Legrand SA (LR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to today's Legrand 2020 Full Year Results Conference Call. [Operator Instructions] For your information, this conference is being recorded. At this time, I would like to hand the call over to CEO, Benoît Coquart; and CFO, Franck Lemery. Sir, please go ahead.

Thank you. Hello, everybody. Good morning. Franck Lemery, Ronan Marc and myself are happy to welcome you to the Legrand 2020 Results Conference Call and Webcast. Let me remind you that we have published today our press release, our financial statements and the slide show to which we will refer. Those documents are available on the Legrand website. Please also note that this conference call is recorded and webcasted. Let me start with a few opening remarks, following which Franck and I will comment into more details our full year results. I begin on Page 4 and 5 of the presentation with the 5 main takeaways of today's release. First, in the context of the crisis, Legrand deployed a proactive and responsible approach. Second takeaway is that while strengthening its competitive positions, Legrand delivered both financial and ESG very good performance. With sales declining minus 7.9% in 2020, the adjusted operating margin reached 19%. Free cash flow to sales stood at 7% and we achieved 128% of our CSR roadmap targets. Third, while having accelerated synergies with previously bought companies, we announced today 3 new acquisitions specialized in connectivity and energy efficiency. The fourth takeaway is that Legrand has enhanced its growth model, which is clearly well profiled for the post-crisis period. Now last takeaway, Legrand is developing its midterm model further. So moving now to Page 7 and 8 on the responsible management of the crisis. From the beginning of the crisis, the group has focused on taking a responsible approach to all of its stakeholders. By -- for example, by immediately protecting the health and safety of its employees and partners; and maintaining services to customers, notably with an early reopening of production plants as of April. Page 8, Legrand also accelerated one-off and structural initiatives to strengthen the pillars of its medium and long-term goals, including many marketing initiatives to grow market share, swifter digitalization throughout the group, quick and targeted adjustments of its cost base, a sustained drive for innovation with new product launches and safeguarded R&D capacities, finalization of 4 acquisitions and keeping active contacts and stepped up environmental, social and governance commitments with, for example, new carbon neutrality targets. After this introduction, let's start with an overview of sales on Page 10. On the backdrop of an unprecedented crisis, sales retreated in total by minus 7.9%. This trend resulted from an organic decline of minus 8.7%, quite similar in both mature and new economies. In addition, the increase in the scope of consolidation was a positive plus 3.6% while the impact of exchange rates was negative, minus 2.6%. Based on acquisitions applied to the last 11 months of 2021, the average ForEx rates observed in January, then theoretical annual ForEx effect for 2021 would be around minus 3.5%. Let's -- let me now go into more details regarding the like-for-like evolution of sales by geographical zone. Please refer to Pages 11 to 13 of the slide show. In Europe, organic sales were down minus 7.9% in 2020. In mature countries, sales declined by minus 9.7%, driven by a particularly negative second quarter due to lockdowns as well as a steady destocking by distributors. In new economies of Europe, sales were up a solid plus 1.9%. In North and Central America, on Page 12, organic sales retreated by minus 8.7% in 2020. In the U.S., sales declined minus 7.8%, including minus 10.7% in the fourth quarter alone. Good trends in busways and PDUs for datacenters as well as in offerings for residential spaces were not enough to offset other segments. Should be reminded that we had a good relative performance in the fourth quarter of 2019. Let me now move to the last zone on Page 13 with rest of the world. Sales were down minus 10.3% organically in 2020. In Asia Pacific, sales retreated minus 7.1%. The area's overall sales were steady excluding India, which was severely hit by the crisis. In South America, net sales were down in many countries, declining minus 14.3%. And in Africa and the Middle East, sales were down minus 16.6%. These were the main comments on sales. Let me now pass the mic to Franck for more colors on our solid financial performance.

Thank you, Benoit, and very good morning to all of you. I will start on Page 14, where I would like to stress 2 points demonstrating the good resilience of the adjusted EBIT margin. First, before acquisition, adjusted operating margin for the year came to 19.1%, which represents a limited 0.9 b point decline versus 2019. Excluding the increase in exceptional cost on gains and despite a market retreat in sales, the adjusted operating margin for 2020 was down by only minus 0.3 point, reflecting the effectiveness of early measures to offset the impact of the crisis. Second is that excluding exceptional item, the adjusted EBIT margin for 2020 stand at 20%. Moving now to net profit on Page 15. It was down minus 18% in 2020, reaching EUR 681 million. This decline comes from the decrease in operating profit, together with an unfavorable trend in net financial result. A positive impact came from the decrease in absolute value of corporate income tax. Let's now share the last part of the financial performance on Page 16, regarding free cash flow and balance sheet. First, you can see that cash flow from operations came to EUR 1.109 billion or 18.2% of sales, down a very limited minus 0.2 points from 2019. Then working capital requirement decreased significantly at 6.8% of sales. And therefore, the ratio of free cash flow to sales reached 16.9%, i.e., plus 1.1 points versus 2019. Last, the balance sheet remained solid with, first, a net debt-to-EBITDA ratio of 1.9%; and second, cash and cash equivalent of EUR 2.8 billion. These were the key topics on the Legrand's 2020 financial performance. I give now the mic back to Benoît.

Thank you, Franck. Let me present now our 2020 ESG achievements on Page 17 to 20 of the deck. So Legrand launched in May 2019 its fourth CSR roadmap structured around 10 key challenges that contribute to the UN Sustainable Development Goals. On Page 18, in 2020, Legrand reported an overall achievement rate of 128% of its CSR roadmap, plusing it again, ahead of schedule and demonstrating the group's commitment to creating sustainable value. On the next pages, 19 and 20, Legrand was again very active, enabling, for example, its customers to save 3 million tons of CO2 on the year while developing skills and promoting diversity at the workplace. 2 slides to conclude on 2020. On Page 21, Legrand strengthened competitive positions in its main market while protecting its margin, generating strong cash flow and delivering CSR achievement ahead of its roadmap. And on Page 22, Legrand will propose a payment of a dividend amounting EUR 1.42, up 6% versus 2019. This would place the payout ratio at 56%, in line with the group's practice of offering an average rate of around 50%. So let's move to the fourth part of this presentation on Page 24 with external growth. So today, Legrand announced 3 new bolt-on acquisitions of companies specializing in solutions for connectivity and energy efficiency in the U.S., in Netherlands and in Italy, for total sales of close to EUR 120 million. Those are all highly complementary, well-known players with very promising positions. Now on Page 25, Legrand has continued to focus on efficiently docking its recent acquisitions and maximizing synergies. In 2020, the group accelerated the successful rollout of new product lines outside their home countries. Now we would like to look at the future through the fifth part of this presentation to see how Legrand enhanced its growth model so that it is well profiled for the post-crisis period. I will be quite fast on this very important part from Page 27 to 44. But, of course, I'll be happy to answer any question you may have and to come back to a specific point. So Page 28, with solid leading positions, accounting for 2/3 of its sales, Legrand is a key player and a pace setter in its markets. The group exposure is well balanced between verticals. Each of them benefits from very supportive long-term trends such as demography, lack of housing, new digital usage, search for comfort and safety, energy savings and more. Page 29, one of the key pillar of organic growth and leadership is innovation. Legrand pursued its innovation strategy, devoting over 5% of sales to R&D and maintaining, for example, its software teams, who account for over 15% of R&D staff. From Page 30 to 33, an update on Eliot, which is, as you know, the Legrand program for connected offers that we continued to expand. It now represents 13.1% of total revenue with a good resistance in 2020. Amongst all those topics, I would highlight the successful docking of Netatmo, launches of new ranges and continued geographical rollout. On Page 33, a key innovation through partnership, the co-development of an innovative autonomous wireless connected switch that requires no battery. Now from Page 34 to 38, we have listed some examples of products that meet emerging new needs, with, for example, from Page 34 to 36, offers that can bring close to 10% energy savings at home, 5% to 15% in data centers or up to 55% in nonresidential spaces. And from Page 37 to 38, you will see new product launches, answering the needs of improved connectivity, new work modes, security and increased comfort. This was for organic growth. The second growth engine of Legrand, as you know, is external growth. On Page 39, Legrand operates in a market of which half is managed by small and mid-sized companies. This offers solid scope for external growth. We track a portfolio of 300 leading local players with whom we keep very active contact. Page 40 and 41. In its ongoing drive for efficiency, Legrand stepped up the pace of its digital transformation by increasing its digital presence and doubling its investments in Factory 4.0. Page 42 to 44, last part of this chapter 5. For over 17 years, Legrand has deployed a demanding and acknowledged approach to ESG. Legrand aims, in particular, to achieve carbon neutrality, in line with the highest requirements, limiting the global increase to 1.5 degrees Celsius above pre industrial levels. Legrand is also encouraging diversity in the workplace and is recognized for its exemplary governance through an independent, gender balanced and international board. Coming now on Page 45. Backed by a proven growth model and offers driven by long-term market trends, Legrand is developing its midterm model further. Over a full economic cycle and excluding a major economic slowdown, the group aims for an annual -- sorry, an average annual growth in sales, excluding exchange rate effects of between plus 5% and plus 10%; an average adjusted operating margin of approximately 20% of sales, as usual, of course, including restructuring costs; a normalized free cash flow of between 13% and 15% of sales on average. At the same time, Legrand will continue to deploy a bold and exemplary ESG approach, driven by demanding road maps with a particular focus on the fight against global warming and the promotion of diversity. And now on Page 47, the last topic of this earnings release, with our target for 2021. Based on current macroeconomic projections, which are still very uncertain, and assuming a gradual improvement in the world health situation, Legrand has set the following targets for 2021: organic growth in sales of between plus 1% and plus 6%; total impact of the broader scope of consolidation on sales of at least plus 3%; adjusted operating margin before acquisitions, so at 2020 scope of consolidation, of between 19.2% and 20.2% of sales; achievement rate of 2021 targets in CSR road map of at least 100%. We are now ready to answer your questions. Thank you.

[Operator Instructions] We have our first question from Andreas Willi from JPMorgan.

My question relates to your guidance and assumptions. Maybe you could give a bit of a backdrop what you have assumed for the economy for your 1% to 6% range, particularly at the lower end, which looks quite modest. And your revenues in 2020 declined a bit more than some of the peers, given your geographic mix. So maybe why don't you expect also a bit more of a recovery of that lower level? And on the profitability, you said that 2020 was close to the 20% level underlying. You should have some volume growth in '21. You also have done quite a bit of restructuring in 2020. So why is the midpoint of the guidance for '21 effectively below the underlying level of 2020? Maybe you could also include in that comment, what you expect on price cost and raw material.

Andreas, so taking your 3 questions. So as far as the guidance is concerned for 2021, well, #1, we have, I think, to acknowledge the situation, remain highly uncertain and especially on the sanitary front. And clearly, if we take the 2 hands of our guidance, plus 1% to plus 6%, plus 1% assume a soft improvement in the sanitary situation. For example, a very low pace of vaccination, stronger-than-expected by most economic impact of this entire situation of the economy, lower-than-expected impact of recovery plans, potential additional destocking and a number of tensions persisting, if I may say, such as U.S., China and so on and so forth. And the higher end of the guidance, plus 6%, it's the other way. It implies an effective pace of vaccination. It implies that we do not discover in a few weeks and a few months that there are variants that are resistant to vaccination and that lead the countries to take additional sanitary measures, global resilience, investment and household consumption. So the plus 1% to plus 6% implies a sort of those 2 scenarios, very soft improvement in the same situation and stronger improvement. It does not include, of course, the situation, whereby the situation in 2021 on the sanitary front would be worse than in 2020. For whatever reason, the vaccination is not effective at all, and there are new variants which are tougher than the existing one. But if we are in a series of additional tough lockdowns implemented by the government, then, of course, it's a different story. So this is sort of 1% to 6% guidance that we have set. As far as the comparison between X, Y and Z, I really have to, as usual, tell you that it's always difficult to compare apple and banana. All of us do have -- all the companies do have a different geographical exposure, do have a different vertical exposure. For example, looking at 2020, it is a fact that we are more exposed to other companies to Southern Europe, including France, Italy, Spain and Portugal, which were hit more than Northern Europe, for example, or Eastern Europe by the epidemic and by the series of lockdown. We are also quite exposed to geographies such as India, such as Latin America. So I think that you cannot compare between peers and companies without taking into account the geographical breakdown of our sales. What really matter and what we are looking at, at Legrand is geography by geography, how our market share is moving. And that's the most important piece for us. We, of course, do not want to see Legrand losing market share on its key market segments. And we have done this deep dive into our main geographies, and I can confirm that in 2020, our market shares were held very firmly. I can take 2 examples, starting, for example, with France. France saw a decline in sales in 2020, a very solid H2, growth in Q4. And we believe that in France, we have gained market share in a lot of our product families, thanks to a lot of growth investments we have made in the previous years, launching a series of new products, especially user interfaces, pushing a lot connected products and so on and so forth. Second example, the U.S., where, of course, the situation in the U.S. is very different between the various verticals. But if you take, for example, data centers, we have high single-digit growth in data center in the U.S., especially on products such as busways and PDUs, and we think that we are significantly gaining market share in the U.S. in data centers. And even in the product families where we see drop in sales in the U.S. because they were more exposed to nonresidential spaces, for example, our market shares are held very, very nicely. So when comparing Legrand with other companies, you should really take into account the geographical breakdown of our sales and the vertical breakdown of our sales. Now as far as your third question, which is the -- why are we shooting for a 19 point -- I mean, for 19.2% to 20.2% with the midpoint at 19.7%. Number one, we have to acknowledge that this would be a return to the historical level of margin of about 20% or close to 20%. Number two, it would then be very consistent with the long-term model, which we are developing further today. We are shooting for 20% across the cycle. We're not shooting for 22% nor for 18%. So it's very consistent, both with the history and with our midterm model. And you also have to take into account that it includes restructuring as usual, so it's all-in. Our EBIT level is all-in. Now I understand that your question is with all the cost savings that you have done, all the restructuring that you have done, why is your margin not going toward the 21% or 22%? Well, a number of savings that we done in 2020 are nonrecurring. When it comes to cutting, for example, travel expenses, to reducing advertising and a number of other stuff, some of those costs were one-off. Number two, we believe that this above 20% margin is the right level of margin, which is a good balance between generating enough cash in order to finance our long-term growth, R&D acquisitions and so on and so forth and delivering good value. So it's a good compromise. It's a good trade off. And we believe that this is a sort of long-term numbers that we should shoot for. So in other words, to make the long story short, the 2021 guidance is getting very close to our historical average. And to the long-term model, we are developing further today.

Next question from Lucie Carrier from Morgan Stanley.

I have 2 questions and 1 short one. I'll go one at a time. I was hoping you can maybe comment a little bit on what you are seeing in North America in terms of trend and also in terms of current trading maybe. Because, I guess, the fourth quarter decline was maybe looking -- looked a little bit more pronounced maybe than some of your peers also in North America. And also the comp effect was not particularly demanding in the fourth quarter. So trying to understand a bit better the current trend in North America.

Yes. So the fourth quarter is clearly on the down side. You saw the numbers in North and Central America, it's down 10.6% in Q4. It's -- I wouldn't say that it's -- so 2 comments. Number one, the relative basis for comparison is quite demanding. You may remember, you see that last year, our sales were up in Q4 in the U.S., and they were down for most of our competitors. And we're down 1%, they were down 4%, 5% for a lot of our competitors. So our relative performance 2019 was very demanding. The first comment. Second comment, when we look at the peers, I wouldn't say that we should be ashamed of our performance. But, of course, again, you need to compare what is comparable. Some of our competitors are only competing against Legrand on data center, for example. And on this activity, again, our sales in 2020 were up high single digit. And I don't believe that we are losing any share to them or the contrary. And if you look at the U.S. peers, you have a number of companies, which are down 10%, 7%, 10%. So again, I don't believe that -- I mean, I'm convinced that we have -- we don't have any market share issue in the U.S., including in the fourth quarter. I don't believe that we are deviating from what similar companies with similar exposure are doing. The fact is that if I take a step down, there are -- so there are 3 segments in the U.S. You have residential, which is doing very well for Legrand, where we have recorded growth. And sometimes on some subsegments, very significant growth. And residential, but residential in the U.S., it's about 20% of our U.S. sales. Then you have data centers which again recorded high single-digit growth in 2020. So -- which are doing very well with significant gains in market shares, but it's also about 20% of our sales in the U.S. And then you have 60% of our sales in the U.S., which is all other kind of spaces. So all of the, let's say, nonresi spaces, it can be office, it can be shops, it can be a bit of industrial spaces. And definitely, this is a piece which was under pressure in the U.S. in 2020, coming mostly from the sanitary situation. And you have many big metros in the U.S. where people didn't go, for example, to the office for 10 months with very little renovation work being performed. So again, when looking at the Legrand performance, there's a clear split between resi data center doing well and the other nonresi space, which were under pressure in the U.S. 2 comments. Well, I will not comment on January sales because well -- company -- see, 1 month of sales is not really an event of any trend. What I can, of course, tell you is that, obviously, the month of sales is consistent with the guidance we are shooting. But I will not comment on any trend because I believe that 1 month does not mean a trend. Number two, midterm, I'm strongly convinced that the positioning we have in the U.S. and elsewhere and the fact that we have the strong residential business in the U.S. is a very strong competitive advantage compared to some of our competitors. So I'm very happy to have this nonresidential market position in the U.S. made of strong leaderships in, for example, architectural lighting, in energy efficiency through lighting controls, in audio/video, in cable management, in wiring devices. And I think that those very interesting leadership positions will bring significant growth and profitability in the years to come. It is true that the situation was a bit more difficult in 2020. I think you had a second question, if I'm correct?

Sorry?

I thought you had a second question.

Yes, exactly what I was going to ask now. So thank you for the comment on the first question. My second question was on M&A and the strategy. I appreciate, obviously, that M&A allows you to kind of target sometimes new market or reinforcing some market and you operate in a very fragmented industry. But when we look over time, it doesn't seem necessarily that the M&A that you have done has enhanced the organic growth profile because we don't really see an acceleration on the organic growth over the years and also on the margin profile. And at the same time, it seems that the return on capital employed on the company tends to be also a little bit impacted by that. So how should we think about the M&A strategy in terms of bringing, what I would call, really additional value to the financial profile of the company going forward?

Well, it's an interesting question. I'll take each of your points one after the other. So the acquisitions made by Legrand not always are accretive on organic growth. And what we are looking for when we are buying a company, it's not always this company to be accretive and organic growth. I'm going to give you 2 examples. When we buy Netatmo, yes, of course, the main objective is that Netatmo enhance the growth profile of Legrand. And when we bought Netatmo, we told everybody that as part of our main 3 targets, we wanted to enjoy the same growth rate on Netatmo than before the acquisitions. And that's what we've been doing. If you look at 2020, Netatmo grew double-digit for the full year. It grew double-digit with a total organic sales being down minus 8.7%. So there is, let's say, about 20 points difference between the total Legrand group and Netatmo. So it is clearly growth enhancing, and we are very proud of this performance in a context which was difficult. In the context, where Netatmo is a lot exposed to countries such as Italy, France, Spain, which suffered from the epidemic. Now you have other cases where we buy companies that do have 1%, 2% or 3% organic growth profile. So of course, when joining Legrand, we try to achieve revenue synergies. But we all know that the revenue synergies are slow to come and do not turn 1% or 2% organic off growth company into a 10% organic growth company. But why are we buying those companies despite they are not able to achieve, let's say, 10% organic growth? It's because they bring us something else. They bring us stickiness vis-à-vis the customer. They bring us leadership position so that we can embark other product families. They bring us profitability, cash flow and many other topics. So yes, organic growth is not the only criteria we have in mind when we buy a company, and we are looking at everything, organic growth, profitability profile, relationship with the customer, potential cost synergies, value creation and so on and so forth. Now when it comes to return on capital employed, well, return on capital employed, number one, we have to be clear on the fact that we have a return of capital employed, which is well above the industry. I guess it depends on the way you compute it, but in 2020, it was about 16% return on capital employed was 18% in 2020 -- in 2019, sorry. And when we look at our peers, so adjusted for the step-up which was booked in 2002 during the IPO. If we look at our competitors, it's between, let's say, 10% and 15%. Where we are at 18%, let's say, excluding the crisis impact. So it's well above the one of our competitor. Now it is true that when you buy, for example, a Milestone, it has a negative impact on your return on capital employed. But is it value accretive? Or is it value disruptive? It is a very important question. I can confirm that when you buy a Milestone 9x EBITDA, which is what we paid for Milestone in 2017 -- Milestone is a company, which had more than 20% EBIT margin, it's a very value-accretive deal, and we are extremely happy to have done the transaction. So yes, the time you do the acquisition, it weighs a bit or it -- on your return on capital employed. But in terms of value accretion of EVA in absolute terms, this is very value-accretive transactions. So I've tried to be a bit precise answering your question. But if I step back, we will continue to do very active M&A policy. We have the strategic intent to do that. We have the pipeline to feed the strategic intent. We have a level of leverage and a cash flow generation, which allows us to do that. We believe -- I believe that it's a very important part of the Legrand business model. And I believe that over the long term, this is EPS accretive, EVA accretive and a good allocation of our cash.

I guess, I have to check with Ronan how you calculate the ROCE. We come to a slightly different number. And it's probably a bit difficult for us to compare you on ROCE by other companies, so we cannot compare you on organic growth with other companies. I guess, that's maybe the challenge. Just one last question, which is more mathematic on the M&A impact for 2021. You very kindly gave us the impact benefit on sales. How much margin dilution do you -- or benefit do you expect from M&A in 2021, please?

So I'll let you -- indeed, yes, with Ronan on the computation on the return on capital employed, which is quite straightforward. I know that then you have several ways of -- to compute it, but there's no magic -- no mystery into computing this number. But please, yes, with Ronan today, and he'll be delighted to take you through the computation. As far as the dilution impact of 2020 -- on 2021, I can so. Maybe let me first remind you the numbers for top line. So we shoot to deliver at least 3% scope impact, and we have a carryover impact of 2020 acquisitions of 2.5%. So we have -- you have rightly come to the conclusion. You see that we have a go-get, if I may say, of 0.5% to be at least at plus 3%. This was for top line. And again, you see -- it demonstrates that we are strongly convinced that the M&A is a very wise use of our -- to spend our cash. As far as the dilution on earnings is concerned, we have no numbers to communicate to you yet. This is traditionally something we do when we release our Q1 and Q2 numbers. When if you look at the past 10 years, except the year during which we bought Milestone, which was accretive to our earnings, we have always enjoyed, let's say, between 0 to minus 40 bps of dilution. So it's highly likely to be within this range depending how much external growth we do, of course. But we have not a precise number to give you yet.

Next question from Gael de-Bray from Deutsche Bank.

I have 2 questions, please. The first one is really a follow-up on Andreas' earlier question on the guidance. Given the very easy basis of comparison for the first half, it seems that the revenue guidance would kind of imply that growth could actually turn slightly negative again in the second half. So I just wanted to get a clarification on this. And then the second question is about the dynamics in the nonresidential market, in particular in the U.S. I think one of your peers recently indicated that they had seen a slight improvement sequentially in the nonresidential market throughout the quarter and continuing in January. So I wanted to get your views on this case.

Gael, so we're, again -- sorry to insist on that, but we are beginning of February, and we can see that the number of contamination is on the rise in many countries. You have a number of countries which are lockdown that -- so again, it's not that we are pessimistic for 2021. And I hope that you can read in our guidance and midterm model that we are extremely confident in the strength of the Legrand model and our ability to leverage the recovery whenever it comes. But we have to acknowledge that the situation is still highly uncertain. Talking about the basis for comparison, which is I understand your question. It is true indeed that we will have an easy, if I may say, basis for comparison starting mid-March until mid-May, which was a period during which a lot of our countries were under lockdown, mostly in -- I mean, as I said, not only in Western Europe, but also in a couple of Asian countries, in Latin America and a couple of U.S. states. So we will have an easier basis for comparison. Let me remind you that our Q2 sales last year was down by more than 22%. And we will have a more demanding basis for comparison in H2 and especially in Q3. Our Q3 sales were almost stable in 2020. So yes, we will have a very -- quite of a strange profile in terms of basis for comparison. Now the question mark and the fact which we don't know yet is when the effective recovery will come, at which pace and in which geographies. So my comment was not saying anything about what the economy will be in H2, which I don't know, and I guess you don't know either. But it's really about basis for comparison and the fact that Q2 is going to be an easy basis for comparison. And Q3, a tougher one. And of course, you could say the same for margins. As far as improvement or not, I'm very, very cautious in commenting any sequential improvement or sequential worsening because -- and it might be different for other companies. But in our trade, again, 1 month or 2 month numbers should not be extrapolated. It depends on so many factors. It depends on the number of days. It depends on the inventory stocking or destocking from our distributors. It depends on 1 big project that you could get. It depends on many, many things. So I would hardly comment any trend, neither for the nonresidential in the U.S., nor for other topics. But again, coming back to the nonresidential piece in the U.S. I would really like to insist on the fact that those are made of extremely solid market positions with very, very strong leaderships. And that midterm, they are extremely good places to be. But again, we'll see in the months to come if we can comment on trends when we will release our Q1 numbers.

Next question from Martin Wilkie from Citi Investments.

It's Martin from Citi. Just a couple of questions. So the first one is on pricing. Obviously, we've seen some pretty high ramp-ups in copper cost and others. Just to understand a bit about the phasing of your price increases, did they go up meaningfully towards the end of last year? Is there still more to come? If you can just talk a little bit about the timing of those. And the second question was just coming back to the mix effect. You pointed out, correct, obviously, your mix can be different to peers. But understanding, is there a structural difference between your profitability in residential versus nonresidential? And within residential, in data center, it's measly different than operators and so forth. And I appreciate it, obviously, very enormously by product. But just to give some sort of sense if there was a margin mix difference between those key categories?

Sorry. So as far as pricing is concerned, let me maybe give you the numbers. So pricing for the full year 2020, our prices were up 1%, 1.0%. And in Q4 alone, our price was up by 1.3%. So Q4 pricing was slightly above the full year pricing. And of course, the pricing and -- our management of pricing had a significant impact on our profitability since for the full year, the price of raw materials and components was about minus 2%. So plus 1% in pricing, minus 2% in raw materials and components. So it had an impact -- positive impact on the margin. Now you have to understand that our pricing is not one price list that we issue on December 1, on Jan 1, all across our product families, across our geographies, and that will impact 2021 pricing. Our pricing is a mix of many things. It's a mix of price lift. It's a mix of managing the discount. It's a mix of end of the year rebate. It's a mix of using X or Y currency to give out a price out to our customers and so on and so forth. So going into 2021, we don't have a set price effect for all across the group. We will, as usual, adapt our pricing depending on the evolution of raw material and components, which are effectively on the rise in Q4 compared to the rest of the year. And we'll adapt it also to the currency evolution and so on and so forth. So what I can tell you as far as 2021 pricing is that as usual, we are monitoring closely the situation. This is a process which is well-managed and well under control at Legrand. Our prices will be up in 2021. I don't recall of any single year during which our prices on average were down for the past 20 or 25 years. So in 2021, our prices will be up. The extent or the magnitude of the price increase will depend on many factors, some of them being still unknown, such as, for example, what will copper, zinc, aluminum, oil components do in 2021. As far as mix on profitability is concerned, there's no structural reason why resi or nonresi should be more profitable than the other. It all depends on the market share we enjoy on a given product family. If you are a leader in a given product family, which is non-resi, and if you're not a leader in a product family in resi, you'll be more profitable in nonresi and resi and the other way. So the profit -- sorry, the profitability -- the driver behind profitability, has always been and will remain the market share we enjoy on a given product family. So looking at the U.S., for example, because we have focused a lot on the U.S. nonresidential position today, there are product families where we enjoy higher-than-average profitability because we are leaders on those. And there are product families where we enjoy lower and average profitability because we don't enjoy a leadership position.

Next question from Andre Kukhnin from Crédit Suisse.

Thank you for giving a growth rate for the year. Could you give us an idea of how much you grew in the second half of 2020 and in Q4, in particular in that segment?

In the U.S., segment? I'm sorry, I didn't get your question.

It's on data centers in the U.S. and you gave the high single-digit growth number for the year 2020. I wondered if you could give us details on how much you grew there in the second half of 2020 and then in Q4, in particular?