LEGRAND_REGISTRATION_DOCUMENT_2017

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MANAGEMENTREPORTONTHECONSOLIDATEDFINANCIALSTATEMENTSFORTHEFINANCIALYEARENDEDDECEMBER31,2017

Cash flows and borrowing

5.5 – CASH FLOWS AND BORROWING

5.5.1 – Cash flows

The table below summarizes cash flows of the Company for the years ended December 31, 2017 and 2016:

12 months ended

December 31, 2017

December 31, 2016

(in € millions)

Net cash from operating activities

863.7

831.8

Net cash from investing activities*

(1,802.1)

(552.1)

Net cash from financing activities

887.4

(416.5)

Translation net change in cash and cash equivalents

(66.1)

(9.0)

Increase (decrease) in cash and cash equivalents

(117.1)

(145.8)

* of which capital expenditure and capitalized development costs

(178.2)

(160.9)

The amount of acquisitions (net of cash acquired) as well as non- controlling interests totaled €1,638.6 million in 2017 (compared with €430.8 million in 2016). It includes €1,638.0 million for acquisitions of subsidiaries (net of cash acquired), included in net cash from investing activities and €0.6 million for acquisition of non-controlling interests included in net cash from financing activities. Capital expenditure and capitalized development costs amounted to€178.2millionfortheperiodendedDecember31,2017(including €33.6 million in capitalized development costs), or a 10.8% rise compared with investments and capitalized development costs of €160.9 million in the period ending December 31, 2016 (of which €34.6 million in capitalized development costs). R 5.5.1.3 NET CASH FROM FINANCING ACTIVITIES Net cash used by financing activities amounted to €887.4 million in 2017, including primarily the payment of dividends in an amount of €317.1 million, the issuance of two new bonds for a total amounting to €1.4 billion (a bond amounting to € 1.0 billion in two tranches in July 2017 and a bond amounting to €400.0 millions in October 2017) and the reimbursement of a bond amounting to €300.0 million in February 2017.

For a detailed analysis of cash flows, investors should refer to the consolidated statement of cash flows provided in the Group’s consolidated financial statements. R 5.5.1.1 NET CASH FROM OPERATING ACTIVITIES Net cash provided by operating activities stood at €863.7 million at December 31, 2017 compared with €831.8 million at December 31, 2016. This €31.9 million increase was due primarily to cash flow from operations (defined as net cash generated by operating activities, plus or minus changes in current operating assets and liabilities) reaching €919.8 million at December 31, 2017 compared with €791.4 million on December 31, 2016 partially offset by changes in current operating assets and liabilities reflected in working capital requirements, which set cash used at €56.1 million in 2017 compared with cash generation at €40.4 million in the same period of 2016. R 5.5.1.2 NET CASH FROM INVESTING ACTIVITIES Net cash used in investing activities for the period ended December 31, 2017 amounted to €1,802.1 million compared with €552.1 for the period ended December 31, 2016. This increase was primarily due to the acquisition of subsidiaries, and to a lesser extent to a rise in capital expenditure.

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REGISTRATION DOCUMENT 2017 - LEGRAND