French electrical and digital infrastructure company Legrand has raised its medium-term growth targets, driven by stronger-than-expected growth in data center business and sustained demand for infrastructure related to artificial intelligence. The company now expects organic revenue growth of 6-8% per year from 2027 to 2030, up from its previous target of 3-5% for 2025-2030. This upgrade reflects the company's confidence in its ability to capitalize on the growing need for data center and AI infrastructure.
Legrand's revised targets also include an upgraded outlook for its adjusted operating margin, which is now expected to average 21-22% of total sales, up from around 20% in its previous forecast. According to CEO Benoit Coquart, the data center boom is expected to continue in the coming years, driven by customers' ongoing investments in AI. He noted that the current installed power capacity in data centers for IT applications is around 80 gigawatts, which is expected to rise to 180 gigawatts by 2030.
The growth in data center demand is expected to drive Legrand's energy and digital transformation business, which includes data center infrastructure and energy management solutions. The company expects this segment to account for around 70% of its total revenue by 2030, up from 53% in 2025. This shift in revenue mix is based on three key factors: strategic acquisitions focused on energy and digital transformation, divestitures of non-core activities, and differing organic growth rates across business segments.
Legrand's upgraded targets reflect its increasing focus on digital infrastructure and energy, driven by accelerating global investments in data centers and AI. The company's traditional building business is expected to decline as a proportion of total revenue, while its energy and digital transformation activities continue to grow. Legrand's optimism is based on its strong position in the market and its ability to provide solutions that meet the evolving needs of its customers.
The company's outlook for the construction sector is mixed, with expectations of moderate growth of 1-3% in Europe, while the US residential and commercial sectors appear less promising. Legrand's revised targets assume that the current boom in data center demand will continue, driven by the increasing adoption of AI and other digital technologies. The company's ability to execute on its growth strategy will depend on its ability to navigate the challenges of the global construction and technology markets.
Legrand's shares have risen in recent years, driven by the company's strong performance in the data center and AI markets. The company's upgraded targets are likely to be welcomed by investors, who have been looking for signs of sustained growth and profitability. Legrand's focus on digital infrastructure and energy positions it well for long-term success, as the demand for data center and AI solutions continues to grow.
As Legrand looks to the future, it is well-positioned to benefit from the ongoing growth in demand for data center and AI infrastructure. The company's upgraded targets reflect its confidence in its ability to execute on its growth strategy and deliver long-term value to its shareholders. With a strong portfolio of products and services, Legrand is poised to remain a leader in the rapidly evolving data center and AI markets.
Key points
- Legrand raises 2027-2030 revenue growth forecast to 6-8% from 3-5%
- Data center installed power capacity expected to rise to 180 gigawatts by 2030
- Energy and digital transformation business expected to account for 70% of total revenue by 2030
