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

By Anna Peverieri

Feb 13 (Reuters) - French electrical and digital building infrastructure group Legrand guided on Thursday for full-year 2025 organic sales growth of 6% to 10%, as it reported full-year sales last year above market expectations.

The French group, which sells products for the commercial, industrial, and residential segments of the low voltage market, reported full-year sales of 8.65 billion euros ($8.99 billion), topping a company-provided consensus of 8.54 billion euros. The beat was driven by a strong demand in data centers, with annual sales in this segment of 1.6 billion euros.

"This performance is mainly due to the strong success of our data center offerings, as well as the sustained pace of acquisitions during the year," CEO Benoît Coquart said in a call with journalists.

He added the further growth recorded by the group is more remarkable taking into account a widespread depressed building market.

The European construction market remains sluggish, hit by high interest rates and weak commercial real estate demand. However, investments in energy-efficient buildings and data centers provide a cushion, offering growth opportunities amid broader sector headwinds.

In North and Central America, which represent 40.1% of the group's revenue, sales increased 4.5% year-on-year. In the U.S., which accounts for 37% of the group's total revenue, sales increased 5.7% year-on-year, as a result of a strong demand for data center solutions.

However, in Europe, which represents 40% of the group's revenue, full-year sales fell 2.3%, hit by a weak construction market.

The group posted full-year adjusted operating profit of 1.78 billion euros, beating the company-compiled consensus of 1.73 billion euros.

Asked about AI startup DeepSeek, the Chinese low-cost alternative to U.S. rivals, Coquart told Reuters the growing adoption of open-source AI models would drive greater artificial intelligence penetration, fueling demand for data centers to store and process data.

However, Legrand did not raise its guidance on the back of this trend, with the CEO saying DeepSeek and other open-source models remain fully in line with Legrand's outlook.

($1 = 0.9626 euros)