Legrand SA (LR) Earnings Call Transcript & Summary

Good morning, good afternoon to all of you, and welcome to Legrand 2025 CSR CMD that is held live and webcast. This event is the continuation of our latest CMD that we held on last year on September '24. During which we presented our strategic road map for the next 6 years until 2030. Today, Benoît Coquart, Chief Executive Officer of Legrand will first introduce the event with a reminder of where we stand in terms of CSR, what are our midterm ambitions and how CSR makes Legrand a better company. Then Franck Lemery, Chief Financial Officer of Legrand will explain how CSR is effectively and significantly supporting performance. We will have a word from Legrand's Chair of the Board on our governance practices, of course, also supporting performance. And last, Virginie Gatin, Executive Vice President, Corporate Social Responsibility, will detail our achievement on our previous CSR road map, and she will introduce our targets for the one that is just starting, and that will last till 2027. The presentation , should last not more than 1 hour and after, we'll have a Q&A session about half an hour. [Operator Instructions] Thank you. And now I'm handing it over to Benoît.

Thank you very much, Ronan. Hello, everybody. Thank you for connecting to this virtual CMD. So needless to say, what we're going to present today is fully consistent and was even inspired by our purpose and our values. So you have on this slide, a reminder of our purpose, improving lives by transforming the spaces where people live, work and meet as well as of our 5 values. If we look a bit what happened in the past couple of years, especially in the past 5 years, it has been quite a difficult time market wise. So we had to go through COVID, we had to go through the shortage in raw mat and components through the Ukraine-Russian war, through the building crisis. And even though the times has been a bit difficult, we've been able to deliver both on our financial and nonfinancial objectives. We have here a few numbers. So over the past 5 years, our sales grew 31%. Our EPS grew 42% and we were able to have an average achievement rate for CSR road map of about 121%. Our CSR road map significantly impacted the Legrand business. If you look at a number of Legrand metrics compared to what they used to be a couple of years back, we have made significant progresses. For example, over the past 5 years, we've been able to cut our CO2 emission scope 1 and 2 by 61%. We now have more than 30% of our managers that are women, and we have hit record high 80% customer satisfaction. We will demonstrate today that we intend to continue to have an ambitious CSR approach and to leverage CSR as a competitive advantage when it comes to attracting talent, when it comes to serving our customers and to make them satisfied. So to make a long story short, CSR is at the heart of our strategy, and we'll continue to be extremely ambitious on that. Now you know that at Legrand, we love setting long-term ambitious targets. So you have here a reminder of our 2030 CSR ambitions, gender diversity. We want to have 1/3 of our key management position, to top managers being held by women against slightly more than 13% back in 2015. We have ambitious climate targets. We intend to cut by 42% of scope 1 and 2 emissions and by 25% of Scope 3 emissions by 2030. We want to phase out all single-use plastic by 2030 to help our customers saving 70 million tons of CO2 using... [Foreign Language]

[Foreign Language] Demonstrating that CSR is fueling the strong commitment of the teams. Our teams are trusting our strategy, our the value proposal of our portfolio and also our values. Now the third driver of performance supported by CSR, processes and discipline of the organization. Legrand is recognized for its responsible, lean and accountable organization. We have a clear definition of roles and responsibilities. We are local for front office to stick to the market and global for back offices to leverage our scale. We took the opportunity of CSR implementation to further improve this organization with, first, a more granular risk management; and second, and large set of KPIs. Just to name one example, we have worked a detailed mapping, a detailed analysis of our physical climate risk that may impact the main facilities, the main production sites and the main distribution centers. Last but not least, the fourth contribution of CSR to group performance is about best governance practices. Before handing over to Virginie Gatin, let's watch together a video of Angeles Garcia-Poveda, Chair of the Board of Directors, who will provide insight on the robust governance of the group.

Hello, dear investors. I would like to take this opportunity to share with you some highlights on Legrand's governance. Legrand enjoys a robust governance that ensures effective and independent oversight and relies on 4 major pillars. Board composition first, solid and well balanced in terms of independency, skills, nationalities, aligned with best market practices; second, a split leadership structure with separate and complementary roles between Chair, CEO and Lead Independent Director; third, highly engaged members. In 2024, 26 meetings with 97% attendance rate, including no less than 34 management interventions during our Board sessions; fourth, strong and transparent processes for example, succession plans or Board evaluation. Let's now take a closer look at our governance structure and Board composition. The Board is organized around 4 strong and efficient committees all of which are chaired by an independent member and all of which work hand-in-hand in crusting and executing Legrand's CSR commitments. In 2024, the engagements and CSR Committee was highly involved, both in reviewing the 2022, 2024 road map results and in shaping the 2025-2027 road map that you are about to discover. The Audit Committee took over responsibility for sustainability reporting. The Remunerations Committee carefully reviewed the CSR criteria present both in the short-term bonus and the long-term incentives. Our Board is composed of 14 directors. 2 directors representing employees, who respectively sit in the audit and the remuneration committees. Our directors bring a strong diverse entry mix of skills in their respective fields across various industries and functional expertises. 75% are independent. We have 7 different nationalities. 42% are female, 50% bring experience in general management with no less than 4 sitting CEOs of global companies and including specific expertise in sustainability. We have a state-of-the-art selection process for appointment of new directors. The Nominations and Governance Committee anticipates future Board succession needs and constantly seek for the best suitable profiles through a evergreen process, producing high-quality shortlists systematically interviewed by all committee members. This process allowed us to appoint 4 new Board members over the past 3 years with an approval rate above 99% at shareholders' meeting. Once the directors are on board, we do not only rely on past experience but to devote every year a day to a working session to develop our collective knowledge on specific topics that are relevant to the brand. Climate, geopolitics or artificial intelligence are some examples. Our yearly upside strategic seminar gives us the chance to deep dive on specific geographies or business areas and to hold detailed discussions on our strategic road map with a balanced mix between challenge and support and a high level of trust in the room that enables healthy debates, your Board is well equipped to support Legrand in continuing to deliver its commitments and advancing a strategic agenda. You can count on all of us to protect our shareholders and stakeholders' interests. Thank you.

Good morning, good afternoon, everyone. I'm going to go over our 2022, '24 achievements on our previous CSR road map, and then I'll cover our new CSR road map. So first, if we take a look at our global achievement, I think it's really good to see how the group has systematically overperformed target across the 3 years of the road map. If you look a little bit closer, of course, you can see how we did extremely well on climate, and it was a little bit more difficult on circular economy, for example, but I'll go back to that and explain a little bit more in a second. If we start first with diversity and inclusion, and we look at each of the KPIs for 2024. So on gender diversity, we were aiming to reach 30% of management positions held by women by 2024. And were slightly over the mark at 30.5%. So all the teams did great work, and this is a really good achievement. On diversity and inclusion labeling, we were aiming to have 80% of our headcount covered by a GEEIS label. We are definitely over overperformance in that one at 94% of our head count covered by GEEIS Label. Employability of early in careers, the idea behind that was really to have internships, apprenticeship and recruitments covered. We wanted to have 4,000 new opportunities for early-in-careers every year of the road map. Across the 3 years, we're at 12,323, so above definitely the target. And I'll explain in a minute as well, a really good dynamic in our teams, thanks to this KPI. And then we extended our diversity and inclusion commitment to our suppliers with the aim to have 200 additional businesses with supplies qualified as D&I, and we ended the road map at 321. If we take a closer look on gender diversity, we see a really strong increase over the last 5 years. First, looking at just management positions, so Hay grade 14 plus with over 30% increase across the 5 years. And if we look at key management positions, we see an even steeper increase, which is really positive, over 60% increase across the 5 years to reach 27.8% by 2024. We know that this brings a really good performance to the teams and also a renewal of talents within the team, so already positive. Moving to the second pillar of the road map, climate. Our aim was first to decrease Scope 1 and 2 emissions. Benoît early on presented the 2030 targets. We have a clear pathway to 2030, and we really did well in the past 3 years and even in the past 5 years on decreasing our Scope 1 and 2 emissions. What we have behind this is more energy efficiency in our sites but also deploying renewable electricity, whether it's on-site or through purchasing renewable electricity. Our aim was to reduce by 10% each year of the road map, our scope 1 and 2 emissions, we're clearly over that market at minus 53% across the 3 years of road map, reaching 65,000 tons of CO2 emissions on Scope 1 and 2. On Scope 3, Benoît also presented the targets for 2030 our key point was really to engage our suppliers. So we were aiming to engage at least 250 key suppliers and have them commit to reducing by 30% their CO2 emissions on average by 2030. We clearly did really well on the engagement side with 327 suppliers engaged. We're slightly below target on the amount of their commitment at minus 341 kilotons of C02. When we move that, I'll explain what we'll do a little bit differently in our new road map. Scope 4, really important topic for us and for our customers. The point here is really through our energy efficiency offers to enable our customers to consume less energy and, therefore, emit less future emissions. So this target, of course, is our target, but it's also for the benefit of our clients. We were aiming to avoid the emission of 12 million tonnes of CO2 over the 3 years of the road map and we're really happy to show that we are well above that at 14.8 million tonnes of CO2 avoided over 3 years, so showing a really good dynamic on our energy efficiency office. Taking a quick look back at Scope 1 and 2, just to show the really consistent decrease in our CO2 emissions across the last 5 years. You see that we moved from 177 kilotons of CO2 in 2019 to 65 kilotons in 2024. So a really, really good achievement. And thanks to the Legrand teams for all their great work on this. Moving to our third pillar, circular economy. First, we wanted to include more and more recycled materials into our products. This means, of course, less impact on the environment. It also means less carbon. So overall, it's good for us. It's good for our clients. We were aiming to have 15% recycled plastics and 40% recycled metals. We did really well on the recycled metals reaching 44% by the end of 2024. We are slightly below target on recycled plastics at 10%. But there's been a great leap between '23 and '24 on this one. The teams have really built a strong knowledge on how to integrate and we'll pursue the work. Banning single use plastic, it's really about taking into account pollution. And we know that plastic packaging pollutes the environment, pollutes the oceans, and even though Legrand will not solve the problem, we can definitely be part of the solution. So we decided to have strong commitments on phasing out single-use plastic from our packaging, starting with banning flow pack packaging coming from fossil fuels and expanded polystyrene. On expanded polystyrene, we're really almost there. We're precisely at minus 99.3% elimination by the end -- by the beginning of 2025 we're there. Flow pack, it's been a little bit of a slower path because we've had to learn as we go how to replace the packaging, what could be the alternatives so we're minus 23%. We're not completely where we wanted to be, but we've learned a lot in the past 3 years, and we're really accelerating the phasing out. And then environmental product declaration, it's really all about providing information to our customers. It's about giving them a full information on what is the environmental impact of the product they are buying from Legrand across the whole life cycle of that product. We wanted to cover 72% of group annual sales with product sustainability profiles, mainly EPD, so environmental product declarations. We're overperformed at 75%, really good achievement because it shows the dedication of our R&D teams to provide all that information to our clients. And it's very useful for our clients not only to calculate the life cycle analysis of the buildings, but also to understand what they're buying and what is the highest performing product on the environmental footprint. Moving to showcasing what we did on phasing out single-use plastic and recycled content. You have a few examples here. We wanted to show concretely what our commitments look like. So on the left-hand side, you see the packaging that replaced previously plastic packaging. It's important to understand the work that goes behind it. First, the teams really rethink what packaging do I really need? So they're really going to look at what can I get rid of? Which packaging is not needed? Or what -- how can I make my clients' life easier by using different types of packaging? On the right-hand side, you see products using recycled content. I'll take the example of the Céliane wiring devices, which on average, uses 45% recycled materials which is great or the Cablofil wire basket, which uses over 90% recycled content. So you see really qualitative products which have a high recycled content. Now moving to our last pillar of our 2022, 2024 CSR road map. First, customer satisfaction. The idea was really to roll out customer satisfaction everywhere. It's been mentioned by Benoît, really important to make sure that we listen to our customer everywhere that we carry out regular customer satisfaction surveys to understand what our customer thinks and to go back to the customer understand what we can do better to increase that satisfaction. So we're really happy with our performance at over 93% because it's really showing all the efforts done by the Legrand teams to go out and see what our customers want and make sure they are satisfied. Business ethics is something we've had for a long time and will continue having. It's making sure we have a strong business ethics policy, reframing, meaning we know within the Legrand teams who needs to be covered and be aware of that business ethics policy to make sure those people are trained and that there is full compliance. We're at 98%. Of course, we're aiming to be at 100%, but still strong performance on business ethics. Employee development, we really want to work on the employability and the skills of our workforce. So throughout the road map, we worked on increasing every single year the number of hours of training for employees, covering at least 85% of our employees. So it's 5 hours, then 6 and finally, 7 hours in 2024, and we're very happy to see the outcome of over 95% of our employees have been trained at least 7 hours in 2024, and it's something we will continue. Safe workplace is crucial, making sure we have less accidents and of course, that we go towards 0. We wanted to reduce by 20% our FR2 across the 3 years of the road map against 2021 baseline of 3.49. We're really, really pleased to see that minus 26% because it improves, of course, our operations and improved productivity, but more importantly, it means we are safer at work and that we take good care of our employees at work and make sure there are less and less accidents, which is a really important point. So we will, of course, pursue this work in the coming years. And then Serenity On program is our social program making sure we cover our employees through health, through disability issues, through parental leave. And also, we extended the 2 well-being health and -- sorry, health benefits and mental benefits. We wanted to cover 100% of Legrand employees on this. We're just below target at 96%, but we're continuing the deployment, of course, and we'll reach the 100% very soon. So all of those KPIs and all of these achievements first, well done to all Legrand teams because it's been really great work and well done to all for this. We're very happy also to showcase this to our clients because a lot of those topics means we're a better performing company. We're stronger and we also have great things to showcase for our clients but also our other stakeholders. To summarize a little bit what CSR brings to the business, we wanted to give you an example of how CSR nurtures and really is used in our business to show how it's used by our business leaders in concrete situation. So here is a video. [Presentation]

So it's really great to see how our CSR commitments really help our business. It's also good to see that our great performance on CSR has helped our nonfinancial ratings. If you look at our 2024 results, we're very happy with the CDP climate change A list, we joined the A list this year which is really good recognition of all the hard work done by our teams. You have also here examples of other like the gold rating for EcoVadis or the AA on MSCI. So this recognition, of course, helps support our work. Now moving to our 2025, 2027 road map, the sixth of the group. I'll first explain a little bit how we work to develop this road map. So the way we start the work on road map is through a maturity survey. We go out to our stakeholders and ask, what are the key CSR topics for you regarding Legrand as a business? And of course, what makes us a more impactful business for our stakeholders, including our clients. So we ask, of course, our clients, we ask our suppliers, we ask our shareholders, our employees, basically a whole area of stakeholders to really understand across the world, what their expectations were. You have on the right-hand side, the order of the topics that they noted. So on crucial topics we have quality and safety of products and services, respect for human rights, business ethics, energy efficiency of buildings, customer experience, health and safety, climate change, environmental impact of products and solutions. And we took all those topics and made sure we included them in our new CSR road map, whether as independent pillars or included in different KPIs. This is really important because, of course, we need to make sure we're working on the right topics, but we also have the right level of ambition to make sure we bring the right level to the business and to our clients. So looking at all of those topics, we built targets on all of them and then constructed the road map. To illustrate this map, we will first start by watching a video summarizing our new CSR road map. [Presentation]

So as you have just seen, our new CSR road map is built around 5 pillars, and we put, of course, serving our customers at the heart of what we're doing because it's essential for us. So now if we take a look at our KPIs that we set ourselves for 2027. Promoting diversity and inclusion. So as you've seen, at the end of 2024, we were at 30.5% management positions held by women. So we want to continue on this good trend, and we're targeting to be at 35% by 2027. GEEIS label also, we want to continue the work. We aim to have 100% of our headcount working in a diversity labeled organization, so GEEIS labeled organization we also want to extend. So currently, the labeling is on 2 pillars, and now we want to move to 3 pillars. Early-in-careers, we've had really great results through this initiative. What we've really seen is young talent being identified and really a renewal of people in some of -- and able to have kind of new ideas reaching the company. So we really want to pursue this, and we'll have 4,000 positions offered to early-in-careers each year of the road map. And we also want to continue to work with suppliers with 100 additional suppliers considered as diverse and inclusive throughout the road map. What you see throughout the 5 pillars I'm going to present is really it's a continuation and a strengthening of all the work we've done in the previous road map, but also, of course, going further with our ambition because we can really see how this is helping our performance. Moving to climate. We want to pursue the work, of course, to meet our 2030 target. So Scope 1 and 2, we aim to reduce by 10% our Scope 1 and 2 emission across 3 years of the road map against our 2024 performance. And then we want to continue to work also on Scope 3 with our suppliers by reducing our CO2 emissions from our suppliers operations by 30%, representing 70% of our purchased goods emissions. So we'll continue to work with our suppliers. Of course, our approach is a little bit different because we've learned a lot in our previous road map, as you just saw, we did really well on the engagement side. We managed to engage a lot of suppliers. It was a challenge to get them to commit to the amount we wanted them to. And we've learned in the past 3 years, we can to apply. So it's really about supporting them, helping them calculate their carbon footprint but also helping them set up their action plans because depending on the size of the customer -- of the supply, sorry, it's not always easy for them to have the maturity to have a full action plan already in place. So we're really here to help them and make sure they understand their carbon footprint and they have the right commitment level. So it's something the procurement team is working on with our suppliers, and we'll be working on in the next 3 years. Moving to a third pillar, developing a more circular economy, we really put eco-design at the heart of what we do. Eco-design is crucial, first, to design the right products for our clients meaning that they want more and more products that have less carbon footprint, that have more recycled content, that can be repaired easily, that can have a second life and that are more easily recyclable at the end of life. So it's really at the heart of what we are doing. This is why we've set this target, which is 50% of new and redesigned projects that need Legrand's Eco-design index criteria. What we put behind Eco-index criteria is they all have to follow the Eco-design process. They can have no single-use plastic packaging, of course. They need to be compliant with all environmental regulations. And of course, we usually look at the more stringent EU regulation. And they have to either improve the CO2 content of the product or the reparability index. This is really at the heart of what we're doing. We are also going to continue what we had in the previous road maps, so continuing integrating sustainable materials, mainly meaning recycled materials into our products, over 1/3 of sustainable materials in our products, exactly 37%. And we're going to continue eliminating single-use plastic in our packaging. We're extending beyond what we had in our previous road map, which was flow pack and expanded polystyrene to more types of plastic, and we aim to remove 80% of plastic primary packaging from our products by 2027. Our fourth pillar is serving our customers. I'll start with the middle. Customer experience is really important. We did great work in the last 3 years on this topic. We want to continue that work. And so it means we want to maintain customer satisfaction at 80% over the 3 years of the road map. We also want to keep the Net Promoter Score at 50 during that time. So it means constant work from all our entities to calculate customer satisfaction to make sure we understand what customers think and to really work on improving that customer satisfaction. Product sustainability profiles, we aim to be at 72% annual revenue covered by product sustainability profiles, over the next 3 years. Of course, we know we performed really well in 2024 at 75%. What we have to take into account is there are a lot of acquisitions that come into play every single year, which are dilutive because most of our acquisitions do not have product sustainability profiles. So we want to have that steady work via our R&D teams to produce the product sustainability profile is used by our clients. But we also have to take into account the dilution from the acquisitions. So we have that steady 72% for this upcoming road map. Last topic on customers is scope for. I previously said, it's a really big topic for us and for our clients. It's part of our offering, and it's a really important one, making sure we put on the market products that bring energy efficiency to our clients. It's also important for them because it means less energy consumption, less CO2 emissions. We saw that at the end of 2024 across the previous road map, we had reached almost 15 million tonnes of CO2 avoided over 3 years. We want to go further. Of course, we want to develop this energy efficiency offering. So we aim to be at 20 million tonnes of CO2 avoided across 2025 to 2027. Now to showcase what is in our energy efficiency offering. Here is a video presenting this offer. [Presentation]

Now moving to the last pillar of our CSR road map for '25, '27 being a responsible business. As was mentioned in the maturity survey, human rights came out as a material topic for our stakeholders. So we introduced human rights and suppliers as a KPI. Our aim is to have 100% of our major suppliers engaged meaning they have signed our code of conduct and also compliant with EcoVadis human rights score. So we set a minimum score and they have to be compliant. Otherwise, they have to put action plans in place. We also want to cover 100% of our risky suppliers that have to sign a code of conduct for suppliers. Moving to compliance. We will continue the work we've been doing historically on business ethics policy, making sure we frame so we identify all the people who need to be covered by our business ethics policy that they are aware of that policy that they are training of that policy and that we are compliant with it. Health and safety, as I mentioned, really key topic. It's good for our people. It's good for our business. We want to pursue the work, but we want to introduce a new FR2, FR2t, so it's including our temporary workers. So it's what we were doing historically on FR2, but we also add temporary workers, hence the name FR2t. And we want to reduce by 20% this FR2t between 2024 and 2027. And then employability and skill development of employees. As I mentioned, we increased every year of the previous road map, the number of hours of training for our employees across that roadmap. We want to continue that work. So we ended the last road map at 7 hours. We will be at 8 than 9 to reach 10 hours by 2027. And in the previous road map, we wanted to cover 85% of employees. In this new road map, we are reaching it to 90%. The aim there again is really to develop the employability and the skills of our employees. So that's it for the KPIs of our new roadmap and now handing it back to Benoît for the conclusion.

Thank you very much, Virginie. Brief conclusion on my side. So I hope you have understood that the CSR is really part of Legrand DNA and actually, the first time somebody was appointed to handle the CSR approach. It was back in 2004. So 21 years ago, and we are currently launching our 6 road map. So it is something which has been part of the Legrand story for the past at least 20 years. We have always seen CSR as a competitive advantage. We believe we are leading the pack in terms of customer satisfaction, in terms of CO2 reduction, in terms of gender diversity. And we intend to continue to do so. So we see our next 2025, 2027 roadmap as another leap forward, and we strongly believe that it will further enhance our performance, make the ground better company and help us to reach our actions. Thanks a lot for your attention.

So thank you, Benoît. We will now switch to the Q&A session in a couple of seconds. [Operator Instructions] We have a number of questions already in writing on the website. So I could start with the first one. That is, can you please remind us on how Legrand managers' remuneration is incentivized on CSR achievements?

Okay. I'll take it. Well, it's an important question, indeed. If you take a Legrand country manager, for example, the Head of France, the Head of India, the Head of Brazil, 20% of the yearly bonus will be based on CSR. So it will typically be 70% financial performance, 20% CSR, 10% qualitative. And the long-term incentive part of this remuneration, so the performance shares would be 1/3 top line, 1/3 bottom line, 1/3 CSR. So 20% of the yearly bonus, 1/3 of the long-term incentive plan is pretty significant. When you look at the CEO, myself, out of the total package, so fixed remuneration, the yearly bonus, a long-term incentive, 17.5% of my remuneration is based on CSR KPIs. So of course, it does not have the same level as a financial KPIs, but it's pretty material and pretty significant.

Okay. Thank you. We have a second question that is -- so I read it, 37% of your sales are made in the U.S. What about the new administration? Do you reckon it could have an impact on your CSR road map?

Well, it's indeed an important question. What we feel is that the way we practice CSR is completely compatible with any feedback from the administration. I mean we, for example, want to improve customer satisfaction. We want to make sure that we give the first job opportunities to a number of people. We want to cut the level of accident at work. All those topics we believe are completely compatible with any directive from U.S. administration. We don't see why it wouldn't fit. So we will, as we said, continue on our road map, continue those targets, and we don't believe that the size of plant in the U.S. is a problem.

Okay. Another question. Can you please elaborate on the time at risk impact regarding your sites or your premises?

Okay. I take the answer as it was in my slide. So as I said, we conducted a very detailed study about the climate risk. It was done with AXA. You know that the footprint of Legrand is made of more than 100 industrial sites and more than 100 also of logistics sites. And what does the study says. It says that currently, we have roughly 6% of our sales, which could be exposed to a climate risk and this 6% of our sales with around 15 sites. So what does it say? It said that not a lot of sales, [indiscernible] and individually, each site is not very meaningful. So now we have that diagnosis, we pushed a little bit the stress test with the worst case of global warming, what would it mean in a few years. And now we know exactly where to work, where to take the action plan in order to mitigate future risks.

Okay. Another question. So in your previous road map, you had an indicator on the deployment of your common minimum social package throughout the world, which was called Serenity On, it's no longer in your new road map. What is the reason? Are you revising your ambition?

I'll take it. So indeed, if you -- when you -- I showed the 2022, 2024 CSR road map, the last KPI of being a responsible business was Serenity On, and we no longer have it in the new road map. It doesn't mean at all that we are stopping on the Serenity On program. We are pursuing the work. It's just that we like to keep the CSR road map with not too many KPIs to show our focus. So we are continuing the Serenity On program. We are also increasing our ambition to extend it further for our employees. It's just that it's become a little bit part of the way we run the business, and therefore, it's not part of the road map. The way we use the road map is really to put focus on specific topics where we need continued work. We keep it in the road map, where we feel we've reached a level of maturity where this is just part of our business and the way we run. As you know, many things that we do every day is not in our road map. We take it out. So this we've taken out because we're at a maturity level where it's really in the way we manage the business. And we are going to continue extending the program in the coming years, 2 new rights and to new coverage for our employees. It's just not in the road map. We will continue externally informing our stakeholders on how we're doing on Serenity On and what's in the program. So it's still there. It's just not in a road map.

And I think we have one last question. That is what's the financial cost of your CSR road map? For instance, the implementation of your circular economy and so on? So an idea of the cost globally.

Well, as Benoît said, Legrand launched the CSR approach more than 20 years ago. We constantly grow in terms of revenue. We constantly held a nice margin and free cash flow generation. So what does he said, he said that at the end of the day, it has no meaningful impact in the cost I would say there is a right balance of benefit in the top line. Some, of course, additional costs but also additional savings. And globally speaking, true that journey that started 20 years ago. we grew a lot, and we sustained around 20% of adjusted EBIT margin. So my strong conviction is that at the end of the day, it's more supporting value creation than affecting that.

It is about -- the same answer to how much does quality cost. Of course, we could save money by doing less qualitative products. We could save money by doing less innovative product, we could save money by serving not as well as our customers. We could save money by not using recycled materials. So we could save money by accepting higher frequency rate of accidents. So there are many, many ways to save money. But we believe that we are using the right way. So we are doing productivity. We are doing footprint optimization. We are Industry 4.0 and cutting on quality, cutting on circular economic concept, cutting on safety for our employees would be a wrong way to do savings. At the end, does it work? Well, Franck provided the answer. We've been able to hold more or less a 20% EBIT margin for 20 years. So yes, it works. And I remind everybody that this 20% margin is higher than the average margin of our peers.

Okay. This is it. We don't have any other questions. So maybe, Benoît, a word of conclusion.

Well, I just wanted to thank you very much for connecting to this digital CMD. Should you have any further questions on our CSR approach, well, The whole team is available for you, so Ronan, Franck Virginie and myself. Thanks a lot.

Thank you.