LEGRAND / 2018 Registration document

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GROUP OVERVIEW

A PROFITABLE GROWTH STRATEGY BASED ON DEVELOPING LEADING POSITIONS

This continuous innovation thus enables Legrand to incorporate more added value in its products and offer integrated systems and smart electrical solutions. Effective management of research and development activities Research and development is under the responsibility of the seven Strategic Business Units, which decide globally on allocating projects to the various teams spread around the world. They are assisted in their task by the Innovation and Systems Department, whose role is to promote and coordinate the innovation approach within the Group, to define the technology roadmap, and to ensure consistency between the technologies used by the different SBUs (see section 2.3.2 of this registration document for further details). A significant portion of Legrand’s research and development work is carried out in France, Italy, the United States, China and other countries, as closely as possible to its markets. As at December 31, 2018, close to 2,400 employees in more than 20 countries were employed in research and development, and nearly 30% of them in new economies. More specifically, the number of R&D staff assigned to software were multiplied by more than four between 2010 and 2018. This global organizational structure enables the Group to optimize its research and development by designing products that share the same platform. It allows it to streamline the number of components and reduce manufacturing costs, as well as pooling development costs and thus dedicate more resources to high-growth businesses like digital systems. In addition, Legrand anticipates the international roll-out of its products as soon as it designs them. The Group has implemented some fifty “technological bricks” covering the main electronic functions within the Group’s offering. For a given electronic function, such as presence detection or NFC (1) , a technological brick brings together all engineering information, associated software and firmware, protocols for testing and qualifying, and manufacturing processes. Technological bricks are made available to the whole Group and can thus be used by several development teams. At Group level, this standardization approach makes it possible to pool investments in engineering and to enhance product quality by sharing experience. An extensive patent portfolio Legrand holds about 3,700 active patents in around 80 countries, some of which relate to the protection of the same or similar technologies in several markets. Legrand considers that its level of dependence on third-party patents is not material in assessing its business development prospects.

The Group’s patents cover almost 1,500 different systems and technologies. The average life of patents in the Group’s portfolio is around ten years, which also corresponds to the average life of the patents held by Legrand’s competitors. 2.2.2.1.2 Innovative commercial initiatives To stimulate demand among electrical installers, product specifiers and end-users, Legrand offers: W a variety of training courses, mainly distance learning via webinars, for electrical installers to broaden their know-how and knowledge of Legrand products and systems; W software to assist the design and costing of installations for professionals; W innovative marketing and sales tools that complement the numerous showrooms that the Group has had for years all over the world. Since 2011, Legrand has used concept stores such as “Lab by Legrand” in Paris to showcase the Group’s premium user interface ranges, “B Inspired” in Brussels, and the “Experience Center” inWest Hartford in the United States. Legrand continues to break new ground in terms of the services it offers its customers, for example by opening “Project Stores” in France and in India in recent years. This concept gives customers an opportunity to explore the Group’s offerings in a connected and interactive showroom, and provides training in the installation of Legrand solutions. R 2.2.2.2 GROWTH BYACQUISITION IN A MARKET OFFERING A LARGE NUMBER OF EXTERNAL GROWTH OPPORTUNITIES In the long term, Legrand plans to continue to making bolt-on acquisitions (2) of companies with leading positions in their market, thereby continuing to develop market share and drive growth. Given the fragmented nature of the market in which it operates, the Group focuses on acquiring small- and mid-size companies. 2.2.2.2.1 A fragmented market (3) The Group’s accessible market, which Legrand values at more than €100 billion compared with around €60 billion in 2008, remains highly fragmented. Indeed, around 50% of global sales are generated by small- and mid-size companies, which are often local and typically enjoy only a marginal share of the global market. With a share of close to 6% of its global accessible market in 2018, Legrand is one of the market benchmarks. Market fragmentation is due in part to differences in standards and applicable technical norms and in end-users’ habits in each country, as well as the wide variety of

(1) Near Field Communication. (2) Acquisitions of companies that complement the Group’s business activities. (3) For more information relating to data on Legrand’s market and competitive positioning, readers can refer to the note on page 4 of this Registration document.

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LEGRAND

REGISTRATION DOCUMENT 2018