SOMFY - Annual financial report 2018

MESSAGE FROM THE MANAGEMENT BOARD

Pierre RIBEIRO Group CFO, member of the Management Board

Jean Guillaume DESPATURE Chairman of the Management Board

In 2018, Somfy’s positive momentum was confirmed by its sales (1) , which increased 5.2% on a like-for-like basis, despite a high comparison base, but suffered a negative currency impact in real terms. Business profitability grew 0.5 percentage point to 16.5% of sales, also on a like-for-like basis, thanks to productivity gains, which offset the increased cost of raw materials, and to cost control. Our strategic investments – in R&D, information systems and marketing – remained steady to support the digitalisation of the product range and the company, and have now returned to standard levels. Net profit, down 11.0%, included the exceptional impacts related to the termination of an expansion project in China and the normalisation of our income tax rate, after a 2017 financial year marked by the reimbursement of the additional tax of 3% on dividends received by French companies subsequent to its invalidation by the Constitutional Council. Restated for these items, net profit grew by 9.2%. The Group’s financial position strengthened, with a net financial surplus of €222.4 million at year end, including €42.1 million as a result of Dooya being accounted for under the equity method (1) . As announced last year, our efforts to improve productivity have delivered initial results and we have significantly improved our quality performance. Driven by the demand for greater energy efficiency, comfort and security in buildings, sales of connected solutions (including motors) continued on their trajectory of strong growth (up 30.4%). In 2018, this activity specifically enabled the Somfy brand to position itself on the new collective housing market, both in France and internationally, through partnerships with property developers that offer genuine development opportunities over the medium-term. With the rollout of an open platform strategy, Somfy reached a major milestone – in line with our strategic roadmap – to better respond both to new consumer uses and to the expressed need for “integrated” home automation solutions. Somfy products are now interoperable with those of other domestic hardware brands, are incorporated into the leading Smart Home management platforms (IFTTT, Apple HomeKit, Amazon Alexa, etc.) and can therefore be operated by these players. These achievements are testament to Somfy’s capacity to evolve and its ability to capitalise on a structurally buoyant connected building market, although a short-term slowdown cannot be ruled out due to geopolitical and economic uncertainties. In 2019, our priorities will include reaffirming our technological lead in the interior solar protection market thanks to innovation, and to support our historical customers, installers and manufacturers as they digitalise their businesses. The Management Board

Following Dooya’s exit from the Group’s scope of full consolidation on 30 June 2018, all figures for the 2017 financial year (except these of the balance (1) sheet) were restated in accordance with IFRS 5 for comparison purposes.

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SOMFY – ANNUAL FINANCIAL REPORT 2018