LEGRAND Aktie

Ladies and gentlemen, dear shareholders, thank you for being with us. Loyal guests of our annual meetings and on behalf of the Board of Directors, I would like to welcome you to our general assembly. We are very pleased to have you here with us. Last year, we were celebrating 165 years since it was founded in emerge. This year, we're celebrating another anniversary. 2026 is 20 years, since the IPO. of the group.

Many of you have been along with us over these 20 years. And we'd like to thank you for your confidence and loyalty this confidence and loyalty meant that we had to be up to your standards. So we have promised the value creation with quite outstanding value creation with a dividend that went up except for the COVID year.

This year '26, we will be offering an increase of 8.2% of the dividend. This continuous growth is based on a business model that is solid and consistent with an external and organic growth going hand-in-hand with a sustainable growth, which is CSR strategy, which is a source of high performance for the group, making Legrand even more relevant and attractive for its employees for -- it's client and shareholders and is more profitable.

We are in need of technological disruption in geopolitical difficulties. And our agility is allowing us to adapt to this new environment, as shown in our business results and 2030 ambitions. The development of artificial intelligence is a lever for development. We are referencing data center, but we're also using these tools to improve further our productivity and better serve our customers.

This year, you will also be invited to express opinion as the 5 renewal of terms of office, including that of Benoît Coquart and mine. We have had a dissociative governance system at Legrand, and I would be very pleased to carry on this journey for another 3 years. After this general assembly, 80% of independent Board of Directors, who are open minded and who are very solid, and they're sitting here in the first row and they are meeting the highest standards in terms of business governance, and this is an ambition that we would like to maintain.

Finally, this in general assembly will be the time to say goodbye to Mr. Landel. One the pillar of our Board of Directors, who's been one of our directors for 2 terms of office, and he would like now to reserve to resume his personal activities. We will have the opportunity to thank him on behalf of the Board later and on your behalf. Now some housekeeping information regarding this general assembly.

At the entrance, you were given your card as well as a digital tablet to vote on the resolution. After this general assembly, you will have to return the template and in return, you will be given a little present made in France to thank you for your presence and loyalty.

Around me on the rostrum, we have Benoît Coquart, Executive Officer; Franck Lemery, the Chief Financial Officer; as well as Emmanuelle Levine, who is the goal Head of the Legal Department and General Secretary of the Board of Directors. This is an open meeting, which is also webstream in French and English on our website, legrand.com.

I will first to convene our bureau, the scrutineers are the 2 shareholders holding the highest number of votes and who have accepted this function. And if I refer to the list, which was given by the bank, Societe Generale, those shareholders representing the highest number of votes are Olivier Brazil and [ Gisel ]. Thank you to the 2 of you. with the approval of cartons, we will appoint as the secretary of our General Assembly, Mr. Emmanuelle Levine. And our bureau is complete.

Regarding the quorum, I will ask the secretary to remind us of the applicable role. The quorum for an ordinary general meeting of first convening is 20% of shareholders with voting route and for an extraordinary meeting, it's 25%. The provisional is at 80.87% that is the shares being held by those -- having the equity. Therefore, we are in compliant with the French law and the general assembly may be officially open.

So this general assembly is now open. Can you confirm, Emmanuelle, that all the preliminary documents have been made available to the shareholders, yes? The report of the Board on the consolidated account and income statement on December 31, 2025, as well as the text of resolutions and all the legal tax have remained available to the shareholders within the required deadlines.

Members of the Board of Directors are also sitting in the room as well as our statutory auditors. Our general assembly is both ordinary and extraordinary, with ordinary and extraordinary resolutions, which will be presented after this presentation, the ordinary resolutions will go from 1 to 16 as well as #27 and resolutions for the extraordinary meeting are from #17 to #26. We haven't received any request for a new resolution or a new item to be added on the agenda by the shareholders. We are hoping to finish this session around 5:00.

So I will spare you the reading all the reports of the Directors meeting but you will find them in all the documents that are being made available on the website of the company as well as the head office of the company. Our agenda today is now here displayed on the screen. We will first discuss the strategic model, creating value within the group, but this will be presented by Benoît Coquart. Our CFO, Frank Lemery, will report about the financial performance. as well as the CSR by Virgin Gatan, who is in charge of our Environmental CSR department. It's a 6 road map of the group, it's the first year for this sixth road map.

Michel Landel will take the floor regarding the composition of the Board of Directors, and she will speak as Head of the Compensation Committee. And then -- as head of compensation, he will also report about the compensation for the directors for '25 and '26. Emmanuelle Levine will also present the resolutions. Then we will listen to the report of the statutory auditors, then will be a Q&A session. And eventually, we will be voting on our resolutions as they have been proposed.

I will now give the floor Benoit Coquart, who will be talking about our business model and our strategic model.

Dear shareholders, I'm very pleased just like every year to talked to you about Legrand. I wanted to start that we had our IPO 20 years ago, we would need more than today's afternoon to describe and reportable the changes Legrand has gone through. But there's 1 figure to be remember, if I were to summarize it in a nutshell. If you had invested EUR 10,000 in Legrand at the time of the IPO 20 years ago, you would be having EUR 110,000. So it's quite an outstanding and interesting track record, and it would be EUR 30,000 on the CAC 40.

There's 1 thing which has been our line [audio gap] Mark, it's the steady growth of our financial performance. Legrand was first introduced in 70 -- and that was 56 years ago, Legrand France and the dividend of Legrand never went down. Sometimes it was stable during the difficult and challenging years. So the management team, the Board of Directors and all the Legrand teams will tried their best to be up to this performance level in the forthcoming years.

Our positioning is rather unique in the industry. We are a large group, but were not as big as some of the big, big technical companies, and we are bigger than many of the SMEs that are present in the market. This unique position is making us stronger we are more concentrated on the market. We are more focused than other big companies, and we enjoy the technological, human and financial resource that large companies and large groups may have.

This is making us operating on EUR 150 billion market, which is 50% large companies and 50% SMEs. We are -- have a well-balanced global presence, 42% of our revenue in Northern Central America, 38% in Europe and 20% the rest of the world. Today, data center is around for 26% of our turnover. It was only 5 to 10 years ago. And then it's almost 50-50 between residential and nonresidential.

We are driven by a very positive trends that you can see here, the data center, and you just need to read the daily papers to realize that it is a booming market, driven by artificial intelligence. It is considered that the demand in gigawatts will be multiplied by 5 in the forthcoming years. We'll talk about it with Franck Lemery, and we'll see that this trend is a major driver of our revenue. But it's not the only one. There is also the energy transition. You've probably read yesterday that the French government has presented its the electrification plan.

And we are at the heart of this. Every time we shift from fossil fuel to electricity, the electricity production generation to double by 2050. So we need more equipment. It is also driven by the digital lifestyle with the aging of the population. There's a lot of connected care plus the infrastructures, the traditional business of Legrand which is also related to the global population, which should grow by 1.5 billion people by 2050.

So it means more houses, more houses, more hospitals, universities, schools and office buildings. Now the sales -- more than 50% of our sales are related to the Energy & Digital transition. So data center and less than 50%, 47% in the central infrastructure traditional product at Legrand. It's a regular growth at Legrand. It depends pretty much on the license to build, et cetera, on a market which is not always buoyant and everything that is related to digital and energy transition is based on these mega trends that I was referring to earlier, which should be growing even further.

We enjoy a broad range of products, no. We have some 300,000 SKUs, plus 200,000 SKUs of made to request products. You have a few examples here. Now if we were to zoom in on the various activities at Legrand today, we have the complete suite for data center, we were on 2 or 3 families of products like smart switches for various systems in the past. But today, we have the full fledge offering from medium voltage to the testing system, the calling system and protection of the electric circuits.

And for energy transition, we also have everything that is related to the protection that is for products, UPSs, et cetera. For digital lifestyle, our offering is based on 2 segments. Connected care and smart houses. And also, we still have these essential infrastructures that is what you will find the historical business of Legrand that is wiring devices. We're still #1 globally. We are the ones selling the highest number of switches.

And there are many other products, industrial products, the emergency lighting of buildings, a bit of lighting fixtures and floor and selling systems, et cetera. Now this offering is based on innovation. R&D in the long run is always 5% of our sales. It's twice as much as the rest of the industry with 3,000 people who are working in the R&D department and more than 20% developing software and firmware solutions.

We also work a lot on climate change effect with 2 pillars. We are developing solutions, allowing our customers to reduce their energy bill and their CO2 emissions. Up to 35% of energy savings and these solutions with a smart thermostat detector of presence, and that's a lot -- so when we say that the data center consume a lot of energy, but we're part of the solutions, we are offering our customers and solutions to reduce their energy consumption in data centers and to improve the energy efficiency of a data center.

So that's for the product offering, but we also work a lot on circular economy and the impact of our products on the environment. So we disclosed the full life cycle of our products were 74% of our sales. So in total, we consider that 79% of our sales are eco-responsible and that's a competitive edge. I know eco responsibility is not as fashionable as a word as it used to be 5 years ago. But we pushed for this because our customers are pretty sensitive to it.

Now our customer satisfaction is at the core of our growth strategy. It is measured with market indicators. They have not been invented by Legrand. There's a CSAT. I'm sorry for this English abbreviations. So that's customer satisfaction, 80% of our customers satisfied and that there is also the Net Promoter Score, NPS is a score measuring the difference between those who are fan of Legrand and those who will be criticizing Legrand. And it is considered that above 30. It's a very good score, and we are standing at 54.

And these figures have been growing year in, year out. It's based on the interview of 576,000 customers surveyed across 79 countries. So it's quite valid from the statistical standpoint. And based on these figures, we also develop improvement plans. Now artificial intelligence would require hours of debate or the impact of AI on our group can be summarized in 3 ways. It is accelerating our sales growth. We need data centers, data centers that need a certain number of Legrand products we consider that there's 1 megawatt of data center capacity that is built.

If we sell 100% of Legrand capacity, we can sell $2 million to $3 million per megawatt. When you hear about a data center are 50 or more gigawatts. You know that there's a huge opportunity here for us. It is also a tool that will improve our customer satisfaction. We have developed 2 agent tools that are very useful to generate product data. And in AI will in 10 minutes summarize the test for our products, so that's Gaia. And then we have Eli presale and after-sell product support, which has been developed on -- based on Legrand products and may answer many questions that you might have on 200,000 SKUs, and it will be for all our product range in the future.

It is also a driver to improve efficiency. We've used -- worked on 200 use cases for which we develop AI tools with 6,000 of our employees who have been trained and they can be improving their efficiency. And we also software and firmware where a software team will save 30% of their working time thanks to AI and these figures will certainly go up pretty soon.

Now pricing power is very interesting. It's a capacity for us to increase our prices slightly. 2022 was an unusual year because it was a year of high inflation rate. But I would say that the average is more or less 2%. No. Why this pricing power because the value creation makes sense and because the price is important for our customer, but many other aspects also matter the quality of the service, easiness of maintenance, the technical support, et cetera, et cetera.

We're always very reasonable as to our capacity to increase the prices, we will not increase our prices as much as the competition because we consider that it is important to be competitive in an environment which is that of fierce competition. Another lever for growth are mergers and acquisitions.

We made 35 since 2020. So we invested EUR 5 billion. We bought back several billions of euros of annual sales, JPY 1.9 billion. It's a good acquisition machine. This is a quality that's been recognized by the market. We can buy nice companies, talk them to the group to create value. We don't destroy value. And the impact of acquisitions and the repositioning of the group towards energy and digital transition is massive.

These energy and digital transition products account for 75% of the acquired sales. So it is all the levers we have to go towards this energy transition and to have a digital mode of living. The executive committee, you see they look happy, and that's very important. I'd like to specify that we have a mixture of local veterans, people who have been here for 30 to 35 years and others who joined us a few months ago with the management team, which is highly motivated, and they will probably do very well in the future.

Now what 4 of this -- so we have objectives for 2030 that are very ambitious. We want to have a total sales of EUR 15 billion by 2030. In 2017, it was EUR 5 million and this year, it should be 10%. So it is a regular growth. adjusted EBIT margin, more than 20% of sales. Free cash flow, EUR 10 billion during this period of time, half would be used for acquisitions. We've used this treasure because we've made quite a number of acquisitions. We will have a very dynamic policy of capital allocation of dividend payout. These are the financial indicators.

Now for the nonfinancial -- we are maintaining pressure. We still have a lot of ambitions in terms of general diversity, 1/3 of key management positions are held by women. Climate ambitions 25% in Scope 3, 42% in Scope 1 and 2, circular, phasing out single-use plastic in packaging. [ Regine ] will tell you more about this later on. We have a lot of solutions so that customers can save CO2. So we would like customers to avoid the emission of millions over 10 years, which is a lot, and 80% of the Legrand sales must be eco responsible.

So whether it's in the financial -- extra financial sector, we are ambitious for 2030. The first year of this road map is being laid out perfectly in accordance with our plan. We still have 4 or 5 years to go. And your group is motivated to meet these objectives. So this is what I wanted to tell you for those -- we've been following us for a number of years. So you will say, yes, we've been hearing this, but this is part of Legrand's quality. We don't change our strategy overnight. We are quite clear. We adapt our strategy according to the market situations according to the opportunities given to us by this or that segment. But this is a clear path.

And with Franck Lemery, our financial manager, we will have a look at the figures. Thank you. And before giving the floor to Frank, let's have a look at a very short video film.

[Presentation]

Good afternoon, ladies and gentlemen. As Benoit and Cees said, I'm absolutely delighted to share Legrand's news. We have this horizon of 2030 I'm going to tell you about what we've achieved in '25, '26. Would you tell you what happened in the past 5 years?

You're going to look at the beautiful characteristics of Legrand in the past 5 years and really talk about the relations between Legrand and its shareholders. So first, 2025. 2025 was an excellent year, a successful year for the first performance indicator, which is the net sales with the growth, not including ForEx by 13%, up 13%. And we see that the 2 growth drivers traditionally of Legrand functioned fully. The organic nonfinancial, plus 7.7%, and the external growth plus 5%, when we look more closely at the organic growth, so we leave aside the ForEx and the acquisitions, we see 2 things.

The first is that this organic growth at 7.7% is driven by the data centers. They grew last year organically by nearly 40%. So this is a great growth driver in the group's organic growth. And the second thing we see is that the 3 geographical zones of the group we're positive, especially North and Central America, which is the center of the world today in terms of data centers. It is the cradle of this development.

And now let's have a look at our profitability. Here again, it was a very successful year in terms of adjusted operating margin a remarkable year because of our results in absolute terms and operating profitability of 20.7%, which is remarkable. It's one of the best figures reached by the group. And there is an improvement of the profitability compared to the previous years. This is thanks to the organic lever, but also thanks to all the acquisitions.

And thirdly, the reason why we have this remarkable performance, these are the conditions in 2025. They were complex in 2025, 2026 is not very easy to start with, but the group has shown its resilience. It faced a certain number of challenges in this macroeconomics. And we set up new tariffs that cost hundred millions of dollars to the group in the full year of 2025. So therefore, very nice profitability -- the conditions are very demanding, and the performance is, therefore, even more remarkable.

Now to end with the figures of 2025 -- here on this slide, there are 2 topics on which I'd like to draw your attention. The first is the cash generation, which is very important for a group. It's very important for a group to generate cash, cash generation is the ability to have an attractive balance sheet. And it is also a question of being able to invest for the future.

And as every year, Legrand could convert its result more than 100% into cash at 107%. And the second point on which I have to draw your attention is the robustness of the group's balance sheet. So therefore, we can contemplate the future with great piece and come. Here, you see the EBITDA multiple -- at the beginning of the year, the rating agency, S&P confirmed the rating of Legrand with a stable perspective.

And this after a year when the M&A was strong. So we are capable of generating enough cash to meet all our ambitions. So that was for 2025 with all the figures. Not feeling well in the room. So we've just shared the figures. Now beyond the figures, we have the method. How are we going to prepare for the future.

Let's talking about innovation, which is very important in our model. This was underscored by Benoit. We're showing a few examples of new products that were launched last year here with you. Let's begin with the data centers. And I'm going to go into the details of all the projects. But behind all these products, we are supporting the evolution of all the architectures of these data centers, and we are preparing these data centers that will meet the needs of artificial intelligence.

And we are launching products in the field of energy transition, digital lifestyle, infrastructure, essential infrastructure that account for half of our business. Now when we talk about the method the second thing for the group, to prepare for the future. These are the acquisitions. And from that point of view, this year was a successful year -- it was a successful year. I really like this page because we see a lot of acquisitions. We see 7 acquisitions.

This is a good representation of the acquisition model of the group, which can always find some beautiful companies that are not well known, but that are leaders in certain market niches. And so this acquisition allowed us to acquire EUR 500 million of annualized revenue, and we see acquisitions in all the verticals that can help them drive Legrand's growth. Digital lifestyle, some data centers, energy transition. And this is distributed over nearly all the continents and all the important geographical zones of the group. So these are the figures, the achievements in 2025, if you take 2025 alone.

Now I would like to share the history of Legrand during the past 5 years. Now the first thing I'd like to share with you. And this perfectly illustrates 1 of the 4 values of Legrand. We talk about constant and reliable value creation. And 1 thing that is very important is that Legrand is consistent and dependable in terms of value creation in the past 5 years and even more. But in the past 5 years, what are the most important indicators.

We see a growth of 63%, not including ForEx benefits of 86%, a good cash generation, close to 15% of the sales during this period. And our capital allocation policy, which is consistent, coherent, which is creating a lot of value with a very attractive dividend, half of the net profits -- the cash generation is dedicated to prepare for the future with acquisitions and the balance sheet is very solid and robust, as I said.

The second thing I'd like to share, therefore, during this period of 2025, that allows us to take a little bit of hindsight is that we have tried -- and this was our strategy to was a deliberate strategy. We've tried to improve the growth profile of the group. You can see here through the figures, the last 5-year period, the growth, excluding currency effects, was 10.3%.

The next 5 years, we're excluding 2020, which was the COVID period. So the next period, 2015, 2019, excluding currency effects, was 8.2%. So 10.3% versus 8.2%. That is 25% acceleration. But the growth profile, the growth of the group was improved but also the profitability of the group because in the -- the years, the five years before the COVID, the adjusted operating margin was at 19.8%. It was on an average 3.6% during the past 5 years, '21 to '25.

And 1 point that we share at each general meeting. We're deeply attached to this, and I hope that you shareholders are also attached to this. This is the allocation, the value -- added value allocation, which is coherent over the long term. So the definition of added value is to subtract purchases to net sales.

So -- this is what is given to the suppliers. And with this remainder, we see what the group does. Half of what the group does is that it goes to the employees, 1/4 for investment for development -- they are the acquisitions, but also the R&D investments, investments in machinery, buildings, IT and 25% for our other stakeholders and the shareholders are part of this. They benefit from 14% of this add value.

And this 50%, 25%, 25%, this is very consistent in the past few years. And here again, we recognize the stability and the fact that the Legrand Group is stable and reliable. So that was for 2025. Before talking about 2026, I'd like to share a video with you on the data centers that greatly contribute to our growth.

[Presentation]

So that's for the data center, 1 of the drivers for our 2030 trajectory. So we've heard about this ambition that 2025 was quite a buoyant year and the early month of '26 as well. The first quarter figures are fully in line with the ambitions of the group. Here are the first quarter results. The sales, excluding ForEx, plus 18% in based on organic growth, 9%, and that from mergers and acquisition plus 8%.

Regarding acquisitions, as of today, we have announced 5 new acquisitions for a total sales revenue of EUR 360 million. So another very interesting year. The adjusted operating margin is ending at 20.7%, quite promising for 25%, and it is the same percentage for the first quarter of 26% with a net profit attributable to the group that has increased by 14%. So a very good beginning of the year, allowing us to be confident for the full year, even though the economic context is not really good this year.

We are expecting a growth rate, which is in line with our 2030 ambition with sales increasing by 10% or 15%, which would include 4% to 7% of organic growth and 6% of acquisitions, and adjusted operating margin after acquisitions of up to 21%. And as Benoit said several times, and I fully agree with him, we are supporting this financial performance with CSR achievement rate of at least 100% of the second year for the '25, '27 road map.

Now these are the 2 pieces of information I wanted to share with you, reviewing '25 and looking at '26 and having a hindsight on the 5 years now. And now regarding our relations with you shareholders, we usually show you this graph, as Benoit has explained, the curve of the Stock price is self-explained. The annualized growth rate is not so tangible, but with EUR 10,000 invested at Legrand, the performance 20 years ago is 3.7x the 1 you would have had by -- if you had invested on in the CAC 40 listed company an attractive dividend.

I've already said it several times as well as Legrand. That's our allocation policy, some 50% of the payout -- this is allowing us to put as a resolution, a dividend of EUR 2.38, that is plus 8.2%. And also, another way to pay attention to our shareholders is to provide you with a full-fledged set of data information, access to regulated information, tools, allowing you to be part of the company's life like, for instance, recently, you were invited to visit our Paris campus to visit a showroom and discuss with our teams.

So it's a comprehensive system that is supported by the team of the financial communication and legal departments. And that's all for me. Thank you.

No, Legrand is also present when it comes to CSR performance. And thanks to Virginia Gatin. We are going to have an eye on our CSR performance.

So CSR performance, as Frank explained, is nonfinancial performance for Legrand it is making us more relevant to our customers. We work on customer satisfaction a lot to improve this rate and scores making us more relevant for -- to our customers. And we also want to be more attractive, and we have high-end efficiency products that are also meeting our customers' expectations.

And we are being more attractive for our teams because these topics are very important to our employees. It allows us to attract and develop new talents. And that is something very important for those people who would like to join the company but it's also a source of pride for those who are already working with the room and it helps to unite our employees around our purpose and our values and to highlight this strong corporate culture, which also is a driver for performance.

And CSR makes us more efficient. It helps to reduce our cost in a significant way through our energy consumption reductions and also it helps to optimize our processes. It was already presented, and I will go into the details. We launched in '25 our sixth road map for CSR for the '25, '27 period with 5 pillars. And here are the first 2 pillars.

Promoversity and inclusion. Our objective is to have 35% of management positions held by women by '27. 100% of our head count working in a diversified labeled organization that is Gliddiversity label. We will be offering 4,000 job position in early career people and 100 new businesses developed with suppliers committed with 2 diversity conclusions. Regarding climate change, -- we have presented our goals for 2030. For the '25, '27 period, we have an intermediate objective to reduce by 10% emissions for scopes 1 and 2 and to reduce by 30% our CO2 emissions from our suppliers' operations -- so our suppliers will have to commit to reduce by 30%, their own emissions by 2030.

And we are committed to the fact that it will be representing 70% of our purchased goods emissions. The third pillar is the development of a more circular economy. It is an increasingly important topic for our customers. We are working with all our R&D team on this. Our objective by '27 is at 50% of new or redesigned projects. That is product range, to be compliant with the Eco-Design Index criteria of Legrand very stringent criteria to qualify the products as eco design.

We also want to increase the sustainable materials included in our products and Benoit talked about 2030 with the reduction of packages to remove 100% of our packages by 2030. For '27, we want to remove 80% of this plastic in primary packaging. Now serving our customer is the fourth pillar. We want to keep on developing energy efficiency solutions for our customers. We talked about electrification of users, the need to reduce the energy consumption, and these solutions are part of the project.

And for '27, we have 20 million tons of CO2 emissions avoided, thanks to our energy efficiency offerings that will result in 70 million tons for the 2020, 2030 period. For the customer experience, as we've all said, it's very important -- it really is needed to improve our customer satisfaction with the 2 indicators with the CSAT and the NPS, Net Promoter Score, and provide our customers with information on the product that they buy, what is its environmental impact, its footprint.

We have product sustainability profiles, and we deliver to our customer all the information on the life cycle of the product and the impact of the product in the environment. And we want to have 72% of the annual revenue covered by product sustainability profiles. Finally, it's about being a responsible business. We want to have 100% of major suppliers engaged in compliance with our standards. So they will have to meet Ecovadis human right schools and 100% of risky suppliers engaged.

Business ethics, we still work on training our employees on business ethics and on compliance frequency rate with and without leave for our employees and that over interim, we want to reduce this rate by 20% by '27 and train our employees, keep on training our employees and increase the number of employees with 10 hours of annual training for each employee by '27.

Now this year, the first year of the sixth road map, the '25 performance level was very good. So 123% on diversity inclusion, on climate change and circular economy, 89% on being a responsible business and 102% serving our customers. So that's a total rate of 110 achievement rate for the first year. Now what does that mean in real life? We have now at the end of '25, 31.3% of management positions are held by women. So this is improving year in, year out.

We have close to 5,600 opportunities that were offered too early in careers in '25. Regarding climate change, we're very pleased to keep on delivering our teams are locally pretty much involved in reducing the emissions. So that's minus 19% reduction of Scopes 1 and 2 in '25 versus '25, and we have reduced by 34% to the weight of plastic in primary packages, we have some 37 of sustainable materials in our groups, 6 million CO2 scope for emissions were avoided 74% of our revenues covered by product sustainability profiles.

We have reduced by 3% of frequency rate and more than 97 of our employees were trained for at least 8 hours. This has been recognized by nonfinancial rating agencies the leading ones being listed here with still a on CDP. We're still very proud of that. And we are platinum in the EcoVadis ranking system.

Franck has also talked about the financial and nonfinancial results -- now the road map is not only about 2025. But if we consider over the last 5 years, we've reduced by 64% or CO2 emissions for Scopes 1 and 2 we have improved by 27%. The number of women as managers in the group. We've reduced by 40%, the frequency rate of accident by 40% over 5 years and -- we have already avoided 24 million tons of CO2 emissions over 5 years. We are very satisfied with these results, and our teams are fully engaged to improve this even further in the future. As said, that this was making us more attractive to our employees and customers. Now I'd like to show you this video about employer branding.

[Presentation]

Thank you very much, Virginie. Now the time has come to talk about corporate governance and compensation and Michel Landel will take the floor.

Ladies and gentlemen, good afternoon. Thank you to you, Mrs. Chair. She's reminded us that company wants to be very stringent regarding governance. This means that our governance structure means that the separation of the functions of the chair and that of CEO, we are in line with the best practices, and we're in line with the French asset mid for recommendations, a strong commitment of the Board members and the team gathering diverse levels of experience.

Now regarding the composition of the Board of Directors, our 5 objectives to be made is to maintain up to 12 members, who are not employees of the company have more than 70% to than independent and ensure gender equality in our presentation and have relevant experience considering the strategy of the company and making the Board more international.

During this General Meeting, shareholders meeting, you will be asked to vote on the renewal of 5 of those members. Starting with Benoît Coquart, Mrs. Isabel Banco givo, who would come after me as a reference administrator as a reference Board of Directors, Mrs. Valerie [indiscernible], Mrs. Angeles Garcia Borel, who would be renewed as a President of the Board of Directors; and finally, Mrs. Claire Sherer.

So much so that after this general assembly and provided you agree, this would be the composition of the Board of Directors of independent directors, that's well above what is recommended by the French FMD Code, 60% of women and 7 different nationalities. And as you will read on the following slide, we will have a right range of complementary skills to be relied on for our future work.

As my position is concerned, as the lead directors have worked with the compensation committee on the succession plan. I have also worked on the evaluation of the Board's functioning, which was an internal evaluation, which has revealed that this Board is working rather well. I've also moderated 2 meetings of the nonexecutive directors, and I have met with a series of managers of the group during a road show.

Now regarding the Board of Directors activity, 14 meetings were held 16 meetings of the committees and attendance rate of approximately 100%. Now I'll let you discover the composition of the committees after the General Assembly provided you agree on renewal the directors' terms of office, as will be presented to you.

And now I will be talking about the compensation of these directors. So the compensation policy adopted by the Board is simple, transparent and responsible. As for the Chair lady, the policy does not plan for any annual variable compensation and no compensation as a Director. As for the Chief Executive Officer, the structure of compensation is aligned with the interest of the stakeholders and it is consistent with the long-term strategy of the company and the performance conditions are very demanding.

And as for the directors, the variable share of their compensation is predominant. Now if we look at the Chair lady -- in 2025, her compensation, fixed composition was EUR 625,000. In 2026, your Board proposes to maintain this amount, the same amount. As for the Executive Director, his fixed compensation was EUR 900,000. The variable share that can go from 0 to 150% was reached at 120.2% target, the long-term variation that can reach 200% of the fixation through performance shares was valued by an independent expert.

Do you mind that you can see here. As for 2026, the Board proposes to raise the compensation of the Chief Executive Officer from 900,000 to 1.100 million, and it hasn't changed since 2021, and it will position the composition of the Chief Executive Officer at a reasonable level compared to the CAC 40 companies, which is the index. And as for the other compensation elements of the Chief Executive Officer, they remain unchanged.

On the next slide, you can see that the structure in 26 and 25 for this compensation of the Chief Executive Officer was based at 75% on the variable compensation, 50% for the long-term variable compensation, 20% on the annual variable compensation. So the fixed share is 25% of the total compensation. And as for CSR, you see that there's a significant component because it is 17.5% of the target value for the total annual compensation.

And as for the compensation of the directors in 2026 -- the Board proposes to renew the policy that we had in 2025 with 1 difference, which is the amount of the variable share for each attendance to an exceptional Board meeting, which will go to EUR 25,000 instead of EUR 5,000. Sorry, EUR 2,500 instead of EUR 5,000. Thank you.

Please don't leave Michele because as I said in my introduction, it will be the last participation of Michel Landel as director, since his term will expire at the end of this meeting. He's enriches meeting this group with this great wisdom and his great humanity. And I'd like to thank him for these years of service and wish him the best for the future. Thank you, Michel.

Thank you very much. Thank you. It was a very interesting experience to take part in this Board a company with a great culture, wonderful teams because the company is made up of men and women, and I can guarantee you that the people we meet within Legrand all worth it. Thank you very much.

Thank you very much, Michel. It is time now to review the resolutions. Emmanuelle Levine, you have the floor.

So the first 3 resolutions presented at the Board are on the approval of the company's financial statements, consolidated financial statements and earnings -- the dividend is EUR 2.38 per share, which is taken from the distributable earnings. The date of detachment of the dividend will be the 23 of May '26, and the division will be paid out to the shareholders on the second of June 2026.

The fourth resolution concerns the vote on the information on the compensation paid to all the officers in 2025 and attributed during that same financial year that is Article L-22-10,341 of the French Commercial Code. Fifth and sixth resolutions are the CNP expos. This is for the compensation of the Chairperson of the Board and the for 2025. Seventh and eighth resolution concerned this say-on-pay Exane, you have to vote on the 2026 pay for the Chair and the CEO of the ninth resolution is the maximum amount of compensation of the directors. The tenth resolution is for the ex anti-say-on-pay you have to approve the compensation for 2026 applicable to the members of the Board. 11th and 15 resolutions are on the renewal of the terms of office of Bernardo, Isabel Concebra, value short Angeles, Garcia, Pobeda and Claire Scherer.

The next resolution is for all the formalities after your meeting is held. 16th and 17th Resolutions concern the renewal for the authorization to buy back shares and the authorization to cancel shares. As for the 16th resolution, which is under the ordinary meeting, will increase the maximum purchase price to EUR 250 per share.

The extraordinary part is to give the board to proceed to reduce the share capital by canceling the treasury shares -- as for Resolution 16 and 17, the Board can buy back the shares of the company and reduce the corporate share according to the conditions in compliance with the market. Resolutions 18 to 25 -- this is to read to renew the financial authorizations approved by the general meeting on the 29th of May 2024. By voting on these resolutions, you will allow the Board to issue some shares under certain conditions according to the market opportunities and the group financial needs to preserve the rights of each shareholder.

This would be limited in terms of time amount, and there would be a cap according to the legislation applicable according to the recommendations according to the practices on the market. And therefore, we propose to limit the financial delegations granted to the Board to iteration of 26 months, maximum caps that be strictly determined for each authorization beyond which the Board will need to convene the general assembly meeting to obtain more authorizations.

For -- with the nodes, I mean, when you don't have any subscription rights, there could not be any increase in capital above EUR 100 million for resolutions with maintenance of preferential subscription rights. We cannot have any increase of capital above EUR 200 million knowing that this amount is also the overall cap applying to any financial delegation except for the 22nd resolution on the increase of capital by incorporation of reserves benefits or premiums or others, some whose capitalization would be limited.

As for Resolution 21, it would allow the Board to -- according to the limitations to maintain the preferential subscription rights in case of an excess demand according to the resolutions in application with which the issuing is carried out. And finally, the 26th resolution considers the modification of Article 9.2 of the Articles of Association on the nomination of the directors representing the employees.

Thank you, Emmanuel, and now it is time to listen to our statutory auditors. The joint auditors will be represented by Gal Lemonofides, you have the floor. Thank you, Gale.

Ladies and gentlemen, dear shareholders, good afternoon. On behalf of the statutory auditors will present a summary of all the various reports that we established your attention for this general meeting. These reports have been given to you are at your disposal. So I'll limit my comments to all the essential items. So for 2025, our reports are on the following points. The certification of the consolidated financial statements, and certification of the individual accounts of Legrand SA, the issuing of a limited opinion in terms of sustainability established by the group, the related party agreements and the increase in capital competitive -- contemplated by your company that have been just presented to you.

So to begin, as for the second resolution, I confirm that we have certified without any variations, the consolidated financial statements of 2025 considering the international IFRS reference, there are 2 points of our consolidated financial statements that are developed in our report. These are the tests of the goodwill and the in undetermined time the litigations and the possible liabilities.

So for each of these points, we've reviewed the accounting methods and implemented, and we made sure that all these assessments were reasonable, all the assessments made by the company and that all the information which are given in the Annex are correct. As for the individual accounts of Legrand SA, they have also been audited without any reservations. The key point of the audit are on the assessment of the fair value measurement of the equity securities.

On the next slide, you can see that we issued a report on the information in terms of sustainability established by Legrand in order to implement the CSRD directive. This has been done according to the vote authority of auditing. Our report complies with the analysis process of the dual materiality carried out by Legrand to identify the material issues and the information that can be published.

The compliance of the information published according to the SRS sustainability standards and the IFRS taxes. So for these 3 points, we've issued a compliance. So this means that we have not noted any errors, no inconsistencies or any significant emissions. Next slide, we have issued a report on the related party agreements, where we indicate that no convention were concluded or authorized during the financial year are approved by the Board that were pursued during this financial year.

And to end, as for Resolutions 17 and 25 on the extraordinary part of your general meeting, we have issued 3 reports on the delegations granted to your Board to proceed with operations on the capital of your company. And we have no observations to make on these operations that are part of the conditions planned by the French commercial code and the definitive conditions according to which the increase in capital would be made have not been fixed.

So therefore, we're not expressing any opinion about that. Ladies and gentlemen, thank you for your attention.

Thank you very much, Gail. I'd like to thank all the joint auditors for their work. And now we'd like to give the floor to the shareholders we've received 6 written questions from 2 shareholders, and the answer to these questions are published on the Internet site of legrand.com in the section of the combined general meeting.

Now in addition to all the legal formalities, the shareholders had the possibilities between Wednesday, the 20th of May and the 26th of May, 3 p.m. Paris time to address your questions by e-mail. I suggest we move on to the oral questions. Please be brief when you present your questions so that we can give the floor to the greater number of shareholders. And please wait to be given a microphone before putting your question. And please introduce yourself. And when you finish putting all your questions, we will proceed with the voting of the resolutions.

Good afternoon, dear shareholders. My name is Guillaume Dalio. I represent Kakao, shareholder of Legrand since its launch in 2021. We've always considered Legrand has a great investment. It has always generated cash, and as always presented a strong balance sheet. I was surprised by the issuing in June '25, of a convertible bond of EUR 800 million over 8 years.

And unless I'm mistaken, this is the first 1 since the IPO in 2006. So my question is the following. What operational elements, financial and strategic led the Board to favor this mode of financing? And how will the Board justify a conversion premium of 45% when it is not very protective for the existing shareholders, considering the historical performance that you recall and very enthusiastic presented by the management. Thank you.

Thank you for your question. I will answer this question. we answered this question in writing also because actually, it's the same question. I think we even exchanged on this during the year. You have to -- remember the conditions we had at the time and why we had to have recourse to this type of financing. It's a very highly competitive financing. The coupon is half of the coupon of a normal bond 1.5%.

Normally, we'd have had 3.35%. So very competitive coupon issuing premium, which is benchmark, 45%, which is a very good premium. The moment was very favorable -- the convertible bond was issued 2 days after Legrand reached its historical high. So that was the threshold to trigger this conversion, which was a very high threshold and the financial needs the traditional financial needs, which are the acquisitions -- so it is a traditional instrument that had not been used by Legrand in the past, as you recall, it was studied certain times by Lucent. It was used by a great number of companies of the CAC 40, peers of Legrand, other very good companies at a term, which was the right time for the company.

And when you look at Legrand's stock exchange performance in the past few years, you can see that conversion is possible. It's good news. That means that the share has progressed and conversion, if it takes place, it will dilute the capital by 1.9%, which is not that greater amount. And we still have time to address dilution.

Once again, if we properly manage the group's dilution, we avoided more modest dilutions for shares for the employee, the employee share ownership plan, et cetera. The number of shares went down from 2020 to '25 by EUR 5 million. And so that is the conversion -- hypothetical conversion of this instrument. So it's all these arguments that were brought to the Board, the diversification of the financing at a time that was the right time very competitive moment, no threat on the balance sheet, as I recalled earlier on, the S&P rating I gave to place after this. after this year, which was a very rich year. So these are the arguments I shared with the Board in June and it convinced us as Andrea.

I understand also that it was more than 50% increase in our stock price. It was not really a problem. It's a kind of problem we are happy with. We don't want to go in a recurrent cycle of convertible bonds, and you can be sure that we pay great attention to this even than a 3 people also convened for questions. Make sure you speak in the microphone.

My name is Christian Dara. Mrs. Board. We didn't talk about China, neither India. Are there any opportunities? Or are they threatening countries? Well, these 2 countries are 2 countries where we have a strong operation?

India is bigger than China. We've been there for a long time. We have an organic growth there, except for the 2020 year, which was a year of COVID and it's the fourth leading country of the group. We delocate their R&D and production -- and we use India as a base for the U.S. market.

So India, we're probably the third leading country within the group enjoying a very high growth rate. China, it's a bit different. We're much smaller in China. -- highly competitive, access is difficult. Nevertheless, Legrand is profitable in China, but the real estate market has been suffering quite a lot in China recently. And this has an impact on us. We have shifted and we bought the Chinese leader of the cabinet for data centers 50% of our sales revenue will come from data center in China.

So what we do at the group level also is true for China. And we're hoping that we will resume with growth, but we're smaller than India. Now is China a threat for our positions out of China, well, we are fortunate to be in a rather protected business, which is rather complex where there is a need of having a very high number of SKUs, 300,000 that I've already said, not necessarily the same for each country.

So our sector is not necessarily targeted by the Chinese operators. But we have the strength to respond to this -- so in a nutshell, India is an extraordinary country for opportunities. I have more reservation regarding China because of our position, but we have good hope to resume with growth in these markets in the future.

Good afternoon, everyone. Christian Shaber, I'm any shareholder. I have a question about artificial intelligence. Could you make the difference between perception AI and generative AI and physical and agentic AI. Could you give us actual examples on physical and genicAI?

Well, we're not in the same position in the value chain of the AI business. We are allowing hyperscalers to install the equipment with the cabinet or we use AI for Agentic AI. I've talked about it in my presentation. Product support systems. It is an extremely complex and technical environment.

And today, we have many, many people who are answering the phone to questions raised by various clients, be they individual or businesses. And -- we have -- we are using this tool for our aftersales services. And in long term, we will have them on our website to answer more relevant fashion to your questions. So that's an example of AgenticAI.

Now for the actual physical part. I don't know what you're referring to. That is the infrastructure to support AI. These are all the solutions that we are putting on the market for data centers, even though we don't talked very much about it. We are partners of NVIDIA on some product solutions. We are working with them on the next generation of chips. So as to see how we can adapt our cooling systems, production system or testing systems, which will be on the market in the future. I hope I've answered your question.

Thank you for your explanation. I'd like to talk about the external growth. Cogeco -- is it an industry or an installer of Access Systems? Now let's talk about distribution networks and whether you're a prescriber. Do you have a direct contract with data center operators, such as OVH Cloud, for instance? Or are you providing technical solutions and not only equipment to those operators. Is it -- are you only selling parts or full-fledged systems?

I'll try and be brief to answer your questions, your many questions, Koge is a manufacturer of access control systems on -- in a building, for instance, your ring and it will send a signal to you as a dweller of the building or to the service, managing the access to the building, which is really coming as a complement to Legrand business. We are very good with the wired system while Cougle is using GSM solution for access to building it's a very good example of the industry in France.

Cosgel is a leading employer in Cholet. So we were present in SonyLimo,Jantiv, Starsberg and various industrial sites in France, and we're adding Cole Now, are we acting as a company prescribing solutions. Well, if I take the French example, we have 3 sales reps in France. Very few of them are involved in distribution -- but these companies, these businesses are installers, smaller big ones or they are prescribing for buildings with architects and designers or more technical prescribers.

So I do confirm that we do work a lot in the prescription side to have our products put in the terms of reference. Now the direct markets, that's some 80% of the data center market. We deal directly with operators such as Google, Microsoft, Amazon XII and in China, Tencent, Alibaba and others. That's most of our sales revenue.

And we have also co-locators, as we call them, with data centers that are rented to hyperscalers. But I would say that more than 80% of data center contracts or direct contracts with direct customers.

There is another question here on the left.

Lonasen individual shareholder -- my question is the following. So the growth rate in the U.S. has been quite high. As you've explained -- my understanding is that it is because you're selling equipment for data centers. But once you've sold equipment, is there more revenue or sales revenue generated after that? In terms, like, for instance, of services, I've heard that there were some problems regarding power generation in the U.S. that the data centers are consuming so much power that it was even difficult for the local communities to have access to electricity or that the price of electricity went up too much and that the we wonder whether the power generation will be good enough to provide power to the data center.

And my second question regarding financial aspects. You said it's -- the ForEx impact is excluded. I would assume that the euro-dollar exchange rates does have an impact on your business? Is there any hedging solution regarding this? Any way to compensate for it's losses due to ForEx. And I've been a shareholder for many, many years. And every year, you present that there are mergers and acquisitions. How can you make sure that it's not hotchpotch of different companies that are not truly Legrand labeled and that they are truly meeting the CSR objectives and that they do stand by the standards.

While we know that in many countries, you have different standards.

Benoit will answer the first 2 questions. And the last question, and then Franck will answer the question regarding ForEx, foreign exchange.

No, there is a lot of presale and a little after sale for the data centers -- we sell a bit of services, supply of components, but 95% of the value is at the time of the initial equipment providing to the data center. What is an opportunity for future business -- it's made for by holes if all 1 is well completed, then -- and that their client is happy, they will ask for us to be involved in the construction and the equipment of all 2 to all 3, et cetera. So it's not truly after sales.

Now for power generation, I think there is a bit of a exaggerated comment about this data center accounts for 3% of electricity consumption and 6% in 2030, global electricity consumption. We're not looking 30%. But it is true that in some areas in North Virginia, around Dublin, Amsterdam, highly dense population where it can account for 15% to 20% raising through social problems. Is it a problem?

Well, it's an opportunity for Legrand. Quite the opposite, everything that we can do to reduce the energy electricity consumption of data center is PUE that is how much power do you actually need for the data centers. This PUE was 1.6% up until recently, 1.6 megawatt of electricity to have 1 megawatt of data center equipment running.

Well, it is going down. So we're making data centers even more efficient and also means that there is new needs of generation few people know about it is that renewables, in spite of the Trump administration, the renewable market is really high because there's telly a payback between solar panels, wind power, et cetera, and the cost of these systems and the payback of these systems over the last acquisitions we've made in the U.S.,

I'm thinking about Cratos and Altran providing testing solutions have 50% of their turnover in data centers. And the other half, another energy transition-related items, PV panels, et cetera. So more products making data centers more efficient from the energy standpoint, and we're also working on energy generation products.

I'll leave it up then to Franck answering the question regarding foreign exchange. Now regarding acquisitions, you've noticed that -- we've had 1 acquisition per month, more than we did prior to that. But we have some margin from Manor. It's an extremely industrialized process. So very quickly we have rules and procedures that are in place financial procedures to start with.

The companies that are acquired are reporting their figures based on our Legrand same for CSR. They will have to meet our CSR road map. They have to comply with the same obligations as any other Legrand entity. And I think that all this is only in a rather efficient manner. There is a docking but no actual integration. We work in partnership with the targeted company's employees. It's a smooth process. And oftentimes, when these companies join Legrand, their growth rate will be accelerated. We're not talking about restructuring failing companies. It is a source of revenue and it is making our processes easier.

Sometimes you have a few glitches. It might take more -- might take some time for more companies, but it's a docking system that works a lot and we've done many acquisitions and our margin has gone up.

Now regarding the foreign exchange impact, you're absolutely right to say that regarding the sales revenue we exclude the foreign exchange because what we control is truly organic and acquisitions. Our exposure is to the U.S. dollar, but a few other emerging currencies, 40% of our sales revenue is made in euros.

But over the last decade, it's really nonsignificant. This foreign exchange impact. It's not because of hedging. We don't go for hedging. It's just that we have a kind of so-called natural hedging. For the -- based on the supply chain, we quite often manufacture in the region, where we sell. So ultimately, the foreign exchange doesn't have an impact on the margin on the value maybe, but the profitability is unchanged.

So it is smoothed out and balanced out of over the year. It doesn't have an impact on the overall performance. And when we communicate our figures, excluding foreign exchange, it is better reflecting the actual reality of the group.

A question here on the right.

Good afternoon. I'd like to thank you all for this general meeting of shareholders. I've listened to you to a great attention. You are reassuring your shareholders because of the stability that you are presenting today and reporting today. I've listened to you with great attention when you talked about the data centers and that it will be a driver of organic growth of the group with Gadot and Siemens.

Now my question is the following 1.9% of the expected growth rate for Europe. What is the growth rate you were expecting for data centers in Europe and in we have at the group level. Let me remind you, 26% of the sales revenue from data centers. We've said this year that they should grow by 10% to 20% organically. And at the end of the first quarter, we said it would be a higher level so closer to 20%. With possible good surprises now this growth rate is mainly observable in the United States, accounting for some 17% of the market.

The data center market is not enjoying the same growth rate in Europe, unfortunately and in other countries either because the investments have just started -- and it takes some time between the time you invest the first euro dollar until the time the data center is actually built in France, you have a problem of connection to the grid. 1 kilometer of grid, it takes 1 to 3 months you need sometimes 2 to 3 years before you actually have data centers.

But it's going to happen. All specialists agree on saying that the European data center market will be enjoying a high growth rates. It's a promising market, but the growth rate is not as rapid in Europe, France and Germany as in the United States.

There's another question here on the right.

#4, as I'm mistaken, you showed that you had activities in the charging of electric vehicles. Each time I stop, I try to see who is the manufacturer of the charging station. And I've now seen a station with Leon Rendino it. So maybe I didn't observe, well, please correct me if I'm wrong. Well, the question is, why don't we sell more stations who mean charging stations? Well, -- maybe you've seen stations with Eco Tap written on it. EcoTapis Lucratinos also Legrand or steal we are victims of our brand policy and all that we sell does not appear under the brand Leone. Now more seriously speaking, this is a highly competitive market. We have business with that less than 20% of our net sales. We don't have great ambitions in that sector because it highly competitive, and there are hundreds of players who manufacture stations and many of them are not profitable.

What I'm interested in electrific issue is what's there behind the station that you can't see. And often, there's a transformer that isn't too far away a low-voltage panel measuring storage of enGen for a company like Lam -- that's where the value would lie as in the station itself. And when you charge in station XZOY, you would think that it's a circuit breaker of the company of which I'm a share.

Thank you. Thank you very much. Thank you. Well, if there are no more questions, let's proceed to the vote of the resolutions. Our Investor Relations teams are always in contact with you, and you will always have the opportunity to contact them and discuss with them Emmanuelle.

So I will give you the definitive quorum before proceeding with the vote the definitive figures for the shareholders present or represented are following 1,585 shareholders that represent 8.87% of the capital and the total number of shares with the voting rights of 211.397,917. So we confirm that the required quorum for the ordinary shareholders' meeting and for the extraordinary shareholders' meeting are there. And I'm going to give the floor to Emmanuelle so that we proceed with the voting, thank you.

As we're going to vote on the resolutions. It's an electronic vote. We're going to show you the film to show you how to use the tablets to vote on the resolutions of the general meeting, you've been handed a tablet. It is strictly personal and will only serve during this shareholder meeting.

When we ask you to vote to our resolution, the window will display automatically on the tablet even if the tablet is in sleep. To vote, nothing simpler just press on the button corresponding to your choice in favor, abstention or against. Press on okay to validate your choice before losing before the closing of the poll. Once your vote has been validated, you cannot change it anymore. Please return your tablet before exiting this room.

Now we're going to vote on the resolutions. I suggest these resolutions not be read fully before each vote.

First resolution, approval of the company's financial statements for 2025. The poll is open.

[Voting]

The poll is closed. The resolution is adopted. Resolution #2, approval of the consolidated financial statements for 2025 and the poll is open.

[Voting]

The poll is closed. This resolution is adopted. Resolution #3, allocation of earnings of 2025 and determination of the dividend, the poll is open.

[Voting]

This resolution is adopted. Fourth resolution, approval of information referred to in Article L221091 of the French Commercial Code in accordance with Article 10 1 of the French commercial code. The poll is open.

[Voting]

The poll Closed. This resolution is adopted. Fifth resolution, approval of compensation components and benefits of any kind paid during or granted in respect of 2025 to Anders Garcia Pobeda, Chair of the Board of Directors. The poll is open.

[Voting]

The poll is closed. This resolution is adopted. Sixth resolution, approval of compensation components and benefits of any kind page during or granted with respect to 2025 to Benoît Coquart Chief Executive Officer. The poll is open.

[Voting]

The poll is closed Seventh resolution, approval of the compensation policy applicable to the Chair of the Board of Directors. The poll is open.

[Voting]

Eighth resolution, approval of the compensation policy applicable to the Chief Executive Officer. The poll is open.

[Voting]

This resolution is adopted. Ninth resolution, maximum amount of compensation paid to the members of the Board of Directors. The poll is open.

[Voting]

The poll is closed. This resolution is approved. Tenth resolution, approval of the compensation policy applicable to the members of the Board of Directors. The poll is open.

[Voting]

The poll is closed. This resolution is adopted. 11th transition renewal of Benoît Coquart, term of office as Director. The poll is open.

[Voting]

The poll is closed. This resolution is adopted. 12th resolution renewal of Isabel Boon Jibo term of office as Director. The polls open.

[Voting]

The poll is closed. This resolution is adopted. Resolution #13, renewal of Valerie Shorts of office as director. The poll is open.

[Voting]

The poll is closed. This resolution is adopted. 14th resolution, renewal of Angeles Garcia Poetas term of office as Director. The poll is open.

[Voting]

The poll is closed. This resolution is adopted. 15th resolution, renewal of Clair sharers term of office as Director. The poll is open.

[Voting]

The poll is closed. This resolution is adopted. 16th resolution, authorization granted to the Board of Directors to allow the company to trade its own shares. The vote is open.

[Voting]

The poll is closed. This resolution stands approved. 17th resolution, authorization granted to the Board of Directors to carry out a share capital decrease by cancellation of treasury shares. The poll is open.

[Voting]

The poll is closed. This resolution is approved. 18th resolution, delegation of authority granted to the Board of Directors to increase the share capital by issuing ordinary shares equity securities giving access to other equity secretaries or giving right to the allocation of debt securities and/or securities giving access to equity securities with preferential subscription rights. The poll is open.

[Voting]

The poll is closed. this resolution is adopted. 19th resolution, delegation of authority granted to the Board of Directors to issue shares or complex securities by way of a public offering other than those referred to in article L411-21 of the French Monte and Financial Code without preferential subscription rights. The poll is open.

[Voting]

Poll is closed. The resolution is approved. Resolution #20, delegation of authority granted to the Board of Directors to issue shares or complex securities by way of a public offering as referred to an article L-411-21 of the French monetary and Financial Code without preferential subscription rights. The poll is open.

[Voting]

The poll is closed. Resolution approved. Resolution 21, delegation of authority granted to the Board of Directors in view of increasing the amount of issuances carried out with or without preferential subscription rights in the event of excess demand pursuant to the 18th, 19th and 20th resolutions. The poll is open.

[Voting]

The poll is closed. Resolution approved. Resolution #22, delegation of authority granted to the Board of Directors to increase the share capital by incorporation of reserves, earnings, premiums or other sums, which may be capitalized under the applicable regulations. The poll is open.

[Voting]

Poll is closed. Resolution approved. Delegation #23. Delegation of authority granted to the Board of Directors to issue shares or complex securities to members of a company or group savings plan without shareholders' preferential subscription rights. The poll is open.

[Voting]

The poll is closed. Resolution approved. Resolution #24, delegation of authority granted to the Board of Directors to issue shares or complex securities as consideration for contributions in kind granted to the company with shareholders' preferential subscription rights waived in favor of the holders of the shares or securities constituting the contribution in kind. The poll is open.

[Voting]

Poll is closed. Resolution approved. Resolution #25, overall limit of delegations of authority. Poll is open.

[Voting]

Poll is closed Resolution is approved. Resolution #26, amendment to Article 9.2 of the company's Articles of Association. Poll is open.

[Voting]

Poll is closed. Resolution approved. Finally, resolution #27 powers to carry out legal formalities. The poll is open.

[Voting]

Poll is closed. Resolution is approved. Well, thank you.

Thank you, ladies and gentlemen, I would like to thank you again for your confidence with this very high rate of approval personal. I'm very pleased to carry on in my term of office as President of the Chair of the Board of Directors. The items of the agenda have all been exhausted. We are informing that the next general assembly will be held next year on May 26, 2027.

Please do not forget to hand back your tablet and return of which you will be given present souvenir as a sign of recognition of your loyalty to the group. Thank you again for your participation, and we wish you a very nice afternoon. Thank you.

[Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]

Good morning, ladies and gentlemen, and welcome to today's Legrand 2026 First Quarter Results Conference Call. For your information, this conference is being recorded. [Operator Instructions] Later, there will be a question-and-answer session.

At this time, I would like to hand the call over to CEO, Mr. Benoît Coquart; and CFO, Mr. Franck Lemery. Please go ahead, sir.

Thank you very much. Good morning, everybody. Franck Lemery, Ronan Marc and I are happy to welcome you to Legrand Q1 2026 Conference Call and Webcast. As you know, this morning, we published our press release, financial statements and the slide show that we will refer to during the call. After a few opening remarks, we will comment the results into more details.

Let me start on Page 4 with the key highlights of the quarter. First, Legrand delivered strong sales growth driven by data centers and acquisitions while maintaining excellent profitability. Second, we announced 4 very exciting acquisitions since the beginning of the year. Third, we confirm our full year 2026 targets.

Moving to Pages 6 and 7. I will start with an overview of sales. Sales delivered strong growth of plus 18.3%, excluding currency effects, comprising organic growth of plus 9.3% with a strong contribution of our data center offerings, growing like-for-like around plus 30%, and growth through acquisitions of plus 8.2%. Based on acquisitions announced and the likely date of consolidation, the overall impact of acquisitions should be close to plus 7% for the full year. The FX effect was minus 5.8% for the quarter. Based on average exchange rates in April 2026, the full year currency effect would be around minus 2%.

On Page 7, you will find the key takeaways per geographies on a like-for-like basis. Europe saw sales down minus 2.8% in a building market that remains contrasted. North and Central America delivered a strong plus 25.8% performance, driven by strong success of data center-related offerings in the U.S. Lastly, Rest of the World was down minus 1.8% in the first quarter despite a very nice growth in India, Sales in the Middle East, which stood only at 1.7% of our FY 2025 sales were not impacted by the geopolitical situation in Q1. These were the main comments I wanted to make on sales.

I will now hand over to Franck for more color on our financial performance.

Thank you, Benoit, and good morning, everyone. I will start on Page 8 with adjusted operating margin. Profitability remained very strong and resilient in Q1 with an adjusted operating margin of 20.7%. Despite inflation already impacting the cost base, this level of profitability reflects our solid execution, our adaptability and the quality of our recent acquisitions. Of course, we remain fully mobilized to address the global geopolitical environment.

Going now to Page 9. First, net profit reached EUR 335 million, up plus 14% versus Q1 2025. This increase was driven primarily by higher profit on operating, a lower corporate income tax of 26% and the negative evolution of the financial results. Second, free cash flow came to EUR 221 million, representing 8.7% of sales, and our net debt-to-EBITDA ratio stood at 2.1 at the end of the quarter.

This is it for the key financial topics I wanted to share with you this morning. I'm now handing over back to Benoit.

Thank you, Franck. We can move now to Page 11. Confidence in our execution capabilities and our ability to adapt to an uncertain economic environment, we confirm our 2026 targets. With the following for the full year: sales growth, excluding currency effects of between plus 10% and plus 15%, comprising organic growth between plus 4% and plus 7% and growth through acquisitions of between plus 6% and plus 8%; adjusted operating margin after acquisitions of 20.5% to 21% of sales; a CSR achievement rate of at least 100% for the second year of our 2025-2027 road map.

On Page 13, a reminder of the 4 acquisitions we announced so far in 2026. All the 4 are in data centers and energy transition, representing combined annual revenue of around EUR 275 million. These transactions, done at very reasonable multiples, strengthen our leadership position in buoyant markets and illustrate once again our ability to identify, execute and integrate acquisitions with discipline.

On Page 15. Legrand benefits from very strong employee engagement. This is illustrated by the success of our second international employee share ownership plan.

Now a few words on the key topics on the agenda of our incoming General Meeting of Shareholders, which will take place on May 27, on Page 17 and 18. Subject to the proposed renewals approval, the Board composition will continue to be among the industry's best practices, with 80% of independent members, 60% of women and 7 nationalities. And as announced previously, the proposed dividend for 2025 is of EUR 2.38 per share, up plus 8.2% versus last year with a 50% payout.

To conclude, I would also like to highlight that we will host the Capital Markets Day in Singapore on September 29, 2026, to provide a progress update on our strategic road map with a particular focus on data centers. We would be very happy to meet you there, and you are all kindly invited.

Those were the key topics of this release, I suggest we now switch to Q&A. Thank you.

[Operator Instructions] And the first question comes from the line of George Featherstone from Barclays.

You started off with 30% like-for-like growth in data centers. And clearly, that's above the guide that you gave previously of 10% to 20%. So first couple of questions on this. I just wondered what you're seeing in terms of order intake, backlog pipeline ahead and whether you're sticking to that 10% to 20%? And if you can maybe compare the growth rates you're seeing in the U.S. versus Europe, that would be helpful.

Well, the 30% is quite a good performance. And when we compare ourselves with the market trends, even though it's not completely, let's say, relevant on a quarterly basis, I think we are doing well. We are slightly above plus 30% in the U.S. The U.S. is clearly growing faster than the rest of the world. And I don't believe it's Legrand specific. I think it's really market specific. The U.S. market for data centers is super hot.

We indeed told you when we entered the year that we were shooting for 10% to 20% growth in data centers, given the Q1 we did and given the large number of orders we continue to get, we will definitely be closer to the high end of the 10% to 20% than to the low end. So we are even more optimistic than we were on the data center business, and all KPIs are well oriented and demonstrate that, once again, 2026 will be a good year. And I have to say that it will be a good year after 2025, which was a fantastic year. I remind you that we grew plus 40% in 2025 and after 2024, which was, again, a good year with plus 15%. So difficult to give you a precise number, but I can only confirm that we will see a very nice growth in data center in 2026.

Now you may wonder why despite the fact that the upper end of the data center guidance, plus 20%, is now more likely than the lower end, why we are not revising our global guidance up. Well, we have to admit at the same time that on the building front, we have probably more uncertainties than we had 3 months back because of the geopolitical situation, which did not impact Q1, but which creates additional uncertainties. So our guidance is kept at the same level, even though Q1 was probably higher than you may have expected and despite the fact that the data center is growing nicely because we remain a bit cautious on the impact of the geopolitical situation.

Okay. That's very helpful. Just maybe one follow-up on that last point. Is there anything you've seen sort of further deterioration, maybe, in those buildings markets through April in the second quarter?

Well, I'll not comment on the month of April, the impact of the geopolitical situation should, of course, come to at least two topics. Number one, the Middle East sales, which, by the way, is less than 2% of our sales, right? If you put together the whole zone, Saudi, UAE, Lebanon, Qatar, Oman, and a few other countries, it's less than 2% of our sales. So the impact at group level will be limited.

And the second impact, and I'm sure that we'll have the opportunity to discuss that during the call, is the impact it has on purchase price, and therefore, on our selling price. Now again, we are -- even though there's just a bit more uncertainty on the building front, we remain extremely confident in our ability to achieve our guidance and extremely confident on the fact that the data center business will deliver a very strong growth in 2026.

Needless to say, and we shouldn't forget it, beyond the short-term uncertainty, and I don't believe that the short-term uncertainty is higher for our sector than it is for others. The long-term prospects for building business of Legrand are very good. There will be some recovery. Hopefully, this recovery will happen as early as late 2026. There's a strong need for housing all across the world. I mean, in Germany, in France, in the U.K., in India, in the U.S. We've been able to move towards new nonresidential verticals, which will support the growth.

Our energy transition business, by the way, is growing slightly in Q1. So all the growth is not coming from data centers. We also have some energy transition businesses growing, especially in the U.S., where our move towards new verticals from the office and from the resi building and more into health care, education, infra, industrial buildings, photovoltaic shows pretty good results with a nice growth. So again, the fact that we have short-term uncertainty doesn't mean that we are not very confident on the fact that beyond data center, the rest of our business will at some point recover.

And the next question comes from the line of Max Yates from Morgan Stanley.

Could I just ask on the gross margin? So the gross margin or the overall margins are flat, the gross margins are down sort of more or less 200 basis points. Could you talk a little bit about how raw materials, particularly kind of copper, silver impacted the gross margin and how much that was maybe other factors? And would you still be confident to offset raw material inflation on an annualized basis when we look at 2026?

Yes. The gross margin is indeed down by close to 200 bps. It's actually 190 bps. And the main components are the fact that pricing is plus 2.3% and pricing does not compensate inflation of plus 4.2% on raw material components and plus 3% of personnel costs. So we have, let's say, gap between the cost of input, if I may say, and on our pricing.

Is it a concern for us? No. We have started to adjust our price up. To give you order of magnitude, when we entered the year, we told you that we intended that we thought the purchase price would increase by between plus 1% and plus 2%. We now think that it could be around plus 4% on a yearly basis. And as a result, we had adjusted up our pricing progressively. We thought that our pricing would be plus 1% to plus 2% on a yearly basis, and we now think that it could be plus 2% to plus 3%. And if needed, we could do more of that.

So it's a timing issue. And we have some price increase that are already executed, some others which are planned, and that's it. On top of that, I have to say that don't forget that even though our data center business has approximately the same EBIT margin as the building market, it has a lower gross margin and lower SG&A. So let's say, the structure of the margin is slightly different. Yes. Last comment. Franck, do you want to add something?

Yes, So for you to -- Max, to understand well, the momentum of the gross margin between Q1 and what it should be on a full year basis, among the 4% of purchase price increase, which has been mentioned by Benoit, half of that is tariff effect. And you have in mind that it is the last quarter where we have additional tariffs. So once again, sales price increasing 2% today could be 2% to 3% at the end of the year. Purchase price, including tariff, around 4% today, should be around 4% at the end of the year. So gross margin pressure should ease.

Now we should also add that, of course, the strong growth also comes with some significant leverage on SG&A with a great productivity on headcount to give you order of magnitude. So our sales are up plus 9% like-for-like and our headcount are slightly decreasing like-for-like. So yes, we have gross margin declining. But at the same time, we have strong leverage on SG&A and, as a result, quite stable margin. What counts at the end of the year is really the EBIT and adjusted EBIT more than the gross margin itself.

Yes. Very clear. And maybe just a very quick follow-up on the data center business. It's quite easy for us to get lost in the kind of quarterly year-over-year growth rate. I guess my question is have you seen -- when we think about the business sequentially, have you seen a sort of sharp acceleration? I ask because we've seen all these orders really accelerating, but are you actually seeing it in the sales? And is there anything you think that's unusual about how your customers are behaving? Are they stockpiling ahead of price rises? Are they stockpiling at the start of the year? Do you get a sense any of it sort of pull forward demand for any reason when you have these conversations?

Well, I don't believe there's been anything exceptional in Q1. You may have noticed that we are no longer commenting on orders or book-to-bill because, frankly speaking, we have a lot of difficulty to bridge the orders with the sales. So we prefer to comment on sales. But we haven't seen any pre-buy which, by the way, is not something easy to execute for project basis. But no prebuying, nothing exceptional.

No. It is just coming from the fact that hyperscalers are massively increasing their investments and that this wave of investment should last for a few years. But again, a quarter which wasn't impacted by something exceptional, let's say.

And the question comes from the line of Daniela Costa from Goldman Sachs.

I will ask the question and then the follow-up separate. But maybe on the question, starting in terms of the free cash flow performance. And I think we've seen some working capital build up again this quarter. Can you -- I guess this is related probably to the data center business. Can you talk back about how we should think about the pattern of this working capital now through the year? I guess we had a bit of this last year. And then does the seasonality on working capital increase? How should we think about sort of still the old levels of cash conversion?

I will take this question, Daniela. So starting with the free cash flow. The free cash flow of Q1 is not very meaningful, like Q1 is always a softer free cash flow in our seasonality. 8.7% of sales, we are very happy with this free cash flow. It's a normal seasonality around 8.5%, 9%. It's the typical seasonality for Legrand. By the way, it's growing versus last year.

Talking about working cap, you're right. So it's up. It's 20.5% versus 11.9% last year. There are many technical plus and minus, but in a nutshell, from a performance point of view, only inventory to sell is increasing, and the reason it's increasing is actually a data center. We are protecting the top line. We want deliberately to serve well our customers. So it is what is driven the 12.5% of working cap versus 11.9% last year. And 12.5% of working cap is also pretty much consistent with the seasonality.

Accordingly, on a full year basis, we are still shooting for the usual metrics of the group, which is free cash flow to sales between 13% to 15%.

And then just on your M&A, you're sort of slightly ahead now for the guidance is tracking. You've been very active. Can you talk a little bit about how you see that developing over the rest of the year? Is there a possibility that sort of you actually exceed and add more than the 8% like you did in 1Q?

Well, so indeed, we've been very active in M&A for now more than 2 years. And again, we've done 4 deals since the beginning of the year. It's highly likely that more will come because we have a lot of discussions going on with many interesting targets and some of the discussions are pretty well advanced. So you should expect to see more deals coming before the end of the year. I cannot commit to a number of deals, of course, because there's some uncertainty.

Now could we exceed the 8%? Well, it becomes increasingly unlikely, not because we wouldn't do more deals or because some of the deals couldn't be EUR 50 million, EUR 70 million or EUR 100 million of sales, but just because of the consolidation timing. We are already 4 months into the year. So we still believe that the 7 to 8 now is the most likely number. Yes, we could exceed, but I wouldn't put that into the machine, if I were you, because for the deals to come, we will only have a few months of consolidation in 2026, so with very little impact on the perimeter effect.

But I confirm that we still have a lot of discussions. And interestingly, I also confirm that on the Legrand standpoint, the multiples remain reasonable. So we're not communicating on precise multiples per deal, but we've been able to strike interesting deals for the past couple of years at 10, 11, 12x EBITDA. And those are the typical kind of metrics we are still looking for when we make deals.

And the question comes from the line of Andre Kukhnin from UBS.

Can I just start with a broader question about the sort of quarterly cadence of growth for the year? Do we need to be aware of any comp effects or any kind of one-offs as we go through the rest of 2026, and we think about the Q1 run rate, given that we had quite obviously varied comp landscape through 2024 and 2025 in terms of organic growth. And the pre-buy effect that you mentioned wasn't there for data centers. Is that the case for the rest of the portfolio as well? Or are you seeing anything elsewhere?

Well, I don't believe there's any technical factor that will play in 2026. So there's no quarter impacted by a number of days, for example, significant number of days, plus or minus. I don't recall of any significant basis for comparison in 2025. So no, I don't believe there's going to be anything technical. So the sales should reflect the underlying market trends and the gains in market share, but no technical topic.

Well, only one factor that may come into play. It's the fact that we are increasingly in the project business, thanks to our data center exposure. And of course, one quarter can be positively or negatively impacted by a very big project. But it's a very, let's say, candid and generic comment. There's no reason it would play one way or the other in 2026.

As far as the prebuy is concerned, no, we haven't seen any prebuy, neither in data center nor in building. And we haven't seen distributors, for example, building significant inventory ahead of some price increase. This is not really a behavior we see in our market. So no prebuy, let's say, significantly impacting our quarter.

And if I may, just a very quick one. I know it's a big topic. But has anything changed in terms of your stance on the 800 VDC architecture in the last 2 or 3 months since we spoke last time?

No, no. It's probably more a topic that we're going to discuss in September. So wait for me to do a bit of teasing for our CMD. But no, those kind of technical change in architecture are not changing in 2 months. So no change in our view. We believe it's going to come. We believe that it's going to be more progressive than some of you expect and that we are well positioned because we already have a number of capabilities to address either the hybrid architecture or the ultimate holy grail full 800 volt DC. So we see that more as an opportunity with more data centers, higher density data centers, more energy-efficient data centers than as a threat, to make a long story short.

And the question comes from the line of Alasdair Leslie from Bernstein.

So first question is just actually on margins, North and Central America margins. We saw a good improvement there. I was just wondering whether we should kind of think of this as a kind of new higher baseline level for sustainable margins in the region, particularly with the mix changing, I guess, so much in favor of data centers? Or do you think we'll sort of see more investment now go back into perhaps reinforcing the traction you're now seeing in that nonresidential side in health care and infrastructure that you kind of flagged earlier?

And then the follow-up would just be on data centers. Maybe just a little bit more color there. Do you still sort of see uniformly strong growth across kind of all product categories? Or are we starting to see a bit of divergence now in the portfolio with some areas sort of standing out if we're starting to move to higher-density data centers?

Yes. Well, so about the first question, well, it's difficult for us to give you a guidance per geographical area. Our margin guidance is at group level, not by geographies. But the fact that the North and Central America margin is doing good progress is, of course, coming from the fact that there's quite an impressive growth. And when we have growth, we have leverage, especially leverage on SG&A. And the fact that the European margin is a bit weaker, the other way, negative growth in Europe. So not only we suffer from the sort of discrepancy between purchase price and selling price, temporary discrepancy, but on top of that, we have negative leverage in SG&A.

So the U.S. margin is indirectly coming from data center. It's coming from the fact that when you have such a strong organic growth, it delivers leverage. Now midterm, what matters is not the margin we're going to have in North and Central America nor the margin we're going to have in Europe or in the Rest of the World. It's really the group margin. And for 2026, we confirm our guidance of 20.5% to 21%. And long term, we confirm the fact that we should have an average margin above 20%. So again, our guidance and the way we steer the group is more at global level than zone by zone.

As far as data center is concerned, well, there's always been a difference between product family. When we said plus 40% last year, some families were at plus 60% or 70% and some of them even more than that. Some product families actually grew triple digits and some others were at plus 5%. So there's no, let's say, consistency, if you wish, between the different product families. We have now many different product families. We do not depend on 1 or 2. We have global coverage starting from medium voltage down to compute architecture and cooling.

If I have to name a few products or a few families that probably grew faster than the average, cooling is one of them, clearly. And you know that we have many capabilities in cooling, especially rear door, containment and so on and so forth. The whole powertrain is doing well. The load banks from Avtron is doing a fantastic growth. But again, don't read that as a fact that the architecture are changing fast. It is just the fact that on those product families, we are very well positioned, that we have a value proposition, which is very compelling for our customers and that we are probably gaining market share.

And the question comes from the line of Phil Buller from JPMorgan.

I guess it's a follow-up to start. What does data center now represent as a percentage of group sales post the closing of the M&A on an annual basis? I guess it's now approaching 30%. And is this something that you're at all worried about, being overly exposed to? Or is this still the primary focus of the M&A pipeline? That's the first question, please.

Well, so it was 26% last year. I haven't done the math precisely, but given the difference in growth and the fact that we are doing a number of acquisitions in data center, yes, it will be probably around 30% this year, plus or minus 1%. So it's probably the order of magnitude. Is it a concern? No, it's not. I mean, this is a position we have deliberately built that will boost the group's organic growth in the years to come, not only in 2026, but given the massive investments which are done in data centers, this growth should continue in the years to come.

By the way, our acquisitions in data centers also help us to grow into energy transition. If you look at some of the acquisitions that were made in the past 12 to 18 months, namely Avtron or Kratos in the U.S. or LINKK Busway in Malaysia, those are acquisitions that are strong positions in data center, but that also brings additional complementary positions in photovoltaic, in industrial buildings, in health care and so on and so forth. So by building our position in data centers, we also build complementary positions in energy transition.

So how high could the 30% be? I don't know. It could easily be 35% or 40%. At some point, the gap in growth between data centers and the rest of the Legrand product offering will narrow, because the building will grow again, because energy transition will grow. So you won't have the same gap between the growth. But yes, it could easily be 35% or 40%. It wouldn't be a concern. It would be a great opportunity for Legrand to continue to grow.

The second question in relation to Q1, a number of companies exposed to building end markets have called out things like bad weather in Q1, which I don't think I've heard from you guys today. Would you say that there's been any adverse effects in Q1, perhaps in Europe or elsewhere outside of data center? Any kind of one-off potential sources of weakness in Q1?

Yes, I've read indeed some of those comments about bad weather, but we are selling through a sort of -- it's a channel sales. We are selling to distributors, who sometimes sell to retailers, who sell to contractors who install. So we are not probably close enough to the end market to feel some of those impacts. So I wouldn't say that it had a significant impact on Legrand Q1 sales. if your concern is why is Europe sales going down, I wouldn't call that a slowdown. It's only a quarter. Q4 in Europe was pretty strong, stronger than you might have expected. Q1 is probably weaker than you may have expected.

But from an end market standpoint, we haven't seen any deterioration in Europe between Q4 2025 and Q1 2026. Markets remain muted. Southern Europe is okay. Northern Europe, including France, is still quite depressed. And our assumption has always been that you would see a progressive recovery in 2026, not a recovery as early as Q1 2026. So up to now, there's nothing that tell us that this scenario wouldn't materialize. The only question mark is, of course, how long will the Middle East crisis last.

By the way, I have to add that, of course, short term, the Middle East crisis is not a good news because it has some impact on the cost of our raw mats and components because it creates cost of transportation, because it creates uncertainty, blah, blah, blah. Midterm, it will also be an opportunity because it will push a number of countries to launch electrification plans. France, for example, just launched one, which will not have a short-term huge impact on Legrand.

But midterm, the move towards more electricity and move away from fossil energy is a very good news for Legrand because if you have energy -- electricity growing in energy mix, of course, you need more transformers, you need more switchgears, circuit breakers, load shedding, measuring and metering products and so on and so forth. But it's a long answer to a quick question, but to make a long story short, nothing specific impacting our European sales. The markets are still quite contrasted, but we still expect some progressive improvement modulo the impact of the Middle East crisis.

And the next question comes from the line of Alexander Virgo from Evercore.

I wondered if you could just sort of pick up a little bit more on that point on Europe. I appreciate your comments around the end markets. But just sort of picking apart the inflation issue and the margin issue, how much of the margin decline in Europe is volume versus the impact of inflation because, obviously, the tariff impact is a North American issue rather than in Europe. So if you could pick apart that a little bit, that would be super helpful.

And I know you don't really guide on the regions and margins, et cetera, intra-quarter, but just give us some sense of how you think it might sort of develop given your comps get marginally tougher, I suppose, as you go through the balance of the year in Europe?

I will answer to this question. Currently, I think the two items that you have mentioned are unfavorable, the inflation balance, even if there -- as you rightly underline, there is no tariff, there is global inflation in plastics, in copper, in aluminum, and it is currently not helping the margin. And second, obviously, the volume, it takes time to adapt SG&As, and Europe is carrying also some corporate function. But all that is temporary. So I don't see any structural moves for European margin, but the two elements are currently unfavorable.

Okay. All right. And just as a follow-up, if I heard you correctly on pricing, the implication, of course, of not changing the full year guide on organic growth is the volume assumption is a little bit lower if the pricing is a little bit higher. Is that the right takeaway here? Or should we assume that actually it's a little bit more on price and volume assumptions remain the same, but because of the uncertainty around implications of the Middle East and your comments about economic backdrop, that you're just sort of giving yourselves a little bit of extra wiggle room, if you like?

Yes. Definitely, we will shoot for more pricing than the initial guidance because we are expecting and assuming more inflation than the initial guidance. So of course, mechanically, you may say there is less volume, but it depends on which part of the guidance you are looking at. Our like-for-like guidance is unchanged from plus 4% to plus 7%.

Plus 4% is clearly a very severe scenario where we would be close to a kind of a recession, which is not the most likely one, but that we have to factor in case of. And if we were in the higher end of the guidance, then we think data center will be more supportive than initially forecasted. Pricing will be more supportive than initially guided. And volume in the building markets will be consistent or slightly less supportive than initially forecasted.

And the next question comes from the line of Aron Ceccarelli from Bank of America.

I had a question on the U.S., which grew 29%. You mentioned the data center grew slightly above 30%. So perhaps can you help me understand the growth in the other part of the business as well?

Yes. So you have three phenomenon. So data center, as you said, grew slightly more than 30%. Resi and the office market remains quite depressed. If you look at the numbers, no change. So resi numbers, official numbers are down. The office vacancy rates are still high and at the same level as the quarter before. So unfortunately, no change. And in between, you have the energy transition business growing nicely, of course, not as strongly as data centers, but growing nicely.

And this is a result of the move we did or we are currently doing in the nonresi to develop verticals with more potential than resi or office. So I named some of them, health care, industrial buildings, a bit of power generation, a bit of microgrid, PV and so on. So we've developed those verticals organically, but also inorganically with some of the acquisitions we made in the U.S. in the past couple of quarters. So this piece is growing nicely, and it is more tied to energy transition than to the traditional, let's say, building market.

As a follow-up on Europe, you mentioned that you are still expecting second half a slow recovery. Are you still expecting France to turn positive as well?

I don't know, frankly speaking. Yes, that's what the numbers would suggest. And if you look at the housing starts, housing permits, the number of transactions, the production of credits, all those KPIs would suggest that France, as the rest of Europe, should see some recovery. Now we should also take into account the fact that there's quite a lot of political uncertainty in France, as elsewhere, that we are quite late cycle.

So I wouldn't commit to a significant growth in France in H2. But the early indicators would suggest that some recovery would happen either in '26 or in '27 actually. May I add that France is now about 10% of our sales. So I remember when I started working for Legrand, France was about 1/3 of our sales, and we were having a lot of discussions on France. Now it's 10%. So it remains a very important market. It's our home market, and we are very proud to be a French company, blah, blah, blah. But it does not impact that much and not as much as it used to, the group's metrics.

Our next question comes from the line of Eric Lemarie from CIC CIB.

I've got one question on the EU, which has recently decided to ban inverters from some countries, and notably inverters from China. And I was wondering what could be the consequences for Legrand. And I was wondering whether Legrand makes some inverters internally for its UPS offering or if Legrand sources them from elsewhere, notably from China?

No, we are not a significant inverter player. So no impact on Legrand. We cannot be impacted by all megatrends. Data center is one of them. The move towards energy transition is another one. And by the way, I can only insist on what I said a little bit earlier. There is a global move in Europe towards being less dependent upon oil and gas and developing electricity usage. Midterm, this is a fantastic opportunity for Legrand again. But inverter will not be an opportunity.

But you make some UPS, right?

We make UPS. We are not a big, big UPS player. And UPS are more today for industrial use or for data center increasingly. But again, we have a small market share in UPS. So I don't believe you'll see any significant impact on our European sales.

And the question comes from the line of James Moore from Rothschild & Co Redburn.

I wondered if I could start, Benoit, with the Americas. And if you take your fantastic data center business, could you help us just understand the quantification of the kind of rough organic sales growth in the quarter for buildings, ideally split resi, non-resi, but just the buildings business, what sort of speed is that growing at?

Well, I cannot give you a precise number. But if you assume that data center was last year more than 40% of our NCA sales and that it grew in Q1 more than 30%, you are left with a small growth. So if you carve out data center, North and Central America business is slightly growing with, as I said, resi and office going down and other verticals all related to energy transition going slightly up mid-single-digit order of magnitude. So I can hardly be more specific than that.

That's very helpful. I'm just playing around with numbers, and it looks to me like you might be closer to 50% in your U.S. data center business, which would it be fair to say your European and your Rest of World data center business, just due to the volatility and timing, it happened to be down in the quarter? Might that explain some of the decline in the European and the Rest of World organic sales declines? Is that not the case?

So I mean, I haven't done the math again myself, but you're probably underestimating the fact that the building in the U.S. office and resi is down. So probably [Technical Difficulty] points of decrease and then the numbers will match, but I confirm that our data center sales in the U.S. are not growing 50%. No, I mean the data center in Europe and in the Rest of the World is not supporting our growth enough.

But it's technically the fact that it represents a small part of our sales. It represents about 10% of European sales and less than 20% in the Rest of the World. So the vast -- the largest part of our performance in those two zones is coming from the traditional building market. Europe, we already commented the building markets are down in most of the countries, but a few countries in Southern Europe.

In the Rest of the World, it is, as usual, a very contrasted situation. You have India going up sharply. You have Africa Middle East being up. And you may be surprised, but Middle East is up again in Q1. And then you have China continues to be down, which is not a surprise because the metrics for the housing market, especially the big condos are still down. And Latin America is also negative. But again, nothing to worry about. And hopefully, we'll see some improvement in Europe and in the Rest of the World going forward.

Could I try something on profitability? Your gross margin, you gave a really helpful answer earlier. But when we think ahead for the full year with your new ambition of 2% to 3% price and 4% raw material and component cost inflation, do you think that the gross margin for the full year can be up in that kind of environment? I haven't...

No, we're not -- I'm sorry, but I mean, we cannot guide on the precise gross margin. We are really -- that's not the way we steer the group. The way we steer the group is to deliver our commitment on the adjusted EBIT margin. And then whether it's with a little bit more, a little bit less gross margin, it is more, a little bit less leverage in SG&A is really not, I think, a strategic topic. So you can count on us to deliver the margin guidance, because that's what we've always been doing and that we are committed to.

Will it come from positive gross margin, negative gross margin, more or less leverage in SG&A, restructuring, more or less, blah, blah, blah, we'll comment that in February 2027, but I cannot guide on that.

And just finally, Franck, you gave a helpful bit of color on the European margin weakness in the quarter. I wondered if there's anything to add on the Rest of the World. It's a complicated business, a lot of mix. Just behind that decline in margin.

No, no, no. I gave you the color on Europe, and we gave you color on North and Central America, and that's it for the Q1. And for the full year, we are not guiding per geography as we are not guiding a line by line. It's a global target.

No, that wasn't really the question. My question was that the margin decline in the quarter year-on-year in the Rest of World business, was there any additional color behind explaining that?

Yes. It's a mix of the margin of many different countries. I don't want to sound disrespectful, but we said 2 questions. And we're entering into a Q&A mode, many different items. To make a long story short, the Rest of the World margin, it's a mix of the countries improving, countries decreasing their margin. Nothing specific, and you should see the same phenomenon. So more pricing coming in to compensate for additional purchase price.

And the question comes from the line of Gael de-Bray from Deutsche Bank.

The first question I have is, I'm wondering if you have enough capacity to address that huge acceleration in data center demand that we are seeing in the U.S. or whether you will have to step up CapEx significantly at some point. And how are you dealing with the ramp-up costs, which are apparently weighing quite a lot on the margin performances of some of your peers? That's question number one.

Well, it's a challenge to increase capacity. We've been able to do it. We've been able to do it without significant change in our ratio of CapEx to sales, which last year remained at about 3%. Q1 is a bit soft, but you know that there's some seasonality in the CapEx. You usually have bigger CapEx in H2 than in H1. So yes, we are able to do it without much changing our ratios because data center is not -- our business, at least, is not a CapEx-intensive industry. And again, look at the CapEx numbers over the last 2 or 3 years, and you'll see the same 3% than the one we had before the stronger growth in data center.

How did it impact the cost base in Q1 and in 2025? Yes, probably because it comes with a number of inefficiencies. When you are growing 30%, 40% in volume, sometimes 60%, 70%, 80%, you are not as efficient as you are when you are growing 2%, 3% and when you are able to do the usual productivity and so on and so forth. You sometimes have to deliver by plane to meet the customers' timeline. You sometimes have to subcontract additional load, which is a little bit more expensive than doing it internally. You sometimes have to pay extra remuneration for your people to do extra time. So all that comes with a bit of inefficiency and a bit of cost.

But did it have a significant impact on the Q1 margin? The answer is no. It's our day-to-day job to manage those inefficiencies. So to make a long story short, it's a challenge. But we've been able to do it without significant impact on our CapEx spend and without hurting our P&L significantly.

No, that's great. And if I may, I'm wondering if you have any strategy, any plan to grow potentially bigger in the medium voltage segment, and within that, specifically in the power utilities market because it's obviously a big market and it's tightly connected with the data center boom.

Well, we don't intend to be a big player and go head front against the big guys, the ABB, the Schneider of the world. But if we find some niche opportunities to participate a little bit more to this business, why not? And actually, we are already a small player. We used to have a range of cast resin high-efficiency transformers, which we bought a couple of years back and which we are nicely selling, some of them in data centers.

We bought recently Kratos Industries which is active in, let's say, medium-voltage and low-voltage switchgear, which is doing well, growing nicely and addressing mostly but not only the data center market. Those businesses are niche markets. If we find additional niches to add to tackle the data center and the energy transition especially in the U.S. at reasonable price, yes, why not. But don't expect Legrand to be ever a big significant player in transformers. This space is already well occupied by big guys. So we will focus on niches only.

Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Benoît Coquart, for any closing remarks.

Well, thanks a lot for your interest in Legrand. As usual, should you have more questions, please contact Ronan, Antonia and the IR team. And please put in your calendar September 29. We are not used to do off-site CMD such as this one, but it will be a fantastic opportunity to get to know a little bit more the data center market as well as to interact with the whole management team and with a number of Legrand people. So it's far from your home, for most of you, but it will be very interesting. So please book your date. We'll be happy to welcome you in September in Singapore. Thank you.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good day, and thank you for standing by. Welcome to the Legrand 2025 Full Year Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Benoit Coquart, CEO of Legrand. Please go ahead.

Thank you. Good morning, everybody. Franck Lemery, Ronan Marc and myself are happy to welcome you to the Legrand 2025 Full Year Results Conference Call and Webcast. As you know, this call is recorded. We have published today our press release, financial statements and a slide show to which we will refer. I begin on Page 4 with the 3 key highlights of this release. First, Legrand delivered a remarkable performance with record sales growth, high profitability and a strong achievement of its CSR objectives. Second, the group continued the successful deployment of its strategic road map towards EUR 15 billion of sales by 2030. Third, Legrand is targeting further sales growth of between plus 10% and plus 15% in 2026, excluding currency effects.

Starting on Page 6 of the deck, we fully achieved our annual targets for 2025, which we will detail further by key topic during this presentation. Moving to Page 7, I will start with an overview of sales. In 2025, excluding currency effects, our sales grew by plus 13.1%. This includes an organic growth of plus 7.7%. This growth is driven by an outstanding performance in data centers with an organic growth of close to plus 40% this year. And regarding our sales in buildings, we are resisting very well despite a still muted market over the year. On top of organic growth, we benefit from a positive scope effect of plus 5.1%. I will come back later on acquisitions. Of course, now based on the acquisitions announced and the likely date of consolidation, the 2026 full year scope impact would be close to plus 6%. As for exchange rates, the effect was a negative minus 3.1% in 2025. And based on the rates of the month of Jan, it will be around minus 2.5% for the full year 2026.

On Page 8, you will find the key takeaways per geography on a like-for-like basis. In Europe, in a market that remains mixed overall, sales were up plus 1.9% over the year, including, for example, in Germany, Italy, the Netherlands and the U.K. In North and Central America, sales were up a strong plus 16%, driven by an outstanding performance in data centers. Finally, in the Rest of the World, sales increased by plus 2.7% with good growth in Asia Pacific, Africa and the Middle East, partly offset by a retreat in South America. These were the main comments I wanted to share on sales.

I will now hand over to Franck for more color on our financial performance.

Thank you, Benoit, and good morning to all of you. I will start on Page 9 with adjusted operating margin. We recorded in 2025 a very solid adjusted operating margin of 20.7% of sales after acquisitions. This represents a plus 20 basis point increase year-on-year, including a 10 basis point organic improvement and a plus 10 basis point favorable impact from acquisitions. The group's high profitability demonstrates once again the strength of our strategic model and our solid capacity to execute and adapt I think notably of the volatile environment linked to the U.S. custom policies, which increased the group cost base by around $100 million.

Going now to Page 10. The net profit attributable to the group stood at EUR 1.2 billion, represented 13.1% of our sales. The increase coming from the operating profit is partially offset by the impact of financial results, while the corporate income tax rate remained stable. The free cash flow came to a solid EUR 1.3 billion at 14% of sales and a conversion rate of 107% supporting the sustained acquisition momentum of Legrand while preserving balance sheet strength with financial leverage kept under control at 1.9 at the end of December 2025.

This is it with the key financial topics I wanted to share with you this morning. I'm now handing over back to Benoit.

Thank you, Franck. Let me now move to our 2025 CSR performance. On Page 11, in 2025, Legrand reached an achievement rate of 110% on the targets set for the first year of its 2025-2027 CSR road map. You will find on Page 12, a few illustrative examples highlighting this performance. For example, Legrand outperformed its targets in terms of Scope 1 and 2 CO2 emission reduction, plastic packaging reduction or use of sustainable materials. All the achievements confirm the strong integration of sustainability into the group's strategy.

I'm now moving to Page 13 to conclude on 2025 performance with our dividend. The approval of the payment of a dividend of EUR 2.38 per share will be proposed to the next General Meeting of Shareholders. This represents a rise of plus 8.2% from 2024 and a payout ratio of 50%.

Let's now move to the second key topic of this release, our strategic road map. In 2025, Legrand actively deployed its strategic road map towards EUR 15 billion of sales by 2030, combining accelerated growth and value creation. As shown on Page 15, this is first illustrated by the reinforced positioning of the group in energy and digital transition offerings which now represent 53% of our sales compared with 47% for essential infrastructure solutions. Data centers at the heart of the group's growth strategy represented sales of EUR 2.4 billion at year-end 2025, i.e., 26% of group sales to compare with EUR 0.7 billion in 2020. Legrand is recognized as an undisputed major player in this field of activity with a deep offering that is perfectly suited to the deployment of infrastructure for artificial intelligence.

Building on nearly 30 acquisitions completed in this field, Legrand has become a leading player and a preferred partner for major industry participants. The side positive impact of all the acquisitions we made in data centers is that they also strengthened the group's existing position in critical power with other verticals driven by electrification, such as infrastructure, industry, telecom, oil and gas and microgrids.

I am now moving to Page 16 to 18. As you know, innovation is really the DNA of Legrand. We highlight on those slides a number of product launches carried out in 2025, which illustrates the sustained momentum in innovation across the group's segments and geographies. On Page 19, we underline the group's continued focus on digital initiatives and customer experience with high and improving customer satisfaction in 2025. Finally, on Page 20, we detail Legrand's particularly active M&A strategy with 7 acquisitions announced in 2025, representing EUR 500 million of annualized sales, all in the fields of energy and digital transition. This momentum extends into 2026, as shown on Page 21, with the announcement today of 2 additional acquisitions in data center in the U.S. with Curtis Industries and in Brazil with Green4T.

Maybe one thing to add that is not in the slide actually, but in the press release, we recently invested in Accelsius in the U.S., a pioneer in 2-phase direct-to-chip liquid cooling. This investment will further strengthen the group's portfolio of solutions for AI and HPC data centers.

Let's now move quickly to the third part of this release with our targets. On Page 23, regarding '26, Legrand will continue to accelerate its profitable and responsible growth momentum in line with its strategic road map. Taking into account the current global macroeconomic outlook, a very strong data center market and a modest recovery in the building sector, Legrand is targeting the following in 2026, sales growth, excluding currency effects of between plus 10% and plus 15%, comprising organic growth of between plus 4% and plus 7% and growth through acquisitions of between plus 6% and plus 8%. Adjusted operating margin after acquisitions of 20.5% to 21% of sales, CSR achievement rate of at least 100% for the second year of its 2025-2027 road map.

On Page 24, regarding our 2030 ambitions -- sorry, building on its achievements and taking into account both observed and expected market trends, Legrand is confident in its ability to reach the upper end of its 2030 sales target range around EUR 15 billion with average annual sales growth of close to 10%, excluding exchange rate effects and average adjusted operating margin above 20% of sales compared with the previously targeted level of around 20% in average.

This is it for the key topics of this release. Last word before we move to the Q&A session. You will find on Page 26 to 28, our corporate access agenda for 2026 should you wish [Technical Difficulty] management. Let's now switch to Q&A.

[Operator Instructions]

And we're going to take our first question. And it comes from the line of Daniela Costa from Goldman Sachs.

Thank you so much for taking my question and the follow-up. I will do them one at a time. But starting on the guidance for 2026, can you give us some help on the building blocks, particularly how much data center growth are you factoring in? And how much of that comes from a backlog you already have? And what pricing are you factoring in there?

Daniela, so our organic guidance, the 4% to 7% growth is basically built this way, a growth in data center of between plus 10% and plus 20% and for the rest of the activity, i.e., the building activity, something basically more or less flat in volume with a bit of pricing. Those are the building blocks. Well, how confident are we on the fact that we're going to grow from plus 10% to plus 20% in data center? I have to say that we are very confident. Not much based on the orders. The lesson of last year is that it's difficult to anticipate what we're going to do based on the orders in hand. Last year in Feb, we -- based on the orders we had in hand, we targeted plus 10% to plus 20%.

And at the end of the year, we did plus 40% or close to plus 40%. So it's a bit difficult to that. So we have to rely not only on orders, which are very good, not only on the book-to-bill, which is above 1, but we also have to rely on the feedback we get from the market and the CapEx plans announced by the hyperscalers and so on and so forth. And based on those information, we are very confident on our ability to do something between plus 10% and plus 20%.

As far as pricing is concerned, overall, not specifically on data center nor specifically on building, we are shooting for pricing somewhere between plus 1% and plus 2%. Now it is based on our scenario when it comes to the raw mats and components. So we believe that the price of raw mats and components will be up between plus 1% and plus 2% this year. But of course, it can change. And if for whatever reason, the price of raw mats and components was to be higher than expected, of course, we would do a bit more pricing. But based on the scenario we have in hand today, we believe that the plus 1% to plus 2% price should be enough.

And then just following up just a bit on the acquisitions and the investments that you have been doing. I think one of the deals today has more of a power distribution medium voltage component, which I believe you hadn't done too much in the past. And then the Accelsius was into liquid cooling, although I guess it's just an investment rather than a full consolidation. But can you talk us through sort of how you're pivoting the portfolio in data centers? Do you want to go into medium voltage? How far out are you in the gray space right now, just to get a bit of a shift on the mix?

Well, it's -- thank you for asking the question that you have because I sometimes feel that we haven't done a job good enough in explaining how deep our portfolio in data center was. So a few numbers. For example, we are already a bit in medium voltage. We've been selling for quite some time, medium voltage, low voltage transformers, cascading transformers to data centers and to a number of other spaces. So -- but maybe let me give you a few numbers. The split between white space and gray space would be something like in 2025, 75% white space, 25% gray space. You could note that gray space was 5% 3 years back, and it's now 25%. So we've been able to rebalance, if I may say, our portfolio as we committed to do at the last CMD.

Now the split between gray and white doesn't give full justice to the breadth of portfolio we've been able to build, which is composed of close to 55,000 SKUs for data centers, standard SKUs. And if we put together the customized SKUs, close to 100,000 SKUs. So maybe the best way to look at it is to break down it by type of applications. So in 2025, we had about 35% of our data center sales, which was for critical power. So critical power, it's medium voltage, low-voltage transformers. It's UPS, switchgear, busbar, busway, remote power panels and a few other products. So 35% critical power. 50% of our sales relates to compute infrastructure with approximately half of that would typically be physical infrastructure.

So racks, tap-off box, feeders, cable management, stuff like that. And half of that would be typically compute management. It's about monitoring PDU, rPDUs, KVM, consoles, transceivers and a few other products. So 35%, 50%. We have 5% of advanced cooling, which is rear door exchangers, containment, and now we have the ability to be more active on 2 phase direct to chip. And then we have 10% which is testing and life cycle services. That's where we have the power banks, have [indiscernible] power banks, but we also have installation, commissioning, monitoring, field services and so on and so forth.

So you see we really have a complete set of products. So yes, we are a bit into medium voltage switchgear. We are already a bit into medium voltage transformers, but it goes down to rack components and even field services. I believe today, we have probably one of the most comprehensive range in the data center industry. And it is set to continue. We have a lot of ideas, both organically and inorganically to continue to build a strong catalog.

Now we take our next question. And the question comes from the line of George Featherstone from Barclays.

Maybe I'll start with a follow-up because the color you just gave there was super interesting. And in the context maybe of the way the business will evolve to the 800-volt DC architecture. And perhaps you could give a little bit of color on what that means for you and how you're going to address this new technology in the future.

Well, thank you very much for asking this question because I sometimes feel that the analyst community is a bit lost with these new architectures, and it's the opportunity to maybe a bit fear. So what is basically 800-volt architecture. You have a concept, which is sort of grid-to-chip concept, which we call in the industry, the holy grail, which is still on the drawing board and won't be at scale before 2030, 2031, 2032. What is currently almost ready, if I may say, is a sort of is 800-volt architecture, but slightly different than this grid-to-chip. It is based on what we call a side car. So how does it work? Basically, you have a powertrain with AC components that feed a power side car, which is located in the white space. This power side car convert from AC to DC, then feed a number of racks, and that's where you have the compute components, the cooling and so on and so forth.

So 3 characteristics: increased power density up to 500 or 600 kilowatt per rack, use of DC components in addition to AC in the electrical powertrain and a sort of decoupling of power and energy storage from the IT rack and those components are moved into a side car serving one or several racks. So this is the architecture, which is almost ready and possibly at scale in a few years. How will the architecture impact Legrand? We have made a number of analyses, and we think that it will have a neutral to negative impact on about 20% of Legrand sales and a neutral to positive impact on 80% of Legrand sales. So the negative impact typically could be on rack PDUs, for example. It could be on UPS because UPS is replaced by sort of battery storage within the side car. It could be on a few other components.

And the positive impact, well, it's on the AC powertrain because you will need more power, more amperage. It could be on the physical compute infrastructure because you'll have a wider racks. It will be on cooling, of course. And especially, it will push 2-phase direct-to-chip cooling. You will have rear door cooling for residual cooling, including actually in the side car. It will be good for commissioning and for Avtron products because not only you will need to commission the electrical infrastructure. But on top of that, you need to commission heat rejection units, CDUs and so on and so forth.

So to summarize the impact it could have on Legrand, it could imply for us the theoretical accessible market, let's say, would be between USD 3 million and USD 4 million per megawatt. Now this being said, I wouldn't like you to get too excited by the opportunity because it won't be at scale before '20 or you won't hit our P&L before, let's say, '28 or '29. And more importantly, this is one amongst many architecture. And you have to understand that we are in a world where you have tens and tens of different architecture. And what is important is not for a company like Legrand is to be architecture agnostic. In other words, to have the ability to work with all the hyperscalers, all -- every single co-locators so that our product launches stick to the architecture that they're going to launch rather than betting that the winning architecture will be X, X or Y.

And I have the feeling that we have the right relationship with all of those guys. I mean we are working with Meta, the Google, the Oracle, the Microsoft, the [indiscernible] of the world and the QTS and the Equinix and so on and so forth. So in a nutshell, it should have quite a positive impact on Legrand, but not for now, within 2 or 3 years. And again, it will be one amongst many different architecture. Sorry, I've been a bit long, but I thought it was worth taking some time because those topics are complex topics, and we need to bring as much clarity as we can to the market.

That's very helpful. Maybe just another question on your guidance for data center growth this year. Previously, you've sort of benchmarked yourself to Vertiv and their growth is quite a bit above what you're saying that yours will be this year. Perhaps could you explain what the difference would be this year for you?

Well, I hope they are right. To make a long story short. But I mean, well, this year, we grew close to 40%, which is significantly higher than their growth, right? Because if my reading was correct, they grew 26%. So we did a fantastic performance. And actually, this plus -- close to plus 40% is probably significantly above the market growth. Well, if the market is not growing 10%, 12%, 14% next -- this year in 2026, but much more than that, then fine. Our objective, as we did last year, is to overperform the market. So if the market is growing 20% instead of growing 10%, all good for Legrand. There's no structural reason why Vertiv should grow faster than Legrand. In '26, we grew 40% against '26. And if you look at the past 2 years, the performance is also significant. So again, we are all different animals in this business.

So comparing one with the other might not be the right way to do. What I can confirm is that again, we're going to experience a nice growth in 2026 in data centers. We have the right product offering. We have the ability, should we miss something, we have the ability to develop it organically or to buy it. And I think we have developed a great expertise in buying data center assets at reasonable prices. We have the right relationships with the customers. We've been able to scale our business by adding capacity whenever needed. So we are ready to capture any market growth that will come.

The next question comes from the line of Phil Buller from JPMorgan.

Thank you for all of the data center disclosure. Just to try and extract one more data point, if I can. You mentioned $3 million to $4 million per megawatt in a higher density architecture, if I heard that correctly. What is the current megawatt in a current architecture, if you will?

Well, it's probably -- now it's between $2 million and $3 million, but probably closer to $3 million now than to $2 million, given the latest acquisitions we have made. So -- well, between $2 million and $3 million, but closer to $3 million.

Perfect. And then on the guidance, I understood that we are expecting flat volume in buildings. I think that, that makes sense as a planning assumption. Would you see any signs from the ground that there's an improving situation in end markets such as residential in Europe or U.S. office? Any kind of on-the-ground commentary on some of those key markets would be great, please.

Well, you're right to say that the world shouldn't be limited to data centers. It's worth also having a look at building. Well, we're a bit more optimistic for buildings, we're a bit more optimistic for Europe than for the U.S. Typically, for the U.S., we believe that -- and we have embedded into our guidance a slightly negative building market overall. We see no short-term positive signals on resi. But it's only 15% of our sales in the U.S. As far as non-resi is concerned, we also remain quite cautious and the statistics tend to show that the market should be slightly down. So overall, building in the U.S., slightly negative. Now bear in mind that in the U.S., 40% to 45% of our sales is now represented by data centers. So only slightly more than 50% is represented by building.

As far as Europe is concerned, we have embedded something flat to slightly positive if you look at the various KPIs, as far as the resi is concerned, well, completions are moving from minus 9% in 2025 or should move from minus 9% in 2025 to plus 2% in '26. Permit should be slightly up by plus 4% in 2026. Renovation should be slightly up by plus 1%. So we start to see positive indicators that of course, we are late cycle. So those indicators do not immediately translate into Legrand sales, but those are rather positive signs that the market should get better. As far as non-resi is concerned, recent updates from experts also suggest some sort of recovery in 2026 with renovation remaining slightly positive and new build also.

So in other words, negative building -- slightly negative building business in the U.S. and flat to slightly positive in Europe. As far as the rest of the world is concerned, what is quite a mixed situation. We don't expect a recovery in China yet on the building side. And Africa, Middle East and India should remain quite supportive.

That's great. There's no pocket of the business that you're concerned about being in a significant contraction territory.

No. I mean it depends what you call significant contraction. The risk is always a bit China because China has experienced a minus 50% decline in the residential business over the past 3 or 4 years. Now China, it's only 2% of our sales. So whatever happens to the resi market in China won't impact much Legrand numbers. So I don't see any reason why there would be contraction somewhere.

And we'll proceed with our next question, just moment. And the question comes from the line of Gael de-Bray from Deutsche Bank.

Can I follow up on the 800-volt DC discussion? I wondered how you're addressing this potential shift from a technological standpoint, I mean, especially around the potential change from electromechanical circuit breakers to solid-state circuit breakers. And also still in relation to 800-volt DC, can I -- can you go a bit deeper into the breakdown you provided, I mean, especially around the revenue base you have in the rack PDU segment and what the impact could be on this part of the portfolio going forward?

Of course, again, Gael, there's a misunderstanding between what the 800-volt DC architecture, which is ready for deployment, which is the one with the side car and the sort of full DC holy grail type of architecture, which is not ready for deployment, won't be before 2030, 2031, if it is, and which is a full DC architecture. We are addressing both by 2 ways. Number one, by developing products whenever needed. So for example, we are developing OCP type of -- and we presented well actually 6 months back at the trade show of racks by working on DC busways and a number of other things. And number two, whenever we feel that we have a gap, then we fulfill the gap by partnering or buying companies. Good example being the 2-phase direct-to-chip liquid cooling investment we made in Accelsius, which is not only an investment, financial investments, but which is also a commercial and technological partnership that will give us the ability to sell a very interesting product offering to high-density data centers.

So you have to keep in mind that Legrand is the only company in this business, which has built from scratch a product offering which is AI ready. Our competitors were either pure play of data centers ready or ready [indiscernible] and so on and so forth. When we started back in 2017, we were doing sales of EUR 300 million in data centers, of which a few PDUs and a few racks. But it was 9 years ago. Since then, we have built product offering almost from scratch by doing 30 acquisitions by developing organic products, which, again, is very suited to high-density data centers. So I don't have the best answer to tell you. We're going to keep developing products. We will keep working hard with the design teams of our customers to make sure that our products are suitable to their needs.

We do a lot of ETO engineering to orders. And whenever needed, we'll partner, we'll invest in partners if needed or we'll buy companies, and it will make Legrand perfectly in good shape to tackle the challenges of the new architecture that are going to come. Now as far as PDUs, I cannot be more precise than I was. I don't want to give you sales by product families. I told you that everything which was related to compute management was about 25% of our sales. And within this 25% of data center sales, you have many things, including rPDUs, but not only rPDUs, you have also monitoring devices. You have keyboard video mouse, you have transceivers, you have the console business that we bought a couple of years back. That's it. And it's -- the PDU business is part of the 20% of our sales that should be negatively impacted by indeed 800-volt architecture. But again, you have many products or families of products that will be positively impacted, 80% of our sales. This is our estimate today.

That's great. Can I also ask about what happened in Q4? I think the outcome in terms of organic growth was certainly a bit higher than what you had anticipated yourself. So what surprised you on the upside? Was it just data center related? Or are you also already seeing residential demand in Europe taking higher here relative to the last time as well.

Yes, it's mostly data center again. Yes, the Q4 is optically better in Europe than the full year, but it also comes from data center actually. Don't forget that data center, it's not only a U.S. business, but it's also Europe and rest of the world. And actually, -- maybe data that I can share with you. I told you that we grew in data center close to 40%. This growth is close to 50% in the U.S. and it's about 20% plus in Europe and 20% in the rest of the world. So we are growing significantly everywhere in data center, even though the growth is stronger in the U.S. and elsewhere. Now to answer -- short answer to your question, we did not anticipate so much sales and actually so much orders in data center in Q4.

The next question comes from the line of Max Yates from Morgan Stanley.

Just my first question is around your pricing. And when you say that's based on your kind of current assumptions, could you give us a feel for kind of what those current assumptions are? Because obviously, it's difficult with kind of copper prices and silver prices. We know they're quite sort of big drivers of direct raw materials. So could you give us a feel of -- are you doing that with kind of $13,000, $14,000 copper in mind? Are you doing that with current steel prices? Or if we do see raw materials stay at current prices, will that number be quite a bit higher?

Well, Max, it's a fair question because -- but frankly speaking, we have so many different -- we are not dependent upon one single raw mat, copper, silver or something else. And bear in mind that the vast majority of our purchases are components. Out of the 35% of raw mats and components, it's about 10% raw mats and 25% components. So it's a mix of many, many things. So we do it with our purchasing team on a very professional manner. We look at experts, specialists. We embed, of course, productivity into that, and it leads to a central scenario. And based on this central scenario, we do the appropriate pricing. The end of the game would be to adapt. The best analogy I can give you is what we did last year for tariff, U.S. tariff. I remember when we did the same call a year ago, we told you that we have embedded only USD 30 million of tariff into our guidance. But I also told you that should there be more tariff we will do more pricing. And that's what happened.

At the end of the year, we had USD 100 million of tariff to compensate for. It's actually the reality is that we had $140 million. We compensated $40 million by optimizing our supply chain, making sure that more products were eligible to the USMCA agreement and so on. And the remaining $100 million of tariff were compensated through pricing in value. So the same story with raw mats and components, we have a central scenario. We might be wrong, we may be right. If copper price was to go even up and then the steel and plastic, oil, components, labor and so on and so forth. And if we needed to do more pricing in order to deliver our profitability target, we will do more pricing. And I mean, we've been demonstrating over the years that we have the ability to do so.

Okay. And just maybe a very quick follow-up on your North America growth rate of 7% in the quarter. I'm really trying or really struggling to understand that because you're sort of saying that data centers was better. If I look at your kind of full year data center number for the group, it feels like you did roughly 30% in the fourth quarter for the group. So U.S. must have been higher than that. You're now saying data centers is sort of 40% of your business in the U.S. I know it wasn't that last year, but your data center business should have been growing -- like that should have been a double-digit contributor to growth. So I'm trying to back out how we get back to 7%.

No, no. Actually, in Q4, our data center grew by about 10%. The reason -- so it seems to be slow. But bear in mind that we had a very, very strong Q4 2024. So as early as July '25, we told you that in H2, you would have an optical deceleration, but which was not a deceleration, which was purely coming from the basis for comparison. So this is the point. I mean, about plus 10% in Q4 on a plus 30% last year, I mean, the year before and full year close to plus 40%.

Okay. So -- but then was your -- is your 40% data center growth this year, is that an organic number? Or is that a...

Yes, close to 40% is for the full year, it's an organic number.

[indiscernible] in the fourth quarter.

Yes. But again, the basis for comparison makes the number a bit tricky because we had a very, very easy Q1 comp because of the great pause, which happened back in Q1 2024. And we had a very, very demanding Q4. Now be careful, don't extrapolate one way or the other, there's no such concept as an exit rate in data center, right? So don't extrapolate good Q4 or slow Q4 into 2026. I can confirm that the performance was great in the U.S. and elsewhere in Q4 that we have a lot of orders that are sustaining our guidance for 2026 and that we should see very exciting growth in data centers this year.

The next question comes from the line of Kulwinder Rajpal from AlphaValue.

So I also wanted to follow up a little bit on the data center side. So we have been discussing about the 800-volt system, but I wanted to actually dig a little bit into the PUE side of things. I mean I know the demand for standard offerings is high. But are you also seeing a traction for your PUE offerings because we know that Europe is already short on power -- to power all the data centers. And then is there a dedicated part of the portfolio that is dedicated to these high-efficiency offerings? And is there something that you can add through acquisitions also?

It's a good question. Indeed, we estimate that we have approximately 40% of our data center sales, which help or can be used to reduce the energy bill of a data center. And it's not only about compute monitoring. It's also, of course, about efficiency within the powertrain and amongst another -- a number of companies. So today, I think the average PUE on a worldwide basis is probably something like 1.5. We know that theoretically, it can go down -- I mean, the best PUE ever, I think, was recorded was 1.025, if I'm correct. So we have a lot of opportunities to help our customers cutting their PUE from 1.5, 1.6 down to 1.4, 1.3, 1.2 if needed. So it is clearly a very important driver behind our data center business, and it should continue to be. Now this being said, it is a fact that you have geographies where access to grid is a constraint.

And we -- there are some countries where it can take up to 2, 3, 4 years for a data center to get connected to the grid. That's why you have to take with a certain cautiousness, the numbers, the CapEx numbers, which are disclosed by our customers because some of those CapEx will not be spent in 2026 or not even in 2027 just because they will need to get the access to the grid. So to make a long story short, I confirm that it is an industry challenge to get the energy. It may translate into some data centers being opened rather in '28 than in '26. But we are part of the solution, not of the problem because a large part of our product portfolio help cutting down the PUE.

Right. And so just to follow up a little bit on this. So is there a specific treatment that you get in terms of pricing with the portfolio and also if it helps the profitability? I know that most of the products are centered around the group profitability, but I just wanted to understand if there is a specific advantage that you can get from this particular set of products.

No. I mean we -- I'm not aware of any significant pricing approach between data center and building. Of course, our products in data center are mission-critical. They are extremely important for our customers to deliver their performance, not only in terms of PUE, but also in terms of reliability, compute performance and so on and so forth. But at the same time, there are big customers are negotiating tough on price, and they want to make sure that they have good value for money. So we are not taking advantage of product shortage or the criticality of our products to do additional pricing. We are doing the same pricing. We are doing elsewhere.

The next question comes from the line of Eric Lemarie from CIC CIB.

My first question on the construction cycle. You mentioned that Legrand is more late cycle, and it's certainly very true for the new build. But is it really the case for renovation? Because I suspect that if I need to renovate my house, I will probably start with some electrical equipment.

No, you are right, Eric. Indeed, for new, you have to -- it depends on the building, but it could be 6, 12 or 18 months lag between the time a permit is issued and the time we sell our products. For renovation, the shorter -- the cycles are a lot shorter even though it depends on the type of renovation. If it is renovating one room, it's almost immediate. If it is renovating a full house, then it takes a full -- a few months now. This being said, the renovation numbers for Europe in 2026 are not very bullish. According to, I think it's your construct. They plan for the residential renovation to be up 1%. So it's a very light increase, let's say. Again, we can have good surprises. We'll see. But so far, nobody expects the renovation market in Europe to rebound sharply. That's not what we have embedded in our guidance. We have embedded, as I said, flat to slightly positive building market in Europe.

And a follow-up on data center. You mentioned this close to 40% growth for the full year in 2025 and 10% for Q4. Could you remind us Q1, Q2, Q3, how was it the growth on an organic basis for data centers for Legrand?

Yes. So we said that it was well above 30% in Q1, well above 30% in H1. So I'll let you, Eric, do your own computation, above 30% in 9 months and 10% in Q4. And that everything was coming from the basis for comparison and that we have kept building a very nice order book over the year. And again, we have a very strong backlog and order book at the end of 2025, which give us full confidence in our ability to deliver our data center targets for '26. And maybe just a word because I want you to avoid a misunderstanding. So the close to plus 40% is really organic. If you were to put together FX and acquisitions, this close to plus 40% would become plus 50%. So the close to plus 40% is really purely like-for-like sales increase in data centers in 2025.

Okay. But the close -- well above 30% you mentioned for the 9 months, it was actually well above 40%, I suspect?

40% is above 30%.

And just if I may...

I'm glad to give you more disclosure, Eric, but you should have the same level of disclosure to all companies. I have the feeling that we sometimes disclose a lot more than anybody else in data centers.

This is certainly true. And if I may, a last one on margin. Your guidance on margin, do you include in your margin guidance for 2026, some positive impact from acquisition or negative impact from acquisition?

Well, actually -- so first comment, when looking at our guidance, we start from a high base, which is a 2025 margin. And we basically include a bit of leverage, organic leverage, not a lot, I have to admit. But I have to say that we have given a clear priority to growth in 2026 and to sustain growth while you have inefficiencies, you have amortization, you have expenses to do. So a bit of leverage and a few 10 bps of dilution coming from acquisitions. It could be minus 10, it could be minus 20. Those are the order of magnitude. And all that leads to the 20.5% to 21% adjusted EBIT margin after acquisitions, which we have embedded into our guidance. And I'm sure that you have also noticed, Eric, that we have upgraded a bit our 2030 EBIT margin target because at the CMD, we said that we were looking for an average EBIT margin of about 20%. And now we make it clear that the average will be above 20%.

The next question comes from the line of Martin Wilkie from Citi.

It's Martin from Citi. I don't want to labor the point too much, but just to come back to the data center growth in the fourth quarter, and I appreciate there are obviously some comp effects, both from the very high growth in Q4 and also because of some of the acquisition effects as well. Could you give us -- you've obviously given the EUR 2.4 billion in absolute terms for the year. But in euro terms for Q4, are we right in thinking that data center sales in euro terms were sort of close to EUR 700 million? Just so we can make sure we sort of square the circle in terms of how big data center was in the fourth quarter.

Well, actually, I don't have this level of granularity. And it's a bit complicated because you have to embed FX, which is strongly negative in Q4 because of the dollar versus euro. You have to embed acquisitions and -- so it's a bit complicated to say. But it seems like you are surprised by the plus 10% in Q4, which is far better than what we guided for back in November for the last. And again, you shouldn't look at the data center business as if it was a distributed business, right? One quarter is impacted by the comps by the project and so on.

If your question is, is your target plus 10% in data center in 2026? The answer is no. Our guidance is 10% to 20%. But of course, we are targeting to grow as fast as possible. So I wouldn't read the plus 10% in Q4 as any indication of what it would be for 2026. What I can tell you, again, and this is confirmed by the publication of our peers, this is confirmed by the huge CapEx plan from hyperscalers where the CapEx is growing from 50% to 100% between '25 and '26. It is confirmed by industry experts. It is confirmed by the backlog we have. It is confirmed by the book which we have. 2026 is going to be another very good year in data centers.

We obviously see the strength of the orders. I think the debate or the confusion with the Q4 numbers is that the full year seems to be a lot better than people had expected. And therefore, we would have thought the Q4 growth rate would have been higher. But I'll go through the math afterwards. I know there's a lot of moving parts on acquisitions and foreign exchange and these kind of things. Perhaps if I could just have one follow-up on data center. Obviously, you started off the year with a lower guidance. When the surprise comes, is it literally sort of an overnight surprise to you? Just -- I mean, I know obviously, there's a difference between backlog and pipeline. But in terms of when you're having those conversations with your customers, what sort of pipeline visibility do you have?

Well, it's very complicated because, again, we are not as experts as others in reading the pipeline. But again, the connection between backlog and sales it's not that easy because orders are -- can be canceled, they can be moved. If we have to -- most of the contracts do have a pricing clause whereby you can adjust the price up or down depending on the price of raw material and components. The orders we have are usually not 3 years orders. We have an ability -- our lead times are typically 8, 10 or 12 weeks for most of our products. We have almost no products where you have a longer lead time or lead time as high as 8 months, 10 months or 12 months. So customers do not need to pass orders 1.5 years in advance.

So most of the backlog we have will have to be delivered in 2026, not in '27 and '28. So it's not solid enough as a leading indicator to tell you precisely, yes, we intend to grow 18.5% in data centers in 2026 because the backlog would support that kind of growth. It's more a trend topic. And this trend topic, again, confirmed the very good '26. I cannot be more precise than that. So in other words, to make the long story short, number one, we shouldn't try to read too much from the backlog even though the numbers are very good. Number two, having a backlog of orders in hand is not a problem to pass on price increase if we needed to.

Now we're going to take our next question and the question comes from the line of Alasdair Leslie from Bernstein.

So a couple of follow-up ones on data centers, please. I mean, obviously, it sounds like you saw a similar surge in data center demand to your peers. I kind of -- I appreciate the comments about not overstating the importance of the backlog, but you obviously do talk about a promising order book there. Does that surge in Q4 demand, does that really give you a sort of fast start to 2026 as well? I was just wondering what the outlook for Q1 data center growth was. Obviously, just last year, reflecting on 2025, it can be a little bit lumpy from one quarter to another. So just to help us kind of calibrate expectations for the first quarter.

Well, we're not guiding on quarterly sales or profit, neither on data centers nor for the rest. And again, an exit rate doesn't mean much in the data center business. So no specific guidance to give you, Alasdair, for Q1. We stick to our yearly guidance.

Okay. And then maybe just the second question was on capacity to meet higher demand in data centers. I mean we hear commentary, it sounds like constraints are creeping back in and on the rise again, obviously, because of the surge in demand. But one of your slides mentioned solid capacity to execute and adapt. I appreciate that's probably a broader level across the group. But -- and it feels like the ability to meet demand, short lead times, that's still very much a kind of competitive advantage right now in the industry. So just wondering if you could comment there in terms of how you assess yourselves relative to the competition on industry.

Yes. So far, the teams have done a very good job, I have to say. So we have doubled our capacity investment on data center in '24 compared to '23 and doubled again in '25 compared to '24, still remaining actually within the 3% to 3.5% CapEx to sales level. So we are not increasing the CapEx guidance. And we believe we will still do a good job. So yes, it's a challenge, and the teams are working hard to meet the demand. But this is a business which is not capital intensive. So you can increase capacity by working on your supply chain, by working with a subcontractor, by adding shifts. You don't have to spend millions and millions in CapEx. So it remains a challenge. We've been able to do a good job in the past 2 or 3 years, and I'm fully confident that it will not be a bottleneck for our business in '26.

Now we'll proceed with our next question, and it comes from the line of Andre Kukhnin from UBS.

Can I just clarify a couple of things first, and then I have one question. On -- and sorry to come back to 800-volt DC. But in terms of -- when you talked about AC powertrain being neutral to positive within the 80% of your business, do you see that as in dollars per megawatt or just in absolute terms, given there's going to be a lot more megawatts when we go to that architecture?

Well, it's also dollar per megawatt but again, I'm ready to have the discussion with your experts if you wish to. But yes, we see much more solid redundant with more intensity AC powertrain. So it should contribute to the higher -- slightly higher dollar per megawatt. And on top of that, you will have gigawatt data centers and not megawatt data centers. So for data centers as a whole, it's also a good news.

Yes, we have no doubt in the growth in megawatts or gigawatts in absolute. It's just a couple of people we spoke to basically suggest that there's at least one stage of switching that disappears in the DC 800V architecture, and that's the AC switching. So I was just intrigued to hear that you see that...

So you have a bit more -- you have less UPS, which is true. But we are not -- we have a very small market share in UPS in data centers, I have to say. But again, it depends which DC architecture you're talking to. If it is the next grid to chip, then it's about DC and no longer AC. But again, this architecture is in the books today. And yes -- so in the architecture, which is currently considered for '28, '29 in some of the data centers, it's still an AC powertrain.

Got it. And just related to that...

There's a focus on this new architecture, which again is a pretty good news for Legrand, not a bad news, which is too strong from the financial community. You are missing, I think, one point. which is the fact that, number one, many architectures will continue. And even if this one has a meaningful market share, this market share is going to be 10%, 12%, 15%, not 100%. And it will probably be made of different type of sub-architecture. So many architecture will coexist. If you take one hyperscaler, if you talk to one hyperscaler, I will tell you that over the past 10 or 12 years, they probably have 6, 7, 8 different architectures by hyperscaler. So in total, you have 10 different architecture coexisting. There's not one that's going to prevail in the years to come, number one.

Number two, you consider a company such as Legrand as static animals, which do have a product portfolio, which we're not able to adapt and to adjust. Again, look at what Legrand did over the past 8 years. So if there's something new coming, in the architecture, if there's one piece missing that we don't have, we will develop it, we'll partner to get it or we will buy it by [indiscernible] company. It shouldn't be such a concern. So it's interesting to see that 1/4 of the questions on this call were on 800-volt DC. I think there's too much emphasis putting on that topic.

Fair enough. I completely take it. I just -- on that kind of nonstatic animal, I guess that's what you're saying on the solid-state switching and braking that you do not have it right now, but you're confident you will develop it or be able to buy it.

Well, I don't want to be specific on one product family or the other. But again, if we feel that there's something that we absolutely need to have, we will have it. But most importantly, the current Legrand portfolio can address 99% of the needs for the next -- at least the next 5 years. That's a very important message that I want to channel to you. Now what will come in 6 or 7 years, it's a different story, but we will adapt. We will adapt. And if we are ready to tackle only 70% or 80% of the architecture that will come in 8 years, but we will do what it takes to address the remaining 20%, and that's it. But we have a product offering, which is suitable for 99% of the architecture that will come in the next 4, 5 years.

Can I just ask on that change to the margin ambition for 2030 from around 20% to above 20%. I guess we learned on this call, above 30% can be 45%. So just wanted to understand whether that above 20% is an ambition to continuously improve margin from here? Or is it kind of, hey, the margin is above 20% now and we are kind of okay with it now?

No, we are not guiding more precisely than that because, of course, it depends on the acquisitions we're going to do. I mean, last year, our acquisitions were accretive, but they could very much be dilutive by 30, 40 bps. It depends on the growth rate and so on and so forth. So I don't want to shoot a number. If you look at the past 6 years, -- so '21 to '25, we've been consistently above 20%. And the average of the 5 years, if I'm correct, is 20.6%. I'm not saying that this is a new standard or new benchmark, but it means that it could be 20.2%, it could be 20.5%, it could be 21%. It will not be 35%, if this is your question. So no, we're not shooting a new target, just that it's going to be above 20%.

The next question comes from the line of Ben Uglow from Oxcap Analytics.

I had a couple. I think a previous question assumed or sort of said you've had an order surge. Maybe I missed it in your opening remarks. But can you just give us a sense of your order development, obviously, in data centers in the fourth quarter? And the reason why we ask is your phasing and your time line in projects can be a little bit different from others. If I look at Eaton, Vertiv others that have reported, they've seen a kind of almost doubling of their orders between the third and fourth quarters and up by 200% plus year-over-year. I guess my question is, have you seen -- I don't want a specific number, but are you seeing exactly that kind of trend qualitatively? And when I think about the phasing of your growth in the current year, is it correct to assume that, that growth, whether it's 10% to 20% or 30% is back-end loaded? I guess what I'm thinking about is how quickly we see any orders come through in the next 6 months.

Ben, well, I'm a bit embarrassed because -- we have seen some order flowing, some backlog building, but I don't want to shoot a number because, again, I don't believe that it will help in any way to forecast what the 2026 sales is going to be. And actually, when we look at our competitors, I don't know, yes, ABB shot an increase in backlog, but they are guiding for growth in data center, which is in the teens. Vertiv, if I correct, is saying that you shouldn't extrapolate anymore the orders and that they will not give it anymore on quarter-by-quarter basis. So I think everybody is more in line to tell you, be careful. You cannot extrapolate an order inflow, a backlog or an order book into the next 12 months sales.

Also more for Legrand, as again, we don't have the same order pattern as an ABB, Eaton, Schneider or Vertiv. We don't have orders, and we've never had in data centers orders above a year. 95% of our orders should be in even '26. So it's the very nature of our business, the fact that we have short lead time, maybe the products we are in, I don't know, maybe the geographies we are in, that makes it -- that makes me a bit uncomfortable to extrapolate the orders we have into sales. So I know you don't like the answer, but unfortunately, I cannot give a better answer than that.

No, understood. And by the way, I appreciate all the disclosure. It goes around and around in circles, but I think we're all trying to get to the same thing. The second kind of question is just around North America on the margin side putting 4Q to one side, it's a pretty healthy evolution year-over-year, but we do have -- still have moving parts in terms of raw material tariffs, et cetera. Is there any reason for us to think about the drop-through or the potential growth in North American margin, obviously, given your top line. Is there any reason to think about it differently this year than last year, i.e., that all else equal, we should be seeing some decent drop-through to your margin? Or are there any qualifying effects?

Well, I will let Franck to take this one. Go ahead, Franck.

Yes. Ben. Well, as you noted, effectively, the margin on Q4 alone for North and South America is a little bit weak. There is absolutely nothing sustainable. There are many moving pieces in that margin with the mix of business with new acquisition with some one-timers. So what I would -- the way I'm reading the performance is more looking at H2 with the gross margin around 50%, with adjusted EBIT around 20%, which makes North and Central America very profitable. And on a year-on-year basis, the margin is improving a lot despite the tariff challenge that we already shared. And second, as you rightly said interestingly, it's the value, the year-on-year growth, 24% of improvement in value of the adjusted EBIT margin between '25 and '24, and that's in euros, it's close to 30%. So bottom line, a very good performance of our U.S. colleagues.

Now we take our next question and the question comes from the line of William Mackie from Kepler Cheuvreux.

I have 2 questions, one relating to the structure of your guidance. One, if I can harness your continued generosity on the data center discussion to talk about the definition of the business. So firstly, with data -- you've talked a lot about the profile of the business here and the growth rates. Could you just touch on the customer profile? We've seen a lot of growth across an announcements from hyperscalers, but there's a broad base of customers. So how is your customer footprint positioned between the large scale and the broader cloud providers and other providers? And how is the growth trends differing between the different DC type customers?

Yes. Well, we are a mix of customers that more or less replicate the market that the feeling we have. So it's probably -- it's not always easy to know them, but it's probably 1/3, a big 1/3 to half on the hyperscaler and then cloud 20%, 25% and then on-premise, maybe 25%, 30%. Those are the orders of magnitude. But if you take the market, there's no reason why our sales wouldn't replicate the market. Of course, the hyperscalers have been the one investing the most. So we are growing very nicely on hyperscalers. Now the growth is also very good on co-locators, either serving hyperscalers or retail co-locators. The one segment of the market, which is not growing at the same pace is clearly on-premise data centers, which have a much slower growth rate. But when it comes to cloud, new cloud, hyperscalers, [indiscernible] retail or, those are growing very nicely.

And then maybe moving across to the segmentation detail that you provide annually on Slide 15. Could you talk a little about your expectations going forward for the growth rates across the energy transition category? We've talked about buildings, which largely fall for essential infrastructure.

Yes. Well, let's maybe a word on '25. So on '25, I told you that the data center grew close to 40%, which implies that the rest is slightly growing only. And out of the rest, you have energy transition growing a little bit more. You have digital lifestyle down with Connected Health growing, but Connected Home being down, and this is a result of the housing market in Europe. And essential infrastructure is basically flat. So plus for energy transition, flat for essential, slightly down for digital lifestyle. When it comes to 2026, it's difficult to be very precise because it will depend on the underlying markets. Now I see no reason why energy transition shouldn't do better than essential because it is boosted by structural trend.

The fact that the world is electrifying and moving from fossil energies to electricity is a structural trend that is here to last. So it should do a bit better than essential, but by a few points, not by 10 or 15 points. This is our central scenario. A word -- I'm not sure it was completely clear on the press release, which is very interesting. When we buy companies related to the critical power into data centers, it's Linkk company we bought in Malaysia. It's Avtron in the U.S. it's Curtis Industries in the U.S. and it's a few others. Usually, they're not doing 100% of their sales in data center.

They are doing 50%, 60%, 70% of their sales in data center and the rest of their sales is made in microgrids, in infra, in industries and so on and so forth. So it helps us building an energy transition footprint in verticals in which we were not. We already had critical power in education, commercial buildings, office buildings, but we did not have critical power into microgrid or industries. So it's a sort of side effect of our acquisitions in data centers, not only builds our position in data centers. But on top of that, it also reinforces and build our position in energy transition.

Maybe a last final follow-up relating to prospects. We've talked broadly about Europe, but I think Rexel last night printed 3.3% growth in France. I know they win market share. What are your thoughts about some of the major European companies -- countries and particularly France?

For 2026, well, number one, we are not growing in France but we're not losing market share. And clearly, Rexel has been massively gaining market share in France for quite some time. So it's a tribute to the teams. For '26, we start to be somehow a bit more positive than we were on France. I'm sure you have heard about this [indiscernible], this housing plan, the so-called Bazooka plan, which the French authorities have stated that they intend to build 400,000 houses a year, which would be a surge compared to the current 270,000. Now we are a bit cautious because so far, it's an announcement. We don't know yet the specifics about this plan, how will it be financed? What will be the measures that will be implemented in order to support this plan. But at least, it signals a change of mood in France and the fact that now housing is considered again as a priority where it was not. So we are slightly more positive on the mood at least. We'll see about the numbers. When it comes to Germany, the Bazooka plan should start to have a bit of impact. Southern Europe has been pretty healthy. We did nice growth last year in Italy, for example. Spain is okay. So again, I don't want to sound too optimistic because we've been waiting for the rebound for 2 years, and it did not really happen yet. But again, the signals start to be a bit more positive. Now before starting to upload, we have to wait for the construction KPIs to flow into our numbers, which is not yet the case.

Dear speakers, there are no further questions for today. I would now like to hand the conference over to your speaker, Benoit Coquart, for any closing remarks.

Well, I just wanted to thank you for your interest in Legrand. Thank you for the clarity of your questions. And should you have more questions and not only on the 800-volt DC, do not hesitate to call the IR team. We'll be happy to answer. Thanks a lot.

This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.

Good morning, ladies and gentlemen, and welcome to today's Legrand 2025 9 Months Results Conference Call. For your information, this conference is being recorded. [Operator Instructions]

At this time, I would like to hand the call over to CEO, Mr. Benoît Coquart and CFO, Mr. Franck Lemery. Please go ahead, sir.

Thank you very much. Good morning, everybody. Franck Lemery, Ronan Marc and myself are happy to welcome you to the Legrand 2025 9 Months Results Conference Call and Webcast. Please note that as usual, this call is recorded. We have published today our press release, financial statements and a slide show to which we will refer.

I begin on Page 4 with the 3 key highlights of this release. First, Legrand delivered robust sales growth and very solid margins over 9 months. Second, we are sustaining a strong acquisition momentum and, third, our 2025 full year target rate in July are confirmed.

So moving to Page 6. I will start with an overview of sales. Over 9 months, excluding FX, our sales grew by plus 14.5%. This includes an organic growth of plus 8.2%, driven by an outstanding performance in data centers of well above plus 30%. This also includes a positive scope effect of plus 5.8%.

And based on acquisitions announced and their likely date of consolidation, the full year impact of scope changes should be around plus 5%. For exchange rates, the effect was a negative minus 2.2% in the first 9 months of 2025. And based on the rates of the month of October, it would be around minus 3% for the full year.

On Page 7, you will find the key takeaways per geography on a like-for-like basis. In Europe, in a market that remains overall contrasted, sales were up plus 1.5% over the first 9 months of 2025. In North and Central America, sales were up a strong plus 18%, driven by an outstanding performance of data center offerings.

Finally, in the Rest of the World, sales increased by plus 2.5% with growth in Asia Pacific and the Middle East, partially offset by a retreat in South America and Africa. Overall, at group level, as expected, most of the organic growth is coming from data centers that represent 25% of our sales at the end of September, while our sales in residential and other nonresidential buildings are flattish with residential slightly down. These were the main comments I wanted to share on sales.

I will now hand over to Franck for more color on our financial performance.

Thank you, Benoît , and good morning to all of you. I will start on Page 8 with adjusted operating margin. At September end, we recorded a solid adjusted operating margin of 20.7% after acquisition. This represents 20 bps of increase year-on-year, including 10 bps on organic improvement and 10 bps favorable impact coming from acquisitions. The group's profitability over the first 9 months demonstrates the strength of our strategic model and the solid capacity for execution and adaptation, notably, amid evolving global trade policies.

Going now to Page 9. The net profit stood at EUR 892 million, representing 12.8% of our sales. The increase coming from operating profit is partially offset by the impact of financial results and a modest rise in corporate income tax. The free cash flow came to EUR 871 million, growing plus 16.3% over the same period of last year.

This concludes our key financial topics I wanted to share with you this morning. And I'm now handing over back to Benoît .

Thank you, Franck. We are now moving to Page 11, detailing our recent acquisitions. Since Jan, we have announced 7 acquisitions, all in buoyant markets tied to the energy and digital transition for a total acquired annualized sales of approximately EUR 500 million. It includes Avtron, Page 12, a very promising leader in North America and a highly strategic acquisition. First, Avtron strengthens our presence in growing data centers, gray space and energy transition in North America. Second, financial metrics are robust, close to $350 million of sales with high profitability.

Third, the transaction is fully compliant with our usual financial criteria of value accretive deals. By the way, I'm happy to confirm that we have just closed the deal a couple of days back. These transactions illustrate our ability and expertise in continuously strengthening our leadership in buoyant fields of activity.

To conclude this section on Page 14, we confirm the 2025 full year targets we raised in July '25, building on the achievements we've just mentioned. And taking into account the first 9 months of 2025 results, we target for the full year sales growth organic and through acquisitions, excluding currency effects of between plus 10% and plus 12%.

This includes expected organic growth of plus 5% to plus 7% and growth from acquisitions of approximately plus 5%. And adjusted operating margin after acquisitions of 20.5% to 21% of sales. And at least 100% CSR achievement rate for the first year of the 2025-2027 road map. Those were the key topics of this release.

I suggest we now switch to Q&A.

[Operator Instructions] We will now take the first question from the line of Daniela Costa from Goldman Sachs.

I have 3 questions, but they are quick. But the first one is in terms of looking at your guidance and given what you've done already in the first 9 months, the -- I guess, if you take the midpoint of the organic sales growth, you're expecting a flat Q4, which implies -- seems to imply sequentially even more deceleration than what a tough comp means. Can you talk through what would be the things that would get you to that level and why? The other 2 questions are quicker are just where was data center growth and what was your pricing and tariff headwinds?

Okay. Daniela, I will take the 3 questions. I will start actually by the data center growth because it explains a lot about our performance in 2025. So as I told you, over the first 9 months of the year, we grew well above 30% in data center. For the full year, we are somehow raising our guidance target for data center growth. We expect now that we should grow in data centers by about 30% in 2025 full year. As you remember that we started the year hinting that we would grow from 10% to 20%.

Then we narrowed that and we increased it 3 months back by saying that we should grow 20% to 25%. And we now believe that given what orders in hand and so on and so forth, that we should grow 30%, which is a good performance because at the end, it would imply that over 2 years compounded, we would have grown 50% in data centers, 50%, 5-0. Plus 15, 1-5 in 2024, plus 30, 3-0 in 2025. So plus 50%, which, by the way, is pretty in line with what our listed peer has released because I trust is also at about plus 50% of what we are.

So it's a very good performance, probably slightly above what the data center market growth is doing. And we believe that nice growth will continue into 2026. Now the fact is that we have a demanding basis for comparison. You remember that in 2024, we started the year very flattish in data center in Q1. And then we did plus 10%, plus 20%, plus 30%. In other words, in H2 2024, we had a plus 25% growth with an even higher Q4. So the visible deceleration, if I may say, is purely visible.

We are at about plus 50% over 2 years. We're going to be close to plus 50% in Q4. But we have to acknowledge the fact that the basis for comparison in H2 and especially in Q4 is demanding for data center. So that's the story of this year as far as data center is concerned, very sustained growth all over the year, no deceleration, but a demanding basis for comparison. So it explains clearly the perceived deceleration that you are mentioning. Now if you look beside data center as a total of our sales, year-to-date, over 2 years, we are at plus 7%.

And the midpoint of Q4 would imply 2 years plus 6%. Now it's not forbidden to think that we could do better than the midpoint. But again, the whole visible deceleration, if I may say, is coming from a base for comparison, not from a weaker data center business. As far as the building piece is concerned because I remind you that, of course, 25% of our sales is growing fast, but we also have 75% of our sales made in buildings. It is pretty flattish.

As I said in my introduction with commercial being slightly better than resi, mostly because resi is very down in China and a little bit down in the U.S. But overall, it remains pretty flattish, and we don't expect it to recover in Q4. So to make a long story short, the story of 2025 is going to be a very strong sustained growth in data centers of about 30% and somehow quite a flattish building business with probably non-resi, a little bit better than resi.

As far as pricing is concerned, which was your last question, we have a selling price over the first 9 months of the year of plus 1%. And for the full year, we will continue to do a bit of pricing. So for the full year, our pricing should be at about plus 1.5%. So if you look on a quarter-by-quarter basis, you will basically have Q1 pretty flat, Q2 plus 1%, Q3 plus 2%, Q4 plus 4%. This is more or less, let's say, with rounded numbers, the pattern of pricing.

So our strategy has been, since the beginning of the year, to do progressive pricing, not too aggressive because, of course, we want to keep our competitive positioning. We are doing it to compensate the impact of tariff. I can share another number, which is interesting. Our purchase price are up by about plus 4% over the first 9 months of the year, entirely due to tariff. Yes, Q4 is -- sorry, plus 3%. Franck is mentioning.

So pricing, again, 0 in Q1, plus 1% in Q2, plus 2% in Q3, plus 3% in Q4. And the net of all that, let's say, over 12 months is approximately plus 1.5% over the full year. Does it answer your question, Daniela? Sorry, I was a bit long, but I thought it was interesting to give you as much granularity as possible.

Perfect -- just on the Q3 data center growth, I got the full year at 50%, but I'm not sure maybe I got lost.

Well, it's -- for the first 9 months, it's well above 30%. So it remains above 30% in Q3, and it will be about 30% for the full year.

We will now take the next question from the line of Gael de-Bray from Deutsche Bank.

I have a couple of questions, please. The first one on pricing. It appears that the 1.5% price increase for the full year is a bit lower than what you had suggested previously. So do you think the price negotiations have changed versus a couple of quarters ago? I mean, have they become any harder? Or is it still the same environment, especially in the U.S. where data center customers are paying for the speed of delivery? So that's question number one.

Well, yes, you are true. When we released our 6 months number, we said that we would be close to 2%. Now we are more, let's say, guiding for 1.5%. The key difference is coming from tariff actually. So it's not that we have more difficulties to pass on price increases. But 3 months back, we told you that the tariff impact on a yearly basis should be somewhere between USD 140 million and USD 180 million on a full year basis. We now believe that it's going to be between $110 million and $130 million. So less negative impact, if I may say, coming from tariff.

Well, I'm not sure I have to explain why. It's a very fluid situation. Things are moving almost from one week to another. So total impact, USD 110 million to USD 130 million; of which, let's say, $70 million to $80 million are already in the 9-month numbers. So we still have a bit to come in the last quarter. Hence, less need to do pricing. Now if I take one step back, I can confirm that the pricing environment hasn't changed. Our customers are always looking carefully at the price increases.

They want to make good deals, whether in data centers or elsewhere. This hasn't changed. But at the same time, we keep our ability to do a bit of pricing because we have many other topics in which to play. Availability, as you rightly mentioned, reliability of our solutions, quality of our aftersales service and so on and so forth. So no change in pricing environment, but a little bit less impact from tariff.

Okay. Understood. And then the second question is on the incremental margin. I'm just curious as to kind of the outlook for incremental margins. I mean, in Q3, the margin was flat. But if revenues are looking better, let's say, in the course of 2026 in the European residential market, can we assume that we will also see much higher incremental margins with support from a better mix?

Well, guys, you are becoming greedy. We have a long-term guidance, which is 20%. For the fifth year in a row, we'll be above this guidance because we are shooting for 20.5% to 21% EBIT margin, which we believe is a pretty healthy level of margin. For '26, let's discuss that in February, if you don't mind.

What I can confirm during this call is that, as you know, we raised our margin target in July, and we are confirming that we will be between 20.5% and 21%. And by the way, we are right in between over the first 9 months of the year with this 20.7% margin. For the '26 topic, let's discuss that in February.

And is there any reason to think that the usual negative margin seasonality in Q4 will not apply?

Well, again, you know our targets. So we have a year too margin, which is between 19.9% and 21.8%. If you look at what we did over the past 5 or 6 years, we've done both. So there's no reason to believe why our guidance margin wouldn't be met. So we were comfortable of the fact that we will be between 20.5% and 21%. Now if you want me to give you a bit more color on what happened in 9 months, it's a very, very clear story.

As you could see in the numbers, we have a margin which is up 20 bps, right, at 20.7%, with a bit of evolution coming from acquisitions. So without acquisitions, our margin would be up 10%. Well, it would be up -- sorry, not 10%, 10 bps. It would be up 30 bps if we take out the other expenses, as you know, because you know Legrand well, you know that our EBIT margin is after one-off exceptional and so on. So it's plus 30 bps, of which minus 40 bps from gross margin, plus 70 bps from leverage on SG&A, all those numbers being like-for-like.

So minus 40 bps gross margin, it's the fact that our pricing is not fully compensating in margin inflation, which was expected and plus 70 bps on SG&A is leverage coming from the growth. So it's a pretty clear-cut story. And I confirm that our P&L is well under control and that we will land where we said we would land.

Okay. Do I have time for just one more question.

Well, a quick one, Gael, because you have a couple of colleagues that are queuing.

Yes. So a very quick one. I mean, Eaton and Schneider have made big moves into liquid cooling recently. And I know you have, well, some kind of an offering here in rear door heat exchangers. I'm just wondering if you can increase the scale of that business so that it can really compete against the likes of Schneider, Eaton and Vertiv?

Well, it's increasing fast. And the growth rates are pretty impressive on this business, even though it's a small one. Of course, we are always looking at opportunities to expand our portfolio and to grow faster. So if we find good opportunities for additional customer catch for capacity expansion or even for M&A, why not?

Now it is a fact that in this business, specifically this one, the price of the assets have gone up very significantly. And you know that, at Legrand, we are not found of deals where you have a return on invested capital of 2% or 3%. So yes, we will -- so we are growing fast already from a small base. We look at opportunities to expand. But of course, we will do it with our traditional value-accretive approach.

And by the way, it's worth mentioning that even though we are less exposed to cooling than Vertiv, overall, those were the numbers I was mentioning a little bit earlier. Over 1 year and 2 years, we are growing as fast as Vertiv. So we don't need to be much bigger in liquid cooling in order to sustain very, very rapid growth.

[Operator Instructions] We will now take the next question from George Featherstone from Barclays.

So I just wanted to start with a bit of a follow-up on the fourth quarter implied guidance. Because given your message on pricing up 3% in the quarter, it sort of implies that you're expecting volumes to come down based on your full year guidance. So what would be the reason for that? That would be the first question, please.

Well, it depends where you put yourself in the guidance. If you are in the mid, yes; if you are up, no. Well, again, I don't want to spend too much time on that. It's purely basis for comparison. To give you the numbers, Q4 was up by more than 6% last year. First 9 months were down about 1% last year. So there's a significant basis for comparison, which we highlighted already 3 months back and which we are highlighting again today. No change in trend. I really -- I cannot say it louder than that.

No change in trends as far as data center is concerned. No change in trend, neither actually positive nor negative when it comes to the building side. So it's purely basis for comparison. It was factored in our initial guidance back in February. It was factored in our upgraded guidance back in July, and it is factored in the fact that we are confirming the guidance today.

Okay. And then maybe just on the data center business. You've been quite helpful in the past, giving us some color on backlog and visibility you have. Is there any color you can give on that again? And then maybe on the orders for the quarter, just sort of growth rates so we can frame that?

No, no, it's a fair question. Well, the KPIs are pretty well positive. We have a book-to-bill in Q3, which is still above 1% -- sorry 1, by 1%. We have a backlog which is above USD 1 billion. So no worries at all when it comes to, let's say, the leading indicator of our data center business. We have a good inflow of orders. We are looking with great interest at all the investments, which have been announced by the big guys and which says a lot about the potential business in '26 and '27.

So again, I read a few notes this morning saying that our sales are a bit disappointing, but I want to say clear and loud that we are extremely confident on the fact that we're going to grow nicely of data center business in 2025, again, by about plus 30% and that this trend should continue going into 2026. No worries at all of the fact that this business would slow down. It will not.

Okay. Just maybe if I could just press you a little bit more on that. Some of your peers have talked to order growth in the third quarter of over 65%, 70% year-over-year. And the more exposure you have to white space and areas like cooling, the stronger that number is. Can you give us some context where your orders year-over-year landed relative to those peers?

Well, yes, the comparison is a bit difficult from one player to another because either you are on product families where you have shortage, in which case, orders are placed sometimes a year or 2 in advance, right? Or you are on business families where you don't have shortage because the companies have managed to increase capacity in the right pace, in which case, the orders do not need to be placed a year or 2 in advance.

So I'm not sure it is relevant to compare the order growth of the company X to the order growth of the company Y. What matter is really the book-to-bill, number one. And at the end, what matters is the actual sales. And again, we've been consistently telling you for 5 years now that our sales growth in data centers were, at worst, comparable to what our peers were releasing and quite often better. And again, looking at what we're going to do in '25 and what we did in '24, this is exactly what we are demonstrating. So there's no worry at all.

Again, on the data center front, we have very good inflow of orders from all customers. There's no customers missing, if I may say, from all geographies. It's not solely a U.S. stuff, but we have a good inflow of orders coming in Southeast Asia, in Western Europe, in Eastern Europe, in Africa and so on and so forth. And we are confident on the fact that this business is going to continue to perform very well in the quarters to come.

We will now take the next question from the line of Jonathan Mounsey from BNP Paribas Exane.

I just want to really understand how the business mix, maybe pricing power ultimately is evolving. I mean, we all know that I think you've delivered price rises every year, at least going back to the '90s. And this pricing power has obviously protected margins in many environments. But I'm just wondering now over the long term going forward, you have 1/4 data centers. It seems to me the business model, the go-to-market is not the traditional construction building go-to-market via distributors selling to electricians. Instead, you're competing for tenders into hyperscalers, et cetera.

I'm just wondering what that means for the through-cycle pricing power. It seems to me that while things are great today, and I'm not calling the end to that, at some point when volume growth maybe slows or industry capacity catches up with the growth, is this really altering the through-cycle pricing power of your group to be -- to have an increasing proportion of it dominated by data centers?

Well, I don't believe that our pricing power came from the fact that we are selling or building stuff through distributors. The pricing power is coming from the fact that price matters a lot for our customers, contractors, whether big or small, but it's not the #1 criteria. The #1 criteria is, let's say, 3 or 4 first criteria is, are the products reliable? Will I have to come back on site to fix a quality issue?

Are the products available very easily? Can I save time when installing the product and so on and so forth. And the same applies to data center customers. I can tell you that the Amazon, Google, Microsoft of the world are very price sensitive. They've always been very price sensitive. But on top of price or even before pricing, they want to make sure to have the product on time.

They want to make sure that once the product is installed, things will work because any service interruption is a loss of money. They want to make sure that if there is an issue, somebody will fix it quickly on site within a few hours and so on and so forth. And of course, they want to have all that in a cost competitive way.

So in other words, I don't believe that the fact that we are doing 25% of our sales in data center change anything when it comes to our pricing power. And going forward, I'm confident on our ability to pass on small price increases year-on-year, providing, of course, we are doing things well when it comes to product quality, service and so on and so forth.

So no, I don't believe it will change anything as far as pricing is concerned. And actually, if you look at the past couple of years, we've not done a lot more pricing nor a lot less pricing in data centers than in building. So the pricing pattern has been more or less similar.

Okay. Just as a follow-up, thinking about the inherent lumpiness of data centers. I mean we can see that consensus maybe struggle somewhat to forecast the growth rate, at least on a quarterly basis as we see this quarter. I'm just trying to think -- maybe you give us some color on the largest customers and projects. I mean, after all the growth we've seen over the last 12 months, what's the kind of typical mix in terms of hyperscalers, say, or the top 5 projects that you sell into?

I mean, do they represent a considerable amount of the data centers exposure? And how fast does that sort of mix evolve? In a couple of quarters, could it look radically different? Just trying to understand what the sales mix looks like on those 2 axes and, therefore, maybe better understand how the sales bridge works for data centers. Do you basically just track data center CapEx? Or is our revenues at least on a quarterly basis, often quite concentrated around, say, a few big projects and customers?

Well, we'll give you probably a bit more color in February because, of course, we are performing this kind of analysis, but not necessarily on a quarter-by-quarter basis. Now to be a bit candid, the difficulty to forecast is your difficulty to forecast, not our difficulty to forecast. Because from the very beginning of the year, we highlighted the basis for comparison, number one.

And number two, again, I'm saying it clear and loud, and I cannot be clearer and louder, but a plus 30% growth in data center in 2025, following a plus 15% growth in 2024 is very good performance, slightly above the market and completely consistent with what the only other peer releasing its numbers, i.e., Vertiv has announced. Midterm, we are -- we said in July that we expected the market to grow in the low teens. I don't know if it's going to be 10%, 12% or 14% throughout 2030.

So we've been very clear on the numbers. We've been very clear on the basis for comparison. Now to be a bit more precise, the performance in the first 9 months of the year is not coming from 1 single customer nor from 1 or 2 big projects that would have been game changers as far as performance is concerned. So it's, of course, pulled a lot by hyperscalers because those are the guys spending the most money, but it's not the only one. Colocation is growing nicely.

We are also active on other type of customers. We also have some business going through distributors to data center guys, especially aftermarket or smaller type of data centers. The growth is about the same in the 3 geographies: North America, Europe and Rest of the World. Of course, data centers represented the first 9 months of the year, 40% of our sales in North and Central America. So the total impact on our global performance is much higher in North and Central America than elsewhere.

But as far as the growth is concerned, it's pretty the same between the 3 zones. So again, it's nothing special to mention except that the market has been growing nicely, and we will grow by a great plus 30%. And going forward, we expect some growth to continue. And we will try to give you more color in February where we will have more detailed analysis by type of customers and so on and so forth.

We will now take the next question from the line of Alasdair Leslie from Bernstein.

Just a sort of follow-up questions really. Sorry, I don't want to re-litigate this too much, but I know you say no change in data center trends quarter-on-quarter. But can we just kind of definitively rule out any kind of mix impacts in the quarter in terms of project deliveries? I know it's lumpy. So maybe last quarter, we just kind of had a lot of larger orders, just the kind of mix impacts or any capacity issues, capacity constraints, execution issues in Q3? Just so we're absolutely clear, there's no [indiscernible] in trends...

You're trying to understand whether there was a problem in Q3 or there will be a problem in Q4 in data center. The answer, again, read on my leaps, if you could. The answer is no. Everything is going very fine. The business is great. We have very strong sales, very strong orders, and we're going to grow 30%. Now you may have included in your model a growth of 40% or 50%, but we've never guided for that.

Our previous guidance for data center was 20% to 25%, and we are even upgrading this guidance, telling you that it won't be -- 2025, it will be closer to 30%. So there's nothing specific happening except that, again, I can only remind you the pattern of last year, 0, plus 10%, plus 20%, plus 30% when it comes to our data center sales quarter-by-quarter in 2024. So it's purely entirely basis for comparison. Things are going very nicely in the data center business.

Fantastic. Thanks for confirming that. And I guess just a follow-up question. I think you've got 12 months visibility from your backlog. That obviously stretches now, I guess, across most of 2026. So I guess, are you seeing indications in that pipeline that maybe deployment growth could be even higher in '26 than 2025?

Well, be careful. I'm not sure I would call that visibility. Yes, indeed, our backlog is mostly over a year. It doesn't extend much beyond 1 year. Now we've always been very careful in mechanically extrapolating a backlog into sales for many good reasons because backlog orders can be pushed, that can be canceled, they can be doubled down actually.

So I wouldn't go as far as extending the backlog -- I mean, mechanically, let's say, converting the backlog into sales. When it comes to our 2026 guidance, both for total sales and for its 2 components, i.e., building and data center, we will do that in February. We are releasing our 9 months numbers. It's a bit too early to give you a guidance for '26.

We will now take the next question from the line of Phil Buller from JPMorgan.

Can I ask why you've chosen not to narrow the range at this point in the year? It sounds like you're very confident about landing above the midpoint of the data center outlook in Q4. You sound very confident about -- it sounds like actually you just upgraded the data center outlook underlying for H2. So I'm struggling to understand what end markets has led you to keep the lower end of the range unchanged?

And the follow-up to that is, I know it's a bit early to talk about 2026, of course, I was hoping you could offer your current thoughts on what you're seeing on the EU resi end market and the U.S. office market going forward? Are there signs of green shoots? Or have you seen anything this quarter that has made you more or less positive on the outlook for those 2 key markets?

Well, it's not Legrand practice to narrow the range in November, and we still have a quarter to go. We still have 75% of our sales in the building where we have absolutely zero visibility. So we decided to keep the guidance as it is. I'm not sure it would have helped a lot the market to narrow the guidance. So we talk a lot about data center because it's the most exciting piece of the business today. It's growing fast and so on and so forth.

But don't forget that on 75% of our business, we have no visibility. As far as the building is concerned, I cannot, of course, comment on '26. I can do the same comment as 3 months back. We see some positive signs. I can give you an example, France, for example. If you look at the building permits in France, there has been a sequential improvement quarter-on-quarter for the past 4 quarters. And if you look at the last 12 months ending September, it's up mid-single digit, which is a good signal, and we like to see that.

And it's consistent with the fact that 2025 will be the third year in a row of market going down. Now of course, when will it translate in our sales, this is always the same question mark. We are quite late in the cycle, and we love to see those early signs of improvement, but we prefer, of course, to see them flowing into our P&L. So -- and the same would apply for the commercial building in the market. We see also positive signs.

You all have seen, especially you, some iconic building being built and opened in the U.S., which we love to see. Those are signs that the market is not bad and that some investors are starting to come back. But again, those are early signs, not yet flowing into our P&L. As far as guidance on '26 is concerned, of course, we'll discuss that in February when we release our full year numbers.

We will now take the next question from the line of Max Yates from Morgan Stanley.

I just wanted to ask around prebuying. And I guess you've continued to talk about prices rising into the fourth quarter. And I guess I just want to understand your sort of level of confidence around whether you have seen in perhaps your kind of non-data center business, any prebuying from your distributors?

And to what extent can you actually have good visibility on this? Is it an easy thing to check? Or is it really sort of something qualitatively that you have conversations with your distributors about, particularly in the U.S., obviously, where the price rises are most significant?

No, it's quite difficult to measure because we don't have 2 distributors. We have a lot of them. And -- but -- so it's more based on conversations we have with them rather than a solid fully reliable KPI that we would track. Based on our conversation, we don't believe there's been any prebuy. So no prebuy. The reason being that -- or no significant prebuy, let's say.

The reason being that it's super complicated to estimate what the impact of the tariff is going to be. See what happened with China, 100% additional tariff, then negotiations, it was canceled. So my feeling is that our distributors are not playing this game of prebuying. All the more as they have the ability to pass on price increases pretty quickly to the market. So I think no significant prebuy.

No significant other, let's say, technical impact in 2025. So the number of days is not really playing significantly. We haven't seen any inventory building or destocking from our distributors in a given geography, no significant. So I don't believe that any of those technical factors, if I may say, has played on the performance.

Okay. And maybe just a very quick clarification. When you were talking about your data center business for next year, I wasn't sure if I heard you say we're going to grow 30% in 2025. And that is a good expectation for next year in '26. Did I hear you say that or not?

No, no. I didn't say that at all. Good that you asked the question. No, I -- so sorry to guys, if I wasn't clear. I said, we grew significantly higher than plus 30% over the first 9 months of the year. We're going to grow 30% in 2025 for the full year. For 2026, we don't know yet, and we will give you a guidance in February 2026. And for the market throughout 2030, we still expect to grow mid-teens. Of course, I'm not guiding for a plus 30% in 2026 in data centers. Good that you asked that question.

We will now take the next question from the line of Ben Uglow from Oxcap.

On -- within North America, and obviously, I'm trying to back out the portion of non-data centers. Is it correct to think that your underlying growth rate outside the data center business is year-over-year down mid-single digit or more. And it does look as though that, that's worse than the preceding quarter.

I may have gotten the wrong end of the stick and these, day I say, these mini models don't really work. But I did want to understand your take on what the underlying trend, year-over-year growth trend is in the non-data center portion in North America. And if there is a change, is that due to residential or office or what's going on there?

Yes. Well, no, actually, if you look at the first 9 months of the year, in North America, the residential is down. The nonresidential is slightly up. And given the relative size of each of the 2, overall, it's probably about flat. Flat plus, if I may say, because we have a bigger exposure to non-resi and resi in the U.S. So -- which implies, of course, that the data center is growing nicely.

Yes. I guess my question is, sequentially, is there any divergence -- i.e., between 2Q and 3Q, and I apologize for being unbelievably short term, but is there any change in that trend? Or would you say it's the same?

No, it's about the same. No significant change in trend. Now of course, the numbers can slightly change one way or the other, but we're not seeing any significant change in trend between H1 and Q3.

Understood. And then my follow-up is just on North America, in terms of the operating margin, could you give us a sort of sense or a flavor of the margins that come into your data center backlog versus what your, let's call it, traditional business has been? How potentially accretive or non-accretive to the divisional margin could that be?

Well, I don't want to be too specific on North America or the rest of the -- so let me take this question at the group level. There's no significant difference between our data center business margin and our non-data center business. So of course, let's say, the geography of the profitability could be a bit different. In other words, you can have a lower gross margin, lower SG&A. But the net of that is that we have approximately the same profitability between data center and building. This is at group level. There's no reason to believe that it's different at a geographical level.

We will now take the next question from the line of Eric Lemarie from CIC Market Solutions.

I've got a first one on data center in the U.S. and on market shares. Could you tell us if Legrand still hold leadership position in the U.S. in busbar and in PDU for data centers? Or did you observe any change in market shares in data centers?

Well, we tend to assess our market shares on a yearly basis more than on a quarterly basis. But yes, I can confirm without any doubt that we are leaders in both busway and PDUs as well as a few other product families actually. So to maybe one step back, our market shares in the product families in which we operate have been pretty healthy.

When we look at our growth rate compared to the market growth rate, I can confirm that we are doing pretty well. I don't want to be too specific on a number of product families. But yes, to answer your question, yes, we remain by far leaders in those 2 product families.

And maybe if I can follow-up one still on data centers. If I'm not wrong, Legrand doesn't seem to be listed as an NVIDIA partner in the website of NVIDIA. And I was wondering if I was wrong or any thought why actually you are not listed?

Well, actually, you have -- a lot of people are releasing press releases about the partnership with NVIDIA. A lot are queuing to apply for being NVIDIA partners. We love NVIDIA. We work very, very well with NVIDIA. But we are maybe -- we have a different commercial approach. So we like partnerships. We like working together. We like developing concepts. We like selling products. We are a bit less obsessed by saying that clear and loud to the market.

We will now take the next question from the line of Benjamin Heelan from Bank of America.

I just wanted to ask a question on pricing again, and thank you for the phasing of pricing through the year. Is there a way to disaggregate how you're seeing pricing in data center and your data center exposure versus the rest of the business? And the reason I ask is because some of the competitors in Europe have talked about deflation in certain parts of the market.

And also across the data center infrastructure kind of wider piece, you are seeing some very, very strong pricing trends in certain areas of that. So just interested in terms of how you're seeing your pricing in data center and how we should think about that medium term? Do you have pricing power? Do you think you can see good pricing there medium term?

No, we haven't seen anything of specific pricing pressure, neither in Europe nor elsewhere on data center. Again, referring to what I was saying a bit earlier in this call, data center customers are price sensitive, but it hasn't changed. They were already price sensitive a year or 2 back, and they remain price sensitive. But it does not, let's say, hamper our ability to do price increase because, again, price is not the only criteria in the customers' mind.

Now be careful because there was huge price increases apparently in some spaces in the U.S., especially in gray space in the U.S. because of a lack of products. Like transformers or stuff like that. So when people were ordering products, it could take as much as a year or 2 before they got delivered. And apparently, a number of players have increased significantly their price. But we are not in a great place in the U.S.

As far as our products are concerned, the lead time has always been pretty reasonable, 8 weeks, 10 weeks, 12 weeks. And we've always had a reasonable price increases. And we believe that because we are reasonable and doing it carefully, we believe that we keep our ability to do further price increase in the years to come. So no significant changes in trends when it comes to pricing vis-a-vis neither data center customers nor building customers.

We will now take the final question from the line of Nick Housden from RBC Capital Markets.

Just a quick one. I was wondering if you could just give us an update on how your energy transition segment is performing? Any growth rates, regional commentary, some commentary in terms of product lines, just anything, that would be great.

Yes. It's indeed a good question because the call has been much focused on data center, but the rest also matters. So as I said, for the first 9 months of the year, apart from data center, our sales are flat, and it means slightly up in the energy transition segment. Slightly down in what we call Essentials, so the traditional product families of Legrand and digital -- and sorry, smart home or digital lifestyle. So energy transition are slightly up. Well, of course, why only slightly up?

Well, it's because a lot of those products are exposed to the building market. So when you have the residential market being very down in China, for example, whatever the quality of your products and whatever the strength of your market share, your sales are going down also. So that's what I can tell you, slightly up versus essentials and digital lifestyle, slightly down.

I would like to turn the conference back to Benoît Coquart for closing remarks.

Well, thanks a lot for your time. I hope we answered all questions you had. If not, well, Ronan and the financial communication team are at your disposal for further clarification. Thanks a lot.

This concludes today's conference call. Thank you for participating. You may now disconnect.

Good morning, ladies and gentlemen, and welcome to today's Legrand 2025 Half Year Results Conference Call. For your information, this conference is being recorded. [Operator Instructions]

At this time, I would like to hand the call over to CEO, Mr. Benoît Coquart; and CFO, Mr. Franck Lemery. Please go ahead, sir.

Thank you very much. Hello, everybody. Good morning. So Franck, Ronan and I are happy to welcome you to the Legrand 2025 H1 Results Conference Call and Webcast. As you know, we have published today our press release, financial statements and a slide show to which we will refer.

I begin on Page 4 of the slide show with the 3 key highlights of this press release. First, Legrand delivered very solid results in the first half of 2025 with strong sales growth and high profitability. Second, we have revised our 2025 full year targets upwards, both in terms of sales and adjusted operating margin. And third, we are actively rolling out our strategy, strengthening our confidence in reaching the upper end of our 2030 revenue target range of around EUR 15 billion.

So moving to Page 6. I will start with an overview of sales. In the first half of 2025, excluding FX, our sales grew by plus 15%. This includes an organic growth of plus 9%, driven by an outstanding performance in data centers. On Q2 alone, our organic growth was of plus 10.1%. This also includes a positive scope effect of plus 5.5%. And based on the acquisitions announced so far, the full year scope effect would be around plus 5% -- sorry, plus 4.5%. As for FX, the effect was a negative minus 1.4% in the first half. And based on the rates of the month of June, it would be around minus 2.5% for the full year.

On Page 7, you will find the key takeaways per geography on a like-for-like basis. In Europe, where market conditions remain contrasted overall, sales rose by plus 1% in the first half of 2025. In North and Central America, sales were up again, like-for-like, of course, a strong plus 20.5%, driven by an outstanding performance of data centers offering. Finally, in the rest of the world, sales increased by plus 3.3% with growth in Asia Pacific, Africa and the Middle East, partially offset by a retreat in South America. These were the main comments I wanted to share on sales.

I will now hand over to Franck for more color on our financial performance.

Thank you, Benoît, and good morning to all of you. I'll start on Page 8 with adjusted operating margin. In H1 2025, we recorded a solid adjusted operating margin of 21% after acquisitions. This represents a 30 bps point increase year-on-year, including 20 bps organic improvement driven by operational leverage and a 10 bps favorable impact from acquisitions. This high profitability level demonstrate clearly, first, the strength of our strategic model and second, our solid ability to execute and adapt.

On Slide 9, a short update on the U.S. tariff topic, a topic that also demonstrates our ability to adapt and deliver. As you know well, close to 50% of our U.S. COGS is imported. The action plan we launched at the beginning of the year is fully on track. It's already delivering visible results, for example, regarding targeted sales price increases, cost savings initiatives, supply adjustment or selective industrial footprint adaptations.

Going now to Page 10. The net profit stood at EUR 628 million, representing 13.2% of our sales. This nice increase is coming from operating profit and is partially offset by the impact of financial results and the rise in corporate income tax. The free cash flow came to EUR 502 million, growing plus 7.2% on the first half.

Page 11 illustrates the robustness of our balance sheet with a net debt-to-EBITDA ratio of 1.5x at the end of the first half. This concludes the key financial topics I wanted to share with you this morning.

I'm now handing over back to Benoît.

Thank you, Franck. So we are moving now to Page 13 regarding our 2025 full year targets. Taking into account the first 6 months of the year results and considering the world's current macroeconomic outlook as well as gradual normalization of customs policies, we have revised our targets upward for the full year 2025. First, sales growth, excluding currency effect, is now of between plus 10% and plus 12% versus previously of plus 6% to plus 10%. This includes an expected organic growth of plus 5% to plus 7% and a growth from acquisitions of approximately plus 5%.

Second, we are now targeting an adjusted operating margin after acquisitions of 20.5% to 21% of sales versus previously holding stable overall after acquisitions compared with 2025 -- 2024, sorry, i.e., around 20.5%. Last, no change regarding CSR, where we target an at least 100% achievement rate for our road map. Before moving to the next part, I would like to point out the fact that 2025 would be the fifth year in a row where Legrand adjusted EBIT margins stands above 20%.

Now from Page 15 to 19, we show that we are fully executing our strategic ambitions to 2030. So on Page 15 to 17, we have announced 6 acquisitions, all in segments tied to the energy and digital transition with -- for a total acquired sales of around EUR 200 million. These transactions illustrate our ability and expertise in continuously strengthening our leadership in buoyant fields of activity.

Second, on Page 18 and 19, we are keeping a very strong innovation momentum with numerous product launches in all verticals. And finally, on Page 20, we highlight the data centers offering exceptional momentum in H1. Data centers account for 24% of group sales in H1 2025, with an order book of above EUR 1 billion, giving us good visibility.

To conclude this section, on Page 21, we reaffirm our 2030 targets at the upper end of the sales range, building on the achievements I've just mentioned and taking into account market trends observed over the past 12 months, particularly in data centers, where we now expect a double-digit average annual organic growth in our accessible market between 2025 and 2030. We are confident in our ability to reach the upper end of our 2030 revenue target range, i.e., around EUR 15 billion compared with EUR 8.6 billion in 2024. Those were the key topics of this release.

I suggest we switch now to Q&A. Thank you.

[Operator Instructions] We will now take our first question from the line of George Featherstone from Barclays.

A couple of questions from me, if possible. Just on the data center business, can you help us with the book-to-bill commentary you usually give? Was it above 1x in the second quarter for data centers? And then secondly, just looking at these longer-term targets that you've talked about already today. If we're going for a double-digit average for data centers to the end of the decade, should we think of a different organic growth rate for the group than you've originally targeted? I think you said 3% to 5% before. But clearly, with data centers growing maybe a bit stronger than you thought at the end of the decade, is there some upward scope to that 3% to 5% as well?

So good question. So of course, as far as the data center trend is concerned, a few data points. In H1, clearly, all the growth of Legrand came from data centers. So you have the data center piece, which was growing very strongly, much stronger actually than our growth in Q4 2024, much stronger than the growth as quoted by some of our listed peers. And the rest of the business, the building business was pretty flat. And going forward, you know that last time we talked, we told you that we were targeting the upper end of our initial guidance for the data center growth.

We started the year thinking that the data center will grow from 10% to 20%. At the end of Q2 -- Q1, sorry, we told you that it will be closer to 20% than to 10%. And now I can, without much debt, tell you that the data center growth is going to be somewhere between plus 20% to plus 25% compared to 2024 for the full year. And of course, we are pushing for it to be closer to 25% than 20%. So clearly, there is a very, very strong momentum throughout the year. And even though the H2 basis for comparison will be more demanding than H1 for data center, I mean, we have -- you know that, of course, still, we will record a fantastic growth for the year.

Now as far as -- what is the sort of backup for this growth? Well, as we quoted in the PPT, we have a very large backlog that we need to deliver that give us, let's say, about close to 12 months visibility. Number two, our book-to-bill in H1 remained above 1. And even though you have some customers that are adjusting up and down their orders, the momentum remains extremely strong for data centers. And we are super confident in our ability to keep growing significantly in H2 and to enter into 2026 with a good growth momentum.

As far as the longer-term prospect is concerned, yes, indeed, we are moving from a forecast for the data center market growing high single digit, 8%, 9%, 10% per year to low teens, 10%, 11%, 12%, 13%, we'll see. Of course, it has an impact on our overall organic growth profile. And clearly, it implies that we'll get closer to the upper end of our organic growth guidance, i.e., plus 5% than to the lower end of organic growth guidance long term, i.e., plus 3%.

So the reason why we are very confident in our ability to target the upper end of the sales guidance, i.e., EUR 15 billion come from 2 factors basically. Number one, the underlying market, especially the data center piece, should be growing more than in our initial forecast. So we should be able to target an organic growth of closer to 5% than to 3%. And number two, the plan we've been executing so far for the past 12 months demonstrate that the model works. And if you like -- look, for example, at acquisitions, this year is going to be plus 5 perimeter impact. We have already bought 6 companies in the first half. I can tell you that there are more to come in the next couple of months. So the underlying market is a bit more supportive. Our strategy is paying off. So yes, the EUR 15 billion, is clearly now more target than the EUR 12 billion.

We will now take our next question from the line of Max Yates from Morgan Stanley.

Maybe we can switch to somebody else and put Max back in the queue.

Our next question comes from the line of Daniela Costa from Goldman Sachs.

It's actually [ Mei Han ] from Goldman Sachs. Just trying to clarify your math on the 22%, 25% growth for data center. How much growth was 2Q because you were up in 40% in 1Q. And our math kind of gives up first half should be up 80%, but there could be seasonality that we should take into account of?

Well, those are your numbers actually, not ours. What we are just telling you is that we are growing a lot more than 30% in H1. Now what you have to take into account, we're not seeing any slowdown in H2 to make things clear, and we believe that H2 is going to grow again significantly. But there's one key factor that you have to take into account, which is the basis for comparison, right? We didn't grow in Q1 2024. And then it was plus 10% in Q2, plus 20% in Q3, plus 30% in Q4. So clearly, we have a basis for comparison, which is more demanding in H2 than in H1, specifically for the data center market. But again, let's be clear, it's not about any market slowing down. And we have the backlog supporting the fact that the market -- the business is going to continue to be extremely positive for the next couple of quarters.

Next question comes from the line of James Moore from Rothschild & Co Redburn.

Benoît, can I ask -- I may be a bit greedy really and ask for a little bit more color on growth speed in the second quarter year-on-year compared to the first by the different segments. I mean just from the data center side of things, you obviously had an extremely strong first quarter. And I understand the comparatives. But just the pace of growth in the second quarter, was it the same or above or below that of the first? And if you could give any color on the other 3 segments, that would also help. And if you could also talk about U.S. growth speed in the quarter between data center, non-resi and resi, that would be really, really helpful.

Okay. Well, I'll start with the second question. The second question is specifically in the U.S., right?

The first one was global for the 4 segments and the second one was the U.S. by the 3 end markets.

Okay. Yes. Well, clearly, if you -- so let's start with the first question. If you take the comps into account, we haven't seen a significant difference in trend for the data center worldwide globally between Q1 and Q2. So no acceleration nor any deceleration in our sales. And it's mostly about the basis for comparison. And it gives us confidence on the fact that it should continue for Q3 and Q4. So no significant change in trend. Now to be extremely honest and candid, it's not always easy to identify and qualify a trend in the data center segment on a quarterly basis because it is made of so many projects, so many customers that it's not the sort of stock and flow business where you can easily and accurately understand what's going on.

So -- but in our sales, at least, if you take the comp out, no change in trend between Q1 and Q2. As far as the U.S. are concerned, well, the entirety of the growth in the U.S. in H1 came from data centers. And the rest of the business remained pretty flattish. We haven't seen a lot of change in trend when it comes to the underlying market. The residential business is still quite -- well, not in a very good shape. Now if you look at the H1 numbers, residential in the U.S. for us, it's just slightly more than 10% of our sales. So it's not a big driver behind our performance, but the underlying resi market remains quite depressed.

As far as the office market is concerned, which is a larger exposure for Legrand, we haven't seen a sign of recovery yet. The key numbers are, let's say, pretty -- are not moving down anymore. So if you take, for example, the vacancy rate of offices, it has been pretty flat at a high level for a couple of quarters. So not yet declining, but not increasing anymore. If you look at the number of square feet being built, it is also flat quarter-to-quarter at quite a low level. So it has been stabilizing, but we have not yet seen a sign of recovery, which is, by the way, not a surprise because we did not expect any recovery before at best the very end of '25 and most likely in '26.

Last word maybe, what have we included in our 2025 guidance? So the 5% to 7% organic growth. Well, we have included -- and it's not a comment specific to the U.S., but for the group. We have included a continuation of good growth in data center with, of course, this basis for comparison topic and no recovery neither in the building in Europe nor in the building in the U.S. So we haven't included in the guidance any recovery in the building market, which we believe going to be more probably a '26 topic than a '25 topic.

Our next question comes from Max Yates from Morgan Stanley.

Hopefully, you can hear me now.

Yes, we can.

Yes, excellent. So look, I just wanted to ask about, firstly, kind of a conceptual sort of question about margins. Obviously, you're going to do that kind of 25% -- 20.5% to 21%. Obviously, margins, typically, you've talked about around that sort of 20% level. So I guess I'm just wondering to what extent will you use this sort of better year of margin expansion and growth to reinvest in the business and sort of we should expect kind of that margin to normalize in the next couple of years back down to that sort of 20%? Or are you kind of comfortable kind of now running at these high levels and the level of investment in the business is around where you want it to be in terms of rebates, R&D, new product developments, et cetera?

Well, clearly, in -- so 2 answers. In 2025, the 20.5% to 21% doesn't imply that we are freezing gross investment. It's important to have that in mind. We're not delivering or we do not intend to deliver this level of margin by cutting R&D expenses, stopping launching new products. No, this level of margin is just a consequence of 2 factors. Number one, the fact that we intend to compensate the U.S. tariff mainly through pricing, and you know that we have the ability to do that. And number two, since we are growing more than we initially thought, we're going to have normal, let's say, leverage on SG&A. So it's not about cutting cost or cutting growth investments, it's about benefiting from the leverage coming from the top line growth.

Now longer term, we haven't changed our midterm guidance, which is to have a 20% margin throughout the cycle. But of course, as noted in our -- in my preliminary speech, it would be the fifth year in a row with margins above 20%. So it's not because we have a long-term guidance of 20% that we cannot, on specific years, target more, of course. Now of course, you know that 2025, to some extent, is also a bit specific. We expect for the full year acquisitions to have 0 dilution and possibly even a couple of bps accretion on our margin, which is not the typical case. Midterm, you know that we expect to have a 30 to 50 bps dilution per year coming from acquisitions.

So you have to take that into account going forward. So to make a long story short, we haven't changed our midterm guidance of 20%. But of course, if we can, we always try to deliver more than that, and that's what we intend to do for 2025.

Very helpful. And maybe just a quick follow-up. I mean, you obviously mentioned and we can all see it that your data center business is certainly -- even if your growth target isn't faster than some peers, but it's growing certainly in the first half faster. So maybe just from your perspective, what do you really put that down to? I guess one interpretation is this is spending on the white space that's accelerated and that favors your product mix. Another interpretation is you have certain products like grid or cooling that are being adopted very quickly. Another would be that you're pushing some of these smaller businesses into kind of new regions. I mean if there was one sort of single thing that you would really kind of zero in on for why this business is growing so fast versus peers, what would it be?

Well, I'm a bit challenging the fact that we are not guiding as high as our competitors. If I read properly, the Vertiv press release, they are guiding for plus 24% organic growth. This year, we're guiding for 22%, 25%. And I clearly said that, of course, we are targeting the upper end of this range rather than the lower end. So...

25% versus 24%, right? It's the same...

You're right. No, you're right. Not telling you that. But at the end, it's above 20%, which is a very significant growth. No, it's -- there's not one product in our portfolio in H1, which is growing far better, far faster than the others. Of course, cooling is growing a bit faster, but it's not the majority of our sales. But then if you look at the rest of our product offering, especially for white space, racks, PDUs and so on and so forth, they are all growing at a nice pace. So I think it's about the underlying market, which is booming.

And one more thing that give us confidence on the fact that this growth is going to continue is the fact that we are probably the biggest white space player, right, in terms of sales. We are bigger than anybody else in the white space. And you know that the sales in white space tend to lag behind the sales of gray space, let's say, 1 or 2 quarters later. So when I see the announcement made by the Vertiv, the ABB of the world, the Schneider and so on and the fact that their gray space business and their orders for gray space are growing nicely. It's a positive sign for us because it means that at some point, it should come into the white space.

So I cannot tell you that there's one customer growing more than the others or one application growing more than the others or even one geography growing more than the others. The 3 zones are growing nicely, North America, Europe and rest of the world. I think it's the underlying market for white space solutions, which is nice.

Okay. I think you'll grow 35% this year. So I think it will be the fastest-growing data center by the end of the year.

We'll look at the numbers in Feb, Max. We'll do the league table in February.

We will now take our next question from the line of Gael de-Bray from Deutsche Bank.

Can I ask about the mix dynamics? I mean, specifically whether there is any margin differential between the data center business and the rest of the portfolio now? And whether you see some potential eventually for margins in North America to fully catch up with those in Europe, maybe in the medium term?

Well, there's not big difference in margins between data center and building because, of course, you have leverage when you are growing 40%, 50%, 60% that you don't have when you are flat. But this leverage is partially compensated by the fact that you have a lot of inefficiencies also. And when you have to add capacity in order to serve your customers, it's not the sort of typical leverage you would experience on a more, let's say, stable building side. So no significant difference in margins.

And as for the building business, we have areas where we are leaders in data centers and areas where we are not leaders. So you have business segments, if I may say, where you have a 10% EBIT margin and you have business segments where you have a 25% or 30% EBIT margin. So as for the building side, it depends on the mix of leadership we have. But as a category, let's say, no significant difference in margin, even though the margin could be -- I mean, the component of the margin could be slightly different, a little bit less SG&A, a little bit less gross margin and so forth. But at the EBIT level, no significant difference.

As far as the North American margins are concerned, there's no structural reason why they would be lower than European ones. It's just a matter of how fast we're going to grow the leadership positions. So the more we acquire leaderships, the more we grow organically. You could see in H1 that we have a strong leverage in our North American margin, the closer we'll get to the European one. Does it change our long-term vision on margin? Well, I'm referring then to the answer on the previous question and the fact that we are still shooting for 20% EBIT. So in other words, no structural reasons why the U.S. margins or North American margins should be lower than Europe. It's just a matter of growing as fast as we can organically and buying companies with little dilution.

Okay. Can I have a second one on the pricing side? I mean your pricing contribution in Q2 and how you see that going into the third quarter? Because I suspect then you will get the full benefit from the pricing actions you have been implementing. Although on the tariff side, I mean, now we have some maybe additional tariffs against Europe on the copper side as well. So any update on the extra cost you see there?

So starting with the first question. On H1, we have a price increase of plus 0.6%. And if you split between Q1 and Q2, Q1 was at plus 0.2% and Q2 at plus 1.1%. And within Q2, June is better than May, which was better than April. So clearly, the phasing in of pricing is executed exactly as planned in order to compensate the tariff. As far as the full year perspective on pricing is concerned, when we entered into the year, we told you that we were shooting for plus 1% maximum. In Q1, looking at the discussions, we told you that we are now shooting for plus 2% to plus 3%. And now that the tariff -- that a number of tariff discussions have been settled, we can maybe be a bit more precise and tell you that we are now shooting for around plus 2%.

So we believe that at a group level, of course, with this plus 2% for the full year on pricing, it's the level of pricing, which is enough to compensate for the -- together with the other action items we have, of course, like the supply chain management, a bit of cost cutting, the USMCA, the work around USMCA and so on and so forth. We believe that it's enough to compensate for the tariff.

As far as the tariff itself is concerned, last quarter, we tell you that based on our own scenario, which implied a number of normalization. For example, we didn't take China at 145%, but we knew it would normalize. We told you that the total cost would be USD 150 million to USD 200 million. Well, now based on the latest discussions as well as on the timing impact, we believe that it's going to be between USD 140 million to USD 180 million.

So you see that not a lot of changes compared to last quarter because our cost scenario assumed a landing in the discussions with China, with Europe, which actually happened. So our scenario was pretty accurate. Out of the USD 140 million to USD 180 million, you already have USD 40 million to USD 50 million in H1 and the rest in H2. So it's always a sensitive topic. We have to remain extremely agile, but we are very confident in our ability to execute our compensation strategy as planned.

Our next question comes from the line of Martin Wilkie from Citi.

It's Martin from Citi. I just wanted to come back to the office market in the U.S., and it sounds like there's some signs there of improvement, but not yet seen in numbers. In past cycles, how long has it taking for leasing activity to improve before you see it in your business? We have seen some companies talk about tenant fit out following leasing and so forth, having picked up in Q2. But ordinarily, when you've looked at that market, how long has it taken for leasing to sort of flow through into your business?

Well, I don't believe that any past experience is relevant as far as the office market is concerned because the fact is that COVID was a game changer. So it's no longer about, let's say, a classical cycle. It's about how long it will take for the COVID impact to be terminated. And the changes COVID implied in terms of flex-office, remodeling of spaces, remote working, home office, blah, blah, blah.

So unfortunately, I would love to have this answer. It's not like for resi. Resi being in the U.S. or in Europe, classical cycle, depending very much on interest rates, you can more or less know how long it will take for the cycle to change. You can identify quite precisely the time lag between permits, starts and the time it flows into your P&L. All that is very much documented.

When it comes to the office market, I think there was -- this COVID revolution, and we are in unknown territories. Now when I look at the numbers, 21% of offices being empty and vacant. The number of square feet being built is -- when you look at the curve, it's 5 or 6x what it used to be. I mean, 1/5 or 1/6 of what it used to be before the COVID.

So the numbers are amazing. It cannot go down more than that. I mean, at some point, you need to have spaces where people meet, work and discuss. So midterm, I'm very confident on the fact that this is going to rebound at some point, probably not by 10% per year, but by 2%, 3%, 4% per year. But it's not yet happening. And unfortunately, the past cycles do not help to do this analysis.

That's helpful. And if I could have a follow-up just on your 2030 targets. I mean you mentioned very clearly that the organic side looks like it's going to be top end of that range. Do you have additional comments on the M&A side? I mean, obviously, you have issued a convertible bond recently. You've done some deals. Should we expect also that the M&A contribution will be the upper end of that range as well?

Well, yes, indeed, until now, for the past year, we have seen more activity than ever in M&A. I mean we -- so not all deals are big. But last year, we did 10 deals, H1, 6. I can already tell you that there's going to be more coming in H2. So we are on a pace which is clearly at the upper end of our guidance rather than at the low end, which doesn't -- by the way, say that we will not have a weak year. You can always have a weak year, a year at 3% and not at 5%. It depends on the opportunities. And it wouldn't be a drama if we had a year at even 2% or 3% perimeter instead of 4% to 5%. But from the number of discussions we have, from the number of LOI going on -- active dialogues and so on, indeed, I'm confident on the fact that at least '25 and '26 is going to be a good year in terms of M&A.

Our next question comes from Ben Uglow from Oxcap Analytics.

I had a couple. The first was really about Europe. I take on board the fact that Europe doesn't form part of the raised growth guidance. But 1 or 2 of your competitors have sort of hinted at some green shoots. If we look at non-res, res, renovation, new build, is there anything out there in the kind of different categories that you see as positive and encouraging? How would you characterize as we move into 2026?

Well, Ben, nice to hear you. Well, yes, indeed, our guidance doesn't include a recovery in the building side in Europe. Now to make things clear, we start to see many signs that things are going to improve in many geographies. And for example, if you look at the permits all across Europe, it was down in '23, 21%. It was down in '24, 4%. And now it is expected to be slightly up in '25, plus 2%. When you look at the nonresidential construction, it was supposed to be down in 2024, slightly up in '25. When you look at the mortgage from the banks, it has been growing significantly quarter-on-quarter.

So we start to see light at the end of the tunnel. And all those are positive signs. Now you know Legrand, you know that we are late cycle, right? So you need to have the building erected isolation, blah, blah, blah, until energy efficiency-related products or switches or circuit breakers are installed. So all those nice indicators will flow into our -- hopefully, will flow into our P&L more in '26 than in '25.

A good example being France. And France, it's Europe, its number of transactions, it should be slightly up this year. The housing starts, 12 months trading is positive. If you should take the comments from a number of real estate guys, that was getting more optimistic. So yes, there is a sort of a mood, which is slightly changing in Europe, especially on the resi side, but again, not hitting yet our top line, and we haven't taken any of that in our guidance for '25.

Understood. And just going back to the inevitable questions on data centers. One or 2 of your peers have hinted or suggested that they're seeing sort of -- I guess, I'd characterize as greater breadth of customers and more colocation, et cetera. In terms of your growth in the first half, was there any significant change at all in your customer mix, i.e., the people buying from you? I guess, in sort of simplistic terms, you effectively selling to the same people? And/or was there any significant kind of large one-off contracts that really contributed to that? Any color on that would...

Well, I'm not aware of any significant change in the type of customers, a move from, for example, from hyperscalers to colos or the other way in H1. Now we spend more time analyzing this kind of trend on a yearly basis than on a half year basis. But I'm not aware of any of those trends. Is there a big, big -- you always have big contracts in data centers, right? Is there something that would explain why we are now shooting for 20% to 25% instead of 10% to 20%. Now it's a set of -- it's a mix of many more projects than expected, not a single one.

We will now take our next question from Alasdair Leslie from Bernstein.

So maybe just a couple of questions. First one on the -- maybe a clarification on the full year guide. I think the components of your organic sales guide, I think previously, they were maybe driven exclusively by data centers. I'm just wondering now it seems like there's maybe a contribution from maybe the rest of the portfolio or pricing, I guess, maybe pricing, but before from what I understood, that was offset by a negative indirect impact on volumes. So are you effectively -- has there kind of been an upgrade on the underlying volumes ex data centers here? I appreciate maybe you're not expecting a strong rebound, but perhaps less bad than previously said?

No, actually, if you take into account the fact that the data center should grow 20% to 25% on a full year, you will easily see that the rest should be flat or maybe slightly positive, but not more than that. So almost the entirety of the 2025 growth should come from data center. Now as far as the rest of the business is concerned, the main change compared to the initial guidance is pricing. Clearly, we expected pricing to be between 0 and plus 1%, and now we expect it to be plus 2%. But otherwise, broadly speaking, and in a nutshell, all the growth -- almost all the growth should come from data center.

Great. And maybe just a second question, just a follow-up on one of the topics from earlier on rear door heat exchangers. Are you successfully scaling that up? And cooling does seem to be moving closer to the rack, which is kind of around your focus area, should be good synergies for you. So I suppose what are the limits of your ambitions around sort of cooling? Could you obviously explore entering direct to chip as well?

Well, the limit of our cooling ambition is our capacity to make things clear. So yes, the rear door business is growing very nicely. It's not as big as we would like it to be because we have to scale it up and it always takes a bit of time, but it's growing very, very nicely.

Now if I zoom out, I think we really are on the right spot. If you look at the investments that will flow into the data center business going forward, of course, you will have a lot of gray space-related investments because you need to build a new data center and to power those data centers. So you need transformers, you need switchgear. You need all of that. And as you know, we are actively working to increase the share of sales made in gray space. But it is a fact that our current positioning is 80% white space, and that's where the investment is going to be made. It's around the high-density data center and racks.

So again, it makes us very confident and that's one of the reasons why we have increased our forecast for the market growth from the high single digit to the low teens because we believe that especially the white space piece should grow faster than the rest. But it's not only about cooling. It's about everything around the rack. It's about the products to connect the GPUs. It's about the products to power the rack and so on and so forth.

And any interest in direct to chip at all or...

Well, yes, of course. We are not in the DTC business yet. Of course, if there is an opportunity to enter, why not? But we have to make sure that it is the best use of our capital. By the way, with the rear door cooling system of Legrand, you can cool a rack up to 200 kilowatts per rack. So it's 99% of the racks, including those for high density. So -- and by the way, even when you have a DTC, you usually also have a rear door cooling. So DTC would be nice to have, but we are well positioned enough with our current cooling offer, which, by the way, does not only include rear door cooling, but also everything relating to airflow management, containment and which, again, is quite complementary to direct to chip.

We will now take our next question from the line of Kulwinder Rajpal from AlphaValue.

So just a medium- to long-term question on data centers. When I look at pre-leasing and under construction capacities also with tightening vacancy rates. And then if we couple this with power investments that are needed to actually operate those data centers, do you think this could be a limitation for data center growth when we look down the line, maybe, let's say, in 2027, '28? Or does that not -- or does your mid-teen growth guidance actually include that limitation?

Yes. Well, we see that at Legrand more as an opportunity than as a limitation. So one number to start with, most people expect the electricity consumption worldwide coming from data center to move from 2% to 4%. So of course, it's a big jump, but it's not from 2% to 20%. And I believe that we should have the ability to absorb these 2% to 4%. Number two, why is it more an opportunity than a threat because it pushes a lot of countries to increase their electricity generation capabilities. And I looked this morning at the latest numbers and the electricity consumption is increasing more than expected.

On a worldwide basis, it was expected to increase 2%. And last year, it increased 3-point-something percent. And every time you are switching from -- or adding electricity capabilities, well, potentially, you are adding circuit breaker, switchgear, transformers, busbar, product to control electricity and so on and so forth, first opportunity. Second opportunity it means that there will be a push to make data centers more energy efficient. And this is the so-called power usage effectiveness, power you need to feed the IT equipment on a worldwide basis, the average PUE, the number I love, it's 1.6. So in order to power 1 megawatt of IT equipment, you need to have 1.6 megawatts of power. Every time you can cut this 1.6 or lower this 1.6 to 1.5, 1.3, possibly 1.1 even less, of course, you are saving a lot of energy.

And it happens that we have a lot of solutions that help cutting the PUE from, let's say, the so-called rear door cooling, for example, to high-efficiency transformers, high-efficiency UPS and so on and so forth. We estimate that more than half of our sales in data centers are made with products that help reducing the energy bill. So it's a fact that data center implies a lot of additional power capacity in the city. It can lead to a number of public debates, which are healthy debates to have. But it's more an opportunity because it should increase the demand for Legrand type of products, either on the electrification side or in the data center side.

And just as a follow-up, so when we look at the current portfolio within the data center space, so do you think do you need to invest more in the coming years to cater to that PUE opportunity that you talked about? Or do you think the portfolio is positioned as it is?

I think we have a good portfolio of products, frankly speaking. And for the white space, we probably have the largest portfolio of products in the industry. So I think we have a good portfolio of products. Now of course, we will keep looking at opportunities, both to add additional product families or to add service capabilities or to add the geographical reach.

And you could see that in the 6 acquisitions announced so far since the beginning of the year, 3 acquisitions are data center related. So yes, definitely, we'll keep looking at opportunities both organically and on the M&A front to capture more opportunities. But we don't need to. We don't have to. We have a product portfolio, which is broad enough, deep enough, good enough to make the most of those opportunities.

Our next question comes from William Mackie from Kepler Cheuvreux.

It's Will from Kepler. A couple of more clarification or calibration questions really. I'll start. Firstly, with data centers, you've made a number of deals. You've enjoying exceptional growth. Could you just give us a sense of your pro forma revenues now and more perhaps specifically how that's broken down by region and perhaps some of the regional growth trend outside North America? And then the -- again, staying with data centers, with regard to the go-to-market approach, I think -- well, we mentioned Vertiv here this morning. So -- but some of your other competitors are perhaps emphasizing more of a systems approach and integrated white and gray space offer and deeper relationships with the designers, developers and builders. Do you have the right go-to-market approach across your portfolio to take you out of a product and into a system solution basis?

And then maybe the other follow-up is on pricing, encouraging price realization with regard to tariffs. Could you talk a little bit when you think about your product categories or strategic business units and regions, where you're achieving that price increase as we go into the second half and next year outside North America, what the sort of price realization is in other key regions?

Well, I'm afraid I will not able to give you as much granularity as you wish on all of those topics. On the first front, so pro forma, it's about 24% -- I mean, it's about 24% of our sales in H1. It's growing approximately at the same pace or growing very fast in the 3 zones. So I don't believe it has changed a lot in terms of geographical mix. But then to give you more color on the split between gray and white and type of customers and so on and so forth, let's do it on a yearly basis and not on a half year basis. But what I can tell you is that it was 24% pro forma, and it was 20% pro forma last year. So it's growing nicely.

As far as the go-to-market is concerned, well, most of our data center sales are made direct. Not of course, because we don't like working with our distributors. And we believe that even in data centers, our distributors have a lot of added value when it comes to service, when it comes to credit, when it comes to many topics. But it is the way today, the market is organized. And as a result, we are following the market, and we are doing a lot of our sales direct to the hyperscalers and the colocation guys. We also have, of course, a lot of direct discussions with our customers. And for example, our teams are working closely with their design teams in order to co-design some of the solutions they will use tomorrow, especially in the white space.

So we are doing this work, and we've been doing it for quite a while. And you may wonder how being a building player, we have such an intimacy with the data center guys. But don't forget that we have bought more than 20 companies. And each time you buy a company in this trade, you onboard people that have knowledge, expertise, relationship that we didn't have before. So we are doing this journey, of course. When it comes to the system topic, I don't believe that the customers are willing to buy one full solution, gray and white from one single maker. The reason being that you don't have one single company that has everything at the same level. And even Legrand, who has both white space and gray space is not legitimate on all this package everywhere.

There are some countries where we don't have the right product or where we don't have the right service setup or -- so this is not the way our customers are organized. Our customers are willing to have the best of breed. They want to have the best rack. They want to have the best cooling solution. They want to have the best switchgear. They want to have the best data center information management and so on and so forth, fitting as much as possible their design. They don't want to rely on one vendor only that would provide everything. So it's not happening. We don't see it happening, and we don't see that as a limitation.

If it was to come, we would be amongst the players benefiting from that since we have the broadest white space offering in this industry, and we have, except in the U.S., a large gray space offering. But we don't see that happening. As far as pricing is concerned, well, we don't give the pricing per geography. Obviously, the plus 2% we were shooting for in 2025, it will be a lot in the U.S. to compensate for the tariff. But we are still shooting, of course, to have positive pricing elsewhere. So up to you to make your computation, but the plus 2% is an average of higher pricing than that in the U.S. and lower pricing than that elsewhere.

Next question comes from [ Claire Leo ] from Morgan Stanley.

Yes, sorry, I pressed the wrong button.

Thank you. We have now reached the end of the question-and-answer session. Thank you all very much for your questions. I'd now like to turn the conference back to Mr. Coquart for his closing comments.

Well, thank you very much for your time. I know it's a busy day for all of you. So thanks for taking the time to discuss with Legrand. And for those of you who are lucky enough to take a summer break, I wish you a peaceful and relaxing break. Thanks a lot.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect your lines.