LEGRAND Stock

Good afternoon. Welcome, everyone, to the 2026 Legrand Capital Market Day. We met 2 years ago in 2024 in London. And I mean, we are back here in Singapore, and thanks to all the one who made the effort to come here, and we see a number of faces we know well. I hope you enjoyed the booths tour this morning as we enjoyed it from the Legrand team. So today, a pretty busy agenda. We'll start with a short overview from the CEO, Benoit Coquart, around the strategic road map of the group. Then Brian DiBella, the Head of North and Central America, will go through the data center strategy for the group.

We'll have a short lunch break, don't worry, at 1:00 p.m., 1:10. And then in the afternoon, a pretty detailed technology keynote around our data center offering and product road map.

Then a focus on Malaysia, that is a strong success story, sorry, for Legrand and with very nice growth perspective. And then Franck Lemery, the CFO, will walk you through our upgraded 2030 ambitions. Then a conclusion from Benoit and then a Q&A session where we will take in priority the questions from the room, but also questions online because the event is webcast. And I would like also to say good morning, good afternoon and good evening to all the people who are connected and following the event.

And now let's welcome on stage Benoit Coquart, the CEO of Legrand.

Hello, everybody. Thank you very much for coming to Singapore, which is a place to be for at least 2 days for the data center world. A big hello also to those who are connected remotely. So I'll try to be fast because we have quite a packed agenda. I'd like to start with a few basic slides about Legrand that you -- all of you know well. So I'll go quickly through those slides. So as you know, we are in a large market. We estimate our market to be EUR 150 billion. We have a lot of competitors, some of them attending this DCW event. We believe that we have at least 6,000 competitors and probably a lot more than that. Some people might see that as a threat. We see that as a fantastic opportunity because some of those competitors are, of course, natural targets for acquisitions. And last, EUR 150 billion of market, Legrand sales, EUR 10 billion, EUR 10.5 billion, EUR 11 billion. You might think that, well, 6% or 7% market share, it's not a lot, but the reality is that we do 2/3 of our sales as #1 and #2 on our market. So with leadership position. And this 2/3 metrics is valid both for building and for data centers.

Well, we have a large portfolio of close to 0.5 million product SKUs, which is probably the strongest and biggest asset of Legrand. We have catalogs, which are big like that. You see the breakdown of our sales. North and Central America represents now close to 50% of our sales, Europe 35%; Rest of the world 18%. Sales by end market, 32% data center, 29% resi, 39% non-resi and by solutions, again, 32% data center, 22% energy transition, 5% digital lifestyle and 41% essential infrastructure. Last basic information about Legrand. We were IPO-ed 20 years back. So we are celebrating the 20th birthday of our IPO. And you see that we had a pretty decent performance with our sales multiplied by 3, EPS by 10 and share price by 6 with a total shareholder return of 13.5%. We are not NVIDIA yet. But over a period of 20 years, this is not that bad.

A couple of words on how we stand compared to the ambitions we released 2 years back in London. So not a surprise to you. We have exceeded our ambitions. Top line, we intended to grow from 6% to 10% per year, half organic, half inorganic, where last year, we did 13.2%. And if we take our latest updated guidance, we are shooting for 16% to 18%. So we are doing basically twice as much as what we thought we would do in terms of top line growth, which is nice.

In terms of profitability, we set a guidance 2 years back, long-term ambition of 20%, and we were at 20.7% last year and from 20.5% to 20% this year. So both in terms of top line and in terms of bottom line, we have done significantly better than our 2024 CMD ambitions. How it is compared to our peers? Well, we didn't spend weeks thinking of the peer group. We just took ABB, Eaton, Schneider. In terms of like-for-like growth, we are growing slightly less than those 3 guys, but we are bridging the gap. And we used to grow a lot less organically. And you see that now over 2 years, we grew 17%. They grew on average 21%. We are doing a lot more M&A than they do. So in total, like-for-like plus M&A, we are basically growing almost 1/3 faster than those guys with a total growth of 33% over 2 years as opposed to 25% for our peers.

When it comes to profitability and cash generation, well, those numbers are well known from everybody. We have an EBITDA margin, free cash flow to sales and cash conversion, which is significantly above our peer group. So both when comparing to our 2024 ambitions and when comparing to our peer groups, I think that we have done a pretty good job for the past 2 years. Now let's jump into our strategic road map. As you know, our strategy is designed around 3 focus areas, of course, data centers, and we'll deep dive into data centers quite a lot today. As a reminder, data center, 76% of our sales in data center come from North and Central America, 12% from Europe, 12% from the rest of the world. So we are very much North American driven when it comes to data center, which is not a big surprise because that's the hottest area worldwide in terms of data centers.

There's a second focus area, which we're not probably not talking enough, and we intend to talk a little bit more about that in the quarters and years to come, which is energy transition. So I'll say a word a bit later on energy transition, which is more geared towards Europe, 46% of our sales in Europe, 27% in North and Central America, 27% in the Rest of the World. And then we have essential infrastructure. We actually embedded our digital lifestyle small business into that, which is more the traditional Legrand business. And you see that it's more balanced in terms of geographies, close to 40% of our sales in North and Central America, a little bit more than 40% in Europe and close to 20% in the rest of the world. So 3 focus areas.

I'll say a quick word on each of them. Well, data center, this is a topic of the day, pretty nice performance. We grew from less than EUR 1 billion of sales back in 2021 to more than EUR 3 billion in 2026. You have a couple of nice numbers on this slide, 32 acquisitions, an organic CAGR of 21% from '21 to '26 and accelerating, if I may say, because last year, we did close to 40% organic growth. This year, our last guidance was 25% to 30%. So pretty nice growth. We have 140,000 SKUs. You could see for those who are attending physically to this event, you could see some of them on our booths thousands of customers. Of course, the big guys are the big customers, whether hyperscalers or colos. And we are a global player, even though 3/4 of our sales are made in the U.S., we have data center sales in 45 countries. And you will not find any single Legrand country without a data center approach, a data center dedicated team chasing opportunities.

Well, I'm extremely proud of this slide. You could see downstair that we have built a comprehensive product offering. Actually, I sometimes have the feeling that the financial community is looking at Legrand with the 2019 glasses. So I sometimes hearing, hey, guys, you are a PDU maker. Hey guys, you are a busbar maker. Well, we do a lot more than that. I hope that you could feel that in the booths. I mean -- and for example, who knows that we are able today to do container with genset, which can be gas-powered or oil powered. One container, 2.25 megawatts each for backup power and main power for off-site data centers. Unfortunately, we couldn't show it on the booths but we are doing that with [indiscernible] who knows that we are the world leader in load banks and that we were the first one to introduce liquid cooled load bank in order to test not only the electrical loads, but also the liquid installation of a data center. Who knows that we have a software, which is installed on millions of devices to manage the load, the compute load to compute the energy, to bring security, to report information to the DCIM system.

So today, we have a product offering, which is much larger, much deeper than what you could think of when you look at Legrand, again, with the 2019 glasses. Well, this slide is important, and this will be my last slide dedicated to data center. We will capitalize on new capacity and architecture. So it's worth spending a few minutes on this slide. Today, so you might hear about a lot of different numbers. We believe that today, we have 80 gigawatts of IT loads, I mean, today last year, 2025, which are installed. When you put all the announcements which were made by the hyperscalers and the big guys, you end up with a potential total load of 420 gigawatt by 2030. Most of the industry analysts discount that because you have a gap to demand, a gap to supply. So not all the data centers are going to be built as expected. And on top of that, you might have some bottleneck here and there, chips or whatever. So if you look at the Omdia and other market intelligence people, they discount that to 250 gigawatt.

When you talk to our industry peers, they even further discount that to 180. So we take the more conservative number, 180, which means that from 2025 to 2030, you're going to have 100 gigawatt of additional capacity being built on IT loads, which is a massive opportunity for Legrand, an absolutely massive opportunity. If you look at year 2030, itself, 30 gigawatt of additional capacity is going to be built. Now the question that some of you raised on the booths tour was how does it translate into content for Legrand? Well, we look at our current offering and the road map, and you have here the numbers. We believe that the current AC architecture bring a total accessible market for Legrand. Again, if we have 100% market share, which we never have, basically, so it's a total accessible market of $2.5 million per megawatt. And you have here the approximate breakdown between critical power, compute and so on. Hybrid architecture with a sidecar, it's $3 million -- more than $3 million and full LVDC, it's more than $3 million.

Let me address one question I had downstair. I was asked what about SST? Well, SST are not in those numbers because we are currently considering whether we are working on an SST. We have yet to decide whether we launch it or not. It depends on many things, including the economic conditions of an SST. Without SST, the LVDC TAM for Legrand would be a little bit more than $3 million, $3.2 million or $3.3 million to be precise. And with SST, we believe that it's going to be $3.8 million. So even without an SST, we have an accessible market, which will be in excess of total accessible market in excess of USD 3 million. So well, simple math, 100 gigawatt built over the next couple of years, $3 million per megawatt. Well, that's it. The opportunity is absolutely massive. And now the challenge for us will be to grab as much as possible of this opportunity.

So I pause here on data centers, and I will let then the rest of the Legrand team to deep dive into this topic. Pretty busy slide. And the 2 slides dedicated to energy transition do not really give justice the potential of this business. So energy transition, as a reminder, we are not doing -- we're not selling heat pumps. We're not selling electric powered press, injection press. We are selling a bit of EV charging station, but not a lot. But every time you have a heat pump, electric press or EV charging station, you may have somewhere upstream circuit breaker, switchgear, transformer, load shedding, measurement, load management and so on and so forth. So we are selling the back end, if I may say, of the energy transition and the electrification.

And if you're looking at the 3 zones, you have massive opportunities ahead of us. Take Europe. The crisis with the war between Ukraine and Russia and then the war between the U.S. and Iran acted as a wake-up call on the fact that Europe is too dependent upon gas and oil and that it was an absolute geopolitical potential issue. So there was a plan electrify Britain. There's now a plan electrify France. Last week was announced a plan to electrify Germany. So every single European country is moving towards more electrification. And you see that the share of electricity in the Europe energy mix will move from 23% to 46%, so doubling in 15 years. And we have a full action plan, which I will not comment to make the most of that. North and Central America, we are cracking the code of energy transition. Until very recently, we considered that energy transition was already occupied by a number of big players that you know well, and we didn't really find how we could be part of this market and still it represents less than 10% of LNCA sales.

Now we've made a number of acquisitions dedicated to data centers that have brought us also the products, the engineering capabilities, the customer connections to sell those products into other verticals of grid power generation, solar, industry and so on and so forth. And we have here again, a lot of potential because, as most of you know, the grid in the U.S. is of very low quality and massive investments will come to renew and upgrade the grid. And rest of the world, which is quite an obvious one, you have a growth in population, growth in industrialization that should also pull the demand for energy transition businesses. So we really see energy transition as a second pillar, which should bring us a lot of additional growth opportunities.

This slide is interesting. It's an example of what I've just said. We made a number of acquisitions in data center, Davenham, Avtron, Kratos, TES, SRS and so on. And they brought us sales in data centers of about EUR 700 million, but they also brought us sales in other energy transition verticals. Again, industry, infra, PV and so on and so forth. Avtron that you saw downstairs, half of the sales in data centers, half of the sales in other verticals. So now we have a market position. We have the teams to start growing significantly our business in energy transition in the U.S. and in Asia, which we didn't have before. Well, I see the clock running so super fast. We are not giving up on essentials. We still believe there's a lot of growth and profitability potential behind our traditional business. So in Europe, markets are supposed to grow again. We have put the Euro construct numbers that show that progressively the market is improving. It will be slow. It will be progressive, but it will come, and we have a number of initiatives to make the most of it.

North and Central America, the numbers are more muted and both in resi and in office, Well, numbers are not getting any better. The fact is that we have significantly reduced our exposure to resi and office building. We have put the numbers here. Back in 2023, office and residential represented 45% of our sales. This year, it should be something like 25%. Of course, a lot of that is coming from the fact that we have grown a lot of data center business, but we have also been able to diversify into other verticals, health, education and a few others. And rest of the world, that's where the opportunity is, of course, absolutely massive. If you look at the GDP growth and population growth in Africa, Southeast Asia, India, Middle East, we have a lot of opportunities. And again, we have put a number of examples. If I take one, which is, for example, India, Well, India, it's the Legrand's fourth largest market. So U.S., France, Italy, India. It's already 6% of our sales. It's growing double digit. Of course, you have the data center opportunity. Of course, you have the energy transition opportunity.

But for example, you have 10 million houses a year missing in India. So there's a huge wave of construction coming, and we will be able to sell a number of products, wiring devices and so on and so forth. Our growth engines are working well. Innovation, we have increased our spending in R&D, and we intend to keep running the group with a level of R&D to sales of about 5%. Customer experience, every year, we survey about 0.5 million customers. We get 20,000, 30,000, 40,000 responses. We have 80% satisfaction rate. And here again, we are shooting for ambitious targets. We want by 2030 to maintain this customer satisfaction rate at 80% to have NPS of at least 50%. And pricing, since we started to record these metrics, we have only experienced year-on-year average increase in prices, and we started back in the '90s, right? So last year, 2.2%. And going forward, we still intend to have a positive pricing every year, which magnitude will, of course, depend on many factors, raw mats and so on and so forth.

Another growth engine, M&A, which is really a great area of expertise for Legrand. We are a good M&A machine. So we've put a couple of numbers to show you how selective was the process last year, which is a typical year. So we screened 1,000 targets. We engaged with 120 companies, and we closed 8 deals. So we see how selective we are. We are closing less than 1% of the potential opportunities we have. And it's a pretty industrialized approach, big pipeline, clear strategic and financial criteria, including something that the market seems to have forgotten, which is sometimes it's better to have an EVA accretive deal. So to be higher than your WACC within a reasonable time frame, 8%, 9% within a reasonable time frame, well managed docking process. And we have a track record, which is pretty in line with our strategy.

If we look at the past 2 years, we have invested close to EUR 1 billion. We have acquired, sorry, close to EUR 1 billion of sales. We have paid on average 12x EBIT and it's even better for '26. It's closer to 11x. And again, it's EBIT of the year of the acquisition pre-synergy. It's not forward-looking 2030 normalized EBIT, including synergies, but it's really the synergies, the multiples at the time of the acquisitions. We have a team which is engaged, motivated, young, 52. So this is Executive Committee of Legrand, on average, 52 years old. So those are the people that will have the responsibility to handle the plan.

A good mix of Legrand experience, veteran as well as newcomers, diverse in terms of profile and background. So you already know, of course, Franck, Brian and Blandine will speak. Some of you have met [indiscernible], especially those of the Group 1 with our EVP, Strategy, Brands and Digital, who worked a lot in putting together this event. And then if you happen to go on the booths this afternoon or tomorrow, you'll probably meet also the 2 other zone leaders, Frederic XERRI for Europe and Jean-Luc CARTET for the rest of the world, we're also attending this event.

Well, last slide on my side. I have 1 minute left to tell you about our 2030 ambitions, but don't worry, Franck will give you a lot more granularity on those targets. So we are upgrading our organic growth ambitions. We are shooting for 3% to 5% per year. We are now shooting for 6% to 8% per year. We are upgrading our M&A targets. We're shooting for 3 to 5. We are now shooting for 5, which is going to be financed, number one, out of our existing cash flow. And number two, we have identified a couple of assets, which we believe are very interesting assets, but less core to Legrand and that we intend to sell for an average representing sales of between EUR 0.5 billion and EUR 1 billion on a yearly basis, and that will help us to accelerate the move toward energy and digital transition. A word on those divestments because this is, I believe, the first time we announced divestment. So margin level consistent with group average, so not dilutive to the group. And again, good businesses, but part of the Essentials product family, not as core as other businesses.

So instead of growing 6% to 10%, we intend to grow 11% to 13%, excluding FX and divestment. To give you order of magnitude, it will -- I mean, I will let you do your math, but it will probably lead us to something like between EUR 16 billion and EUR 18 billion of sales by 2030, depending on the assumption you take for FX and for the divestment. And in terms of adjusted operating margin, we were shooting for 20%, and we are now shooting for 21% to 22%, of course, same definition, so including dilution coming from acquisitions and including any restructuring expenses, no change in definition. That's what I wanted to tell you.

And on that, I'm now turning the mic to Brian DiBella, President and CEO of Legrand North and Central America that will give you more granularity about our data center strategy. Thank you.

Okay. Well, good afternoon to everybody that's here in the room, and good afternoon, good morning, good evening to our folks that are remote. I'm really glad to be here to talk data center, right, as if we haven't had enough this morning, but let's get into it. Okay. Well, I did recognize some names by show of hands, who was in London 2 years ago? Yes. A lot of folks, and I know we have some folks remote. We've been awful busy. And I was reflecting on a lot of the questions and conversations that we had in London. At that point, in 2024, we were just at the beginning stages of this AI era that we're now very much in. And there were a lot of questions about where Legrand was going to play, how much growth potential. And well, what we've learned is a lot, right? So the first thing, the numbers -- Benoit shared the overall growth, data center business since the close of '23 last full fiscal year, 2.5% growth.

Now given this is a financial audience, that's probably the thing you're most interested in. What's that? Yes, 2.5x, 250%. Thank you. Good one. But it's the numbers -- the other numbers that to me are more meaningful here because this is really defines, one, how we got there. But more importantly, as we face this AI era, we understand it much better. We know what we need to be doing and where we need to play. We have positioned ourselves. We've transformed ourselves in terms of our offering. So we've completed 15 data center acquisitions since 2024. So in 2 years, 15 acquisitions. What has that done? It's increased our addressable market by 3x. And we haven't forgotten how to innovate. So in addition to the acquisitions, 20 new platforms launched, and we use that term platform.

So think about a next generation in technology. It is a DC busbar that you saw downstairs. It's a next generation of our Xerus platform. These are not just individual SKUs, but entire platforms that are built to do what? Well, to address the radical changes in infrastructure that AI is requiring, right? This has been about solving that equation of what's it going to take to be successful in the next several years in this AI era. And because of this activity, we are now positioned in what we call the critical systems layer. And I'll explain a little bit more what that means. But ultimately, this is about being relevant to customers solving their biggest problems and helping them ultimately achieve their objectives.

So we saw this data before, the sales by region, 76% in the U.S. that's reflective of 2 things. Number one, it's the overall strength and size of the market. But number two, it's a demonstration of our effectiveness of establishing key positions with the market leaders, right? We're focusing on where the market activity is, the hyperscale companies, the colocations that come out of U.S., we are establishing a strong foundation with those key customers, and we've done that. So as we look at where we are today, 76%, 12 to 12 as those hyperscale companies, those colocation companies look to expand, which they're doing right now, and I'll share some stories with you in a few slides, we're going to see those numbers increase.

We're going to build off of the reputation, the proven solutions that we have. And then we see this sales by solution. This is, again, a reflection of that adaptation of our product offering, right? We're not just in PDUs, if you will. We've got 1/3 of our business in critical power. Physical compute, 25%; monitoring, management and control, that's Xerus and other technologies, 25%. Advanced cooling, so that is liquid cooling and then testing and life cycle services, 10%. So a much different -- it's not a 2019 lens on Legrand. We are a very diverse player with a very meaningful participation in this market. So this is the slide that Benoit shared, and I'll go into a little bit more detail where this fits into our strategy, but I want to sort of share the philosophy of how we got here. We are selective at where we're choosing to play. Now our history, our foundation was built sort of in what we would call the white space area. And I think what that allowed us to do is understand the relationship immediately between compute and infrastructure.

When you are directly connected, you're in the cabinet, small changes in compute have direct impact to us where companies that were way upstream in the gray space maybe didn't have to deal with. There was no change to them. And so as this AI era has evolved, we have identified those products and systems across this infrastructure where differentiation on the product. So being able to handle generational changes like we heard in the DC area today or the interconnection between gear, customization add real value. They solve real problems. And we have kind of worked our way back all the way across the powertrain to that source of energy from generators or power, utility power coming into the building. And we have taken positions in what we call the most critical parts of that infrastructure.

And that does include commissioning, right? You can have all the products in there, but if they don't work together, if you can't test and validate, you can't turn the data center on. So our footprint. Those dots, those are approximately 60 manufacturing locations that are primarily or exclusively tied to data center. Now Legrand has more than that. But this is really a reflection of what I'll call the heritage of Legrand. It's a local specialist. We've grown through acquisitions, but also organically. And when we go into a market, we developed very close relationships with key contractors, with the people that are influencing the market. We understand the codes, the standards, the practices.

Now that means we have that local knowledge, but we're not a holding company. We're an operating company. So there is a network that sits on top of this that allows us to coordinate globally, to take a global view on solutions with customers, but to have the agility, speed and decision-making that happens in a local market. And again, I'll go into a little bit more detail about what this means from a strategic standpoint, but this is where we are today.

So now I want to talk about a few of the key trends that really influence and impact our view of the future and our strategy. So first one, AI. And top of the slide, workloads are driving increases in rack densities and power demand. You can go back 20 years in the data center market, and there was always a story about rack densities were increasing and increasing power, but it's different this time, right? You can see the shape of the curve is steepening. There is a completely different level of power requirement. That means we've got to use new technologies, and that's primarily DC power and liquid cooling. But again, it's also a good story because there's a lot more power needed. Benoit shared the figures in terms of the value per gigawatt.

So -- what have we got here? Well, here's kind of a look, and this is our view of what we think the mix will be in 2030. So again, new architectures, direct current. And for those in the room that had a chance to go through the booth, really that understanding of the different generations of power that we can anticipate. Now this is our view of 2030. And what you can see is they're all still here, right? What makes us unique is we're not trying to advocate for 800-volt LDC or a sidecar. We can handle all of it. We have the ability to be in the present, in the future and in the distant future based on what our customers ultimately need based on the deployments of individual projects or the availability of technology. And the same goes true for cooling here. Now a big shift, and this is 2025. If we went back a few years before that, it would all be air. So we know liquid is coming as these power levels go up. We've got a lot more power to cool.

I think one of the important parts of this that I think for us has been not a surprise, but a good evolution. Once you invest in a liquid cool infrastructure for that direct-to-chip cooling, there's an obvious solution for everything else that's in the cabinet, and that's a rear door heat exchanger. So we can see where maybe a little bit in the past, a little bit more of a niche solution, we think regardless of single phase or 2 phase in the future, that role of rear door heat exchanger as providing the best cooling solution from an efficiency and from a cooling capacity is here to stay, and we have a very good position there. As if all that technology and infrastructure change wasn't enough, we've also got to go faster, right? And there's some practical parts of this. Obviously, we know the big hyperscale companies, the AI companies are racing to compete with one another for model training.

We now have this concept of time to token. So there's an economic return for it. I think beyond that, there's a practical limitation, which is labor and resource availability. So things like modular construction, prefabrication, they're new to the data center. There are innovations in data center construction. I would tell you from a Legrand perspective, who's been in the construction game for a century plus, they're familiar to us, and they make good sense. They make the products efficient to manufacture. They again allow for rapid deployment, consistent quality. And again, it's state of the market right now.

So to wrap up, the market view, the trend view. This is really on one slide, and we'll frame up this AI era, not surprising with 2 major driving forces. Number one, the one that's upfront is power, right? We need more power. That means, number one, different technology, right? We need DC power. The physics require it. The efficiency is there. So we're going to see that, but it's not going to be an overnight switch, and I'll talk a little bit about our perspective on that in the coming slides. Obviously, when you have more power, you need a different cooling technology. That brings us to liquid cooling. And then power generation. Benoit shared some data about energy transition, the U.S. market, in particular. We just don't have enough. So what we're seeing is more and more bring your own power being required for large data centers.

Speed to build, so number one, what do customers want? How do they want to deploy, again, prefabrication. We saw the structural containment. These are all parts of what I'll call productivity on the job site. They create speed, modularity, again, a key part of that. And then safety, 2 dimensions here. The power levels are going up, so they're inherently more dangerous. And when we're trying to go fast, we want to make sure both in the construction process and the operation that we're keeping people safe.

Okay. So this is our strategy on a single page. And the way that this section is going to work is I'll go through each of these 5 pillars or vectors of the strategy and then share some customer examples because this isn't just words, this is really happening today. And I think those customer examples will give you some insights into what it really looks like and how the Legrand differentiation is coming to life. Now fundamentally, what does this all mean? -- very practical focus. It's helping our customers solve this technology transition with infrastructure that can be designed, built and manufactured, deployed and commissioned, right? We know there's going to be technology changes at the chip. We know that's going to lead to a lot of disruption and change in the infrastructure. We're here to solve it for them. We want to help them achieve their objectives, whether that's token factories or cloud services or communications.

So pragmatic DC transition with our customers. Now again, I think we had a good sense of that. The DC transition is here, but it's not coming cleanly. It's not coming all at once. And so I'll explain a little bit more about how we're going to do that. You got a sense for the folks that are here in the booth thinking about the different generations of technology. Owning the critical infrastructure layer. Again, we want to play in areas where differentiation on service, on design makes a difference. It's important to the success of the project. Again, we've been in construction for over 100 years. We've proven we know how to manage projects and deliver on time. That is an absolute reputation that we have in the market. We've got to continue to be excellent at that. Wind, liquid cooling and racks and commissioning. So the liquid cooling market is still evolving. There's a lot of questions. We've made some choices here about where we want to be the best.

And then glocal. And I think this is the most unique part about this strategy. It's a really big differentiator as far as Legrand. I shared the map that showed all those different local locations. We have teams. And again, I'll bring another map up to show a different view of that. But that ability to have deep expertise, deep relationships in market, but a global coordination, global scale and capability, we can be local and fast, but large and efficient. Okay. So this is a repeat of Benoit's slide. And I think the important part here is that thinking across the generations is an essential part of this. We put this one upfront because we know it's been a question on your minds. I'm going to move quickly through this one because, one, the folks that were in the booth that are here, I think, saw this in action. And for the folks that are remote, we're going to have our technology keynote after the break, and Blandine and Rebecca will talk a little bit more about the specifics.

So what does that look like? What does pragmatic DC evolution look like? And this is a real example for those that were in the booth this morning, we actually talked about this. This is a hyperscale company that we've been working with, and you heard the term rack and stack cabinet. This is a very specialized cabinet that we had developed for this hyperscaler over several years. This is their preferred way to deploy 5,000 pounds fully populated. So that's as much as a very heavy car or truck fully populated. A lot of other unique features that we had designed before DC power into this cabinet. And they said, Legrand, we need to go OCP, right? We're going to -- this was a Blackwell Ultra, so that generation of NVIDIA chip, and they wanted to use OCP standards and 48-volt DC in the rack. We said -- they said, can you do it? But don't change anything about this cabinet that was never designed to do that. Just make it the same, but make it DC capable. And we were able to do that. We worked directly with them from design through prototype.

Again, they came to our factory to validate and test the cabinet. So we now have met all of those load and transportation tests. This particular one is both UL and CE certified because this is a global platform. So this is what pragmatic looks like. It's take what I know, don't make me change too much, but power up the stuff that I need inside my cabinet, and that's what this has been all about. So here's that view of critical infrastructure. And I think, again, that history of starting in the white space and understanding the relationship between the IT equipment that this is all about and where as you go upstream, any sort of break or interconnection or schedule issue can cause a critical path failure on the project.

So again, as we understand the evolution of this DC architecture, where do we want to play? Where are the products and systems that really support that critical path to bringing these data centers online. And that's what's reflected here. Again, global opportunities for us from IT compute through load banks and commissioning. We'll talk a little bit more about that, all the way back to generators and cable bus, which this pathway system that, again, essential to powering generators, and I'll go into our first example of that one.

So we had a safety moment down in the booth for folks that don't know as a manufacturer, we take safety really seriously. That absolutely translates to job site and operations and data center. So this one, a little less technical, but really important. So this is a cable bus. This is a large colocation facility. And there are about 30 generators that feed the facility, and they're set about 20 meters back from the building. So think about that. These rows of generators and then these cable bus systems, about meter wide running 20 meters to the building. Now they need to be inspected regularly. They need to be -- there's maintenance that has to happen, and they're running low on the ground. So you can imagine it would take a while to walk up and down the rows. Now the practical reality is the guys that are doing that, they're going to hop over and they -- one, it's a trip and fall hazard, Two, they could damage the cable bus. So we designed for them basically a ladder system, a step system that allowed them to go over and shortcut across to be able to inspect very, very efficiently to have a better vantage point.

Now is this highly technical? No, but it makes a difference. It's the reality of what happens on the job site about the application. The other piece with this product, not unique to this project, these are separate structures. So those gens sets are out on pads 20 meters away, then I've got a huge building that's connected to. Now you can imagine when there's a weather event or a seismic event, that's when you need your generator most. Those buildings and structures could move separately. So again, one of the things that we design in that's unique is 6-plus inches of flexibility on 3 different dimensions, not just for the outer structure, but the conductors inside. So again, that insight, that expertise, there were some questions we had this morning about so what, is it really different? It is because we've learned about what really matters over time.

Now this more traditional example. And I would say if the other one was a job site installation-related insight. In this case, we are effectively an extension of this hyperscaler's internal engineering team. That powertrain, there's a lot of different places that you can put technology in there from monitoring to switching. This particular hyperscaler uses our low-voltage switchgear and power panels. It is the heart of their powertrain. It is where all of the most important parts, again, not just the power distribution, but monitoring, protection, switching is all designed into this. And like everybody else, they are coming out with their new generation to begin their AI deployment and they said, we need to completely redesign the product. We need to be capable of handling higher loads, and we need you to increase your capacity by at least 50%, and we need it as soon as possible.

And so that's what this really came down to is working with them in 1 year's time, we went from a conversation to a fully vetted listed product, UL, seismic rating, very flexible circuit protection, modular design built into it, and we increased our capacity by 60% out of our core factories in the U.K. and Ireland. And we are now adding 2 new production sites, one in the U.S. and one in India for this key player. And we are, again, their #1 most important supplier design for their data centers, start with us. So our track record of service. Again, 100 years in the construction business. We know that we've got that global picture, the ready-to-serve factories that I shared. We understand project management. That doesn't mean just doing things in spreadsheets. It means being on site. That's what construction project management is. It's in our DNA, technical engagement, so from design through commissioning and then, of course, post-commissioning start-up and support.

It's -- again, it's how we do business as a company that's been in construction for a long time. But the numbers here are actually pretty important as well. The first one, 4.5x. So Benoit shared the numbers about our profit improvement, our great free cash flow. Why we are generating that free cash flow, it also gave us the resources to invest 4.5x our historical level in new capacity, allowed us to be ready today and for the future to meet the demands of all the growth in this data center market. And the other number, which, again, I'll dig deeper on in a few slides, 400 in-market support professionals, not salespeople, not in-office engineers, but field support people that are out there to be on the ground to make sure these projects go well. So what does that look like? Well, this one -- this is a colocation company in Latin America, specifically in Chile. And they're doing -- in addition to doing compute colocation, this was for a fiber network.

So supporting hyperscale and other enterprise businesses in the Latin American market. And they're building this whole fiber access. They had a vision or a plan to build basically fiber consolidation data centers. And they came to us for certain parts of the infrastructure, and we're looking at it. And the risk of trying to do this traditionally to go out into what are some fairly remote and rugged locations and build a data center, we just said, you know what, would you be willing to entertain doing this in a modular way. We can bring everything together for you in a container. We can handle sourcing all of the key systems, things like fire suppression and cooling that aren't part of our expertise. We'll do that directly for you. We will factory test and validate every part of the infrastructure to make sure it works. We'll do that up to high-level communication standards. Again, these are communication data centers, and we'll arrange the deployment on site. And so we have been successful. The first 4 have gone perfectly well.

You can see what that looks like. So this is the container. There is the infrastructure in there, fully built, designed and delivered and installed by Legrand, again, from the design phase all the way through site level support when those things are getting dropped in. And of course, when you do it right, you get more business. So the first 4 will lead to 6 more. In this case, go back a couple of years, '24, '25, the AI race was really ramping up. I'm sure you all had a general awareness of it. This particular really big hyperscaler was in a frenzy competitively to get out in front of the market. And they were securing capacity from a real estate standpoint, from a power standpoint and from a material and component standpoint as fast as they could. They also had a bunch of colocation partners doing the same thing. And they really, as a company moving fast, got a little bit out of sync. They didn't realize quite how much they had committed, dumped an awful lot of unforecasted demand on us, but they had made customer commitments as well based on it.

And so they sat here sort of with more work, more projects and more demand that they could handle and quite frankly, than we were really sure what to do with. So we had several phone calls with them. They actually came out to our site. We worked together to prioritize how we want to manage this massive backlog of products. We had them work with us to validate some additional suppliers to strengthen our supply chain for this higher level of demand. And we also brought on some contract manufacturing to help hit the peaks, again, all with them working directly with us. So from this, I'll say, slightly out of control surge of demand, 5 months' time, we were able to triple our output. Now that to them means no risk to their projects because they're going to have all the components that they need. They're going to have the systems. In this case, it was our Starline system, which is vital to the commissioning because you're providing power directly into the rack.

We brought our lead times overall down 24 weeks from 40 to 16. That increase unlocked $170 million of additional demand, that sales for us that we fulfilled in the year. So winning in rack level cooling and commissioning. So first one, doubling down on rear door heat exchanger. As I mentioned previously, this was back in the day, we're talking go back 2019, pre-COVID, a niche, very clever solution, very high efficiency, but you wouldn't necessarily choose to bring in liquid cooling infrastructure for it, but it had a role in the market. Well, what we've seen, obviously, as direct-to-chip becomes more prevalent and becomes necessary, quite honestly, once I've invested in that liquid cooling infrastructure, I've got a whole lot of other things that need to be cooled, right? I have power shelves, I have networking and communications equipment. There's a lot of other equipment stuff that's in the rack or cabinet that generates heat, got to do something with it. It's absolutely the best way to handle that. And again, once I've gone liquid cooling, the price of entry comes way down in terms of complexity and cost to add that.

Now direct to chip, it's a reality. We're going to play there. I think there's still a lot of questions about how that technology is going to evolve, especially when we start talking about 2 phase, which, again, the physics start to pull you there at some point in time. So we will continue to play. Again, I'd say there's a lot of R&D and evaluation. And then we've got load banks. And this is a hidden gem in terms of participation in the liquid cooling market. And there's a story I used when we were evaluating this company that I'll share with you is the easiest way to think about it. Anybody heard of the gold rush of the 1800s in the U.S., right? All the prospectors were running out, everybody was hoping to make it rich. That's kind of what's going on in the liquid cooling market. There's a lot of different competing technologies. But in that gold rush, there were maybe a few people that actually did strike gold, but the people that got rich were the ones that were selling shovels and picks and Levi's jeans. And that's what liquid-cooled load banks are.

Regardless of the technology that's out there, you need to commission, you need to validate that your liquid cooling system is sufficient and secure. And so no matter what, we don't care what you choose for liquid cooling technology because you're going to be buying a load bank from Legrand. So this one -- this is an AI specialty company, very innovative in terms of their infrastructure design, a very aggressive guy at the helm in terms of schedule. So it can be very demanding, but it's a customer we really like having. It keeps us out, what I'll say, on the leading edge in terms of technology. So this was MGX 1.1. So again, this is a Blackwell AI chipset. So this was, as of not that long ago, the latest and greatest. They needed us to take -- again, make a DC-compatible rear door heat exchanger. So bring DC power into it, a product that was never designed for it, but this is what they needed. And we need it right now.

So again, from the request to working through prototypes and actually first article, we're able to do that in 8 weeks. What does that mean? Well, they get what they need in terms of their cabinet. They get a great cooling solution for, again, everything else that's in the cabinet. Also by going directly to DC, we save about $7,000 per cabinet for a rectifier because this is now a native DC rear door heat exchanger. This one, I love this one. It's a huge colocation company, huge, huge colocation company. It's their first liquid cooled data center. And of course, they called us because we're the leader in load banks and said, we got to get this right. We're not really sure about this. We want to make sure the system is going to be reliable. So before we get to product, we spent several weeks in meeting upon meeting, working out the testing scenarios with the owner, with the contractors, with the engineers, right? What do we need to do? How do we make sure that this whole system is going to be safe? What does this box need to have in terms of monitoring and tracking.

And one, strength plays to strength. We had -- we gained insights from that scenario planning that actually influenced the design of the product and certain features that are built in. Number two, obviously, we became the standard for their fleet when it did come time to commission that data center. And what we learned, #1 issue, you don't want to leak because that will shut down $1 million rack in terms of equipment could damage it. The impact in terms of loss revenue can be very, very significant. But the other thing, yes, the primary purpose is to make sure it's reliable. But by calibrating correctly. So you can adjust your inlet water temperature, you can adjust your flow rate. You can make this cooling system even more efficient. Those pumps and those chillers, they do take a lot of energy, and we're talking about 20%, 30%, even 40% more efficient when you calibrate them correctly. Those 2 things. One, make sure you are using the least energy possible, but also make sure that those GPUs aren't going to throttle down.

You don't want them to overheat and throttle when you're doing training. So for us, again, great, great advantage. We were the first to have the product and the product was designed with specific features that were learned through this exercise. So glocal, again, I would say this is a unique part. For folks that know Legrand, we've grown over the years through acquisition. Our history was in the electrical business. And I'll say local codes and standards, local practices is really at the heart of what we've been for a long time. And those things are still extremely relevant because data centers are buildings that get built somewhere. And so having relationships, understanding who is making the market, who the influencers are is really, really powerful. It's also really hard to replicate to take a big global operation and try to drive it into a local market.

I can tell you because we've learned, it's a lot easier to build an overlay network to control and manage and coordinate across all of these local resources and capabilities. So what do we look like? I said -- I shared the number of 400-plus in-market people. You can see here by market, the U.S., 200 sales and 160 field service and support; South America, 70 and 55, et cetera. Asia, 350 and a lot of salespeople in Asia, 150 support and services. And then we have a global key account team that sits on top of all of that for the largest global accounts, where they want global product road maps, they want assurances on product quality, et cetera. So let's talk about what that looks like. So this is actually a local one. This is a 100-megawatt data center. It was a -- it's a colocation site for a hyperscaler, right? So it's colo, but it's hyperscale occupant.

Now we got wind of this from one of our global accounts and a specific product that was sort of spec-ed in. So the global team said, all right, we got to do this. This is going to be a project for this particular product, busway product. I want to make sure the local team is ready to support it. So local team is saying, what do we know about the project? And so they figured out who the contractor was, turned out as a contractor that they know really, really well. And conversations with the contractor, they found out who the engineer was. Engineer, they know really well.

And those conversations led to this, hey, this engineer is really pushing for a faster schedule. Yes, great that you can provide the one product, but can you help us reduce the time line? We need to do this faster. This engineer is obsessing about this. We didn't know what it was exactly, but this really aggressive time line, which, by the way, turned out it was from a bet with his boss that it could be done. So that was the whole reason that they were looking. But what that led to for us is a much deeper conversation about how to take one product and engineer an entire solution.

So we saw the folks that are in the room, the structural hack where we had all those systems built in. Imagine getting that all done from one supplier. Everything is going in, in schedule. All of those infrastructure from power delivery to cable management, PDUs, all coming from a single supplier in a single schedule just ready to drop in and connect. That's what this project was all about. And again, this was the first one. It's a 100-megawatt facility. There'll be more. We are now the default. And you're going to hear a bit more about this after the break from our local team members. Okay. This is kind of the other side of this. This is a true global situation. So another hyperscale customer here, standardized on our PDUs, next-generation PDU for their edge AI sites. So these aren't the big training mega sites. This is when you're taking AI and you're rolling it out to your phone, right? If you've got that in a phone or you've got an AI app in your pocket, how many folks have Grok or whatever, you're not going back to the center data center for that. That's being replicated somewhere on an edge site.

So again, like everybody, we need more, we need them now, and we need global quality. We want to make sure that these are going to work. These are edge sites that they tend to be more remote management. So quality was absolutely critical. So what we did, number one, we had to work with them, increase global capacity by 50%. Number two, not only trust but verify. You've heard of that statement. This was very much because these are going in remote locations because the schedule was so critical, couldn't have any quality issues. And these are intelligent. So they use our Xerus platform. So the sensing and all those other features are really critical in addition to that power delivery. So we actually, again, worked with them to come up with an approach. We built an AI-enabled using cameras, quality control system and test system for every one of those PDUs that is fully documented and shared with them.

So they know whenever they ask, how is it going, we can share that, make sure that they have the assurances that they need to roll out a single global model for this edge deployment. For us, $40 million of incremental revenue in 6 months' time. And again, reinforcing that strong position of Legrand as the key partner in critical infrastructure. So we put all this together, right? AI, not a shocking thing to say. It's transforming the market. It's reshaping what infrastructure looks like. So scale, it's much bigger. It's much more complex, right? We know we're going to be going through power transitions. We know we're going to have to deal with hybrid infrastructures and differences on projects and differences that each one of our customers, whether it's a hyperscaler or a colocation company are going to demand.

But our expansion of our portfolio puts us in a position to address all the major elements of that critical infrastructure. We take that strong reputation that we've built, the know-how in terms of construction and project management and apply it across that critical infrastructure. And that, for us, is a strategic differentiator. That's the unique part about Legrand. And I think it really positions us in a very, very unique and powerful way for AI infrastructure and beyond. So that is the AI, the data center strategy for now. We are, I think, by the clock, I'm a couple of minutes ahead of schedule. So have a couple of important announcements. First thing, we are going to go to a lunch break. So I think we have everything close by. We're going to come back and you want to be back at 2:00 p.m. because we're going to start our technology keynote. And up on stage, and I'll introduce them here, we will have Blandine Antoine, our Executive Vice President of Products and Technology; and Rebecca Gilstrap, who is Senior Director of Data Center Strategy and Products.

So with that, that's a wrap. All right. Thank you, everybody.

[Break]

Good afternoon, good morning, good evening to those who are following us online. We have the toughest slot in this day, which is right after lunch. So I thought I'll make it easy for you and give you the takeaways right now, three of them. First, Legrand has a broad portfolio of highly specialized, high-performing solutions that serve the needs of our customers throughout the power chain into cooling from low voltage to medium voltage, from cooling to powertrains, from hyperscalers to enterprise data centers. We have all those solutions, and we're getting ready for more. Second, our open architecture design philosophy and our worldwide integration capabilities allow us to provide customization at scale, thereby enabling customer choice and thereby winning customer preference.

And third point, as you've seen on the booth, as you've seen on our slides, we are ready for the transition to direct current. We are building a reference design that supports this transition and will allow our customers to pick the degree to which they want to move into direct current. With that said, Brian has explained to you that core to our business and core to our success is our ability to solve our customers' toughest problems. And what is the toughest problem today is to get compute online as quickly as possible in a world where permitting, where power are becoming scarcer and more difficult to get. So how do we do that? We must simplify complexity. Those are complex projects. We're talking gigawatt scale design centers. 2 years ago, 1 gigawatt project would only mean a nuclear power plant. Even the biggest airports are at best 200, 250 megawatts of power. And outside of China, it takes 6 to 15 years to build 1 gigawatt nuclear power plant.

Our customers want to build 1 gigawatt systems in less than 2 years. This is a very complex project, and our goal is to help them by simplifying it. Second piece is when they start executing, they want to reduce risk and they want to go as fast as possible. This is where our integration capabilities, the prefabricated solutions and the containerized solutions that you've seen on the booth come into play. And finally, when the facility is ready to go live, we want to make sure that it runs as a clock with high energy efficiency, 24/7, 365 days a week. We do that by supporting them not only through design and installation, but also through testing, commissioning and maintenance services.

And finally, we know that every megawatt matters. Sustainability has been core to Legrand's portfolio design for years. We're on to our seventh CSR road map launching next year, which means we've been in this business of sustainability for 20 years. So we know that we need to make our systems more efficient in terms of energy, water, but also materials, in particular, copper. So how do we do that? We believe that providing best-of-breed systems is a really good place to start. You know that our data center position has been built on acquiring very successful businesses with very specialized solutions all over the world. So we start with that performance, but we know it's not enough. We complement it with application engineering and co-design so that we create those unique solutions that our customers need because they have unique needs, unique ways of working, unique operating systems. And to facilitate this integration, we adopt what we call the open architecture.

We are integrators. We have our own systems. We have our own solutions, but we don't mind pulling into our systems a good and efficient product from somebody else. That's what our panel builders building business have been doing for years. And we believe that is the best way to serve our customers but we don't log them into a particular architecture, a particular system. We give them this freedom to operate, which is why they trust us and continue to work with us. So a lot of people talk about grid to chip. I'd like for you to think that it's better to talk about chip to grid because where does the change come from? The change comes from the chip technology evolving very rapidly. So we'll be showcasing in this keynote, first focusing on our current portfolio and then looking at how it will be evolving on how those changes in the chip technology are pushing changes through the whole power architecture.

We like to think of our business as 5 pieces. In the previous presentation, we were bundling together the physical compute infrastructure and the monitoring systems. Here, we'll be splitting them in 2 because we want you to understand really what makes the solution special. So we'll start from the chip, physical computer infrastructure, your racks, your PDUs, et cetera, talking about how we design them so that you can have monitoring through different sensors and integration in intelligent platforms. Moving into our cooling technologies. talking about critical power and then finally, explaining how our service business is supporting the performance of our customers throughout this powertrain and cooling technology.

Rebecca will present to you a quick overview of our portfolio. It's not an easy thing to do. As we mentioned, it's roughly 140,000 SKUs all together. So we'll try to keep it compact. But if you need more details, we'll be very happy to answer any questions you have. And then I'll take the mic back to talk about how we see the transition to low-voltage direct-current.

And with that, Rebecca, it's up to you.

Thank you, Blandine. One of the most important points that I want you to take away is that Legrand has been in the data center business, and we have built that business and that portfolio, that product portfolio based on physical infrastructure. Down in the booth, you saw all of these components pulled together into a full data center architecture. Here, we have the physical infrastructure pieces that make -- that are closest to compute and that are supporting the most valuable assets within the data center space. So starting with racks, cabinets and enclosures, we're actually housing as a first line of security and protection to those valuable compute assets. You have pathways taking power and connectivity and connecting, right, those cabinets. And then we actually have the connectivity pieces that are running the data, the bits over those pathways. And then you saw the high-amperage power busway that we have that's pulling all of that together.

So we are protecting, we're creating the pathways, and then we are also powering and pulling it together, again, for our most valuable assets. One of the things that our customers rely on us most for is our intimate knowledge of airflow, power densities, cable management. Again, if you were downstairs and you were in the booth, you actually saw the rigidity and the density that we're able to get within our cabinet platforms. We took all of this and we combined it with the OCP, the open compute project; ORv3 rack so that we could have the best of breed from the Legrand systems and combine it with open systems and an open platform for the next generation of AI mass compute. Additional pieces that can be added to this, you could see in the OCP and LVDC infrastructure that we had power shelves, busbar, liquid-cooled busbar and also the application of our ZPE serial console and then also taking all of this together and adding intelligence on top of it with our smart rack controller.

So again, all of the physical infrastructure to protect those most valuable assets within the data center while also adding on the intelligence on top of that. The other piece that I'll add to this is that it's not only the cabinet showing up and being there and then being loaded, Legrand has impeccable capabilities in terms of rack and stack. So the density that can be deployed in dynamic loads. So if you think about these cabinets being fully loaded, you can actually see on the bottom here casters, so they can be rolled in to the data center and still keep the structural integrity as if they were a static load.

Physical compute infrastructure is expanding beyond, right, just the typical pieces that you've seen, and it's becoming the backbone of AI factories. Structural hacks are these backbones. Again, if you saw in downstairs, there was actual like data center structure set up. And so what you have is this structural hack is supporting busway, it's supporting cable and power pathways. It's supporting liquid cooling, right? So heavy, heavy manifolds that are coming out and coming down into the racks. And it's also supporting again, that separation of those critical systems. One of the other pieces that is important is that you can take these pieces as stand-alone parts, but you can also put them together. And that is one of the unique pieces for Legrand is that we know this space. We understand the criticality of the space as a whole, and we understand the need for the durability and security.

The other piece that I'll add to it is it's the energy efficiency that we're able to do. So you're getting consistent airflow within the structural hack. You are also getting the structural integrity of the actual backbone and you're also getting faster deployment speed and safety and serviceability. So as we separate out those systems, so you can actually see the structural hack coming out, we're creating designs so that those -- each of those individual critical systems can be serviced and sustained through the lifetime.

Moving on to monitoring management and control. So I'll take you back, right, reminder on business school, you have to measure to manage. And we take that to heart in the data center. In order to be able to manage better efficiency and optimization, you need to be able to monitor and manage your platforms. And so our intelligent rack PDUs, our serial console servers and then also the additional intelligence that we have taken and applied to other products. So with these visualizations, we actually enable data center owners and operators to have revenue-grade metering capabilities. We give insights so that data center owners can make proactive PUE optimization decisions. And we give the command and the control to data center operators so that they can deploy faster and then they can keep operational resilience within their portfolio.

And then by doing so and taking all of that and extending it outside of the rack, we have created the most extensive communications protocol on the busway market. Rack PDUs are an excellent example of how our engineering teams are working hand-in-hand, where we are taking market-leading and first-to-market technology from a hardware perspective and coupling that with the firmware that we have from our Xerus platform. So again, coupling the engineering expertise in both hardware and again, also in firmware and software. By doing this, it has given us the largest PDU patent portfolio in the industry. The other attributes that we're able to get from this are visualization of harmonic distortion. So while we have these capabilities at the rack level, it will become more important as Blandine gets into her section as we're looking at other product portfolios, how we take this technology and apply it across our full product portfolio.

And for example, we take our customized intelligent edge and power and e-house modules, and we're able to apply the intelligence to these new construction models. They're customizable, they're prefabricated, and they're helping customers deploy compute faster to the degree of 50%. The other piece that we do from a differentiation is that we are able to be the design and engineering pieces through the entire life cycle. And our monitoring and management gives us visibility to the health of these systems, and we're able to provide that proactive participation within the data center ecosystem and help data center owners understand what the environment looks like and how they can improve their operations from an efficiency perspective.

The second example that I want to give you from a monitoring and management control perspective is a research project that we are doing where we are driving to reduce operational expenses by 50%. The other key metric with this is that we are driving and striving to reduce the carbon footprint by 60%. So these are the types of R&D projects that we are going we're partnering with and we're going out in the market. And then we're also making public, right, so that we can continue to drive that innovation and bring improvements to our product portfolio, but also to the industry.

Legrand's advanced cooling portfolio is a heterogeneous and pragmatic approach to cooling. Again, we went over the hot aisle containment and the importance of airflow from a cabinet level, but also from a structural hack perspective. The next stepping stone is the rear door heat exchanger, where we move into active airflow, and we can handle up to 140 kilowatts per rack. The next step is that we have single-phase direct-to-chip and also 2-phase direct-to-chip. And one of the unique abilities that we have is being able to understand that compute and then also couple technologies together so that we can provide, again, heterogeneous approaches to our customers. So let's dig in a little bit deeper on this.

Our rear door heat exchangers have been in the market for over 20 years. They have been supplement and supportive of HPC high-performance computing environments. By taking this and by taking the densities that we have coming from AI, we have a tried and true technology that we are able to deploy and provide to our customers. Earlier, Brian shared with you one of the achievements that we had for a leading AI company in the U.S., and we had the customer ask of taking our technology that we had and deploying a 48-volt rear door heat exchanger. Again, we went from customer ask to prototype in less than 4 months. We went from customer ask to production in less than 5 months. And this is the speed and the customer intimacy that we are driving, again, across our portfolio.

The other piece that we are looking at from a cooling perspective is, again, I mentioned it before, how are we combining technologies to get the highest efficiency possible. In 2027, we are launching a combination between the strengths that we have within the rear door heat exchangers alongside direct-to-chip immersion level thermal performance. This is something that is ideal for multiple platforms and also incorporates many of the features that you saw within our physical compute infrastructure, including the ORv3 rack. So across the critical power infrastructure, you saw it down in the booth. Brian had multiple customer success stories. Legrand is playing across the full portfolio from generation to power distribution to power protection and power quality. Our strength is not only in the product portfolio itself, but also the local depth that we have and the global support that is behind that.

One of these examples is from our Keor Flex AI -- sorry, excuse me, our Keor Flex AI team. The Keor Flex UPS team that developed the highest efficiency UPS with a modular design in the industry came and put together a solution for us to have an AI simulator. This AI simulator is able to replicate the high fluctuations that we've been talking about from an AI workload perspective. By doing so, it is able to look at the peak loads and make sure that the UPSs and other technology are able to filter and decouple these fluctuations. This comes in 300-kilowatt modules and is a scalable solution. And again, by having solutions like this, it gives us the testing capabilities to make sure that we are protecting the compute and that AI workloads will be protected.

Across the critical power infrastructure, we have moved from being a panel builder to extending out to global engineering and integration for our containerized solutions. So whether it's modular, whether it's prefabricated, we have power solutions that are being pulled together that are helping our customers move faster, deploy faster, have safer environments and also have better certifications and lower risk within the data center deployment. Not only is it the deployment pieces that we are helping from a critical infrastructure, but we are also helping with the life cycle services of these offerings. And so again, this is where our monitoring portfolio comes in and gives us that visibility so that we are able to proactively, again, work with our customers from a preventative maintenance perspective, provide health checks, be proactive with spare parts and make sure that our customers, we're working with them hand-in-hand on that component management.

Again, we are reducing risk. We are shortening time to token, and we are making a safer environment for our customers to operate. Across these testing and life cycle services, we are working hand-in-hand with our customers to design and install, to commission and accept -- do the acceptance testing and also, as I've said multiple times, to be proactive in the preventative and corrective maintenance across our portfolio. This is building trust. It's building partnership. And again, it's working with our customers to make sure that the most valuable assets within the data center are protected.

An example of our testing and life cycle services extension comes with the acquisition of Avtron. We extended the power and thermal load testing capabilities. And as Brian mentioned earlier in the customer success story, we are able to test liquid cooling with our Avtron liquid cooling load banks. By doing so, we are able to take and replicate the loads of AI liquid cooled servers, but we're also able to stress test those loads. So it's not only mitigating the risk before commissioning, but it is also the optimization of those systems so that they can be running as efficiently as possible. And in all of that, we are driving, again, the performance and the reliability across our portfolio and for our customers.

So regardless of what the construction modality is, Legrand is helping our customers move faster, move safely and also deploy at a speed and in a density that we have not seen before. As we head into 2030, there are market reports saying that the construction model can change up to 50%. And again, Legrand is rising to this challenge and is here to work with customers. And as Benoit said, regardless of what is going into these pieces, we take an open and agnostic approach and work hand-in-hand with our customers to make sure that we meet their application needs.

And with that, I'm going to hand it over to Blandine to go over how we are powering the DC architecture revolution.

Thank you very much, Rebecca. So I think you've understood how all the solutions illustrate my 3 takeaways: One, through acquisitions and organic development, we have built a portfolio of highly specialized industry-leading positions that we want to continue to leverage. Second, our open architecture and our integration capabilities allow us to do customization at scale, which is really a premium offering today in the market. Third, as illustrated by some of the novelties that Rebecca highlighted, particularly in the cooling technology field, we are ready for what's coming.

I think what we're trying to demonstrate in the next chapter is how we'll be leveraging the 3 strengths to take a very strong position in the direct current transition of architectures. You all know a lot about direct current. Direct current is nothing new. It's actually the first formula of electricity that we have discovered back in the 17th century when people and Mr. Volta in particular, were jolting frogs with current. It was direct current at the time. But since then, we've moved to AC for a lot of many good reasons.

Now the industry is trying to move back to direct current for 2 reasons: space and power constraints. Space, why? If you want to have a very efficient compute system, you want your chips to be very close to one another so they can work in sync. The farther away they will be, the more the chances that they will disconnect. You want them very close. So you want to put as many chips as you can in one rack. To do that, you need to take out of the rack anything that's not a chip, start with your conversion modules.

Second, power. As we're growing rack densities, I think it was either Brian or Benoit who showcased that very fast trending density in the racks, we need to bring power to that rack. I'm sure you've seen on the various booths at the exhibit today that we already have fairly big cables coming into the racks. If we're multiplying power density by 10, 20, maybe 50, we would need with a similar architecture to multiply the number of cables by 10, 20, 50, which would become completely not practical.

How do we keep growing the power without growing the number of cables? Well, you have 2 solutions. Either you grow intensity, but that's not practical because to grow intensity, you need to put more pipes for power, you need to put more cables or you grow voltage. The engineering solution is to grow voltage. When you do that, the benefit is you reduce your losses, so you can either reduce the amount of material that you put in your system, have pipes twice as large as before or reduce the losses and hence, improve your PV, have more effective operations. Operators will make different trade-offs, so probably you meet somewhere in the middle on those 2 benefits.

The second thing we want to do is not just increase voltage, but also shift to direct current because when you do that, you can decrease the material resistance and more importantly, as Brian showcase, you will reduce the number of conversion steps, hence, growing the effectiveness of your whole powertrain. Now that you've decided to take the conversion modules out of your IT service to get more space in your rack, it's very easy to say, well, if I'm taking them out of the rack, I can move them pretty much anywhere in my powertrain.

The first solution is to centralize them inside the rack, and that's what the OCP ORv3 architecture does, but then you can move it into the sidecar and then you can move it further upstream closer to the grid so that you win on this conversion with the number of conversion steps. Space and power are the 2 driving factors behind the transition to direct current. How will that transition take place? We believe, and I think it's an industry consensus that this will not take place overnight. It will be a phased transition.

Phase 1 is pretty much where we are today in the most advanced deployments where the racks are not just standard racks, they are OCP ORv3 racks or versions there off, where you pull the AC/DC converters outside of the servers, centralize them in the power shelf in your rack and use a direct current power bus bar at the back of your rack to power those servers. You gain a little bit on the conversion because you centralize everything, you gain in terms of spatial density into the rack.

The next phase, and we have been showing on this model here what will change with blue representing the direct current technology. The next phase is to take those power shelfs outside of the rack and bundle them next to the rack in a sidecar. We've demonstrated our prototype downstairs in booth. The power sidecar will allow the rack to be fully direct current with the 48-volt that is the current server technology. The benefit of the sidecar is that it's retrofit friendly. You can use the same AC powertrain as you have in current buildings and convert your compute to direct current just by putting a sidecar and changing your IT rack.

In that sense, while we call it Phase 2, we believe it could actually be quite a permanent solution. There are many facilities that will likely choose to retrofit and just put the sidecar and the IT rack next to it rather than upholding the whole investment and changing the whole powertrain to direct current. Phase 3 is where you get all the benefits from eliminating the conversion steps in the powertrain, moving the direct current conversion from the chip closer to the grid, closer to your transformer. You'll hear about SSTs. I'll talk a bit more about them. We believe the TRU, the rectifier unit has a bit more potential at least in the short-term.

Low-voltage current distribution, low-voltage bus ways. Obviously, your protection systems need to move to direct current. We're introducing the AI-load stabilizer. I'll talk a bit more about it later. Obviously, your IT rack will also evolve with ultimately the conversion happening from 800-volt DC to 48-volt DC directly in the servers. Going back to my thesis, it's not grid to chip, it's really chip to grid. You see that the move of direct current coming closer and closer to the grid is driven by the increased density in the rack.

This chart summarizes this transition. This is your traditional AC architecture where you have your servers where the conversion from AC to DC takes place in the PSUs. Then moving forward to the grid, your TRC PDUs, the low-voltage AC busbars and busway, secondary protection, the UPS, the main protection, the transformers, the medium voltage switchgear and ultimately, your substation in the grid. Legrand has solutions for every single box on that line from the rack to the medium voltage switchgear. The architectures that are being deployed today in the most advanced data centers are the OCP ORv3, which we just talked about. Rebecca shown you what the rack looks like.

In that rack, we're pulling the conversion outside of the service into this power shelf. Everything stays the same. Here again, we have solutions for every single box on that rowing. Next phase, which is a bit of a bridge architecture where we're allowing retrofits from existing AC architectures to a direct current rack by introducing the sidecar, which will bundle all the various converters into one place. Same thing. This doesn't change, and Legrand has solutions for every single box in that line.

What we see coming next is a conversion happening further upstream. We believe we can take 2 versions. One is keeping your very robust, highly reliable electromechanical transformer. You've seen some of our booth, those big sturdy cast resin transformers with a big magnetic core aluminum windings, cast resin around them. Those are highly reliable industry-proven technologies. They don't fail. You can easily make them redundant. We know that our customers are very risk averse.

I'd like to give this as an example. As you've seen in one of our jewels of the crown are the rear door heat exchangers. We've iterated on this solution, more energy efficiency, hot swappable doors, lower weight and yet customers still buy the old version because the old version has been on the market for 20 years. It is reliable. It doesn't fail. And if it does fail, we know how to fix it. They are willing to let go of the other benefits because of that reliability. They will not get rid of the medium-voltage, low-voltage electromechanical transformer anytime soon.

We're introducing the rectifier, which is basically a power electronic system that brings that voltage from AC to DC and then getting the rest of the powertrain to convert to direct current technology. There is a little bit of a risk here because you have power electronics in there. We believe this is a risk that we can control because this rectifier is basically half a UPS. As you've seen in the previous presentation, we have quite a strong engineering background in UPS. We have the highest efficiency UPS in the market. We know how to deal with those matters.

Here again, if we think about this phase of transition to direct current, Legrand is developing or already has solutions for every single box on that line.

Finally, when the technology is ready, solid-state transformers, whole bunch of questions about how we get there, but it is likely that semiconductor technologies could provide benefit at this stage. All of that will be done in the Legrand way, the way that we know how to create value for us and for our customers. Those pieces are being developed as modular, customizable systems so that we can tailor them to the exact needs of our customers. We're adding a data control and management layer, the famous Xerus platform that you've heard about quite a bit today, and that I'll go into more details to.

This is our sidecar. It's on the booth. It will be ready for commercialization in 2027. It combines a lot of our strength with customization capabilities, intelligent redundancy, integrating the backup units to a certain level. This is a 660-kilowatt unit with going down to 550-kilowatt, if you want some redundancy, advanced monitoring, seamless serviceability, easy to maintain, easy to install. Obviously, sustainability core to our offering. We're aiming for industry benchmarks efficiency with up to 98% conversion efficiency.

Going back to my transition description, we're showing here what we believe is the most likely end state in the next 5 years, which is your transformer, your old electromechanical transformer combined with the TRU. If I go again from chip to grid, we have the new LVDC ITRC. We're introducing this AI load stabilizer, which will basically buffer the fluctuation that AI is imposing into your power system. Your LVDC protection, the rectifier, the transformer, haven't picked it here, but you will have your medium-voltage switchgear and then the substation.

What do each of the things do? Well, this is your rack. We're connecting everything with a busway, easier to install, easier to maintain with flexibility where you put the tap-off boxes. You can integrate protection in those boxes, the AI-load stabilizer, the protection unit. We design protection units. We have panel building businesses across the world. It's just a matter of integrating solid-state circuit breakers in those designs, and we'll be able to create those offers. So across that line, we have solutions for each box.

Now I'd like to get a little technical because I think it's fun. This is our chips going to the grid over there. You can imagine your rack as being a [ can ] of various GPUs. All being put in the same place with your DC to DC conversion, bringing the 800-volt DC to the 48 volt that's used in the service, connected to your protection system, backup generation, which could be solar panels or more likely battery energy storage systems, your AC/DC rectifier, potentially AC power generators like those that we sell with our new acquisition, Girtz, and then your substation over there.

What does this thing do? It's connected to that busway and it's basically creating a reservoir of power so that any excess demand here does not pull from the grid, but pulls from that bank of energy. Some people out there, very respectable people are trying to convince you that to protect the grid, you need to put a big system here to absorb those fluctuations. Control Theory 101 in engineering classes say that you need to control the perturbation as close to the source as possible. That's true for noise, that's true for power. That's true for anything that could transfer energy into your system.

Because if you don't quench it here, then you get oscillation throughout. You're moving the trouble upstream, and that can create quite a bit of damage. Why? Because those things will go up and down in power intensity quite a bit at very fast frequency. If you combine several of those data holes, sending those high-frequency changes throughout the system, best case, you'll have to oversize your system, so putting a lot of CapEx to make sure that you can cater to the peak of demand. Worst case, you get into an oscillation system. You can look up on the web, the Tacoma bridge accident in 1940, where the winds put in resonance to bridge and the bridge just crumbled.

That could happen in such a system if you ended up having all your data holes coming into residents. To make it simpler, I like this hydraulic metaphor. Current is water flow, pressure is voltage. Your high-voltage dam here, pushing the current into the expansion tag, which will be your transformer, bringing the voltage to a lower level, having your valve here to cut the power if everything goes wrong, that's your protection system, moving into this distribution of taps. And those -- each of those taps, each of those faucets is one GPU.

If one is off, one is on, one is off and one is on, you have somewhat of an average system. But as we said in the introduction, the benefits of putting all those things together is to get synchronized compute because that's where you get efficiency in your training. All that going on at the same time, off at the same time, on at the same time, off at the same time. If anyone is only gardening, you know that if you suddenly open the tap of your gardening hose, you'll find it jolting because you get a lot of high pressure suddenly. You don't want that jolt to percolate through your system.

We're introducing this double tank system with one small, super rapid transient response reservoir, i.e., a super capacitor and one larger, slightly slower reservoir that can pick up the demand once the capacitor is already shaped it. That's your BBU, your battery backup unit. The combination of those 2 systems is the AI low stabilizer. Depending on your load profile, how big the swings are, how fast the changes are, you can choose to have more super capacitor, more expensive or more batteries, less expensive, but not as rapid. Each customer will be able to customize their system based on their own needs. That's the AI load stabilizer.

As I mentioned, the challenge is this ultrafast power load fluctuation. The solution is to absorb it by putting the CBUs and BBUs on the busway so that they can absorb what's coming from the various racks in the data hall. It performs 3 functions. The first one is to be the energy buffer for this powertrain. The second one is to shape the load. If you size those correctly, instead of seeing very high swings of demand, you'll see a much smoother, more stable load curve that won't go as high. It's basically an average of your peaks, which it makes it much easier to get a permit from a utility company.

They don't like those swings. But if you can commit to a very smooth load profile, they'll be happy to give you the permit. You won't need to oversize your upstream power train to match that very high intensity. You can just put it at the level that you've chosen based on your design.

Finally, it also performs a ride-through function, which is your typical UPS function of preventing any perturbation from the grid to making the damage to your IT rack. All of that will be enabled, monitored and controlled by our Xerus platform. Lots of sensors in the rack, lots of sensors in the AI-load stabilizer to check power harmonics, to check voltage, to check current, but also temperature, water leakage, intrusion, motion. We've developed this completely in-house on an open platform.

Even the sensors are in-house. We have our own PCBAs and CPUs, embedded operating system, which we called the Legrand OS, if you want, based on Xerus, and then a variety of applications and APIs, which allow the systems to communicate to the DCIM of the customers.

Legrand is not super famous for software, but we believe that with this particular one, we need to make a bit of a buzz. It's already deployed in millions of devices across the world, has been on the field for more than 13 years. My 3 takeaways, but now you should be able to repeat them after me. First, we have a very robust portfolio of high-performing solution that has been built over the years through acquisitions and organic development. Those are specialty solutions recognized as leading solutions by the market.

Second, our open architecture design philosophy, coupled to our integration capabilities allows customization at scale, driving customer preference by enabling their choice. Finally, we're able to cater to rapidly changing needs. Our history from the first racks we built to our current -- current direct current system design shows that we can understand customer needs and very rapidly bring a solution to market. You heard about our rear door example system. In less than 8 weeks, we're able to put a new design in the market. We have many of those stories and this transition to direct current is another one.

Direct current will not be one size fits all. There will be a variety of architectures coexisting in the market from OCP ORv3 to full direct current, and we have solutions for each of those phases from low-voltage to medium-voltage for hyperscalers to enterprise systems for AC to DC.

With that, it is my pleasure to welcome on stage Achraf Hegazy, the CEO of our Malaysia business; and Jason Lim, Managing Director of Bus Power Systems.

Good afternoon, everybody. Good morning, good evening. Let me now take you to Malaysia, a place that has become very strategic recently. A lot of players are investing heavily in Malaysia right now. For Legrand, for us, it's not only a place where we want to capture opportunities and to grow, it's also a place where we are building strong capabilities to support the data center industry.

Let's start with first, why and how Malaysia is leading the way in the data center development in the region, in Asia Pacific. Of course, there is the diversification of the hyperscaler from U.S. Of course, there is the spillover from Singapore a few years ago where operators are looking to places not too far to build capacities in IT and megawatt. But there is also the fact that in Malaysia, there is affordable and available land, power and water. A part of this power is already renewable. There is a strong regulatory framework such as the DCTF, the Greenlane Pathway that help build data center faster and connected to the grid.

There is a vision. There is a strong governmental policy that aim to transform Malaysia as a digital-driven and high-income nation by 2030 and the regional digital player in the region. All of this has proven successful because we jumped from a few years ago from less than 100 megawatts to 1,300 megawatts now. The projection are giving us 2,500 megawatts by 2030. Important point to note, 70% of this demand will be AI-driven.

What has started as a spillover from Singapore a few years ago has now gained its own momentum. It's a momentum built around scalable power, industrial depth, execution speed, connectivity and hyperscale capital. On our side, what have we done and what's the journey of Legrand in Malaysia? We have been in the country for a long time for 4 decades now. Before the data center boom we were relying a lot on the commercial and residential segments with the acquisition of Megapower, the leader in PVC conduit in 2011. At that time, 85% of our sales was coming from electrical essential.

A few years after, we acquired our first capabilities in the white space with the acquisition of AG Manufacturing. But it's really the past 2 years that we grew a lot and increased our position with the acquisition of Linkk Busway Systems, the leader in busduct and busway in Malaysia and in the region and the acquisition of SRS Power Engineering, the leader in critical power infrastructure. The shift has happened for us in Malaysia. We jumped from a USD 20 million business to a USD 300 million business with 65% of our sales coming from data center and 30% coming from energy transition followed by electrical essential.

Behind every adventure, behind every success, behind every story, there are teams, and we are lucky to have great teams in Malaysia. You see here the different teams that we have and all the talents that we have in Malaysia. We work together, we move in sync to bring more value to our customer and to support the industry. More than products, we want, of course, to build a solution. What makes our platform unique in Malaysia is that we leverage both on local capabilities, local engineering and on the Legrand global portfolio with all the brands that you have seen such as CRS or Avtron.

We are capable to leverage on both local capabilities on manufacturing, engineering or execution and on regional one. This help us to tailor according to the needs and to tailor according to the local requirements. This takes me to the platform that we have built in Malaysia. We have invested a lot in 3 different dimensions. The first one being the fact that we can do it [Technical Difficulty] or CTO. 1/3 of our sales today come from solutions that are assembled and already tested in our factories and facilities before being deployed to the customer site.

Supply chain. Today, we are capable to accompany a hyperscale player and deliver product on a different site in the same time on the span of a few months or a few years. On the opposite, we are capable to sprint and deliver needs for a specific project of our customer.

Last point, seamless execution from engineering validation through the FAT to commissioning, testing and installation. We have teams that are dedicated to follow up the full life cycle of the project. This being done, it's the 3 different ingredients of our platform, and it's helping us to build strong partnership with our customer. A few words on [Technical Difficulty] and this, I think, was also mentioned by Brian before. The whole game on the sales is -- because the data center buying journey is becoming -- is already a complex journey and it's becoming more and more complex. The game that we are playing or trying to play is to make Legrand global agreement and framework work locally.

For that, we leverage, of course, on the different agreements that we have, and we leverage on our local team. The game is to make the local works in our region. We support, of course, also regional and local player. By playing on the different dimension and engaging at different level, we can engage early the specification, influence the specification and make execution easier locally. All of this is helping us to build long-lasting relationship with key players of the industry. I believe you can illustrate some of it.

Thank you, Ashraf. Good afternoon, everyone. Good morning, good afternoon and good evening, I guess, to everybody at home. I'm Jason Lim, Managing Director at Linkk Busway Systems, Malaysia. Malaysia is indeed a very vibrant market right now in the DC landscape, and we love our position in it because we have built a very strong track record with some of the most demanding data center customers in the region.

Let's look at some of these successes. Firstly, on the left, you see our international global colocation customer. We participated in their project last year. The first phase of that multiphase project was 100 megawatts. But more than the scale of the project, I'd like to focus on the breadth of the project. We participated in it, and we delivered many products throughout the Legrand portfolio in this project from cable management, hacks, power distribution units, busways, busbars, all the way from the gray space throughout the data center to the white space.

For us, this proved a very important point. Through global credibility and local execution, we are able to not just supply 1 or 2 products, we are able to supply a fleet of products. And through that, we push up the value pool here.

Secondly, we go to the middle, slightly different case here, a very large local colo. What is very striking here is how these local colos have also grown very rapidly. What was our first purchase order from them was for 36 megawatts of busbars a few years back. It was now 80 megawatts last year. This year, it looks like we are going to double that throughout a fleet of products. This colo incidentally themselves have made a public announcement to say that they are going to build out 1.5 gigawatts in the lead up to 2030. That's pretty crazy.

For us, we are fully embedded in this ecosystem. We know the local contractors. We have long-standing relationships with consultants. We navigate tight time lines with them. We anticipate execution risks. Because we are able to do all of this, these data center colos, they love us. Through that, through problem solving with them, we are heavily involved in their projects. As you can see here, we have supplied busbars, busways, skids, low-voltage switchgear. We even do the servicing and commissioning with them. More than that, we feature very strongly in their road map and their pipelines coming up.

Third of all, hyperscalers. Hyperscalers have very strong demands in custom solutions and repeatability -- so thanks to our global key account team, which has plenty of traction with these hyperscalers. Here in Malaysia, what is tangible for us is that we see many more opportunities, many more allocations, and that's happening month-to-month, that number is going up. This track record is very important to us. Why? Because Malaysia, as I said, is a vibrant market. We don't just -- from our position, we don't want just to be counting the megawatts that are in Malaysia. We want to maximize and capitalize on Legrand content in every single megawatt in the build-outs in Malaysia.

So scaling up. The market is scaling up. Legrand is scaling up as well in its capabilities. They have acquired these 2 companies, Linkk, where I'm from and SRS this past couple of years. Linkk is a market leader in power busbars in Malaysia and SRS is a market leader as well in LV and medium-voltage power protection solutions. These 2 acquisitions have brought EUR 135 million of combined revenue at time of acquisition. Obviously, these numbers have gone up a lot since. I see a smile from Benoit, so he's pretty happy about it.

Apart from this, it's not just the numbers, it's the synergies that have been created. Just now Brian mentioned, data center build-outs have gone from 18 months to 9 months. It's pretty crazy. In Malaysia, we see plenty of that. We haven't seen the metatents yet, but it might be a sign of things to come. The focus here in Malaysia has been global credibility, but definitely local manufacturing, local involvement, local proximity. This local idea is very appealing. That is totally in our Legrand wheelhouse.

We have that through these acquisitions. Through this, we see a lot of synergies and these synergies provide multiplier effects for more and more business going ahead.

Synergies. Synergies require good docking, as I learned. Linkk, I hope, is a very good example of this from very humble industrial roots in 1992. Over 30 years, we have built manufacturing capability. We've developed epoxy technology. We have expanded internationally. By 2024, we were market leaders in power busbars sitting on 2 factories in Kuala Lumpur in Malaysia. In 2025, when Legrand acquired us, it was a proven industrial business. But what is very interesting here is what happened in the ensuing 12 months. Integration took very short time.

In 12 months, now today, we are sitting in factories 3 and 4 with factory 5 coming up on the horizon in coming months in anticipation of the rising demands in the market. It has been truly an accelerator in all essence of the word. We see that in a few areas. Firstly, the team. To cope with these kind of crazy demands, obviously, there is a burgeoning workforce. This workforce with Legrand has been able to tap into global resources, global knowledge and applied it locally and regionally.

On top of that, whilst doing that, employee satisfaction has been very high at 90% or more. Beyond that, there's been a lot of value created. Just now, we talked about how we win projects with the local colos and the international colos. On top of that, we do have interaction between Linkk and group R&D. We create an accelerated product road map, more customized solutions locally and for the region. Going forward, what do we want to do? We want to continue to win and win more. From there, we want to as well build more in Malaysia, develop in Malaysia and serve Legrand customers around the world.

Thanks. Back to you, Achraf.

Thank you, Jason. To conclude, 3 points. Outlook look good in Malaysia. In the next few years, the digital economy should contribute by 1.2% every year to the GDP. There is a clear vision, and we see a projection at 2.6 gigawatt by 2030. Second message, as Jason already mentioned, we are not starting from scratch. We are already in it. We have already built our platform, and this is putting us in a good position to continue to catch opportunity and to continue to bring value to our customer. With this being said, with the extended portfolio that we have, capabilities that we have built locally, we are confident to double the sales in Malaysia by 2030.

This being said, thank you, and I believe it's time to welcome our CFO, Franck Lemery. Thank you.

Good afternoon, good morning, good night probably for some of the people online. It's now time to share a few key financial figures. As an introduction of 2030 ambition, I just would like to recap a few of the major financial achievements of the group recently. First achievement is that in a, let's say, challenging economy, we have been able to grow. We grew 43% between 2025 and 2019. Obviously, in a [ restating ] building market, the volume growth was very modest and it was supported only by energy and digital transition.

But 2 other growth engines worked very well. The first one is the pricing, which was at plus 22% on the period. Pricing, as you know, is a strategic asset of the group. It can be also a tactical asset in an inflationary backdrop. The second engine definitely has been M&A, acquisition bringing plus 21% of scope on the period.

Now the second achievement is the margin evolution and the value creation. As I said, sales were up 43% operating profit, 48% with adjusted operating margin improving by 70 bps. It improved by 70 bps on 3 factors. The first one is the organic or let's call that operational leverage of 180 bps, mainly driven by productivity. Inflation balance was not that favorable at that time, but productivity has been very strong. I said 4% of volume, like-for-like headcount, minus 12%. That's huge productivity at the border of the group.

The second factor is that we have invested a little bit more than usually in restructuring. Just to give you one figure, you know the millions, but we closed 40 sites during that period. The last factor is a very usual one, the one you know very well is the dilution coming from our acquisitions. Third acquisition is more about cash -- free cash flow -- third achievement, sorry, it's about cash. So first, the free cash flow, very robust free cash flow generation, EUR 7.2 billion over the 6 years at an average ratio of 15.1% of sales.

What did we do with that money? Capital allocation in the prior, top priority was M&A, EUR 4.3 billion, dividend comes second, EUR 2.8 billion and some share buyback for EUR 0.8 billion. Capital allocated is slightly below the -- above the free cash flow, meaning the debt slightly increased, but the balance sheet remains very solid, very robust. At the end of 2025, net debt-to-EBITDA is 1.9. This is for looking back.

Now let's look ahead to 2030 ambition and start with the market conditions. We are expecting the 3 focus areas of the group to be positive for the upcoming years. Starting with data center, 32% of our exposure -- current exposure, we are expecting the market to grow mid- to high teens. Energy transition, 22% of the current sales should grow mid-single digit. Essential Infrastructure, 46% of our sales is expected to grow low single digit with a progressive recovery.

Now what does it mean for Legrand in terms of top line? 2030 growth has been revised up as far as organic is concerned. We aim to achieve an organic CAGR of plus 6% to plus 8%. M&A through acquisition, the scope should be around 5% per year in average. As it has been introduced by Benoit, there should be some divestments comprised by EUR 0.5 billion to EUR 1 billion of sales.

In terms of margin and cash, once again, we have upgraded our adjusted operating margin outlook, switching now for 21% to 22% of adjusted EBIT margin, obviously, always including gross venturing and acquisition. Free cash flow should remain strong at 13% to 15% and cash conversion above 100%.

As far as cash is concerned, that's it for capital allocation. Capital allocation will still be very clear and the policy will still be very disciplined. Top priority remains M&A, where we should dedicated roughly 60% of our free cash flow. Dividend remains attractive at 50% of net income payout. Some share buyback, selective. What does it mean selective? It means at least compensate the dilution coming from LTI and employee shareholder of top line and if relevant, a little bit more.

According to that, embedding the divestment, the 5% of scope, we want our balance sheet to remain solid with a leverage of net debt to EBITDA comprised between 1.5 and 2.5. So that's it.

My last slide is a kind of a wrap-up of this financial model of those 2030 upgraded ambitions. As you can see, it's very clear. As you can see, it's highly value accretive. It's about stronger growth profile. It's about improved adjusted EBIT margin. It's about cash generation and disciplined capital allocation policy.

With that, I'll hand it over back to Benoit.

Thank you, Franck. Well, I feel the level of energy has gone down a little bit. I think you need another technical keynote maybe. I'm going to be very joking. Well, I'm going to be very fast, and then we'll open the Q&A. A lot has been said. I'd like to emphasize the fact that all what we've been telling you will position ideally Legrand for the next decade. If we look at the percentage of our sales made in what we call energy and digital transition, so data center, energy transition and digital lifestyle, it used to be 40% of our sales back in '21. Last year, it was 53% of our sales. By 2030, if we do what we intend to do, should be 70%.

Our objective is not to shoot for 2035 targets yet, but we're going to have an exciting decade given the repositioning we have made.

As a conclusion, we've been successfully repositioning Legrand, and I believe we have strengthened a lot the group's growth profile as illustrated by '25, '26 and the new guidance. We -- I believe, have a unique business model supported by best-in-class profitability, cash generation and M&A, and we have upgraded our ambitions with value-accretive ambitions for 2030.

This being said, now I think it's time to open for questions and answers. Thank you.

Okay. So we'll start the Q&A session, of course, giving priority to the room here, and I see already many hands that are raised. So please, when you ask your question, stand, tell us your name and the institution you are working for before asking your question. And ideally, as I see that we have many questions, if you could have one question with one follow-up and then we'll hand over the mic to someone else. So maybe we'll start here with Ben. You can stand up and you'll have -- you'll get a mic.

Benedict Uglow from Oxcap. Thank you very much for the comprehensive presentation throughout the day. I'm sure there's going to be a lot of questions about 800-volt DC. The number that really stuck out and frankly, continues to blow me away is your acquisition track record in this space. You did 8 acquisitions, acquired EUR 1 billion of sales at 12x EBIT. My question is how and how sustainable -- the environment that we're in seems to be absolutely insane. Everything is expensive. How can Legrand do it? And how are you doing it differently from competitors, which are allocating massive amounts of capital at far higher multiples?

Well, I cannot talk on behalf of -- can I take that one? I cannot speak on the behalf of my competitors. How are we doing it? Well we try to entertain a close relationship with targets. We pay fair prices. Sometimes it's 13x or 14x. So it's not always 11x or 12x. I think we are a good home for companies. We respect our words. We are fast in terms of negotiating the deal. Companies who join Legrand knows that they're going to grow. We also have ways and means to incentivize and align interest. So for example, we are doing a lot of earn-outs or even JVs sometimes so that the owner can stay and participate to the growth of the company.

We have a pretty good reputation. We've been able to have reasonable multiples. I still believe that in years to come, I cannot commit on a precise number, but I'm confident in our ability to continue to make deals at reasonable prices.

The key criteria is not that much a multiple is really the return on invested capital. We can accept to be at 6% or 7% on year 1, provided within a reasonable time frame, we exceed the WACC. We should be at 9% or 10% within 3, 4 years. I believe it's a reasonable framework. Maybe we can have the testimony of Jason because -- sorry, Jason. Well, Jason, he didn't mention that, but he's the founder of Linkk. So he created the company about 30 years back. He's the one who negotiated with Legrand. Maybe you can -- from the target side, let's say, tell us, tell our friends, how did it work out?

I think for us as a founder, especially going through this crazy data center exponential curve, it is new to somebody like us, new to an organization like us. Obviously, our heart goes to the people around us. We do not want short-term gains only. We want the company to be in a better place, the people to be in a better place. I think that's why Legrand is a beautiful fit for a company like us and for hopefully, many more acquisition targets. We feel like it's the best place that provides growth and provides a safe ground, safe learning, growing ground for the people that are there. That's what I feel.

One quick follow-up is just on -- I guess, I don't know if it's for Benoit or Franck, but on the margin upgrade for '21, '22, where is that more to do with productivity? Or is it to do with operating leverage on the data center side?

Well, it will come as a whole. Globally speaking, I think we -- there are 3 types of levers that we can -- organic level that we can unlock. The first one is just the growth, the growth coming from synergy of acquisition coming from better absorption of fixed costs. Then we have the second type of lever, which has been the usual one of Legrand. You know the Legrand way restructuring, productivity staying lean.

The third one is about some of our new levers like AI, we have ambition in productivity in AI, more IT, more digitalization. All that will contribute. Obviously, it's embedding the '21 to '22 is embedding also the dilution -- potential dilution of acquisition. One will know -- we never know what it will be, but probably it will be dilutive. But there are plenty of things that can be -- that can be improved in the company.

The world is different when you are growing 6% to 8%. No. But I mean when you are growing 3%, 4%. I mean it makes your life a little bit easier. You have more SG&A to absorb. You have more leverage on your production cost. So yes, it's -- we believe that it's consistent with the fact that we are upgrading our sales target.

Well, that's maybe Daniela, in the first row.

Daniela Costa from Goldman Sachs. Two questions, a quick one for Franck on the targets and then a more general one. But starting with the one on the targets. You've upgraded the margin guidance, but you didn't change the free cash flow range. Is the -- what you're pivoting to just a more capital-intensive business? How should we think about like CapEx or working capital?

No, no. Well, yes, free cash flow to sale is not upgraded. The value, of course, is upgraded because the top line is growing. But as far as the percentage of free cash flow to sale is concerned, well, it remains stable because we have more growth ambitions and 2 types of growth, organic growth has to be financed and is consuming some cash. Second, additional M&A. The previous M&A target was 3% to 5% of scope. Now it's around 5%. You know that the acquisition are dilutive on the working cap.

Okay. And then just more...

But in terms of CapEx to sales, we should be approximately the same level as today. So we are shooting for 3% to 3.5% of CapEx.

Yes. Exactly.

Typical working cap to sales and typical CapEx to sale shouldn't move.

We'll have more CapEx dedicated to capacity for data centers, but it will be compensated by less CapEx elsewhere. So the total level of CapEx will be unchanged compared to the past.

But 1 of the 2 is increasing slightly in percentage of sales, I guess, working capital.

Working capital mainly on behalf of acquisition and accelerated acquisitions.

Yes. Got it. Clear. And then just more in terms of the structure. I think when Legrand was more essential infrastructure, it used to be a very decentralized organization. That was sort of how you used to explain the greater margins than you had versus peers and others. The data center business is a much more customer concentrated, more global. You're talking about bundling products. So how do you -- how have you adapted the organization underneath? Have you changed incentive systems? How does that whole decentralized model versus a more centralized customer and opportunity?

Well, we used to be decades ago, a very decentralized company, but for the past 10 years, we've made the journey of being a little bit more centralized on a number of topics. Now when it comes to data center, the globalization is mainly on 2 things: product development and customer management. On product development, we have a central team led by Blandine, who is combining the capacities or capabilities of many different companies we acquired and making sure that the work is done consistently, maybe we'll say a word on the way it is organized to Tiger Teams and make sure that the specialist in power management is talking to the specialist to the right and that everything works as a system.

It is now organized and processed so that the teams can work together. As far as the customer fronting is concerned, that's what Brian said. We had a team of key account managers handling the international key accounts, which are hosted in the regions and we work together and manage it organized. The fact that we are mostly a country-based organization when it comes to front office is not an obstacle, neither in terms of product development, which has always been organized quite globally and under what we call the P&T department nor for the customer fronting, which is organized with key account managers.

As far as incentivization is concerned, no, I mean -- but, of course, we have adjusted the targets. The data center guys are expected to do a strong growth. So you can grow 20% and not get 100% of your bonus because sometimes we feel that it's not enough. So we are just -- we have adjusted -- but the basics of the bonus relying for country managers mostly on organic growth and profitability improvement and also CSR hasn't changed.

Do you want to say a word on the way that the product development is organized?

Sure. We've recently implementing a new position, which is the one that Rebecca is leading as a global data center product portfolio, product management position. Her role is not easy because you know that even though we have global customers, there still are local norms, local installation habits. It's making sense of all of that to develop a unique data center product road map that takes into account the specificities. We have massive opportunities in that realm.

You were mentioning are we getting productivity. We believe that platforming some of our offers, which were developed over time through acquisitions is one big opportunity for getting better cost because we know that even though our customers are currently racing to install power, at some point, they will also try to put some pressure on the margin. We're getting ahead of that to make sure that we continue to have a very efficient portfolio and that we're able to cross-sell.

Those local teams such as Achraf and Jason have that knowledge of their market. They have that knowledge of their customers. It's our responsibility to make sure that they know about our whole offer, which is a complex and very broad offer, 140,000 SKUs across various product families. This central position of product management will be particularly helpful. It also helps us -- Rebecca is based in the U.S. It helps us bridge with our U.S. teams who are very familiar with the hyperscalers and their requirements and make sure we understand them and bring this knowledge to all the markets in which they're deploying capabilities.

We move to...

It's Max from Morgan Stanley. Could you just walk us through for your data center growth target of mid- to high-teens, how have you actually gone about formulating that? I realize you can look at kind of gigawatts, dollars per megawatt market, but maybe just so we understand it from our side, what's actually gone into that assumption? And is there any market share gain as well?

Well, we are not very sophisticated, [ longer ]. So we took the gigawatt. We said the market is going to move somewhere between 17%, 18% in gigawatt, and we'll do approximately the same. But again, if we can do more, we'll be able -- we'll be very happy to do more. But for us, the best proxy of the underlying market growth remains the gigawatt.

Okay. And just as a follow-up. So -- you previously said that you'd like the data center business at 40% of group or maybe that's kind of how you thought about it longer term, but you didn't want to go too much. You'll probably get there easily organically. So just when we think about kind of future acquisitions, should we think about maybe you're done or we see more of a balance of acquisitions and where they've been quite data center heavy. How should we think about that?

It's difficult to say because, of course, to make an acquisition, you need to be 2. I think you're likely to see more data center acquisitions coming, but not at the pace we have had so far. We've -- well, what was the number you shed, 15 acquisitions in 2 years, which are data center related. It's a lot. I don't believe we'll see that pace. You are likely to see a number of acquisitions coming in energy transition because we really intend to build energy transition as a second pillar for the growth. But then it will depend on opportunities. We'll really see.

Even in traditional essentials, if we find something which is highly complementary, a little bit like the 2 deals we made in -- the 4 deals we made in Australia and New Zealand, we'll consider. There's no taboo provided it makes sense and it fits into the portfolio. We'll have the financial means because not only we intend to dedicate, as Franck said, 60% of our free cash flow to acquisitions, but we will also have this divestment that will provide us additional capital to reallocate to those acquisitions.

Gael de-Bray from Deutsche Bank. Could you provide the breakdown of the $2.5 million per megawatt by category between compute and critical.

We're already giving a lot more information than anybody in this market. No. I mean, we have, of course, a precise breakdown. It's probably -- if I can give you a number, probably a little bit less than -- approximately half is probably critical power, let's say, and the other half is the rest of compute, load management, cooling and so on and so forth. This is the only order of magnitude, but I cannot give a lot more granularity because then it will -- we need to get into the individual product families. But half critical power, half the rest approximately.

And why do you expect the physical compute infrastructure segment, the market potential for that to increase over time and the low voltage direct current architectures, the final one doesn't look like very intuitive knowing that the value of the PDUs will certainly get lower?

Yes. But the PDUs represent a very, very small value of the compute part. And then you will have AI stabilizer (sic) [ AI-load stabilizer ], you have a high-density IT rack. You have a number of components that will either remain or be added. So again, if you take the $3 million or the $2.5 million of existing PDUs, they represent a very small part. But we happen to have a very strong market share in PDUs because it is a historical business where we made two acquisitions, but it remains quite a small part of the $2.5 million.

If I may. We already see it today with the ORv3 racks that we're selling. The value of the power shelf and the busbar is equal to or greater than the PDUs. So everybody focuses on that, but there's other infrastructure that replaces it. So...

Move to James. You go James, you stood up already.

I'll stand up. Andre from UBS. I have a quick question on the growth targets. I just ran some math here and the data centers growing mid- to high teens, that gives you 5% to 6%, I think, already. So if we're throwing 1% for the energy transition, then it leaves really not much growth for the rest of the group at the low end of your target. Is that how you see it? Or is that your kind of traditional conservativeness?

Well, the very day where we upgrade our number, it is conservative. No, I mean, we want to have clear evidence that the building market is going to rebound. And again, without repeating what I've said, it is not expected to be supportive in the U.S., and the rebound in Europe is expected to be quite slow. So yes, the majority of the growth would come from data center and to a lesser extent, energy transition.

And if I may ask a second question on the portfolio pruning that you announced of EUR 0.5 billion to EUR 1 billion. Could you just talk about what provoked it? And what kind of businesses we're looking at? Is that geographies? Is that product categories?

I cannot be too specific in terms of -- well, it has been identified, of course. So it's not a number we are throwing away. We know precisely what kind of asset we intend to divest. Those are good businesses, profitable, as profitable as the rest of the group. So it's not a matter of boosting our margin by selling a failing business and unprofitable business. It's just a matter of capital allocation. We believe that our capital will be better allocated to data center energy transition topics than on those essential assets, which have some value, that's why we think that we can easily sell them, but which have probably more value for other owners than for Legrand.

So it's purely a matter of freeing some capital and releasing this capital into assets that have more strategic interest, more growth potential, more synergy potential with Legrand than what we intend to sell. We'll be more specific the day we're going to sell them. And I have to add that, yes, it's new because Legrand has never announced such a portfolio pruning, but we've been doing this exercise every year. It's not something we discovered. Every year we have a series of meetings internally. We try to identify assets that are less strategic to Legrand. And I've met some of you in the roadshows and some of you asked me whether this process was in place. I said, yes. We haven't found so far, but it may happen that we find something which is of interest of selling and we have finally -- so the process is not new. But we think that, again, we have a better use of our capital than being invested in those less strategic assets.

James Moore from Rothschild & Co Redburn. Two questions, if I could. Benoit, this is not meant as a critical question, actually quite the opposite. Delighted with your defense of 800V DC today. It's great to see the shipset going up. But for the cynics who are going to come back at me, how can I answer when there's probably a plus side of the equation and a minus side of the equation. So presumably, that increase from 2.5 to 3.3 or 3.8 with solid-state, if we ignore solid-state, that increase of however much that is, what, $0.80 a megawatt is presumably made up of a decline on some products, PDU or others, and an increase. And I just wondered if the magnitude of the decline, is it like $0.50 of decline, $2 of decline offset on the other side? How significant is that piece of the jigsaw?

Well, I cannot easily answer this question, but the importance is that net is a plus and a clear plus. And at the end, what really matters is how much of the -- it's not that much, whether it's 3.1 or 3.3 or 2.9. What really matters is how much of this value pool you can capture. Today, the reality is that when we have 1 megawatt, we almost never sell $2.5 million. When we sell $0.5 million, $0.6 million or $0.7 million, we are happy enough, right, because we are able to get some product families.

So 99% of our time is spent on -- not on computing whether it's going to be 3.1 or 3.3, spent on trying to increase the $0.5 million to $0.7 million and then to $1 million and $1.5 million by providing our customers with higher added value by bundling products together, by coming with containers or skid-mounted solutions by adding capacity through acquisition. That's what we do rather than really scratching our head for too long on whether it's going to be 3.3 or 3.4. I don't know if you want, Brian, to add.

The other part of it, so the PDU market is different. There's where we lead significantly, which is intelligent PDUs. And then there's the traditional, say, dumb or more basic PDUs. If you look at that across the segmentation of the data center market, our intelligence is valued more at the edge. So think about smaller sites, remote management. The big core compute sites generally not using Legrand PDUs. So when we talk about the AI training loads, and it does matter because they're going to become a larger and larger percentage of the market.

But the reality is, we're not nearly as impacted in the core, where you're doing AI training, when you're doing the heavy loads, those are more dumb PDUs, quite frankly, from competitors. So there's an incremental opportunity if you look at us now having power solutions in cabinet, in rack, in those core sites where we don't do a lot of that today, and still being very relevant at the edge because you're not going to have those massive DC power loads when I'm doing basic inference type work or cloud and networking work.

Yes, there's an unequal cost benefit based on where we actually play. So again, as you're thinking about it, that's why we can't just sort of spout a number, because there's two dimensions of change. One is product A for product B, but the other one is the application piece, which again, think AI training versus everything else.

And if we zoom on UPS, because UPS is the second application which should disappear in hybrid and then the full LVDC application. It's part of the $2.5 million, but our market share in UPS is today very low. So we see a lot more opportunities behind the BBU, the AI-load stabilizer, which incorporates part of the UPS function than risk in losing UPS in AC architecture that we don't really sell today.

Great answer. I mean, when you think about your growth plans for AI in general over the next 4, 5 years, how much -- and it's easy for all of us to look at the megawatts announced and the additions. I mean, the supply side of the equation is abundantly clear. But do you look at all at the demand side of the equation and the degree to which AI is actually going to be useful and the degree to which model companies are actually going to make free cash flow and a sufficient degree of free cash flow to justify heading towards EUR 2 trillion of CapEx at the end of the decade? Or do you just leave that as a problem that's frankly all of ours and too big to solve?

Well, I'm not sure we have a say in it.

Well, I think Benoit is right. We don't have a crystal ball, but it's been interesting to see that in the past few months, the gross margin of some of those players have moved from 35% to 80% based on new pricing schemes. So it looks like they're finding a way to make money out of those big investments. And we'll see how it all pans out. But the news seems to be positive so far.

We've seen a lot of -- you had a couple of years back this DeepSeek topic, and then you had a few weeks back the fact that AI could kill 10% of humanity within 10 years. But the key question is, are the CapEx slowing down? And the answer is no. On the contrary, if you look at the past couple of quarters, there's been an upgrade or increase in the CapEx forecast of a lot of those guys. So up to now, there's absolutely no slowing down in CapEx investments.

It's Phil Buller from JPMorgan. It sounds like you don't have any real gaps in the data center portfolio, but you also have quite an aggressive 5% M&A target. So how should we think about the focus areas technology-wise? Is this DCIM, BMS, more cooling solutions?

Well, we cannot be too specific because, again, it's confidential information, and I don't want the whole market to go after the same targets as us. But we still have gaps, either product families or geographies, because sometimes we are relevant in one product category in the U.S., but not yet in Asia, or the other way. And second comment, not all the 5% going to be dedicated to data center. And we have a number of gaps in energy transition that we intend to fill.

So no, we still have a lot of ideas. I told you that we have a pipeline of about 400 targets. I didn't make the exact count, but out of the 400 targets, you probably have 50, 60, 70 targets in data centers and a lot of discussions going on. But again, statistically, you will not see the 5 or 6 acquisitions a year dedicated to data center. You're probably likely to see less, but a lot of acquisitions in other complementary fields of activities.

As a follow-up to that, you touched on competition. The rate of change towards this LVDC is very quick. So are there any specific categories within the data center that you think are most easily addressed by the competition, perhaps that solid-state transformers or something else?

Well, solid-state transformers is going to be a highly competitive area. This is one of the reasons why we are still wondering whether it makes sense for Legrand to have its product offering. But again, it's one piece of the powertrain, and the powertrain is one piece of the whole data center architecture. So trust me, even in LVDC, there are going to be a lot of pockets of growth and pockets of profitability. Go down, and you will see the AC market is already super competitive. You have hundreds and hundreds of players providing a rear door, busbar, medium voltage breakers and so on and so forth.

Now I hope we have demonstrated that despite it's a competitive market, we have all the assets we need to continue to grow. It's true in the AC world, it's going to be true in DC world. DC will not be a game changer in terms of competitive landscape. All the more all the different architectures will survive and coexist.

I had a discussion at break time with some of you. Take the hybrid. A year ago, there was this concept that the hybrid architecture could probably last 2 or 3 years and then everything will switch to LVDC. We believe that it will probably last much longer than that because as was said, this is a perfect solution to retrofit existing AC-powered data center, which will not be willing to go through the cost and pain of moving to full DC. So a lot of different architectures will coexist. A lot of competitors will continue to be tough, but we have the assets to win.

It's George Featherstone from Barclays. I'd just like to start maybe on the AI-load stabilizer. Perhaps a bit niche, but... Is it the right way to think about this product as a viable competitive solution to the medium voltage UPS that might sit outside the data center that we hear from some of your competitors?

I'll be direct. I think a medium voltage UPS is way too far from the AI load to provide the protection it's claimed to do. In any system, you want to quench the perturbation as close to the source as you can. So they might say it provides the same function. I don't believe it will be as effective, in part because it means that the perturbation has to travel all the way through the powertrain to the medium voltage UPS to provide this buffering capability. So you lose all the benefit of downsizing your architecture, because you need to have this high fluctuating intense load go through your powertrain. So we do think that the AI-load stabilizer, which is our version of what you see called ESR in many other reference architectures, has a real advantage over that particular solution.

Now you'll have space for everybody. So no, But I mean...

Yes. The other advantage is, if there is a problem, you are in a much more isolated area of impact, right? So something goes wrong at that rack or in that row and I've got my load stabilizer there, it's isolated to one subset. If I've got it back in the gray space, everything downstream can be impacted from that, which, again, is a much more serious impact to the reliability and the performance of the site. So again, whether it's wave perturbation or even fault protection in any architecture, the more you can be close to the point of use, there's a lot of advantages to it.

That being said, it doesn't mean that the medium-voltage UPS would not add value, right? It would have a different function. You still need to provide backup power and transient protection to your ancillary systems. Think about your cooling system, think about all the ventilation systems. But in terms of supporting buffering for the AI loads, it's not the right solution from a technical perspective.

Okay. And then maybe just a general question now on the data center business. You're clearly doing a little bit more direct to customers, and this is different from your legacy business. So I just wondered, within the contractual terms of that, now you're doing a bit more commissioning as well of the data center products. Are there any extra warranties or anything like that, that we need to think about on an ongoing basis in terms of what you commit to the customer?

Globally speaking, no. It's a new business, but you shouldn't think about a riskier business from a legal contract management point of view. We are getting organized on that. By the way, this is one of the most centralized contract management business that we have. We have trained many people. We are implementing AI supported contract management system in order to be fast and to go very deep. So looking at the balance sheet, riskier, or the business globally riskier on that front, no.

It's Martin Wilkie from Citi. The question was really on the hyperscalers and how their technology road map has sort of defined the strategy for you? Because when we look at some of the stats on how big full DC could be by 2030, there's a big wide range of estimates from different companies, different consultants and so forth. But do you get like a 2-year road map from your customers to sort of inform you of what you need to develop for '27, '28? Or how much of that is that you have to sort of sense what is needed and how much of it is that you're guided by your customer?

It's actually NVIDIA that sets that, right, because they have the road map on the GPUs. And I would say the hyperscalers reluctantly comply. They like to tell us NVIDIA doesn't know anything about building data centers and yet they dictate all of this different infrastructure. That's context. Relative to your question, it really depends on which one. They all have general ideas of how they want to design. But I would tell you, the reality is never exactly what that is. So we do sit down and we'll work on product specifications. I mentioned the example I went through where I said we're kind of an extension of their infrastructure, and they're putting a lot of functionality into those switch panels. So that's probably a 2-year to 3-year road map on that product as it fits into their powertrain.

The other components in that powertrain that are sort of less dependent on the functions might not be as long reaching. So it will vary by both product and the particulars of the customer. But as much as they know, we'll be involved in those conversations. And I would just say, we value it. It's important to make sure we're going to have product ready. The volume unit forecast has been shifting a lot. These first couple of years in this AI era have been really dynamic. And I'd point to, and again, back to NVIDIA, the Blackwell rollout.

Well, yes, they did start producing them, but the demand that happened, there wasn't sufficient supply, so they reverted back to Hopper production, which had slightly different architecture, projects got reprioritized based on chip availability. So all the forecasts that had been put in place were kind of put aside and then we did what we had to do to support the market. So it's an and both kind of dynamic.

The other thing depends on the product. So talk about gensets. So we have Girtz now. Gensets because the lead times are so long, they're going to be at least planning high-level capacity and trying to get in line with orders 2 to 3 years on actual hard demand, not just a general road map and forecast, but getting the line for capacity. And that kind of works back. Load banks are around a year, and then the rest of the infrastructure products are anywhere from 4 to 6 weeks to about 6 months. So all of those things will shape how specific they are with that. And again, each one has a slightly different approach. Some are global. Others will be global for 50%, regional for another 50%. So there's a lot of variability in that.

But there are two consensus today in the industry that the numbers we gave, so approximately probably less than 5% of new IT load by 2030 is going to be full LVDC and 35% is going to be hybrid. So total 40%. It's more or less industry consensus today, number one. And number two, the other industry consensus is that it will also depend on the purpose of the data center. We told you that out of the 30 gigawatt of additional capacity that should be built in 2030, 70% our estimate will be AI and 30% non-AI.

Out of the 30 gigawatts, 70% are going to be AI. It's probably, I don't know, 1/4 training, 3/4 inference. The training piece is more likely to have full LVDC, because that's where the benefits in terms of energy consumption is going to be very significant. And the penetration rate of LVDC in inference data center should probably be much slower. And this is also an industry consensus. And again, the importance for Legrand is not to -- of course, we are tracking that carefully, but everybody can have his own advice. Our objective is to be ready whatever happens.

So we have to be ready for the AC, OCP, hybrid, full LVDC architecture with products that will answer our customers' needs. And if it is not 5%, but 15% by 2030, fine, we'll be ready. It will be a good business opportunity for Legrand.

Can I also add, just from an engineering perspective, we're whiteboarding with our customers. So while they're sharing their road maps with us, we're also sharing our road maps with them. And then we're also uncovering problems as we're at the table with them or as we're doing data center walk-throughs. Brian had several examples in those customer success stories where it was joint development that was found out through the relationship, through the customer intimacy. They told us about a problem. We stepped up and we solved that problem for them, and that wasn't necessarily on a road map.

Delphine Brault, ODDO BHF. Can you disclose the share of service in your data center activity? At what pace is it growing? And is it currently more or less profitable than the solutions you provide?

Yes. Well, we told you that life cycle services represented about 10% of our sales. Part of that being products, mostly load banks. And it's probably half of that being the banks and the other half being services, so commissioning. So it's quite small. Well, it's growing nicely. Now if you compare our service sales with one of our competitors, you have to have in mind that there are 2 products that have a lot of associated services, UPS and cooling. Well, we're not selling a lot of UPS in data centers, and cooling, it is quite small, it's 5% of our sales. So if we had a bigger chunk of our sales in UPS and services, we'll do a lot more services. But given what we currently have as a setup in terms of product, it's about, let's say, half of our 10%, so 5% of data center sales approximately.

And second question, you said that you are working on SST and you will see whether you will launch it or not. Can you be a bit more specific on what will drive your decision? Is it related to market acceptance, market penetration or competition risk as you touched upon briefly?

Well, it's very basic return on investment. So given the profitability of the SST, is it worth doing the investment, and that's it. So we are in a world where technology is, sorry, but it is pretty widely available. Either you can source a technology, you can license the technology, you can buy a company. So it's not a technological issue. It's more, will there be enough market potential, margin to justify the investment and the effort. We have so many opportunities in the data center world that we need to make sure that it's profitable enough.

And again, it's not like if SST sales was driving the rest. You can be a very good SST player and not selling any IT rack, not selling any direct current switchgear, not selling any busbar, not selling any AI-load stabilizer. And the other way, you can be very good on all those product families without having an SST. So since there's not connected sales between SST and the rest, it's a pure ROI decision.

Alasdair, Bernstein. I suppose a kind of follow-on to that, because it's good to see that the TRU is part of the technology road map. And I guess, when could we potentially see that launch? I mean, if we were to think about the sidecar potentially comes into the market in late 2027, could the TRU soon follow after that? And are you more confident around the economics of the TRU versus the SST, simply because obviously, you're using perhaps more of your existing technology here?

Sure. So we think we're fairly close to the TRU just because of our current asset base in the UPS systems. It hasn't been our highest priority for development. I think one of the takeaways from this presentation is it's a very fast-moving market, and we have to reallocate our resources super fast to catch the right waves. But we believe we could get one to market if we put our own efforts against it within 2 to 3 years, which we really would be timely to catch that wave.

You don't need to have a product ready for the LVDC within 6 months, because the market is not yet there. And what is really important is that we codevelop the product. So we need to spend some time showing what we demonstrated in the bus. We have already started to some of our customers making the adjustments, trying to get into their specs, sharing the technical difficulties. And if we have everything ready by, so hybrid '27, full LVDC by '28, which is the sort of road map we can have, it makes a lot of sense. It's very consistent with the way the market is moving.

Dominic from Millennium. I had two questions. One on the capital allocation. Share buybacks are now part of your capital allocation policy and you say it's selective. Can you just elaborate a little bit on the criteria you will apply to those buybacks? And just back of the envelope, if you look at your leverage targets and the other M&A and dividend allocation you're planning to do, it looks like you could be buying somewhere around EUR 8 billion worth of stock up to 2030. Does that sound like a sensible estimate?

And the second question is on the data center forecast you're applying, the 180 gigawatts, which is significantly below other forecast such as the 250 gigawatts from third party. Can you talk a little bit about how derisked you feel those forecasts are? How much visibility you have at this stage?

Well, it may very much be 250 gigawatts. We just took what most of our peers, the ones who know the market, shared the numbers, and the average is 180 gigawatts. If it was to be 250 gigawatts, then great. It will provide us with even better growth opportunities. But we thought it was reasonable to take the sort of our industry consensus rather than Omdia or third-party estimates.

Now frankly speaking, whether it's 180 gigawatts or 250 gigawatts, doesn't make a huge difference at the end. It's what I didn't do the math, but it's a 23%, 24% CAGR instead of 18% or 17%, something like that. So yes, it could provide with additional growth potential for Legrand, but it's not like doubling. So it could be 250 gigawatts, but we decided to take the industry consensus, our industry consensus, which is more around 180 gigawatts.

On the share buyback, I take the question on the share buyback. Definitely, it's not your number. Let's say, 13% to 15% of free cash flow to EUR 16 billion to EUR 18 billion top line cannot bring EUR 8 billion of share buyback. Now answering to your point, what does it mean selective? At least the minimum will be to compensate employee distribution, LTI, employee shareholder plans. That's the minimum. And then the rest, it will be a little bit opportunistic, meaning if the pipeline of M&A were to be smaller, which it doesn't look like, there could be some share buyback, or if we were to overperform the model. So being on a longer term above the 15% of free cash flow to sales, then we will consider additional share buyback.

Let's look at what we did 2 years back. Our level of leverage was down to 1x net debt to EBITDA. So we decided to launch -- it was not a big program. We decided to launch a EUR 500 million share buyback program. We executed EUR 400 million. And then we started to have a pipeline of acquisition building up again. So we decided to stop the program. And the reason why we launched this EUR 500 million was typically because we overperformed in terms of cash management and cash generation. So if we have more cash than expected, we'll not do additional acquisitions for the sake of doing additional acquisition, then we will consider giving back to shareholders. This is the approach.

Yes. As we are reaching now close to the end of the Q&A session, I propose that we take one of the questions we had online, which is pretty interesting, because we are asked the questions about our customers, so the hyperscalers and so on. So I don't know who will answer that question among the team, but what infrastructure decisions should customers from Legrand make today to avoid limiting their business in the next 10 years?

And that's pretty interesting to get that question, because at least for this time, we're asking questions about our customers. And what we believe in terms of -- I would say that why I'm asking this one, because I got it maybe 4 or 5 times, which is in a different way. In another way, what is the biggest challenge for your customers for the next few years? Is it power infrastructure, cooling, software or integrating everything into one complete system?

Well, I'm not sure I have advice to give to my customers. And of course, everybody can react. I think the biggest challenge ahead is definitely the exact theme of this trade show. It's how can we use less and less megawatts to run the compute system. Not only it's a matter of energy efficiency, but it has become a matter of social acceptability. Not only in Europe actually, but even in the U.S., you have a growing number of concerns on the fact that data center, especially hyperscalers are consuming too much energy and too much water.

I don't believe it's really a water issue. But in terms of energy, it may become a problem for local communities. So I think our customers will have to demonstrate that they do whatever it takes to lower their PUE down to the 1.02, 1.03, 1.04. That short term, yes, you can have fossil generation, but midterm, you should also have renewables and so on, that the product they're going to use will be increasingly using recycled materials. And I think it's a matter of social acceptability. So if we want the market to grow, I think it's going to be really important for those guys to demonstrate that they are increasingly taking that into account. But this is my takeaway. Maybe you guys are closer to the customers. You can give your own feedback.

Yes. I think in addition to that, I think having flexibility with your design, so not being sort of beholden to a single technology road map, but understanding that whether it's a plan A or a plan B, or thinking about where you can replace product A for product B, I think the transformer example is a good one. Don't bet on solid-state transformers that don't exist yet or haven't been proven as part of your infrastructure, because it's "the most optimal way to do that". I think optionality is going to be key because a constraint in one area can be solved if you've kept the design flexible by changing out other parts and systems.

Thank you. So we have reached the end of the CMD. Maybe one word of conclusion?

Well, I just wanted, of course, to thank the Legrand team who participated to this and contributed to the event. So Ronan's team, the Southeast Asian team, Juan and all the people. So it has been a lot of work to organize this event. But more importantly, I wanted to thank you for spending the time. It's what 2 days spent on Legrand. So it's a big investment from your side. I know that you have a lot to do with other companies. So thanks a lot for making the trip to Singapore. And should you have any follow-up questions, the whole team is at your disposal for further information.

This being said, we're going to be pleased to invite you for a small drink. So you will have other opportunities to interact with the rest of the team. So thanks a lot for coming. Thank you very much.

Good morning, ladies and gentlemen, and welcome to today's Legrand 2026 Half Year Results Conference Call. For your information, this conference is being recorded. [Operator Instructions] At this time, I would like to turn the call over to CEO, Mr. Benoit Coquart; and CFO, Mr. Franck Lemery.

Please go ahead, sir.

Thank you very much. Good morning, everybody. Franck Lemery and myself are happy to welcome you to Legrand H1 2026 conference call and webcast. This morning, as usual, 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 on the results in more details.

Let me start on Page 4 with the key highlights of the quarter. First, Legrand delivered another period of record sales growth together with continued excellent profitability. Second, we are continuing to implement our 2030 strategic road map with determination. Third, we are raising 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 17.4% in H1 2026, excluding currency effects, comprising: first, an organic growth of plus 9.8%, driven by data centers and energy transition-related offerings. Second, growth from acquisitions with a positive scope effect of plus 6.9%. Based on acquisitions announced and their likely date of consolidation, the overall impact of acquisitions would be around plus 8% for the full year. The exchange rate effect was minus 3.7% in H1. Based on average exchange rates in June 2026, the full year currency effect would be around minus 1.5%.

On Page 7, you will find the key takeaways by geographies on a like-for-like basis. Europe sales saw sales down minus 2.4% in a building market that remains as expected, contrasted. North and Central America increased sharply by plus 24.2%, driven by strong success of data center and energy transition solutions in the U.S.

Lastly, Rest of the World grew by plus 2.3% in the first half with significant growth in India, Australia and several other Asian countries, while activity in China remained soft. Despite the geopolitical situation, sales in the Middle East grew in H1. 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 to all of you. I will start on Page 8 with adjusted operating profit. Profitability despite inflationary pressure remained very strong in H1 2026 with an adjusted operating margin of 20.8%. This is a high level, reflecting strong execution and adaptability, notably effective pricing and cost productivity as well as the quality of our recent acquisitions.

Going now to Page 9, regarding value creation. First, net profit reached EUR 698 million, up plus 11.2% versus H1 2025. This increase was driven primarily by higher operating profit, a slightly lower corporate income tax of 27.5% and the negative evolution of the financial results. Second, free cash flow came to EUR 488 million, representing 9% of sales. This is it for the key financial topics.

I'm now handing over back to Benoit.

Thank you, Franck. So during the first half of the year, we actively deployed a strategic road map. Let's take 3 examples, data centers, acquisitions and innovation. First, data centers on Page 11. The group's strong organic growth in the first half was driven in particular by its Data Center business, which delivered organic growth of above plus 30% and now accounts for 32% of Legrand's revenue. Legrand has built one of the broadest offerings in the industry from on-site power generation to installation testing. Its portfolio includes more than 140,000 product references and a growing range of services, including engineering services, on-site support, testing and commissioning.

The group is particularly well positioned to support the development of high-density AI data centers through scalable, highly engineered solutions tailored to the specific needs of hyperscalers, co-location, new cloud providers and enterprise customers.

Second example, acquisitions on Page 13. So far in 2026, we already announced 7 acquisitions so far including one today in Finland, all are focused in energy and digital transition, further strengthening the group's leadership position in high-growth markets. They represent a combined annual revenue of around EUR 450 million throughout the world.

Third example, innovation on Pages 15 and 16. As you know, innovation and regular new product launches have always been and remain a key priority for Legrand. You can see once again our continuous strong innovation momentum with numerous product launches in all verticals since the beginning of the year.

We can now move to Page 18 with our full year 2026 targets. Confident in our action plans, we are raising our full year 2026 targets. Based on its first half performance and the current global macroeconomic environment, Legrand is now targeting the following in 2026. Sales growth, excluding currency effects of between plus 16% and plus 19% versus plus 10% and plus 15% previously, comprising organic growth of between plus 8% and plus 10% versus plus 4% and plus 7% previously and growth through acquisitions of around plus 8% versus between plus 6% and plus 8% previously.

Adjusted operating margin after acquisitions of between 20.5% and 21% of sales unchanged, CSR achievement rate of at least 100% for the second year of its 2025, road map. In conclusion, this first half highlights the strength of our business model and the acceleration of our momentum, strong growth, high profitability and disciplined execution. Our Capital Market Day on September 29, 2026, in Singapore will be an opportunity to provide an update on our 2030 ambitions with a particular focus on Data Centers. We would be very happy to welcome you there. Those were the key topics of this release.

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

[Operator Instructions] We will now take our first question from Andre Kukhnin from UBS.

Could we just start with comments on the Data Center specific growth in the second half, if you could specify that for Americas and maybe the Rest of the World as well, please?

Well, so in the first half, as I said, the Data Center business grew a little bit more than plus 30% on a worldwide basis with a growth which was stronger in North America than elsewhere. As far as the full year is concerned, you know that 3 months back, we're guiding for close to 20%. Now we believe that on a full year basis, our Data Center will grow between 25% and 30% organically for the full year, which you can do the math. But basically, it means in H2, it would be between 20% and 30%. So we expect to see the continuation of the strong growth in Data Center. And I have to say that the pace is not slowing down. We have very, very solid orders, a lot of discussions going on. And we are quite optimistic, I have to say, for the next couple of months.

Got it. And if I may just ask, I think during the quarter, you talked about working on the sidecar offering for the future 800VDC architectures. Could you talk about how long have you been working on that? And when do you expect that to be commercially available? And given that I think this is seen as a sort of a transfer step between the current architectures and the full solid-state setups, do you also intend to have an offering for what I think is going to be the battery rack in the full 800 VDC?

Well, Andre, I expected to have more questions on the results before getting into the LVDC topic, which the financial community is sort of obsessed by. I don't want to be too exhaustive on that because we have a CMD end of September. We'll spend a day together, and it will be the opportunity to go a lot deeper into those topics than during a call dedicated to the results.

But to make a long story short, yes, we are working on the full hybrid architecture, including the side car, and we are not late compared to what we can see on the market. And yes, of course, we are also working on the next step, which is a full LVDC, even though there's now a consensus on the market that it won't come before some time. I remind you the sort of base scenario in which we work, which is that the so-called hybrid architecture, so with [ NEC, ] DC architecture could represent as much as maybe 10% or 20% of the new IT loads by 2030.

As far as the full LVDC is concerned, now most people expect that it would represent at best 1% or 2% of the new IT loads by 2030. So those are the orders of magnitude that we've been talking about for almost a year now. And I can only note that more and more people are on the same page as us. So yes, we are working on both architecture, hybrid architecture and LVDC to answer your question. But once again, we'll give you a lot more color in September. And I hope, Andre, you will join us in Singapore.

Of course, yes, we'll be there.

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

I'd like to start with another one on Data Center, if I may. It's 32% of your sales now, which is great on the one hand, but there are these growing concerns about a potential bubble or at least the medium to longer-term affordability of it also. So perhaps you can share what you're seeing on the ground in terms of the medium-term outlook? Are you concerned internally by the risk of a potential bubble beyond that near-term optimism. Just to start there, please.

Well, I've not heard much about a bubble as far as the AI was concerned. I heard a lot about bubble concerning potential valuations. What we see on the ground is that there is a huge demand, which is not slowing down at all, a sort of race to capacity, which is happening with orders coming to be delivered in '26, some of them in '27, some of them in '28. And frankly speaking, when I see the penetration rate of AI, which is still very low and the disruption potential it has on so many sectors, name software, traveling, financial services, health and many others. I think that we are just scratching the surface of what AI can bring as a benefit. And if we need -- if we think that AI will be almost everywhere and will impact all sectors, then you need a lot more computing capacities than is currently available.

So I'm not saying that we will grow 30% forever. We won't, of course. But I still see a very, very positive momentum for a couple of years. Here again, we'll try to give you a bit more color on what we see ahead of us in terms of gigawatt market growth and so on in September. But again, I don't see a reason why given the low penetration rate of AI in many sectors, why the need for computing capabilities would slow down.

Yes, that makes sense, and it's very clear. My follow-up is on the margin topic really. So clearly, a solid performance in Q2 or H1, given what's going on in the world. But by geography, it's really the U.S. that's driving that in North America, I assume, driven by the data center leverage. But perhaps you can talk to the margins in Europe and the rest of the world year-on-year. How should we think about that evolution in the second half in the context of the unchanged margin? And are there any AI benefits that you can touch on that you're able to achieve internally as well?

Well, as far as the margin is concerned, what happened in H1 is pretty clear. And you can see that we have 20 points decrease in operating margin, which is coming half organic -- basis points, sorry, 20 basis point decrease, half from acquisitions, half organic with a gross margin, which is down 130 bps coming mostly from acquisitions. And you know that the company we are acquiring tend to have a lower gross margin and lower SG&A base than the rest of the business.

SG&A, which has a positive impact of 90 bps on our profitability, which is mostly leverage. And then other, which has a slight positive impact of 20 bps with the level of restructuring, EUR 1 million, which is similar to H1. So this is for the group. Of course, NCA, North and Central America has a very strong performance, which makes a lot of sense given the strong sales growth they are experiencing. And it compensates the decrease in Europe and in the Rest of the World, which is suffering from softer sales. And especially that in Europe, we are more integrated.

Europe is bearing a number of central costs, holding costs as well as global centers for innovation. So when you don't have top line impact in Europe, it has, of course, a negative impact on the profitability. So this is for H1, no surprise, more or less a stable margin, let's say, with lower gross margin, positive impact from SG&A and a slight positive impact from others.

As far as H2 is concerned, frankly speaking, we'll see. It will depend on the top line evolution we will have in the 3 areas. The bottom line is that we are confirming that despite inflation of purchase price, despite muted sales in Europe, despite the geopolitical situation, which remains somehow uncertain, we are fully confirming our guidance in margin, i.e., an adjusted EBIT margin of between 20.5% and 21%. But again, to see the difference from one zone to another, let's wait for H2 to happen and let's wait for the -- especially the top line in H2 to happen before commenting.

We will now proceed to the next question. And our next question comes from Daniela Costa of Goldman Sachs.

I will start my question and then I'll ask the follow-up after. But on the -- following up on this point on pricing into the second half, I guess that's within your round of control. If you could give us any idea of whether you've done any price increases in July or what do you see and especially differentiating between Data Centers and the rest would be very useful.

Well, it's difficult to differentiate from one time to another, from one business to another. I can give you the global numbers. So our price effect was plus 2.9% in H1. So you can see the acceleration between Q1 and Q2. Q1 was at plus 2.1%. Q2 was at plus 3.6% and globally, plus 2.9% for H1. And given the environment, especially the purchase price environment, we expect -- we now expect a price effect for the full year, which could be up to around plus 3%, having in mind that the price increases started in H2 last year.

So the basic comparison in terms of pricing is a bit more demanding. So we were expecting 3 months back to be between plus 2% and plus 3%, and we are now confirming to be around plus 3% given the environment. Now if the situation of purchase price, so price of components was to worsen for whatever reason, of course, we would keep our ability to do a bit more pricing. When we entered the year, we thought we would do plus 1% to plus 2%. Now we are shooting for plus 3%. And if it was needed, we could do 2% more.

This was for purchase price -- for selling price. As far as purchase price is concerned, I can also give you the data. In H1, it was plus 3%. Purchase price plus 2% in Q1, plus 4% in Q2. And we are now expecting an inflation to be probably a little bit higher than plus 4%. So expectations for the full year, purchase price of plus 4% plus, let's say, and selling price of about plus 3%, excluding tariff. This is what we are shooting for. But again, should we need to do more selling price, we would do more depending on the environment.

And then just as a follow-up in terms of the data center business, we are starting to see some announcements in Europe. I think we saw sort of SoftBank in France, but there's been others. I know that your portfolio is slightly different in Europe versus the U.S., but how should we think about -- should we just imagine you benefiting the same way you did in the U.S.? Or there are some things we should keep in mind on the difference in the portfolio?

Well, no benefit yet in 2026 so far because of the time difference between announcement and an actual Data Center setup. You know that because of permitting, because of access to electricity, access to the grid, it can take up to 3, 4, 5 years before a project is announced and the time that the Data Center is effectively open, and we are late cycle in the data center. We start to do some sales a few months before the Data Center is open. So we're not yet seeing the same amount of business as we see in the U.S., but it's not specific to Legrand. I mean it's a whole market.

Our core assumption is that it should help us in the years to come. But so far, in 2026, the most exciting market, faster growing remains the U.S. Now the day it will come a bigger scale in Europe, it will be a good news because theoretically, we have the ability to sell more dollar per megawatt in Europe than in the U.S. because there are a number of product families that we have in Europe and not in the U.S. So it would be a good news, but we're not seeing that yet. And the vast majority of our business of the market and of the growth is still coming from the U.S.

We will now proceed to take our next question. And our next question comes from the line of George Featherstone of Barclays.

First one would just be on the non-data center business and kind of a little bit of an update about what you're seeing there and what you're implying for the rest of the year in terms of that non-data center business and the growth embedded in that.

Well, we're not really seeing an improvement between Q1 and Q2 in the building market. So the underlying building markets remain not very supportive, and this is the case both in the U.S. and Europe, which is not a surprise again because from the very beginning, we told you that, especially in Europe, the statistics were supposed to show some market improvement, but that it wouldn't come before the end of the year and that it still has to be demonstrated. So it's not a surprise, but no improvement between Q1 and Q2.

The good news, if I may say, that within this building market, which remains somehow a bit depressed, we see a number of product families, especially those related to energy transition, which are doing better than the traditional so-called essential product families. So all products related to the electrification. So for us, it's transformers, circuit breakers, measure, load shedding and a few others are a few points better than light switches, lighting, AV, floor boxes and all this kind of stuff.

So it shows that even in a difficult building environment, we have some businesses that have the ability to overperform the market. What will it be for the rest of the year? Well, if we listen to specialists, most people expect the U.S. building market to remain quite depressed. And there's no short-term positive signals coming from the experts, especially on resi, even though it's less than 10% of our sales now in the U.S., nobody expects the resi market to rebound in '26.

Most experts believe that Europe should progressively improve with a number of uncertainties related to consumer confidence, geopolitics, the cost of energy, blah, blah, blah, but at a slow pace. This is a sort of macro scenario. What have we included into our guidance? Well, as you could see, we have included data center market, strong growth, 25% to 30% like-for-like. And the rest of the business growing low single digit as it grew in H1. So we haven't incorporated into our guidance a sharp rebound in the building market either in the U.S. nor in Europe.

Okay. That's really helpful. And then just a couple of follow-ups on the data center conversations we've been having. First one would be, you spoke about confidence in the demand outlook. Are you able to put some context around that, maybe give us a growth rate you're seeing in orders? Is it above the sales growth rate, for example? And then the second thing on your acquisitions you've made there recently, there's perhaps a consistent theme forming, which is you're buying more businesses within the testing and commissioning space. Can you perhaps talk to the opportunity that you're seeing there?

Well, I'm not sure I can give you a lot more color on the data center growth by geographies, by customers, by product types. I can maybe tell you that if we look at the product families, of course, when you grow more than 30%, it means that you have some product families growing 50%, 60%, 70%, 100%. Those growing the most are probably cooling, testing, commissioning and part of the powertrain. So they correspond to some of the acquisitions we've made in the last 2 or 3 years. But again, we are seeing very, very good growth and very solid order inflow across most of our product families.

As far as the latest acquisitions are concerned, well, the objective was to build a significant market position in critical power in the U.S. And for those of you who know Legrand for quite some time, you know that we've been trying to enter the energy transition/critical power in the U.S. for quite some time. But this was a market which was occupied by big guys. And for years, we didn't find the right way to enter.

Well, interestingly, data centers provide us a very good entry point. And we've bought a number of companies active in powertrain. So power generation with turbine packaged in a container on site to do power generation whenever -- either actually as a backup power or as a main generator. Medium voltage switch gear, low-voltage switchgear, busway, busbar, testing and commissioning. So the whole powertrain. And what is of interest is that most of those acquisitions have something like half of their sales in data center and half of their sales in the other type of verticals, could be building, could be renewables, could be infra, could be industries, could be health.

So by entering into the critical power in the U.S., we also enter into other verticals, and we have started to build a meaningful and significant position in energy transition in those other verticals. So it's not only about testing and commissioning, it's mostly about critical power in the U.S., and it is a very interesting position, growing nicely and not only growing nicely in data centers, but also growing nicely in other verticals.

If I zoom on testing and commissioning, well, Avtron, which is the company you referred to is a world leader in load banks, has very strong market share in the U.S. and elsewhere. It will prove to be one of the most exciting acquisitions of Legrand, very good multiple, very strong growth, very nice profitability. And indeed, it is for us, a way to be even more involved on the high-density AI data center because when you have 1 gigawatt, 2, 3 gigawatt data center, when you have a 1-megawatt rack, for example, which is liquid cooled, not only you need to test the loads, but you also need to test the liquid cooling systems.

So the higher the density, the more liquid cooled data center the more testing you need, the more commissioning you need and the more sales with Avtron will do. So it's a very, very interesting acquisition. Again, I hope, George, that you will come to Singapore because we'll have more opportunity to discuss that, and we will even display some Avtron product, and we have some Avtron people. So we'll be able to talk directly to them.

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

Maybe if I could just start on the margins. So I noticed you had higher restructuring costs above the line this quarter. So I just wanted to ask about some of the moving pieces. What is your expectation for restructuring as we go through the full year? Was that a temporary kind of higher restructuring of Europe? Or is that something you expect to be higher for the full year and therefore, a drag on margins? And then also if you could comment on whether there were any tariff refunds during the quarter because that's a consistent theme we've heard across a number of companies.

Yes. So as far as restructuring is concerned, well, we're not much commenting by zone. At group level, we had a restructuring of EUR 33 million in H1 which was very much in line with what we had in H1 2025 because we had EUR 34 million restructuring in H1 2025. So yes, we remain very active. While it's not a surprise to see a lot of restructuring in Europe because typically, that's where we lack sales. And when we have -- when our volumes are not growing, we tend, of course, to do restructuring, footprint optimization, blah, blah, blah.

As far as the full year is concerned, our main assumption is that it could be close in terms of EUR 1 million to 2025. I remind you that in 2025, it was EUR 65 million. So I cannot commit on a precise number, but it will be around this number. As far as the tariff refund is concerned, well, tariff has become a very complex issue. I have to admit. So even though we are tracking that very carefully, the potential refund, whether you ask it or not, new tariff, tariffs that are canceled, that are replaced, it has become a very, very complex topic.

I have to say that in H1, tariff did not have a material impact, either positive or negative. And that's it. And if we can get a bit of refund, we will. But frankly speaking, it is not a strategic topic for us. It would be a onetime benefit, not huge. So it is not a topic on which we are spending a lot of time. We are focusing on a lot more in the U.S. on how can we cope with this data center hyper growth, how can we better serve our customers rather than on tariff. So we don't expect it to have a very meaningful impact one way or the other on the 2026 accounts.

No, no, sure. I was just trying to understand whether the margin was clean or not. The second...

I can answer, yes, the margins are clean. they will be clean for the full year.

Okay. So the second question, and I think it was something kind of George was trying to get at. But I think you've previously talked about around 6 months visibility in your data center business. You kind of talked earlier in the call about some of your orders were now kind of extending into '27 or maybe '28. Could you maybe give us a feel of kind of how long your backlog is today, has that meaningfully exposed? And any commentary on how much of your revenues for '27 might already be locked in by your order backlog would be really helpful context.

Well, I don't really like this concept of 2027 being locked in by backlog because we've been consistently telling you that backlog is more for us, an indication of which customer we have to serve and when and which supply chain investments we have to make in order to make sure that we deliver probably more than a leading indicator of what our sales in 2027 is going to be because the backlog can be canceled, can be delayed, can be modified, can be -- so of course, we start to have orders for 2027.

On some very specific businesses where the lead time are longer, we even have a few orders for '28 and sometimes '29. But does it give us a lot of visibility. The answer is no, again, because we are not counting on this backlog to make our assumptions. What gives us confidence on the fact that the data center market will continue to grow. It's more the gigawatts that were announced for '27, '28 and beyond. There are tens and tens of gigawatts. And each time there is a gigawatt being built, I remind you that 1 gigawatt, we could potentially sell EUR 2 billion to EUR 3 billion of sales per gigawatt, so EUR 2 million to EUR 3 million per megawatt.

So this is more the kind of leading indicators we are tracking rather than a backlog because, again, backlog can be changed. By the way, the total CapEx from our customers. And to this extent, the recent announcements from some of the hyperscalers on the fact that they were even increasing their CapEx plans for '26, '27, '28 is quite a good news for Legrand, of course.

And our next question comes from Alasdair Leslie from Bernstein.

So I wanted to follow up, I suppose, on what you were discussing previously around U.S. data center acquisitions, but maybe focusing more on the Girtz acquisition, your strategy there, but perhaps more in the context of how you're looking at the opportunity in prefabricated modular data centers now. Is the plan to develop dedicated Legrand power pods and maybe even kind of modular IT pods? And maybe also if you could reflect on how this fits in with that partnership you have with Siemens and Cadolto in -- I guess maybe that's focused more on Europe. Maybe you could confirm that. And if you have any kind of estimate on how big the kind of modular prefabricated market in the U.S. is right now, perhaps as a share of additions?

No, it is a fact that prefab, even though within this world, you have different type of systems, is gaining ground because it helps our customers to shorten -- I mean, to optimize their supply chain and to open faster data centers. So it's getting around worldwide. We do have already modular capabilities in a number of geographies. So in the U.S., for example, we are able to provide genset modules with Girtz indeed, which are gas-powered or diesel powered and which can be used even as a main source of power, especially in zones such as Texas and elsewhere.

We are also providing skid, so premounted critical powertrain with Kratos in the U.S. In Colombia, we have a unit fully dedicated to modules, which is called Teknica. In Europe, we have a couple of units doing that, especially a new unit in Ireland called TES and so on and so forth. In Malaysia, we just acquired SRS, which has the ability to do skids and modules for power, medium voltage and the voltage. So we have progressively acquired a number of capabilities to do modules, not to mention our ability to do full rack hot air containment, including racks, busway, type of boxes and so on.

So we do have these capabilities, not everywhere, but at least in the U.S., in Southeast Asia and in Europe. And it's part of the nice growth we have. It's not the only one. So that's it. I don't know what else I can tell you, except that once again, I would invite you to come to Singapore. And I feel that it's probably the right time to do a CMD dedicated to data centers given a lot of number of questions we have. And again, you have the ability to talk face-to-face to the teams in charge of all those businesses, and they will give you as much information as you can as you want on those modules, skids, prefabricated product lines and customer expectations.

And our next question comes from Gael de-Bray from Deutsche Bank.

Can I get back maybe to the question around the company's execution during the quarter? I mean, if there were any specific challenges beyond the price cost dynamics that you've met to deliver that very strong growth in the quarter? And why specifically did you see both margins and free cash flow trending a bit down on a year-on-year basis and whether you expect that to reverse maybe more positively into the second half? So that's question number one.

Well, if I have to name one operating challenge, it would definitely be how to cope with the hyper growth of our data center business. Not to say that we have any margin issue on data center, but our teams are spending a lot of time optimizing the supply chain, speeding up development process of new product, shipping on time, sending people on site to help the installation and commissioning and so on and so forth.

So it has clearly been a challenge. Did it have an impact on cost? Yes, probably. Our cost is not as optimized as if we're growing 10% when you grow 30% plus, which again means 50%, 60%, 70% in some geographies in some product families, it comes with a number of additional costs. Now again, it's a pretty good news for Legrand. As far as the difference between Q1 and Q2, I will let maybe Franck to give you more color.

Yes. And especially on the cash flow, Gael, the question you asked. So cash flow at the end of H1 is at 9%. H1 is always soft. 9% is not unusual, and you know very well why it is soft. At 9%, it's not unusual. If I look back at the last years, almost 1 year out of 2 was below or equal 9%. It's a little bit soft on the back of higher working capital requirements, which are around 14%, where the typical working capital requirement for the group would be 12%.

1/3 of that is totally mechanical, scope conversion, all that. 2/3 is -- I wouldn't call that company execution, but the current backdrop, which is a little bit more inventory, a little bit more accounts receivable and also on the opposite, a little bit more account payable. All that is the current picture. Looking ahead on the full year basis, we really think that we -- working cap will be normalized. And accordingly, full year free cash flow should be the usual one between 13% to 15%.

So H1 is challenging, of course, in terms of managing the strong growth in data center. But whether in terms of margin or in terms of cash flow, nothing special, and we are confirming for the profitability of 20.5% to 21% yearly guidance, and we are confirming for the free cash flow 13% to 15% long-term guidance.

Understood. And the second question is on the willingness to design and launch a power side car offering for 2027. I was wondering whether you have in your M&A pipeline today any specific targets in the rectifiers or battery backup segments?

Well, I don't know -- you will understand that I cannot be too specific on our M&A pipeline. I will just answer that we have either internally or through contract manufacturing and subcontracting all the technological building blocks of a side car. So we have -- and it might not be very obvious from the outside, but we have a lot of expertise in DC, in conversion. We are UPS player, even though not a big one in data center, but we are a UPS player. We have, of course, a lot of capabilities in racking.

So we have all the technological bricks again, either organically or through subcontracting that we need to do a side car, which, by the way, is not technologically speaking, something very, very complicated. Now again, if your question is, will you guys continue to do acquisitions in the quarters to come? The answer is yes, probably not at the same pace as the one we have had so far. which is almost a deal a month, but we continue to have a very large pipeline of opportunities in data center and elsewhere.

Again, I cannot be too specific on the countries or products, but we have a very large pipeline, and we will continue to do nice deals at a very reasonable price. Maybe worth mentioning, you didn't ask the question, Gael, but I know that you have the question on the back of your mind. We can add that the 7 deals we have made so far in 2026 have paid less than 11x 2025 EBIT. So probably less than 10x 2026 EBIT. So it remains quite reasonable.

We will now take our next question from the line of Martin Wilkie from Citi.

It's Martin at Citi. The question is just to come back to acquisitions. You increased your acquisition impact guidance for the year. Just to check to start with, is that just based on the deals that you've already done? You missed out a number that haven't yet been consolidated? Or you said obviously the pace might slow in coming months. But just to check if that guidance includes some future deals or just based on what you've already done so far? So that's the first question.

No, it's based on what we have already done so far. So there's no uncertainty. I'd say it could be 7.7%, it could be 8.2%, of course, but that's uncertainty. The only uncertainty is how fast we will be able to consolidate them. Now we will continue to make deals. But of course, if we close a deal in October, for example, in November, you won't have much sales flowing into our 2026 P&L. So the 8% perimeter is based on the deals which have been announced so far. And should more deals come, there will more impact the 2027 perimeter than 2026.

And that sort of leads on to my follow-on. I think you're now at 32% of sales in data center. And I believe in the past, you said that you wouldn't really want it to go above around 40%, which a while ago seemed like a distant prospect. But now if you're adding a mid-single-digit percent to top line each year through acquisitions, many in data center and that end market is clearly growing much faster than everything else, it's not impossible that you get to 40% of sales in data center sort of within the next couple of years. I mean is that a ceiling that you still see? Or how should we think about how you're looking at the portfolio on a sort of 2- or 3-year view in terms of how big data center could become?

Well, I would -- if I were you, I would save this question for the CMD because it's more a long-term question than a short-term one. But yes, of course, if the data center business continue to grow much faster than the rest and if we keep doing a lot of acquisitions in data center, it could be more than that, it could be more than 40%.

Now 2 comments. Number one, not all the acquisitions will be data center related. For the past 3 years, we deliberately wanted to do a focus on data center because we felt that we needed to build a position throughout the gray space and the white space. So we have targeted a number of spaces where we wanted to be, cooling, testing, medium/low voltage gensets. We also targeted a number of geographies, U.S., Europe, Asia to make a long story short.

Well, I'm not saying that we are all set, and we still have a lot of ideas of companies that would complement our setup, but we have done a lot of the job. And we have a product portfolio, which is a lot more comprehensive than it was 3, 4 years back. So to make a long story short, I don't believe that 100% or even 80% of our acquisitions would be data center related, number one. Number two, the data center business won't grow 25% to 30% every year.

So we can discuss whether the growth rate long term is going to be 10%, 15% or 20%, but it won't be 30% or 40%, which was the case last year. And hopefully, the building market will also rebound. So you have to put all that into your model. Now would it be a bad news for Legrand if the data center business was to be 40%, 42%, 44%. I don't believe it would. It would, I think, give us additional growth potential. And from an investor standpoint, I think it will be good news, more than bad news.

[Operator Instructions] We will now take our next question from the line of Alexander Virgo from Evercore ISI.

I wondered if you could just give us a little bit more of a sense on the North America business. I'm just trying to establish, I guess, going back to some of the earlier questions, growth from data centers versus growth from non-data centers. Because I mean, it looks like even at 23, your non-DC business is growing pretty well, actually, probably a little bit stronger than I would have expected. So I'm just trying to get a sense of what's driving that, the breadth of the growth in the portfolio. And then just yes, if you could give us a little sense of color on DC in North America, that would be super helpful.

Well, yes, the non-data center business is growing. So the data center piece is growing more than plus 30%, as I said. The non-data center business is growing. And within the non-data center business, it's all -- it's not resi, it's everything related to energy transition outside the resi. So again, it's all those verticals which we are now targeting, health, education, infra, industries, transportation and so on and so forth. So complementary verticals that we have progressively added either organically through the reallocation of some resources previously dedicated to office or inorganically through some of the acquisitions dedicated to data center, which we have made, the Girtz, the Kratos, Avtron and so on.

So energy transition in new verticals, which is growing nicely. As far as the resi, it remains quite depressed. But again, it's 10% of our U.S. sales. And as far as the office market is concerned, we are seeing no rebound to the office market. And the usual KPIs we are tracking vacancy rates, for example, or square feet being built are not really improving. So we are successfully doing what we said a couple of years back we would do, i.e., we are repositioning the group in the U.S., not only into data centers, but also into other verticals than resi and office, and this repositioning has some benefits.

We will now take our next question from Eric Lemarie from CIC CIB.

A question on data center. Do you start to see some new players coming challenging your position in -- especially in the U.S., players coming from, I don't know, other businesses or the geographical area?

Well, not really. Well, we have new entrants, which have bought some assets, especially in liquid cooling, which has been a very attractive spot to many -- to a lot of people. So you could see, as I could, a couple of deals being done lately at quite healthy price on some liquid cooling assets. But otherwise, no, I mean, data center market has always been quite competitive, as competitive as the building market actually in the U.S. and elsewhere. You have a lot of tough guys. These are big companies or smaller ones. But I haven't seen an increase in competitive intensity in data center.

Okay. And if I may, a very quick follow-up. You mentioned this energy transition solution very well oriented in the U.S. Do you see the same trend in Europe, nothing yet?

Yes, it's better than Essentials in Europe by a few percentage points. Well, it's not as spectacular as you can see in businesses such as HVAC because of the heat wave. So for example, we're not selling air conditioning or we're not selling a heat pump, but we are selling the back-end infrastructure that supports HVAC, heat pump or electrification. So again, switchgear, transformers and so on and so forth. So yes, in Europe, if we look at the minus 2% we are doing, actually, the energy transition business is growing in Europe. And we like it to grow more, but it's growing, whereas the Essential business is down.

We will now proceed to take our next question from Aron Ceccarelli from Bank of America.

I have one on M&A. You have deployed close to around EUR 1 billion on acquisition in H1 alone. Given the increase in scarcity and valuation of quality data center assets, where do you still see opportunities to create value through M&A? And are there segments where you're simply unwilling to pay current market prices?

Well, I don't really know what you call current market price. For Legrand, current market price are 10x EBIT. This is the price we are paying, right? So if the question is, do you see more opportunities to do M&A at 10, 11, 12x EBIT, the answer is yes. we have a number of discussions going on at this level of price. So well, again, we don't intend to spend EUR 1 billion per semester. And we've done a lot of acquisitions for the past 18 months. So the pace will slow down by definition.

We won't have a great impact of 8% every year. But yes, we see a lot of opportunities at very reasonable prices. And why do we have so many opportunities? Well, it's because the model of Legrand is built this way. So we have a pipeline of 350 companies that we are tracking. We have relationship with everybody. We are paying reasonable prices at fair prices. We are very fast in executing deals. We are probably targeting animals which are probably smaller for many other players.

So the sort of EUR 50 million to EUR 100 million or companies we are targeting are probably not in the scope of some of the other bigger than Legrand industry players. We are good at docking. And I have to say that the results of the company we acquired back in 2025 are very good, including Avtron, very, very good, actually better than expected, to tell you the truth. So now there's no reason why we would slow down. We -- I mean, there's no reason why we will stop. We will slow down in terms of pace, but we won't stop and we -- and you should expect to see more deals coming in the quarters to come.

As far as the financial capabilities are concerned, we have a leverage at the end of June, which is 2.4x EBITDA, which is a bit higher than our historical average, which was comprised between 1.5 and 2, but it's not a big deal. It remains a reasonable level of leverage. We are deleveraging fast when we pose acquisitions. And it won't be an obstacle to do deals if we think that there's a very attractive company fitting well into our setup at reasonable prices, even with the level of leverage, we can, of course, do it. So yes, we will continue.

If I may, just a quick follow-up on the -- on your Pathway business, you had a great success on developing the Starline brand to multimillion euros business. Now you acquired a smaller business in medium voltage switchgear, Kratos at the beginning of this year. And the medium voltage switchgear is probably a little bit more consolidated market. It's less close to your core because it's medium voltage. We start to see some of the high-voltage players coming into that market as well. So what does it actually take to win in MV switchgear? And do you think you are potentially able to replicate what you've done with Starline with Kratos now?

I think there is a fundamental misunderstanding of what the competition in the market is, you have to understand the market. And take, for example, medium voltage. In the U.S., well, you have a very few limited number of companies doing circuit breakers. You have basically the big 4, which are doing medium and low-voltage breakers. But then you have a lot of smaller companies integrating those breakers into their panels and doing highly engineered, customized, very technical panels for data center customers, but for other customers, incorporating the breakers from X, Y or Z and Kratos is one of them.

Kratos do not have its own breaker capabilities, but it's integrating third-party breakers, could be AC, could be DC into big, big panels, which are very complicated to do, delivered within a few weeks and serving the needs of data center customers. And this market is highly scattered with additional actually consolidation possibilities. And the one having the relationship with the end customer is Kratos.

Kratos is working with the design teams of its customers on specific design, on-demand design of very technical big panels, and then we'll incorporate the components from X, Y or Z. And by the way, it has very nice margins. So this medium voltage market, as you call it, it's not one market with 4 big guys holding each 25%. It's a market with a number of component suppliers, some of them being the big names you know and multiple smaller players, very good, very technical with a strong team of engineers, very good service, sometimes on-site service to do commissioning and testing, able to incorporate those components into subsystems which are very appreciated from customers.

Now if the question is, do you intend to grow Kratos 20%, 30%, 40% per year? Yes, of course, it's an objective. We have designed a business plan, which incorporates a lot of growth for Kratos. And since the beginning of the year, well, the acquisition is quite recent, but since the beginning of the year, Kratos is growing very nicely and has an order book, which makes us very confident on the fact that the business plan we have designed at the time of the acquisitions will be meet or even beat, if I may say.

We will now take our next question from James Moore from Rothschild & Co Redburn.

Benoit, you said around 80% of the portfolio is protected from a move to 800 VDC. But as AI data center architectures evolve, do you expect OCP and other emerging standards to lead to a more open multi-sourced ecosystem in which, as you said in the past, each submarket is determined by the individual players? Or do you think value is going to concentrate into a smaller number of integrated power platforms?

I'm not sure. I'm not sure because take OCP, for example, it's a good example. So OCP for those who enter the market, OCP is a sort of common standard for racks, which has been developed by a few hyperscalers. It's not because you have a common standard that you have commoditization or concentration of the product family. For example, you have -- I mean, you have common standards in many product family. You have common standards in jacks. You have common standards in circuit breakers, you have common standards in many, many things.

It did not lead to a concentration over a few market players because you have a lot of different ways to add value into an OCP rack. The rack itself gives you a certain ability to design differently from one player to another. Then you have the way everything is organized within the rack and then you have the components and so on and so forth.

So I don't believe that any of those architecture, neither the OCP, the AC/DC hybrid model, 800-volt DC, 1,000 volt DC or whatever, will lead to a concentration of player. I think it will bring some innovation to the market. It will probably give a sort of competitive advantage to those who already have the relationship with the hyperscalers, such as we do, to those who have already a large catalog, a large portfolio of products to those who have the technology or if they don't have it in-house, who have the supply chain to onboard EV technology from third party.

So that's why I'm very confident on our ability to be part of the 2 architecture. Now again, 100% of the orders everybody gets today, not only Legrand, but everybody gets on this market are based on the traditional AC architecture, 100%, even the orders, which should be delivered in '27, '28. So it's not for today. It will be a good news because the more added value you bring to an architecture, the more ability we have to sell products. But again, the penetration rate by 2030, which is within 4 years, would still be limited. Core assumption, I remind you what I said at the beginning of the call, core assumption is 10% to 20% for hybrid, a few percent for LVDC.

Very clear. Could I just follow up with one clarification or follow-up on side car. Where specifically do you gain or lose content? Is the incremental opportunity primarily existing products, busway, protection distribution? Or is it entirely new product categories that you're now designing and might launch in Singapore or the likes?

Well, for us, it's mostly additional value. For the players who are in UPS, you would argue that with the sort of disaggregation of the end of the powertrain within the white space, this architecture needs no UPS, but this additional object, which is a side car. Well, I was telling you that we were a significant U.S. player, but unfortunately, not in data centers.

We are a significant UPS player, but not in data centers. We are a significant UPS player elsewhere in commercial buildings, in health -- hospitals and hospitality and so forth. But in data centers, we've not really been able yet to enter the UPS space. So we have not -- we have almost nothing to lose because we're not selling UPS. We have only to gain because there's this new object, which is a side car. Now it includes a number of components, which we can either develop ourselves or once again source. Even in a powertrain, we're not doing all components. Even in a rack, we are not doing all components. We can either develop or buy. So it will mostly be an additional value for Legrand. Now again, welcome to Singapore.

[Operator Instructions] And the question comes from Ben Uglow from Oxcap Analytics.

It's a slightly blunt follow-up on some of the earlier discussions. What I'm trying to understand is not the direction, but the magnitude on the European margin. 18% is the lowest level we've seen on your European margin since that COVID quarter, and that was against a completely different volume backdrop. Benoit, you talked about, I think maybe I understood it, but bearing maybe more central costs. We talked a little bit about volume. But if we have to simplify, is this about just pricing and price cost? Is the bulk of that gap coming from price cost? And am I right to assume that the majority of that will be alleviated in the second half? Just understanding why it's down there, please? Sure.

Well, I will let Franck take the question, Ben.

Yes, Ben, it's very consistent with what Benoit said earlier. The 18%, if it has to be compared to last year, it's close to minus 5 points. So it's low. But the 5 points, gross margin is holding well. SG&A with the pattern of Europe, it's not a question of adaptation. It's just some costs are located in Europe. SG&A is minus 30 bps roughly. And then you have other operating items, minus 140 and especially with the exceptional restructuring that we already quoted and which is very legitimate in Europe, look at our sales, it's legitimate adaptation with the restructuring, which will deliver paybacks for the future. So on the gross margin side, Europe is doing the job in terms of pricing versus inflation.

It's mostly SG&A, which are a bit more fixed than elsewhere and which -- and also a number of central costs, which we'll not cut because the European volumes are going down and restructuring. You may have heard, Ben, for example, that we are closing 4 sites in France. So even in a country like France, which tends to be a bit more sensitive than elsewhere, we are closing sites because we feel that we should continue to adapt to the reality of the building market, which is not yet recovering.

We will now take our next question from the line of William Mackie from Kepler Cheuvreux.

Perhaps I'll just have the one question as a top-down conceptual. You've upgraded your organic growth guidance significantly, but you've left your operating profit expectations flat. How would you characterize the implied lack of operational gearing when you think about the various buckets, including mix evolution, cost and price realization?

Well, we did not expect when we entered the year to have leverage, even though we are shooting not for 8% to 10%, but we're already shooting for significant organic growth increase. So you have different brackets. Well, you have -- well, number one, the dilution from acquisitions, even if limited, we expect to have a slightly dilutive impact from -- on the margin from acquisitions in 2026.

Number two, we have adjusted our price, as you know, and our target is, as usual, to compensate in value the increase in purchase price through pricing. It can have a slight negative impact on margin. It's not a problem. So compensating in value, not necessarily in margin. Well, we have the one-off costs, which remains significant because we intend to keep doing a restructuring. And then we have also all the inefficiencies that comes with the strong growth we are experiencing in data center, which is difficult to quantify, which to be very candid, which we haven't quantified.

But when you have a big customer asking your products to be delivered on site next week, well, sometimes you are doing a plane instead of a ship. So altogether, this 8% to 10% organic growth or the 16% to 19% total growth will translate into indeed a margin between 20.5% and 21% which is not that bad, which remains at a good level. Now does it mean that we are not doing productivity? Well, the answer is no. I can share with you an interesting number for H1. So our volume is up by close to 7% in H1. Like-for-like number of people is flat. So yes, we are doing productivity, and we intend to keep doing productivity. This is one of the reasons why we have significant exceptionals. But at the same time, we have dilution, inefficiencies, purchase price increasing and so on and so forth.

And specifically going back to the follow-up on the last question. Your SG&A expense in Europe was up EUR 50 million quarter-on-quarter Q2 on last year against less growth in Europe on revenue. How should we think about that? Is that a new base? Or should we think that there were some onetime charges for repositioning or provisioning or reserving, which will reverse as we go into the second half of the year?

Globally speaking, all that is more or less a run rate with dedicated investment, for example, in R&D, in digital. So all that is preparing the future. There is just a single onetimer, which is the shareholder plan, which is hitting only Q2. And the global -- the total amount for that is a little bit above EUR 10 million for the group. I will not disclose the number for Europe alone, but this is for the group. But this is the only one-timer or otherwise, as I said, we keep investing for the group in Europe. We are managing the total P&L.

Now is -- I mean, a couple of questions on the margin in Europe, is the margin in Europe a problem for Legrand. The answer is no. Clearly, we manage the group -- the margin at group level. Whether we have a little bit more restructuring here, a little bit less here because we are closing sites in France and maybe not in the U.S. and opening sites in the U.S. Whether the R&D cost in China or in India. All that for us, it's, as we say in French, right pocket, left pocket.

What matters is the margin we are able to have at group level. And again, with 20.5% to 21%, it's a very healthy level of margin. And the priority, to make thing clear, the priority for more than 2 years now has been put on delivering more growth. and especially more organic growth because we feel that there is a historical opportunity for Legrand to accelerate its top line potential, which has been stuck at 1% to 3% for years.

And we've been able to reposition the group towards data center and energy transition. And our objective is to grow the group as fast as possible while maintaining a satisfactory level of margin and a satisfactory level of free cash flow. It has been the target. The target has not been to improve margin for the past couple of years. And this is a deliberate decision. And I think it's in the interest of our customers and our shareholders.

William, I did not mention because I hope it's clear for you, the number you quoted is not on a like-for-like basis. It's including acquisitions. And we have consolidated a few acquisitions in Europe. So organically, in Europe, we have gross margin, which is a little bit under pressure as elsewhere, but nothing significant. We were able to pass on the selling price. We have SG&A, which are not adjusted as much as you could think of for 2 reasons, a few one-offs like the shareholding plan, but it's not big cost. And number two, because it has -- it bears a lot of central costs, R&D management, AI and so on and so forth. And last, more restructuring because we are closing a number of sites in order to keep optimizing our footprint. Nothing to be worried about. And that's it.

That's the end of the question-and-answer session. Thank you all very much for your questions. I'll now turn the conference back to Mr. Coquart for his closing comments.

Well, thank you very much for your time and for your questions. Should you have more questions, you have the whole team at your disposal to answer. And for those of you who are lucky enough to take a summer break, I wish you a good 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.

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.