By Anna Peverieri
(Reuters) -French electrical and digital building infrastructure group Legrand on Thursday increased its annual operating margin outlook as it reported first-half core earnings above market expectations.
The group, which sells products for the commercial, industrial and residential sectors, had already raised its 2025 revenue growth forecast earlier this month, citing strong North American data centre demand.
Tech companies, led by those in the United States, are investing heavily in data centres to meet surging demand for data-hungry artificial intelligence models.
Legrand CEO Benoit Coquart told journalists that first-half organic sales growth was up 9%, driven entirely by its data centre business, which accounted for nearly a quarter of sales.
The company’s data centre revenue has surged nearly sevenfold since 2018, and is expected to exceed 2 billion euros in 2025, he added.
The group now expects an adjusted 2025 operating margin after acquisitions of between 20.5% and 21% of sales, compared with 20.5% previously.
First-half adjusted earnings before interest and taxes (EBIT) of 1 billion euros ($1.15 billion) beat analysts’ consensus of 964 million euros in a company-provided survey. Sales rose 13.4% to 4.77 billion euros, topping the 4.66 billion euro consensus.
Coquart said data centres’ share of sales could potentially reach 30% but is unlikely to surpass 60%, with residential buildings remaining at the core of the company’s business.
Here he saw early signs of recovery, particularly in France, but expected no big improvements before 2026.
In the U.S., which accounts for 39.2% of group revenue, sales rose 21.6%.
Legrand maintained its 2030 targets and said it expects to reach the upper end of its revenue range of around 15 billion euros, compared with 8.6 billion euros it reported last year.
($1 = 0.8715 euros)
(Reporting by Anna Peverieri; Editing by Kirsten Donovan)
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