LEGRAND / 2018 Registration document

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GROUP OVERVIEW

AN ORGANIZATION SERVING BOTH THE GROUP’S STRATEGY AND ITS CUSTOMERS

2.3.2 – Back Office

The role of the Back Office, generally organized centrally at Group level, is to optimize the industrial organization, accelerate the development of new products, keep capital employed under control and adapt the Group’s Back Office resources to the business. Since the first half of 2014, Legrand has set up an Operations Department that brings together all the Group’s “industrial” Back- Office functions (product marketing, innovation, R&D, purchasing, manufacturing and supply chain) under a single responsibility, with three priorities: W focus more on the Group’s strategic business areas by creating seven Strategic Business Units (SBUs) in charge of R&D and production; W enhance productivity management by setting up a Group Operations Performance Department; and W improve supply chain and purchasing efficiency by bringing them closer to operations. At the same time, an Innovation and Systems Department was set up to enhance coordination of innovation using a shared technology roadmap. R STRATEGIC BUSINESS UNITS To take into account the close relationship between manufacturing and the technology used, Legrand’s manufacturing and development activities are organized into seven Strategic Business Units (SBUs). These pool specific industrial process and product manufacturing expertise and are aligned with the local structure of the Group’s markets: W user interfaces; W energy distribution; W building systems; W cable management; W digital infrastructure; W UPS systems (uninterruptible power supplies); W installation components. The Strategic Business Units have the following objectives: W to ensure the best customer service rate and optimal product quality; W to handle product marketing and develop new products; W to define and implement industrial plans, in line with commercial development;

W to improve cost prices on an ongoing basis; and W to control capital employed and, in particular, capital expenditure and inventories. More specifically, the SBUs’ ongoing goal is to improve their industrial performance and reduce capital employed by: W factoring these criteria into the product design phase, specifically through the deployment of product platforms and technology platforms (see section 2.2.2.1.1). Product platforms enable the Group to achieve significant reductions in development time and the number of components used, and to increase the utilization rate of equipment. The platform concept, originally deployed for user interfaces, is being rolled out to other product categories such as digital infrastructure, security lighting, UPS (1) systems and even plastic cable management systems. Using technology platforms makes it possible to pool investments in engineering and to enhance product quality by sharing experience. Around 65% of the Group’s sales were thus covered by platforms in 2018; W streamlining and optimizing industrial sites; W introducing plant specialization by product line or technology so as to reach critical mass and prevent the dispersal of resources and skills; W systematically applying a recently revamped “make or buy” approach to all new projects to determine whether to invest in new manufacturing assets or to outsource and thus gain extra flexibility and adaptability, while at the same time reducing the amount of capital employed; and W deploying industry best practices at production facilities through the “Legrand Way” program, aimed at overall operational excellence (productivity, capital employed, quality, customer service, etc.). In particular, Legrand is aiming to increase the deployment of “Legrand Way” in its manufacturing sites by 11 points between 2018 and 2021. At the same time, the Group is making targeted investments to digitize its manufacturing base – intending eventually to allocate up to 10% of its capital expenditure to the Industry 4.0 – including in particular 100 PoCs (2) of which 51 are already operational and ready to be deployed, such as: W gradually deploying data gathering and analysis applications that help control production processes in real time throughout the economic chain, and to accelerate the cycles of this chain; and

2

(1) Uninterruptible power supplies. (2) PoC: Proof of Concept.

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LEGRAND

REGISTRATION DOCUMENT 2018