Good morning, ladies and gentlemen, and welcome to today's Legrand's 2023 1st Semester Results Conference Call. All participants are in listen only mode. Later, there will be a question and answer session, and for your information, this conference is being recorded. At this time, I would like to hand the call over to CEO, Mr. Benoît Coquart, and the CFO, Mr. Franck Lemery. Please go ahead, sir. Thank you. Good morning, everybody. Thank you for connecting to this webcast. Franck, Ronan, and myself are happy to welcome you to the Legrand 2023 first half result conference call and webcast. Please note, as usual, that this call is recorded. We have published today our press release, financial statements, and a slideshow to which we will refer. Those documents are available on the Legrand website. After a few opening remarks, we will comment the results into more details. I begin on page four with the two key takeaways of this release. First, Legrand recorded very solid results in a contracting building market, and we continue to deploy our strategic roadmap through a range of growth and development initiatives. Second, we have revised our full year targets upward. Moving to page six to seven, I will start with an overview of sales. In the first half of 2023, our sales grew in total by +4.9%, driven by an organic rise of +4.6%. In a contracting building market, these figures point to our resilience. It is driven by faster expanding segments, energy efficiency, connected products, and data centers, by pricing power and by the group's robust commercial performance. On top of organic growth, the scope effect was +1.3%, including +1.8% linked to acquisitions and -0.5% to the net impact of Russia. Based on acquisitions made and the likely date of consolidation, the overall impact should be close to +2% full year, excluding the impact from Russia. Last, the FX effect is negative at -1% and should be close to -2.5% for the full year 2023, based on the average rate of June 2023 alone. You will read on page seven, the key takeaways per geographies on a like-for-like basis. In the first half of 2023, the group achieved overall a solid level of growth. Europe grew a very solid +6.8%, driven by a strong growth in energy efficient solutions and despite residential market down in most geographies. In the U.S., we recorded a slight decline of -0.3%. This reflected a double-digit fall in residential and a slight retreat in non-residential, partially offset by a double-digit growth in data centers. Finally, the rest of the world area grew a solid +8.2%, driven by a very sustained growth in India, Africa, and the Middle East. These were the main comments I wanted to make on sales. I will now hand over to Franck for more color on our robust financial performance. Thank you, Benoît. Good morning to all of you. I will start on page nine, commenting the adjusted operating margin. Before acquisition and excluding Russia, we recorded a high adjusted operating margin of 22.7% for H1, representing a remarkable +2.2 points increase versus H1 2022. The high profitability of the period is driven by gross margin. It is reflecting our firm control of expenses and sales prices. The impact of acquisitions and of Russia were respectively of -0.3 and -0.2 points, meaning the adjusted operating margin all in for the first half of the year stood at 22.2%. Going now to page 10. Highlighting two main points. First, net income of EUR 651 million represents 15.2% of our sales. Earnings per share are up, +19%, standing at EUR 2.445. It shows the group very strong value creation. Second, the cash generated during the first half of the year is remarkable, with cash flow from operation up +9.7% at EUR 863 million. Despite a continued strengthened coverage of inventory, the free cash flow stood at 18.9% of sales. These strong financial indicators demonstrate Legrand continued best-in-class profitability and cash flow generation. Moving now to page 11, regarding the balance sheet structure. We have a very sound balance sheet testified by two indicators. First, the debt. Net debt at the end of June amounts to EUR 2.4 billion, with a ratio to EBITDA standing at 1.2. Gross debt has a maturity of 4.6 years and more than 90% is at fixed rate. Second, we have EUR 2.9 billion of available cash. This concludes the key financial topics I wanted to share with you. I'm now handing over back to Benoît. Thank you, Franck. On both pages 13 and 14, we give a few examples of the wide range of initiatives launched in the semester, around growth and development. First, following the acquisition of Encelium and Clamper earlier this year, today we are announcing the acquisition of Teknica, the EUR 45 million turnover, Chilean specialist, notably in data center solutions. Second, we launched many new products showing the group's focus and capacity on innovation, both for core infrastructure products and in faster expanding segments. Third, regarding the improvement of our operational performance, we are consolidating, for example, our distribution centers in the U.S., and just opened a new plant in Mexico. We can now move on Slide 16, about our raise the 2023 full year targets. Excluding a major economic slowdown, Legrand has now set the following full year targets for 2023. Sales growth at constant exchange rate and excluding Russia, impacts of between +5% and +8%, versus +2% and +6% previously, including a scope of consolidation effect of around +2%. An adjusted operating margin before acquisitions, i.e., at 2022 scope of consolidation and excluding Russia and relative impact of around 20.5% of sales, versus around 20% initially. At least 100% achievement rate of our CSR roadmap. This is it for the key topics of this release. I suggest we now switch to Q&A. Thank you. Thank you, sir. Ladies and gentlemen, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. We'll move on with our first participant, Daniela Costa from Goldman Sachs. Please go ahead. Your line is open. Hi, good morning. Thank you. I have I have mainly one question. Just in terms of understanding your organic sales growth guidance for the year, can you talk through sort of what you make in terms of like, volume and pricing? Especially given, I guess, the market was slightly surprised by weaker organic growth in the second quarter, but you obviously are upgrading guidance. Can you talk behind that? Similarly, maybe can you make up the makeup for the 50 basis points extra on margin on why not more, given what you did imply a pretty low second half? Thank you. Hello, Daniela. First of all, before I, I give you a bit to the building blocks of our guidance, I wanted to highlight that we have always warn you, that you shouldn't extrapolate a given quarter. Indeed, the second quarter is softer than the first quarter in terms of top line, but for us, it doesn't really mean that the market has slowed down. Quarter performance can be impacted by many topics. For example, specifically, Q2 2023, was somehow impacted by the number of open days or days of trade. It was impacted by some destocking from some distributors in a number of geographies, bit of U.S., France, Australia, and a few others. We don't see a significant change of trend market-wise between Q1 and Q2. Now, talking about the full year guidance, to make sure that the numbers are clear. In terms of top line, we are shooting for between +5 and +8, including a scope of consolidation as +2. Indeed, it means that organically, we are shooting for a number comprised between +3 and +6, with a midpoint of +4.5%. We expect the growth in H2 to be pretty consistent with the one we had in H1. A little bit more, a little bit less, but not inconsistent with what we have seen. What are the building blocks of this top line performance? Well, number one, we don't expect the market to further deteriorate. We believe that the building market hasn't been supportive in H1, and our building market was probably down in many geographies. We could discuss a bit later, the value strength in the U.S., in Europe, and the rest of the world. We don't expect in H2, a further deterioration in the market. Number two, we should have a little bit less pricing than in H1 mechanically, because we do not intend to do additional price increase. To give you the number, we had a pricing increase in H1, which was slightly above 7%, and we expect in H2 to have a pricing, let's say, between 2%-3%, leading to a total pricing tax of between 4%-5% for the year. A little bit less pricing than than in than in H1. We intend. And then the third building block, which is important, is that we intend to reinvest part of the good margin improvement into additional growth. Our objective is to spend more in SG&A, in sales, in customer support, in communication, in order to grab additional volume and to boost a bit the sales in H2. Those are the building blocks for the guidance in, in, in, in, in top line, well, you have made the math match yourself, Daniela, but our organic growth guidance imply a year to go, which is comprised between 1.5% and 7.4%, which implies a volume growth from a slightly negative to mid-single digit positive. As far as the margin is concerned, you are right to say that it implies an H2 which is significantly softer than H1 because the year to go in terms of EBIT margin is basically around, let's say, 18% for H2, which is below the historical H2 margin that we have had of, let's say, between 19% to 19.5%. Why is that? Well, number one, we will have a little bit less pricing, as I said, than in H1. In front of this softer pricing, you shouldn't expect price of raw mats and components to go down. Our assumption today, of course, it may change, but our assumption today that the price of raw mats and components will be from, let's say, stable to slightly up. Just a word on that. You know that raw mats and components represent 36% of our sales, but 72% of the 36 are not raw mats, but are components. The price of components include the added value, energy cost, and so on and so forth. This is the reason why our current scenario assumes that the price of raw mats and components will be from flat, flat to slightly up. You will have less benefit from the difference in selling price versus versus purchase price. Number two, as I said, we intend to spend more in G&A than in H1 in order to go and grab some additional business opportunities. As a result, all those, let's say, building blocks, if I may say it, to this guidance of 5%-8% in top line and 20.5% in bottom line. Got it. Thank you. I assume you, you don't assume any further destocking from distributors, so you think it was just a Q2 phenomenon? Well, our feeling is that the level of stock from our distributors is pretty low in many geographies. Of course, there's, it's, it's always, it's, it's always a question mark, but we don't embed in our H2 scenario a significant destocking from the distributors. No. Got it. Thank you. I'll go back to queue. Thanks. Okay. Thank you. We'll move on with James Moore from Redburn. Please go ahead. Your line is open. Yes. Hi, everyone. Thanks for the opportunity. I wondered if you could talk a little bit about the inflation numbers that we saw on, on raw material and components in the second quarter, and how you expect those numbers to develop quantitatively in the second half, please? To, to give you the numbers, in H1, we had a pricing of, to be precise, 7.3% up for selling price, and we have an increase in price of raw mats and components of 0.4%, +0.4%. Of course, this gap between the +7.3% and the +0.4% has been a strong benefit in terms of profitability. If we look Q1, Q2, specifically on, on, on Q2, the selling price was lower. It was closer to +6%, and the raw mats and components were slightly down. This is specifically for Q2. As far as H2 is concerned, those are the numbers I just gave. Selling price between +2% and +3%, and price of raw mats and components, between zero to slightly up. Again, be careful, huh. You know that we have only very little visibility on the price of raw mats and components. Of course, if the economy rebounds sharply, then it's likely that the price of raw mats and components will go up again. If the economy decelerates, it would be the other way. Take that as today's assumption from Legrand, but it may change depending on the economy. Last comment, should the price of raw mats and components go down instead of up, I confirm that we will retain our ability to do a bit of pricing in H2. Don't expect the selling price of Legrand to go down in H2, even in a context where the price of raw materials and components would go down. The counterparty, or the other way, if the price of raw materials and components were to go up significantly because of a strong demand in the economy, we still have retained the ability to do a bit more pricing. Based on today assumptions, we assume that our selling price will be up 2%-3%, and our purchase price will be from 0 to slightly up. That's very helpful. Good. I think wage inflation, you talked about being about 5.5% in the 1st quarter. Is that still a significant similar magnitude? How do you think that progresses going forward? Well, for Legrand, it's slightly more than 5% wage inflation. It used to be last year, 4%-5%, so indeed, it has gone up a bit. The situation is very different from one geography to another. We believe it is still under control, and we have implemented locally a number of schemes in order to limit the wage inflation. So slightly more than 5%. On top of that, I have also to say that the impact of this wage inflation in, you know, accounts was limited by the fact that we have done some productivity. For example, in H1, our volumes are broadly flat, and our like for like headcount is down by a little bit more than 2%. No, we, we, we see the, the wage inflation as being a, a manageable topic. Very helpful. One last one, if I could squeeze it in. Just looking at the U.S. business, it looks like you were growing to around 3% in the 1st quarter and something like -3% in the 2nd quarter. I haven't exactly done the math, but I think you commented that resi was down double-digit in both quarters, and data center was strong in both quarters. It looked to me that the change was non-res, going from slight growth in the 1st quarter to slight decline. I don't want to oversplit hairs, Benoît, but you talk about destocking. Do you really think this is a US non-res destock, or do you think there are any incremental deteriorations in, say, your big office market? No, we don't see a deterioration. Again, you, you know, I'm, I'm always a bit uncomfortable to comment quarterly numbers. I prefer to comment, high share numbers, which are, for me, a bit more significant because you're given a quarter, you know, destocking or, or number of days, or cut off, or stuff like that, does not impact a half a year, but it can impact a quarter. I prefer to comment on a high tier basis. Now, looking at NCA, Legrand North America, over the first half of the year, couple of comments. Number one, I have to remind you, the Legrand exposure in the U.S., 20% of our sales are made in resi, 55% in non-resi, and 25% in data center. I, I, I can later on comment Europe, and you'll see that in Europe it's, it's pretty, pretty, pretty different. What have we seen in H1? We, we saw a clearly double-digit negative market on residential, with residential improvement being down, housing starts, all those numbers being down. In total, double-digit down. As far as non-residential is concerned, it's a very diverse situation per sub verticals. If you, if you look, for example, at private manufacturing construction, it is expected by market specialists this year to be up close to 40%. Unfortunately, this is not the vertical in which we are playing. The office market is, is closer to zero, and in, in a number of verticals, such as, for example, finance, it is even down significantly. The non-resi on which we are exposed, i.e., mainly, office market in big, big metros, is indeed down. It's not more depressed in Q2 than in Q1, but it's indeed down. You have the data center market, which is very well oriented, and which we believe we will keep going. In this context, we are doing pretty well, given the verticals in which we operate. As far as the residential business is concerned, it's double-digit negative. As far as the non-residential is concerned, it's slightly negative with a clear destocking on Q2. I can confirm that the destocking happened little bit in resi and a lot in non-resi. As far as data center is concerned, it is indeed double-digit up with a very strong, a very strong number. This is what we saw in H1. Now, of course, as far the trends are concerned, this is always a question mark. As far as residential is concerned, we start to see some positive signals, which may more impact 2024 than 2023, but we start to see some months with, for example, housing starts being positive. As far as non-resi, we see no reason why the market sh- wouldn't enter into a progressive recovery mid-term, with a number of things that will help energy savings, work from anywhere, and so on. Data center, we, we remain very, very positive with the, the support of, of, of AI. That's what we can see in the U.S. Again, we, we are not seeing a sequential deterioration of the market nor on our market position between Q1 and Q2. Very helpful. I've got a few more, but I'll go back in the queue and yield to Conch. Thanks a lot. Thank you. We'll move on with Alexander Virgo from Bank of America. Please go ahead. Your line is open. Yeah, thanks very much. Morning, Benoît. I just wondered if you might go a little bit more into the, the trends. I, I guess you've done, you've done the U.S. now with James. I wondered if you could do the same with, with Europe for us. Because, again, we're just trying to, just trying to work out the, the, the sequential development. I appreciate you're looking at the H1 rather than Q2, Q1, but it, it, it does look like there was quite a big difference between the two. And I'm just trying to understand that in, in Europe. Thank you. Yeah. No, it's, it's, it's important. Indeed. Well, Europe, as you know, has a very different exposure, compared to the U.S. In Europe, we do approximately 45% of our sales in residential. Slightly less than 50% in non-residential, and about 5%-6% in data centers. We are, compared to the U.S., we are a lot more exposed to residential and a lot less exposed to, to data centers. What trends have we seen? Well, residential is probably mid-single digits negative in value. Probably a double digit negative in volume for the market, with the new build under pressure in many geographies, France, Germany, the Nordics, and a few others. Non-residential is probably flattish in value, data center is very well oriented, of course, it impacts not as much ourselves, as in the U.S. In this context, I believe we are doing very well. Part of this very good performance is coming from the leverage of our fast expanding segments. For example, we are experiencing a very strong growth in Europe in the energy efficiency and electrification related products. Products such as, for example, circuit breakers, EV charging stations, high efficiency cast resin transformers, measuring, and so on. We are also doing well in data center, because as I said, from a smaller base. To give you order of magnitude, the energy efficiency products represent 27% of our sales in Europe, and data center, only 5%-6%. I think we are doing well in a context which is not a very easy context in Europe, especially on the residential side, which is down. What is the outlook? Well, as far as the residential concern is, the market is concerned, there's no consensus yet on the timing of the recovery. When you look at the value statistics, it's a mixed bag of pluses and minuses, especially for 2024. As far as the non-residential is concerned, we believe that there's, as for the U.S., no reason why it, the market wouldn't recover, given the huge number of commercial buildings which are not energy efficient in Europe, which are not well connected, which do not have the capability to hold the remote conferencing and so on and so forth. We believe that at some point, the non-residential market will grow. And as far as the data center market, it will remain very well oriented, and we believe will continue to expand a lot of growth. This is for Europe. As far as the rest of the world is concerned, well, India is doing very, very, very well. Both the market, but also on the market, we are gaining clearly market share compared to our competitors. As far as China is concerned, the Chinese market is depressed. I remind you that we're very much dependent in China from the new residential. So new construction in residential, which, which, which has been depressed for quite some time now, with so far, no stimulus plan from the authorities. In this context, being able to do growth in value, growth in volume, is, I think, a pretty good achievement. For the rest of the world, it's as usual, a mixed, a mixed bag. Africa, Southeast Asia, Middle East, doing well. In South America, the situation remain extremely difficult from a macro standpoint, including, including Brazil. That's very helpful, Benoît, thank you very much. Maybe one for Franck, before I go. I wondered if you could just kind of talk us through the cash flow, Franck, and particularly your, your own levels of inventory and destocking. Thank you. Well, I let Franck maybe answer this question. Franck? Yes, talking about inventory, you, you remember that our historical level were between, let's say 13%-14%. That we grew deliberately the inventory last year to support the business in a very challenging supply chain. We were, we, we achieved up to 19% at, at the higher level, which was Q3, Q3 last year. Now it starts normalizing progressively with the ratio of inventory to sales around 60%. You may remember that we, we, we, we said that, that we give ourself around two years to, to fully normalize our inventory ratio. We are currently, currently on the, on the trajectory of what we want to do, but there is no rush. First, the, the, the cash, the free cash flow is still very solid. second, the supply chains stays a little bit challenging on some particular components. We will keep doing that reasonably. Thank you very much. Thank you. We'll move on with Gael de-Bray from Deutsche Bank. Please go ahead. Your line is open. Oh, thanks, very much. Good morning, everyone. I have three questions, please. Hopefully, they're gonna be pretty quick to answer. Would you be able to quantify how much money you already reinvested for growth in selling and marketing expenses in H1, and by how much this could change in the second half of the year? That's question number one. Well, we have, of course, a number of programs that, that we have initiated....It's always a question mark on how efficient gonna be this program and how much money we're gonna spend. We, we prefer to embed that into a guidance rather than giving you a precise number. I confirm that the strategic intent is clear. We will, we will have more SG&A put into the model, into the machine than in H1. On top of that, there's another line which I haven't commented and which will impact H2. Well, you may have noticed, guys, that in H1, our level of restructuring was significantly higher than usual because we spent EUR 30 million in restructuring in H1. You know that usually we tend to spend EUR 20 million-EUR 30 million on a yearly basis, in H1, we did EUR 30 million on H1. Well, it is also an area where we are, where we will look for opportunities in H2, so it's difficult to give you a precise guidance because there's also a timing issue. Our, our restructuring could range from EUR 10 million to EUR 30 million in H2. It will also impact our H2 H2 performance. Clearly, our intent is to invest into growth and productivity in H2, through mainly SG&A, and if we can find good ways to invest our money, through restructuring. It's too early to quantify that. We'll, we'll comment that, when we will release our H2 numbers in February 2024. You see, guys, no, no question. Okay. To question. Go, go ahead. Go ahead. I can see that. Well, maybe then could you, could you help us appreciate what was the impact of destocking and the, the impact of the, the calendar situation in Q2? Well, the, the, the calendar situation, I can, I can give you the, the sort of, of mechanical, mechanical impact. Compared to between Q1 and Q2, it probably had a negative impact of about 2 points of growth between Q1 and Q2. It helped Q1, and it was at the expense of Q2. Now, again, you know, it's always the same story with a number of days. It may impact it, it has a significant impact on a month, noticeable impact on a quarter, negligible impact on a, on a semester, and no impact on a yearly basis, right? It's always the same topic, so you can explain a quarterly performance, but hardly a yearly, yearly performance. As far as destocking is confirmed, super complicated to, to quantify. Those are more, you know, feedback we got from our distributors than hard numbers. I confirm that there was some destocking. I have named a few geographies. I can name others. I said, the U.S., France, Australia. We could also mention Brazil, for example. We could also mention smaller geographies such as Austria. It was not hundreds of EUR million, but it was noticeable on the quarter, but no measurable impact. Okay, thank you. The final one is on your data center exposure. Since you're only exposed to the white space in data centers in the U.S., I'm, I'm, I'm wondering if the development of AI-related data centers will actually make any major difference to you? Well, yes, it will, actually, the AI development will probably have more impact on the white space than on the gray space. Because in the white space, it will, it will change the design of the racks. You need to have a higher density racks, so it will change the cabinets, the racks themselves, the way servers are connected. It will also imply smarter management of the rack, and that's what our PDUs are about. Our PDUs help better managing or smart managing the data center and rack. The cooling will need to be closer to the rack, so you need to have, for example, rear door cooling and not, not only the big cooling system for the data center. No, we estimate that the AI will have a very significant impact on the growth of the data center market, especially in the White space. As far as our exposure between White and Gray, worth mentioning that indeed, on a worldwide basis, we are a lot more exposed to White than to Gray, but we have a lot of ambitions in the gray space, in Europe, and in the rest of the world. We have already secured a number of very interesting data center projects with products such as power busbar, for example, or UPS. Specifically in the U.S., we intend to remain focused on the white space because we don't have a gray space offering. The 25% of our sales made in white space in the U.S. should indeed be positively impacted by the AI trend. Thank you very much, Benoît. Thank you. We'll move on with Alasdair Leslie from Societe Generale. Please go ahead. Your line is open. Yeah. Hi, good morning. Thank you. Just maybe start with a quick follow-up on destocking. I think France and the U.S., two of your largest markets, you've called out at least two quarters of destocking there, at least. Do you see any signs of stabilization, I suppose, in those channels, maybe at all towards the end of the quarter? That's the first question. The second question is really around sort of North America, non-resi. I appreciate you've got high exposure to offices there in that space. You know, the outlook is obviously still very uncertain. That's kind of outside of your control. I was just wondering whether you've, you've got kind of internal initiatives underway, where, where you're kind of working on boosting growth there over the next 12 months, whether through kind of new product development across your offerings, greater marketing push, you know, share gains, that kind of thing in, in, in new segments. Just something to, to kind of engineer your own growth. That's, that's the second question. Thank you. Well, as far as the first question is concerned, coming back to what I've said earlier, it's difficult for us to, to really anticipate what our distributors will do. Also, more as, you know, you, you, you, as analysts always have in mind, excellence on their part, but actually, our distribution network is made of 100 of distributors, each of them having a different, different strategy. What we feel today is that there's not a lot of products into the channel. If you visit, you know, DIY shop or professional shop, you will not see a lot of products on the shelf. We believe that the level of stock is not too high in, in the channel. Now, we are not in the minor for distributors, depending on what they expect the market to be in the next two quarters, they will have their decision as far as inventory is concerned. Again, our H2 scenario does not include a significant destocking from our distributors. Now, again, we will see what happens. As far as the second topic is concerned, we see our dependency upon the office building in the U.S., indeed, as a situation we should try to mitigate. We are doing a number of things in order to mitigate this situation. Number one, for the next six to 12 months, we have launched a number of sales programs in order to secure additional volumes and additional market shares. This is one of the reasons why we had this discussion earlier on the fact that we would reinvest part of our SG&A into growth. This is not the only geography where we intend to do that, but indeed, we have a number of programs in order to achieve that. Number two, organically, we are trying to expand our product offering into additional verticals. For example, we are, we have plans for hospitality, for education, for health, in order to reduce our dependency upon the, the office and the office market. Number three, we, we, we are still very active in terms of M&A, even though we have not announced any transaction in H1 in the U.S., I can tell you that we are very active, looking at interesting opportunities. I mean, not big ones, the U.S.ual bolt-on acquisitions that would be positioned on other verticals than the office building in order to mitigate this dependency. We are doing a lot of things, both organically and inorganically. What, what I would like to insist upon is that, of course, for the past two years, this piece of North American market has not been very supportive. Now, I, I wanted to insist on the fact that it remains a very attractive piece of business, nicely profitable, very cash generative, with market shares which are well en- enhanced, very solid market position, stickiness with the customer. Those are strategically very good market positions. It is a fact, indeed, that for the past 24 months, the office market in the U.S. hasn't been very supportive. Very clear. Thank you. Thank you, Benoît. Thank you. We'll move on with Jonathan Moberly from BNP Exane. Please go ahead. Your line is open. Hi, good morning. Thanks. Let me ask a, a couple of questions, maybe first on the, the margin outlook going forward. Obviously, the guidance this year implies lower margins in the second half. You've talked about that. I'm just wondering, what it really implies is a margin below the target, and what's the plan to recover the margin back to 20%, and is that something you'd achieve, say, in 2020? Is it cost saving driven? Does it require volumes to recover? And maybe just linked to that, as you're putting this investment in, this extra SG&A, focus more on volumes, do you need to update the scorecard for these developed businesses maybe to revup- to reward volume growth a little more, maybe reward attracting some of these new verticals that you've just touched on, where I guess, market shares like to be lower, margins may at least to begin with, be inferior. Do you need to kind of evolve to, to encourage more volume growth, relative to what you've done historically? Okay, so on, on your first question, you know, whatever the, the, the margin in H2, even if we, we do the, the 18% or 18.5% implied by our, by, by our guidance, our, our EBIT margin will remain well above 20%. At 20.5%, it will be one of the two highest margins ever got it by Legrand. There's absolutely no issue in the level of margin of Legrand. And if your question is about 2024, of course, it's far too early to guide on 2024, but I can tell you that there's no reason why Legrand wouldn't be consistent with its mid- midterm guidance of delivering a 20% EBIT. Delivering 18% or 18.5% EBIT in H2, because we would reinvest some of our proceeds into the growth wouldn't be a problem. To make things clear, the 20.5% margin is before acquisition and Russia. Then you, you of course, have to add or to deduct to this 20.5% dilution coming from acquisition and dilution coming from Russia. Well, this is for the margin. As far as the second question is concerned, do you want to take it, Franck, maybe? Yes. Perhaps to give us some flavor about the question of reinvestment and SG&A and also follow up to Gael's question. At the end of H1, our SG&As are growing by 7%, so it's above the top line. They have some reinvestment already, already made. R&D heads are up, for example, marcom spendings are also growing quite, quite significantly. If you try to assess what could be H2 with a 18%-18.5% of adjusted EBIT margin, then it would mean acceleration of the SG&A investment. The 7% can be quite above the run rate. It can come up around the double digits. This would be the kind of effort and reinvestment that we would do. I guess just what I really meant, I didn't want guidance for 2024. I just wanted to understand what your plan is. Obviously, when you choose to spend more on SG&A, you still have a plan to get back to 20% margin. I was just trying to understand the drivers. If you're only doing 18 in the second half, how do we get back there next year? I don't suppose the SG&A is gonna go backwards, what is it? Gross margin? Is it volume, price? How do we get there? Well, well, you know, I, I, I think we have 14 years track record in delivering a 20% EBIT margin. You can trust Legrand on our ability to do the SG&A adjustments which are needed or, or, or the right pricing, which is needed in order to deliver this 20%. Again, it, it, it, it is not, it, it is not a comment on 2024 margin because we discussed that in, we discussed that in February. Trust Legrand, our ability to manage our PNL in order to deliver the level of margin we commit to deliver. Second comment, which is something which you should also have in mind, H2 margins is most of the time lower than H1 margin, for many reasons, including the fact that you have a number of weaker months, such as the month of August in US and Europe. When we deliver a 20% EBIT margin, it's quite often the H1 is at 21 and H2 is at 19. It is not per se a problem. Again, we can manage our level of pricing, SG&A, and restructuring in such a way that we deliver our margin commitment. Can I have one more question, unrelated, just on service levels. I know, I think you've talked a number of times about the service level fell, I think from 92% down to more like 80 during the supply chain issues. I, I think you'd mentioned before that when it got back to 90, you'd be willing to consider, you know, more proactively lowering your own inventory. I know you said you were doing it progressively, but what's the service level today? Are we back at 90 now? Are we back up to the level that you're seeking, or are we still actually below where we'd like to be? No, we are not yet at this level. In H1, we are at the level of service, which is slightly above 86%. It's better than in 2022 and 2021, but it's not the 92% level we had in 2019. We have made, let's say, almost half of the way to recover our, our, our level of service. It is coming from, from different factors. At least 2 factors prevents us from being at the level of service we would love to be. Number one, you have a level of demand, which is very different from one product to another. Depending on whether the product is positioned on the electrification trend, for example, or on the classical residential, you can have a product family which is up 20%-25% and another product family which is down 5% or 10%. Of course, in terms of forecasting, it's always a bit more complicated than what it used to be a couple of years back. Number two, in terms of supply chain, the situation has improved in H1 2023, but there is one dark spot remaining, which are the electronic components. Even if the market is improving, there are still some difficulties to source some microcontrollers, power MOSFET, IGBT, a couple of components. Progressive improvements are expected in the, in the, in the months to come, but, but it has remained a source of tension. Those are probably the two reasons why we are able to deliver 86% service level, but not yet the 90% we are shooting for. Thank you. Thank you. We'll move on with Alexandre Emery from CIC Market Solutions. Please go ahead. Your line is open. Yes, good morning. Thanks for taking my question. I got two, actually. First one, on the faster expanding segments, could you give us the growth of this segment in H1? Maybe could you give us the contribution of this faster expanding segments to the consolidated sales as a whole in H1? Second question on the cash flow generation. Obviously, it has been very, very good in H1, but could you maybe help us and give you what we could expect in term of working capital for the full year, in terms of working capital change for the full year? Thank you. Well, we are not giving a number for fast expanding on a quarterly or half year results, but I can tell you that there is a massive overperformance of fast expanding against traditional. And especially, two pieces which grew very fast, data center in the U.S. and green in Europe. But if we take the consolidated, the fast expanding, so including connected green and data center, it's a very, very strong overperformance compared to the classic infrastructure product. As far as the second question is concerned, well, we cannot give you, of course, a guidance for cash flow generation, but even the working capital is difficult to estimate. That's actually the reason why we were used to communicate on a normalized free cash flows, because what will happen last two weeks of December is somewhat, somehow, uncertain. We're not giving any guidance for free cash flow or for networking capital. I can tell you that, 2023, but you have already guessed it, will be a very good vintage in terms of free cash flow. No question. Okay. Thank you. Can I, can, can I add a follow-up one on this faster expanding segments? You mentioned the connected product. Are, are they still penalized by the difficulties of the supply chain for electronic components in H1? Well, the gross numbers are very good. Now it's likely that we could have done better in a number of product families where the components were not really available. You know, you're going to take, for example, assisted living, which is, which is a business, you know, related to people staying at home and all the alarm system that help bringing some help to old people when they fall. Well, this is an interesting business, which grew a lot in H1, which grew a lot in 2022, but which would have grown even even better if the components were available. Yes, it has been a limitation to our growth. Now, again, it's probably EUR 20 million, not EUR 200 million. Yeah. Thank you. Thank you. We'll move on with William Mackie from Kepler Cheuvreux. Please go ahead. Your line is open. Yes, good morning, Benoît, Franck, thank you for the time. I, I'd like to come back to the discussion of the H2 profitability. You've described a, an environment with positive net pricing in H2 and volumes flat or stable. And we've discussed a lot of SG&A as being the main factor, but I, I guess when you're talking about a 350-400 basis point drop, my question would be, can you walk through the bridge? Should we ascribe all of that to a step up in SG&A, or are there other factors in your assumptions? When we think about the skew between H2 and H1, could you provide a little more color on your expectation by region, given that we've seen some very strong performance in the H1? Thank you. Well, I, I wouldn't quote the H2 margin as being a drop of 300 basis points. Bear in mind, again, that there is a seasonality traditional impact. If you look at the past 5 or 6 years, but of course, sometimes, on a given year, the H2 was exceptionally low or exceptionally high. On average, our H2 margin over the past couple of years has been 19 point something, between 19 to 19.5%. If we deliver 18% margin, the so-called drop should be seen as 100 or 150 basis, and not 300 basis. Number one. Number two, apart from what I gave you very precise guidance for selling price, purchase price, and potentially restructuring, so you can do the math itself. This margin doesn't imply a 30% growth in SG&A. It implies indeed double-digit growth in SG&A. Now, let's, let's make things clear. If we are not able to achieve the program we want to achieve, well, we may not have the reward in terms of supply, but we'll indeed have a slightly higher margin. This is not the plan we have today in mind. The plan we have in mind is to invest into growth for H2 2023, as well as to prepare the start of 2024. Following up on that. By the way, as, as part of the, as part of the building blocks of the H2 guidance, you should also have in mind that there is still some wage inflation, even though it's under control for Legrand, with more than 5%, it, it, it is to be put into the, the model also. Thank you. Just following up, in terms of your reinvestment plans for growth, would you describe those as to be applied broadly across the group, or do you see a particular programs in specific regions or countries? We have a broad program, including in countries which are doing well. Take India, for example, even though we are very satisfied and very happy with our growth in India, we still believe that we can grab a few additional percentage point of market share. We have also initiated a program in India. It's not specifically or specific to the U.S. or to the geographies which are which are which are which have a little growth in H1. In fact, growing segments, we also have some programs. Again, the uncertainty is, will we be able to implement all those? Will it have impact we want them to have? It is not as mechanical as I put EUR 1 of LNCA into the, the market, and it brings me EUR 2 or EUR 4 of sales, huh? You have to, you have to achieve those program. If you are not able to achieve them all and to spend all the money, again, of course, we'll do a, a bit more savings and a bit more margin, but then a little bit less sales. This is a sort of, you know, it's a topic on which we are working today. Thank you very much. Thank you. We'll move on with Aurelio Calderon from Morgan Stanley. Please go ahead. Your line is open. Hi, good morning, Benoît and Franck. Thanks for taking my question. I've got two, please. The first one is around market share. If you've seen any market share evolution, and I know that you don't like to comment on quarterly evolutions, but have you seen any different, different trends in Europe and in North America, maybe over, kind of, let's say, since, kind of the COVID recovery, have you seen any market share shifts? That's the first one. The second one is, more trying to think about the inorganic growth part of the equation. Are you seeing anything different in the market in terms of multiples, in terms of ability, to buy businesses? Just trying to think about that sort of implied deceleration in, in organic growth, if there's anything to, to read into that. Thank you. Hello. No, no, we are not seeing anything negative in terms of market shares. Well, of course, it's, it's, we know, we have, you have, we have 100 geographies and 100 product families, so, you always have, market families in which you win and market families in which you lose. Overall, we think that we are holding firmly our market share, the traditional part of the business. We are probably gaining market share in fast expanding. Actually, it is confirmed when, when you, you compare, when we, we compare ourselves with our listed peers. Of course, you know that the comparison is always difficult because, each of the listed companies do have a different market exposure. Well, of course, you have the players which are helped, if I may say, but by the U.S. industrial construction, such as ABB and Schneider. If you look at companies closer to our world, well, you have Hubbell Electricals being down 2%, well, you have Signify down 8% or 9%. You have Saint-Gobain, which is just up 1.5%. You have Assa Abloy at +5. You have, well, Rexel slightly above Levall. Both on a micro perspective, i.e., by looking country by country to our performance compared to our local peers, and on a global standpoint, when comparing ourselves with the listed peers, we don't have the feeling that we are losing any share. As far as second topic is concerned, it is true that we will achieve a perimeter scope impact, which will probably be lower than our historical average. You know that historically, we've been able to deliver a 3%-4% scope effect each year, and this year, given what we have announced to today, it will be closer to +2%, which is a number we included into our guidance. Now, you shouldn't read that at all as the fact that we are lacking targets, lacking good ideas, or that the targets would be more difficult to grab, because, for example, prices would have go up or whatever. It is just a timing issue. I confirm that we have a number of advanced discussions going on. If we are doing the job properly, we should be able to sign one or several deals in H2. It is just a timing issue. We still believe that we are, we should be able to deliver on a yearly basis, a 3% to 4% perimeter impact. As far specifically as the, as far as specifically as the prices are concerned, we have not seen really prices going up in the past two or three years. We are not really seeing prices going down today, despite the WACC are going up because of the exchange rate. The reason being that most of the counterparty we have in front of us are individual sellers, and they have a price in mind, which does not depend much on the interest rate or the beta or the risk premium, but it's more a psychological price, which is usually not going up much or down, down much, depending on the economy. Prices, in other words, remain reasonable and i-in a range that makes us confident that our next deals should be value accretive and EPS accretive as per our standards. That, that's very helpful. If I may, squeeze in one, one last question? I think, when we were speaking, in one key and so on, you were talking about pricing carry over being highly theoretical because there, there are some effects from, from rebates and so on. The question is, are you offering more of these rebates also as part of your, kind of efforts to, to boost the top line? Or, or have you not been offering rebates above any, any normal range? No, no significant additional rebates because the rebate game is not a game which is paying off a lot in our business. So now our programs are more about grabbing additional customers at doing more powerful launches than increasing communication toward a number of targets, more than doing some rebates. And actually, the 2%-3% price impact that we expect to experience in H2 implies no price cuts, but no significant additional price increase. We may have to increase the price in geographies where the currency is depreciating a lot, but otherwise, we don't intend to do any significant or meaningful additional price increase. Even though indeed, carryover is very theoretical, most of the H2 pricing should be carryover. That's great. Thank you. Thank you. We'll move on with Delphine Brault from Oddo BHF. Please go ahead. Your line is open. Yes, good morning, gentlemen. Thanks for taking my questions. I have only one, one clarification. The first one is on Russia and the acquisition. The dilution was minus 50 BPS in H1. I'm wondering how much you believe it should be in H2? Second one is on pricing. You just said that we should not expect price increase in H2. Did you raise prices in July? If so, in which segment specifically? Is it a sum of some raise and some decrease? Just to understand how prices evolved. Yeah. Okay, starting with the second question, you know, we're, we're not tracking every single monthly pricing per, per geography, but we haven't done any meaningful price increase in July. I confirm that most of the 2%-3% price increase we should record in H2, is coming from the carryover of last year and beginning of this year. Does it mean that we won't do any price increase? Again, I really want to make clear. Today, we are not planning any, but if for whatever reason, the price of formats and components was to go up, we are not ruling out the possibility to do, to do one more. As far as the dilution is concerned, we have -50 basis points dilution in H1, of which -30 basis points is the U.S.ual dilution coming from acquisitions, and -20 basis points, the dilution coming from Russia. You know that we treat Russia as a negative scope in 2023. We compute the dilution of Russia as if it was an acquisition, actually. -30 from traditional M&A and -20 for Russia. As far as the full year is concerned, well, it can always change, but our current assumption is that we should have a dilution coming from acquisitions of about -20, which is somehow consistent with the 2% scope effect. The dilution from Russia at about -20 or so. In total, instead of being -50, it should be -40. Bear in mind that the dilution of acquisitions is almost known. Well, we could have, we could make additional acquisition, and consolidate them over 1 or 2 months, but it's almost known. Dilution coming from Russia is still very uncertain, of course. Please take this -40 BPS as today's best view from the management, but not as a, as a, you know, number carved on marble, as we said, of completely as a commitment. Okay. Thank you. Thank you. We'll move on with Supriya Subramanian from UBS. Please go ahead. Your line is open. Yes. Thank you. Good morning. Thank you for taking my question. Most of them have been answered. Just one question on growth trends. Could you share your thoughts on what you're seeing in trends between new build versus renovation market trends and also sort of regional highlights as well, please? Thank you. Well, the, the trend against the new, new, new versus reno, it's a bit difficult to assess on the Legrand standpoint, because the products are broadly the same, whether they are new or, or, or reno. We can read at the market statistics, but, but it's difficult for us to have a sense of the impact it has on our top line. As far as market statistics are concerned, clearly in the residential piece, both in the U.S. and in Europe, the new is going down more than, than resi. Which is not a surprise, because it is a pattern which we have often seen. If you take the, the housing starts, the building permits, in the U.S. and, in Europe, they are more down, if I may say, or, or plunging more than light or renovation work or stuff like that. As far as the commercial is concerned, it's a question mark. We don't have this level of granularity in all our statistics, but at least for resi, I can confirm that market-wise, the market, the, the new is going down more than, than, than renovation. Okay. All right. Clear. Thank you very much. Thank you. With that, it appears there is no further question at this time. I'd like to turn the conference back to Mr. Benoît for any additional closing remarks. Thank you. Well, thanks a lot for your time. If you need more information on the Legrand results, you have, as usual, Frank, Ronan, Antonia, and myself. For those who are lucky enough to take a summer break, I wish you a happy break, and I'd be happy to see you again in a couple of weeks. Thanks a lot. Thank you, everyone, for joining today's call. You may now disconnect. Have a nice day, everyone.