Somfy // Annual Financial Report 2021

01 PRESENTATION OF THE GROUP

Customers and consumer trends

As a result of the health crisis, the home has ďĞĐŽŵĞ Ă ƌĞĨƵŐĞ͘ /Ŷ ϮϬϮϭ͕ ƚŚĞ ƚƌĞŶĚ ǁĂƐ ĐŽŶĮƌŵĞĚ͕ and homes are the preferred place of investment. Today, homes are more comfortable, more ener ŐLJͲĞĸĐŝĞŶƚ͕ ĂŶĚ ŵŽƌĞ ŝŶƚĞůůŝŐĞŶƚ͘ ƵƐƚŽŵĞƌƐ ĂƌĞ looking for products that are easy to install and use ĂŶĚ ƚŚĂƚ ĂƌĞ ĚƵƌĂďůĞ ĂŶĚ ĐŽŵŵƵŶŝĐĂƟŶŐ͘ ^ŽŵĨLJ ŚĂƐ Ă ƐŽůŝĚ ƉŽƐŝƟŽŶ ƚŽ ƌĞƐƉŽŶĚ ƚŽ ƚŚŽƐĞ ƚƌĞŶĚƐ ĂŶĚ is also present throughout the value chain, from in ƐƚĂůůĂƟŽŶ ƚŽ ƌĞƉĂŝƌ͘ džĐĞůůĞŶĐĞ ŝŶ ĐƵƐƚŽŵĞƌ ƌĞůĂƟŽŶƐ begins with installers as they are the brand’s ambas ƐĂĚŽƌƐ͕ ǁŝƚŚ ŵŽƌĞ ƚŚĂŶ ϯ͕ϬϬϬ ďĞůŽŶŐŝŶŐ ƚŽ ƚŚĞ ^ŽŵĨLJ džƉĞƌƚƐ ŶĞƚǁŽƌŬ ŝŶ ƵƌŽƉĞ͘

CSR challenges and risks

/ Ŷ ϮϬϮϭ͕ ^ŽŵĨLJ ĐĂƌƌŝĞĚ ŽƵƚ a complete overhaul of its ƌŝƐŬ ĐĂƚĂůŽŐ͕ ǁŚŝĐŚ ǁŝůů ĞŶĂďůĞ Ă ŵŽƌĞ ŽƉĞƌĂƟŽŶĂů ĂŶĂůLJƐŝƐ ŽĨ ƚŚĞ ƌŝƐŬƐ ƚŚĞ Group faces over all of the company’s major ƉƌŽĐĞƐƐĞƐ͘ / Ŷ ĂĚĚŝƟŽŶ ƚŽ ƵƉĚĂƟŶŐ ƚŚĞ ' ƌŽƵƉ͛Ɛ ŐůŽďĂů ƌŝƐŬƐ͕ Ă ƌĞǀŝĞǁ focused on our response to ƚŚĞ ' ƌŽƵƉ͛Ɛ ŝŶƚĞƌŶĂů ^Z challenges and those ŝĚĞŶƟĮĞĚ ďLJ ^ŽŵĨLJ͛Ɛ ƐƚĂŬĞŚŽůĚĞƌƐ ǁĂƐ ĐĂƌƌŝĞĚ out. These issues are ŐƌŽƵƉĞĚ ŝŶƚŽ ^ŽŵĨLJ͛Ɛ ƚŚƌĞĞ pillars within their ^ƵƐƚĂŝŶĂďůĞ ĞǀĞůŽƉŵĞŶƚ ƉŽůŝĐLJ͗ WůĂŶĞƚ͕ WĞŽƉůĞ͕ Prosperity. The materiality assessment used for this ĮŶĂŶĐŝĂů LJĞĂƌ ǁŝůů ďĞ reviewed in 2022. For more ŝŶĨŽƌŵĂƟŽŶ͕ ƐĞĞ ƚŚĞ EŽŶͲĮŶĂŶĐŝĂů ƐƚĂƚĞŵĞŶƚ chapter of the Annual Financial Report.

Coping with component shortages

They are everywhere in our everyday objects and are complex and expensive to manufacture. 80% of components are manufactured in Asia. The Covid-19 crisis may ŚĂǀĞ ĨĂŶŶĞĚ ƚŚĞ ŇĂŵĞƐ͕ but the shortage is mainly structural. It is the result ŽĨ ŝŶĐƌĞĂƐĞĚ ƉƌŽĚƵĐƟŽŶ electric car. Faced with this ƐŝƚƵĂƟŽŶ͕ ^ŽŵĨLJ ŝƐ ǁŽƌŬŝŶŐ hard to secure its supplies. The Group has also mobilized its R&D to design motors that incorporate ŶĞǁ ŐĞŶĞƌĂƟŽŶ components. of component-hungry ƉƌŽĚƵĐƚƐ͕ ƐƵĐŚ ĂƐ ƚŚĞ

Digital revolution dŚĞ ƌĞƐƚƌŝĐƟŽŶƐ ůŝŶŬĞĚ ƚŽ ƚŚĞ ŚĞĂůƚŚ ĐƌŝƐŝƐ ŚĂǀĞ boosted e-commerce growth. As for the connected ŚŽŵĞ͕ ƚŚĞ ĂƌƌŝǀĂů ŽĨ ĂĚĚŝƟŽŶĂů ŚŽŵĞ ĂƵƚŽŵĂƟŽŶ ƐŽůƵƟŽŶƐ ŚĂƐ ŐŝǀĞŶ ƚŚĞ ŵĂƌŬĞƚ Ă ƐƵďƐƚĂŶƟĂů Ɛƚ͘ This market is characterized by the growing number of players of varied sizes, the appearance of new entrants, and the growing presence of GAFA. It is also a more mature market, with the development of ŽƉĞŶ ƉƌŽƚŽĐŽůƐͶƐƵĐŚ ĂƐ ƚŚĞ ŶĞǁ DĂƩĞƌ ĐŽŶŶĞĐƟǀŝ ƚLJ ƐƚĂŶĚĂƌĚ ŝŶ ǁŚŝĐŚ ^ŽŵĨLJ ŝƐ ƉĂƌƟĐŝƉĂƟŶŐͶŽƉĞŶŝŶŐ the way to interoperable products that are secure in terms of cybersecurity. Digital technology also ŵĞĂŶƐ ƵƐŝŶŐ ƉƌŽĚƵĐƚ ĚĂƚĂ ƚŽ ŐĞŶĞƌĂůŝnjĞ ƉƌĞĚŝĐƟǀĞ maintenance. ͸

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SOMFY – ANNUAL FINANCIAL REPORT 2021