CORRECTED-UPDATE 2-Legrand upbeat on margins after robust 2013 profit

Thu Feb 13, 2014 3:45am EST

(Corrects year of 20.1 percent margin to 2013)

* 2013 adj op profit 882.3 mln vs Reuters poll avg 863 mln

* Sees 2014 driven by U.S. buoyancy, recovery in Europe

* CEO says model protects it from currency swings

* Raises dividend to 1.05 eur/share from 1.00 eur/shr

* To pursue four to six acquisitions per year

By Natalie Huet and Alexandre Boksenbaum-Granier

PARIS, Feb 13 (Reuters) - Switch-maker Legrand posted better-than-expected annual profit on Thursday and said it was confident it would able to protect its margins from currency swings in emerging markets.

The world's largest maker of electrical switches and sockets also predicted its North American business would remain strong through 2014, while Western Europe gradually recovered.

Legrand said profit margins rose in 2013 while sales were little changed, and that it had benefited from its ability to fine-tune production across different regions depending on market conditions and currency moves.

The company said it expected 2014 organic sales growth of 0 to 3 percent, driven by a buoyant market in North America, where revenue grew 4.7 percent last year, and by a gradual improvement in Western Europe.

Legrand said emerging markets remained a "generally favourable environment" but noted uncertainties due to recent currency swings.

Shares in Legrand, which gained 26 percent last year, were 2.6 percent higher at 0804 GMT, the second biggest gainers on the CAC 40 blue-chip index, giving the company a market capitalisation of around 11 billion euros.

The company generates around 20 percent of sales in U.S. dollars, 40 percent in euros and 40 percent in other currencies, Chief Executive Gilles Schnepp told reporters on a conference call.

He said swings in currencies like those witnessed in recent months across emerging markets did not affect the company's profitability.

Legrand is aiming for a 2014 adjusted operating margin before acquisitions of between 19.8 and 20.2 percent, compared with 20.1 percent in 2013.

"Legrand benefits from a particular situation: we have an almost perfect balance between production costs and revenue. In other words, we produce in the currencies in which we sell," Schnepp said.

"We are very confident as to our ability not to see ...profitability affected by currency variations."

Rival Schneider Electric cut its full-year revenue forecast in October, blaming unfavourable exchange rates, and said it would raise prices and shift production to emerging markets to preserve margins.

In 2013, Legrand took over six companies representing additional sales of about 200 million euros ($272 million) and it will continue to pursue four to six acquisitions per year, Schnepp said, declining to provide more details.

Full-year adjusted operating income rose 0.9 percent to 882.3 million euros, well ahead of analysts' expectations, at 863 million on average in a Reuters poll. Sales reached 4.46 billion euros, up 0.5 pct on an organic basis.

($1 = 0.7359 euros) (Editing by Andrew Callus and John Stonestreet)

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