LEGRAND_REGISTRATION_DOCUMENT_2017

02

GROUP OVERVIEW

Legrand and its business

offering called “Guest room management” for Mariott International hotel rooms. This program also includes French players that offer solutions for the smart building such as BNP Paribas Real Estate and Vinci Immobilier as well as start-ups such as Netatmo, Lumenetix and Bios Lighting; W the development of offerings for newuses,such as the possibility to connect to one’s house from a car, designed with Renault, or the inclusion of artificial intelligence into facial recognition connected door entry systems by Shidean in China; and W the participation in various technology alliances, such as Open Connectivity, ZigBee Alliance, BACnet International and LoRa Alliance, to ensure the interoperability of its range with those of other companies. Legrand also uses its external growth policy to enhance its presence in the most promising areas and has thus acquired, in the past three years: W Milestone (a leadingplayer of theAudio-Video (AV) infrastructure and power in the United States) and Luxul Wireless (a specialist in Audio-Video infrastructures for residential buildings and small and mid-sized commercial buildings) in the Audio-Video field as well as AFCO Systems Group (an American specialist of Voice-Data-Image enclosures); W Server Technology Inc. (a leading North American player in the smart PDU (1) segment), Raritan (which also has solid positions in the smart PDU (1) segment in North America and specializes in KVM (2) switches), as well as Fluxpower and Primetech (specializing in UPS (3) ) for datacenters; W Jontek (a frontrunner of the assisted living sector in the United Kingdom); W IME, leading Italian contender and European specialist in measuring electrical installation parameters, in the highly promising energy efficiency segment; and W a stake through a joint-venture in Borri, an Italian company specializing in triple-phase UPS (3) . 2.1.1.2.3 New business segments Boosted by technological progress and the emergence of new needs, particularly linked to the development of new technologies (see section 2.1.1.2.2 of this Registration Document for more details), digital infrastructure, home systems, energy efficiency and assisted living are continuing to grow. Over the past 10 years, the share of new business segments in the Group’s sales has more than doubled to represent more than 38% (4) of Legrand’s total sales.

potential. Considering that around 15% of the world’s population does not yet have access to electricity, and that a middle class boom is expected in many countries (for instance, according to the United Nations, Asia will have 3 billion middle class citizens by 2030, five times more than in Europe), driving demand especially for high value-added products, Legrand believes that in the long term, its market offers attractive growth potential as electricity generation and distribution infrastructures are gradually developing. The Group sells its products in nearly 130 new economies and has a commercial and/or industrial presence in over half of them. This expansion is evenly spread, with new economies representing more than 31% of the Group’s sales at December 31, 2017, the most significant country being India (close to 6% of total Group sales). 2.1.1.2.2 New technologies Legrand is convinced that new technologies, in particular digital ones, significantly increase the value-in-use of electrical and digital building infrastructure products for both individual users and professionals. The Group has therefore decided to step up its investments in new technologies, deploying a range of initiatives that include: W the launch of the Eliot program in July 2015, aimed at speeding up deployment of the Internet of Things in the Group’s offering. As part of this initiative, Legrand has set itself ambitious targets that include achieving double-digit average annual total 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. The achievements at the end of 2017, with in particular over 30 connected product families and an average annual total growth in sales of connected products of some 28% between 2014 and 2017, are well ahead of schedule; W R&D investments that are increasingly focused on these new technologies, with around 45% of R&D staff assigned to electronics and digital offerings in 2017; W the signing of collaborative agreements, strategic partnerships and many technological alliances, in particular for connected products with the launch of “Works with Legrand” announced at the CES in Las Vegas in 2018, a program created to enable smart building professionals to develop solutions that are inter-operable with the Group’s offering, and which counts already more than 20 partnerships. Legrand has for example, partnered with Amazon, Apple and Google and has also developed with Samsung a new connected management

(1) PDU: Power Distribution Unit. (2) KVM: a KVM switch makes it possible to control several computers from a single screen, keyboard, mouse console. (3) UPS: Uninterruptible Power Supply. (4) Based on 2017 sales including 12 months of 2017 acquisitions.

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REGISTRATION DOCUMENT 2017 - LEGRAND