Good morning, ladies and gentlemen, and welcome to today's Legrand 2020 year results conference call. All participants are in listen-only mode. Later, there will be a question-and-answer session. For your information, this conference is being recorded. At this time, I would like to hand the call over to CEO Benoît Coquart and CFO Franck Lemery. Sir, please go ahead. Thank you. Hello, everybody. Good morning. Franck Lemery, Ronan Marc, and myself are happy to welcome you to the Legrand 2020 results conference call and webcast. Let me remind you that we have published today our press release, our financial statements, and a slideshow to which we will refer. Those documents are available on the Legrand website. Please also note that this conference call is recorded and webcasted. Let me start with few opening remarks, following which Franck and I will comment into more details our full year results. I begin on page four and five of the presentation with the five main takeaways of today's release. First, in the context of the crisis, Legrand deployed a proactive and responsible approach. Second takeaway is that while strengthening its competitive positions, Legrand delivered both financial and ESG very good performance. With sales declining -7.9% in 2020, the adjusted operating margin reached 19%, free cash flow to sales stood at 17%, and we achieved 128% of our CSR roadmap targets. Third, while having accelerated synergies with previously bought companies, we announced today three new acquisitions specialized in connectivity and energy efficiency. The fourth takeaway is that Legrand has enhanced its growth model, which is clearly well-profiled for the post-crisis period. Last takeaway, Legrand is developing its midterm model further. Moving now to page seven and eight on the responsible management of the crisis. From the beginning of the crisis, the group has focused on taking a responsible approach to all of its stakeholders, for example, by immediately protecting the health and safety of its employees and partners and maintaining services to customers, notably with an early reopening of production plants as of April. Page eight, Legrand also accelerated one-off and structural initiatives to strengthen the pillars of its medium and long-term growth, including many marketing initiatives to grow market share, swifter digitalization throughout the group, quick and targeted adjustments of its cost base, a sustained drive for innovation with new product launches and safeguarded R&D capacities, finalization of four acquisitions and keeping active contacts, and stepped-up environmental, social, and ESG commitments with, for example, new carbon neutrality targets. After this introduction, let's start with an overview of sales on page 10. On the backdrop of an unprecedented crisis, sales retreated in total by -7.9%. This trend resulted from an organic decline of -8.7%, quite similar in both mature and new economies. In addition, the increase in the scope of consolidation was a positive +3.6%, while the impact of exchange rates was negative -2.6%. Based on acquisitions already completed, acquisition-driven growth would contribute around +2.5% in 2021. On Forex, if we apply to the last 11 months of 2021, the average Forex rates observed in January, then theoretical annual Forex effect for 2021 would be around -3.5%. Let me now go into more details regarding the like-for-like evolution of sales by geographical zone. Please refer to pages 11 to 13 of the slideshow. In Europe, organic sales were down -7.9% in 2020. In mature countries, sales declined by -9.7%, driven by a particularly negative second quarter due to lockdowns, as well as a steady destocking by distributors. In new economies of Europe, sales were up a solid +1.9%. In North and Central America, on page 12, organic sales retreated by -8.7% in 2020. In the U.S., sales declined -7.8%, including -10.7% in the fourth quarter alone. Good trends in Busways and PDUs for data centers, as well as in offerings for residential spaces, were not enough to offset other segments. It should be reminded that we had a good relative performance in the fourth quarter of 2019. Let me now move to the last zone on page 13 with rest of the world. Sales were down -10.3% organically in 2020. In Asia-Pacific, sales retreated -7.1%. The area's overall sales were steady, excluding India, which was severely hit by the crisis. In South America, net sales were down in many countries, declining -14.3%, and in Africa and the Middle East, sales were down -16.6%. These were the main comments on sales. Let me now pass the mic to Franck for more colors on our solid financial performance. Thank you, Benoît, and very good morning to all of you. I will start on page 14, where I would like to stress two points demonstrating the good resilience of the adjusted EBIT margin. First, before acquisition, adjusted operating margin for the year came to 19.1%, which represents a limited 0.9 point decline versus 2019. Excluding the increase in exceptional costs and gains, and despite a market retreat in sales, the adjusted operating margin for 2020 was down by only - 0.3 point, reflecting the effectiveness of early measures to offset the impact of the crisis. Second is that excluding exceptional item, the adjusted EBIT margin for 2020 stand at 20%. Moving now to net profit on page 15. It was down - 18% in 2020, reaching EUR 681 million. This decline comes from the decrease in operating profit together with an unfavorable trend in net financial result. A positive impact came from the decrease in absolute value of corporate income tax. Let's now share the last part of the financial performance on page 16 regarding free cash flow and balance sheet. First, you can see that cash flow from operations came to EUR 1.109 billion or 18.2% of sales, down a very limited - 0.2 points from 2019. Working capital requirement decreased significantly at 6.8% of sales, therefore, the ratio of free cash flow to sales reached 16.9%, i.e., + 1.1 points versus 2019. Last, the balance sheet remained solid with, first, the net debt to EBITDA ratio of 1.9, second, cash and cash equivalent of EUR 2.8 billion. These were the key topics on the Legrand's 2020 financial performance. I give now the mic back to Benoît. Thank you, Franck. Let me present now our 2020 ESG achievements on page 17 to 20 of the deck. Legrand launched in May 2019, its fourth CSR roadmap structured around 10 key challenges that contribute to the UN's Sustainable Development Goals. On page 18, in 2020, Legrand reported an overall achievement rate of 128% of its CSR roadmap, placing it again ahead of schedule and demonstrating the group's commitment to creating sustainable value. On the next pages, 19 and 20, Legrand was again very active, enabling, for example, its customers to save 3 million tons of CO2 on the year while developing skills and promoting diversity at the workplace. Two slides to conclude on 2020. On page 21, Legrand strengthened competitive positions in its main market while protecting its margin, generating strong cash flow and delivering CSR achievement ahead of its roadmap. On page 22, Legrand will propose a payment of a dividend amounting EUR 1.42, up 6% versus 2019. This would place the payout ratio at 56%, in line with the group's practice of offering an average rate of around 50%. Let's move to the fourth part of this presentation on page 24 with external growth. Today, Legrand announced three new bolt-on acquisitions of companies specializing in solutions for connectivity and energy efficiency in the U.S., in Netherlands, and in Italy for total sales of close to EUR 120 million. Those are all highly complementary, well-known players with very promising positions. On page 25, Legrand has continued to focus on efficiently docking its recent acquisitions and maximizing synergies. In 2020, the group accelerated the successful rollout of new product lines outside their home countries. We would like to look at the future through the fifth part of this presentation to see how Legrand enhanced its growth model so that it is well profiled for the post-crisis period. I will be quite fast on this very important part from page 27 to 44. Of course, I'll be happy to answer any question you may have and to come back to a specific point. Page 28, with solid leading positions accounting for two-third of its sales, Legrand is a key player and a pace setter in its markets. Group exposure is well-balanced between verticals. Each of them benefits from very supportive long-term trends, such as demography, lack of housing, new digital usage, search for comfort and safety, energy savings, and more. Page 29. One of the key pillar of organic growth and leadership is innovation. Legrand pursued its innovation strategy, devoting over 5% of sales to R&D and maintaining, for example, its software teams, who account for over 15% of R&D staff. From page 30 to 33, an update on Eliot, which is, as you know, the Legrand program for connected offers that we continue to expand. It now represents 13.1% of total revenue, with a good resistance in 2020. Amongst all those topics, I would highlight the successful docking of Netatmo, launches of new ranges, and continued geographical rollout. On page 33, a key innovation through partnership, the co-development of an innovative autonomous wireless connected switch that requires no battery. Now from page 34 to 38, we have listed some examples of products that meet emerging new needs with, for example, from page 34 to 36, offers that can bring close to 10% energy savings at home, 5%-15% in data centers, or up to 55% in non-residential spaces. From page 37 to 38, you will see new product launches answering the needs of improved connectivity, new work modes, security, and increased comfort. This was for organic growth. The second growth engine of Legrand, as you know, is external growth. On page 39, Legrand operates in a market of which half is managed by small and mid-sized companies. This offers solid scope for external growth. We track a portfolio of 300 leading local players with whom we keep very active contacts. Page 40 and 41, in its ongoing drive for efficiency, Legrand stepped up the pace of its digital transformation by increasing its digital presence and doubling its investments in Factory 4.0. Page 42 to 44, last part of this chapter five. For over 17 years, Legrand has deployed a demanding and acknowledged approach to ESG. Legrand aims, in particular, to achieve carbon neutrality in line with the highest requirements, limiting the global increase to 1.5 degree Celsius above pre-industrial levels. Legrand is also encouraging diversity in the workplace and is recognized for its exemplary governance through an independent gender balance and international board. Coming now on page 45, backed by a proven growth model and offers driven by long-term market trends, Legrand is developing its mid-term model further. Over a full economic cycle and excluding a major economic slowdown, the group aims for an average annual growth in sales, excluding exchange rate effects, of between +5% and +10%. An average adjusted operating margin of approximately 20% of sales, as usual, of course, including restructuring costs. A normalized free cash flow of between 13% and 15% of sales on average. At the same time, Legrand will continue to deploy a bold and exemplary ESG approach driven by demanding roadmaps with a particular focus on the fight against global warming and the promotion of diversity. Now on page 47, the last topic of this earning release with our targets for 2021. Based on current macroeconomic projections, which are still very uncertain, and assuming a gradual improvement in the world health situation, Legrand has set the following targets for 2021. Organic growth in sales of between +1% and +6%. Total impact of the broader scope of consolidation and sales of at least +3%. Adjusted operating margin before acquisitions, so at 2020 scope of consolidation, of between 19.2% and 20.2% of sales. Achievement rate of 2021 targets in CSR Roadmap of at least 100%. We are now ready to answer your questions. Thank you. Ladies and gentlemen, if you have a question, please press O1 on your telephone keypad. It's zero and one on your telephone keypad. We have a first question from Andreas Willi from JP Morgan. Please go ahead. Yeah. Good morning, gentlemen, and thanks for the efficient conference call this morning. My question relates to your guidance and assumptions. Maybe you could give a bit of a backdrop what you have assumed for the economy, for your 1%-6% range, particularly at the lower end, which looks quite modest. Your revenues in 2020 declined a bit more than some of the peers given your geographic mix. Maybe why don't you expect also a bit more of a recovery of that lower level? On the profitability, you said that 2020 was close to the 20% level underlying. You should have some volume growth in 2021. You also have done quite a bit of restructuring in 2020. Why is the midpoint of the guidance for 2021 effectively below the underlying level of 2020? Maybe you could also include in that comment what you expect on price, cost, and raw material. Thank you very much. Hello, Andreas. Taking your three questions. As far as the guidance is concerned for 2021, well, number one, we have, I think, to acknowledge that the situation remain highly uncertain, and especially on the sanitary front. Clearly, if we take the two hands of our guidance, plus one to plus six. Plus one assume a soft improvement in the sanitary situation. For example, very low pace of vaccination, stronger than expected by most economists impact of the sanitary situation and the economy, lower than expected impact of recovery plans, potential additional destocking, and a number of tensions persisting, if I may say, such as U.S., China, and so on and so forth. The higher end of the guidance, the plus six, it's the other way. It implies an effective pace of vaccination. It implies that we do not discover in a few weeks and a few months that there are variants that are resistant to vaccination, and that lead the countries to take additional sanitary measures, global resilience, investment, and household consumption. The plus one to plus six implies those two scenarios, very soft improvement in the same situation and stronger improvement. It does not include, of course, the situation whereby the situation in 2021 on the sanitary front would be worse than in 2020. If, for whatever reason, the vaccination is not effective at all, and there are new variants which are tougher than the existing one, and that if we are in a series of additional tough lockdowns implemented by the government, then of course it's a different story. This is a one to six guidance that we have set. As far as the comparison between X, Y, and Z, I really have to, as usual, tell you that it's always difficult to compare apple and banana. All companies do have a different geographical exposure, do have a different vertical exposure. For example, looking at 2020, it is a fact that we are more exposed to other companies to Southern Europe, including France, Italy, Spain, and Portugal, which were hit more than Northern Europe, for example, or Eastern Europe, by the epidemic and by the series of lockdown. We are also quite exposed to geographies such as India or such as Latin America. I think that you cannot compare between peers and companies without taking into account the geographical breakdown of our sales. What really matter and what we are looking at at Legrand is geography by geography, how are our market shares moving? That's the most important piece for us. We, of course, do not want to see Legrand losing market share on its key market segments. We have done this deep dive into our main geographies, and I can confirm that in 2020, our market shares were held very firmly. I can take two examples. Starting, for example, with France. France saw a decline in sales in 2020. Very solid H2. Growth in Q4. We believe that in France we have gained market share in a lot of our product families. Thanks to a lot of growth investments we have made in the previous years, launching a series of new products, especially in user interfaces, pushing a lot connected products, and so on and so forth. Second example, the U.S. Well, of course, the situation in the U.S. is very different between the various verticals. If you take, for example, data centers, we have a high single-digit growth in data center in the U.S., especially on products such as Busway and PDUs. We think that we are significantly gaining market share in the U.S. in data centers. Even in the product families where we see drop in sales in the U.S. because they were more exposed to non-residential spaces, for example, our market shares are held very nicely. When comparing Legrand with other companies, you should really take into account the geographical breakdown of our sales and the vertical breakdown of our sales. As far as your third question, which is why are we shooting for 19.2%-20.2% with a midpoint at 19.7%? Number one, we have to acknowledge that this would be a return to the historical level of margin of about 20%, or close to 20%. Number two, it would be very consistent with the long-term model which we are developing further today. We are shooting for 20% across the cycle. We're not shooting for 22%, nor for 18%. It's very consistent both with history and with our midterm model. You also have to take into account that it includes restructuring as usual. It's all-in, our EBIT level is all in. I understand that your question is with all the cost savings that you have done, all the restructuring that you have done, why is your margin not going toward the 21% or 22%? A number of savings that were done in 2020 are non-recurring. When it comes to cutting, for example, travel expenses, to reducing advertising and a number of other stuff, some of those cuts went off. Number two, we believe that this about 20% margin is the right level of margin, which is a good balance between generating enough cash in order to finance our long-term growth, R&D, acquisitions and so on and so forth, and delivering good value. It's a good compromise, it's a good trade-off. We believe that this is a sort of long-term numbers that we should shoot for. In other words, to make a long story short, the 2021 guidance is getting very close to a historical average and to the long-term model we are developing further today. Thank you very much. Thank you. Next question from Lucie Carrier, from Morgan Stanley. Please go ahead. Good morning, gentlemen. Thanks for taking my question. I have two question and one short one. I'll go one at a time. I was hoping you could maybe comment a little bit on what you are seeing in North America in terms of trend and also in terms of current trading, maybe, because I guess the fourth quarter decline looked a little bit more pronounced maybe that at some of your peers also in North America, and also the comp effect was not particularly demanding in the fourth quarter. Trying to understand a bit better the current trend in North America. Yes. The fourth quarter is clearly on the downside. You saw the numbers, in North and Central America, it's down 10.6% in Q4. Two comments. Number one, the relative basis for comparison is quite demanding. You may remember, Lucie, that last year, our sales were up in Q4 in the U.S., and they were down for most of our competitors. Not down 1%, they were down 4%, 5% for a lot of our competitors. Our relative performance in Q4 2019 was very demanding. First comment. Second comment, when we look at the peers, I wouldn't say that we should be ashamed of our performance. Of course, again, you need to compare what is comparable. Some of our competitors are only competing against Legrand on data center, for example. On this activity, again, our sales in 2020 were up high single digit. I don't believe that we are losing any share to them, or the contrary. If you look at the U.S. peers, you have a number of companies which are down 10%, 7%, 10%. Again, I'm convinced that we don't have any market share issue in the U.S. including in the first quarter. I don't believe that we are deviating from what similar companies with similar exposure are doing. The fact is that, if I take a step down, there are three segments in the U.S. You have residential, which is doing very well for Legrand, where we have recorded growth and sometimes on some sub-segments, very significant growth. Residential in the U.S., it's about 20% of our U.S. sales. You have data centers, which again recorded high single-digit growth in 2020, which are doing very well with significant gains in market shares, but it's also about 20% of our sales in the U.S. You have 60% of our sales in the U.S., which is all other kind of spaces. All other, let's say, non-resi spaces. It can be office, it can be shops, it can be a bit of industrial spaces. Definitely this is a piece which was under pressure in the U.S. in 2020, coming mostly from the sanitary situation. You have many big metros in the U.S., where people didn't go, for example, to the office for 10 months with very little renovation work being performed. Again, when looking at Legrand performance, there's a clear split between resi data center doing well and the other non-resi space, which were under pressure in the U.S. Two comments. I will not comment on January sales because the company, see, one month of sales is not relevant of any trend. What I can, of course, tell you is that obviously the month of sales is consistent with the guidance we are shooting, but I will not comment on any trend because I believe that one month does not mean any trend. Number two, midterm, I'm strongly convinced that the positioning we have in the U.S. and elsewhere, and the fact that we have this strong non-residential business in the U.S., is a very strong competitive advantage compared to some of our competitors. I'm very happy to have this non-residential market position in the U.S., made of strong leaderships in, for example, architectural lighting, in energy efficiency through lighting controls, in audio video, in cable management, in wiring devices, and I think that those very interesting leadership positions will bring significant growth and profitability in the years to come. It is true that the situation was a bit more difficult in 2020. I think you had a second question, if I'm correct. Sorry? I thought you had a second question. Yes, exactly. I was going to ask now. Thank you for the color on the first question. My second question was on M&A and the strategy. I appreciate, obviously, that M&A allows you to kind of target sometimes new markets or reinforce in some markets, and you operate in a very fragmented industry. When we look over time, it doesn't seem necessarily that the M&A that you have done has enhanced the organic growth profile, because we don't really see an acceleration on the organic growth over the years and also on the margin profile. At the same time, it seems that the return on capital employed on the company tends to be also a little bit impacted by that. How should we think about the M&A strategy in terms of bringing, what I would call, really additional value to the financial profile of the company going forward? Well, it's an interesting question. I'll take each of your points one after the other. The acquisitions made by Legrand not always are accretive on organic growth. What we are looking for when we are buying a company is not always this company to be accretive on organic growth. I'm going to give you two examples. When we buy Netatmo, yes, of course, the main objective is that Netatmo enhance the growth profile of Legrand, and when we bought Netatmo, we told everybody that as part of our main three targets, we wanted to enjoy the same growth rate on Netatmo than before the acquisitions. That's what we've been doing. If you look at 2020, Netatmo grew double digit for the full year. It grew double digit with the total Legrand sales being down -8.7%. There is, let's say, about 20 points difference between the total of the group and Netatmo. It is clearly growth enhancing, and we are very proud of this performance in a context which was difficult, in a context where Netatmo is a lot exposed to countries such as Italy, France, Spain, which suffered from the epidemic. Now, you have other cases where we buy companies that do have 1%, 2%, or 3% organic growth profile. Of course, when joining Legrand, we try to achieve revenue synergies, but we all know that revenue synergies are slow to come and do not turn 1% or 2% organic growth company into a 10% organic growth company. Why are we buying those companies despite they are not able to achieve, let's say, 10% organic growth? It's because they bring us something else. They bring us stickiness with the customer. They bring us leadership positions so that we can embark other product families. They bring us profitability, cash flow, and many other topics. Yes, organic growth is not the only criteria we have in mind when we buy a company, and we are looking at everything, organic growth, profitability profile, relationship with the customer, potential cost synergies, value creation, and so on and so forth. When it comes to return on capital employed. Return on capital employed, number one, we have to be clear on the fact that we have a return on capital employed, which is well above the industry. I guess it depends on the way you compute it, but in 2020, it was about 16%, return on capital employed. It was 18% in 2019, sorry. When we look at our peers, adjusted for the step-up which was booked in 2002 during the LBO. If you look at our competitors, it's between, let's say, 10% and 13%, where we are at 18%, let's say, excluding the crisis impact. It's well above the one of our competitor. Now, it is true that when you buy, for example, a Milestone. It has a negative impact on your return on capital employed. Is it value creative or is it value destructive? See, it is a very important question. I can confirm that when you buy a Milestone 9x EBITDA, which is what we paid for Milestone in 2017. Milestone is a company which had more than 20% EBIT margin. It's a very value accretive deal, and we are extremely happy to have done this transaction. Yes, the time you do the acquisition, it waits a bit on your return on capital employed, but in terms of value creation of EVA in absolute terms, this is a very value accretive transactions. I've tried to be a bit precise answering your question, but if I step back, we will continue to do very active M&A policy. We have the strategic intent to do that. We have the pipeline to feed the strategic intent. We have a level of leverage and a cash flow generation, which allows us to do that. We believe, I believe that it's a very important part of the Legrand business model, and I believe that over the long term, this is EPS accretive, EVA accretive, and a good allocation of our cash. Thank you very much. I guess I'll have to check with Renaud how you calculate ROCE. We come to a slightly different number, and it's probably a bit difficult for us to compare you on ROCE with other companies, but we cannot compare you on organic growth with other companies. I guess that may be the challenge. Just one last question, which is more mathematic on the M&A impact for 2021. You very kindly gave us the impact benefit on sales. How much margin dilution do you, or benefit do you expect from M&A in 2021, please? I'll let you, indeed, yes, with Renaud on the computation of the return on capital employed, which is quite straightforward. I know that then you have several ways to compute it, but there's no magic, no mystery into computing this number. Please, yes, with Renaud today, and he'd be delighted to take you through computation. As far as the dilution impact on 2021, okay. Maybe let me first remind you the numbers for top line. We shoot to deliver at least 3% scope impact, and we have a carryover impact of 2020 acquisitions of 2.5%. You have rightly come to the conclusion, you see that we have a go get, if I may say, of 0.5% to be at least at + 3%. This was for top line. Again, you see it demonstrate that we are strongly convinced that the M&A is a very wise use to spend our cash. As far as the dilution on our earnings is concerned, we have no numbers to communicate to you yet. This is traditionally something we do when we release our Q1 and Q2 numbers. If you look at the past 10 years, except the year during which we bought Milestone, which was accretive to our earnings, we have always enjoyed, let's say, between 0 to - 40 basis points of dilution. It's highly likely to be within this range, depending how much external growth we do of course, but we have not a precise number to give you yet. Okay, thank you very much. Thank you. Next question from Gael de-Bray from Deutsche Bank. Please go ahead. Oh, thanks very much. Good morning, everybody. I have two questions, please. The first one is really a follow-up on Andreas' earlier question on the guidance. Given the very easy basis of comparison for the first half, it seems that the revenue guidance would kind of imply that growth could actually turn slightly negative again in the second half. I just wanted to get a clarification on this. The second question is about the dynamics in the non-residential market, in particular in the U.S. I think one of your peers recently indicated that they had seen a slight improvement sequentially in the non-residential market throughout the quarter and continuing in January. I wanted to get your views on this case. Thank you. Hello, Gael. Again, sorry to insist on that, but we are beginning of February, and we can see that the number of contamination is on the rise in many countries, that you have a number of countries which are under lockdown. Again, it's not that we are pessimistic for 2021, and I hope that you can read in our guidance and mid-term model that we are extremely confident in the strength of the Legrand model and our ability to leverage the recovery whenever it comes. We have to acknowledge that the situation is still highly uncertain. Talking about the basis for comparison, which is, I understand your question, it is true indeed that we will have an easy, if I may say, basis for comparison, starting mid-March until mid-May, which was a period during which a lot of our countries were under lockdown. Mostly, as I said, not only in Western Europe, but also in a couple of Asian countries and in Latin America, and a couple of U.S. states. We will have an easier basis for comparison. Let me remind you that our Q2 sales last year was down by more than 22%, and we will have a more demanding basis for comparison in H2 and especially in Q3. Our Q3 sales were almost stable in 2020. Yes, we will have a very strange profile in terms of basis for comparison. Now, the question mark and the fact which we don't know yet, is when the effective recovery will come, at which pace, and in which geographies. My comment was not saying anything about what the economy will be in H2, which I don't know, and I guess you don't know either. It's really about basis for comparison and the fact that Q2 is going to be an easy basis for comparison and Q3 a tougher one. Of course, you could say the same for margins. As far as improvement or not, I'm very cautious in commenting any sequential improvement or sequential worsening, because, and it might be different for other companies, but in our trade, again, one month's or two month's numbers should not be extrapolated. It depends on so many factors. It depends on the number of days. It depends on the inventory stocking or de-stocking from your distributors. It depends on one big project that you could get. It depends on many things. I would hardly comment any trend, neither for the non-residential in the U.S. nor for other topics. Again, coming back to this non-residential piece in the U.S., I would really like to insist on the fact that those are made of extremely solid market positions with very strong leaderships, and that midterm, they are extremely good places to be. Again, we'll see in the months to come if we can comment on trends when we will release our Q1 numbers. Okay. Thanks very much. Thank you. Next question from Martin Wilkie from Citi Investments. Please go ahead. Yeah. Thank you. Good morning. It's Martin from Citi. Just a couple of questions. The first one is on pricing. Obviously, we've seen some pretty high ramp-ups in copper costs and others. Just to understand a bit of phasing of your price increases. Did they go up meaningfully towards the end of last year? Is there still more to come? If you could just talk a little bit about the timing of those. The second question was just coming back to the mix effect you pointed out. Correctly, obviously, your mix can be different to peers. Understanding, is there a structural difference between your profitability in residential versus non-residential and within residential, is data center meaningfully different than office and so forth? I appreciate it obviously vary enormously by product, but just to get some sort of sense if there is a margin mix difference between those key categories. Thank you. Sorry. As far as pricing is concerned, let me maybe give you the numbers. Pricing for the full year 2020, our prices were up 1.0%. In Q4 alone, our price was up by 1.3%. Q4 pricing was slightly above the full year pricing. Of course, our management of pricing had a significant impact on our profitability since, for the full year, the price of raw materials and components was about -2%. +1% in pricing, -2% in raw materials and components. It had a positive impact on the margin. Now you have to understand that our pricing is not one price list that we issue on December 1st, on January 1st, all across our product families, across our geographies and that would impact 2021 pricing. Our pricing is a mix of many things. It's a mix of price list. It's a mix of managing the discount. It's a mix of end of the year rebate. It's a mix of using X or Y currency to give a price out to our customers and so on and so forth. Going into 2021, we don't have a set price effect all across the group. We will, as usual, adapt our pricing, depending on the evolution of raw material and components, which are effectively on the rise in Q4 compared to the rest of the year. We'll adapt it also to the currency evolution and so on and so forth. What I can tell you as far as 2021 pricing is that, as usual, we are monitoring closely the situation. This is a process which is well managed and well under control at Legrand. Our prices will be up in 2021. I don't recall of any single year during which our prices on average were down for the past 20 or 25 years. In 2021 our prices will be up. The extent or the magnitude of the price increase will depend on many factors, some of them being still unknown, such as, for example, what will copper, zinc, aluminum, oil components do in 2021. As far as mix on profitability is concerned, there's no structural reason why resi or non-resi should be more profitable than the other. It all depends on the market share we enjoy on a given product family. If you are a leader in a given product family, which is non-resi, and if you are not a leader in a product family in resi, you'll be more profitable in non-resi than in resi, and the other way. The driver behind profitability has always been, and will remain, the market share we enjoy on a given product family. Looking at the U.S., for example, because we are focused a lot on the U.S. non-residential position today, there are product families where we enjoy higher than average profitability because we are leaders on those, and there are product families where we enjoy lower than average profitability because we don't enjoy leadership position. Okay, thank you very much. Thank you. Next question from Andre Kukhnin from Credit Suisse. Please go ahead. Is in the U.S. Thank you for giving the growth rate for the year. Could you give us an idea how much you grew in the second half of 2020 and in Q4, in particular in that segment? In which segment? I'm sorry, I didn't get your question. It's on data centers in the U.S. You gave the high single-digit growth number for the year 2020. I wondered if you could give us details on how much you grew there in the second half of 2020, and then in Q4 in particular. Well, trying to see if I have the numbers. Give me a few seconds. Sure. I confirm it was high single digit for the full year of 2020. It was a bit stronger in H2 in terms of growth rate than in H1. It was above +7% in H2. Again, be careful on not extrapolating that into trends and saying that there is an accelerating trend in data center in the U.S. between H1 and H2. Well, it's also the result of many things, including, for example, the fact that in H2 you had a bit less lockdown and it can also depend on a number of big hyperscale project that you can get or not. It's not necessarily the indication of a trend, but to be very factual on your question, it was slightly stronger in H2 in terms of growth rate than H1. Got it. Thank you. I appreciate that. You can confirm that this is your estimate of the end market growth as well, or you can confirm that that was above the end market growth? We're above market growth. Quite significantly in that we have gained market share in data center in the U.S. This is pretty clear. Well, it also depends, of course, on which market segment of the data center you are, and there were some segments which grew faster than others. Typically, the so-called hyperscale sector in the U.S., driven by big consumers such as the so-called Super 8 consumers such as AWS, Google, LinkedIn, and a few others. This sector grew faster than other typology of data centers. This being said, we have clear evidence that we have gained market share in data centers in the U.S. Great. Thank you very much. Could I ask you also on the M&A pipeline, you obviously closed three new deals. Is that something that we can take as an evidence of accelerating trend, or is it just timing? It is just timing, having in mind that starting in March, we have decided to hold a bit our acquisition approach because, of course, nobody really know at that time what would the profile of 2020 be in terms of activity. We thought it was a sound decision to hold a bit and focus on managing the crisis for our customers, for our people, and so on. There were a few months during which, even though we have kept the relationship with the seller, we were not actively looking for opportunity. The day we decided to start again, we started about the potential acquisition. Given the large number of target that we have on our sector, we easily found appropriate partners to join forces with. It's timing. Now, if the question is, will you still be active in M&A? I already answered this question, yes, we will. Again, I think that it is the right strategy for Legrand, and we have the pipeline and the leverage for that. Great, thank you. Final, any comment you could make on the stocking levels in the channels? Anything kind of globally that we should be aware of in terms of either stocking or de-stocking happening in the fourth quarter? Well, I can comment on the trend, not that much on the level, because the level is, of course, a responsibility of our distributors, and we don't have a full knowledge of the level of stock inventory they have about the raw product. What I can tell you is that looking at the sell in, sell out numbers on our main geographies, there was a clear de-stocking in 2020, which occurred more on Q2 than on Q4, and it was consistent with the fact that the demand dropped a lot in Q2, especially in Western Europe. If you take the whole of 2020, there's been a clear de-stocking, especially in our main geographies. Take, for example, France, Italy, and a few others. What will it be in 2021? I don't know. You probably have to ask our distributors what they intend to do. It will probably depend on what they think about the profile of the year. If they believe that the demand will start to increase and that they will enjoy strong growth, they will probably restock it a bit. If they believe that the environment is so uncertain that they should wait a bit, they will hold the level of stock to the same level as today. It really depends on their vision of the 2021 sales evolution. What I can confirm, based on the numbers we have, is that in 2020, there's been some de-stocking. Can you confirm that there was still de-stocking in Q4? There was probably a bit of de-stocking in Q4, indeed, in a number of geographies, but not to the same extent than the one we saw in Q2. Great. Thank you very much for your time. Thank you. Next question from Anika Jain from Barclays. Please go ahead. Hi there. Good morning. It's actually Shane McKenna from Barclays. Thank you for taking my questions. Given the high level of restructuring in 2020, how do we see the cadence of savings from these actions, particularly as a number of the actions were in Western Europe? Is it more likely 2022 when we start to see the uplift? What sort of restructuring level should we assume in 2021? Is there a return to a more normalized level? That would be great. Well, you are right to point out the significant level of restructuring, which was indeed EUR 76 million, compared to an average of EUR 20 million to EUR 25 million in the previous years. This EUR 76 million being before the benefit of the capital gain of the sales of our building in South America, which occurred in Q1, EUR 76 million. Well, the payback of this restructuring really depends. It's between a few months to a few years. If you take, for example, the U.S., which is a place where clearly you can implement very quickly restructuring, it's a matter of months before it pays back. If you take, as you said, Europe or a number of other countries, it's a bit longer. It can take three, four years to pay back. Yes, we saw some benefit of that already in 2020, and we should see some benefit of that also in 2021, 2022, and 2023. This being said, and that's why we are clearly guiding for a mid-term margin of about 20%, we don't believe that this restructuring, which was very useful. For example, we have closed or announced the closing of 18 sites out of 130. It's a very, let's say, tonic restructuring. We don't believe, and we don't want it to change the margin profile of Legrand. We still believe, as I said, that the 20% margin is the right level of margin, the right compromise between value creation and financing of growth. In front of this restructuring, we will have in 2021, 2022, and 2023 to put oil back into the machine so that we can grow. We have to put more budget to launch our new products. We'll have to keep sustaining a very healthy R&D to sales budget to hire salespeople and so on and so forth. The restructuring level in 2021, the level of restructuring expenses in 2021 will, of course, depend on the profile of the year. It shouldn't be of the same magnitude as 2020. We expect that it will come back close to the historical level, which would make a lot of sense. Except, again, if we are in a situation where the situation becomes worse than in 2020, in which case we would have to take additional measures. Again, this is not the central scenario in which we operate. My follow-up question, if you can expand a little bit more about the market trends that you saw, particularly in France and Germany, you highlighted strong showing during Q4. Could you also give us some color around Italy and within those markets, some breakdown between what you're seeing in both resi versus non-resi as you went through the quarter? I know it's difficult for you to share based on just one month, but whether those trends have continued into 2021. Thanks. A couple of comments. Italy in Q4 was down again, and 2020 has been a difficult year for Italy, not specifically for Legrand, but for the Italian market, which was down double digit in 2020. We believe that on this market, we did pretty nicely, and actually we had interesting performances, especially in connected products and for example, smart thermostat and other connected products. Again, even though our sales was down in Q4 and in full year in Italy, our market position was untouched. If you look at Western Europe, we don't see the same kind of trend as obvious as the one we saw in the U.S. Looking at Germany, France, Italy, Spain, Scandinavia, the Netherlands, the U.K. and so on, you don't have as clear of a difference between resi and non-resi. What was positive, especially in H2, of course, in Europe, was the highly scattered and pulverized, if I may say, sales to small contractors for small works of renovation, either sold to the professional channel or through DIY, because you had a lot of people coming out from the lockdown, which wanted to do some work at home, either by themselves or with a contractor. All the little works of renovation did very nicely. This is mostly resi, but at the same time, for example, the new resi piece wasn't so supportive in H2. As far as non-resi is concerned, you had a number of topics which were very positively oriented. Connected products were pretty okay. Wiring devices was pretty okay. You had other which were less positively oriented. Not a clear difference between resi and non-resi, but a couple of items which grew pretty nicely, and some were under pressure. As far as January is concerned, again, same comment as the one I did before. I don't want to comment on January sales, neither in Europe nor in the U.S. or elsewhere, because I believe that one month's sales are not relevant of any trend. We did it in April last year. When we released our Q1 numbers, we highlighted that April was down 41% because we wanted the financial community to be aware of the brutality of what companies were experiencing. We thought that not everybody had in mind that sales could go down by as much as 30%, 40%, 50%, 60% in some geographies because of the lockdown. Again, in a more normal situation, we are today in a more normal situation, we don't believe that commenting one month's number make any sense. We'll comment and a lot more our Q1 numbers when we release them in a couple of months. Understood. Thank you very much. Thank you. Let me remind you that if you wish to ask a question, you have to press O1 on your telephone keypad. We have a new question from Lucie Carrier from Morgan Stanley. Please go ahead. Thank you for the follow-up, but actually the question has been answered. It was on the restocking, so I'll just leave it. Thank you. Next question from Eric Lemarié from Bryan Garnier. Please go ahead. Yes. Good morning, Eric from Bryan Garnier. Thanks for taking my three question, please. First one on your presentation, page 30, I am a bit surprised by the 1% decline in organic sales in connected products. While you said Netatmo sales were 20%, so I suspect the connected product sales, the non-res, were very bad in 2020, which is not surprising, but I was wondering whether you expect or not a sharp recovery in 2021 in the non-residential connected product, on the back, on the trend for digitalize the buildings. This is my first question. The second question, do you expect anything from the European Green Deal in terms of impact on your activities in the years to come? The last question, regarding the free cash flow, do you have any sort of indication for the 2021 free cash flow? Maybe I missed something, but when I look to 2020, the level of free cash flow looks to be much better than the consensus. I was wondering if you could give us any sense of what could be the trend this year. Thank you. Taking your three questions. I confirm that the Eliot organic sales in 2020 were down 1% and that the Netatmo sales were up double digit. It's about a 20 points difference between the growth of Netatmo and the decline in the group sales of -8.7%. -1 for Eliot, double digit for Netatmo. Where does the difference come from? Netatmo, it's only 10% of Eliot sales. You have 90% of Eliot sales which are non-Netatmo, either both resi or non-resi. You have, for example, if I take the resi piece, products such as door entry systems, which are not Netatmo products and which are residential, which are Eliot products. In the non-resi front, you have PDU for data centers, you have lighting controls, you have power products, you have UPS and a few others. It is true indeed that if Netatmo, which represents 10% of Eliot sales, is growing double digit, and if Eliot is only -1%, it means that Eliot excluding Netatmo is down by more than 1%, by definition. First comment. Second comment, it's not such a bad performance because it means that there is about eight point difference between Eliot and not Eliot. Eliot minus one, non-Eliot minus nine, to make a long story short. What we intended to see in 2020, and what we wanted to achieve, is a clear over-performance on connected products compared to non-connected. The same over-performance that we've been able to achieve in the previous years. We have achieved it in 2020, except that in difficult markets, instead of enjoying a +10% organic, we enjoy minus one. We can demonstrate this clear over-performance. Again, we are convinced that connected products in the years to come, both resi and non-resi, will be growth enhancing. That's why we have invested a lot in 2020, despite the crisis on connected products. We have kept launching new products. We have shown a few of them in the deck. We have increased by 1% our R&D expenses, P&L, in 2020 compared to 2019. A lot of that being on connected products. We have a record high 5.1% of sales on R&D. We have deployed Eliot products further and, for example, the line of wiring devices is now sold in 44 countries. We are extremely pushy on connected products because we believe that in the years to come, it will help us to sustain and to enjoy a nice growth. Again, in 2020, there was this minus one compared to minus nine. As far as the European Green Deal, we'll see. The Green Deal is a series of initiatives, a lot of them not yet being translated into clear regulation with clear budget and local regulation. What I can tell you is that it's extremely encouraging to see a number of initiatives being taken, either at European level or local level. It's initiatives such as, for example, in France, what we call the décret tertiaire, which is the obligation for a number of commercial buildings to measure their energy consumption to reduce it. It's highly promising to see MaPrimeRénov, which is a system of incentives given to end users so that they can finance works at home to improve the energy efficiency of their buildings. Not all of those incentives are targeted toward our trade. Some of them are. Those, for example, focusing on global renovation. Some of them are more focusing on insulation or heat exchangers or stuff like that. To make a long story short, the Green Deal had yet to come into the reality and local legislation and budgets and work, but the initiatives that have been launched so far show a change in mind in the spirit of lawmakers in Europe that demonstrate that the green topics are now on the top of the agenda, and it will definitely help Legrand and the industry in the years to come. The good news is that it is also now on top of the U.S. agenda. The fact that the new U.S. administration decided to join back the Paris Agreement, for example, is a very good news. We see a lot of potential behind the budgets that will be dedicated to make buildings more efficient in the decade to come. As far as the free cash flow question, I will leave it to Franck to answer. Thank you, Benoît. Good morning, Eric. Yes, as far as free cash flow is concerned, 2020 is an excellent year in terms of free cash flow, 17% of sales, over EUR 1 billion as last year. Talking about 2021, three items to underline. First, the mechanical effect that has benefited from 2020, the working capital requirement will be adverse. Second, there were some one-timer in 2020 with some asset sales, which will not be repeated in that level. Second item, we will resume the normal pace of CapEx in order to keep fueling the growth. To consider some numbers, I will revert to the midterm model with a normalized free cash flow at a nice level between 13%-15%. Thank you very much. Thank you. Next question from Jonathan Mounsey from Exane. Please go ahead. Hi. Thank you. Good morning. Just a couple questions. First of all, on residential. Obviously, it's been very strong, even as your sales have been down. How long do you think that's going to continue? It sounded from your comments on Italy, a lot of it's driven by people renovating their houses as they're being forced to sit in them for so much longer than normal, rather than new build. It feels like this is a trend that can't last forever. It's also pulling forward demand, the speed at which people are doing up their houses. It's going to mean their house is in a much better state at the end of this and maybe I could see a situation in a year or so's time or even less where there's not need to renovate in the way that people have been. On the cost savings versus the margin target. It sounds to me, and correct me if I'm wrong, but is this the right interpretation? The savings versus the investments are basically a wash. You're going to use the savings to invest in the business in terms of R&D, marketing, new product launches. Hopefully, I guess all with the aim of increasing sales growth. When we think about the EBIT bridge, the investments basically cancel out the benefits of the 18 site closures that you've announced in the last 12 months. Is that right? Thank you. The shortest answer to your first question is I don't know. To elaborate a little bit more on that, you have some short-term positive trends on resi, and you have some longer term very positive trends either. Short term, you're right to say that there is an excitement of many people in many geographies that they have spent two or three months locked at home and have discovered how much it was difficult to work from home, that did not have the right level of connectivity, that it was worth renovating one additional room to work. All that translated into a boost in resi in many geographies, especially the U.S. and in Western Europe, and you could see that as short term. Now, mid and long term, there are clear trends that should support the residential market. There is a lack of housing in many geographies. The trend toward home working or smart working, as we call it today, remote health, and studying remotely will last. Of course, people will go back to the office and spend maybe on average one or two days at home instead of five days during the lockdown. There will be a trend toward more home working, and there will be a need for renovating the home. Everybody now has got used to do a lot of things using their smartphone, including ordering food and stuff like that. A lot of people start to realize how nice it is to have a camera which can be remotely operated or a thermostat which can be remotely operated. There will be a continuous trend for connected products at home. Electrical vehicle. We have enjoyed nice growth in EV charging stations in many geographies, because the more electric vehicle you sell or hybrid, the more charging stations and electrical infrastructure you need. Not to mention energy efficiency. We won't be able to tackle the 2030 and 2050 challenges at the European level or at the American level if we don't improve significantly the energy efficiency of residential buildings. I remind you that in Europe, 75 of buildings, both resi and non-resi, are considered as being non-efficient. All those very positive trends might, of course, be impacted one way or the other by the crisis or the rebound, but they are sustainable long-term trends that should support the growth in residential buildings. The same for non-resi. Of course, when people such as in 2020 were not at their office, as I said, you don't have a lot of renovation work which is performed. Long term, you have many very positive trends that could help non-residential buildings. The fact that people will alternate between home working and office working will imply, for example, that the network and the AV systems of non-resi buildings, of offices, will need to be upgraded so that you can have an efficient work between non-resi and resi. A lot of collective spaces will have to be reorganized for more meeting rooms, and it will translate into works. Energy efficiency in buildings will also be a must. So on and so forth. I'm sorry to spend a bit of time on that, but beyond very short-term trends, which are impacted by lockdowns, curfew, surge in contamination, number of deaths, and so on and so forth, long term, you have a number of very positive trends that will be highly supportive to our market. As far as the benefit of the 18 closures is concerned. Number one, it's 18 sites closed or for which the closure has been announced. Sometimes not yet closed, and some of them will be closed in 2021. Well, we have 130 sites. The sites are not employing all of them, thousand of people. Still, this being said, it is true that we have done a lot of restructuring effort in 2020. I can give you one more number. The number of people, average headcount at Legrand, in like-for-like, decreased by 8% between 2019 and 2020. We have had a lot of restructuring, but again, not all the benefit have to be enjoyed in 2021. On top of that, there are a number of areas where we should put additional budgets, and most of you have named a few of them. Advertising, travel, freight, if we ship more volumes. We have to boost the number of budgets in order to sustain growth. It's not a surprise to us, and this is a way our saving plan was designed, that not all the benefit of the restructuring will flow as is into the P&L because we have additional expenses to finance that. Understood. Thank you. We don't have any more questions for the moment, ladies and gentlemen. If you wish to ask a question, please press zero one. It's zero one on your telephone keypad. We don't have any more question. Back to you for a conclusion. I know you have a very busy day, and sorry for that. It was not planned this way, that so many companies in the same so-called peer group communicate the same day. Sorry for that. Thank you very much for taking the time to listen to what we have told you. If you have additional questions, Franck, Ronan, Sammy, and myself are available for any questions you may have today. Thank you very much and have a good day.