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UPDATE 2-Russia, mature Europe to drag on Legrand sales in 2015
February 12, 2015 / 7:57 AM / 3 years ago

UPDATE 2-Russia, mature Europe to drag on Legrand sales in 2015

* FY net 531.7 million euros vs f‘cast 555.25 million

* Targets organic sales in range of down 3 pct to up 2 pct

* To pay dividend of 1.1 euros, up from 1.05 in 2013

* Shares down 3 percent (Updates with shares down, analyst comment)

By Andrew Callus and Marc Angrand

PARIS, Feb 12 (Reuters) - Power switch and socket maker Legrand warned that challenging prospects in Russia and difficult conditions in mature European markets would drag on revenue growth in 2015 as it delivered yearly earnings that undershot expectations.

Shares in the French company, which had risen earlier this month to a record 49.02 euros, were down 3 percent at 45.685 euros in early trade, compared with a 0.2 percent drop in the French blue-chip CAC 40 index.

Legrand said on Thursday its net profit fell to 531.7 million euros ($603 million) from 530.5 million a year earlier. Analysts had forecast 555.25 million, according to the mean estimate of 17 estimates in Thomson Reuters I/B/E/S data.

The company said it was targeting 2015 organic or underlying sales in a range of down 3 percent to up 2 percent compared with 2014, with the low-end of the target assuming a marked drop in sales in Russia.

Russia, suffering from an economic downturn due to western sanctions over its actions in Ukraine and falling oil export revenue, accounted for 3.4 percent of Legrand’s sales in 2014.

Business was nevertheless going well in the United States, which has become the company’s biggest market thanks in part to dollar strength, the company said.

“Macroeconomic projections currently call for a continued supportive environment in the United States,” the company said in a statement.

But it also noted generally attractive prospects in emerging markets were marred by short-term uncertainties, particularly in Russia, while conditions in more mature European markets were likely to remain difficult this year.

The company nonetheless said it would pay a dividend of 1.1 euros, up from 1.05 in 2013.

Its full-year sales totalled 4.5 billion euros, up 0.5 percent on a like-for-like basis.

The company also forecast an EBITA margin for 2015 of between 18.8 percent and 20.1 percent before acquisitions, compared with a 19.8 after acquisitions.

Some analysts noted the risk of earnings expectations being lowered for this year on the basis of the results. “We see scope for consensus EPS (earnings per share) downgrades of around 3 to 4 percent,” said SocGen in a research note.

$1 = 0.8825 euros Editing by Mark Potter and David Holmes

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