LEGRAND / 2018 Registration document

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CONSOLIDATED FINANCIAL INFORMATION CONCERNING THE GROUP’S ASSETS, LIABILITIES, FINANCIAL POSITION AND RESULTS

CONSOLIDATED FINANCIAL STATEMENTS IN ACCORDANCE WITH IFRS FOR THE YEARS ENDED DECEMBER 31, 2018 AND DECEMBER 31, 2017

2.4 INCOME TAX EXPENSE Income tax expense consists of the following:

12 months ended

December 31, 2018

December 31, 2017

(in € millions)

Current taxes: France

(52.8)

(27.6)

Outside France

(188.6)

(244.6)

TOTAL

(241.4)

(272.2)

Deferred taxes: France

3.4

30.9

Outside France

(63.3)

17.1

TOTAL

(59.9)

48.0

Total income tax expense: France

(49.4)

3.3

Outside France

(251.9)

(227.5)

TOTAL

(301.3)

(224.2)

Income tax expense amounted to €(301.3) million for full-year 2018 and, once adjusted for the following non-recurring favorable impacts, €(309.7) million for full-year 2017: W the favorable accounting impact representing respectively a €26.4 million tax income in 2017, linked to mechanical revaluation of deferred tax liabilities on trademarks resulting from the announcement of reductions in corporate income tax rates, primarily in France;

W the favorable accounting impact representing a €18.3 million tax income in 2017 in France, resulting from refund of tax on dividends paid since 2013, net of the exceptional income tax on companies in 2017 in France; and W the favorable accounting impact representing a €40.8 million net tax income in 2017 linked to changes in tax measures in the United States, mainly accounting impacts due to mechanical revaluation of deferred tax assets and liabilities.

The reconciliation of total income tax expense for the period to income tax calculated at the standard tax rate in France is as follows, based on profit before tax of €1,074.1 million in 2018 (versus €938.9 million in 2017):

12 months ended

8

December 31, 2018

December 31, 2017

(Tax rate)

Standard French income tax rate

34.43%

34.43%

Increases (reductions): W Effect of foreign income tax rates

(8.92%)

(5.85%)

W Non-taxable items

1.41%

0.40%

W Income taxable at specific rates

(0.17%)

(0.13%)

W Other

0.39%

2.32%

27.14%

31.17%

Impact on deferred taxes of: W Changes in tax rates

0.39%

(7.67%)

W Recognition or non-recognition of deferred tax assets

0.52%

0.38%

EFFECTIVE TAX RATE

28.05%

23.88%

The effective tax rate represents 28.05% in 2018 and, once adjusted for the favorable accounting impacts mentioned above, 33.00% in 2017.

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LEGRAND

REGISTRATION DOCUMENT 2018