Legrand raises mid-term targets on data centre growth

By Mathias de Rozario and Rihab Latrache

Sept 28 (Reuters) - French electrical and digital building infrastructure group Legrand raised its medium-term targets on Monday, driven by a stronger-than-expected growth in its data centre business.

Legrand, which operates across the commercial, industrial and residential sectors, has been outpacing the 2030 goals since it announced them in 2024, thanks to soaring demand for data centres, which account for a growing share of its revenue, CEO Benoit Coquart told Reuters.

It now expects average organic revenue growth of 6% to 8% per year between 2027 and 2030, up from the 3% to 5% range it had forecast for 2025-2030. It also sees an adjusted operating margin averaging between 21% and 22% of total sales, versus around 20% in the previous guidance. 

Coquart expects the sector's boom to continue in the coming years, saying Legrand's clients are bolstering their AI investment plans even as some AI leaders urge developers to slow the development of advanced models. 

"We currently have 80 gigawatts of installed capacity in data centres for IT, and we believe that by 2030, this will rise to 180," Coquart said in an interview ahead of Tuesday's Capital Markets Day.

The group expects the share of turnover generated by its historical building business to shrink, while the energy and digital transition business, which includes data centre infrastructure and energy management solutions, is set to grow from 53% of its total revenue in 2025 to around 70% by 2030.

"There are three factors: acquisitions, which will mainly be in the energy and digital transition sectors; the divestment, which will take place in the core business; and, quite simply, the different rates of organic growth," Coquart said.

Legrand expects its construction business to return to moderate growth of between 1% and 3% in Europe. The situation is slightly less positive in the US for both residential and commercial business areas, he added.

(Reporting by Mathias de Rozario and Rihab Latrache in Gdansk, editing by Milla Nissi-Prussak)