipped with real -time metering Revenue growth (CAGR) Datacenter power infrastructure with real-time metering 92% CAGR 17% CAGR Metered Busway Outlets ("Plug In Boxes") Outlet-Metered Rack PDUs 89
Slide 90: Datacenter use case: top 3 US bank
Initiatives in NCA: driving energy efficiency Datacenter use case: top 3 US Bank REDUCTION IN POWER + COOLING CONSUMPTION: ~30% Implemented real-time metering of power consumption per individual compute device, using Legrand power distribution equipment ▪ Allows min/max comparison to rated ("namepla
Slide 91: Rest of the World: key figures
Rest of the World: key figures Introduction METRICS(1) 2020 SALES(3) BREAKDOWN 22% SALES(2) HISTORICAL PERFORMANCE China 21% €1.2Bn India 2018 2019 2020 20% Of Group Organic Sales(3) variation in % +4.9% +1.4% -10,3% Total Sales(3) 11% By geography(3) South East variation in % +0.5% +5.0% -14.4% Asi
Slide 92: Trends differ by datacenter type
Initiatives in the Rest of the World: sustaining the datacenters momentum Trends can strongly differ depending on the datacenter type HYPERSCALE COLOCATION COLOCATION ON PREMISE ON PREMISE MICRO HYPERSCALE Colocation Other wholesale Retail Large Small Datacenter 60% of the market 40% of the market =
Slide 93: Datacenter front office teams expansion
Initiatives in the Rest of the World: sustaining the datacenters momentum Geographical expansion - Legrand datacenter front office teams # of countries in Rest of the World with datacenter dedicated front office teams 19 16 12 14 11 2017 2018 2019 2020 2021 93
Slide 94: Singapore case: success story
Initiatives in the Rest of the World: sustaining the datacenters momentum Singapore case: success story LEVERAGING ON ACQUISITIONS GLOBAL & LOCAL AGILE ORGANIZATION • Access to the vertical through local leading acquisition • Worldwide specification for key players craving vendor (SJ Manufacturing)
Slide 95: South Africa case: ongoing momentum
Initiatives in the Rest of the World: sustaining the datacenters momentum South Africa case: ongoing momentum thanks to successful projects LEVERAGING ON ACQUISITIONS GLOBAL & LOCAL AGILE ORGANIZATION • Access to the vertical through global leading acquisition • Worldwide specification for internati
Slide 96: Datacenter verticals
Datacenter verticals Illustration ON PREMISE Small COLOCATION PoP COLOCATION PoP MICRO €180k >€10mm €450k €180k • City: Cotonou • 14 Cities Worldwide • City: Tokyo • City: Bogota • Customer: government • End-user: cloud service • Customer: colocation • Customer: government • Racks, power, UPS, provi
Slide 97: Optimizing resources, fostering talents
¢¢© OPTIMIZING RESOURCES, FOSTERING TALENTS ¢¢© Antoine Burel, Deputy CEO & COO Karine Alquier-Caro, EVP Purchasing Bénédicte Bahier, EVP Human Resources 97
Slide 98: Agenda
Agenda Optimizing resources, fostering talents o Operations performance: continuous improvement o Purchasing leverage o Human Resources & entrepreneurship spirit 98
Slide 99: Operations performance: missions & approach, key figures
Operations performance: continuous improvement Missions & approach, key figures APPROACH: GLOBAL VISION - LOCAL INSIGHTS 2020 NUMBERS GLOBAL MANAGEMENT & STRONG PROCESSES MANUFACTURING Global management 60% 1/3 New Added • Products development roadmap (what & where) economies Value • Manufacturing s
Slide 100: Operations performance: fuel profitable and sustainable growth
Operations performance: continuous improvement Geared to fuel profitable and sustainable growth DRIVING GROWTH PERFORMANCE SUSTAINABILITY INNOVATION & CUSTOMER INDUSTRIAL FOCUS CARE COMPETITIVENESS Strong processes Comprehensive new products • Legrand Way management system Contribute to sustainable
Slide 101: Operations performance: target KPIs
Operations performance: continuous improvement Target KPIs GROWTH PERFORMANCE SUSTAINABILITY INNOVATION AND CUSTOMER CARE INDUSTRIAL COMPETITIVENESS FOCUS Mid- Mid- Mid- KPIs Current KPIs Current KPIs Current term term term(1) 3% Up to 4% R&D to sales 5% 5% Productivity Health & Safety (FR2) 4.6 -20
Slide 102: Purchasing footprint
Purchasing leverage Purchasing footprint A GEOGRAPHICALLY BALANCED PURCHASING DETAILED MATERIALS & COMPONENTS BREAKDOWN 32% SHARE OF CATEGORY Europe PURCHASING Trading 23% (electrical finished goods designed by Legrand) Metallic subcontracting 18% (including added value) 25% Electronic 15% North & (
Slide 103: Accelerating value creation through purchasing performance
Purchasing leverage Accelerating value creation through purchasing performance PROFITABILITY RELIABILITY Redesign to cost Risk management Inflation monitoring dedicated process with Securing procurement front office SUSTAINABILITY EFFICIENCY Sustainable procurement pillars Digitalization • Decarboni
Slide 104: Legrand team is…
Human Resources & entrepreneurship spirit Legrand team is… GEOGRAPHICALLY BALANCED HEADCOUNT(1) STRONGLY SUPPORTIVE TO PERFORMANCE 38% Full engagement Europe • 80% Engagement rate (2021), strong progression vs 2017 Loyal • Stable and low attrition rate overall (~5%) 19% 36 726 North & Central Americ
Slide 105: Actions for engagement & retention
Human Resources & entrepreneurship spirit Actions for engagement & retention: our purpose is Improving Lives WE FOCUS ON MAKING LEGRAND A GREAT WORKPLACE… …AND WE ARE RECOGNIZED FOR IT NB: Forbes magazine 2020. At Group level, Legrand is distinguished as one of the “World’s Best Employers 2020” base
Slide 106: Focus on general managers
Human Resources & entrepreneurship spirit Focus on general managers GENERAL MANAGERS PROFILES ACCOUNTABILITY Full P&L responsibility including the implementation of Solid experience in sales management key strategic topics defined by the Group for sales and industrial operations: ~25% coming from ac
Slide 107: Improving gender diversity
Human Resources & entrepreneurship spirit Improving gender diversity STRONG INVOLVEMENT OUR PROGRESS % of women Our commitments as of December 31st 2018 2019 2020 • Increase over 3 years by 20% the ratio of women in management positions • Reach by 2030, 1/3 of women in key positions Executive Commit
Slide 108: Focus on inclusion
Human Resources & entrepreneurship spirit Focus on inclusion EMPLOYEE LGBTQ MINORITIES DISABILITY NEXT GENERATION DIVERSITY RATING 2021 Legrand • Continuing support • Continuing initiatives • Inclusive workplace: • Offering significant employee's global shown by general for an improved 2.2% of total
Slide 109: Actions for engagement & retention: Serenity On
Human Resources & entrepreneurship spirit Actions for engagement & retention: Serenity On To promote a better balance between private and working life Minimum standards for maternity leave (14 weeks minimum) and paternity leave (at least 5 days). Paid 100% of base salary Since end of 2017 Global ini
Slide 110: Conclusion
CONCLUSION Franck Lemery, CFO Benoît Coquart, CEO 110
Slide 111: Ambitious mid-term targets: sales ambitions
Conclusion: Ambitious mid-term targets Sales ambitions demonstrating the ability to seize all growth opportunities SUSTAINED SALES GROWTH … ... SUPPORTED BY STRENGTHENED PILLARS Market expansion driven by structural megatrends and new addressable segments (> €30Bn) +5% to +10% Enhanced organic growt
Slide 112: Ambitious mid-term targets: profitability
Conclusion: Ambitious mid-term targets The right level of profitability to sustain accelerated growth ... REFLECTING AN EFFECTIVE STRATEGY A BEST-IN-CLASS PROFITABILITY … TO SUSTAIN GROWTH ACCELERATION Profitability supported by volume leverage, sector- benchmark pricing power and solid cost managem
Slide 113: Ambitious mid-term targets: free cash flow and capital allocation
Conclusion: Ambitious mid-term targets Strong free cash flow generation allocated to M&A and dividends CONSISTENT LEADING … AND A BALANCED CAPITAL ALLOCATION FREE CASH FLOW GENERATION … >1/2 of free cash flow invested in bolt-on acquisitions, whilst preserving a solid balance sheet 13% to 15% of sal
Slide 114: Pursuing the ESG journey
Conclusion Pursuing the ESG journey ONGOING CSR STRATEGY LONG-TERM ESG AMBITIONS 2022: Neutrality on scopes 1, 2 and part of scope 3, with compensation C LIMATE (1) 2030: Newly SBTi validated targets (1.5°C) Scope 1&2 -50%, Scope 3 -15% 2050: Elimination of net GHG emissions (Scopes 1, 2 & 3) 2030 S
Slide 115: Legrand is perfectly positioned to benefit from next cycle
Conclusion Legrand is perfectly positionned to benefit from next cycle • Low risk industry S TRUCTURALLY SOUND INDUSTRY • Secular and new trends BOOSTED BY EXCITING MEGATRENDS • Strategic and low energy intensive • Only building pure player U NIQUE PROFILE WITH PROVEN • Cristal clear growth strategy
Slide 116: Investor relations and press relations contacts
INVESTOR RELATIONS LEGRAND Ronan MARC Tel: +33 (0)1 49 72 53 53 ronan.marc@legrand.fr PRESS RELATIONS PUBLICIS CONSULTANTS Laurence BAULT Mob: +33 (0)7 85 90 63 36 laurence.bault@publicisconsultants.com 116
Slide 117: Glossary
Glossary Adjusted operating profit is defined as operating profit adjusted for amortization and depreciation of revaluation of assets at the time of acquisitions and for other P&L impacts relating to acquisitions and, where applicable, for impairment of goodwill. Busways are electric power distribut
Slide 118: 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