Legrand Announces Its Intention to Disengage From Russia

Rhea-AI Summary

Legrand has announced its decision to divest its Russian operations amidst rising operational complexity and uncertainty. These activities represented approximately 1.5% of the company’s sales in 2022. The divestment will lead to an impairment charge close to €150 million to be reflected in its 2022 financial statements, impacting its balance sheet exposure to Russia, which stood at €200 million. However, this move is not expected to affect the Group’s adjusted operating profit. Legrand aims to ensure compliance with regulations and maintain operational continuity for local employees and customers.

Positive

• Strategic divestment from Russia to ensure compliance and operational continuity.
• The impairment charge will not impact adjusted operating profit.

Negative

• Impairment charge of approximately €150 million booked against 2022 financial statements.
• Divestment represents only 1.5% of overall sales, indicating limited revenue impact.

LIMOGES, France--(BUSINESS WIRE)-- Regulatory News:

In view of recent developments, including rising operational complexity and uncertainty, Legrand (Paris:LR) has decided to divest its Russian operations and is currently reviewing options for transferring their control in a timely and orderly manner.

Legrand's activities in Russia accounted for approximately 1.5% of full-year sales in 2022. As of December 31, 2022, the Group’s balance-sheet exposure to Russia, including currency translation reserves, amounted to approximately €200 million, of which close to €150 million will be booked in respect of its 2022 consolidated financial statements as an assets impairment, with no impact on the Group’s adjusted operating profit.

Legrand believes this disengagement is the best option to ensure its ongoing compliance with all legislation and regulations as well as the long-term continuity of local operations for its employees and customers.

Key financial dates:

• 2022 annual results: February 9, 2023
  “Quiet period¹” starts January 10, 2023

• 2023 first-quarter results: May 4, 2023
  “Quiet period¹” starts April 4, 2023
• General Meeting of Shareholders: May 31, 2023

About Legrand

Legrand is the global specialist in electrical and digital building infrastructures. Its comprehensive offering of solutions for commercial, industrial and residential markets makes it a benchmark for customers worldwide. The Group harnesses technological and societal trends with lasting impacts on buildings with the purpose of improving life by transforming the spaces where people live, work and meet with electrical, digital infrastructures and connected solutions that are simple, innovative and sustainable. Drawing on an approach that involves all teams and stakeholders, Legrand is pursuing its strategy of profitable and responsible growth driven by acquisitions and innovation, with a steady flow of new offerings—including products with enhanced value in use (faster expanding segments: datacenters, connected offerings and energy efficiency programs). Legrand reported sales of €7.0 billion in 2021. The company is listed on Euronext Paris and is notably a component stock of the CAC 40 and CAC 40 ESG indexes. (code ISIN FR0010307819).
https://www.legrandgroup.com

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¹ Period of time when all communication is suspended in the run-up to publication of results.

View source version on businesswire.com: https://www.businesswire.com/news/home/20230125005580/en/

Investor relations

Legrand

Ronan Marc

Tel: +33 (0)1 49 72 53 53

ronan.marc@legrand.com

Press relations

TBWA Corporate

Tiphaine Raffray

Mob: +33 (0)6 58 27 78 98

tiphaine.raffray@tbwa-corporate.com

Source: Legrand

FAQ

What is Legrand's plan for its Russian operations in 2023?

Legrand has decided to divest its Russian operations due to rising operational complexity and uncertainty.

What financial impact will the divestment of Russian operations have on Legrand?

The divestment will result in an impairment charge of approximately €150 million but will not affect the Group's adjusted operating profit.

How much of Legrand's sales came from Russia in 2022?

Legrand's Russian operations accounted for approximately 1.5% of its total sales in 2022.

When will Legrand announce its 2022 annual results?

Legrand will announce its 2022 annual results on February 9, 2023.

What is the balance-sheet exposure of Legrand related to Russia?

As of December 31, 2022, Legrand's balance-sheet exposure to Russia was approximately €200 million.