LEGRAND_REGISTRATION_DOCUMENT_2017

GROUP OVERVIEW

Legrand and its business

2.1.1.2.1 International development

The Group benefits from solid, long term growth levers. Geographically, more than 80% of its sales are generated internationally, of which around 33% in the United States, the Group’s top country in terms of sales (based on 2017 sales, including 12 months from the acquisitions completed in 2017). Apart from new business segments (1) , social megatrends (such as aging populations, increasing willingness to reduce energy consumption and the growth of new economies) and technological megatrends (particularly digital, with the Internet of Things) offer long term growth prospects for the Group. Indeed, at the heart of these developments – in particular those linked to the emergence of the Internet of Things – lies the electrical and digital infrastructure of buildings, an area in which Legrand specializes. More generally, Legrand is convinced that new technologies, particularly digital ones, significantly increase the value-in-use of its products and systems. The Group has therefore decided to step up its investments in this field: innovation, especially with the launch of the Eliot program in July 2015; acquisitions, in particular with the acquisition of Milestone AV Technologies, Server Technology and AFCO Systems Group in 2017; and the signing of a number of technology partnerships withmajor groups such as Amazon, Apple and Google or start-ups (in the lighting control field with Lumenetix and Bios Lighting – respectively specalized in color management and biological cycles), as well as commercial partnerships (for example, with BNP Paribas Real Estate and Vinci Immobilier, whose pilot residences, launched in France in 2017, are equiped with “Céliane with Netatmo”, a new line of connected user interfaces. Against this backdrop, Legrand has set itself ambitious targets, such as achieving double digit average total annual growth in sales for connected products between 2014 and 2020, and doubling the number of its connected product families, from 20 in 2014 to 40 in 2020. By the end of 2017, achievements were well ahead of this schedule. R 2.1.1.2 NUMEROUS GROWTH OPPORTUNITIES Driven by social megatrends (such as environmental protection, the sharp rise in data traffic, aging populations and the growth of new economies) and technological megatrends (such as the emerging Internet of Things, Big Data, wireless and fiber- optic technology), the market for electrical and digital building infrastructure is changing, offering enriched features and the scope for long term growth. The Group’s growth, both geographic and in terms of products and distribution channels, is at the heart of the global challenges raised by these megatrends.

Strengthening the Group’s presence in North and Central America

As a result of its ongoing innovation efforts, accompanied by 15 acquisitions in the North and Central America region in the last 10 years, the Group generated more than 30% of its sales in this region in 2017, thereby strengthening its leadership positions (particularly in audio-video infrastructure and power, cable management, highly energy-efficient lighting control, pre-terminated solutions for voice-data-image networks, and structured cabling for residential buildings). More particularly the United States, which represents around 33% of Legrand’s sales (based on 2017 sales including 12 months of 2017 acquisitions), has been the Group’s number one country in terms of sales since 2015. More specifically, in 2017, Legrand completed the acquisition of Milestone AV Technologies, a leading player of the Audio- Video (AV) infrastructure and power in the United States. This acquisition rounds out the Group’s solid positions in this field since its acquisition of Middle Atlantic Products in 2011. Milestone’s business is driven by long term evolutions, related in particular to the rapid growth of communication modes and needs (collaborative and remote working) and to technological innovation (digitalization of promotional media and streaming (2) ). With over 75% of its sales generated with products that are number 1 on their markets (with the brands Chief, Sanus and Dalite), Milestone has very solid market positions and in 2017, it recorded an adjusted operating margin of 21.8%. These good showings are the result of a growth model that is very close to that of Legrand, built on innovation, financial discipline maintained in the long term, client-centered customer support and an integrated vision of performance that takes strong CSR commitments into account. Moreover, the complementarities between Milestone and Middle Atlantic Products, a subsidiary of Legrand and leader of AV enclosures, should enable short-term and medium- term synergies for the Group, estimated between 1% and 5% of Milestone’s sales in 2016 ($464 million). In this connection, Legrand has created an Audio-Video Division in North America, that brings together Milestone and Middle Atlantic Products (the historic Audio-Video businesses of Legrand) as well as a Residential AV Business Unit that combines the Audio-Video residential offerings of Milestone, Middle Atlantic Products, Luxul, Nuvo, QMotion, Vantage and OnQ, to be distributed through the current sales teams that serve specialist channels like CEDIA (3) . Presence in the new economies The new economies (Latin America, Central America, Eastern Europe, Turkey, Asia excluding South Korea, Oceania excluding Australia, Africa and the Middle East) offer long term growth

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(1) Energy efficiency, home systems, digital infrastructure and assisted living. (2) Continuous digital access to information. (3) International trade association grouping all players in home systems – manufacturers, designers and integrators.

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REGISTRATION DOCUMENT 2017 - LEGRAND