LEGRAND_REGISTRATION_DOCUMENT_2017

MANAGEMENT REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE FINANCIAL YEAR ENDED DECEMBER 31, 2017

Selected financial information

The table below shows a reconciliation of adjusted operating profit and maintainable adjusted operating profit with profit for the period and operating profit:

2017

2016

2015

(in € millions)

Profit for the period

713.2

630.2

552.0

Share of profits (losses) of equity-accounted entities

1.5

1.3

0.0

Income tax expense

224.2

218.6

258.0

Exchange (gains) losses

8.3

(6.5)

(6.0)

Financial income

(13.7)

(10.9)

(11.0)

Financial expenses

92.1

101.3

93.7

Operating profit

1,025.6

934.0

886.7

Amortization and depreciation of tangible assets

99.8

97.1

97.4

Amortization and depreciation of intangible assets (including capitalized development costs) and Milestone’s inventory step-up

116.1

77.9

72.3

Goodwill impairment

0.0

0.0

0.0

EBITDA

1,241.5

1,109.0

1,056.4

Restructuring costs

21.2

25.1

28.0

Maintainable EBITDA

1,262.7

1,134.1

1,084.4

05

The table below shows a reconciliation of the Group’s adjusted operating income and maintainable adjusted operating income with net income and operating income:

2017

2016

2015

(in € millions)

Profit for the period

713.2

630.2

552.0

Share of profits (losses) of equity-accounted entities

1.5

1.3

0.0

Income tax expense

224.2

218.6

258.0

Exchange (gains) losses

8.3

(6.5)

(6.0)

Financial income

(13.7)

(10.9)

(11.0)

Financial expenses

92.1

101.3

93.7

Operating profit

1,025.6

934.0

886.7

Amortization and other P&L impacts relating to acquisitions

79.3

44.5

43.7

Goodwill impairment

0.0

0.0

0.0

Adjusted operating profit

1,104.9

978.5

930.4

Restructuring costs

20.5

25.1

28.0

Maintainable adjusted operating profit

1,125.4

1,003.6

958.4

The table below shows a reconciliation of research and development expenditure with research and development expense:

2017

2016

2015

(in € millions)

Research and development costs

(252.1)

(237.7)

(216.1)

Acquisition-related amortization and R&D tax credit

(7.6)

(2.8)

(5.3)

Amortization of capitalized development costs

29.4

27.1

26.3

R&D costs before capitalized development costs

(230.3)

(213.4)

(195.1)

Capitalized development costs

(33.6)

(34.6)

(27.4)

Research and development expenditure for the period

(263.9)

(248.0)

(222.5)

159

REGISTRATION DOCUMENT 2017 - LEGRAND