Slide 1: 2010 Full-year Results
2010 Full-year Results February 10, 2011
Slide 2: Agenda
Agenda 2010 financial review (A. Burel) 3 Lastingly robust fundamentals (G. Schnepp) 12 What has changed? (O. Bazil) 18 Enhanced growth profile (G. Schnepp) 27 Mid-term objectives, 2010 dividend and 2011 targets (G. Schnepp) 44 Appendices 49 2010 Results 2
Slide 3: Financial review
Financial review Antoine Burel CFO 3
Slide 4: 2010 Full-year Results
2010 Full-year Results Change in net sales Adjusted operating margin in €m in €m & as % of sales 3,891 20.2% 3,578 +8.7% 16.2% +3.6% lfl(1) +35.5% 784 579 2009 2010 2009 2010 Net result Free cash-flow generation in €m & as % of sales 10.8% 8.1% €646m +44.3% 418 16.6% of sales 290 2009 2010 1. Like-f
Slide 5: Change in Net Sales: Group total €3,891m in 2010
Change in Net Sales France: €919m +0.6% LFL(1) Group total €3,891m in 2010 - Good performances in wiring devices +8.7% - Success of LCS2 digital infrastructure solutions +3.6% LFL(1) - Firm trends on renovation markets - Offsetting still convalescent state of the building industry USA & Canada
Slide 6: Change in Net Sales
Change in Net Sales Breakdown of change in 2010 net sales (€m) 141.0 41.6 313.0 93.9 5.2 18.4 -6.4 19.3 France Italy Rest of USA- Rest of +8.7% Europe Canada World Total +3.8% FX +3.6% +1.2% 3,890.5 Like-for-like(1) growth Scope of 3,577.5 consolidation FY 2009 FY 2010 2010 Results 6 1. At constant
Slide 7: Change in Net Sales: New economies and mature countries
Change in Net Sales New economies Strong growth +24.2% LFL(1) +11.9% 1/3 of total sales today Success of new products Best performers in 2010 Russia, India, China, Brazil, Turkey, Mexico, Chile, etc. Mature countries Growth +2.6% LFL(1) +0.2% Success of new products Still convale
Slide 8: 2010 P&L: Adjusted Operating Margin Up 400 bps
2010 P&L : Adjusted Operating Margin Up 400 bps In € millions 2009 2010 % change Net sales 3,577.5 3,890.5 8.7% Gross profit 1,876.9 2,092.8 11.5% As % of sales 52.5% 53.8% (1) Adjusted operating income 578.8 784.1 35.5% As % of sales 16.2% 20.2% Accounting entries related to the acquisition of Legr
Slide 9: Exceptional Cash Generation
Exceptional Cash Generation In € millions 2009 2010 % change Cash-flow from operations (1) 484.1 673.0 39.0% As % of sales 13.5% 17.3% Change in working capital requirement 242.2 76.4 Net cash provided by operating activities 726.3 749.4 3.2% As % of sales 20.3% 19.3% Capital expenditures (including
Slide 10: Net Debt Reduction
Net Debt Reduction Change in net debt (€m) +24 +7 -142 Total -646 +289 change +184 1,340 Free Dividend Acquisition FX Other 1,198 cash-flow paid Dec. 31, 2009 Dec. 31, 2010 2010 Results 10
Slide 11: Sound Balance-sheet Structure
Sound Balance-sheet Structure Structural improvement Rating (1): BBB, positive credit watch Significant financing headroom: €1.2bn Wise debt management : main credit-line maturities running to 2013 at the earliest and to 2025 at the latest 1. Standard & Poor’s 2010 Results 11
Slide 12: Lastingly robust fundamentals
Lastingly robust fundamentals Gilles Schnepp Chairman & CEO 12
Slide 13: A Profitable, Virtuous Business with Two Growth Drivers
A Profitable, Virtuous Business with Two Growth Drivers Organic growth Acquisitions Market share Profitability 2010 Results 13
Slide 14: Best-in-class Operating Margin
Best-in-class Operating Margin Operating margin: Legrand vs peers 20.0% 18.0% 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% (1) 2003 2004 2005 2006 2007 2008 2009 2010 Electrical Peer Margin - Average Legrand Adjusted Margin Electrical Peer Margin - Max 1. Actual figures for Legrand, I/B/E/S consensus
Slide 15: Non Dilutive Self financed Business Model
Non Dilutive Self financed Business Model Non-dilutive self-financed business development through innovation and bolt-on acquisitions Attractive dividend policy with no dividend cut Solid balance-sheet structure 2010 Results 15
Slide 16: Sustainable Growth – Examples of 2010 Initiatives
Sustainable Growth – A Natural Fit With Our Business Model, Examples of 2010 Initiatives Environment Eco-design NILOE Wiring device - Every stage of the Niloé life cycle has been designed for maximum reduction in environment impact vs previous range (-20% for switches and -30% for sockets compared t
Slide 17: Sustainable Growth – Healthy Progress in 2010 Targets
Sustainable Growth – Healthy Progress in 2010 Targets Performance Indicator 2010 targets ISO 14001 certified sites (%) Maintain rate at above 70% % of recycled waste Maintain rate at above 75% Reduce carbon dioxide emissions 10% reduction relative to linked to energy consumption 2006 Emissions of vo
Slide 18: What has changed?
What has changed? Olivier Bazil Vice-Chairman & COO 18
Slide 19: 2002 – Reshape Group Organization
2002 – Reshape Group Organization From… ..to a dual organization with Global back-office organizations: local organizations 3 industrial divisions in charge of R&D and production: responsible for Cost and capex optimization back-office and Acceleration of new product launches front-office
Slide 20: 2009 – Re-engineering of Processes
2009 – Re-engineering of Processes (1) R&D: new processes in product design Increase number of new products Decrease time to market by one-third Production processes: rationalization of product platforms (1) 60% to 70% decline in the number of components Increase utilization rate of equi
Slide 21: Structural Improvement in Operational Performances
Structural Improvement in Operational Performances Higher adjusted operating margin Lower capex needs Lower working capital requirement Higher free cash flow generation 2010 Results 21
Slide 22: Higher Adjusted Operating Margin
Higher Adjusted Operating Margin 22% 20.2% 20% +420bps 18% +200bps 16% 16% 14% 14% 12% 10% 1992 1994 1996 1998 2000 2002 2003 2005 2007 2009 2010 Adj. operating margin Avg adj operating margin 2010 Results 22
Slide 23: Lower Capex Needs
Lower Capex Needs 12% 10% 8% 8% -400bps 6% -110bps 4% 4% 2.9% 2% 1992 1994 1996 1998 2000 2002 2003 2005 2007 2009 2010 Capex as % of sales Avg capex as % of sales 2010 Results 23
Slide 24: Lower Working Capital Requirement
Lower Working Capital Requirement 25% 21% 20% 15% -900bps 12% 10.0% (≤) 10% -200bps 5% (1) (1) 1992 1994 1996 1998 2000 2002 2003 2005 2007 2009 2010 WCR as % of sales Avg WCR as % of sales 2010 Results 24 1. 2009 and 2010 data are normalized
Slide 25: Higher Normalized Free Cash Flow
(1) Higher Normalized Free Cash Flow 14% 13.0% 12% (2) 10% 10% +300bps 8% 6% 6% +400bps 4% 2% 0% 1992 1994 1996 1998 2000 2002 2003 2005 2007 2009 2010 Normalized FCF as % of sales Avg normalized FCF as % of sales 1. Excluding the positive impact of tax loss carry forward in 2006 and 2007 and assumi
Slide 26: Enhanced Growth Profile Fueled by Improved Operating Performance
Enhanced Growth Profile Fueled by Improved Operating Performance Added resources to fuel growth Higher adjusted operating margin Accelerate new product launches Lower capex needs Speed up bolt-on Lower working capital acquisitions requirement Seize market Higher free cash flow opportun
Slide 27: Enhanced growth profile
Enhanced growth profile Gilles Schnepp Chairman & CEO 27
Slide 28: Enhanced Growth Profile
Enhanced Growth Profile Accelerate new product launches Speed up bolt-on acquisitions Seize market opportunities New economies New business segments Medium term drivers 2010 Results 28
Slide 29: Accelerate New Product Launches
Accelerate New Product Launches 4 to 5% Higher of sales invested R&D efficiency: in R&D every •Shorter time to market year •More projects •Partnerships A steady flow of major new products Much more to come launches in 2003-2010 from 2011 onwards Wiring devices My Home Axolute Arcor Energy distri
Slide 30: Speed Up Targeted Bolt-on Acquisitions
Speed Up Targeted Bolt-on Acquisitions About €200m invested about on average per year … €400m 2005 2006 2007 2008 2009 2010 New business New economies Wuxi segments Complements 2010 Results 30
Slide 31: New Economies – Increases In Group Resources and Presence
New Economies – Increases In Group Resources and Presence Over the Past 5 Years Net sales Sales & marketing headcount in €m & as % of total group sales in number and as % of group total 51% 33% x2.0 x2.5 19% 29% New economies 1,262 3,056 608 1,206 2005 2010 2005 2010 Production headcount R&D headcou
Slide 32: New Economies – Strong and Long Standing #1 and #2 positions
New Economies – Strong and Long Standing #1 and #2 positions Hungary - 1994 Poland - 1996 Turkey-1996 Russia -1993 Romania Mini circuit breakers Wiring devices Wiring devices Slovakia Wiring devices Cable management Cable management Wiring devices Cable management Mini circuit breaker Air circuit br
Slide 33: New Economies – Robust, Well-balanced Local Footprint
New Economies –Robust, Well-balanced Local Footprint Balanced exposure breakdown of sales in new economies Africa / Middle east 15% About 2/3 Latin America of sales in new 34% economies with products Easterm New economies Europe & Turkey 26% Asia 25% #1 or #2 on their market Production in 10 main co
Slide 34: New Economies – Legrand Geared for Growth
New Economies – Legrand Geared for Growth +14% like-for-like average growth over the past 5 years(1), 12 points above like- 50% of sales New economies for-like growth in in new mature countries economies five years from 33% of group sales now today in 2010 vs 19% in 2005 1. 14% like-for-like ave
Slide 35: New Business Segments – Opportunities in Our Core Business
New Business Segments – Opportunities in Our Core Business Digital infrastructures Close to 20% Energy performance of total group sales New business segments Wire mesh Residential systems 13% CAGR since 2005 2010 Results 35
Slide 36: Energy Efficiency – Meeting Needs at the Heart of Legrand's Expertise
Energy Efficiency – Meeting Needs at the Heart of Legrand’s Area of Expertise Buildings alone account for 40% of all energy used More than 90% of buildings are New business segments small/medium size(1) : at the heart of Legrand’s area of expertise 1. In France, area < 2000 sqm 2010 Results 36
Slide 37: Energy Efficiency – Addressing All Needs in Residential Buildings
Energy Efficiency – Addressing All Needs in Residential Buildings Lighting management Temperature management Airtight electrical infrastructure Shutter management Energy consumption management New business segments Distribution panel Solar panel connection offer Electrical vehicle charging station 2
Slide 38: Energy Efficiency – Addressing All Needs in Commercial Buildings
Energy Efficiency – Addressing All Needs in Commercial Buildings Lighting management Solar panel connection Emergency Electrical vehicle Lighting charging station Programming New business segments Transformer Network analyzer metering Time switches Reactive energy compensation Measuring devices 2010
Slide 39: Energy Efficiency – Strong Demand for Legrand's Natural Partner
Energy Efficiency– Strong Demand for Legrand’s Natural Partner Presence and brightness management in a 2000 m2 building with natural light SAVINGS | YEAR(1) €1780 Payback 2 years SAVINGS | YEAR(1) 2500 kg | CO2 Solutions addressing Electrical Expressed as a CO2 equivalent of all pollutant gases (CO2
Slide 40: Medium-Term Opportunities – New Needs in Buildings
Medium-Term Opportunities – New Needs in Buildings Go Through the Digital and Electrical Infrastructures => Legrand’s Area of Expertise Electrical-vehicle charging station Medium term Demand response / smart grid opportunities People care 2010 Results 40
Slide 41: Electrical Vehicle Charging Station
Electrical Vehicle Charging Station For Residential and Commercial Buildings A market at its beginnings / French case study France expected to count 2 million electric vehicles(1) by 2020 0.4 million public charging stations Medium 4 million private charging stations term opportunities Private
Slide 42: Smart Grids
Smart Grids – End-user and Utility Both Need the Electrical and Digital Infrastructure of Buildings Generation & User Network Distribution Medium term Transport & Retail opportunities Networks Networks 2010 Results 42
Slide 43: People Care – A Major Social and Economic Challenge
People Care – A Major Social and Economic Challenge A future market Population over 80(1) 109 million as of today Lighting path 400 million in 2050 X4 Medium Easy-fit socket term opportunities Need for solutions to maintain people at home Door entry Remote assistance with teleloop control 1.
Slide 44: Mid-term objectives, 2010 dividend and 2011 targets
Mid-term objectives, 2010 dividend and 2011 targets Gilles Schnepp Chairman & CEO 44
Slide 45: Mid-term Objectives
Mid-term Objectives 10% CAGR total sales (1) 50% of sales in new economies five years from now 20% average adjusted operating margin (2) Resulting in: 10% CAGR in adjusted operating income + Attractive dividend (1) Including like-for-like and acquisition-driven growth, excluding major FX o
Slide 46: 2010 Attractive Dividend Proposal
2010 Attractive Dividend Proposal Dividend per share in € % yield based on January 31, 2011 closing price 0.70 0.88(1) 3% 2009 2010 2010 Results 46 1. Subject to the approval of shareholders at the General Meeting on May 26, 2011; payable on June 3, 2011.
Slide 47: 2011 Objectives
2011 Objectives 5% targeted growth in sales at constant scope of consolidation and exchange rates + bolt-on acquisitions Adjusted operating margin above or equal to 20% including bolt-on acquisitions 2010 Results 47
Slide 48: Agenda & Contacts
Agenda & Contacts Agenda Contacts May 5, 2011: Investor Relations: François Poisson 2011 first-quarter results tel: +33 (0)1 49 72 53 53 francois.poisson@legrand.fr May 26, 2011: 2011 Annual General Meeting Press Relations: Vilizara Lazarova July 28, 2011: tel: +33 (0)1 44 82 46 34 2011 fi
Slide 49: Appendices
Appendices 49
Slide 50: 2010 - Net Sales by Destination
2010 - Net Sales by Destination (1) Total Scope of Like-for-Like Currency In €m 2009 2010 Change Consolidation Grow th Ef fect France 913.5 919.2 0.6% 0.0% 0.6% 0.0% Italy 571.5 590.4 3.3% 0.1% 3.2% 0.0% Rest of Europe 710.6 757.7 6.6% 3.8% -0.9% 3.6% USA/Canada 512.6 560.4 9.3% 0.0% 3.8% 5.4% Rest
Slide 51: 2010 Fourth Quarter – Net Sales by Destination
2010 Fourth Quarter – Net Sales by Destination (1) Total Scope of Like-for-Like Currency (€M) Q4 2009 Q4 2010 Change Consolidation Grow th Effect France 231.3 232.8 0.6% 0.2% 0.4% 0.0% Italy 133.0 136.7 2.8% 0.1% 2.6% 0.1% Rest of Europe 184.8 221.1 19.6% 13.1% 2.0% 3.7% USA/Canada 117.0 130.2 11.3%
Slide 52: 2010 Third Quarter – Net Sales by Destination
2010 Third Quarter – Net Sales by Destination (1) Total Scope of Like-for-Like Currency (€M) Q3 2009 Q3 2010 Change Consolidation Grow th Effect France 206.2 210.9 2.3% 0.1% 2.2% 0.0% Italy 129.8 138.1 6.4% 0.1% 6.2% 0.1% (2) Rest of Europe 170.6 183.7 7.7% 0.3% 2.8% 4.4% USA/Canada 136.5 154.8 13.4
Slide 53: 2010 Second Quarter – Net Sales by Destination
2010 Second Quarter – Net Sales by Destination (1) Total Scope of Like-for-Like Currency (€M) Q2 2009 Q2 2010 Change Consolidation Grow th Effect France 240.1 249.0 3.7% -0.1% 3.8% 0.0% Italy 147.1 155.4 5.6% 0.0% 5.6% 0.0% (2) Rest of Europe 171.6 180.4 5.1% 0.6% 0.5% 4.0% USA/Canada 128.3 150.3 17
Slide 54: 2010 First Quarter – Net Sales by Destination
2010 First Quarter – Net Sales by Destination (1) Total Scope of Like-for-Like Currency (€M) Q1 2009 Q1 2010 Change Consolidation Grow th Effect France 235.9 226.5 -4.0% -0.1% -3.9% 0.0% Italy 161.6 160.2 -0.9% 0.0% -0.9% 0.0% (2) Rest of Europe 183.6 172.5 -6.0% 0.7% -8.8% 2.3% USA/Canada 130.8 125
Slide 55: 2010 - Net Sales by Origin
2010 - Net Sales by Origin (1) Total Scope of Like-for-Like Currency In €m 2009 2010 Change Consolidation Grow th Ef fect France 1,018.7 1,043.1 2.4% 0.4% 2.0% 0.0% Italy 615.1 622.6 1.2% -0.1% 1.4% 0.0% Rest of Europe 672.5 737.2 9.6% 5.4% 0.2% 3.8% USA/Canada 519.6 571.7 10.0% 0.0% 4.4% 5.4% Rest
Slide 56: 2010 Fourth Quarter – Net Sales by Origin
2010 Fourth Quarter – Net Sales by Origin (1) Total Scope of Like-for-Like Currency (€M) Q4 2009 Q4 2010 Change Consolidation Grow th Effect France 260.8 264.2 1.3% 0.1% 1.2% 0.0% Italy 143.4 144.2 0.6% 0.0% 0.6% 0.0% Rest of Europe 176.9 219.3 24.0% 15.4% 3.4% 3.9% USA/Canada 119.3 132.1 10.7% 0.0%
Slide 57: 2010 Third Quarter – Net Sales by Origin
2010 Third Quarter – Net Sales by Origin (1) Total Scope of Like-for-Like Currency (€M) Q3 2009 Q3 2010 Change Consolidation Grow th Effect France 232.8 242.5 4.2% 0.6% 3.6% 0.0% Italy 139.2 146.3 5.1% -0.2% 5.3% 0.0% (2) Rest of Europe 163.2 177.8 8.9% 1.2% 2.9% 4.6% USA/Canada 138.2 157.7 14.1% 0.
Slide 58: 2010 Second Quarter – Net Sales by Origin
2010 Second Quarter – Net Sales by Origin (1) Total Scope of Like-for-Like Currency (€M) Q2 2009 Q2 2010 Change Consolidation Grow th Effect France 265.1 282.7 6.6% 0.5% 6.1% 0.0% Italy 159.1 163.4 2.7% -0.2% 2.9% 0.0% (2) Rest of Europe 162.0 174.0 7.4% 2.0% 1.1% 4.2% USA/Canada 129.6 153.5 18.4% 0
Slide 59: 2010 First Quarter – Net Sales by Origin
2010 First Quarter – Net Sales by Origin (1) Total Scope of Like-for-Like Currency (€M) Q1 2009 Q1 2010 Change Consolidation Grow th Effect France 260.0 253.7 -2.4% 0.4% -2.8% 0.0% Italy 173.4 168.7 -2.7% -0.2% -2.5% 0.0% (2) Rest of Europe 170.4 166.1 -2.5% 2.4% -7.0% 2.4% USA/Canada 132.5 128.4 -3
Slide 60: Adjusted Operating Income By Geographical Zones
Adjusted Operating Income By Geographical Zones France Italy Rest of Europe ( €m ) 2009 2010 % 2009 2010 % 2009 2010 % Net sales 1,019 1,043 2.4% 615 623 1.2% 673 737 9.6% Adjusted (1) EBIT 192 267 39.1% 164 197 20.4% 51 87 71.3% % of sales 18.9% 25.6% 26.7% 31.7% 7.5% 11.8% USA/Canada Rest of the W
Slide 61: 2010 Fourth Quarter – Adjusted Operating Income
2010 Fourth Quarter – Adjusted Operating Income In € millions Q4 2009 Q4 2010 % change Net sales 903.6 1,016.9 12.5% Gross profit 483.5 523.3 8.2% As % of sales 53.5% 51.5% Adjusted(1) operating income 143.9 180.8 25.6% As % of sales 15.9% 17.8% Accounting entries related to the acquisition of Legra
Slide 62: 2010 Third Quarter – Adjusted Operating Income
2010 Third Quarter – Adjusted Operating Income In € millions Q3 2009 Q3 2010 % change Net sales 861.8 963.5 11.8% Gross profit 453.8 516.7 13.9% As % of sales 52.7% 53.6% Adjusted(1) operating income 157.7 203.3 28.9% As % of sales 18.3% 21.1% Accounting entries related to the acquisition of Legrand
Slide 63: 2010 Second Quarter – Adjusted Operating Income
2010 Second Quarter – Adjusted Operating Income In € millions Q2 2009 Q2 2010 % change Net sales 910.7 998.4 9.6% Gross profit 472.1 552.1 16.9% As % of sales 51.8% 55.3% Adjusted(1) operating income 142.0 213.0 50.0% As % of sales 15.6% 21.3% Accounting entries related to the acquisition of Legrand
Slide 64: 2010 First Quarter – Adjusted Operating Income
2010 First Quarter – Adjusted Operating Income In € millions Q1 2009 Q1 2010 % change Net sales 901.4 911.7 1.1% Gross profit 467.5 500.7 7.1% As % of sales 51.9% 54.9% Adjusted(1) operating income 135.2 187.0 38.3% As % of sales 15.0% 20.5% Accounting entries related to the acquisition of Legrand F
Slide 65: 2010 – Reconciliation of Cash-Flow From Operations with Net Profit
2010 – Reconciliation of Cash-Flow From Operations with Net Profit In € millions 2009 2010 Net Profit 291.3 419.5 Depreciation & Amortization 222.7 193.5 Change in other non-current assets and liabilities and deferred tax (23.7) 36.9 Exchange (gains)/losses net 1.4 23.3 (Gains)/losses on fixed-asset
Slide 66: Scope of Consolidation
Scope of Consolidation 2010 Q1 H1 9M FY Inform Balance sheet only 6 months Indo Asian Switchgear Balance sheet only 4 months 2011 Q1 H1 9M FY Inform 3 months 6 months 9 months 12 months Indo Asian Switchgear 3 months 6 months 9 months 12 months Metasystem Energy 3 months (1) 6 months 9 months 12 mon
Slide 67: 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