Limoges, February 9, 2017

2016 Results Acceleration of Legrand's two growth drivers

Growth in sales excluding exchange-rate effect: +6.5% (compared with +2.1% in 2015) Ongoing success of Eliot program: nearly +40% total growth in sales of connected products 8 bolt-on1acquisitions made

Solid integrated performance, targets fully met

Organic growth in sales: +1.8%; near the high end of the target (+2%)

Adjusted operating margin before acquisitions: 19.7%; exceeds the high end of the raised target (19.6%) Growth in adjusted2net income excluding minority interests: +3.0%; proposed dividend: €1.19 Achievement rate of CSR roadmap: 122%

On the closing of full-year accounts for 2016, Gilles Schnepp, Legrand Chairman and CEO, commented:

" Acceleration of L egr and ' s two growth drivers

In 2016, Legrand continued to expand its market positions by accelerating organic growth, driven by innovation and many commercial initiatives, and by stepping up the pace of acquisitions.

Legrand invested €248m in R&D in 2016, actively pursuing an innovation strategy that saw the launch of many new products again this year, among them the new Ekinox3 cabinet line in India and the Domino Sencia user interface range in Latin America. In connected products, the Group has successfully continued to deploy its Eliot program: in addition to strong showings in its Digital Lighting Management and intelligent PDUs3offerings in the United States, where Eliot was rolled out in November 2016,

Legrand has strengthened its product offering with ranges such as Class 300X door entry systems, whose launch was particularly well received in France and Italy in 2016. At the 2017 Las Vegas CES4, Legrand introduced "Celiane with Netatmo", a connected switch and socket solution. More generally,

with nearly +40% total growth in sales of connected products in 2016, the Group is ahead of schedule and will continue to deploy Eliot in new countries in 2017.

In 2016, the Group also invested over €400m in eight bolt-on1acquisitions representing total annual sales of more than €170m, of which over 80% made with no. 1 or 2 positions. Legrand thus strengthened its presence in buoyant new business segments such as energy efficiency and digital infrastructures, and also in lighting solutions. This strong momentum continued with the acquisition in

January 2017 of OCL 5, specialized in architectural lighting solutions for commercial and premium residential buildings in the United States.

All of these initiatives contributed to Legrand's solid performance in 2016 and strengthened the Group's value-creative growth profile in the long term.

1 Small- to mid-size acquisitions that complement Legrand's activities

2 Adjusted net income excluding minority interests does not take into account the favorable non-recurring accounting impact of a tax income generated by the mechanical revaluation of deferred tax liabilities on trademarks that resulted from the announcement

of reductions in the corporate income tax rate, mainly in France. This €61.2m tax income is adjusted as it has no cash impact, and bears no relationship to the Group's performance. However, these reductions in the corporate income tax rate, if maintained over time, should have a positive impact on the Group's tax rate.

3 Power Distribution Unit

4 Consumer Electronics Show

5 Original Cast Lighting

Solid integrated performance, targets fully met

Legrand has fully met all of its 2016 targets:

  • organic growth in sales came to +1.8% near the high end of the target (+2%), partly driven by one-offs in the United States and Italy,

  • adjusted operating margin before acquisitions (at 2015 scope of operations) stood at 19.7% and exceeded the high end of the raised target (19.6%), and

  • CSR roadmap achievement rate reached 122%.

Growth initiatives undertaken over the past few quarters have successfully fueled the acceleration in the Group's responsible growth. Thus, in 2016, total sales rose by +4.3% (+6.5% excluding exchange-rate effect compared with +2.1% in 2015), adjusted operating profit increased +5.2%, and all four focus points set out in its CSR roadmap were more than 100% achieved.

In 2017, Legrand will pursue its investments aiming at creating value in the long term while respecting all of its stakeholders."

Adjusted net income excluding minority interests

Reflecting the Group's performance, adjusted net income excluding minority interests rose +3.0% in 2016 and stood at €567.3m.

This adjusted net income excluding minority interests does not take into account the favorable non-recurring accounting impact of a tax income generated by the mechanical revaluation of deferred tax liabilities on trademarks that resulted from the announcement of reductions in the corporate income tax rate, mainly in France. This €61.2m tax income is adjusted as it has no cash impact, and bears no relationship to the Group's performance.

However, these reductions in the corporate income tax rate, if maintained over time, should have a positive impact on the Group's tax rate.

Proposed dividend

Legrand will ask the General Meeting of Shareholders to approve the payment of a dividend of €1.19 per share in respect of 2016 (compared with €1.15 in respect of 2015) representing a payout1of +56% (equivalent to the 2015 figure).

2017 targets

Macroeconomic projections for 2017 call for a gradual improvement in the economic environment. Against this backdrop but taking into account high bases for comparison for business in the United States and Italy, the Group intends to pursue its strategy of growth and sets 2017 targets for:

  • organic growth in sales of between 0% and +3%; and

  • adjusted operating margin before acquisitions (at 2016 scope of consolidation) of between 19.3% and 20.1% of sales.

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

1 Based on adjusted net income excluding minority interests, which does not take into account the favorable non-recurring accounting impact of a tax income generated by the mechanical revaluation of deferred tax liabilities on trademarks that resulted from the announcement of reductions in the corporate income tax rate, mainly in France. This €61.2m tax income is adjusted as it has no cash impact, and bears no relationship to the Group's performance.

Key figures

Consolidated data (€ millions)(1)

2015

2016

Change

Sales

4,809.9

5,018.9

+4.3%

Adjusted operating profit

930.4

978.5

+5.2%

As % of sales

19.3%

19.5%

+5.3%

Operating profit

886.7

19.7% before acquisitions(2)

934.0

As % of sales

18.4%

18.6%

Adjusted(3)net income excluding minority interests

550.6

567.3

+3.0%

As % of sales

11.4%

11.3%

+14.1%

Net income excluding minority interests

550.6

628.5

As % of sales

11.4%

12.5%

Normalized free cash flow

617.2

623.9

+1.1%

As % of sales

12.8%

12.4%

+1.1%

Free cash flow

666.0

673.0

As % of sales

13.8%

13.4%

Net financial debt at December 31

802.7

957.0

+19.2%

  1. See appendices to this press release for definitions and reconciliation tables of indicators presented

  2. At 2015 scope of consolidation

  3. 2016 adjusted net income excluding minority interests does not take into account the favorable non-recurring accounting impact of a tax income generated by the mechanical revaluation of deferred tax liabilities on trademarks that resulted from the announcement of reductions in the corporate income tax rate, mainly in France. This €61.2m tax income is adjusted as it has no cash impact, and bears no relationship to the Group's performance. However, these reductions in the corporate income tax rate, if maintained over time, should have a positive impact on the Group's tax rate.

    2016 integrated performance

    Legrand reported a solid integrated performance in 2016:

    • all financial indicators are on the rise, including consolidated sales up +4.3%, adjusted operating profit up +5.2% and adjusted1net income excluding minority interests up +3.0%;

    • free cash flow stood at €673.0m or 13.4% of sales;

    • with a 122% achievement rate for its 2014-2018 CSR roadmap, the Group is ahead of schedule. More generally, these good showings demonstrate once again the Group's capacity to create value for all of its stakeholders.

Consolidated sales

Total sales for 2016 stood at €5,018.9m, up +4.3% from 2015. The impact of the broader scope of consolidation that resulted from acquisitions was +4.7%. At constant scope of consolidation and exchange rates, sales rose +1.8%, near the high end of the 2016 target, reflecting a +2.8% increase in mature countries and an -0.1% decline in new economies. The exchange-rate effect was -2.1%.

1 Adjusted net income excluding minority interests does not take into account the favorable non-recurring accounting impact of a tax income generated by the mechanical revaluation of deferred tax liabilities on trademarks that resulted from the announcement of reductions in the corporate income tax rate, mainly in France. This €61.2m tax income is adjusted as it has no cash impact, and bears no relationship to the Group's performance. However, these reductions in the corporate income tax rate, if maintained over time, should have a positive impact on the Group's tax rate.

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

2016 / 2015

4thquarter 2016 / 4thquarter 2015

France

-2.7%

-3.8%1

Italy

+3.4%

+2.2%

Rest of Europe

+5.2%

+3.9%

North and Central America

+5.8%

+3.9%

Rest of the World

-2.1%

-2.0%

Total

+1.8%

+0.7%

These changes at constant scope of consolidation and exchange rates are analyzed below by geographical region:

  • France (17.4% of Group sales): the organic change in sales in France was -2.7% in 2016, with the fourth quarter hit, as announced, by an unfavorable calendar effect. Excluding this calendar effect, the change in sales in the fourth quarter alone would only be down very slightly. As observed in 2016, the improvement in leading indicators for new residential construction, which accounts for between 15% and 20% of sales in France, should be reflected in Legrand's business over the next few quarters.
  • Italy (9.8% of Group sales): organic growth in sales for full-year 2016 was a solid +3.4%, buoyed by the success of new Class 300X connected door entry systems, and more particularly, in the first half alone, by one-off projects in energy distribution. Excluding these two one-offs, organic growth in sales in Italy would come to around +2%, in line with the estimated market trend.
  • Rest of Europe (17.4% of Group sales): sales rose +5.2% from 2015 at constant scope of consolidation and exchange rates. Countries in Eastern Europe turned in good showings for the year as

    a whole. Sales also rose sharply in several mature countries in the region, more particularly in Southern Europe2, as well as in the United Kingdom (around 2.4% of total Group sales3), Germany, Austria and Belgium.

    Finally, sales in Turkey were down due to the political situation in the country.

  • North and Central America (29.2% of Group sales): sales rose +5.8% in 2016 at constant scope of consolidation and exchange rates.

    This rise was driven by good performances in the United States, where organic growth reached +5.6%, buoyed notably by the success of the Digital Lighting Management offering and good showings in non- residential segment. In the second half more particularly, one-off load-in in the retail business also contributed to strong growth. Excluding one-offs, full-year organic growth in the United States was around +3%.

    Other countries in the region, including Mexico, also reported a good rise in sales.

  • Rest of the World (26.2% of Group sales): sales were down -2.1% from 2015 at constant scope of consolidation and exchange rates. A number of countries including India, Chile and Colombia reported strong showings for the year as a whole. Sales in North Africa4were also up in 2016. These good results could not offset declines in activity in some other countries, including Brazil and certain countries in Asia and the Middle East. In China, full-year sales were steady compared with 2015, sustained by

one-off government measures in the first quarter.

1 Excluding the calendar effect, change in sales in France in the fourth quarter would only be down very slightly

2 Southern Europe = Spain + Greece + Portugal

3 Based on average exchange rates for 2016 and annual sales of the last acquisitions

4 North Africa = Algeria + Egypt + Morocco + Tunisia

Legrand SA published this content on 09 February 2017 and is solely responsible for the information contained herein.
Distributed by Public, unedited and unaltered, on 14 February 2017 16:08:15 UTC.

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