France's Legrand tops sales estimates, bets on data centers to offset macro weakness

Legrand SA

13/02/2025 06:00

By Anna Peverieri
       Feb 13 (Reuters) - French electrical and digital
building infrastructure group Legrand guided on Thursday for
full-year 2025 organic sales growth of 6% to 10%, as it reported
full-year sales last year above market expectations.
  The French group, which sells products for the commercial,
industrial, and residential segments of the low voltage market,
reported full-year sales of 8.65 billion euros  ($8.99 billion),
topping a company-provided consensus of 8.54 billion euros. The
beat was driven by a strong demand in data centers, with annual
sales in this segment of 1.6 billion euros.
    "This performance is mainly due to the strong success of our
data center offerings, as well as the sustained pace of
acquisitions during the year," CEO Benoît Coquart said in a call
with journalists. 
    He added the further growth recorded by the group is more
remarkable taking into account a widespread depressed building
market. 
    The European construction market remains sluggish, hit by
high interest rates and weak commercial real estate demand.
However, investments in energy-efficient buildings and data
centers provide a cushion, offering growth opportunities amid
broader sector headwinds.
    In North and Central America, which represent 40.1% of the
group's revenue, sales increased 4.5% year-on-year. In the U.S.,
which accounts for 37% of the group's total revenue, sales
increased 5.7% year-on-year, as a result of a strong demand for
data center solutions. 
    However, in Europe, which represents 40% of the group's
revenue, full-year sales fell 2.3%, hit by a weak construction
market. 
    The group posted full-year adjusted operating profit of 1.78
billion euros, beating the company-compiled consensus of 1.73
billion euros.
    Asked about AI startup DeepSeek, the Chinese low-cost
alternative to U.S. rivals, Coquart told Reuters the growing
adoption of open-source AI models would drive greater artificial
intelligence penetration, fueling demand for data centers to
store and process data.
    However, Legrand did not raise its guidance on the back of
this trend, with the CEO saying DeepSeek and other open-source
models remain fully in line with Legrand's outlook.

($1 = 0.9626 euros)

 (Reporting by Anna Peverieri; Editing by Rod Nickel)
 ((Anna.Peverieri@thomsonreuters.com;))