Legrand Sa · EURONEXT:LR
Legrand Sa — Shareholder Meeting (May 2008)
87 slides from Legrand Sa's shareholder meeting presentation, May 22, 2008
Slide 1: 2008 Shareholders Combined General Meeting
2008 Shareholders Combined General Meeting May 22, 2008
Slide 2: Agenda
Agenda 2007 highlights and change in Legrand business model (multi-pole profile) - G. Schnepp A value-creating business model - O. Bazil Financial results - A. Burel Dividend and Targets - G. Schnepp Sustainable development - G. Schnepp Corporate governance - G. Schnepp Presentation of
Slide 3: 2007 Highlights and Change in Legrand Business Model
2007 Highlights and Change in Legrand Business Model (Multi-pole Profile) Gilles Schnepp Chairman & CEO
Slide 4: 2007 Highlights
2007 Highlights Good 2007 full-year performance IPO commitments exceeded Share price since market listing Enhanced business model GM 2008 4
Slide 5: Good 2007 Full-year Performance
Good 2007 Full-year Performance Firm increase in sales Robust growth in adjusted EBIT (€M) (€M and as % of sales) 800 16.5% 17.5% 18.0% 16.0% 600 14.0% +11% +18% 12.0% 4,129 10.0% 3,737 400 724 8.0% 616 6.0% 200 4.0% 2.0% 0 0.0% 2006 2007 2006 2007 Significant rise in net income Vigorous free cash f
Slide 6: IPO Commitments Exceeded
IPO Commitments Exceeded Performance since IPO Metrics IPO commitments (2006-2007) Sales 8-10%(1) CAGR at constant exchange rates +13.7% CAGR at constant exchange rates Adjusted(2) EBIT Stable margins including acquisitions Margin up 180 bps to 17.5% Free Cash Flow(3) 10% FCF CAGR 30% FCF CAGR
Slide 7: Share Price Since Market Listing
Share Price Since Market Listing Legrand share price : €2 3 -24 A A ve rage ve ra g e: €1 9 -2 0 €19.75 Market December December May 19, listing on 2006 2007 2008 April 6, 2006 GM 2008 7
Slide 8: Enhanced Business Model
Enhanced Business Model Business model improvement A value-creating business model Trading up Acceleration of acquisition-driven growth Multi-pole profile Geographical expansion Development in promising market segments GM 2008 8
Slide 9: Multi-pole Profile – Geographical Expansion
Multi-pole Profile – Geographical Expansion Improved distribution of resources Vigorous expansion in RoE and RoW(1) GEOGRAPHICAL Breakdown of headcount by geographical zone Sales in RoE and RoW zones (1) (€M) EXPANSION France, Italy France, Italy RoE & RoW (1) RoE & RoW (1) & USA & USA 41% 59% 55% 4
Slide 10: Multi-pole Profile – Energy Efficiency
Multi-pole Profile – Energy Efficiency Rising demand for energy A high-growth market segment management solutions PROMISING MARKET 5% Today buildings account for SEGMENTS 40% of 2007 sales of total world energy consumption(1) Need for energy savings +27% Need for electricity quality organic grow
Slide 11: Multi-pole Profile – Energy Efficiency
Multi-pole Profile – Energy Efficiency Energy savings Electricity quality PROMISING MARKET Céliane - Interscénario SEGMENTS Source inverter and service continuity Axolute - Touchscreen Compensation of reactive energy Universal vacancy Emergency lighting sensor control unit Surge protective device GM
Slide 12: Multi-pole Profile – Power Distribution
Multi-pole Profile – Power Distribution +17% (1) in 2007 PROMISING Busbars MARKET SEGMENTS XL3 enclosure DPX moulded case circuit- breaker Cast resin transformer DMX air circuit- breaker GM 2008 12 1. Sales growth at constant scope of consolidation and exchange rates
Slide 13: Multi-pole Profile – Voice-Data-Image/Datacom
Multi-pole Profile – Voice-Data-Image/Datacom Systems +13% (1) in 2007 PROMISING MARKET SEGMENTS Cabinets, enclosures and connections GM 2008 13 1. Sales growth at constant scope of consolidation and exchange rates
Slide 14: Multi-pole Profile – Wire Cable-trays
Multi-pole Profile – Wire Cable-trays +19% (1) in 2007 PROMISING MARKET SEGMENTS GM 2008 14 1. Sales growth at constant scope of consolidation and exchange rates
Slide 15: A Value-creating Business Model
A Value-creating Business Model Olivier Bazil Vice-Chairman & COO
Slide 16: Enhanced Business Model
Enhanced Business Model Business model improvement A value-creating business model Trading up Acceleration of acquisition-driven growth Multi-pole profile Geographical expansion Development in promising market segments GM 2008 16
Slide 17: Trading Up Strategy – Value Creation: Design
Trading Up Strategy – Value Creation Design Galea Life - Corian® GM 2008 17
Slide 18: Trading Up Strategy – Value Creation: Design
Trading Up Strategy – Value Creation Design Synergy - Polished brass GM 2008 18
Slide 19: Trading Up Strategy – Value Creation: Design
Trading Up Strategy – Value Creation Design Céliane - Leather GM 2008 19
Slide 20: Trading Up Strategy – Value Creation: Design
Trading Up Strategy – Value Creation Design Axolute - Black glass GM 2008 20
Slide 21: Trading Up Strategy – Value Creation: Design
Trading Up Strategy – Value Creation Design Art - Bright steel GM 2008 21
Slide 22: Trading Up Strategy – Value Creation: Functionalities
Trading Up Strategy – Value Creation Functionalities Security Security Axolute – Video door entry system GM 2008 22
Slide 23: Trading Up Strategy – Value Creation: Functionalities
Trading Up Strategy – Value Creation Functionalities Convenience Convenience Céliane – Pathway lighting GM 2008 23
Slide 24: Trading Up Strategy – Value Creation: Functionalities
Trading Up Strategy – Value Creation Functionalities Convenience Convenience Céliane - Programmable thermostat GM 2008 24
Slide 25: Trading Up Strategy – Value Creation: Functionalities
Trading Up Strategy – Value Creation Functionalities Convenience Convenience Vantage - Touchpoint GM 2008 25
Slide 26: Trading Up Strategy – Value Creation: Functionalities
Trading Up Strategy – Value Creation Functionalities Convenience Convenience Axolute - Touchscreen GM 2008 26
Slide 27: Trading Up Strategy – Value Creation: Functionalities
Trading Up Strategy – Value Creation Functionalities Energy Energy saving saving Céliane - Interscenario GM 2008 27
Slide 28: Trading Up Strategy Examples: Céliane and Axolute
Trading Up Strategy Examples: Céliane and Axolute Trading up strategy in France: Continued success of Axolute in Italy success of Céliane Nearly +43% +50% in 2007 sales growth in Axolute sales of enriched in Italy in 2007 functionalities GM 2008 28
Slide 29: Acquisitions in Emerging Countries Since 2005
8 Acquisitions in Emerging Countries Since 2005 Wuxi GM 2008 29
Slide 30: Targeted Acquisitions Since January 2005
19 Targeted Acquisitions Since January 2005 Emerging countries High-growth market segments Wuxi GM 2008 30
Slide 31: Case Study – Zucchini
Case Study – Zucchini International expansion Strong sales growth CAGR +33% Expanding sales from 4 to 17 89 66 50 countries between 2005 and 2007 2005 2006 2007 Strong improvement in profitability Margin up from under 10% in 2004 to a level in line with Group average in 2007 GM 2008 31
Slide 32: Active Policy of Self-financed Acquisitions
Active Policy of Self-financed Acquisitions An ongoing and firm stream of acquisitions Strong contribution to growth Number of acquisitions per year since January 2005 6 Over 5 4 4 €600M 2 of incremental sales acquired Before 2005(1) 2005 2006 2007 To May 2008 GM 2008 32 1. Annual average
Slide 33: 2007 Financial Results
2007 Financial Results Antoine Burel CFO
Slide 34: Enhanced Business Model
Enhanced Business Model Business model improvement A value-creating business model Trading up Acceleration of acquisition-driven growth Multi-pole profile Geographical expansion Development in promising market segments GM 2008 34
Slide 35: 2007 Results – Firm Increase in Sales
2007 Results – Firm Increase in Sales Total sales: €4,129M in 2007 10.5% reported growth 8.6% organic growth(1) Rest of Europe €911M (1) Organic growth: 12.8% France €1,010M (1) Organic growth: 6.3% Rest of World €868M (1) Organic growth: 13.2% USA/Canada €624M (1) Organic growth: 1.6% I
Slide 36: 2007 Results – Robust Income Growth
2007 Results – Robust Income Growth IFRS, in M€ 2006 2007 % of Change Net Sales 3,736.8 4,128.8 10.5% Gross Profit 1,855.1 2,068.3 11.5% As % of Sales 49.6% 50.1% Adjusted¹ Operating Income 616.2 724.0 17.5% As % of Sales 16.5% 17.5% Accounting entries related to the acquisition of Legrand France (8
Slide 37: 2007 Results – Vigorous Cash Generation
2007 Results – Vigorous Cash Generation in 2007 IFRS, in M€ 2006 2007 % Change Cash-Flow From Operations (¹) 618.7 668.0 8.0% As % of Sales 16.6% 16.2% Change in Working Capital Requirement (37.2) 17.5 Net Cash Provided by Operating Activities 581.5 685.5 17.9% As % of Sales 15.6% 16.6% Capital Expe
Slide 38: 2007 Results – Solid Balance-sheet Structure
2007 Results – Solid Balance-sheet Structure High free cash flow generation: over 10% of sales Net debt / EBITDA ratio under control Solid balance sheet structure and access to credit allow an active acquisition policy 4.7 x 4.1 x 2.9 x 3.1 x (1) 2.2 x 2.1 x 2002 2003 2004 2005 2006 2007 Investment
Slide 39: 2008 First-quarter Financial Results
2008 First-quarter Financial Results Antoine Burel CFO
Slide 40: 2008 First-quarter Results
2008 First-quarter Results In M€ Q1 2007 Q1 2008 % of Change Net Sales 1,032.7 1,049.0 1.6% Gross Profit 525.4 541.4 3.0% As % of Sales 50.9% 51.6% (1) Adjusted Operating Income 185.1 187.6 1.4% As % of Sales 17.9% 17.9% Accounting entries related to the acquisition of Legrand France (15.7) (12.6) O
Slide 41: Dividend and Targets
Dividend and Targets Gilles Schnepp Chairman & CEO
Slide 42: Structurally Higher Cash Flow Generation
Structurally Higher Cash Flow Generation Optimized capex spending Capex as % of sales -500bps Structurally higher free cash flow 9% generation (Average free cash flow as % of sales) 4% +500bps 1990-2001 2002-2007 11% Reduced WCR (1) under control 6% WCR as % of Sales 1990-2001 2002-2007 -800bps 21%
Slide 43: Rise in 2008 Dividend
Rise in 2008 Dividend Robust growth in adjusted EBIT Significant rise (€ M) in dividend per share(1) (€ ) +40% +18% 724 0.70 616 0.50 2006 2007 2006 2007 Structurally higher free cash flow Pay out ratio raised(2) generation (Average free cash flow as % of sales) Dividend as % of net income Group sha
Slide 44: 2008 Targets
2008 Targets At this point, Legrand achievements are on course overall despite an economic slowdown that has proved more marked than anticipated Legrand is positioning itself to meet its targets for growth and margin GM 2008 44
Slide 45: Sustainable Development
Sustainable Development Gilles Schnepp Chairman & CEO
Slide 46: Sustainable Development at Legrand – A Natural Extension of Our Corporate Values
Sustainable Development at Legrand – A Natural Extension 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 man
Slide 47: Environmental Commitment – Business Sites That Respect the Environment
Environmental Commitment – Business Sites That Respect the Environment Controlling the direct environmental impact of operations Targets for 2010(1) Hold certification rate over ISO 14001 Regulatory compliance 70% certification of sites Control of environmental risks Improving environmenta
Slide 48: 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 Contribution to greenhouse effects Distribution Total energy consumption Use End-of-life treatment Targe
Slide 49: Social Commitment – Promoting Safety and Health at the Workplace
Social Commitment – Promoting Safety and Health at the Workplace Esculape project: Implementation of a Health & Safety management system in accordance with ILO-OSH 2001(1) Targets for 2010(2) Risk assessment Percentage of Group workforce Achieve over 78% within the scope of formal risk assessm
Slide 50: Social Commitment – Favoring Employability and Diversity
Social Commitment – Favoring Employability and Diversity Allow for labor-market conditions … …and manage skills and careers with care Strong mobility Training Adaptability Building loyalty High turnover in emerging countries Promotion of mobility (GPEC(1) ) Favoring diversity: Group init
Slide 51: Social Commitment – Active Sponsorships Within our Core Business Areas
Social Commitment – Active Sponsorships Within our Core Business Areas In 2007, €644,000 went to support social Support for education causes Budgets managed by individual entities, Scholarships to Santa María University in touch with local communities financed by BT Chile Legrand North America b
Slide 52: Commitment, Recognition, Visibility
Commitment, Recognition, Visibility Participation in the UN Global Compact and encouragement for suppliers to join – 43% of our suppliers had signed up by the end of 2007 Agreement with Électriciens Sans Frontières (Electricians without Borders) Legrand shares included in FTSE4GOOD index in 20
Slide 53: Corporate Governance
Corporate Governance Gilles Schnepp Chairman & CEO
Slide 54: Efficient Structure Ensuring Effective Corporate Governance – 1/6
Efficient Structure Ensuring Effective Corporate Governance – 1/6 Board of Directors 6 meetings in 2007 Self-assessment of Board operations Chairman Honorary Chairman Vice Chairman Legrand Group Gilles Schnepp François Grappotte Olivier Bazil Directors proposed by Wendel Arnaud Fayet Jean-Bernar
Slide 55: Efficient Structure Ensuring Effective Corporate Governance – 2/6
Efficient Structure Ensuring Effective Corporate Governance – 2/6 Strategy Committee 3 meetings in 2007 4 members: Jacques Garaïalde – Chairman Olivier Bazil Jean-Bernard Lafonta Gilles Schnepp Review of annual budget and economic-result targets Review of acquisition opportunities and proces
Slide 56: Efficient Structure Ensuring Effective Corporate Governance – 3/6
Efficient Structure Ensuring Effective Corporate Governance – 3/6 Audit Committee 4 meetings in 2007 3 members: Gérard Lamarche – Chairman Arnaud Fayet Jacques Garaïalde Quarterly review of draft financial statements Review of internal and external control procedures Risk management Rela
Slide 57: Efficient Structure Ensuring Effective Corporate Governance – 4/6
Efficient Structure Ensuring Effective Corporate Governance – 4/6 Nominating and Compensation Committee 4 meetings in 2007 4 members Jean-Bernard Lafonta – Chairman Jacques Garaïalde Edward A. Gilhuly Gérard Lamarche Proposals to the Board concerning management compensation Compensation benc
Slide 58: Efficient Structure Ensuring Effective Corporate Governance – 5/6
Efficient Structure Ensuring Effective Corporate Governance – 5/6 Two fundamental principles of compensation policies In line with market standards: an annual benchmark is performed by an outside consultancy Directly connected to results for the year: achievement of economic result target Econom
Slide 59: Efficient Structure Ensuring Effective Corporate Governance – 6/6
Efficient Structure Ensuring Effective Corporate Governance – 6/6 Compensation in respect of the 2007 financial year Stock options and free shares allotted to over 1,000 Group employees on the basis of the achievement of the economic result target (1) for 2007 Stock-option and free-share plans in
Slide 60: Presentation of Resolutions
Presentation of Resolutions Gilles Schnepp Chairman & CEO
Slide 61: Resolutions on Financial Statements, Earnings and Dividends
Resolutions relating to approval of financial statements, appropriation of earnings and distribution of dividends No. 1 Approval of statutory financial statements at December 31, 2007 No. 2 Approval of consolidated financial statements at December 31, 2007 No. 3 Appropriation of earnings GM 2008 61
Slide 62: Resolutions on Agreements and Commitments
Resolutions relating to 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 Commercial Code No. 5 Commitments within the scope of Article L.225-42-1 of the Commercial Code GM 2008 6
Slide 63: Resolutions concerning Directors' terms of office
Resolutions concerning Directors' terms of office No. 6 Ratification of the co-option of Mr. Mattia CAPRIOLI to the Board of Directors No. 7 Renewal of the term of office of M. Olivier BAZIL No. 8 Renewal of the term of office of M. Mattia CAPRIOLI No. 9 Renewal of the term of office of M. Arnaud FA
Slide 64: Resolutions relating to Share Buybacks
Resolutions relating to balance-sheet optimization through share buybacks No. 16 Approval of a share buyback program No. 17 Authorization to cancel shares purchased pursuant to the share buyback program No. 18 Powers relating to formalities GM 2008 64
Slide 65: Report of the Statutory Auditors
Report of the Statutory Auditors Gérard Morin, PricewaterhouseCoopers Audit Dominique Descours, Deloitte et Associés
Slide 66: Report of the Statutory Auditors
Report of the Statutory Auditors General report on statutory financial statements Report on consolidated financial statements Special report on regulated agreements Report on the Chairman's report regarding internal controls Special reports on financial delegations GM 2008 66
Slide 67: Q&A Session
Q&A Session Ei legrand’
Slide 68: Vote of Resolutions
Vote of Resolutions Jean-Luc Fourneau Company’s Secretary
Slide 69: Vote on the first resolution
Vote on the first resolution Approval of statutory financial statements at December 31, 2007 GM 2008 69
Slide 70: Vote on the second resolution
Vote on the second resolution Approval of consolidated financial statements at December 31, 2007 GM 2008 70
Slide 71: Vote on the third resolution
Vote on the third resolution Appropriation of earnings GM 2008 71
Slide 72: Vote on the fourth resolution
Vote on the fourth resolution Agreements within the scope of Article L.225-38 of the Commercial Code GM 2008 72
Slide 73: Vote on the fifth resolution
Vote on the fifth resolution Commitments within the scope of Article L.225-42-1 of the Commercial Code GM 2008 73
Slide 74: Vote on the sixth resolution
Vote on the sixth resolution Ratification of the co-option of Mr. Mattia CAPRIOLI to the Board of Directors GM 2008 74
Slide 75: Vote on the seventh resolution
Vote on the seventh resolution Renewal of the term of office of M. Olivier BAZIL GM 2008 75
Slide 76: Vote on the eighth resolution
Vote on the eighth resolution Renewal of the term of office of M. Mattia CAPRIOLI GM 2008 76
Slide 77: Vote on the ninth resolution
Vote on the ninth resolution Renewal of the term of office of M. Arnaud FAYET GM 2008 77
Slide 78: Vote on the tenth resolution
Vote on the tenth resolution Renewal of the term of office of M. Jacques GARAÏALDE GM 2008 78
Slide 79: Vote on the eleventh resolution
Vote on the eleventh resolution Renewal of the term of office of M. Edward GILHULY GM 2008 79
Slide 80: Vote on the twelfth resolution
Vote on the twelfth resolution Renewal of the term of office of M. François GRAPPOTTE GM 2008 80
Slide 81: Vote on the thirteenth resolution
Vote on the thirteenth resolution Renewal of the term of office of M. Jean-Bernard LAFONTA GM 2008 81
Slide 82: Vote on the fourteenth resolution
Vote on the fourteenth resolution Renewal of the term of office of M. Gilles SCHNEPP GM 2008 82
Slide 83: Vote on the fifteenth resolution
Vote on the fifteenth resolution Renewal of the term of office of M. Ernest-Antoine SEILLIERE GM 2008 83
Slide 84: Vote on the sixteenth resolution
Vote on the sixteenth resolution Approval of a share buyback program GM 2008 84
Slide 85: Vote on the seventeenth resolution
Vote on the seventeenth resolution Authorization to cancel shares purchased pursuant to the share buyback program GM 2008 85
Slide 86: Vote on the eighteenth resolution
Vote on the eighteenth resolution Powers relating to formalities GM 2008 86
Slide 87: Disclaimer
Disclaimer This document has been prepared by Legrand S.A. (“Legrand”) solely for use at its shareholders’ meeting held on May 22, 2008. 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