SOMFY - Annual financial report 2019

04 MANAGEMENT BOARDMANAGEMENT REPORT

RESULTS

FINANCIAL POSITION

Current operating result stood at €204.8 million over the financial year, up 15.2% in real terms, and represented 17.1% of sales, compared with 15.8% in the previous year. It benefited from a positive impact of €3.1 million from changes in exchange rates and €0.4 million from the application of the new lease recognition rule (IFRS 16). This improvement was due to both high sales, particularly during the second half-year, and a modest increase in structure costs, as a result of the normalisation of “strategic” expenditure following a period of substantial investment. Consolidated net profit grew 16.3% to €163.2 million. It includes a net non-current operating expense of €3.2 million, a positive contribution from associates of €3.8 million and an income tax charge of €37.2 million. Reflecting these solid results, return on capital employed (ROCE) was 22.2% (23.7% restated for the impact of IFRS 16), compared with 20.4% in the previous year.

Group equity rose from €894.4 million to €1,012.8 million over the financial year, while the net financial surplus rose from €222.4 million to €310.5 million, despite the recognition of financial liabilities of €48.3 million following the application of IFRS 16 to leases. The hike in net financial surplus was due to the increase in cash flow and the decline in working capital requirements.

ALTERNATIVE PERFORMANCE MEASURES

The change N/N-1 on a like-for-like basis, current operating margin, ROCE and net financial debt are Alternative Performance Measures (APMs), definitions and calculation details of which are included in note 4.3 to the consolidated financial statements.

SEGMENT REPORTING AT 31 DECEMBER 2019

Europe, Middle East & Africa

Asia & Americas 217,938 -27,480 190,458 14,687

Intra-regional eliminations

Consolidated

€ thousands

1,200,241

Segment sales

1,071,415

-89,112 89,112

–

Intra-segment sales

-61,632

1,200,241

Segment sales – Contribution to sales Segment current operating result Share of net profit/(loss) from associates

1,009,783

– – – – – – – – –

204,830

190,143

3,846

-6

3,852

220,091 53,307 19,138 95,553 336,533 136,549

Cash flow

206,805 51,489 17,996 94,090 315,155

13,286

Net investments in intangible assets and PPE

1,817 1,142 1,462

New right-of-use assets

Goodwill

Net intangible assets and PPE

21,378 135,852

Investments in associates and joint ventures

697

STOCK MARKET PERFORMANCE

During the 2019 financial year, the Somfy SA share price increased by 38.9%. At 31 December 2018, the last trading day before the close of the previous financial year, the share price was €63.00, compared with €87.50 at 31 December 2019. Over the same period, the CAC 40 and CAC All-Tradable indices (formerly SBF 250) increased by 26.4% and 25.1% respectively. Based on this last share price and taking account of a gross dividend per share of €1.55 (1) , the Somfy SA share yielded 1.8%. The market for the share recorded a monthly trading volume high of 138,855 and low of 27,067 per month, with a monthly average of 70,970 shares, compared with 93,111 shares the previous year.

POST-BALANCE SHEET EVENT

Within the context of the current epidemic (Covid-19), the global picture remains uncertain and is evolving rapidly. At this stage, it is difficult to measure the consequences in 2020 on business activity and on the Group in particular (2) .

OUTLOOK

The ongoing changes in the building sector, due to the energy transition, digitalisation and changes to society have led the Group to review its structure and to announce, in January 2020, the appointment of a new Executive Committee, a consequence of which was the merger of the three existing activities into a single unit and the re-segmentation of the ten geographic regions into two major sales territories.

See information on this subject in the press release of 7 April 2020 in chapter 10 Recent events since 2 March 2020. (1) See information on this subject in the press release of 23 March 2020 in chapter 10 Recent events since 2 March 2020. (2)

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SOMFY – ANNUAL FINANCIAL REPORT 2019