Legrand : Results for first nine-month - 2018

Limoges, November 8, 2018

Results for the first nine months of 2018

Double-digit growth in key indicators

Net sales: +11.3% (+17.2% excluding exchange-rate effect)

Adjusted operating profit: +11.4%

Net profit attributable to the Group: +21.1%

Normalized free cash flow: +24.5%

Multiple development initiatives

Success of new product launches

To date, four external growth operations announced2018 targets confirmed1and specified

Legrand is aiming for:

- organic growth in sales of close to +4%, and

- adjusted operating margin before acquisitions2of between 20.0% and 20.5%

Benoît Coquart, Legrand Chief Executive Officer, commented:

"Double-digit growth in key indicators

Over the first nine months of 2018, sales rose +11.3% in total. This good performance was driven by an increase in the scope of consolidation (+11.8%) and by a solid organic rise in sales (+4.8%) which benefited from Group growth initiatives that were partially offset by a decrease in sales in France in the third quarter due to a marked and one-off destocking in distribution.

Excluding the unfavorable exchange-rate effect (-5.1%), sales rose +17.2% in the first nine months of the year.

Compared with the first nine months of 2017, adjusted operating profit increased +11.4% and adjusted operating margin stood at 20.5%, up 0.1 points. Excluding acquisitions2, adjusted operating margin for the first nine months was stable compared with 2017 at 20.4%, as performance in the third quarter alone was unfavorably affected by specific items.

At the same time, net profit attributable to the Group and normalized free cash flow grew sharply, increasing +21.1% and +24.5%, respectively, from the same period of 2017.

Multiple development initiatives

The innovation momentum continues, with many digital initiatives and the successful launch of many new products since the beginning of the year. These included connected offerings of the Eliot program, solutions dedicated to the buoyant digital infrastructures market, as well as several user interface ranges.

Moreover, the Group has pursued its strategy of targeted acquisitions and has already announced since the beginning of the year four external growth operations in the fields of digital infrastructures, UPS, and electrical equipment for DIY3activities. These acquisitions thus enable Legrand to continue to strengthen its positions on upbeat segments of its accessible market."

1Targets announced by Legrand on February 8, 2018: "organic growth in sales of between +1% and +4%" and "adjusted operating margin before acquisitions (at 2017 scope of consolidation) of between 20.0% and 20.5% of sales". For a complete presentationof Legrand's 2018 targets, readers are invited to consult the press release announcing full-year 2017 results.

• 2At 2017 scope of consolidation.

• 3DIY = Do-It-Yourself.

2018 targets confirmed1and specified

Based on its performance in the first nine months of 2018 and excluding any economic slowdown by the end of the year, Legrand is confirming and specifying its 2018 targets. Legrand is aiming for:

- organic growth in sales of close to +4%, and

- adjusted operating margin before acquisitions (at 2017 scope of consolidation) of between 20.0% and 20.5%.

Legrand will also pursue its strategy of value-creating acquisitions.

1Targets announced by Legrand on February 8, 2018: "organic growth in sales of between +1% and +4%" and "adjusted operating margin before acquisitions (at 2017 scope of consolidation) of between 20.0% and 20.5% of sales".For a complete presentation ofLegrand's 2018 targets, readers are invited toconsult the press release announcing full-year 2017 results.

Key figures

Consolidated data(€millions)(1)	9 months 2017	9 months 2018	Change
Sales	3,988.3	4,437.4	+11.3%
Adjusted operating profit As % of sales Operating profit As % of sales	814.9 20.4% 776.319.5%	907.9 20.5% 20.4% before acquisitions(2) 854.319.3%	+11.4% +10.0%
Net profit attributable to the Group As % of sales	474.3 11.9%	574.5 12.9%	+21.1%
Normalized free cash flow As % of sales Free cash flow As % of sales	541.513.6% 415.010.4%	673.915.2% 441.610.0%	+24.5% +6.4%
Net financial debt at September 30	2,284.1	2,260.1	-1.1%

• (1) See appendices to this press release for definitions and indicator reconciliation tables.

• (2) At 2017 scope of consolidation.

Financial performance at September 30, 2018

Consolidated sales

Sales in the first nine months of 2018 stood at€4,437.4 million, upa total +11.3%.

Organic growth in sales was +4.8%, including +3.9% in mature countries and +7.1% in new economies.

The impact of the broader scope of consolidation came to +11.8% and should come to around +7.5% for full-year 2018, based on acquisitions announced and their likely dates of consolidation.

The exchange-rate effect was -5.1% in the first nine months of 2018. Based on average exchange rates for October 2018 applied to the last three months of 2018, the full-year exchange-rate effect would come to around -4%.

Changes in sales by destination at constant scope of consolidation and exchange rates broke down as follows by region:

9 months 2018 / 9 months 2017	3rdquarter 2018 / 3rdquarter 2017
France	+0.1%	-4.3%
Italy	+5.7%	+4.0%
Rest of Europe	+10.4%	+8.6%
North and Central America	+4.1%	+4.7%
Rest of the world	+4.7%	+4.3%
Total	+4.8%	+3.9%

Changes in sales at constant scope of consolidation and exchange rates are analyzed below by geographical region:

-France(15.1% of Group sales)

Organic growth in sales was +0.1% in the first nine months of 2018: after a +2.0% rise in the first half of 2018, the change in sales was -4.3% in the third quarter alone due to a marked and one-off destocking in distribution. Downstream sales (sell-out) were flat overall in the third quarter compared with the previous year.

In a market that remained lackluster, Legrand has recorded good showings in energy distribution and digital infrastructures since the beginning of the year, and benefited from a very good response to its new user interface ranges Céliane with Netatmo and dooxie, partially offset by unfavorable change in sales in cable management, installation components and bulkhead lights.

-Italy(9.4% of Group sales)

In the first nine months of the year, sales were up +5.7% at constant scope of consolidation and exchange rates.

Legrand's verygood performance since the beginning of the year has been driven in particular by the success of its Eliot program'sconnected offerings (including the Classe 300X connected door entry system and the Smarther intelligent thermostat), and benefited more specifically in the second quarter from the favorable one-off stocking effect of new Living Now user interface range.

-Rest of Europe(17.1% of Group sales)

Organic growth in sales was +10.4% in the first nine months of 2018.

Driven by commercial initiatives, the Group recorded double-digit organic growth over the first nine months of the year in theregion'snew economies, with good showings in Romania, Hungary and Turkey in particular.

Sales grew at a sustained pace in a number of mature countries, including Spain, Germany, the Netherlands and Greece.

Revenue was slightly up in the United Kingdom.

-North and Central America(36.4% of Group sales)

Sales were up +4.1% at constant scope of consolidation and exchange rates compared with the first nine months of 2017.

In the United States, organic growth in sales was +4.9% in the first nine months of 2018 and +5.9% in the third quarter alone. These good showings were driven by successes in wire-mesh cable management, intelligent PDUs, and lighting controls, as well as byMilestone's good performance.

Because of a demanding basis for comparison, Legrand'sbusiness retreated in Mexico over the first nine months of the year.

-Rest of the World(22.0% of Group sales)

Organic growth was up +4.7% from the first nine months of 2017.

Sales grew strongly in India, China and South Korea, as well as in many African countries such as Algeria, Egypt andCôte d'Ivoire. Legrand also turned in good showings in Australia and Malaysia.

In Latin America, sales were very slightly up in Brazil, but retreated in Colombia and Chile. Revenue also declined in Saudi Arabia.

Adjusted operating profit and margin

Adjusted operating profit rose +11.4% to stand at€907.9million.

Adjusted operating margin came to 20.5% in the first nine months of 2018, up 0.1 points from the same period of 2017. The good performance of the acquisitions, in particular Milestone and Server Technology, has an accretive effect on Group adjusted operating margin.

Excluding acquisitions (at 2017 scope of consolidation), adjusted operating margin reached 20.4% of sales, in line with the first nine months of 2017.

More specifically, adjusted operating margin before acquisitions (at 2017 scope of consolidation) was 18.8% for the third quarter of 2018 alone, 1.6 points less than in the third quarter of 2017. This change was predominantly due:

• - for around 2/3, to non-recurring items primarily related to a marked and one-off destocking in distribution in France1, as well as the high basis for comparison in the third quarter of 2017, and

• - for around 1/3, to other items mainly related to the increase in customs duties in the United States and to growth initiatives. Legrand has already launched adjustment measures aimed at offsetting the unfavorable impacts on its profitability.

Net profit attributable to the Group

Net profit attributable to the Group stood at €574.5 million in the first nine months of 2018, up +21.1%from the first nine monthsof 2017. This €100 million risecameprimarily from (i) a €78 millionstrong improvement in operating profit; (ii) a favorable change in net financial expense and foreign-exchange results in an amount of€19 million; and(iii) stable corporate income tax whose rate stood at 29.0% (i.e. a four-point decline from the first nine months of 2017, reflecting the announced2impact of the reduction in corporate profit tax in the United States for around three points and the favorable consequences of specific one-off factors for around one point).

Cash generation

Cash flow from operations increased +20.4% to standat €789.8 million, i.e. 17.8% of sales in the first nine months of the year.

Normalized free cash flow recorded a steep +24.5% rise toreach €673.9 millionover the first nine months of 2018.

Working capital requirement remained under control at around 10% of sales at September 30, 2018.

Free cash flow stood at €441.6 million.

Multiple development initiatives

Success of new product launches

Legrand has continued to successfully enrich its offering with new products that deliver greater value in use, including the connected solutions developed under its Eliot program. In the first nine months of the year, the Group launched:

• - new user interface ranges, among them Pial + in Brazil and Arteor Animation; as well as the connected offerings Céliane with Netatmo and Living Now, which benefited from a very favorable response in France and Italy, Yiyuan in China, and Valena Life and Allure in Greece;

• - Practibox S distribution cabinets, XL3N 630 power enclosures, DX3 stop Arc and DMX-SP 2500 circuit breakers in energy distribution solutions;

• - new solutions for building systems withWattStopper'sHuman Centric Lighting offerings, the UX digital management interfacefor hotel rooms, and Finelite'sHP-4 Wet Location architectural lighting fixtures;

1For full details, readers are invited to refer to comments on page 4 concerning business developments in France in the first nine months of 2018.

2For more information on tax reductions in the United States announced in 2017, and their expected impacts on Legrand'saccounts, readers are invited to refer to pages 14 and 15 of the press release announcing full-year 2017 results, published February 8, 2018.