LEGRAND_REGISTRATION_DOCUMENT_2017

GROUP OVERVIEW

A structure serving the Group’s strategy and customers

Long-term “value creation” During the 2006-2017 period, the Group’s capital employed (1) only increased by around 3% per year, while basic earnings per share (2) rose by around 8% per year over the same period.

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2.3 – A STRUCTURE SERVING THE GROUP’S STRATEGY AND CUSTOMERS

Legrand has manufacturing and marketing sites and subsidiaries in nearly 90 countries. Legrand’s organizational structure is based on two distinct roles: firstly, sales and operational marketing activities (Front Office), and secondly, activities connected to strategy, operations (innovation, R&D, manufacturing, purchasing, and logistics) and general administration (Back Office). W TheFront Office is organizedby country inorder to respond to the specific requirements of each market in terms of relations with distributors, electrical installers, product specifiers and end- users. The aims of this decentralized organizational structure, run by local managers, are to develop sales in accordance with the strategy set out by the Strategy and Development Department and approved by Senior Management, to raise commercial profitability, and to optimize the working capital requirements for each country.

W The Back Office, generally organized on a centralized basis, includes an Operations Department, responsible for innovation and research & development, manufacturing, purchasing and the supply chain, and the head office departments (Strategy and Development, Finance and Human Resources). The specific aims of this organization, at Group level, are to define strategy, optimize industrial organization, accelerate the development of new products, keep capital employed under control, adapt the Group’s resources to the business, appoint key managers worldwide, establish all internal control rules, and coordinate risk management processes.

2.3.1 – Front Office

Legrand’s relationship with generalist and specialist distributors (IT, VDI, web, etc.), electrical installers, product specifiers, and end-users represents a strategic priority for the Group. Legrand is extending the marketing coverage for its markets as a whole by prioritizing areas with high long-term growth potential, such as new economies and new business segments. R 2.3.1.1 THE FRONT OFFICE’S ROLE AND RESPONSIBILITIES The Front Office acts as an interface with Legrand’s distributor customers, electrical installers, product specifiers, and end- users. In each country, Front Office activities are run by a country

W optimizing working capital requirements through efficient inventory and trade receivables management. The Group’s subsidiaries in each country are given significant latitude to manage their business and staff, and country managers are real entrepreneurs. R 2.3.1.2 AN ECONOMIC CHAIN ADAPTED TO MARKET FLOWS As part of its business activity, Legrand has various means of accessing a market consisting of a wide variety of users (distributors, electrical installers, product specifiers and end-users). W Legrand’s distributors are the electrical and digital device and equipment distributors.These can be generalist distributors,the reference distribution channel for Legrand products because it

manager who is responsible for: W growing market share and sales; W increasing commercial profitability; and

(1) Capital employed is defined as the sum of net debt and equity, less investments in associates, adjusted for asset step-up linked to the acquisition of Legrand France in 2002 and net of the related deferred tax. (2) Based on the 2017 adjusted net profit attributable to the Group. Adjusted net profit attributable to the Group does not take into account the net favorable effect of significant, non-recurring gains and expenses resulting from announced changes in corporate taxation, primarily in France and in the United States.

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REGISTRATION DOCUMENT 2017 - LEGRAND