The largest electrical sockets and switches maker Legrand said recently that the company’s organic sales growth for the year as well as its margin targets are not easy to meet because of the declining construction markets in Italy and France.
Legrand stated that it intends to grow its sales by 0 to 3% and its adjusted operating margin from 19.8% to 20.2 percent of sales before acquisitions.
On Thursday, the company reported that it is now looking at the lower end of the target because of the failing of its construction markets plus the slower profit growth its China business.
During the first nine months of the year, Legrand’s adjusted operating system slid by 1% to 663.2 million euros while its sales went higher by 0.8% to 3.32 billion because of the profit growth in its Germany, Spain and Netherlands.
France was the main disappointment for Legrand where profits reduced by 3% to 5%. The country saw the decline rate to 3.5% in the third quarter of 2014 from the 2.1% in the second quarter and the 1.9% in the first three months of the year. This outpaced the third quarter plunge in Italy of 3%.
Legrand shares are now down by approximately 16% since its highs recorded sometime in May which gives the company a current market value of 1.06 billion euros.