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

The following table shows the sensitivity of gross debt to changes in the exchange rate of the euro against other currencies, 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

10% increase

10% increase

(in € millions)

US dollar

0.1

34.4

0.0

32.8

Other currencies

0.2

2.0

0.1

2.2

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

10% decrease

10% decrease

(in € millions)

US dollar

(0.1)

(31.3)

(0,0)

(29.8)

Other currencies

(0.2)

(1.9)

(0.1)

(2.0)

Operating assets and liabilities break down as follows by reporting currency:

December 31, 2018

December 31, 2017

Current operating assets excluding taxes

Current operating liabilities excluding taxes

Net exposure

Net exposure

(in € millions)

Euro

495.9

618.8

(122.9)

(139.7)

US dollar

565.0

316.9

248.1

195.8

Other currencies

697.4

419.4

278.0

228.4

TOTAL

1,758.3

1,355.1

403.2

284.5

The table below presents the breakdown of net sales and operating expenses by reporting currency as of December 31, 2018:

Net sales

Operating expenses

(in € millions)

Euro

2,075.0

34.6%

1,622.6

33.4%

US dollar

2,153.0

35.9%

1,792.7

36.9%

Other currencies

1,769.2

29.5%

1,442.9

29.7%

TOTAL

5,997.2

100.0%

4,858.2

100.0%

When relevant, natural hedges are also set up by matching costs and revenues in each of the Group’s operating currencies. Residual amounts are hedged by options to limit the Group’s exposure to fluctuations in the main currencies concerned. These hedges are for periods of less than 18 months. The Group estimates that, all other things being equal, a 10% increase in the exchange rate of the euro against all other currencies would

have resulted in 2018 in a decrease in net sales of approximately €356.5 million (€322.3 million in 2017) and a decrease in operating profit of approximately €62.2 million (€54.0 million in 2017), while a 10% decrease would have resulted in 2018 in an increase in net sales of approximately €392.2 million (€354.5 million in 2017) and an increase in operating profit of approximately €68.5 million (€59.4 million in 2017).

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LEGRAND

REGISTRATION DOCUMENT 2018