SOMFY - Annual Financial Report 2020

03 NON-FINANCIAL STATEMENT

V. PRODUCT INNOVATION SERVING USER CUSTOMERS

sites that buy components. The BFT (Italy) and Lian Da (China) sites are not included; the percentage of suppliers covered by a supplier risk analysis. – In 2019, the top five were assessed, and in 2020 the top 40 were targeted with 49 assessments carried out, and in 2021 the top 80 should be targeted. For every component developed by a supplier, the Group requests a written undertaking relating to the European Directives REACH and ROHS. The 2020 campaign covered all suppliers with sales of more than €10 thousand and includes a response rate of compliance statements of 53%, down in relation to 2019; in accordance with the regulations adopted by the US Securities – and Exchange Commission in 2012, the Group implemented its duty of diligence in respect of its supply chain, in order to ensure that the supplies used in its products do not contain any conflict minerals. Out of the 15 suppliers concerned by “conflict minerals” in 2020, all met the undertaking requirements. Somfy products need electric energy in order to function. Non-compliance with electrical safety standards and regulations could expose users to significant risks. To ensure their operational safety and control their environmental impact, these products must also meet regulations concerning electromagnetic and environmental compatibility. 2. Policies Somfy is scrupulous in its compliance with these standards relating to electric safety and electromagnetic and environmental compatibility standards in all the countries in which it operates. In order to promote best practices in terms of product safety and to anticipate the integration of the requirements in the products, Somfy is actively involved in the proceedings defining these standards and regulations. This work is done via European and international standardisation bodies or through professional organisations. A policy of CE marking, and in particular of French standard labelling in France and UL labelling in the United States, confirm compliance with these standards and regulations. 3. Initiatives Somfy is actively involved in five standards committees at IEC – (International Electrotechnical Committee) and CENELEC (European Committee for Electrotechnical Standardization) level with more than 100 days of meetings per year. Regulations are also monitored through professional bodies such as IGNES and FIEEC; an in-house laboratory at Somfy is accredited by the company – Laboratoire Central des Industries Électriques in France; governance was strengthened by the introduction of a Product – Compliance Committee chaired by a member of the Executive Committee. This Committee oversees regulatory compliance and the related organisation within the Group. The implementation of this policy was strengthened in 2020 by various practical measures: IV. REGULATORY SAFETY AND COMPLIANCE OF PRODUCTS 1. Description of the risk

1. Description of the risk

We are going through a period of radical change in consumer behaviour and habits. Climate change will further accelerate this transformation. Customers are moving towards meaningful and sustainable consumption, by limiting environmental impacts and choosing to shop locally. 2. Policies Somfy has simultaneously implemented a structure to attract, listen to and involve customers by consulting communities on the one hand, and through a culture developing innovation and flexibility to address and respond rapidly to changing needs on the other. 3. Initiatives With the aim of placing customers at the heart of its concerns, of better understanding their expectations and sources of dissatisfaction, Somfy has created forums and surveys. This is the purpose of the community platform, “My Somfy Lab”, which brings Somfy together with Internet users so that they can jointly create the products and services of the home of tomorrow. In this way, in 2020, 6,012 contributions from 4,000 consumers were recorded from “My Somfy Lab” members. 43 surveys were conducted, across all countries and targets combined. Dialogue with customers has continued despite the health crisis. For example, Somfy spoke with consumers to better understand usage and expectations related to an air quality sensor during the phases ahead of its development. The Group has also shared with French, German and US consumers the ways in which they normally use their interior blinds in order to identify, along with them, the ideal interior blind, as well as its price. All these insights help the teams innovate and improve their understanding of consumers and their needs. 4. Results and KPIs Customer satisfaction is measured in several complimentary ways: thanks to surveys conducted every two years. The objective is to – assess base trends and to shape the areas for improvement. There are two types of results: the extent to which Somfy is recommended by customers: ● the Net Promoter Score (NPS). This was 68 in 2018, meaning two points lower than in 2016. This satisfactory result will be updated for the year 2020 in March 2021. A range of customers are asked the question “How likely are you to recommend Somfy to a friend or colleague?”. According to their answer, customers are classified as detractors, passives or promoters. The Net Promoter Score, the result of which ranges from -100 to +100, is equal to the percentage of promoters less the percentage of detractors, overall assessment of customer satisfaction with an equally ● satisfactory result of 85%; Salesforce, the CRM solution used by the distribution – subsidiaries, includes an instant measurement of customer satisfaction (CSAT). This measurement is taken everywhere the solution is installed. Operational KPIs and targets are defined. The results are analysed by customer segment and localised action plans mean customer satisfaction can be improved in each country.

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SOMFY – ANNUAL FINANCIAL REPORT 2020