SOMFY - Annual financial report 2018

07 CONSOLIDATED FINANCIAL STATEMENTS

Somfy SA is a company governed by a Management Board and a Supervisory Board, listed on the Eurolist of Euronext Paris (Compartment A, ISIN Code: FR0013199916). Somfy is the global leader in automated opening and closing systems for both residential and commercial buildings, and a key player in the connected home. The head office is based in Cluses, Haute-Savoie, France. Somfy SA is a 52.65%-subsidiary of the French company J.P.J.S. On 4 March 2019, the Management Board approved the IFRS consolidated financial statements of the Group for the 12-month financial year ended 31 December 2018. At its meeting of 6 March 2019, the Supervisory Board, following verification and review, did not issue any observations and duly authorised their publication. Total assets were €1,184,255 thousand and consolidated net profit €140,366 thousand (Group share: €140,458 thousand). All accounting rules and methods are included in the various notes which are grouped by theme and highlighted in colour for greater readability and relevance. ACCOUNTING PRINCIPLES NOTE 1 — CONSOLIDATED FINANCIAL STATEMENTS – NOTE 1.1 BASIS FOR PREPARATION negociated on the acquisition of equity investments (notes 7.2.2 and 7.2.4 to the consolidated financial statements). As part of the preparation of these annual consolidated financial statements, the main judgments made and the main assumptions used by Management have been updated based on the latest indicators available.

The consolidated financial statements are presented in thousands of Euros. All amounts are rounded to the nearest thousand of Euros, unless otherwise specified. The financial statements have been prepared in accordance with the historical cost principle, except for a number of assets and liabilities that were measured at fair value, in particular in relation to derivative instruments. Consolidated financial statements include the financial statements of Somfy SA and its subsidiaries at 31 December of each year. The financial statements of subsidiaries are prepared for the same reference period as the parent company and on the basis of homogeneous accounting methods. The financial year-end of all companies is 31 December. In application of European regulation 1606/2002 of 19 July 2002 on international accounting standards, the Group’s consolidated financial statements for the financial year ended 31 December 2018 have been prepared in accordance with the international financial reporting standards (“IFRS”) applicable at that date, as approved by the European Union at the date of preparation of these financial statements. The preparation of the consolidated financial statements requires Management to make a number of judgments, estimates and assumptions liable to affect the values of assets, liabilities, and income and expense items in the financial statements, and information provided in the notes to the financial statements. Due to the inherently uncertain nature of the assumptions, actual results may differ from estimates. The Group reviews its estimates and assessments on a regular basis to take past experience into account and incorporate factors considered relevant under current economic conditions. The major items of the financial statements that may be subject to estimates are as follows: the impairment of goodwill and intangible assets and property, – plant and equipment, whose measurement is specifically based on future cash flow, discount rate and net realisable value assumptions (note 5.1 to the consolidated financial statements); retirement commitments, whose measurement is based on a – number of actuarial assumptions (note 10.2.1 to the consolidated financial statements); provisions (note 9.1 to the consolidated financial statements); – the measurement of options associated with stock option plans – and free share allocations granted to employees (note 10.3 to the consolidated financial statements); the measurement of certain financial instruments used to hedge – foreign exchange and raw materials, as well as certain options COMPLIANCE WITH ACCOUNTING STANDARDS NOTE 1.2 JUDGEMENTS AND ESTIMATES NOTE 1.3

At 31 December, the Group reviews its performance indicators and carries out impairment tests if there is any indication that an asset may have been impaired.

NEW APPLICABLE STANDARDS NOTE 1.4 AND INTERPRETATIONS

Standards, amendments and interpretations whose Note 1.4.1 application is mandatory for financial years beginning on or after 1 January 2018

The Group has applied the following standards, amendments and interpretations as of 1 January 2018:

Standards

Content

Application date

Applicable from 1 January 2018 Applicable from 1 January 2018

IFRS 9

Financial Instruments

Revenue from Contracts with Customers Classification and Measurement of Share-based Payment Transactions

IFRS 15

Amendments to IFRS 2

Applicable from 1 January 2018

Amendments to IFRS 15 Annual improvements to IFRS

Clarifications to IFRS 15 Applicable from 1 January 2018

2014-2016 cycle – excluding amendment to IFRS 12 which is applicable from 2017 Foreign Currency Transactions and Advance Considerations

Applicable from 1 January 2018

Applicable from 1 January 2018

IFRIC 22

“Revenue from Contracts with Customers” IFRS 15 IFRS 15 “Revenue from Contracts with Customers”, which supersedes IAS 11 “Construction Contracts” and IAS 18 “Revenue”, lays down accounting principles for the recognition of revenue based on an analysis completed in five successive steps: identify the contract; – identify the various performance obligations, i.e. list the distinct – goods or services the seller is committed to supply to the purchaser; determine the total price of the contract; – allocate the total price to each performance obligation; – recognise revenue when a performance obligation is satisfied. –

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SOMFY – ANNUAL FINANCIAL REPORT 2018