LEGRAND_REGISTRATION_DOCUMENT_2017

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GROUP OVERVIEW

A structure serving the Group’s strategy and customers

Selling Legrand’s products to electrical equipment distributors (“push”) As part of the “push” strategy, Legrand maintains close relationships with electrical equipment distributors by focusing on product availability and just-in-time delivery, and by simplifying and accelerating the ordering, stocking and dispatching of its products. The “push” strategy is also based on providing a catalog that covers all of an electrician’s requirements, and includes new and innovative products. In addition, Legrand makes access to and use of its catalog easier by making an electronic version available, standardizing packaging sizes and appearance, and by introducing innovative services such as pre-sorted deliveries. Legrand’s “push” strategy includes: W priority inventories . In France, many distributors have agreed to maintain permanent inventories of certain Legrand priority products. In return, Legrand ensures not only that large amounts of non-priority finished products are held in its inventory, but also that flexible and reactive production enable it to fill its distributors’ orders quickly. In an emergency, products that are not stocked by distributors can be delivered anywhere in France within 24 to 48 hours via the “Dispo-Express” service; W inventory management . In the United States, Wiremold and Legrand Data Communications, US subsidiaries of the Group, can access the inventory levels of some of their main distributors on a daily basis. If inventory levels drop below a pre-defined threshold, new inventories are prepared and shipped immediately; W intelligent sorting . In order to optimize the logistics chain, Legrand pre-sorts its products before dispatching them to electrical equipment distributors in France, thereby anticipating the steps these distributors will have to follow in order to distribute the products to their agencies and customers. This value-added service, which is intended for the largest product flows, decreases the preparation work that the distributors have to perform themselves, reduces dispatch errors, and lowers handling costs, giving Legrand a competitive edge that is appreciated by its customers; W setting up international logistics platforms . Legrand manages its international distribution via logistics platforms from which it dispatches its products. By reducing the distance between its products and customers, Legrand is improving the service provided, and significantly reducing delivery lead times. Legrand has installed logistics platforms in Asia, the Middle East and Eastern Europe. These platforms and various subsidiary-owned warehouses are connected by a single network that makes it possible to synchronize their inventories on a daily basis. Using logistics platforms also enables more products to be transported in fewer trips, thus reducing CO 2 emissions to protect the environment.

offers broad expertise and unique coverage of the market, or distributors specialized in specific fields (IT, VDI, etc.), or even specific new distribution channels such as e-commerce. Sales to generalist and specialist distributors represented the vast majority of the Group’s consolidated sales in 2017. Legrand’s relations with its distributors are generally governed by terms and conditions of sale specific to each local market. W Electrical installers are professionals and individuals who buy, install and use Legrand’s products. The professional category includes electricians, business owners, panel builders, and industrial and commercial companies with a business activity connected to the installation of electrical products and systems. They are also very often product specifiers for the Group. W The other product specifiers are architects, decorators and design firms, who fuel demand for Legrand’s products by recommending their installation to end-users or by specifying them in the design of certain building projects. W End-users are the people who use Legrand’s products in the environment where these products are installed or used. Legrand’s distribution chain is organized so that manufacturers like Legrand sell their products, primarily to distributors, who in turn sell the products to the electrical installers responsible for installing them in end-users’ buildings. This is a flow- driven business, as electricians may come to buy products from the distributors several times a week, depending on their requirements. Product specifiers play an active role in this chain by advising electrical installers and end-users on product and application choices. R 2.3.1.3 A “PUSH-AND-PULL” STRATEGY Sales and marketing are the responsibility of the Front Office, whose headcount accounted for more than 19% of Legrand’s total headcount in 2017 (see section 4.6.2.2 of this Registration Document). Marketing efforts are focused on each level of the distribution chain (distributors, electrical installers, product specifiers and end-users), in accordance with the Group’s “push- and-pull” strategy, the aim of which is outlined below. These efforts are primarily aimed at providing market players with information, training, and other services relating to the Group’s entire range of products and systems, alongside sales. Legrand believes that making access to and use of its products easier for distributors, electrical installers and end-users enables the Group to create significant product and brand loyalty, and to generate demand for its products and systems at each level of the distribution chain.

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REGISTRATION DOCUMENT 2017 - LEGRAND