LEGRAND / 2018 Registration document

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

QUANTITATIVE AND QUALITATIVE DISCLOSURES RELATING TO FINANCIAL RISKS

The following table shows, for the periods indicated, data on euro/U.S. dollar exchange rates from 2014 through 2018, expressed in euros per U.S. dollar. This exchange rate information is provided as an indication only and does not represent the exchange rates used by Legrand in the preparation of its consolidated financial statements:

Period-end rate

Average rate (1)

High

Low

(euro per US dollar)

2014

0.82

0.75

0.82

0.72

2015

0.92

0.90

0.95

0.83

2016

0.95

0.90

0.96

0.87

2017

0.83

0.89

0.96

0.83

2018

0.87

0.85

0.88

0.81

(1) The average exchange rate for the euro is calculated as the average monthly figures for the relevant year-long period.

Readers are referred to note 5.1.2.2 appended to the consolidated financial statements mentioned in chapter 8 of the present Registration Document for a description of management of exchange risk.

5.10 – QUANTITATIVE AND QUALITATIVE DISCLOSURES RELATING TO FINANCIAL RISKS

5

Legrand’s exposure to financial risk mainly concerns the following areas: W interest rate risk; W currency risk; W commodity risk; W credit risk; W counterparty risk; and W liquidity risk. The Group’s cash management strategy is based on overall financial risk management principles and involves taking specific measures to manage the risks associated with interest rates, exchange rates, commodity prices and the investment of available cash. The Group does not conduct trading in financial instruments, in line with its policy of not carrying out any speculative transactions. Transactions involving financial instruments are conducted with the sole purpose

of managing interest-rate, exchange-rate and commodity price risks, and as such are limited in duration and amount. This strategy is centralized at Group level. Deployment is managed by the Financing and Treasury Department, which recommends appropriate measures and implements these after they have been validated by the Corporate Finance Department and the Group’s senior management. A detailed reporting system has been set up to permit permanent tracking of the Group’s positions and effective oversight of the management of financial risks. A detailed description of risks and Legrand’s risk management appears in note 5.1.2 appended to the consolidated financial statements referred to in chapter 8 of this Registration Document. Main characteristics of internal control and risk management procedures implemented by the Company on financial information are described in chapter 3 of this Registration Document.

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LEGRAND

REGISTRATION DOCUMENT 2018

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