Legrand SA (LR) Earnings Call Transcript & Summary

Hello, everybody. I hope you are warm and as excited as we are.

Yes. So good morning, everyone. We are very honored to welcome you to the Legrand 2024 CMD. I am Ronan Marc, I'm heading Investor Relations and also financing and treasury for the group. So our last Capital Markets Day was in 2021 in September, and it was, if you remember, a comprehensive exercise around our strategy and the definition of our midterm model. So today, we will develop 3 key topics. The first one will be a short reminder of who we are and then what we delivered against this midterm model, of course. Second topic will be going a bit in detail through the key trends shaping our future. And we will detail our path to 2030 and our growth enablers. The third part of the event will be the presentation of our ambitions for 2030. Now a bit of logistics. We will have a 30-minute break at the middle of the event, so at about 10:00 or 10:15. And then at the end of the event, at 12:00, we'll have a 1-hour Q&A live with all of you in the room, but also through a web chat for all the attendees on the webcast. And all the speakers participating to the event will be here to answer all the questions you would have. The event will finish at 1:00 p.m. U.K. time, and this is it. So now I'm handing it over to Benoît Coquart, the CEO of Legrand, for a short introduction.

Thank you very much. Hello, everybody. Once again, I'm honored to have you here today. A couple of words, so I discussed with one of you before entering the room, and he told me, "Look, guys, your 2030 ambitions look very much like your 2021 guidance, so you have to explain us what has changed and why Legrand is today stronger than it was a couple of years back?" And we have 4 hours to demonstrate that Legrand has changed, even though we have kept our strengths that we believe we are well positioned to make the most of the years to come. So a couple of words to start with. Compared to the last CMD, which was hosted back in 2021, what remains and what has changed? So what remains? We are the only sizable player in our industry. We have a unique positioning. I will comment on that a bit later, unique position of giant industries. We have natural barriers to entry coming both from our products and from our local presence. We have the sector's best cash flow and profitability, and we have a committed governance and highly engaged teams. Those are strengths of Legrand, which has not changed and which will remain in the years to come. What has changed compared to 3 years back? Number one, we have enlarged our addressable market. So we have a larger playground to play on of about EUR 130 billion. Number two, we have reinforced our growth profile. You know that we have invested heavily into what we are used to call the faster expanding segments, those faster expanding segments represented last year in 2023, 36% of our sales. We have a major data center exposure. Data center represented last year 15% of our sales. And if we had consolidated in -- the 4 acquisitions we made this year, this 15% would have probably been closer to 17%. So we have a large data center exposure. We have strengthened our core model, especially with 2 topics, which are very important to our model, customer satisfaction and R&D. And again, I will say a word on that a bit later. And we have raised our ambitions on CSR. We are currently closing our 2022-2024 roadmap, and we will soon open the next one. So what we have tried to do is to keep -- maintain reinforced the traditional strength of Legrand and adding a few specificities. We will have few characteristics we will describe. If we look at the numbers, we have taken -- we took a number of commitments 2 years back. And I'm happy to report that we have delivered as per the commitment. We told you we would grow between plus 5% to plus 10% per year, organic plus M&A, and we did plus 9.2%. So it is true indeed that we have made probably a little bit more pricing than expected, a little bit less volume than expected to be very, very open. We also have to admit that the economic environment, especially the building market hasn't been as supportive as we would have liked it to be. We told you that we intended to deliver an adjusted EBIT margin of about 20% of sales. We delivered 20.6%, so slightly above our midterm model. And we intended to generate free cash flow, normalized free cash flow between 13% to 15% of sales, and we delivered on the upper end of the range with 14.8% despite the investments we decided to make to reinforce a level of inventory in order to better serve our customers. So all in, I'm happy to say that we have delivered as per our plan. As far as today's agenda is concerned, so Ronan already said a few words about that, so we'll make a sort of a taxonomy of who Legrand is today and our strategic model pillars, then we will describe the past to 2030, and we will go segment after segment to tell you where we are in terms of product offering, what are the trends underlying each of the segments and what our strategy is. Then, we will go through our 2030 ambitions, and we will conclude. So starting with our -- the part 1 of our strategic model. [Presentation]

And I'm happy to welcome Franck Lemery, all of you know, the CFO of Legrand, and Virginie Gatin, our Executive Vice President for CSR, which will help me to go through this part. So a couple of words on Legrand. I'll try to go fast because most of those facts are known. Starting with our purpose or values, it's -- this slide is important because those values are really driving the relationship we want to entertain with our teams, with our customers, with our stakeholders as well as with our shareholders and with the financial community. A couple of words on our product offering. We happen to have the broadest product range in the industry. If you look at the Legrand catalog, we have 300,000 standard products, standard SKUs to which we should probably add something like 200,000 or 250,000 customized SKUs. We don't have the precise calculation to be fair. So we have a very broad product offering, and you see a couple of functions we are proposing to our customers. Of course, it is a lot of complexity to manage. Complexity in terms of engineering, complexity in terms of supply chain, complexity in terms of manufacturing, but it is also a fantastic barrier to entry. If somebody wants to compete against Legrand, if you want to be relevant, he has to have a couple of hundred thousand SKU, which is a lot of product to develop. This is probably the reason why we don't have a lot of cheap makers that are interested by our trades. They are focusing on businesses which may be easier to penetrate. We have quite a balanced exposure, which gives us some sort of resilience to crisis. We are doing more or less 40% of our sales in Europe, 40% of our sales in North and Central America and 20% in the rest of the world, of which close to half in renovation. And as far as end markets are concerned, slightly less than 40% in residential, slightly more in nonresidential; data center, as I said, 15%; and other 5%. So quite a balanced exposure. Again, that gives us some sort of resistance to downturns if any. As I said in my introduction, we have much larger exposure to faster expanding segments than we used to have. Last year, those faster expanding segments, namely data centers, connected products and energy efficiency solutions represented 36% of our sales. And as shown on this slide, in 3 years, we have added, both organically and through acquisition, more than EUR 1 billion of sales in those faster expanding segments. So our growth profile has been boosted, enhanced by those faster expanding. We have quite a unique positioning. We believe our market is worth approximately EUR 130 billion, as I said. So it's not a market which is as documented as other markets. So it's our own computation. And we think it is made of 2 sets of competitors. Large companies, it could be GAFAM, it could be electrical conglomerates, it could be a very large player, which indeed have strong financial and technological capabilities, but which have less focus on Legrand on our core market. If you look at our big listed peers, for example, all of them have an exposure to the building market, which is smaller than 35% of their sales. So they are doing many, many things, but less focus on the Legrand core market. And half of the market is made of small and midsized companies. We have counted 5,000 competitors, but it's likely that you have more than that, 6,000, 7,000 or 8,000 competitors. They are very strong and tough competitors, very active ones. They have a strong intimacy with local customers, channels, standards. They are really sticking to their market. And of course, there are also the core acquisition targets for Legrand. So these high fragmentation of the industry is for us a competitive challenge because we have many competitors to compete with. But at the same time an opportunity because it gives us the opportunity to purchase a number of companies. If you look at the market between 2019 and 2023, you see that our markets went up from EUR 110 billion to EUR 130 billion, not a lot of organic growth, I have to admit. Our estimate, and again, take that as an estimate because sometimes not easy to precisely size and measure the KPIs of our market, is that our market has grown all in. So volume and price, not more than 2% per year, driven by data centers. Excluding data centers, our market was flat and down in volume. But on top of the organic growth of our market, which hasn't been very, very supportive for the past 4 years, we have added new adjacencies. In other words, we entered into new markets, a number of additional solutions for data centers, liquid cooling, transceivers console, for example; connected healthcare and a few others. So we have added basically EUR 10 billion of additional market. So between 2019 and 2023, our market grew more or less from EUR 110 billion to EUR 120 billion, to which we have added EUR 10 billion of adjacency. This is really important to have in mind because this is part of the Legrand model, regularly, every year, every 2 years to add new market segments of EUR 1 billion, EUR 2 billion, EUR 3 billion accessible market and progressively to enlarge our market. So you may think, look, the market is worth EUR 130 billion, Legrand is EUR 8-point-something billion, so you guys have a remote 6% market share. You are a small company in your trade, how can you keep growing and be so profitable? The answer is on that slide. The key metrics for us is not the market share we have on the total market, but the percentage of our sales made with #1 or #2 positions. When you are on a given segment, in a given country, a strong #1, you are more profitable than anybody else because you have economies of scale, you are 2 or 3 times bigger than the #2 because you have pricing power, you are more able to resist during crisis because when there is a crisis, customers tend to fly to the leaders. You are more able to grow because when you're a leader, you are distributed everywhere with your distribution partners, you have a broad equity which is so strong that when you are coming up with a new product, your customers will at least try it. So being a strong #1 or #2 is a must in our business. And as you can see, we are doing 2/3 of our sales as #1 and #2. And this is more or less the same in all zones. You could imagine a full Legrand, we would have -- if we had 6% market share everywhere, we wouldn't be as profitable and as growing. But the 6% is actually a mix of positions where we have 30%, 40% market share and business segments in which we are absent. So this KPI is extremely important, and we are tracking it very, very carefully. We are delivering a major benefit to our stakeholders. We are in a complicated channel where we have plenty of distributors from large distribution chain to small retailers, lot of specifiers, engineering companies, architects, a lot of installers, contractors from the small guy who will come at your place to fix a panel board to the big contracting company, to maintenance teams, to panel builders, and of course, a number of end users from you as a homeowner to a Google or Microsoft as big customers. And to those customers, we are offering a number of benefits. We have a large offer. We have brand recognition. We have a strong installed base. So once again, the complexity of the channel is at the same time a strong barrier to entry and an opportunity for us to grow. We have enhanced our customer value propositions. It's not very much visible from the financial community. But for the past 4 years, we have invested heavily into 2 things: customer experience, so we launched a program which we called Best of Us in order to measure and improve customer satisfaction. So you see that our numbers are not bad in 2023. They could be even better, but it's a good starting base. We have a customer satisfaction rate of 78% and an NPS of 44%. And we have also kept investing heavily into product utility. Despite the economic environment, which has not been very supportive, we have not made any compromise in terms of investment in R&D and marketing. So we kept spending a lot in R&D. Between 2018 and 2023, our cash invested in R&D has grown by 27%. Interestingly, when we measure customer satisfaction, the top 3 items are -- where we are ranked the best by our customers, our product installation, product quality and product features with a total satisfaction of about 90%. Last slide, and I will turn to my colleagues. We have an organization performance model, which we believe is crisis-proof. Well, you know the Legrand organization. I will not describe it much. Maybe just to mention that we have a very reactive decision-making process, lean central functions, flat organization chart, solid process, well spread incentive model, perfect alignment in terms of incentive between a CEO, executive committee, management team, public commitment and the financial community. So the best evidence of this flexible organization is in 2020, you remember the COVID year, 2020, which was the worst crisis for a couple of decades. Our EBIT margin before restructuring was about 20%. So quite a good and healthy level of margin. And we have highly engaged team. A couple of numbers, 80% engagement rate in 2024. We have a low turnover, 7%. And we launched last year -- this year actually, the first employee shareholder plan, international, with a very strong participation rate. So that was a short introduction. I'm now handing over to Franck and Virginie for -- to continue to give you some insights about who is Legrand. [Presentation]

Thank you, Benoît. Hello, everybody. Very pleased to be with you today. I will drive you through the financial pillar of the Legrand strategic model. And to do so, I will illustrate it with the last 5-year performance. Before some heads-up about the context of this last 5-year performance, obviously, it has been quite a bumpy period. Many things have happened, many crisis across the world, which ended by hurting a little bit our market with probably volume flattish to slightly negative. But the most important thing to retain from that period for us and a much positive item is that energy and digitalization transition is a tailwind, and it is a tailwind, which is reinforcing. Now looking at our performance over the last 5 years and the pillar of Legrand model: first pillar, our ability to grow. In that adverse market conditions, we were able to grow plus 7% during the period, leveraging 3 Legrand strengths: one is pricing, second is regular M&A and the third one is the success of our faster expanding segment strategy. Those segments grew 15% CAGR during the period, combining M&A and like-for-like. Second pillar of our strategic model is our best-in-class profitability. During that period, those 5 years, including 2020, we delivered 20.2% of adjusted EBIT margin. Let me have a slight comment about what is adjusted EBIT margin for Legrand. It's all in. It can exclude restructuring exceptional item. It's not EBITDA. EBITDA would be well above 20%. So during that period, 20% -- 20.2% of adjusted EBIT margin, which has been -- which is a nice level, which has been sustained during the period, even slightly improved between the beginning of the period and the end of the period. And that despite the normal, the mechanical dilution of our M&A strategy. How did we achieve this nice profitability? It's about 2 main items. The first one, which is not a surprise for you, is our pricing power. Legrand is well recognized for its pricing power. Pricing power, it is, of course, the capability to pass through inflation, but above all, it is the recognition of the value proposition of our product. It's about the quality of our offering. It's not only passing through inflation. During those last 5 years, we can see on the slide that we have a quite a fine-tuned management of the balance inflation with sales price, raw material cost and wage increase, which were pretty much the same, around 23%, 24%. So for me, the 2 main takeaways of this slide, demonstrating our pricing power and our pricing strategy is first. During that period with huge inflation, we were -- we had an efficient pricing power, enabling us to offset inflation. Second takeaway is that the pricing was smart, was balanced in order -- and reasonable in order to keep the strategic asset intact and powerful for the next years. The biggest driver, finally, of our profitability during those 5 years is productivity. We have delivered quite meaningful productivity around those last 5 years. Talking about productivity, there are 3 main items that we are leveraging in order to unlock productivity within the group. The first one is kind of a daily continuous improvement with operational excellencies, deployment of best practices, what we are calling the Legrand way. We see that it's expanding everywhere and in every job. The second one are the opportunities provided by the digitalization. One good example is the Industry 4.0 that we are also broadly deploying in all our factories. And the third one is much more structural, it's much more about big move. We are talking about restructuring, restructuring in which we have invested, over the last 5 years, EUR 240 million. And what we can see on the slide are the results. Just 2 numbers, 2 assets, how efficient we have those 3 levers. Talking about headcount optimization, on a like-for-like basis, headcount in production diminished by 17%. It was also the case of a strong decrease in administration, of course, excluding R&D that was safeguarded. The second KPI demonstrating the productivity is about footprint consolidation, and the bridge illustrated the beauty of the Legrand model. At the beginning of the period, 1 of 20 industrial sites within the group, we acquired 20 sites. And despite that, at the end of the period, there were 111 industrial sites in the company. So that's it for productivity and profitability. Now third pillar of our financial model is the strong cash generation. The numbers speak by themselves, 15.5% of free cash flow in the period, 125% of cash conversion in the period. Obviously, it is the results first of the high profitability; second, the lean working capital; and third, low intensity business. Before wrapping up, just one word about those financial metrics within those last 5 years. In the last 5 years, the faster expanding segment share in our sales grew from 25% to 36%, so plus 11 points. With that, growth didn't change the big financial equilibrium of the group, 20% of adjusted EBIT, more than 15%; 13% to 15% of free cash flow; 5% of R&D to sale working cap. The change in the mix of our portfolio hasn't changed the financial profile of the group, which is still a very solid financial profile. As a conclusion, what was the value creation during those last 5 years? Sales, plus 40%; EPS, plus 50%; very solid free cash flow. Talking about capital allocation priority given in M&A, allocating a big part of our free cash flow to the growth. And second, dividend payout, which is attractive around 50%. And all that, keeping a strong balance sheet. And the last KPI is our whole share around 15% last year. So that's the -- almost the end of my presentation. I would like to share with you a short video to illustrate what we have seen about the productivity. It's a video which has been filmed in one of our factory in China. It's in Wuxi. It's a factory of roughly 300 people, and you will see what has been done in terms of productivity. [Presentation]

Thank you. And now let's speak about CSR with Virginie.

Thank you very much, Franck. Hello, everyone. So alongside our strong financial performance, we have a strong CSR performance, which I'll detail. We are creating value for our customers. And this is, of course, key for us, with our energy efficiency products that we enable them to save energy consumption, and therefore, emit less CO2 emissions. I think one interesting KPI behind this is across the last 2 years, 2022-2023, we enabled our customers to save 9.5 million tonnes of CO2 through our energy-efficient offers. So I think these are really important numbers. Benoît mentioned it as well, customer centricity is really key for us. And so we're really pushing the focus on customer satisfaction and everything around that. So customers really are the heart of our value creation. Other stakeholders, especially our value chain, is a really important pillar as well. We really want to help and to take on board a whole ecosystem on our CSR commitments and good practices. One good example is our supply chain. So we've been working with our suppliers, engaging them, and we have 195 key suppliers that are committed alongside with us to reduce their greenhouse gas emissions by an average of 30% by 2030. So we've been really working with them for them to really move on their CSR commitments. And of course, very important for us, our employees, and we really focus on creating value for our employees. This means that we want a safe, a diverse, inclusive and stimulating environment. We work very hard on many topics. And one key number I wanted to pick out is at the end of 2023, we had 29.1% of our management positions held by women. So that's an increase of 5.6 points since 2019, and that's a really important commitment, but also really creating value for all our employees, not just women, but just making us a more diverse workplace. So this is -- important part is the value we're creating, but it's also how we're embedding this into our performance. We have been committed to CSR for 20 years. This year is a 20-year anniversary on CSR. So I think important to explain this because it's really the way we work is a strong historical commitment translated into CSR roadmaps. Benoît mentioned it, we're currently in our 5th CSR roadmap 2022-2024. We'll be launching our 6th CSR roadmap early next year, and this is really embedded into everything we do. Another very important point and key for the success of our CSR commitment is the fact that we have CSR integrated into our incentive schemes. We are, as you probably know, a very KPI-based company, and CSR is no exception to that. It's embedded into the incentive of many of our employees of key managers, over 1,400 people. And I think it's really a trigger to get everybody moving on CSR. Just an example, 17.5% of our CEO's remuneration is based on CSR. And also, the credibility is important. Since 2015, all our CSR results have been audited externally, and I think that really makes everything that we -- or the KPIs that come out much more solid and reliable. All this great work has been recognized by the CSR ratings. So just a couple of examples. We joined last year the CDP A-minus list, which we're very happy with because it really proves all the work, all the hard work that's been done internally on climate. We have also been recognized for the past 2 years by the CDP as a leader in suppliers' commitment, meaning that we are extremely transparent with our own customers on the climate impact of our products that we sell to them. Another one is EcoVadis, we've had the platinum rating since 2021. So good performance, strong performance, reliable, audited and recognized. I just wanted to focus on one topic, which is extremely important, Benoît mentioned it, it will be mentioned again, but it's really important for us, is all our work on energy efficiency. It's a big market. So overall buildings in the world represent about 40% of greenhouse gas emissions worldwide, so that's big. Everybody is aware of it. We're seeing a lot of regulations coming, government policies to try to reduce that. But of course, it's a challenge, but also it's a great opportunity for us because it means all our energy-efficient offering is out there and our clients really need them. We have a very diverse portfolio of energy efficiency products and solutions, and they can bring up to 35% savings for our customers. As you've seen, this segment has really grown, and we've reached 24% of our sales on this in 2023. I'm now handing it back to Benoît for the conclusion.

Thank you, Virginie. So we are at the end of Part 1. To make the long story short, we believe we have undisputed strategic positioning and assets. We have delivered as per our plan and our commitments. We gave you a lot of numbers. If you have 3 numbers to remember: over the past 5 years, sales, up 40%; EPS, up 50%; and carbon direct emissions, down 40%. And what is, I believe, as important as those numbers, the fact that we have prepared Legrand to make the most of the next cycle, we'll see that. We have kept acquiring a number of companies that give us a lot of assets to enter into new geographies and new markets. We have kept innovating. We have improved our customer service and our customer satisfaction. We have been very reasonable on pricing. You know that pricing is an important lever of Legrand performance. The market has done a lot of pricing for the past 3 or 4 years because of the increase in price of raw mats and components. So have we, but we have tried to be very sensitive and cautious about not doing too much pricing. So we still have some margin for maneuver, to make a long story short. We have worked a lot on our cost base, but don't believe that it is the end of the story. You saw with Franck that every time we acquire a new company, we are reloading, if I may say, our capability to do savings. So we have done many things, which I believe will position us well for the next couple of years.

Okay. So thank you, Benoît; thank you, Franck; thank you, Virginie.

So it's time to -- for part 2, so the objective is to give you a bit of insights about how we're going to grow in the years to come. Starting with a couple of trends shaping the future. I'll go fast on those ones because those are well-known facts, but we thought it was important to pinpoint a few data points. So among the key trends, digitilization and demographics. If you look at digitilization, we'll come back to that in a couple of minutes, data centers, of course, going to -- kept growing, and they are set to represent 4% of the world electricity consumption in 2030 against 2% today. And I have to say that those 4% are probably an estimate which many people believe it's going to be more than that, actually. Data center capacity, 40% of the data center capacity will be dedicated to AI. And the number of connected devices is supposed to explode between 2023 and 2030 and to more than double. So this trend between -- to digitalization doesn't come without challenges. We'll see that in terms of use of resources, but it is a fact, and it is for Legrand a megatrend that should support our topline. Demographics will help. The middle class is supposed to increase by 37% over the next decade, and middle class means additional means in terms of security, comfort and so on and so forth. The number of people being more than 65 years old will double between now and 2050. And again, we'll see that with increase, it comes together with a number of additional needs in terms of electrical installation. Amongst the trends, the building market, which hasn't been very supportive, to say the least, for the past couple of years, will be, at some point, supported by some interesting megatrends. There are a number of countries when there is a structural lack of households. So we gave the example of France. In France, we have about 300,000 new houses being built every year. And the demand or the need is estimated to be in excess of 400,000 for a couple of reasons, including the fact that an increasing number of families got split and need additional houses. And this structural lack of household, it's true for France, but you could say same for Germany, you could say same for the U.S., you could say the same for the U.K., you could say the same for India. So there are a number of countries where structurally, there will be some -- the need to build new houses. This is for residential. And for nonresidential, there is a tendency towards adding value to offices. So I know that in a number of countries, especially in the U.S., the number of square feet that have been built or renovated is lower now than before the COVID crisis. But it will be, at some point, compensated and more than compensated by higher adoption of digital technology. You have -- this number is interesting, the so-called Class A offices, which are modern premises with a number of additional features compared to the traditional offices, represent 30% of the existing offices in the U.S., but 85% of future construction. In those Class A offices, we have the ability to have to sell more advanced product like AV, audio/video, for example, distribution, nice architectural lighting and so on and so forth. So the building market has been depressed in many geographies, will recover boosted by a number of strong trends. Environmental urgency, energy efficiency, you know that the building operations repesent 30% of global energy consumption, so we will not be able to tackle the energy dilemma or energy issue without improving the building energy efficiency. The energy efficiency expenses are set to more than double between 2022 and 2030. And the certified green building in square meters will be multiplied by almost by 10 between '21 and 2030. So there is -- regardless of politics, if I may say, there is a trend towards better efficiency of buildings that we definitely support our business. Electrification, again, a well-known trend, the share of electricity within the global energy mix will increase from 20% to 41%. So a world which is more electric means a world with more electrical products. We will again see that in a minute. The share of renewable energy is supposed to move from 30% to more than 80%. The number of electrical vehicles, there's a debate whether it will be 350, 300 or 320. But at the end, there's no doubt that the number of electrical vehicles being sold going to explode from 16 million today to 200 million, 300 million or 350 million. It's the stock, of course, by 2030. So a number of very positive trends that will help our business. We have slightly adjusted to make the most of those trends. We have slightly adjusted our market segmentation. So on the left hand of the slide, you have the previous segmentation, the so-called fast expanding segments, 36% of our sales; energy efficiency, 24%; data center, 15%; connected, 15%. We have quite a significant overlap. What does this overlap mean? It means that a product -- connected product, which helps reducing energy in data center would fit into the 3 categories. So it was a bit complex. It wasn't perfectly in line with the market trend. So we have adjusted our market segmentation to get rid of this overlap and to come for the fact that a lot of our products are connected regardless of the segment in which they fit. So it is now classified into energy transition, which is a broader product offering. We'll see that in a minute. It includes also typically circuit breakers, which we're not part of the segmentation before. Data center, not a lot of change; and digital lifestyle, and we will definitely get into each of those segments. So to be extremely clear, we are not doing fast expanding segment washing. So the objective was not to move from 36% to 46%, this is an internal move we made, and we really wanted our subsidiaries to be completely aligned. Energy transition in front of electrification; data center in front of AI, if I may say; and digital lifestyle in front of connected homes, so we really wanted to have a market segmentation, which was perfectly in line with our objectives. Needless to say, because one of you asked me the question before we entered the room, our reporting to the market will not change. We report by country, we are organized by country, and we'll keep reporting by country. So for the analysts who are in this room, you won't have to change your 30-year spreadsheet. You can keep the numbers by -- of course, by geographies. So this is market segmentation, we have 54% of our sales, which is made of essential infrastructure products. And again, we'll go into the details. So the growth is steady over the long term, and it is very much driven by building construction and renovation cycles. So the input or the key drivers are new build, consumption, square feet and so on and so forth. And you have 46% of our sales which are dedicated to energy and digital transition, which growth should be over the long term above construction market and co-related to the megatrends I have described. So slightly more than half of our sales in essential infrastructures and slightly less than half of our sales in energy and digital transitions.

So thank you, Benoît. We'll now invite Brian DiBella, CEO of Legrand North and Central America, to come on stage, and we'll talk about data centers in details.

Well, before giving the mic to Brian, I would like to say a few words about the data center exposure. So those are interesting numbers. We believe that the Legrand potential market in data center, it's about EUR 70 billion. So of course, it doesn't include everything that fits into a data center. It doesn't include, for example, the IT equipment. We are not active in servers and so on and so forth. Otherwise, it would be a couple of hundred billion euros. Within this potential market of EUR 70 billion, which is made of EUR 20 billion white space, EUR 50 billion gray space, our current accessible market, the market for which we have today some offer in our catalog, represent EUR 11 billion, half white, half gray. And with this EUR 11 billion, we have a market share, which is slightly higher than 10%. So we had last year sales of EUR 1.2 billion. I have to say that I love this slide. Why do I love this slide? Because it shows what are the growth drivers for Legrand in the data center market. It's really a triple engine growth. Number one, the EUR 70 billion market will keep growing, probably high single digits. So the EUR 70 billion will become EUR 72 billion, EUR 75 billion, EUR 77 billion. Number two, our current accessible -- addressable market will grow, not only following total market growth, but on top of that, every year, every 2 years, we will add a new product family on which we are not. For example, over the past 4 years, we added EUR 1 billion of accessible market to Legrand by entering into rear door cooling by entering into transceiver. So the EUR 11 billion, regardless of the growth of the market, will become EUR 12 billion, EUR 13 billion, EUR 14 billion. And third growth lever, of course, we intend to keep gaining market share. So the market will grow, our addressable market will grow because we will enter into adjacencies, and hopefully, our market share will grow. So you see the triple-engine growth. This is a bit complex. I'll not comment in detail, and I recommend that you spend a bit of time on this slide. It shows where we are in terms of product offering, and we have quite a broad product offering in data centers, both for gray space and for white space, even though we'll see that in a minute, we are much bigger in terms of sales in the white space. How do we decide in which product family we want to enter? We look at the functions which are mission-critical for data center operators. And number two, we look for segments where technology can address the issue. And if a segment is mission-critical and if technology can help, then it is a segment of interest to Legrand. So there are a number of market segments in which we will not enter because we believe that those segments are not mission-critical or that something else than technology will solve the issue. And today, we have quite a broad product offering, ranging from busway to transformers, transceivers to KVM and so on and so forth. In terms of sales, so last year, we did EUR 1.2 billion of sales in data centers, 15% of our sales. 76% of those sales are made in North and Central America, which is the biggest market, and it is also where we made a number of acquisitions and where we started, if I may say. So Brian has a big responsibility, and he knows it. And in terms of space, 95% of our sales are made in white space and 5% in gray space. Definitely 5% is too small. And we have made a number of moves, especially in terms of acquisitions to grow this 5% to 10%, 15% and 20% or more. A couple of trends. I'll go fast. Of course, AI is a real game-changer for data centers, and the large language model training will require much higher density data centers. It is estimated that the installed data center power capacity for IT loads will grow by about 18% per year until '26-'27 and then close to 10%. By the way, some of you may be surprised because you are hearing that mega billions of euros of investments here and there, which indeed will happen, but don't misunderstand the time those investments will be spent. It's a couple of years. So of course, we're not in a market, which is going to grow 50% or 60% per year. And we believe that the IT loads will grow slightly more than double digit. And as far as our market is concerned, it will probably grow high single digit for a couple of years. The chart on the left is interesting. It shows the racks per capacity. So typically, for example, the red chart shows all the racks, the percentage of the racks below 10-kilowatt of consumption. So needless to say, the average density of the racks will increase, and by 2027, 40% of the racks will have a capacity above 20 kilowatts. So it's very interesting because, of course, we'll see that, but the denser the rack, the more electrical equipment in it. It also shows that we will still have a remaining market of lower density racks, which will be very significant. 60% of the racks, by definition, will be lower than 20 kilowatts, and we also need to address these lower density racks. And the type of data centers, most of the time, we focus a lot on the big hyperscalers. And of course, those are the guys investing heavily, the Microsoft, the Google, and Brian will say a word about that. But we shouldn't also forget that you have other type of data centers, which we intend to address, either what we call near edge, so country-wide data centers, which are based on big metros or even on-premise data centers, which we call far edge. And of course, we should have the ability to address all types of data centers between big hyperscalers, which require -- which are 100-megawatt facilities, so today, you have facilities at 100, 120, 150 megawatts, and much smaller data centers, which are below 1 megawatt. Data center implies a lot of energy demand and a constraint on resource. I'll not comment more this slide. I already said that the share of electricity dedicated to data center would move from 2% to 4% and maybe more, even 5% or 6%. And the constraint on electricity is also a constraint on land, space and water. So it is a world where increasingly technology will have to provide a number of solutions to data center operators in order for them to limit the resource consumption. Resource being, again, electricity, land, water and people. So you already have a number of trends. For example, you have some moratoriums in some geographies, some countries that say we're going to slow down the number of data centers being built or renovated because we don't have enough space. We have accelerated regulations, typically Germany, which will require data centers to have a power usage effectiveness of 1.2 maximum by 2027. By the way, what is a PUE? It's a number of input power you need to run the IT equipment. So it has to be as close as possible to 1. 1 means that to run 1 megawatt IT equipment I need 1 megawatt of power. 2 means that to run 1 megawatt of power I need -- of IT equipment I need 2 megawatt of power because I also need to power lighting, cooling and a number of other equipments. So the more efficient the data center is the closer to 1 the PUE is. Typically, it's kind of regulation will happen in a number of geographies and so on and so forth. So data center world is a world where, of course, we have huge potential prompted by AI, but also a word where the resources will become increasingly limited and where technology will have to help. Well, the data center used to be -- market used to be a very North and Central America and principally U.S. market. And in 2023, we estimate that our market is still more than half U.S., North and Central America, 29% rest of the world and 19% Europe. But as you can see on the right-hand side of the slide, under developments are a number of hubs: Mumbai, Chicago, Phoenix, Beijing, London, Dublin, Jakarta, Seoul and so on and so forth. So it is increasingly a worldwide business. Of course, a number of specs are done in the U.S. But now you have regional hubs, which are built everywhere. It is a competitive advantage to be a worldwide player. So what is our value proposition? We intend to provide with our customers a best-of-breed suite of technological solution, as I said, for mission-critical applications to improve efficiency and sustainability. And this is a very strong competitive advantage. We have an AI-ready offer. Well, typically, use system rear door cooling. You know that cooling high-density rack of 50- or 60- or 80-kilowatt rack is a challenge. And if you're doing it with a traditional cooling system, this cooling system can take up to 1/3 of the space of the data center, which is, of course, a loss of money, huge for the data center operators. So you have to cool as close as possible to the rack and the rear door cooling, which is basically liquid going through the door and cooling down the entire rack, which we are able to propose, is a much more efficient cooling solution. We could say the same for busway, for example. Busway is an alternative to cable. If you have to feed very high-density rack with cables, the number of cables you would need is just huge. So it's a lot more efficient to feed the cabinet with the busway. We have best-of-breed technology. As an example, we are showcasing the Infinium acclAIM Fiber offer, which is a new offer for fiber optics distribution in cabinets, which avoid the use of the traditional cassettes, which is progressively taking off. We are DCIM and BMS agnostic. We can be connected. Our solutions can be connected to any data center information management solutions. So of course, we have partnership with a few DCIM makers. So if the data center operators want us to propose a DCIM, we can, but we can also connect to any DCIM solution available in the market. And it is a strong competitive advantage to tell the data center operator, pick up the DCIM you want, anyway our system would be compatible. And of course, we have a product offering, which is adapted to all types of data centers, the example being circuit breakers. We have small circuit breakers adapted to edge type of on-premise circuit breaker data centers, and we can go up to 6,300 amps, so very big circuit breakers. And actually, we have recently supplied a full suite of gray space solutions, transformers, UPS and circuit breakers and switchgear to a very big data center in Switzerland. On our business, if you look at our sales in data centers, from 2019 to 2023, our sales grew 17% per year, of which 13% like-for-like, so it is above the market trend and it has, of course, been a very satisfactory growth. In terms of business priorities, we're not a surprise. We'll keep investing in technology, service and capacity. By technology, it is part of the Legrand model. We are increasingly platforming. So the Legrand strategy is to acquire a capability and then to platform it and to make it available to other geographies. A good example being busway. We acquired the U.S. market leader in busway called Starline back in 2019. But it's a bit difficult to sell U.S. manufactured busway into China because it's heavy and it costs a lot to carry to China. So we are developing a local capability -- we developed, actually, a local capability of busway in China with a product called Power Flex based on the Starline technology. And of course, we are deploying capacity. Some of the product families are growing 20%, 25%, 30% per year, and we have to do a bit of capacity buildup. We accelerate the deployment of existing solutions. You have to know that today, we have what we call internally LDCS teams, so Legrand Data Center Solutions team in more than 45 countries. So we have dedicated sales and support teams addressing the data center market in 45 markets. And we'll pursue bolt-on acquisitions. We have done 11 acquisitions in 5 years in data centers, of which 4 in 2024 so far. We have added EUR 1 billion of additional adjacent markets over 5 years. Many opportunity remains. When we talk data center, you always think big guys, big companies, but actually, the type of competitors we have is very much similar to the type of competitors we have in the traditional building segment. There are plenty of small and medium size companies in this data center world. So I can tell you that we have a long pipeline of opportunity, and I'm very confident in our ability to announce more deals in data centers in the coming quarters. So that's a short introduction I wanted to make, and I'm turning to Brian. Maybe, Brian, you can say a few words about yourself and then make your presentation.

There is a video before.

And there is a video before. Before turning to Brian, we have a small video made in Italy and showcasing the data center project in Italy. One word on the fact that you will hear many brands which I mentioned, [indiscernible], Starline. Worth mentioning, all those brands, of course, belong to Legrand. So don't be surprised if you don't hear a lot about Legrand, but it's all the brands that will be commented here are our brands bought or developed by Legrand. [Presentation]

Brian, the floor is yours, traveling from Italy to the U.S.

Yes. Well, I've been to many data centers, but none in a site quite as beautiful as that, Northern Virginia, the desert in Mexico. So I'm doing something right or maybe something wrong there. But thank you, Benoît. So Brian DiBella, President and CEO of Legrand North and Central America. And talking about data centers today is sort of my career coming full circle with Legrand. I actually started back in 2003 as an IT consultant to the company and was hired on as the first Head of IT in 2004. So I was operating Legrand's data centers as opposed to selling products and solutions for them. After 3 years, I was given the opportunity to make a pretty significant career pivot into general management, and I ran the Wire and Cable Management business unit within the U.S. 2014, I was promoted to run the entire electrical business in the U.S., the Electrical Wiring Systems division as we call it, which included the cable management and PL2 wiring devices product. 2022, took a lateral move, but a very fun move to take over the data center business. And then in March of this year, I took responsibility for all of North and Central America. So it's been a great journey and a great career, but this is a great topic to be talking about. So Benoît had shared a pretty good overview of the data center market, where Legrand plays, what our views are of trends. And what I'm going to do now is dive into some specific customer examples to really illustrate Legrand's value proposition, the strength of our relationships and why we're so excited and encouraged about the future. So we'll start out with the products that we're in. As mentioned in North America, heavy focus on the white space. The white space is where the critical high-value equipment is. This is where servers and networking gear is. I want you to think about the data center market right now as a race, and it's a race for speed, and it's a race for efficiency. So I don't know how many people have heard, but the headline about Microsoft actually signing a deal to reopen Three Mile Island. Everybody heard about that? So just last week, there's such demand for power that we are literally reopening closed or attempting to reopen closed nuclear power plants. And so there's a race on one hand to get real estate to get access to power. The other part of the race is bringing new technology online. And I'll talk a bit about artificial intelligence and what it means for our products. Benoît provided a really good overview, but everybody is racing to have the next greatest thing in terms of AI. So speed is really important. Efficiency comes into play because power is a limited resource. If I've only got so much power in the grid, I better make the best use of it within the 4 walls of the data center and make sure that I'm really efficient with the infrastructure, right? Total energy consumed divided by the power for compute, I want that number to be as close as 1 as possible. And I'll talk a bit about how our solutions enable that. So let's take a look at where we're playing right now, the major product categories for us. First one, we saw that great video, Starline Busway, #1 position in terms of market share. This is about flexibility and scalability. As the video showed, you install the busway and then the tap boxes can be configured at different power levels. They can be moved to different locations. They make the installation and provisioning faster and more efficient. KVM, keyboard video mouse, the early days of data centers, you'd have a cabinet with multiple servers and you'd have this device that allowed you to switch from server to server, so you didn't have to have 5 keyboards and 5 mice and 5 monitors. Well, that's evolved today to basically a remote control system for data centers. You can access from outside any number of servers, networking equipment for troubleshooting, for automating routine, we call it KVM over IP. So it's KVM over the network. There's no more little box inside. It's all done with remote control and management, an essential part of productivity and asset management in data centers. Intelligent PDUs. So that's PDUs that have chips. And again, we saw the example of the Raritan PDUs. These are smart. They have computers built into them. They have networking equipment built into them that allow them to communicate to one another to support sensors and sensing technology, including even access to the doors. So we have physical -- you can open and close the doors by communicating through a PDU to a data center aisle. So a lot of functionality that gets built out of that core technology. Again, #1 market share position in Intelligent. Cabinets. This is a fragmented market. There's very basic cabinets all the way up to highly custom that have specialized features for cable management, for supporting heavy weights or different types of cooling technology. I would say Legrand, through our strong relationships with key end users, has really taken the premium segment of the cabinet market where high customization is creating high value for those deployments, and I'll share an example of how we actually cut the deployment time for an AI solution by 2/3 because of the cabinet. Overhead systems. So our Cablofil system, # 2 share position. What's important about this product, we have global specs with pretty much every major data center player, from the hyperscale technology companies to co-location companies to traditional business enterprises, lots of innovation around the data center application. And then what you heard about rear door heat exchanger, it's a technology we like a lot. Liquid cooling, again, it's a very fast-emerging, fast-changing market, still very fragmented as the market is sort of settling in on which technology is going to win. The advantage of rear door, it's efficient and it's easier to retrofit than any of the other liquid cooling technologies. We like our position #3 in North America. Okay. Well, since we're talking about data centers, I've got to talk about AI. And I think Benoît provided a good overview of this. At the end of the day, there are a lot of big numbers that get thrown around, around artificial intelligence. Statista published something earlier this year that said it's going to be a $2 trillion industry by 2030. I don't actually know what that means, it's hardware services, software. What I can tell you is there's some really concrete numbers that exist today. And it's about what's happening in the market, the race to deploy AI. So the chart here on the right, this is published earlier by research firm, Omdia, earlier this year. This shows in 2023, all the shipments of the NVIDIA H100 GPUs. These are effectively the computers, the processors that do AI trainings, particularly for the large language models. These are the top 12 customers. I'll summarize the math for you, so you don't have to look too closely. They sold about 650,000 GPUs last year. Those are individual chips. Those would then go to integrators. It could be companies you have never heard of. It could be computer manufacturers like Dell that take those GPUs, and they assemble them into servers. So 650,000 GPUs will translate into roughly 80,000 AI servers. Now those are going to be deployed. The programs, they're not all done at once. Generally, companies like Microsoft, Meta, they have 2-, 3-, 4-year roadmap. So those -- think about those as being deployed over 3 years. So 20,000 to 25,000 per year. That creates an annual addressable market opportunity for Legrand infrastructure of about $1 billion. So it's an incremental market on top of traditional compute, traditional storage and networking, just for those AI servers, about $1 billion per year. And again, that's continuing over multiple years. So $3 billion over 3 years is the other side of that math. That's PDUs, that's busway, that's cabinets and cooling. Okay. So I want to talk -- the examples I'm going to go through are customer-specific, but these are pretty confidential and sensitive projects. So I can't share customer names. So before we jump into that, I just wanted to give you a sense of the types of companies and the profile, the split of business that we have. And I think what I'm most proud of is the diversity of our customer set, maybe more than that actually the relationships we have, but we're pretty diverse. The hyperscalers, that's 1/3 of our business. It's roughly 1/3 of the data center market. These are the companies that you know well. It's Google, Amazon, Microsoft, Facebook, Meta, et cetera. We have long-standing relationships with all of them. Next, we have global enterprises. So some of these are technology companies. I would put Tesla, Twitter, Oracle, financial institutions, large banks and traditional manufacturing enterprises would fall there. Strategic distribution. So these are IT distribution companies, Ingram Micro, CDW and traditional electrical distributors, WESCO, Anixter is another example. And then there's everything else. There's a lot of companies in the data center business that aren't these huge technology companies. They could be traditional manufacturers like Legrand. They could include start-ups that are using AI technology to develop brand-new service offering. It's a really, really fragmented market. And again, this is our customer mix. So we're doing business across the spectrum of data center businesses. Now that's great. We've had relationships with these companies for years, really since the start of the data center industry coming on in the early 2000s. What's key about that is that our R&D teams have access to the current issues, the current problems, the current projections that these data center operators or enterprises are trying to solve. It helps us be first to market with new innovations. It helps us be first to market with the types of technology that's going to drive the future. We heard about, again, our Xirrus, the intelligent PDUs, being able to integrate those into the environment with the control management systems that these data center operators are choosing. I'll give you an example where this really paid off well for us. So we heard from Virginie. Legrand has been very ambitious and a leader in CSR. Early 2022, we had a meeting with the Head of Network Operations for one of the hyperscale companies. And the hyperscale companies tend to pay attention to one another and sort of copy each other. And he said, "What you need to know, here's some things on technology and networks, but CSR. If you haven't started paying attention to CSR, you better get on it fast because all of us, meaning the hyperscale companies, we're all going to be talking to you about CSR". That was beginning of 2022. I will tell you, started last year in 2023, several of them in our quarterly business reviews were asking about CSR and now pretty much every major large data center company has a CSR agenda topic. I would say I'm proud to say we have sort of passed the test with flying colors, but we knew about it before it happened. We were ready, but if we hadn't, that customer insight, that close relationship that they shared and advise us, this is what you need to do. This is what the market is going to do. Here's how you can be successful. Okay. So this is our first real customer example. It features the Starline Busway. This was a cloud software company. And I mentioned this is a race. So everybody is looking to get space, power, real estate access. For the smaller players, this can be a real challenge because the big guys are out there trying to procure as much. They have more leverage because of their size. So they had a multiyear plan to roll out their next-generation software, including AI. And this goes back several years ago. Now one of the tricks is that they were planning to deploy in parallel to procuring new sites. So they didn't know exactly where their data centers were going to be, but they wanted to design their solutions so they could -- once they got going, they could deploy quickly and grab as much capacity as they can under the radar of the big players that were trying to take the big spaces. What that meant is we had to develop a solution for them that was able to adapt to a space that was yet to be determined. And again, we saw in the video that busway going overhead. It's just laid out in the space, and then we can fit the tap boxes in later when we actually get the final configurations for the rows. That was a very, very key differentiator. So we started with really sitting down and talking to them about how much power they expected to have in each rack, thinking about the different profiles of the rows, how many racks would you have in a given row. And from there, designed the minimum number of options that could suit any number of spaces, any number of power levels and then began the global deployment. We did a proof-of-concept over 18 months with them, proving that we had the right offering for all the different mixes that they might see. Well, they ultimately said, yes, this works. You've got a global supply chain. You've got manufacturing all over. So as we pick and choose where to go, we know you'll be there with service and support. That is, again, not a hyperscale company. It's a midsized company. It's a $100 million Legrand customer today, and we are sole sourced on that infrastructure. So AI hardware leader. This is a company that makes well-known AI hardware. And enterprise companies, so not the big hyperscalers, but enterprise companies and AI technology companies approach them and said, "Hey, can you -- we don't need a whole data center full of AI. We just need to buy a few cabinets for our own internal development". Maybe they have a data security issue, maybe it's intellectual property or it's a start-up company that wants to do things sort of in the garage. So they approach this AI hardware company and said, we need a turnkey solution, just something that is sort of AI in a box using your servers and the infrastructure to support it. Well, if they're going to put their name on it and their reputation at stake, they're going to want to use proven technologies. We worked with them to design a suite that includes the actual cabinets, the overhead busway system and the PDUs, the power distribution units that go into that cabinet, all have been designed based on proven technologies, things that have been around for a long time and then features that were optimized for that AI application. They made them more durable. They made them more energy efficient. They made them look aesthetically better, and they're designed to deal with those high power loads of AI. Again, traditional compute, maybe 10 kW for a cabinet. These were over 60 kW, so almost 5x the normal load. Again, great example. And for us, how much was this? Yes, $25 million last year, and that number is growing as private entities continue to deploy AI internally. So now we go to what I'll say the humble cabinet story. So I mentioned that the big technology companies watch each other. They kind of move as a heard. Once one starts to do something, the others kind of follow suit. Take you back to late 2022, ChatGPT, right? What was our lives like before ChatGPT? It really surprised everybody. It was the fastest adopted new technology in history, over 1 million users in just 5 days. It caught the industry by surprise. And that is what created the -- I call it, the arms race that we're in right now for AI. Well, this is a case of a technology company that didn't have an AI plan. They were working on some experiments in the back. ChatGPT hits, their CEO goes into lockdown crisis mode. We need an AI solution. We need it deployed as quickly as possible. They begin looking at different options, converting existing data center space to AI. Well, where does the cabinet fit into the story? Well, everything has to ultimately get put into a cabinet. The way that this would typically work is we would build all our cabinets, we would ship them to the data center, all the cabinets that they need. And then the integrators would come in, install the servers, install the PDUs. And this would typically take 3 to 4 months just to do that fit out of the cabinets. They didn't want to wait that long. This CEO is well known for being very demanding. So we need it in 1 month. So what we did is something called a Rack-and-Stack solution that we developed with the integrator. We began -- as our cabinets came off the line, and they were designed to be very robust, very durable in terms of the physical support. They had multiple options for cooling because they were retrofitting this AI into existing data center spaces, so they didn't know exactly how they were going to cool, but we had a lot of different options available. So again, we're running -- we're flying the plane and building it at the same time is the way I like to describe it. So what Rack-and-Stack says, instead of shipping everything to the site and building it there, we basically did it in a factory. We shipped the cabinets to the integrator site, and they populated all of the equipment on their site and then had to move and transfer, ship all of those fully populated cabinets into the data center. And again, rather than waiting until we had everything built, we were doing daily shipments to the integrator with factories on both coasts. We were going to 2 different sites, and they were building -- as we -- as they came off our line, basically, we sent them to the integrator, they were populated and deployed. It allowed them to make a claim very quickly. Yes, we have our AI training. We have our AI. We'll have a great offering just like ChatGPT and Microsoft and the big players. Bottom line, we took 90 days down to 30 days, all with the way we manufactured and worked with the integrator on that deployment. So again, power is a big deal. Cooling is a big deal. Densities are only going up. This is a case where the available power to the data center was limited. The grid only had so much power. That means we can talk about AI loads being huge. But if you can't get power from the grid, you are capped, which means everything that's in that data center has to be maximized for efficiency. And that's where the U-Systems rear door heat exchanger came in. So there's a figure. Again, it's power usage, efficiency or effectiveness, total power over compute. You want to be as close to one as you can. Well, I'll give you the punchline here. In this case, the rear door heat exchanger, the U-Systems exchanger was 1.035. That means only 3.5% of the total load was necessary for cooling. In a data center, that is a big do. Cooling is the #2 source of energy usage in a data center, and we were only 3.5% of the total consumption. That was the difference maker for this job, difference maker for this client and again, one that we're very, very excited about where this fits because of the efficiency levels. The other thing that the efficiency gives us is the ability from a rear door heat exchange solution to go to very high power levels, right? There's a correlation between efficiency and how much power you can cool. In this case, up to 200 kilowatts, which is much higher than most of the other competitors in this segment. Okay. So last slide, we're talking data center. We're talking future. We have a very robust pipeline of new products. I'll give you the highlights here. On sort of the bookends of the slide are new firmware, new software technologies, new chip technologies. We're making sure, one, that we're designing in the features that our customers and clients need. They need intelligence. They need high-performance monitoring. They need very secure platforms. Data security is a big deal, and that includes remote management capabilities. We also want to make sure with our suppliers that we're on their product roadmaps that we will have a reliable, efficient supply chain of all those key electronic components. In the middle, power monitoring, that is on our Starline Busway System. Again, as these power levels go up, as AI power usage changes the profile of data center, it's more important than ever to be able to monitor and track. You can tell if things are going right or wrong with AI training based on the power usage. The way the servers are behaving will tell you what's happening. The profile is very different from traditional compute, making this absolutely critical, leverages that same firmware platform that we mentioned. So we're platforming across all of our products for a common technology, and it's been continually updated to integrate with data center management software. And then IP54 busway, everything is a data center now. We shared the video that showed our factory with all the automation. Well, all that automation requires control. It requires networking. The data center is moving from very clean white rooms into factories, into outdoor spaces, and we're just adapting our products to move with the market. So that's it from North America and data centers.

So thank you. Thanks a lot, Brian. We'll now invite Amélie Zegmout, CEO of Legrand Iberia, to come on stage and to talk about energy transition.

So thanks, Brian. Welcome, Amélie. I will say a few words. Actually, I was tasked by my team to go faster because we are a bit late. So I'll go much faster. But of course, I'll be happy to answer any questions you may have on this piece. So energy transition, for Legrand, it's a new guy in -- not newcomer in the portfolio, but it's pretty new for you. So it's worth spending a bit of time explaining which product fits into this category. We basically have 3 categories of products, everything which is used to protect electricity. So it's about circuit breakers, it's about transformers, it's about UPS. So every time you are adding an electrical line, you need to have somewhere a transformer, somewhere a circuit breaker, a switchgear or a UPS, number one category. Number two, products that help to do energy savings, so energy management and lighting controls. And number three, EV charging stations. So it's really all the products connected to electrification. In terms of numbers, this product category represent 1/4 of our sales, slightly more than EUR 2 billion of sales. More than half of those sales are made in Europe. The big difference between Europe and North and Central America is that we don't have a switchgear product offering in North America, and we do have one in Europe and in a number of countries. So 55% of our sales made in Europe. And in terms of verticals, 73% of those sales in commercial buildings, 22% in residential. Those will typically be the small electrical cabinet you have in your home with a few circuit breakers, measurement product and so on and 5%, a small 5% in industrial in infrastructure. A few megatrends. Not a surprise, as per the official numbers, electricity demand will double by 2050, even though the final energy consumption should decrease by 2%. Nobody really knows if we will make it. But whether we make it or not, there's one thing which is true that electricity within the electricity mix will significantly increase at the expense of fossil energies. It will be driven by a number of things, new loads, the fact that in a number of countries, you have middle-class emerging with new needs and the number of loads per home will increase. Electrical vehicles, of course. So you have a couple of measures, which I will not comment. Nobody knows if in 2030, it will be 40 million, 50 million or 60 million electrical vehicles that are going to be sold. But one thing is for sure is that it will be a lot more than the 16 million which are sold today. Heat pumps will replace traditional heating systems and so on and so forth. So more and more electrical loads, more and more electrical circuits, more and more protection devices, measurement devices, control devices for those loads. Interesting to note that out of the -- ex tens of million EV charging stations that are going to be sold, it is now admitted by most industry specialists that more than half of those electrical vehicle charging will happen where Legrand is strong, i.e., at home or at the workplace and not necessarily at some charging point operators place. So it's a good business opportunity for Legrand. This slide is interesting. It's worth spending a bit more time on it. You know that building accounts for about 40% of the world's CO2 emissions and 30% of final energy consumption. But actually, small and midsized building, which represent 80% of the markets are not equipped with energy management systems, not yet. The big ones are 90% of the big buildings or large buildings are equipped with the BMS system. And this is the reason why actually the BMS market share is not moving much because most of the big buildings are already equipped. But the small buildings are not, main reason being complexity and cost. Not all buildings can afford having a full BMS system, heavy BMS system, which costs more than EUR 50 per square meter. But now there are a number of solutions which exist and which can provide, we'll see an example in a minute, lighter automation solutions to smaller buildings. The big challenge we have, if we want to meet our energy reduction or energy efficiency targets on a worldwide basis is to tackle this large base of small and midsized buildings, which are not equipped with any energy management system. Our unique value proposition, we want to propose an open and versatile offering for buildings with state-of-the-art power distribution and protection products from transformers to EV charging stations. So our products are adapted to the most demanding works. You have here an example of a pediatric hospital where we supplied our full set of switchgear. Again, we are BMS agnostic. Our energy management solutions and lighting control solutions can be connected to any BMS. And actually, we are connected to the most spread BMS system being Johnson Controls, Honeywell or Siemens. A lot of our products are conceived to reduce CO2 emissions. You had an example in the Italian data center with the transformers. Actually worth mentioning that all those energy transition products that are sold into data centers as per Legrand classification are classified into the gray space in data centers. We, of course, not double counting. But of course, the same transformers can be installed in a data center in a big commercial office. And our solutions are supported by software and services. You have here an example of NEMO Green, which is a software that we launched 2 years back, which is a platform allowing multi-location companies to track their energy consumption per site with type of loads and so on and so forth. We have a number of leadership positions in this Energy Transition category. You see that we have more than 24 countries where Legrand is #1 or #2, and I remind you how important it is in terms of profitability and capability to grow. We made a number of acquisitions, not much in the last 3 or 4 years, but before. And now we are in the process of localizing those acquisitions. So we are taking the know-how. Take, for example, Busbar. We made a couple of acquisitions in Busbar and we localized our Busbar offering in China. We localized our Busbar offering in Colombia, and we'll keep doing it. In terms of sales, we grew our sales by 9% per year between 2019 and 2023, all organic. So it has grown very nicely, and the growth rate of this category has been almost as fast as the one for data centers. And in terms of business priorities, we will accelerate on power infrastructure. So we keep investing into our product offering. We will enhance our project approach. We need to provide more specification, project management, commissioning, maintenance. So that's what we are doing either organically or through acquisitions in order to tackle big projects. There's also a capacity expansion plan because, again, some of the products are growing faster than the average 9%, and we need to build capacity. And we'll keep doing focused M&A. A good example being Clamper in Brazil, which is the Brazilian leader in surge suppressor, which is important for countries with a lot of, what do you call that, éclair, strikes, lightning. We'll further expand into energy management, especially BMS Light and lighting controls. And we will double down on EBCs. We have made 2 acquisitions in EBCs, one in the Netherlands, one in Scandinavia. I'm not sure we'll do a lot more acquisitions because you have a lot of companies that are not so attractive in terms of margin profile or technology capabilities. But organically, I believe we have now a number of assets that we can deploy without having to make a lot of acquisitions. Now if a good opportunity was to arise, we will, of course, look at it, and we will keep deploying otherwise what we have. This is, in a nutshell, what I wanted to say as an introduction to this Energy Transition category. Now before handing over to Amélie, we have a small video about a new product offering we are launching. So it's a bit of commercial advertising, but this small movie was conceived to be as an introduction to our customers. So please launch the video. [Presentation]

The floor is your. Maybe you can start Amélie by introducing yourself.

Yes, absolutely. So I'm Amélie Zegmout, CEO of Ligrand Iberia today since September of last year. I've been actually celebrating my 20th anniversary within the group as well like Brian, having held various positions in the group in Europe and Middle East, the latest one being Managing Director of the Gulf countries subsidiary based in Dubai and Head of the Tertiary and Industrial Markets for Legrand France. So as the CEO of Ligrand Iberia, I'm extremely pleased to be here, honored to be with you and obviously very pleased to be given the opportunity to showcase some of Legrand Iberia's contribution to energy transition, mainly in Electrification and Energy Efficiency Initiative. So let me first give you a brief overview of what Legrand Iberia is. Legrand Iberia, that is obviously Spain and Portugal, is made of 415 committed individuals. It represents sales of EUR 200 million today with a mid single-digit average growth between 2019 and 2023. If we look at the energy transition perimeter, we consider a double-digit average growth within the same period. And energy transition solutions today account for more than 30% of our total sales. So quite well exposed within the energy transition markets. Legrand Iberia benefits from quite a solid local footprint. We are in the market, physically present in the market for more than 50 years. We do have a local manufacturing unit just beside our headquarters, which is based in the suburbs of Madrid. We've got 8 commercial regions, 6 in Spain and 2 in Portugal and 3 showrooms to welcome and train our customers. Our front-office structure is basically placed on 2 pillars, which are technical expertise and customer centricity. Regarding customer centricity, we have decided to basically build our organization based on 2 main teams, regional teams that are there to handle the, I would say, the daily activities, very close to the customers in the different regions of the area, making sure that continuous and optimum service is being secured and they are organized per customer type. So you will have people dedicated to investors, to consultants, to installers, to distributors. In support of that regional team, we decided to build a national team of experts with a very dedicated approach per vertical and per key account. So here, we are more talking about a centralized this positive answering to customers that have centralized organizations and centralized requirement. So that twofold organization truly allow us to maximize customer centricity and customer reach. Technical expertise is the second pillar. And in that case, we've talked about it, but we provide services such as training, which is absolutely key, design and engineering, project management, commissioning and aftersales service. This bundled set of services really bring added value in addition to our innovative solutions, and we will see in the examples that we will showcase that it does make a difference to our customer. Before moving on to the case studies that we would like to share with you, I would like to give you a snapshot on where is Spain in regards to decarbonization. If you look on the left-hand side of the screen, you would have the electricity generation in 2023. The official numbers are here. And we can see that basically renewable energy for the first time in history accounts for more than 50% of total energy generation in 2023. It was approximately at 42% in 2022. So there is quite a massive jump, positive jump into that matter. If we consider nuclear being a low-carbon energy source, we would have a 70% share of low carbon energy within the total national mix of energy generation. Spain is positioned as #2 when it comes to energy production capacity with 77 megawatts -- gigawatts, sorry, of production capacity, which is #2 after Germany, and that obviously constitutes a very solid base to make sure and enable Spain to reach out to the targets, ambitious targets, which are reaching out to 74% share of renewable energies in 2030 and 100% in 2050. So that's pretty good news, and Spain is really a good student in that regard. Now if we look at energy consumption, the situation is slightly different. And we can see here 2 main levers for further decarbonization when we look at energy consumption again. Number one is transport because it accounts for 42% of energy consumption today in Spain. And the number two is residential and commercial buildings. So we talk here about sustainable mobility, obviously, electrification of vehicles, energy efficiency initiatives in buildings and self-consumption in homes and SMEs, which is still at its initial stage of development in Spain. We do have the Spain National Climate and Energy Act, which set a very ambitious target of improving energy efficiency by 40% between the baseline of 2021 and 2030 and outlines a series of initiatives. So a lot of regulations, a lot of initiatives, a lot of incentives are driving the willingness to reach out to that 40% energy efficiency improvement. I would name, for example, the -- all the green renovation programs that are going on at the moment. within the sustainable mobility, we have the Moves III incentive plan. So here, we are talking about a grand program to push consumers to go for electrical vehicles and install EV infrastructure in their homes or nearby their offices. And we, of course, have also the critical infrastructure drive mainly through the growth -- exponential growth of data centers, which has recently started in Spain. So what I propose now is to basically dive into very concrete examples of what we have done in Spain in the recent months and years to contribute to those initiatives and to drive electrification and energy efficiency in the market. To start with, I would like to give you an example on sustainable mobility. So the business case here was the installation of 75 EV charging units, 22-kilowatt EV charging units within petrol station of a very large energy provider in Spain. As you can see on the slide, the value chain was pretty short because we did have an end-customer, which is a leading oil company, as I mentioned. And we did have an in-house charging operator. It's not always the case. But in that particular example, we worked directly with the end-customer. So as I mentioned, we did supply 75 EV charging units along with the electrical panel and the breakers to protect and secure the installation. As we were discussing with the operator and as the operator was truly the main decision-maker in the process, what really mattered to them was our ability to configurate our software, configurate our system to match their revenue model, how they would foresee the use of the stations in regards to consumers like yourselves, okay? And that was absolutely key. We spent 6 months discussing with the customer to make sure that we reach out a software that was completely aligned with their expectations. So there was a lot of R&D going on and a lot of tailoring and again, ensuring complete alignment with their expectations. That took place in our subsidiary in Holland because we're working in that case with the Ecotap solution. But we, of course, had a local team to ensure, again, customer proximity, and we appointed a dedicated project manager to secure the full execution of the project and to make sure that he would act as a single point of contact. So that was, again, another key driver for decision for that particular customer. The second added value that the customer truly appreciated was our ability to transfer knowledge to him. So training, here, is absolutely key. The way to manage the charging stations was absolutely essential, I would say, and tailoring a training module would empower the customer. So customer empowerment was really part of the value proposition to secure his knowledge, but also to secure, of course, durability and continuity of service of the installation. So aftersales service was also proposed in that particular example. As mentioned, EV charging stations cannot work without the full power infrastructure around it. So I wanted to share with you this particular example where we actually supported a leading network provider in ultrafast charging stations. So in that case, there was a massive deployment last year, and by the way, it is still carrying on this year. They are doubling their capacity with the deployment of 150 ultrafast charging stations within Spain and Portugal. We supported that particular project with the supply of electrical panels, supervision and circuit breakers, so ACBs and MCBs, ACBs up to 2,500 amps. And we did work in that case with a value chain that was slightly more complicated. We had the end-user, as I mentioned, but we also had an integrator in smart grid solutions. So we were integrated within the smart grid connection solution, which you can see here on the left-hand side of the screen. And we sold through the traditional distribution network to a panel builder that would assemble our panels. So the value chain being more complex, obviously, collaboration was of utmost importance. In that case, we collaborated very closely with the panel builder and the integrator to design and engineering the right configuration of the panels. Obviously, configuration could change depending on the structure of the EV charging station that we were supplying the project with. So again, design and engineering. And in that case, we had done that completely internally because we had the local technical office sufficient to handle the collaboration with the customer. So again, a lot of technical discussions and a value proposition that would match exactly the needs of the customer. The second aspect, which was according to me, one of the main key success factor was timely and reliable delivery. You can imagine when we have such a complex value chain and we have a deployment of 150 ultrafast charging stations across the country, we had to be very precise in our ability to give reliable logistic service and timely deliveries. So in that case, we had 5 deliveries planned as per set schedule and the products couldn't arrive too early or too late on the project. So obviously, cooperation with our distribution network was very key to ensure optimal supply chain service. So those were 2 basically examples of what we are doing when it comes to sustainable mobility. As I said, Spain is at its very initial stage of deployment. We foresee a major acceleration. We've started to see it this year. We have emergence of a lot of new actors, whether they are developers, whether they are integrators or operators. And we have, as you can imagine, a team dedicated to make sure that we capture these growth opportunities. I would like to move now to energy efficiency initiatives. So I will speak again about the data center industry. It has been obviously discussed extensively by Brian and Benoît. But I thought it was important to give you some insight about what we do locally when we talk about in-country data center projects. So in that case, and as it is the case in many geographies at Legrand, we do have strong relationships with multi-tenant leading data center developers and of course, their project teams. So in that particular case, we've worked with that developer, but also project management companies, engineering consultants and of course, the MEP contractors, the installers with whom we had a very strong connection. The business case was 2 data centers of 20- and 70-megawatt power, which totaled 22,000 square meters IT space. So we are talking of quite about quite a large facility. And we did supply 3 solutions, 2 in white space, call it el containment and cable management and 1 in gray space, high-power busbars. Here, as it was mentioned, so I will go fast on it, our ability to customize the solution to provide a turnkey solution and value proposition from 3 design, 2 installation, 2 commissioning was a massive added value for us. Speed of execution is key. Brian talked about speed of execution, making sure that we adapt ourselves to the needs of the customer, and we adapt ourselves to the unexpected events of projects because critical projects have unexpected events, and we must have the ability to adapt and to be resilient to that. I will end with an example on commercial space because we have seen that commercial buildings account for 40% of emissions -- of carbon emissions. So quite a significant responsibility when it comes to energy efficiency. And I would like to share with you an example, which is quite typical of what we see in Spain with big customers with small and recurrent commercial spaces. In that case, we were discussing with a leading bank in Spain who decided to completely redesign its offices. So we are talking about 1,800 office spaces and decided as well to deploy a new concept, which is called Work Café. As you know, we are really into the hybridization of commercial space at the moment. The value chain was again quite short with discussions directly held with the end-user and its engineering consultant. In that particular case, 3 main topics. One was design. We tend to forget to talk about design, but for commercial end-users, it is extremely important. It is part of the well-being that we offer to the tenants. And in that case, we had the possibility to embed our technology within wiring devices, giving full aesthetic coherence with the rest of the installation, as you can see here on the slide. The second aspect was technology. So we offered the dual technology of passive and infrared sensors, again, embedded within the wiring device, which optimize the reach within the space, hence, maximizing energy efficiency. And I would add a point here, which was key, again, was the ability to have available products at the right time, at the right place. As we can imagine, these commercial end-users had offices across the countries. We're using a network of small and medium installers to install the products. And of course, it was absolutely fundamental that our products would be on the shelves of our distributors to make sure that the product would be and the project would be installed on time. So 4 examples, 2 on electrification, 2 on energy efficiency. I would end with the great excitement of going further with new innovations coming in. You have seen the video of the BMS Light solution branded [indiscernible] for, which is basically a building energy management system within commercial space. I would like as well to talk about our new Guest Room Management system within hotels, which addresses digital lifestyle, but also energy efficiency initiatives. We definitely foresee fantastic growth opportunities in those 2 segments. You know pretty well that tourism is quite interesting in Spain, and we look forward to many successes with those simple, efficient and impactful innovations. Thank you very much.

Thank you. Thanks a lot, Amélie. So now we have just covered about 40% of our turnover in terms of opportunities, vision and actions. It's now time for a 30-minute break. So it is 10:30, and we will restart at 11:00 sharp, please. So please try to come back 2 or 3 minutes before we start. Thank you. [Break]

So welcome back. So we have seen who we are, what we did, what we delivered and the exciting opportunities from data centers and energy transition are bringing. So we now have the pleasure to welcome on stage Chris Dodd, the CEO of Legrand Care, and will talk about Digital Lifestyle.

Hello, Chris. A few slides of introduction on the child business of Legrand, Digital Lifestyle. It's basically 2 set of products, everything which relates to smart home. So it's about security, access control, connected comfort, connected energy management and so on and so forth, first piece. And second piece, connected care and assisted living. You're probably very much familiar with smart home. You're probably a bit less familiar with connected care and assisted living. It's the reason why Chris will introduce you to this interesting business. In terms of sales, it's only, if I may say, 6% of our sales EUR 0.5 billion, mostly European, 83% of those sales are made in Europe because that's where we have made a number of acquisitions to develop into smart home and connected care. And in terms of vertical, it is the residential business, 20% Connected Care, even though this piece can grow with the acquisition of Enovation and a bit of hospitality. In terms of market trends, not a surprise. This Digital Lifestyle is driven by the digitalization of the home. So you have here a typical home ecosystem and most of those functions are currently being actually digitalized for remote control, for scenario building between the various functions. It is also the case for Connected Care. I won't comment this slide because Chris will do it in detail, but you have to understand that we are currently in Europe, but also in a number of other countries, in a big dilemma, whereby there is more and more needs for care because people are getting older because you have chronic disease. And at the same time, we have a shortage of money, budget and workers. And technology as for the data centers can help solving this issue. Our value proposition, we are proposing product- and software-driven platforms for better and more independent living with the best combination, or try to have the best combination between technologies, simplicity of use, simplicity of installation and privacy protection. So you have a few pictures of some of our product offering. We want to have products that are simple to install and to use. For example, we have ranges of connected wiring devices, connected switches and sockets, the so-called with Netatmo ranges, Céliane with Netatmo, Living Now with Netatmo, Valena with Netatmo so that you can build a network within your home with your light switches and sockets. And those switches and sockets can be installed the same way as a traditional hardwired mechanical switch or socket. So simple to install, simple to use. Cybersecurity in privacy by design, we believe that it's a strong competitive advantage to be named Legrand because a lot of homeowners trust us because they've been in contact with our products for a while. So we are from the design stage, building some privacy protection in our product, and we leverage that as a competitive promise to our customers. We have strong app and interface content. Good example with the Nogo -- NOVO Go, sorry, telecare solution, and we're able to propose complete system from stand-alone device to complete home energy management system. For example, the thermostat, it can be used as a stand-alone thermostat, and you can just increase or decrease the temperature, but it can also be part of a broader system together with load shedding, for example, measurement so that you can manage the full temperature and energy consumption of your home. In terms of top line, just a little bit of growth, not very impressive, I have to admit. So like-for-like growth, plus 3% between 2019 to 2023. Despite the Connected Care part grew 10% per year. So the traditional smart home went down, especially in volume. It is obviously very much connected to the fact that we are not in the consumer electronic business. We are really selling systems, infrastructure type of products that are mounted onto the wall, connected to a circuit breaker. And as a result, our sales are very much connected to heavy renovation or new build. And the fact that for 3 or 4 years, the new build -- new residential market in Europe has been pretty depressed. So not a very impressive growth, and we are shooting to do better for the years to come. In terms of priorities, we want to grow our base of connected residential functions. So you have a couple of penetration rates of some product categories. We are already -- 33% of our sales in door entry are already connected, but only 6% in wiring devices and 3% in panel boards. So we want the 6% and 3% to become progressively 8%, 9%, 10%, 4%, 5%, 6%. So we want more and more traditional functions, traditional products to be connected. We want to embed the connectivity capabilities into an increasing number of ranges. We have more than 100 different ranges of wiring devices of switches and sockets. In 2019, 10% -- 10, sorry, of those ranges were connected. Last year, it was 33% and progressively 40%, 45%, 50% of the range will be connected. We want those functions to be embedded into a complete system. We want to incorporate a number of new functions. We want to become the European leader in connected care and connected health. This will be a key spot. And we keep looking at additional M&A. We acquired recently Enovation to get more software capabilities into connected health. We acquired a minority stake at UIoT in China to penetrate the Chinese market of smart home. And we have here again, as in many field of activities, a long list of opportunities. We are -- we intend to pursue. So that's what I wanted to tell you as a quick introduction. Now, I'm turning to Chris to talk to you a little bit more about Connected Care and Connected Health. Maybe you can introduce yourself briefly, Chris, before you start.

Yes, sure. Thank you, Benoît, and good morning, everyone. Yes, I began my career designing... [Technical Difficulty]

Do you mind please doing it with a traditional mic?

Yes, I don't mind. I didn't start my career designing conference microphones. So I started my career designing Assisted Living Systems before moving on into product management, marketing, program delivery and on into general management. And before joining Legrand 10 years ago, I held various senior positions in health care technology providers and within the NHS. So this morning, I'm going to tell you a little bit about Legrand Care and talk about our products, our propositions, the market, some of the challenges that the market is facing, how we fit in and how we solve some of those and our ambitions for the future. So here at Legrand Care, we design, we develop, we supply, we install, we maintain, we service products, services, software for health care and social care organizations. In the first instance, our products and services help people to live independently at home. Many elderly people prefer to remain living in their own homes for as long as possible, avoiding or delaying a move to residential care, if possible. And then away from the home, our systems help professional caregivers in group living environments, in hospitals, in nursing homes, in hospices to deliver better care, more efficient and timely care. And then across the ever-increasingly complex health care ecosystem where there's many actors, there's multiple patient journeys. Our software systems support better delivery of digital care and collaboration. They provide a platform for connecting organizations, clinicians and patients together. So Legrand was quick to spot the unique challenges coming from the aging population. And since 2011, it has acquired a number of specialist assisted living companies starting with Intervox based in Le Creusot in 2011 through to Jontek, a sole software company in 2016. And then more recently, we brought these specialists distinct organizations together under the specialist brand of Legrand Care, with the key objective of leveraging the core competencies of the wider business to bring a consistent market-leading offer to bear. Today, 2 million people rely on the Legrand Care technology as part of their service to help them live independently at home. And more recently, with the increasing sales of our connected care devices, we've seen our recurring revenues increased to 25% of total annual revenue. Then more recently, in 2024, we took the decision to expand from our presence within social care and on into health care with the acquisition of the Netherlands-based digital health care software specialist, Enovation, with a much larger recurring revenue base, taking our business all in all to circa EUR 160 million with half of the revenues coming from recurring sources. Well, we're seeing increasing challenges and spending within health care. I'm sure you're aware of that, certainly in the press a lot. We have an aging population, people tending to live longer. People are living longer with chronic illnesses. Those chronic illnesses requiring more complex interventions and treatments. And at the same time, we're seeing staff shortages across health and social care, difficulty filling vacancies, people often feeling overloaded and overworked within the environment. And this is further exacerbated by inflationary cost pressures and increasing wage costs, increasing treatment costs. So here, we could continue to spend more on health and health care, but we simply don't have the people or the hands on deck to meet the ever increasing demand. The solution, what's the solution? I don't think the solution is simple, but certainly part of the solution is to increase the uptake of digital health care solutions, transforming health care organizations and systems requires smart solutions. It requires solutions that improve productivity, allowing the clinician to spend more time, focus their time on the patient, delivering real care, face-to-face care when needed, digital care when possible and certainly starting to consider digital first. Again, transforming health care organizations and current systems such that they can deliver sustainable, affordable high-quality care is driving the need for software to automate workflows, and we're seeing increasing spend in IT infrastructures and the need to integrate new technologies. As we look to solve this problem or the wider health economy looks to solve this problem, we're seeing an increasing drive towards the delivery of care in the primary care setting in the community, in the home. It's preferable in most cases and certainly more cost effective than the more expensive secondary care hospital setting. So where does digital health care fit into that? Well, certainly, through aging in place, helping people to remain at home -- living at home through technology-enabled care avoiding inappropriate hospital admissions and readmissions, proactive calling to aid social inclusion and avoid loneliness. Person-centered care, giving people the ability to better manage their own condition, involve them in their treatments, improve their health education, allowing them to access services online without going directly to hospital via apps, portals and devices. And so moving away from always providing face-to-face care, traditional face-to-face care to a more blended hybrid model using e-health and virtual wards. And then when somebody does enter the system and ensuring what can be done digitally and what is appropriate to do digitally is done digitally, telemonitoring, health coaching, video consultations, for example. And then when treatment is required, ensuring that the right care is delivered at the right time in the right place, and the patient's information follows them across the system seamlessly and securely. Many organizations are moving to a value-based model, i.e., quality over quantity with preventative solutions. Again, driving the need for software, software that provides better insights, analysis and aids better planning and collaboration across the system. Assisted living in -- Legrand Care and across assisted living in the health care markets and office, we hold a leading position in those. And there are many similarities between the assisted living and the health care markets. They're both business to business. They both have professional actors at their heart. They're typically publicly funded either directly or indirectly. They're tender-driven. Assisted living market is highly regulated. There's pretty standard, European standards for products that are put on the market. Our offer extends from the supply of product right through to full turnkey solutions, configuration, installation, software increasingly delivered as a service and the cloud and technology these days increasingly delivered as a service. And within the health care market, we're seeing incentives coming from government to help health care organization, bring digital solutions and improve productivity within their own systems and setups. If we drill a little bit further down into our product, services and software. In the first instance, our products and services are generally bought by organizations that combine them with their own service offer to help people live independently at home. And central to this is our Legrand Care Home Hub, which is a device which is based in the home. It has multiple sensors that connect to it. You might be familiar with some of them, panic button, smoke detectors, fall detects, medication compliance-type devices. All managed and configured by our own cloud management portal, which eases the setup and the ongoing maintenance of these devices, which are installed in a vast number of people's homes. They're all digitally connected. They all use industry-standard digital protocols to connect them. And then with the acquisition of Enovation, we've seen our software platform extend right across the care continuum, providing a unified yet modular platform for our software. If we start by looking at, say, tele-monitoring, which builds upon our own substantial presence within the U.K. and in this area and in Southern Europe, this provides a software module that receives and manages alerts and alarms from the devices in the home. It then helps coordinate the response, which might be as simple as providing friends or family to go and provide some help right through to a blue light response in the event of a medical emergency, a fire or a fall, for instance. Then on into Healthcare Information exchange, which provides secure internal and external communication and information transfer between organizations and clinicians, e.g., for video consultations and image sharing. Medication Management streamlines the process from the production of a prescription by the clinician through to the pharmacy and the administration of the process. Care Coordination streamlines the movement of patients from expensive secondary gear hospital beds through into nursing homes and the data flow that accompanies that. And Patient Engagement provides a digital front door to health care organizations, providing information about treatment procedures and the ability to complete preoperative questionnaires. So we've come quite a way in recent times in Legrand Care. As Benoit said, we've grown over 10% organically in recent years. But where are we going in the future? Well, certainly, I don't see the challenges in health and social care going away anytime soon. So we continue to foresee significant growth growing within our core markets in new geographies through acquisition as appropriate. Certainly looking to be market leader in the connected care field, although I prefer to see us leading the market as well as being market leader. We continue to invest in innovative new technologies and particularly in intelligent analysis of data and trends such that going forward, we would be able to predict with some degree of a -- high degree of likelihood that an event on exacerbation is going to happen in the near term. And then with the right intervention, this could be avoided, an inappropriate hospital admission avoided, which is absolutely fantastic for the patient, great for the whole health economy and go some way to managing this demand-led crisis that we're seeing across health and social care at the moment. Thank you.

Thank you, Chris. I think we will now move to the last segment of Legrand sales with essential electrical and digital infrastructure.

So as Ronan said, the last segment, if we may say. So it's going to be a bit frustrating because it's more than half of our sales, but I won't be able to spend 2 or 3 hours, I would love to spend on this piece. But we have assumed that it was a business which you probably knew a little bit more than the others. So we're going to spend 15 minutes for 54% of our sales. So in terms of products, that's where you see all the traditional Legrand products that you know well. So starting at the top left of the slide, wiring devices, overhead cable management, audio/video to distribute the audio/visual signals within the space. All products that help channeling power and data to the point of consumption, so trunking, floor installation, floor systems. Local area network products, both copper and fiber. Lighting fixtures, high-end, customized, highly-specified lighting fixtures in the U.S. Emergency lighting, those exit sign -- you have throughout commercial buildings to help exiting the business in case of an event such as a fire. A few industrial components, passive components like industrial socket, a few cabinets and so on. And building components, products that are really in the back of the truck of the contractor and which are used to do everyday installation, so boxes, flush mounting boxes, tubes, multi-socket outlet and so on. In terms of sales, so 54% of our sales, EUR 4.6 billion, it's quite well spread between commercial and residential, 51% commercial, 41% residential, a bit of infra and industry, but you know that we are not positioned on infra and industry. And in terms of geographical breakdown. Here again, good balance between the North and Central America, 44%; Europe, 37%; and Rest of the World, 19%. In terms of market trends. Well, there are a number of macro signs that point to a progressive recovery in the building market. The building markets have been very depressed for 2 or 3 years. residential throughout the world. I mean, in the U.S. and Europe, in China, commercial space and especially the office space in the U.S. And when looking at the statistics, well, number of specialists are pointing out that building market should recover, not with a growth rate of 5% or 6% per year, but turning from negative to positive. We put a number of S&P data on this slide whenever available. And when the granularity of S&P was not good enough, we switched to other data points. So in Europe, it is expected that the resi should turn negative to positive, minus 5% to plus 2% CAGR. Non-resi should turn from flat to positive. North and Central America, same thing. Residential should turn from negative to positive. Same for the office market. So you see that the growth -- the expected growth rates are not huge. S&P is expecting an average growth rate of about 2% per year for both resi and non-resi in Europe and North and Central America. But at least it's turning from negative to positive. What we don't know, of course, is how progressive will this recovery be because those are statistics over quite a long period of time, '24 to 2030, and we'll take 1 or 2 quarters, or 2 or 4 quarters, it's a question mark, but it will happen. As far as the Rest of the World is concerned, you can see that most people expect quite a nice recovery including China, which tend to be a question mark. As we said, there is an increasing demand for housing starts and initial need for additional electrical products. So I already mentioned the French numbers, 300,000 units being built a year, and the demand is closer to, let's say, 400,000. Same for Germany. Currently, 200,000 the need is estimated to be 400,000. Same for U.K., 340,000 against 200,000. But this housing gap is also more and more documented in the U.S. with an estimated gap of more than 2 million housing units, not to mention the Rest of the World where demographic and urbanization should lead to an increasing number of houses. Take, for example, India, you have a medium house, which are -- apartments, which are currently being built and the need is estimated to be 10 million per year. So I don't know when it will happen. But if we want everybody to have a place to live in this planet, there will be a need of additional construction to be made. On top of that, with a number of people accessing to middle class or upper end class, you have also more need for additional functions, additional electrical products. People wants their home to be beautified, if I may say, people need to remotely work. And when you remotely work, you need to have connectivity at your place. People are always in the need for safety. So they want access control, fire protection and so on and so forth. And you have a number of new usage such as gaming and remote health. So those trends should, at some point, support our, let's say, traditional building market. You also have a few segments that should grow a bit faster. We put a few statistics here. I will not comment the full slide, but health is expected to grow 3% per year, hospitality 5% per year and education 3% per year. And we have some exposition to those verticals. So again, this should help our market. What is our unique value proposition? Well, we want to enhance the comfort, performance and safety of buildings with product, it's really important that are simple to distribute, install and use from we claim to be, and I think we are the world #1 company in the essential product for buildings. You have a few examples. We want products that are simple from distribution to usage. So you have an example of a very simple, if I may say, or basic emergency lighting unit in France. It is available in 1,000-or-so point of sales of our distributors. The fixing system is the same than the existing base. So it's very easy for a contractor to take out the old emergency lighting unit and to connect it. Super simple to network it so that you can have from your iPad or your smartphone, status of whether the battery or the lighting are working or not. So super simple to distribute, to use, to configure. For all type of customers, we took the example of India. If you take light switches, wiring devices, we have full -- we have 10 ranges in India covering everything from basic needs to upper-end houses with 3 brands, which are Legrand India, of course, IndoAsian and Legrand BTicino. So the cheapest switch is sold, about EUR 0.20 of units. So approximately EUR 0.20 of units and the higher BTicino Legrand switch is probably sold at EUR 50 a switch. So we really want to cover all type of buildings and all type of segments. We are working a lot on design and look and feel. You have an example with our U.S. Focal Point, architectural lighting and acoustic solutions, which are designed to make really a very friendly atmosphere. And the same design, touch can be seen on many of our products, including the technical ones. And we often have a number of associated service to help our customers do the right association between the products. So we have configurators. We have product finders, we have inventory finders with the example of a U.S. audio/video offering. One focus. We are not talking much about wiring devices, but I remind you that we are the world leader in light switches. You have here a nice example of our last French range. For those of you who are currently equipping their secondary house in France, I strongly encourage you to go for this nice range. But Legrand rotary variator switch is a dimer, but we like to beautify also the names of our products. So we are the world leader in wiring devices. We are #1 about in 45 countries. We have 129 different ranges. You can imagine how complicated it is for somebody to compete against Legrand. We can be, of course, competed again in India, in China, in France, in Germany, in the U.S., but being a competitor to Legrand in all countries, you will need to develop more than 100 different ranges, which is a significant investment. So we are meeting all standards worldwide, all kind of buildings, from entry level to premium, basic, mechanical on-off switch to a connected switch and/or range of wiring devices include up to, I think, 200 different functions. And the beauty of that is that we are doing those ranges with only 12 product platform. So you see, it's a bit like in the automotive industry. From a market standpoint, we want to have a lot of variety, a lot of different product branches. But on the back end, we want to have as little platform as possible to make the most of the market coverage and at sometimes the productivity and the economy of scale. Well, the numbers are not very impressive. For those essential electrical infrastructure products, we grew organically only 1% per year from 2019 to 2023. Over this period, we had a price effect of what plus 5% per year? 4% to 5% price effect. So volume-wise, if you assume that the price increase were more or less the same across our product ranges. It implies a drop in volume of about, what, 4% per year. So it's a significant drop in volume from 2019 to 2023. So the market clearly wasn't supportive at all. And we hope and we expect now the market to be a little bit more supportive. In terms of right business priorities, we want to leverage market rebound. So we intend to accelerate the range renewal pace. So we have a plan, where we have identified a number of product ranges where we want to go faster, and we will finance it not through additional R&D, but we'll finance it by doing more platforming of our product offering, the 12 platforms for the 100, if I take the wiring device example, for the 129 range of products and by doing more productivity. We intend to -- and Brian was tasked with this job to redeploy North America to faster-growing verticals. We believe that the office market will rebound at some point. But as I said earlier, we have identified a number of faster-growing verticals, especially health and education, and we want to sell more to those verticals. And of course, we want to fine-tune to Legrand model. We could spend 10 slides on each of the subcategories, we don't have time for that, but you have to reassure the fact that we are working hard to improve all the drivers of the traditional Legrand model , so fill-rate, China saturation, e-commerce, configuration commissioning, maintenance, brand equity, customer training, digital content and applications, all those levers are important growth levers, and we are working hard to improve their efficiency. We want to expand geographically and reinforce our retail position. So geographically, it's typically Africa. If you look at the number of offices we have in Africa, we had 5 offices in 2010, 11 in 2020, 14 in 2022, and we have a target of 20. So each of the markets taken individually are small markets, indeed, Ivory Coast, Benin, Ethiopia and so on, but they have some significant growth potential, and we want to have a broader coverage of the African market. And in more traditional emerging market or new economic market, we want to reinforce our position in retail. You have some interesting numbers for China and for India. For China, for example, in 2023, alone, we moved from 6,000 point of sales to 10,000. The potential is obviously huge because you have tens and tens of thousand points of sales, and we have the same approach in India. We will pursue targeted acquisitions. Acquisitions, M&A, it's not only about buying datacenter companies or connected care companies, it's also about buying traditional companies, and we have put 3 examples, each of them have brought or will bring Legrand some additional benefit. For example, the most recent announcement was the acquisition of APP in Australia. APP, it's a maker of tube business. So of course, tube is not the sexiest business ever for Legrand. It does not have the same growth potential as a datacenter, for example. But this acquisition helped us to double our size in Australia. And when you are twice the size you were before the acquisition, you have huge synergy potential and a huge potential for additional economies of scale. You are more relevant vis-a-vis your customers, whether the distributors or the contractors. You are onboarding more talent that will help you to develop your business. So size in a given country also matter. Second example, A. & H. Meyer, we are, of course, very strong in connectivity products, sockets. But we were not as strong as we wanted to be in sockets sold to furniture makers because it is not our traditional channel, our traditional channel is to sell the sockets through distributors and through contractors and so on. So the acquisition of A. & H. Meyer was a way to acquire the market leader in Europe for connectivity products, sold to kitchen manufacturers or to office furniture manufacturers. So it's a channel play, not a product play, but a channel play. Last example, EMOS in Czech Republic. It's a maker of very traditional low face value product, boxes and so on, sold to small retail and DIY and EMOS was a way for us to acquire channel presence amongst a number of important players, retail players and DIY players in Eastern Europe. So you see that each of those acquisition has a merit and we'll keep doing acquisitions in those traditional -- more tradition essential products. Now we would have loved to invite our Indian colleagues to come. It was a long travel. So we have shot a video about India. So you will see our colleagues are not only talking about Essentials, but also about energy and digital transition products. The word on India before we send the video, so India, it's the fourth largest revenue contributors for Legrand. It's what, between 5% and 6% of our sales, and they were tasked to become the third largest country within a few years. So we are growing fast in India. We grew every single year since we entered India back in 1996, except in 2021, which was a COVID year, and we have a number of interesting position, but I will let the Indian teams comment our market positions in India. [Presentation]

Well, the last was a real advertising that we shot in India to advertise our new [indiscernible] economic range for retail actually.

Yes. So now -- so we have seen all the opportunities and our actions on the four segments of Legrand in terms of top line. In addition to this, there are a number of transversal growth enablers, some of them that you know pretty well, but on which Benoit will give some details regarding our road map.

I'll go fast because I have the feeling that you are really waiting for the Q&A part. So we'll cover very quickly innovation, eco-responsible sales, customer experience, digital pricing and M&A. And to start with innovation, we'll start with, again, a short video, showcasing a few innovation. We couldn't show everything, of course, but few innovations that we have introduced in the past couple of months. [Presentation]

So, what I like in this video, it shows that innovation at Legrand is not only about embedding new functions into products, but it's about the size of the product, the ease of installation, ease of cabling, introduction of recycled materials and so on and so forth. Well, you know that innovation matter and is really an important driver and important part of our business model. On average, we have spent 5% of our sales in R&D. And I confirm that this is what we intend to spend going forward. And I will not comment much. We have seen a number of products. It's really part of the DNA. And again, it's not solely about new functions, but it's about ergonomics, simplicity, competitiveness, innovation and so on. We have a very solid offer creation process. To give you an example, we meet once a month for 2 days, 2 full days every month except in August, we are in France. And that's where the teams present the project of new products. So every hour, we have a new product proposal and I have the pleasure and honor to chair this meeting, and we decide, depending on the interest of the range depending on the payback, the appetite of the countries, whether or not we go for the new products. So it's a very processed way to launch the product. We have a couple of metrics. R&D to sales 2023 was slightly below our long-term metrics of 5%. But I confirm that going forward, we intend to spend 5% of our sales in R&D. We have 20% of our heads, which are dedicated to software/firmware will progressively take that to 25%. We have launched a number of AI initiatives, and we believe that software dev, and productivity linked to AI, especially on the testing side and documentation side of software can be up to 25%. So we'll free some additional resources to have some additional firmware and software bandwidth. And last metric, we are currently doing 67% of our sales with platforms and we intend to move that up to 75%. We'll never be at 100% because every year, we add new companies that are joining the group. And by definition, it takes a few years before they can be moved to a platform. So innovation, supporting climate chain mitigation with an eco-responsible sales. It's another driver, which is important. As Virginie said, we have products helping to cut the energy bill whether in residential, commercial or datacenter, represented last year, 24% of our sales. So 1/4 for sales helped to reduce the energy bill to do savings, of which more than 50% in datacenters, I think that Brian gave a number of examples, Usystems, Minkels, Cold Corridor and so and so forth. But on top of that, we have a complete approach where we intend to echo conceive our product. We have a full-life cycle analysis of the impact of products for 73% of our sales. And again, it's difficult to increase because every year, we are adding tens and tens of new SKUs coming from the company we acquire. We are actively deploying circular economy principles. It has been a focus of our fifth road map, and I can already confirm that it will be a focus on the next one. So use of recycled materials, ban of single-use plastics, creation of eco or circular models. So eco-responsible sales, it's not only about saving energy for our customers, even though it's an important part of the story, it's also about being ourselves a responsible company. Customer satisfaction, I told you it was important. We have very processed as usual at Legrand way of measuring the customer satisfaction. So we typically survey 500,000 customers. We have a survey, which is done once a year in more than 70 countries. Last year, we got 11,000 verbatims on top of the quantitative feedback. We get a lot of qualitative feedback, and we have put in place what we call a closed-loop feedback. So every comment is analyzed by the local countries and we bring an answer to all those verbatim. So we started with a CSAT of 78% and an NPS of 40%. Last year, we were at 78% and 44%, and we are shooting for a CSAT of 80% and an NPS of 50%. I remind you that above 30% as far as NPA is concerned, it is considered as great level. So we are already good. But as written in the title, we want to move from good to even greater. Another interesting enabler is the software and firmware offer. So connected ranges represent 15% of our sales. Out of the 100 product families, we have 40 are connected. And by the way, you have the split of those 15% between the various subsegments. So of course, essential infrastructure are barely not connected, because when we connect the switch, we move it to the digital lifestyle, but the three other categories are quite connected. And we are investing in software and firmware. I told you that last year, 20% of our heads were dedicated to software and firmware. It was 15% in 2020, 5% in 2010, and we want it to be 25% or more than 25% in 2030. This was for firmware and software. As far as the more traditional digital -- sorry, I'm going fast because I have the [indiscernible] moving fast. So we are continuing our digital transformation journey. Again, we could spend half a day bringing you through all the initiatives we have. So we have more than 50 global digital initiatives. It is about CRM consolidation, webfactory. HRIS, human resource information system deployment. ERP, we have [indiscernible] of ERP replacement. And we want progressively those initiatives to incorporate some AI capabilities. So we have 500 AI ambassadors, we have completed 100 use case, and the objective is to do as many use cases as possible and whenever appropriate, it's not always appropriate to deploy them in the organization. This is the reason why we can plan internally to do 25% saving on our software development because we have made a number of PoCs that demonstrate that it is possible. Pricing, it's a strategic sustainable asset. Since we started to measure this KPI, we've always recorded price increase year-on-year, sometimes 0.5%, sometimes 6% or 7%, but always has not been a single year at Legrand, where prices went down. While the average pricing over the past 13 years has been plus 2.8%. But of course, it has been a bit artificially boosted, if I may say, by the last -- but the 2021, 2023, pricing was a bit exceptional. It is not by chance that we have the ability to do pricing. It's for, I believe, two reasons. Number one, of course, price matter to our customers, and our customers are extremely price sensitive, but they're also extremely sensitive to quality, availability, ease of installation, ease of maintenance, technical support, total cost of ownership. There are a number of things that are, for them as important as price, number one. And number two, we have internally the process, the tools, the skills with many pricing managers that are able really to enforce dynamic pricing policy. Well, going forward, we'll keep doing some -- a bit of pricing and our guidance from now to 2030 include a bit of positive pricing. M&A. Another very interesting enabler. We have completed 23 acquisitions since 2020 up to now, EUR 2.6 billion invested, EUR 1.1 billion of sales acquired. And as I said, of course, we are interested to acquire companies in the energy and digital transition segments, but we are also looking at more traditional acquisitions. And as you can see, we have acquisitions in all the fields of activities. And in all geographies, we have a French, Irish, Italian, U.S., Colombia, Chilean, Australian, Czech, so we've done a lot of acquisitions throughout the world. And it is here again, super industrialized and disciplined process. We have an active pipeline. As I said, we have more than 5,000 players in the industry. We have a pipeline review. And in our pipeline, we have 350 targets. This pipeline is moving. You have approximately 10% of the 300 that are going out and coming in either because after further qualification, they don't really fit our criteria. Sometimes they are bought by somebody else. Sometimes we have more interesting targets coming onto the list. We have quite a selective approach. We do on average 5 acquisition a year, but we have more than 50 targets analyzed each year. And what we're looking for are local complementary leadership position, good cultural fit and reasonable price. So as far as price is concerned, most of you know the Legrand metrics, we want an acquisition to be EPS accretive from, at least, 3 of full consolidation. Most of the time, it's much earlier than that, but it's a simple metric, if I may say. EVA accretive within 5 years, so we have -- want to have a [indiscernible] higher than the WACC within 5 years. And we are, of course, shooting for multiples, which are lower than our own multiples to give you an order of magnitude, even though some acquisitions were probably a bit expensive price in 2024. On average, the multiples we paid for the acquisition we announced in 2024 was 12x EBIT, bit expensive, probably a bit higher than the average multiples we paid, but still within our framework. And of course, we have a very disciplined docking process. Here again, highly industrialized, every time we acquire a company, we have processes, methods to dock them within Legrand. So that within 2 years, they can be fully integrated, and they can, of course, continue their story of nice growth and profitability increase.

Okay. Thank you, Benoit. So It's a nice time to move to the third part of the event. We've seen who we are, what we did, what will drive our growth until 2030. So now let's see what are precisely our ambitions for 2030 and invite again, Franck and Virginie to join us on stage, please.

Okay. So speaking about 2030 ambitions. I will start with sales and adjusted EBIT, and I will distinguish the organic effect and the M&A effect because that's two moving pieces that are necessary to explain. But first, as for the last 5 years, some heads up about the next 6 years, what are the market conditions we are envisioning. And here, we expect two clear trends, one about essentials and digital lifestyle, as Benoit said, turning progressively from negative to positive. And the second is about sustaining the good pace of energy transition and datacenters, with respectively, mid-single digit, high single-digit growth for them. In that backdrop, we are shooting for organic growth comprised between 3% to 5% and still on the organic perimeter, an improvement of our adjusted EBIT margin comprised between 30 to 50 bps every year, leveraging the recipes, I explained at the very beginning pricing power, productivity, dedicated and targeted resolute investment in digital, in new products and so on. So it's a little bit, of course, theoretical, but it means that if we were to stop M&A, excluding acquisition our adjusted EBIT margin would be above 22%, reaching 2030. So that's it for the organic impact. Now talking about M&A impact. Our ambition for 2030 is to grow 3% to 5%, thanks to the acquisitions in terms of top line, which means some acceleration versus the most recent years where we are among 3%. And as Legrand is more profitable at the average of the market, naturally, mechanically, there would be a dilution that we can measure our historical metrics between 30 to 50 bps every year on the margin. The last point is that with this ambition, we would add by 2030, EUR 2.5 billion of sales of top line to the group. So now the math is easy. If we combine M&A and organic impacts, group top line should be between EUR 12 billion to EUR 15 billion by 2030, and adjusted EBIT margin would be at around 20% of our sales. Last type of metrics is about cash generation. We want to keep a lean working capital requirement with 3 characteristics, 3 specificities: Always being a low credit risk business, always improving inventory, we have to normalize. Benoit mentioned, the investment we made to accompany our customers during the -- those bumpy time, but it will progressively normalize and we will also keep continuous improvement on that front in the supply chain. And the third item that is important to keep in mind is that our acquisitions are dilutive also on the working capital requirement. It is dilutive on the EBIT margin. It's also obviously dilutive on the working cap. We will keep being a low-CapEx business, CapEx comprised between 3% to 3.5%, all that embedding all investment we will do in digital transition in data centers. And as a result, free cash flow to sales should be between 13% to 15% during the period. Interestingly, it means a cash flow generation of around EUR 10 billion in the next 6 years. What would be the capital allocation during that period? As always, clear priority dedicated to M&A. We can allocate 50 -- slightly more than 50% of the free cash flow to external growth. We intend to serve attractive dividend at roughly 50% payout. And share buyback would be limited to avoid the dilution of free shares for [ employees ]. Two considerations concluding [ TTTTs ] part. The first one is about finally the magnitude of the [ dry power ] would be able to invest in M&A. We are talking about EUR 5 billion of [ dry power ] that we can invest in M&A over the last 6 years. And the second point I want to make about this capital allocation policy is that it is very clear, as you can see on the slide, very straightforward. It is very predictable, and it's also geared to growth. And now I'm turning to Virginie for the CSR missions.

Thank you, Franck. So for 2030, we will definitely continue our ambition on CSR. We want to continue having a positive impact on our customers, of course, on our employees, on the whole value chain. As I already mentioned, so we are currently in our fifth CSR roadmap, which we'll finish at the end of this year. We'll be moving to our sixth CSR roadmap in early 2025. And some of our key ambitions for 2030: To pursue our work on our eco-responsible sales. So we target to have 80% of our sales by 2030 to be made with eco-responsible products. That's either energy-efficient products or products covered by a product sustainability profile. And we have just reinforced, a few months back, our climate ambitions. So we aim to be a net zero at Legrand by 2050. This ambition has been validated by the science-based target initiative. A net zero ambition means that we have to reduce by 90%, 9-0 percent, our CO2 emissions by 2050 across our whole value chain to Scope 1, 2 and 3 against 2022 baseline. And we have new intermediate targets for 2030 to reduce by 42% our Scope 1 and 2 emissions and by 25% our Scope 3 emissions against a 2022 baseline. So big ambitions, but we know we have the right plans in place to carry them out and succeed.

Thank you. Thank you very much, Franck and Virginie. A few words to conclude. So we believe we are in the right markets at the right time and that our industry is structurally sound and boosted by powerful mega trends. We also believe that we have a transparent business model with effective strategy. You may like or not, as an investors of Legrand, the business model, but we opened the door of the kitchen and you can look the way we are cooking, and we hope that we were transparent enough that you can really understand the model of Legrand. And we strongly believe we have a clear road map to performance in terms of top line growth, profitability, cash flow and CSR. So thanks a lot. We'll now turn to questions. And right before -- I know, Ronan. Right before the questions, we have a short video showcasing the Celiane range of [ wiring ] device, which I showed a bit earlier. [Presentation]

So now it's time to -- for the Q&A session. And so all the speakers are back on stage to answer any questions you would have. We will give priority to the live questions from the room here, but we also have more than 200 people connected on the webcast that are also -- that also have the ability to ask questions, and I have them here with me. So please raise your hand, so that someone can give you the mic. And please stand up, ask your question, present yourself, where you're working, and then you might have the right to one follow-up, but not more, okay?

Highly processed, as usual.

And that's it. So let's start. So maybe we'll take the question from James here.

I need to stand up. I'm James Moore. I work at Redburn Atlantic. The first question would be really -- thanks for the new segmentation and the energy transition piece of the business, very helpful, 25% of business. To what degree have you just repackaged the company to orient yourself towards the splits that other electrical players have versus what I hope is more the case, you've actually seen the growth potential of electrification? And you're taking, I don't know, a pre-existing transformer business in Italy, a French circuit breaker business, and you're trying to actually push it more globally and to really expand the growth of a more dedicated selling go-to-market proposition.

No, we are not reshuffling our strategy or updating our strategy depending on what other players are doing. I have to say that we are in a business where we are all different animals. So I don't believe there's anybody comparable to Legrand. But I also believe that most of my competitors are also unique in a sense. Now, the reason why we have reshuffled our market segmentation was really because I think we are missing something not by putting transformers, UPS and circuit breakers as a top priority for growth. And we really wanted our country to understand that energy transition was not solely about EV charging stations or about lighting controls, but that the, what we call for our business, infrastructure-related products was also as important as pushing EVCS. Take -- the examples shown by [ Amélie ] are interesting. For EUR 1 of EVCS, you could potentially sell EUR 5 or EUR 10 of circuit breakers. So since we are a significant player in this field, since there are a number of mega trends putting the demand, we thought it was important vis-a-vis our own teams to tell them now it's time to run on those products also as you are currently running on EV charging station or running on lighting controls.

If a follow-up means a second question, could I ask about cooling? If we go to a world where direct to chip and immersion happen in the next decade, people talk about liquid growing at 80% on cooling and air growing at 10%, where does rear door heat exchanger really fit into that? It feels like it is quite linked to that speeding up, but how does it play out if we move to CDUs and liquid?

No. Our rear door cooling, as said by Brian, can cool up to 200 kilowatts. Frankly speaking, if you look at the next 4 or 5 years, I don't believe that they will be the higher density than that. So above 100 kilowatts, you will probably have a mix of technologies. Direct to chip could be one of them. Rear door cooling could be one of them. Now, each of those technologies have their pros and their cons. In terms of direct to chip, it's a bit of a more complex system, maybe not as adapted to renovation or refurbishment as rear door. The good thing -- rear door is that you have an existing rack provided, you have a bit of space, you can take out the old door and put a new one, including the cooling system. So no, we don't see that as a threat. And if it becomes a prominent technology and if we feel that there is -- that it's a missing piece in our catalog well, we'll move either organically through acquisitions. But we believe that with rear door cooling, plus all the cold corridor, hot corridor concept, we already have a number of cooling solutions to cool up to again to 2,000 -- to 200 kilowatts.

Gael de-Bray from Deutsche Bank. Can I ask perhaps two questions on the growth side? Two because obviously, your business model is obviously half organic and half M&A. So the first one is on organic growth. You're talking about 3% to 5% by 2030. Just to make it clear, I think that you don't really expect any catch-up in the markets after the declines we've experienced over the past couple of years. So no -- let's say, no real solution to the housing shortages, it seems, that we have in various markets on a global basis? And can you also confirm that you don't really intend to -- or you don't assume that you will outgrow the market within this 3% to 5% organic growth?

Well, you saw the numbers. According to industry specialists, the traditional building market shouldn't grow more than 2% per year. So we have based our 3% to 5% organic growth assumption, that's what Franck said, exactly on that. So building market turning from negative to slightly positive and then a few boosters coming from data center, energy, energy transition. Now, the 3% to 5% -- so assume a very moderate growth for the building market and Legrand slightly overperforming. It also assumes a bit of pricing. It's difficult to say, but if you are putting in your model a 1% price effect per year, you will probably be not too far from the reality, assuming, of course, that you don't have another crisis of raw material and components. So no, it assumes a small under -- overperformance on a market, which is going to be slightly growing for the building market, not indeed catching up strongly and a more sustained growth for energy transition and for data centers. Is it clear?

Yes, it is. It's not obvious when I look at the weighted average of the growth rates you've indicated for the essential electrical infrastructure segment and then the growth rates expected in data centers and in digital lifestyle. But anyway, I still see the 3% to 5% as a bit conservative. But maybe you're rightly so, at least in the short term. And then on M&A, the -- I think I remember from the previous CMD that you had talked about maybe 3,000 small and midsized companies in your market. Now you're talking about 5,000. So I'm not so sure what happened. If you've fine-tune the analysis or if there's been any new entrant to the market? So that's -- I mean, that's question number one on the M&A side. And the second one is, I also remember you had talked about potentially EUR 30 billion of new complementary markets. And today, it seems that you've maybe made some acquisitions, allowing you to access EUR 10 billion of EUR 30 billion. So is the remaining EUR 20 billion market opportunity still a valid number or not?

So the two questions are actually tied. Every time we enter into a new adjacency, we are adding potentially hundreds of new competitors to the list. Before we bought Enovation, none of the connected health companies were seen as competitors because we're not yet active in connected health. The day we bought Enovation, all of a sudden, we have hundreds of competitors and tens of potential targets added to the pipeline. So the move from 3,000 to 5,000 is coming mainly from the fact that we have added EUR 10 billion of adjacencies, so hundreds and hundreds and hundreds of new competitors, and also to the fact that every year, we are discovering new competitors, not in France or in Italy, which are -- and in wiring devices, which are markets which we know for decades. But when it comes to EV, when it comes to data center, when it comes to cooling, every year, we identify new potential competitors. Now as far as EUR 10 billion compared to the EUR 30 billion, indeed, we identified EUR 30 billion in adjacencies. And we entered only into EUR 10 billion, the reason being that we will enter in an adjacency if and only if we find the right candidate. So in the EUR 20 billion remaining, which is now a bit larger because we have added new adjacencies, we consider them as being super interesting, but we have not yet being able to secure a deal with the one player that is of interest. Take liquid cooling and rear door capabilities, if we hadn't had Usystems, we will not have bought a remote player. I would have preferred not be present in this sector rather than buying a company which did not have a technology or the market plans. So in other words, we will enter into the EUR 20 billion or EUR 30 billion of additional adjacencies, provided there is a player which is good enough to meet Legrand's criteria.

Maybe I will leave you to someone to ask who are the remaining opportunities.

But actually, I have the list. It's a bit confidential, as you know.

It's Martin Wilkie from Citi. The first question was going back to the essential electrical infrastructure, you've got low single-digit growth. But obviously, electrification is becoming a bigger part of buildings. So taking third-party forecast for the building market, are you sort of underestimating the content per building boost do you get? And then related to that, there are things like the Buildings Directive in Europe, European Performance Buildings Directive that could, during this planning period, give quite some boost to renovation. Just to understand, has that been factored in? Or is that some upside surprise if...

It depends where the money goes. Electrification does not mean that all of our products will be positively impacted. Take -- okay -- I'll take a very simple example. If you take a house in France, which is probably one of the most electrified countries in the world, the consumption is 6-kilowatt per house. If you add a heat pump, which is probably 4 to 7 kilowatts, and you add an EV-charging station, which is 7.3 kilowatts; so just by adding 2 classical electrical installation 80 square meter house, you are adding heat pump and EV charging station, it more or less triples the electrical consumption from 6 kilowatts to 20 kilowatts. Well, you will need to have a little bit more circuit breakers. You will need to have some measurement and loading shedding so that you can really manage the load and -- because you shouldn't charge electrical vehicle at the same time you're cooking your chicken typically. So it adds to the so-called energy transition category, but it doesn't add any single light switch, not a single one, right? It does not add any floor boxes. So the money spent to innovation, to energy transition goes straight into our energy [ transition ] category, but not necessarily into the other categories. The only caveat to that is that if you're going through a heavy restructuring of your home, so if you decide to change the windows, if you decide to add a couple of circuit breakers, if you decide to add a heat pump; it is possible that at the same time, you will ask the contractor to change a few switches or maybe to equip a new place for remote working. So there is side consequence or a side, let's say, possibility that a more traditional product offering are embedded into the total work. But it's not a direct impact. We can take a very simple example to that. Take -- I was discussing with one of you, the super bonus concept in Italy. Super bonus was tax incentive, whereby if you were spending EUR 100 to do energy-efficiency work at your place, you are getting EUR 110 credit. So it's kind of very substantial tax scheme. While it had a lot of impact on the heat pump, a lot of impact on solar panels, very little impact on our trade. Yes, we added a few circuit breakers, but we didn't add a single switch or a single box due to -- so don't get me wrong. All those incentives are good for Legrand. They are impacted and they will impact part of our sales, but not 100%. I don't know if it addresses your question.

If I can have a separate question as a follow-up. You obviously bought Enovation in the assisted living market, that was a sort of software deal. It looks like that will be unusual compared to what you're now guiding for. What was the rationale behind that particular deal? And why it's not applicable in the rest of the portfolio?

No. Well, it's indeed not a typical company because it is a pure software company having a profitability, which is much higher than Legrand profitability. And we paid healthy multiples, even though it fits completely into our financial metrics. So I can confirm that Enovation will be EV accretive within 5 years of full consolidation. So it is a bit nontypical in terms of business model. But in terms of financial metrics, it fits completely into the Legrand criteria. Well, we have identified, with Chris and the strategic team for quite a while, the fact that we wanted to complement our assisted living offering with some software capabilities. And what we liked at Enovation was that it has quite a broad software offering. It's not solely focusing on patient engagement. For example, it has all the suite of software that he described; and number two, it was available for sale, which is also a good reason. So we bought it. It's not out of question that we continue to do a few acquisitions in this trade. We'll not spend another -- same amount that we spent, we will spent quite a big money because we wanted to acquire a platform and because Enovation, it's quite a sizable player. Most of the players in the software business are EUR 3 million, EUR 4 million, EUR 5 million, EUR 6 million, EUR 10 million company and not [ EUR 60 million ]. So we'll continue to do some buildup. And we believe that the addition of Enovation in the assisted living traditional product offering is quite a powerful play. And we are the only one, from what I know, in this industry to have one foot in the software for health system and one foot in the home.

So maybe your neighbor -- yes.

It's George Featherstone from Barclays. Just want to come back on data center. You've said market is going to be growing high single digits for Legrand. That's a bit lower than what your peers are talking to. So I just wonder if you could explain the difference there?

I don't know how to comment my competitors. I can only comment that this guy, also in Q1, had a 60% increase in our book. Does it mean that the market is growing 60%? It doesn't. So we have a strong evidence that the IT load will increase by that number we gave, about 18% until 2027, I think. And it's not because you increase -- you double the IT load that you double the electrical equipment, it's a little bit like what I said for the home. It's not because you are moving from 20 kilowatts to 40 kilowatt back that the content is doubling or tripling. So no, I believe we have strong evidence that the market will grow high single digit. It already grew high single digit, but it was a bit helped by pricing. So volume-wise, we think it's going to go a bit faster than it used to go. Now we'll see. We'll see when the number is going to be reported. What I can confirm loudly, straight in my foot, as we say in French; is that we are not losing share. Clearly, with a 13% like-for-like growth between 2019 and 2023, we gained share. And market share, especially amongst the big guys, it's super easy to measure. If you take the big accounts, the Meta, the Google, the Microsoft; we know exactly who is supply what, for which product category. There's no secret. It's completely open book. So I can confirm that we have gained market share in a lot of our product categories and overall in the data center space.

And maybe just a quick follow-up on it. In terms of capacity that you have to service this market, how booked out are you in terms of the visibility you have from an order book perspective?

It is one of the very few markets where we have the order book. For the traditional building market, we don't. And I've been telling you consistently, for decades almost, that we have to deliver out of our stock the orders we get on a daily basis. For data center, it's a bit special. Since there is a rush for products, rush for capacity, everybody is getting a lot of orders. Now the difficulty is that it does not give you a precise sense of what your sales will be in 6 months because those orders can be delivered over a period of 2 or 3 years, those orders can be modified, they can be canceled. So it's not because you have an order book growing 50% or 60% that you will have any single month where your sales will grow 50% or 60%. So we -- of course, we are fighting hard to build up this order book. But moving from order book to forecast is quite a difficult exercise. This being said, I still confirm that we are confident that the data center market will continue to [ grow ] not at a 50%, 60% pace per year.

It's Max from Morgan Stanley. Could you just -- could you talk a little bit about your ambitions to expand into gray space? I think you said you sort of want to be #1 and #2 in everything that you do. So obviously, there's some pretty large incumbent players there. So specifically in the power side, switches, UPS', where do you think you could potentially move into?

Well, we have already quite a nice product offering, but indeed, we're not doing a lot of sales in data centers. And you could see our circuit breakers, switchgears, transformers, UPS are mostly sold to commercial buildings, not yet enough to data centers. So there are a number of things we can do, both organically and inorganically. Inorganically, we can keep buying companies that are specialized in selling gray-space products to data center operators. For example, 6 months ago, we announced the acquisition of a nice Irish company called Davenham, which is doing switchgear specifically for data centers. So 98% of their sales are made to data center guys. So buying components, safety breakers and so on from X, Y or Z, putting them into a very solid switchgear and selling that to data center customers. Well, Davenham, I hope you will see in the coming quarters a lot of growth coming from Davenham. We are currently expanding capacity at Davenham. And we intend -- Davenham, its mostly to the European player, and we intend to expand it to other geographies. And you'll see other acquisitions in this field in the coming quarters, hopefully. Organic -- this is for inorganic growth. Organically, it's about organizing ourselves to meet the requirements of data center specialists. So data center specialists, they want to have better support in the conceiving the electrical installation. So we need to put experts that will help them, work with them on their specs. They want to have somebody sometimes installing the products, but supervising the installation. They want to have service teams able to go on site within a few hours to fix the problem, should the problem happen, and so on and so forth. So we are currently organizing ourselves in a number of geographies in order to provide this 360-degree service in order to better serve or data center customers. So yes, there are a lot of big guys in this gray space area, but we have already secured a number of projects in France, in Switzerland, in Italy and elsewhere. And we believe that we have -- and we are building the capabilities to grow. And I can bet with you that in 3 years' time, when we will meet, it will no longer be 95-5 but it will be -- although it's not an official forecast, but it will be maybe 70-30 or 60-40. So we have a lot of ambitions in the gray space, and I'm convinced we will succeed.

And maybe just a quick followup. You've talked previously about trying to diversify your North America business away from office into some of these other segments like education. I think you talked about kind of using pricing to do or -- not cutting prices, but maybe stimulating demand in the second half of last year. Given how kind of protected your markets -- so how do you actually do that in practice? And have you actually had some success? Because I guess that's your own barrier to entry that...

We'll never use price -- the price lever to enter into a new segment. And we believe it is not a winning game. When you have a strong incumbent player, your customers are not switching from this player to you because you are cutting price by 10%. They are switching to you because you are providing better service, better product and so on and so forth. So price will never be a lever. Now, if we want to enter into the K-12 and all those verticals, it's about developing products that are really adapted to the needs of those verticals. And sometimes the product may be slightly different. It's about entering into the space, but maybe you can say a word about the strategy we are putting in place to grow faster into the education, hospitality and so on.

So it's really focusing on the specific applications. If we think about the reality of where we work versus where we learn or where we live in the case of health care, technology is becoming more prevalent. Technology is used in the classroom. It's certainly used as part of health care. We already have AV solutions, we have network solutions that have been optimized around the commercial office applications because that's where the growth was. We had strong market position. So now it's putting the effort into looking at what's slightly different about moving flat panel mount from a boardroom into a surgical studio or a surgical suite or thinking about how a teacher is going to interact with remote and other learning capabilities and then developing the go-to-market for it. And that's probably where we've optimized our go-to-market, our sales teams for serving particular end markets, but we can pivot them. We can shift from a commercial office to health care, to in education. And again, those adaptations of the product will allow them to migrate because things are looking more and more similar and then even within commercial out of office into retail spaces, where digital signage continues to be very, very prominent. And that's -- we've already really built out the plans for all of those. All of the business leaders, division leaders within LNCA are highly motivated to reduce their concentration on commercial office. But I do think, Benoit shared a bit, we're not going to abandon it. We're sort of at the bottom of the market now, and there is a movement back to the office, there is demand for giving people a reason to commute. So think about that. You got to earn your commute now. You've got to have spaces that are more enticing and more productive. So we have to be able to do all of those things. But there's plenty of opportunity. And the trends around health care and education are very favorable for the types of products we have.

It's Andre Kukhnin from UBS. I want to ask a question on portfolio. Are you entirely happy with what you've got right now? And are you considering any pruning and hence maybe disposals going forward?

Well, we are asking ourselves the question every year. It's part of the strategic review we do, including with our Board actually, whether there are pieces of businesses which are structurally underperforming or -- which we believe will not make sense as part of the Legrand portfolio. We haven't found any significant piece of business. So we think that there are many things we can add to the portfolio. Hence, the EUR 30 -- EUR 20 billion of additional adjacencies. But we haven't found, let's say, distressed assets neither in terms of top line, nor in terms of profitability that would be a good candidate for portfolio pruning. The reason being that compared to a lot of the companies active in this trade, we remain a small player and a pure play. We are EUR 8-point-something billion in a world where you have many players, which are EUR 20 billion, EUR 30 billion, EUR 40 billion. So we are not as diversified as other companies. And the result of that is that we don't have side assets that we could get rid of. Now. It's not a taboo if we were to find, I don't know, a couple of hundred [ million ] euros where we believe there's absolutely no synergies with the rest of the group and that could be divested because it would underperform structurally, we would divest.

If I may. So that performance in essential infrastructure -- electrical infrastructure products of minus 3 to 4 volumes or volumes that you mentioned, that's entirely in line with the market?

It's entirely, sorry?

In line with the market.

Yes, it's in line with the market. It depends on the geographies. There are other geographies where we think we did better than the market. But if your point is, would you get rid of 54% of your sales, it's a nonsense. We are -- not only because it's half of our sales, because it's a historical business, but also because if you don't have this presence, you are not selling in energy transition or in digital lifestyle. You're also selling in those businesses because you are distributed everywhere. You are part of the game with all contractors in this planet, thanks to your wiring device piece of business and so and so forth. But again, [ notable ] on that if part of essential or part of the transition piece, we were to identify a distressed asset, we would sell it without any problem or philosophy issue.

If I may, just last one on the office and particularly that U.S. example that you gave, where I think 30% of the existing stock is Grade A, but future construction is 85. Is there a content argument there for you in terms of what's your kind of value per square meter in Grade A versus Grade B, C?

We've not been able to put together a number which would be reliable enough to share with you. We believe that, yes, there is a [ content ] just qualitatively. You cannot imagine a qualitative office space without having high-quality lighting, without having lighting controls, without having sustainable product inside, without having bandwidth to connect yourself and to get access to the network, without having hybrid AV systems that you can -- at the same time, you can hold meetings which are mixed meeting, presence meeting and remote meetings. So qualitatively, we believe that nobody will tomorrow be back to the office if you're not able to bring this kind of added value. But we have -- we don't have a precise content to share.

[indiscernible], ODDO BHF. One clarification first, does your guidance include 2024 or is it from 2025 onwards?

No, it doesn't include '24. It's from '25 onwards. And of course, it is a guidance we should be seeing as an average, by the way. So on average, in 2030, when we will look at the KPIs, if we are doing our job well, we should have recorded organic growth between 3 to 5, perimeter growth between 3 to 5 and so on and so forth. But no, it's -- we, of course, are not commenting the '24 -- lending in the '24 guidance.

Second question, if we assume 17% of sales in data center this year and, let's say, double-digit growth and 1% of pricing, you get close to 3% of organic sales growth already, which is the low end of your range. And you have 80% of remaining sales, still, which we have close to zero volume growth. So how do you reconcile this with the fact that we are at trough in the construction market?

Well, first of all, if we were to grow double-digit in data center, we'll be happy. We think that the market is going to grow high single digit, not necessarily double digit. Second, the 1% price, to be a purely mechanical, should be times 83% by definition because the high single-digit growth doesn't include some price. And then, of course, the low end of our guidance implies a very slow recovery in the building market. The higher end of the guidance implies a more dynamic building market. So our guidance is not 3% organic. Our guidance is 3% to 5% organic. But you're right, the low end of the guidance implies a very small [ flat ] plus growth in the building market, indeed.

Kulwinder Rajpal from AlphaValue. So first, just a clarification. So now when we look at the new segmentation of faster expanding, the 50-50 midterm goal kind of seems moot. So should we now look at it more as a 60-40 goal?

We -- it's a fair question because indeed, we gave a couple of years back target. We are not shooting for a target anymore. Yes, indeed, the transition piece should theoretically grow faster, but we could see the past 4 years that, for example, the smart home piece didn't grow faster than the rest because it's highly linked to new construction. So theoretically, you are right. The 54-46 conceptually should rebalance, but we're not shooting for an official target. What is important to have in mind is that long term, we believe that 46%, indeed, should be supported and driven by mega trends that should definitely help the 46% to become 48%, 50%. It also depend on acquisitions. If we acquire a lot of traditional businesses, of course, it will impact the mix. So without shooting a number, yes. I mean the trend should be that the 46% become progressively 48%, 50% and so on.

And then just zooming in on energy transition, are there any particular pockets in there that make up more than 5% of that particular segment? Or is it too distributed for you to break out?

No, it's more -- I don't want to give a too precise breakdown. The biggest piece is definitely the circuit breaker piece because it's also the bigger market. So the switchgear, the big cabinets, including [ air ] circuit breakers, molded case, miniature circuit bakers, measurement; this is the biggest piece. And...

And lastly, so connecting this to the grid problem that we are currently having with the renewables, so when we look at just Legrand in the grid value chain, obviously, it would be mostly low voltage, plus maybe a little bit of medium voltage. So how would you classify the great opportunity for you, going forward?

Well, by grid opportunity, you mean the related sales we can make in renewable installation, for example?

Yes. Because, I mean, the grids need huge upgrade across developed economies so...

We are not in the grid business, clearly. So all the capacity that we need to be built in order to cope with the increasing demand, generation, transmission, solar installation, wind turbine; we are not in this business at all. . The only thing we can tell you is that every time there is a capacity which is built somewhere down the chain, somewhere, there will be [ initial ] circuit breaker, somewhere there will be [ initial ] transformer, somewhere there will -- so we have a side impact of this grid building, but we are not in the core infrastructure piece of the market. And we don't intend to be because we believe it's out of reach. It's already occupied by a number of players, doing their job pretty well. And it's not the natural playground of Legrand. The natural playground of Legrand, it's really the building and the data center, not what is before the building, if I may say.

Alasdair from Bernstein. So I think we're going to see a lot more kind of architectural design changes within in the white space. So I was just wondering if we see a kind of -- I was wondering whether you could talk a little bit more about the respective growth rates across that product portfolio? Do you expect it to be kind of market of more extreme, sort of much stronger growth in intelligent PDUs and busbars? And do you expect to see kind of cannibalization in cable management? I was wondering whether you could let us know a little bit more about which way your portfolio leans now? You've had a lot of M&A in the last couple of years.

Well, all products which are related to higher-density racks will grow faster than the rest just because this is a hot topic today. So we expect cooling probably to go a bit more -- a bit faster than more traditional products. But we don't have a product family, which we believe we'll grow 30%, 40% a year and other which will grow 5%. So overall, even though there is a bit of a hype and probably higher fast growth in cooling for couple of quarters, midterm, we believe that they should -- we should have a consistent growth all across our portfolio of product. I don't believe -- Brian, if you can add to that.

Yes, no, very much the same. It will average out.

It will average out. Maybe if I just -- if I could pick up on Slide 53, I think, it was as well. You talked about the Legrand offering for AI, right, $50,000 to $150,000. So I was just wondering if you could put that in the context of perhaps a standard rack today. And that's a broad spread between -- if I've interpreted this correctly, between $50,000 and $150,000. So is that -- does that just scale up in terms of kilowatt per rack? Or is -- are there different sort of architectural influences here as well?

So that -- those numbers are dependent on effectively what you're selling into the rack. So the power levels are much higher. There's connectivity in there as well. But if we were to say what's a typical general compute, it's 15,000 to 20,000 on a comparable. So the AI is giving you more value typically for the rack or cabinet, for reasons that I talked about. There's a bit more specialization. Right now, there's an element of price just sensitivity because everybody is in a rush, so they're paying more. You're going to bring cooling into that, where you might not have rear door cooling today, and then we wouldn't be participating because we don't do traditional air cooling. The busway and tap boxes, they move pretty proportional to the power levels. So you're going to have to up the size of the busbar. So it could be 200 amp going to 800 amp or even 1,000 amp that will increase the value of that. And then the tap boxes themselves are going to have higher cost, higher-end components. Now the PDUs, it won't be one-to-one, but generally, you need more robust internals. The way you're talking about an AI application and the ones that we've designed specifically for AI applications, it was one of the other examples I gave you about the full -- there were some special features that they wanted. They wanted more monitoring capabilities to track, again, because the AI, especialty training, it's just a very different use profile. They go from 100% to 0. So power consumption, power monitoring, temperature becomes a big deal because it's not like the general compute, which is a little bit more stable. So there's value add in a lot of different dimensions. The power piece is the most obvious and you bring cooling and heating. But then the electronics or the features in the racks and cabinets, which again, they're not one-to-one, but they could be 20%-, 30%-type premiums. And when you package it all together, that's where those multiples come in.

Eric from CIC. I got one question. On this 46% of sales in transition-related product, is it not already 48%? Because you explained that with the last acquisition in data centers, data center represents already 70% of the sales.

Well, it's just -- it was 46% last year. We'll see in 2024, depending on the acquisition. Don't forget that we've also bought APP, which is a EUR 100 million business in traditional businesses. So we'll see. But indeed, if this piece is growing faster organically than the essentials and if we keep doing 60% of the sales acquired in transition against 40% in essential, again, mechanically, yes, the 46% will become 48% or 50% pretty soon.

I got another question. Can you maybe tell us more about Omajin, your new -- if I'm not -- a new brand in residential connected product?

Yes. Well, you live in France?

Yes.

So you are a potential customers, so I should be very careful. No, you know that we bought back in December 2018 a very interesting company in France called Netatmo in doing smart home products, air quality, connected cameras, indoor and outdoor connected thermostat and so on and so forth. And the products are highly engineered. For example, the indoor camera -- outdoor camera, they have embedded some face recognition. If you register your face, it recognize you or your wife's face and it doesn't signal anything. But if it is somebody the camera doesn't know, it sends a signal to your phone. So it's high engineered product. And the Netatmo team thought that they needed to have a more access type of product offering in order to expand the accessible market. So now Netatmo is selling. So the launch of Omajin was -- it's a new brand, dedicated to really access type of smart home products. So now Netatmo -- we have actually 3 set of products with Omajin, which is a simple, out-of-the-box access type of cameras and devices. Then we have Netatmo, which are highly engineered product for a smart home, and then you have the Legrand with Netatmo [ ranges ], which is a complete system, where you put together a full home energy management system with thermostat, cabinets, wiring device and so on. So it's a little bit like what I said about wiring devices. It's a better way to cover the whole market. It's difficult to cover the market with only one brand because you're always at risk of damaging the image of your brand if your brands start to sell access type of products that is it.

Maybe a last one. You mentioned for Spain, if I'm not wrong, a regional and a national team organization. And I was wondering if this kind of organization was similar in other countries at Legrand?

Well, the commercial organization depends very much on the customer setting in a given country. So you have all types of organization. We want to have a commercial organization, which reflect more or less the organization of our customers. So some of our customers are organized regionally, take the distributors, for example. Some others are organized regionally, especially the big accounts. So yes, in a number of countries, you have similar type of organization. But again, we want to mirror our customers' organization. It's really part of the model of Legrand highly processed back office, purchase, manufacturing, finance, acquisition and so on. But in terms of sales organization, we give a lot of leeway to the countries because we really want the organization to, again, mirror the organization for customers.

Okay. Thank you, everyone. I think it's the end of this Q&A session. Before I hand over to you, Benoit, for a few words of conclusion, for the ones attending the event here live, you will have a light lunch served right here. And we have a very small present also for each of you that is coming from France, and don't forget to get it when you will walk up the stairs before leaving the place. Thank you.

Thank you very much. Compliant gift, so don't forget. It will not breach -- I hope it will not breach the compliant rules of the organization. If it does, don't take the gift, we won't be hurt. No, I just wanted to thank you a lot because I know that it's -- dedicating half of the day to Legrand, it's a big investment. So thanks very much for coming. We hope it clarifies the Legrand strategy and way forward. And should you have more questions, the whole team, Ronan, Antoine, Franck, Virginie, of course, the operational team and myself are at your disposal to answer any questions you may have. Thanks a lot.

Thank you.