LEGRAND / 2018 Registration document

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MANAGEMENT REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2018

CASH FLOWS AND BORROWING

5.4.11 –Net profit attributable to the Group

Net profit attributable to the Group stood at €771.7 million in 2018 representing a €60.5 million increase or +8.5% compared with 2017 net profit attributable to the Group and representing a €146.0 million increase or +23.3% compared with the 2017 net profit attributable to the Group once adjusted for the net favorable effect of non-recurring and significant gains and expenses on income taxes. This €146.0 million increase primarily reflects: W a €113.4 million rise in operating results; W an €11.3 million favorable change in net financial expenses;

W a €10.5 million favorable change in foreign exchange gains; W an €8.4 million positive effect linked to the reduction in income tax expense; W a €1.1 million rise in the results of equity-accounted entities; and W a €1.3 million rise in profit attributable to minority interests

5.5 – CASH FLOWS AND BORROWING

5.5.1 – Cash flows

The table below summarizes the Company’s cash flows for the years ended December 31, 2018 and 2017:

12 months ended

December 31, 2018

December 31, 2017

(in € millions)

Net cash from operating activities

925.3

863.7

Net cash from investing activities*

(571.8)

(1,802.1)

Net cash from financing activities

(152.2)

887.4

Translation net change in cash and cash equivalents

(1.8)

(66.1)

Increase (decrease) in cash and cash equivalents

199.5

(117.1)

* of which capital expenditure and capitalized development costs

(184.3)

(178.2)

For a detailed analysis of cash flows, investors should refer to the consolidated statement of cash flows provided in the Group’s consolidated financial statements. R 5.5.1.1 NET CASH FROM OPERATING ACTIVITIES Net cash provided by operating activities stood at €925.3 million at December 31, 2018 compared with €863.7 million at December 31, 2017. This €61.6 million increase was due primarily to cash flow from operations (defined as net cash generated by operating activities, plus or minus changes in current operating assets and liabilities) reaching €1,100.5 million at December 31,

2018 compared with €919.8 million on December 31, 2017, partially offset by changes in current operating assets and liabilities, which set cash used at €175.2 million in 2018 compared with €56.1 million in the same period of 2017, or €119.1 million more. R 5.5.1.2 NET CASH FROM INVESTING ACTIVITIES Net cash used in investing activities for the period ended December 31, 2018 amounted to €571.8 million compared with €1,802.1 for the period ended December 31, 2017.This decrease was primarily due to the acquisition of subsidiaries.

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LEGRAND

REGISTRATION DOCUMENT 2018

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