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

R NOTE 3 – DETAILS ON NON-CURRENT AND CURRENT ASSETS

3.1

INTANGIBLE ASSETS

December 31, 2018

December 31, 2017

(in € millions)

Trademarks

1,820.1

1,810.3

Patents

92.7

81.7

Other intangible assets

396.9

402.0

NET VALUE AT THE END OF THE PERIOD

2,309.7

2,294.0

3.1.1 Trademarks with indefinite and finite useful lives The Legrand and Bticino brands represent close to 98% of the total value of trademarks with indefinite useful lives. These trademarks with indefinite useful lives are used internationally, and therefore contribute to all of the Group’s cash-generating units. They should contribute indefinitely to future consolidated cash flows because management plans to continue using them indefinitely. The Group performs periodical reviews of these trademarks’ useful lives.

Trademarks with finite useful lives are amortized over their estimated useful lives ranging: W from 10 years when management plans to gradually replace them by other major trademarks owned by the Group; W to 20 years when management plans to replace them by other major trademarks owned by the Group only over the long term or when, in the absence of such an intention, management considers that the trademarks may be threatened by a major competitor in the long term. Amortization of trademarks is recognized in the income statement under administrative and selling expenses.

Trademarks can be analyzed as follows:

December 31, 2018

December 31, 2017

(in € millions)

Gross value at the beginning of the period

2,042.4

1,917.8

W Acquisitions

35.5

184.3

W Adjustments

0.0

0.0

W Disposals

0.0

0.0

W Translation adjustments

14.8

(59.7)

Gross value at the end of the period

2,092.7

2,042.4

Accumulated amortization and impairment at the beginning of the period

(232.1)

(220.0)

W Amortization expense

(36.9)

(33.4)

W Reversals

0.0

0.0

W Translation adjustments

(3.6)

21.3

Accumulated amortization and impairment at the end of the period

(272.6)

(232.1)

NET VALUE AT THE END OF THE PERIOD

1,820.1

1,810.3

To date, no impairment has been recognized for these trademarks. Each trademark with an indefinite useful life is tested for impairment separately, in the fourth quarter of each year and whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

Impairment tests are performed using the relief from royalty method. This method consists of measuring the royalties that the company would have to pay to license the trademark from a third party. The theoretical value of these royalties is then measured by estimating future revenue generated by the trademark over its useful life, as if the trademark were owned by a third party.

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LEGRAND

REGISTRATION DOCUMENT 2018