SOMFY - Annual financial report 2019

04 MANAGEMENT BOARD MANAGEMENT REPORT

INFORMATION ON RESEARCH AND DEVELOPMENT ACTIVITIES (ARTICLES L. 233-1 AND L. 233-26 OF THE COMMERCIAL CODE)

In 2019, the Research and Development activities carried out in line with the established roadmap. The Group filed 44 patent applications with the patent office INPI (Institut National de la Propriété Industrielle) which had published 38 of them in 2018. At the end of 2019, Somfy had a portfolio of 2,212 registered patents. Thanks to the eco-design efforts made in 2019, more than 50% of Somfy products sold worldwide will be Act for Green ® certified in 2020. Act for Green ® certification is one of the levers of the Group’s environmental programme aimed at reducing its carbon footprint. 76 new products and services marketed by the Group in 2019 In October 2019, the Group presented its first motorised sliding window to the market. Following three years of research, in joint development with the French group Liébot, there are 15 patents pending in relation to this project, including nine for Somfy and two jointly innovated with its partner. With a motor integrated into a sliding window, this range is a precursor of future developments to address environmental challenges related to indoor air quality, while overcoming ventilation related constraints: lack of time, concerns regarding burglary or loss of heat. This initial project from the new “Somfy air” programme won the “Innovation Award” at the 2019 Batimat Mondial du Bâtiment trade show. Somfy has spent the last 50 years making everyday life easier for millions of users around the world by developing smart home and building management solutions. The Group innovates to automate and connect all types of equipment to open, close and shade windows, terraces, doors and gates using connected motors that operate them together using intelligence and make them interoperable with other household equipment. In addition to motorisation, Somfy solutions include accessories for control, comfort and security. Occupants are central to Somfy’s concerns and the Group constantly strives to create reliable long-term solutions that offer a better way of living and increased well-being for everyone. This is what Somfy calls smart living. Somfy has 6,067 employees worldwide, of which 5,711 excluding temporary staff, operates in 58 countries, and generated sales of €1,200.2 million in 2019, up by 6.5% in real terms, with a current operating result of €204.8 million, i.e. 17.1% of sales. The Somfy spirit and its vision for tomorrow Somfy shares its vision for the future with every employee via a document that has been translated into 17 languages, called Somfy Spirit, which lies at the heart of the Group’s collective vision: 2019 NON-FINANCIAL PERFORMANCE STATEMENT (ARTICLE L. 225-102-1 OF THE COMMERCIAL CODE) PRESENTATION OF THE BUSINESS MODEL — PRESENTATION OF SOMFY

In 2019, specific efforts were made to strengthen the Interior Product range. A preview of Somfy’s range integrating the global radio standard Zigbee 3.0 was unveiled at the 2019 CES trade show, before its launch at the CEDIA Expo home technologies trade show in the United States. Zigbee 3.0 is now the undisputed standard for the Connected Home. Backed by an alliance of more than 400 manufacturers including Amazon, Apple, Google and IKEA, it guarantees the interoperability of their equipment. Silent motorisation is also a major technology lever in the Interior Products market. Launched commercially in late 2019, the Sonesse ULTRA range was presented at the 2020 CES trade show. At 38 decibels, which equates to the sound level of the rustling of leaves, the new Sonesse ULTRA range is the quietest motorisation solution for blinds and curtains on the market. Lastly, the collaborative creativity platform My Somfy Lab has stepped up its activity. In 2019, 14 research projects were the subject of user feedback, including six in the form of user tests of the solutions (beta-tests) and the remainder in the form of exploratory studies. This interactive platform which comprises 3,645 registered contributors (an increase of 44%) resulted in 1,307 ideas and 6,092 questionnaire responses, an intense level of activity that included 2,151 comments and more than 7,421 “Likes”. This vision is born of the firm belief that everyone throughout the world aspires to a safe, healthy and eco-friendly living environment for themselves and their family. To meet these basic needs and improve living environments, Somfy has created innovative solutions for the home and buildings in three areas: comfort and well-being for everyone irrespective of their age; – security for both people and property; – environmental conservation. – Today, Somfy offers a line of products that is unique to the market For the past 50 years, the Group has been improving living environments by integrating technology into window, terrace, door and gate equipment. At the forefront of the digitalisation of buildings, Somfy is a pioneer in smart living or connected home, designing for occupants new functions for new and existing buildings that match the aspirations of everyone. Somfy’s ambition is to make smart living accessible to all and release the potential of the connected home through attractive product lines and interoperability with home equipment and its new control methods – voice, home automation, artificial intelligence. Through each of its subsidiaries and brands, the Group is committed to making these innovations as widely accessible as possible. Somfy is a genuine local stakeholder, with a presence on five continents, and adapts its product lines to the expectations and specific features of each of its markets. In this way, Somfy contributes to the development of both its customers and its partners, by making the excellence of its products and services a constant objective. Somfy’s growth and success depend on the entrepreneurial spirit of all the men and women who make up the Group. It is also based on their personal quest for individual fulfilment through a collective project. Over time, increasing numbers of market players have been involved in this project, on the clear assumption that

“Inspiring a better way of living accessible to all”.

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SOMFY – ANNUAL FINANCIAL REPORT 2019