(News Bulletin 247) – The electrical infrastructure specialist delivered its medium-term objectives on Tuesday, predicting revenue growth of 6% to 10% per year by 2030, to reach 12 billion to 15 billion euros by that date.

Weighed down for several months by its exposure to the building sector, Legrand has started to get its head above water. The electrical infrastructure specialist had published reassuring half-year results in the first half.

And, more recently, several research firms have raised their opinions on the stock, notably Deutsche Bank, judging that the Limoges group will benefit from the cycle of central bank rate cuts and, by extension, from the recovery in construction.

It is in this context that the CAC 40 member unveiled its medium-term ambitions on Tuesday, with its first day dedicated to investors since 2021.

The group announced that it expects revenue growth of 6% to 10% per year on average by 2030, with organic growth contributing between 3% and 5%. The remaining 3% to 5% will be generated through acquisitions. Legrand will thus allocate an envelope of approximately 5 billion euros to external growth operations over the period 2025-2030.

>> Access our exclusive graphic analyses, and enter the confidence of the Trading Portfolio

Data centers and electrification

By combining organic and external growth, Legrand expects to achieve revenues of between 12 billion and 15 billion euros in 2030, at least 50% more than its 2023 turnover, which stood at 8.4 billion euros.

The company also expects to generate an adjusted operating margin of 20% over the period 2025-2030, after 21% in 2023. It intends to generate a free cash flow representing between 13% and 15% of turnover on average each year for a cumulative amount of nearly 10 billion euros over the period 2025-2030.

These targets are, more or less, the same as those unveiled in 2021 (5% to 10% growth in the “medium term”, a margin of around 20% and a cash flow representing between 13% and 15% of revenues).

To ensure its growth, the company intends to ride the wave of major trends in its markets, particularly energy efficiency. “There is (…) a trend towards improving the efficiency of buildings that will undoubtedly support our activity,” declared Legrand CEO Benoît Coquart during the investor day, quoted by Reuters.

The company also intends to take advantage of the dynamism of data centers, a segment which currently represents 15% of its sales and which recorded an average growth of 13% between 2019 and 2023.

The group points out that with the rise of artificial intelligence, capital expenditure in data centers should increase by 18% between 2023 and 2026, before returning to a more moderate but still vigorous growth of around 9% per year between 2027 and 2030.

On the Paris Stock Exchange, the company’s roadmap received a rather lukewarm reception. Legrand shares opened down before reversing and rising by 0.2% around 3:20 p.m. But this increase remains significantly lower than that of the CAC 40, which gained 1.3% at the same time.

Royal Bank of Canada notes that the company’s targets remain “largely unchanged.” “We note that the lack of target increases contrasts with a number of power companies, such as Schneider and ABB, which have revised their medium-term forecasts upwards (particularly for growth) over the past two years,” the Canadian institution points out.