SOMFY // 2022 Annual Report

02 MANAGEMENT REPORT

Presentation of the key risks for SOMFY, ranked accordingto their estimated impact and likelihood of occurrence

Risk

Name of risk

Description of the risk

Stronger competitive intensity from international players could challenge SOMFY’s current leadership position. New market needs requiring the Group to tailor its response to each customer type. A major disruption, due to internal or external causes, could impact the business continuity of factories and the supply chainflow (including at suppliers’ premises). A malicious intrusion into the Group’s IT systems could result in the partial or total unavailability of these systems, the partial or total cessation of operations, damage to data integrity or data theft. A lack of alternatives for certain technologies or a lack of supply diversification for certain components could result in the Group being dependent on a number of suppliers. A volatile economic environment could make it difficult to anticipate and react to uncertainties in the various markets in which the Group operates, which could lead to a decline in sales, a deterioration of margins or an increasein costs and doubtful debts. Political instability in certain geographies and numerous geopolitical conflicts or tensions could impact the Group’s operational and commercial efficiency, and result in a need to adjust its manufacturing, logistics, supply and/or distribution footprint. The lack of operational, technical and commercial synergies in relation to the Group’s JVs could affect the optimal leverage and implementation of the opportunities envisioned at the time of the acquisition. The lack of investment or insufficient acceleration of process digitalisation and data governance projects could deprive SOMFY of catalysts for its internal operational efficiency, as well as externally, including customer support (loyalty, customer journey, differentiated service offers and value proposition). Not being the market leader in terms of innovation and being recognised as such, (time-to-market, patenting, new functionalities, new services, differentiating offers) could leave the door open to competition and generatemarket share erosion over time.

Competition

R1

Customers’ needs evolution

R2

Operation & Supply disruption

R3

Cyber-attack and data privacy

R4

Technical dependency

R5

Economic volatility

R6

Geopolitical/Country instability

R7

JV strategy and governance

R8

Digital maturity

R9

Innovation leadership

R10

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SOMFY – ANNUAL REPORT 2022