LEGRAND_REGISTRATION_DOCUMENT_2017

08 CONSOLIDATED FINANCIAL INFORMATION CONCERNING

THE GROUP’S ASSETS, LIABILITIES, FINANCIAL POSITION AND RESULTS Consolidated financial statements in accordance with IFRS for the years ended December 31, 2017 and December 31, 2016

2.3 OPERATING EXPENSES Operating expenses include the following main categories of costs:

12 months ended

December 31, 2017

December 31, 2016

(in € millions)

Raw materials and component costs

(1,768.3)

(1,592.2)

Personnel costs

(1,411.3)

(1,299.1)

Other external costs

(1,001.1)

(921.7)

Depreciation and impairment of tangible assets

(99.8)

(97.1)

Amortization and impairment of intangible assets

(99.3)

(77.9)

Restructuring costs

(21.2)

(25.1)

Goodwill impairment

0.0

0.0

Other

(94.2)

(71.8)

OPERATING EXPENSES

(4,495.2)

(4,084.9)

“Other” primarily includes impairment losses and reversals on inventories (Note 3.4), trade receivables (Note 3.5), and provisions for contingencies (Note 4.4). In addition in 2017, “Other” includes the non recurring impact of the reversal of Milestone’s inventory step-up.

The Group had an average of 37,356 employees in 2017 (versus 35,902 in 2016), of which 30,085 back-office employees and 7,271 front-office employees (versus 28,883 and 7,019, respectively, in 2016).

2.4 INCOME TAX EXPENSE Income tax expense consists of the following:

12 months ended

December 31, 2017

December 31, 2016

(in € millions)

Current taxes: France

(27.6)

(44.9)

Outside France

(244.6)

(205.1)

TOTAL

(272.2)

(250.0)

Deferred taxes: France

30.9

33.6

Outside France

17.1

(2.2)

TOTAL

48.0

31.4

Total income tax expense: France

3.3

(11.3)

Outside France

(227.5)

(207.3)

TOTAL

(224.2)

(218.6)

240

REGISTRATION DOCUMENT 2017 - LEGRAND