The benefits are there, but investors remain very cautious. The manufacturer of electrical equipment Great announced Thursday, November 3, in a statement, that it had earned almost 812 million euros in the first nine months of the year, for a turnover of 6.154 billion euros (+ 19.1%). This did not prevent the stock from falling 7.23% to € 71.62 at around 9:35 am, the largest drop in the CAC 40 index, itself down 1.06%. Since the beginning of the year it has lost 30% of its value. For RBC analysts, if “sales and earnings are slightly higher”, analysts’ expectations, “cash flow seems weaker. The forecast for the year is confirmed but it seems prudent given the results” of the first nine months.
Legrand simply confirmed that it is aiming for sales growth of between + 9% and + 12% (excluding currency effects), with organic growth of between + 6% and + 9% in 2022. Given the “uncertain economic outlook” in the world, on the other hand, it is “complicated to plan for 2023”, said its CEO, Benoît Coquart. The group benefited from the positive exchange rate effect, but also from organic sales growth of more than 10%, due to a slight increase in volumes, a perimeter effect linked to acquisitions, and from inflation-driven price growth. “Despite numerous adverse exogenous factors, in particular linked to high generalized inflation, the profitability of the group is showing excellent resistance,” said Benoît Coquart.
The preferred employers of electrical equipment and materials employees
Raw materials and components on the rise
The group recorded an increase in the prices of raw materials and components (+ 15% in these nine months), energy and transport. It raised its prices by 9.9% but less than its costs. On the wage side, “there will probably be gestures” in 2023 too, said Benoît Coquart during an exchange with journalists. On the supply side, “the situation has improved on plastics and mechanical materials. Two complex issues remain: electronic components, and in North America – 40% of our turnover – specific problems with the supply chain in China” confined due to Covid .
On the sales side, “the one that suffers the most is the residential part, people are reallocating certain expenses, especially in Europe”, according to Benoît Coquart. “On the other hand, we have good growth in India, the Middle East and in the energy efficiency products segment.” Legrand has even less exposure as it operates without an order book. However, “our strength is knowing how to adapt, whatever the underlying economic situation”, assures its director. Much of his activity is linked to low-cyclical operations (eg building renovations) and another part in strong expansion (eg energy efficiency solutions).
Legrand, Somfy … here are the best employers of material and electrical material