LEGRAND_REGISTRATION_DOCUMENT_2017

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MANAGEMENTREPORTONTHECONSOLIDATEDFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDEDDECEMBER31,2017

Year-on-year comparison: 2017 and 2016

R 5.4.1.2 BREAKDOWN OF CHANGES IN NET SALES BY ORIGIN FROM 2016 TO 2017 The following table presents the breakdown of changes in net sales to third parties as reported by zone of origin between 2016 and 2017:

12 months ended December 31

Exchange-rate effect

Change in scope of consolidation

Organic growth (1)

Net sales (in € million, except %)

2017

2016 Total change

France

1,012.6

977.8

3.6%

0.0%

3.6%

0.0%

Italy

544.7

529.4

2.9%

0.1%

2.8%

0.0%

Rest of Europe

914.5

844.6

8.3%

3.3%

6.5%

(1.6)%

North and Central America

1,857.4

1,496.7

24.1%

24.1%

1.9%

(1.9)%

Rest of the World

1,191.6

1,170.4

1.8%

0.4%

2.3%

(0.9)%

CONSOLIDATED TOTAL

5,520.8

5,018.9

10.0%

7.8%

3.1% (1.1)%

(1) At constant scope of consolidation and exchange rates.

5.4.2 – Cost of sales

The consolidated cost of sales rose 10.3% to €2,627.0 million in 2017, compared with €2,381.0 million in 2016. This was primarily due to: W consolidation of new acquisitions; W the increase in volume of raw materials and components consumed as production increased;

W higher raw material and component prices in 2017 than in 2016. These were partly offset by: W ongoing efforts to raise productivity and adjust to changing conditions. As a percentage of net sales, the cost of sales came to 47.6% in 2017 compared with 47.4% in 2016.

5.4.3 – Administrative and selling expenses

Administrative and selling expenses rose by 10.8% to €1,511.6 million in 2017, compared with €1,364.7 million in 2016. This was essentially attributable to: W ongoing investments in growing activities; and W consolidation of new acquisitions.

These were partly offset by: W ongoing efforts on productivity initiatives.

Expressed as a percentage of sales, administrative and selling expenses came to 27.4% in 2017 compared with 27.2% in 2016.

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REGISTRATION DOCUMENT 2017 - LEGRAND