Regulatory News:
Legrand (Paris:LR):
Consolidated key figures
2
Consolidated statement of income
3
Consolidated balance sheet
4
Consolidated statement of cash flows
6
Notes to the consolidated financial
statements
7
Consolidated key figures
(in € millions)
9 months 2019
9 months 2018
Net sales
4,888.9
4,437.4
Adjusted operating profit
998.5
907.9
As % of net sales
20.4 %
(1)
20.5%
20.8 % (1) before
acquisitions
(2)
Operating profit
931.3
854.3
As % of net sales
19.0 %
(1)
19.3%
Net profit attributable to the
Group
625.0
574.5
As % of net sales
12.8 %
(3)
12.9%
Normalized free cash flow
757.0
673.9
As % of net sales
15.5 %
(4)
15.2%
Free cash flow
671.6
441.6
As % of net sales
13.7 %
(4)
10.0%
Net financial debt at September
30
2,769.1
(5)
2,260.1
(1) Including a favorable impact of around +0.1 points linked to
implementation of the IFRS 16 standard. (2) At 2018 scope of
consolidation. (3) Implementation of the IFRS 16 standard does not
have a significant impact on the net profit attributable to the
Group. (4) Including a favorable impact of around +1.0 point linked
to implementation of the IFRS 16 standard. (5) Including €328.1
million of lease financial liabilities (implementation of the IFRS
16 standard since January 1, 2019).
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.
Normalized free cash flow is defined as the sum of net cash from
operating activities - based on a working capital requirement
representing 10% of the last 12 month’s sales and whose change at
constant scope of consolidation and exchange rates is adjusted for
the period considered - and net proceeds of sales from fixed and
financial assets, less capital expenditure and capitalized
development costs.
Free cash flow is defined as the sum of net cash from operating
activities and net proceeds from sales of fixed and financial
assets, less capital expenditure and capitalized development
costs.
Net financial debt is defined as the sum of short-term
borrowings and long-term borrowings, less cash and cash equivalents
and marketable securities.
The reconciliation of consolidated key figures with the
financial statements is available in the appendices to the first
nine months 2019 results press release.
Consolidated statement of income
9 months ended
(in € millions)
September 30, 2019
September 30, 2018
Net sales
4,888.9
4,437.4
Operating expenses
Cost of sales
(2,345.4)
(2,108.3)
Administrative and selling
expenses
(1,313.9)
(1,202.6)
Research and development
costs
(232.9)
(205.2)
Other operating income
(expenses)
(65.4)
(67.0)
Operating profit
931.3
854.3
Financial expenses
(67.7)
(59.7)
Financial income
9.5
8.7
Exchange gains (losses)
0.9
7.0
Financial profit
(loss)
(57.3)
(44.0)
Profit before tax
874.0
810.3
Income tax expense
(246.9)
(235.0)
Share of profits (losses) of
equity-accounted entities
(1.3)
(0.3)
Profit for the period
625.8
575.0
Of which:
- Net income excluding
minority interests
625.0
574.5
- Minority interests
0.8
0.5
Basic earnings per share
(euros)
2.343
2.152
Diluted earnings per share
(euros)
2.322
2.133
Statement of comprehensive income
9 months ended
(in € millions)
September 30, 2019
September 30, 2018
Profit for the period
625.8
575.0
Items that may be reclassified
subsequently to profit or loss
Translation reserves
188.6
(12.5)
Cash flow hedges
0.2
0.0
Income tax relating to components
of other comprehensive income
6.7
5.6
Items that will not be
reclassified to profit or loss
Actuarial gains and losses after
deferred taxes
(14.2)
2.6
Other
0.0
0.0
Comprehensive income for the
period
807.1
570.7
Of which:
- Comprehensive income
attributable to the Group
806.2
570.3
- Minority interests
0.9
0.4
Consolidated balance sheet
(in € millions)
September 30, 2019
December 31, 2018
ASSETS
Non-current assets
Intangible assets
2,520.0
2,309.7
Goodwill
4,574.2
4,322.0
Property, plant and equipment
675.9
661.4
Right-of-use assets*
320.1
0.0
Investments in equity-accounted
entities
18.3
17.4
Other investments
2.8
2.1
Other non-current assets
37.4
14.3
Deferred tax assets
110.8
107.8
Total non-current
assets
8,259.5
7,434.7
Current assets
Inventories (Note 4)
945.2
885.9
Trade receivables (Note 5)
767.8
666.4
Income tax receivables
43.0
89.6
Other current assets
217.8
206.0
Other current financial
assets
1.8
1.2
Cash and cash equivalents
1,449.3
1,022.5
Total current assets
3,424.9
2,871.6
Total Assets
11,684.4
10,306.3
*out of which the €249.1 million transition impact of the IFRS
16 standard.
(in € millions)
September 30, 2019
December 31, 2018
EQUITY AND LIABILITIES
Equity
Share capital (Note 6)
1,068.8
1,070.0
Retained earnings
4,296.8
4,051.8
Translation reserves
(342.1)
(530.6)
Equity attributable to equity
holders of Legrand
5,023.5
4,591.2
Minority interests
10.1
5.9
Total equity
5,033.6
4,597.1
Non-current
liabilities
Long-term provisions
136.4
145.2
Provisions for post-employment
benefits
170.6
155.9
Long-term borrowings (Note 7)
3,592.3
2,918.6
Deferred tax liabilities
727.8
701.0
Total non-current
liabilities
4,627.1
3,920.7
Current liabilities
Trade payables
624.7
662.0
Income tax payables
50.5
31.5
Short-term provisions
95.8
87.9
Other current liabilities
625.8
605.2
Short-term borrowings (Note
7)
626.1
400.5
Other current financial
liabilities
0.8
1.4
Total current
liabilities
2,023.7
1,788.5
Total Equity and
Liabilities
11,684.4
10,306.3
Consolidated statement of cash flows
9 months ended
(in € millions)
September 30, 2019
September 30, 2018
Profit for the period
625.8
575.0
Adjustments for non-cash
movements in assets and liabilities:
– Depreciation and impairment of
tangible assets
81.6
74.1
– Amortization and impairment of
intangible assets
71.1
58.4
– Amortization and impairment of
capitalized development costs
16.1
19.4
– Amortization of right-of-use
assets
52.0
0.0
– Amortization of financial
expenses
2.0
1.9
– Impairment of goodwill
0.0
0.0
– Changes in long-term deferred
taxes
2.6
25.5
– Changes in other non-current
assets and liabilities
25.8
29.0
– Unrealized exchange
(gains)/losses
(1.9)
3.0
– Share of (profits) losses of
equity-accounted entities
1.3
0.3
– Other adjustments
(0.1)
0.4
– Net (gains)/losses on sales of
assets
3.2
2.8
Changes in working capital
requirement:
– Inventories (Note 4)
(13.8)
(125.3)
– Trade receivables (Note 5)
(49.4)
(99.3)
– Trade payables
(56.1)
13.7
– Other operating assets and
liabilities
22.7
(41.5)
Net cash from operating
activities
782.9
537.4
– Net proceeds from sales of
fixed and financial assets
6.5
4.7
– Capital expenditure
(93.0)
(75.3)
– Capitalized development
costs
(24.8)
(25.2)
– Changes in non-current
financial assets and liabilities
(4.4)
(0.5)
– Acquisitions of subsidiaries,
net of cash acquired
(389.1)
(87.7)
Net cash from investing
activities
(504.8)
(184.0)
– Proceeds from issues of share
capital and premium (Note 6)
4.9
12.8
– Net sales (buybacks) of
treasury shares and transactions under the liquidity contract (Note
6)
(17.1)
(38.8)
– Dividends paid to equity
holders of Legrand
(357.1)
(336.8)
– Dividends paid by Legrand
subsidiaries
0.0
(0.2)
– Proceeds from long-term
financing
402.7
404.7
– Repayment of long-term
financing (Note 7)
(54.3)
(400.0)
– Debt issuance costs
(5.4)
(3.7)
– Increase (reduction) in
short-term financing
155.4
16.2
– Acquisitions of ownership
interests with no gain of control
(2.3)
(39.9)
Net cash from financing
activities
126.8
(385.7)
Translation net change in cash
and cash equivalents
21.9
(5.2)
Increase (decrease) in cash
and cash equivalents
426.8
(37.5)
Cash and cash equivalents at the
beginning of the period
1,022.5
823.0
Cash and cash equivalents at
the end of the period
1,449.3
785.5
Items included in cash flows:
– Interest paid* during the
period
66.8
71.4
– Income taxes paid during the
period
177.0
189.2
* Interest paid is included in the net cash from operating
activities.
Notes to the consolidated financial statements
Note 1 - Introduction
This unaudited consolidated financial information is presented
for the nine months ended September 30, 2019. It should be read in
conjunction with consolidated financial statements for the year
ended December 31, 2018 such as established in the Registration
Document deposited under visa no D.19-0306 with the French
Financial Markets Authority (AMF) on April 10, 2019.
All the amounts are presented in millions of euros unless
otherwise indicated. Some totals may include rounding
differences.
The consolidated financial statements have been prepared in
accordance with the International Financial Reporting Standards
(IFRS) and International Financial Reporting Interpretations
Committee (IFRIC) interpretations adopted by the European Union and
applicable or authorized for early adoption from January 1,
2019.
None of the IFRS standards issued by the International
Accounting Standards Board (IASB) that have not been adopted for
use in the European Union are applicable to the Group.
The IFRS 16 standard was applied from January 1, 2019 using the
simplified retrospective transition method ("cumulative catch-up"
method). As a result, the 2018 comparative period has not been
restated.
Main impacts resulting from the implementation of this standard
are mentioned in the consolidated key figures and were explained in
Note 1.2.1.3 of the consolidated financial statements as of
December 31, 2018.
Note 2 – Significant transactions and events for the
period
Apart from the points mentioned in this document, no significant
transactions or events are to be reported over the period.
Note 3 - Changes in the scope of consolidation
The contributions to the Group’s consolidated financial
statements of companies acquired since January 1, 2018 were as
follows:
2018
March 31
June 30
September 30
December 31
Full consolidation
method
Modulan
Balance sheet only
Balance sheet only
6 months' profit
9 months' profit
GemNet
Balance sheet only
Balance sheet only
7 months' profit
Shenzen Clever Electronic
Balance sheet only
6 months' profit
Kenall
Balance sheet only
Debflex
Balance sheet only
Netatmo
Balance sheet only
Trical
Balance sheet only
2019
March 31
June 30
September 30
Full consolidation
method
Modulan
3 months' profit
6 months' profit
9 months' profit
GemNet
3 months' profit
6 months' profit
9 months' profit
Shenzen Clever Electronic
3 months' profit
6 months' profit
9 months' profit
Kenall
3 months' profit
6 months' profit
9 months' profit
Debflex
Balance sheet only
6 months' profit
9 months' profit
Netatmo
Balance sheet only
6 months' profit
9 months' profit
Trical
Balance sheet only
6 months' profit
9 months' profit
Universal Electric
Balance sheet only
6 months' profit
The main acquisition carried out in the first nine months of
2019 was Universal Electric Corporation, the US leader in busways.
Universal Electric Corporation reports annual sales of over $175
million.
In all, acquisitions of subsidiaries (net of cash acquired) came
to a total of €389.1 million in the first nine months of 2019 (plus
€2.3 million for acquisitions of ownership interests without gain
of control), versus €87.7 million in the first nine months of 2018
(plus €39.9 million for acquisitions of ownership interests without
gain of control).
Note 4 - Inventories
Inventories are as follows:
(in € millions)
September 30, 2019
December 31, 2018
Purchased raw materials and
components
378.0
347.6
Sub-assemblies, work in
progress
111.4
98.5
Finished products
598.4
563.7
Gross value at the end of the
period
1,087.8
1,009.8
Impairment
(142.6)
(123.9)
Net value at the end of the
period
945.2
885.9
Note 5 - Trade receivables
Trade receivables are as follows:
(in € millions)
September 30, 2019
December 31, 2018
Trade receivables
855.2
750.4
Impairment
(87.4)
(84.0)
Net value at the end of the
period
767.8
666.4
Note 6 - Share capital
Share capital as of September 30, 2019 amounted to
€1,068,828,524 represented by 267,207,131 ordinary shares with a
par value of €4 each, for 267,207,131 theoretical voting rights and
266,905,487 exercisable voting rights (after subtracting shares
held in treasury by the Group as of this date).
As of September 30, 2019, the Group held 301,644 shares in
treasury, versus 905,347 shares as of December 31, 2018, i.e.
603,703 fewer shares corresponding to:
- the net acquisition of 600,000 shares outside of the liquidity
contract;
- the transfer of 331,335 shares to employees under performance
share plans;
- the cancellation of 550,000 shares;
- the net sale of 322,368 shares under the liquidity contract
(Note 6.2.2).
As of September 30, 2019, among the 301,644 shares held in
treasury by the Group, 273,793 shares have been allocated according
to the allocation objectives described in Note 6.2.1, and 27,851
shares are held under the liquidity contract.
6.1 Changes in share capital
Number of shares
Par value
Share capital (euros)
Premiums (euros)
As of December 31, 2018
267,495,149
4
1,069,980,596
721,214,426
Exercise of options under the
2009 plan
82,578
4
330,312
728,173
Exercise of options under the
2010 plan
179,404
4
717,616
3,095,870
Cancellation of shares
(550,000)
4
(2,200,000)
(32,734,305)
Repayment of paid-in capital*
(146,768,602)
As of September 30, 2019
267,207,131
4
1,068,828,524
545,535,562
*Portion of dividends distributed in June 2019 deducted from the
premium account.
On February 13, 2019, the Board of Directors decided the
cancellation of 550,000 shares acquired under the share buyback
program (shares bought back in 2018). The €32,734,305 difference
between the buy-back price of the cancelled shares and their par
value was deducted from the premium account.
In the first nine months of 2019, 261,982 shares were issued
under the 2009 and 2010 stock option plans, resulting in a capital
increase representing a total amount of € 4.9 million (premiums
included).
6.2 Share buybacks and transactions under the liquidity
contract
As of September 30, 2019, the Group held 301,644 shares in
treasury (905,347 as of December 31, 2018, of which 555,128 under
the share buyback program and 350,219 under the liquidity contract)
which can be analyzed as follows:
6.2.1 Share buybacks
During the first nine months of 2019, the Group acquired 600,000
shares, at a cost of €36.7 million.
As of September 30, 2019, the Group held 273,793 shares,
acquired at a total cost of €16.8 million. These shares are being
held for the following purposes:
- for allocation, upon exercise of performance share plans, of
8,793 shares purchased at a cost of €0.5 million; and
- for cancellation of 265,000 shares acquired at a cost of €16.3
million.
6.2.2 Liquidity contract
On May 29, 2007, the Group appointed a financial institution to
maintain a liquid market for its ordinary shares on the Euronext™
Paris market under a liquidity contract complying with the Code of
Conduct issued by the AMAFI (French Financial Markets Association)
approved by the AMF on March 22, 2005. €15.0 million in cash was
allocated by the Group to the liquidity contract.
As of September 30, 2019, the Group held 27,851 shares under
this contract, purchased at a total cost of €1.8 million.
During the first nine months of 2019, transactions under the
liquidity contract led to a cash inflow of €19.6 million
corresponding to the net sales of 322,368 shares.
Note 7 - Long-term and short-term borrowings
7.1 Long-term borrowings
Long-term borrowings can be analyzed as follows:
(in € millions)
September 30, 2019
December 31, 2018
Bonds
2,900.0
2,500.0
Yankee bonds
358.0
340.4
Lease financial liabilities
265.5
6.5
Other borrowings
87.8
87.3
Long-term borrowings excluding
debt issuance costs
3,611.3
2,934.2
Debt issuance costs
(19.0)
(15.6)
Total
3,592.3
2,918.6
7.2 Short-term borrowings
Short-term borrowings can be analyzed as follows:
(in € millions)
September 30, 2019
December 31, 2018
Negotiable commercial paper
500.0
363.5
Lease financial liabilities
62.6
1.5
Other borrowings
63.5
35.5
Total
626.1
400.5
7.3 Changes in long-term and short-term borrowings
Changes in long-term and short-term borrowings can be analyzed
as follows:
September 30, 2019
Cash flows
Variations not impacting cash
flows
December 31, 2018
(in € millions)
Acquisitions
Reclassifications
Translation
adjustments
Other
Long-term borrowings
3,592.3
398.2
25.5
(56.6)
24.5
282.1
2,918.6
Short-term borrowings
626.1
100.2
8.9
56.6
3.5
56.4
400.5
Gross financial debt
4,218.4
498.4
34.4
0.0
28.0
338.5*
3,319.1
*out of which the €270.2 million transition impact of the IFRS
16 standard.
Note 8 - Segment information
In accordance with IFRS 8, operating segments are determined
based on the reporting made available to the chief operating
decision maker of the Group and to the Group's management.
- Europe, including France, Italy and Rest of Europe (mainly
including Benelux, Germany, Iberia (including Portugal and Spain),
Poland, Russia, Turkey, and the United Kingdom);
- North and Central America, including Canada, Mexico, the United
States, and Central American countries; and
- Rest of the world, mainly including Australia, China, India,
Saudi Arabia and South America (including particularly Brazil,
Chile and Colombia).
These three operating segments are under the responsibility of
three segment managers who are directly accountable to the chief
operating decision maker of the Group.
The economic models of subsidiaries within these segments are
quite similar. Indeed, their sales are made up of electrical and
digital building infrastructure products in particular to
electrical installers, sold mainly through third-party
distributors.
9 months ended September 30,
2019
North and
Rest
Europe
central
of the
(in € millions)
America
world
Total
Net sales to third
parties
2,033.9
1,935.0
920.0
4,888.9
Cost of sales
(896.7)
(933.3)
(515.4)
(2,345.4)
Administrative and selling
expenses, R&D costs
(660.3)
(640.2)
(246.3)
(1,546.8)
Other operating income
(expenses)
(27.2)
(30.3)
(7.9)
(65.4)
Operating profit
449.7
331.2
150.4
931.3
- of which acquisition-related
amortization, expenses and income
· accounted for in administrative
and selling expenses, R&D costs
(10.0)
(47.4)
(9.8)
(67.2)
· accounted for in other
operating income (expenses)
0.0
- of which goodwill
impairment
0.0
Adjusted operating
profit
459.7
378.6
160.2
998.5
- of which depreciation
expense
(46.6)
(16.8)
(17.9)
(81.3)
- of which amortization
expense
(6.5)
(1.6)
(0.6)
(8.7)
- of which amortization of
development costs
(15.1)
0.0
(1.0)
(16.1)
- of which amortization of
right-of-use assets
(19.9)
(17.6)
(14.5)
(52.0)
- of which restructuring
costs
(9.3)
(2.4)
(6.2)
(17.9)
Capital expenditure
(65.2)
(13.3)
(14.5)
(93.0)
Capitalized development costs
(23.6)
0.0
(1.2)
(24.8)
Net tangible assets
411.2
137.5
127.2
675.9
Total current assets
1,704.6
1,002.1
718.2
3,424.9
Total current liabilities
1,231.3
377.4
415.0
2,023.7
9 months ended September 30,
2018
North and
Rest
Europe*
central
of the
(in € millions)
America
world
Total
Net sales to third
parties
1,933.2
1,650.1
854.1
4,437.4
Cost of sales
(837.6)
(796.1)
(474.6)
(2,108.3)
Administrative and selling
expenses, R&D costs
(619.1)
(557.7)
(231.0)
(1,407.8)
Other operating income
(expenses)
(30.6)
(16.9)
(19.5)
(67.0)
Operating profit
445.9
279.4
129.0
854.3
- of which acquisition-related
amortization, expenses and income
· accounted for in administrative
and selling expenses, R&D costs
(4.7)
(39.1)
(7.6)
(51.4)
· accounted for in other
operating income (expenses)
(2.2)
0.0
0.0
(2.2)
- of which goodwill
impairment
0.0
Adjusted operating
profit
452.8
318.5
136.6
907.9
- of which depreciation
expense
(43.6)
(13.9)
(17.6)
(75.1)
- of which amortization
expense
(5.9)
(2.1)
(0.6)
(8.6)
- of which amortization of
development costs
(18.8)
0.0
(0.6)
(19.4)
- of which amortization of
right-of-use assets
0.0
- of which restructuring
costs
(5.4)
(0.1)
(2.9)
(8.4)
Capital expenditure
(53.0)
(9.8)
(12.5)
(75.3)
Capitalized development costs
(23.6)
0.0
(1.6)
(25.2)
Net tangible assets
387.6
100.1
116.2
603.9
Total current assets
1,125.4
731.5
761.8
2,618.7
Total current liabilities
799.3
299.6
399.8
1,498.7
* For the 9-month period ended September 30, 2018, the
presentation of the published data has been modified to reflect the
change in operating segments starting January 1, 2019.
Note 9 - Subsequent events
The Group acquired Connectrac, an innovative US company
specializing in over-floor power and data distribution for new
construction and renovation of commercial buildings. Connectrac
reports annual sales of around $20 million.
Furthermore, subject to standard conditions precedent, the Group
acquired Jobo Smartech. Chinese leader in connected management
solutions dedicated to China’s hotel segment, Jobo Smartech
generates annual sales of over €10 million.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20191107005780/en/
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