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

Net debt (excluding debt issuance costs) breaks down as follows between fixed and variable interest rates before the effect of hedging instruments:

December 31, 2018

December 31, 2017

Due within 1 year

Due beyond 5 years

Due in 1 to 2 years

Due in 2 to 3 years

Due in 3 to 4 years

Due in 4 to 5 years

Total

Total

(in € millions)

Financial assets* Fixed rate

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

Variable rate

1,022.5

0.0

0.0

0.0

0.0

0.0

1,022.5

823.0

Financial liabilities** Fixed rate

(6.4)

(10.2)

(20.3)

(428.2)

(411.1)

(2,040.5)

(2,916.7)

(2,868.2)

Variable rate

(394.1)

(4.4)

(5.5)

(13.9)

(0.1)

0.0

(418.0)

(188.8)

Net exposure Fixed rate

(6.4)

(10.2)

(20.3)

(428.2)

(411.1)

(2,040.5)

(2,916.7)

(2,868.2)

Variable rate

628.4

(4.4)

(5.5)

(13.9)

(0.1)

0.0

604.5

634.2

*

Financial assets: cash and marketable securities.

** Financial liabilities: borrowings (excluding debt issuance costs).

The following table shows the sensitivity of net debt costs to changes in interest rates, before hedging instruments:

December 31, 2018

December 31, 2017

Impact on profit before tax

Impact on equity before tax

Impact on profit before tax

Impact on equity before tax

(in € millions)

Impact of a 100-bps increase in interest rates

6.7

6.7

5.4

5.4

Impact of a 100-bps decrease in interest rates

(8.6)

(8.6)

(8.3)

(8.3)

When relevant, “natural” hedges are preferred. If required, when the acquisition of an asset is financed using a currency other than the functional currency of the country concerned, the Group may enter into forward contracts to hedge its foreign currency risk. As of December 31, 2018, the Group has set up forward contracts in US dollars, British pounds and Mexican pesos which are accounted for in the balance sheet at their fair value.

The impact of a 100-basis point increase in interest rates would result in a gain of €6.7 million due to a net positive variable-rate exposure. Conversely, the impact of a 100-basis point decrease in interest rates would result in a loss of €8.6 million. 5.1.2.2 Foreign currency risk The Group operates in international markets and is therefore exposed to risks through its use of several different currencies.

8

The following table shows the breakdown of net debt (excluding debt issuance costs) by reporting currency:

December 31, 2018

December 31, 2017

Financial liabilities**

Net exposure before hedging

Net exposure after hedging

Net exposure after hedging

Financial assets*

Hedging

(in € millions)

Euro

608.6

(2,964.2)

(2,355.6)

22.4

(2,333.2)

(2,331.9)

US dollar

164.1

(348.3)

(184.2)

(29.6)

(213.8)

(144.4)

Other currencies

249.8

(22.2)

227.6

7.2

234.8

242.3

TOTAL

1,022.5

(3,334.7)

(2,312.2)

0.0

(2,312.2)

(2,234.0)

*

Financial assets: cash and marketable securities.

** Financial liabilities: borrowings (excluding debt issuance costs).

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LEGRAND

REGISTRATION DOCUMENT 2018