SOMFY_ANNUAL_FINANCIAL_REPORT_2017

04 MANAGEMENT BOARD REPORT

deferred payments falling due. The hearings are also scheduled for 2018. Somfy SA remains confident regarding the settlement of

these sums and therefore no provision in relation to these

receivables was recognised at 31 December 2017.

PRESENTATION OF FINANCIAL STATEMENTS

Growth stood at 10.3% on a like-for-like basis over the financial year, including 8.5% over the first half and 12.3% over the second, and followed an increase of 10.2% over the course of the previous year. It reflects significant growth in all business segments and locations (1) . The most noteworthy performances came from Asia-Pacific, America, France, Eastern and Central Europe, and Northern Europe, all of which recorded double-digit growth. The trend was less impressive, but nevertheless remained definitively positive within the two other major regions, Southern Europe and Germany. The strong performance of these figures is testament to the growing interest of consumers in different continents in motorised and connected solutions in the home, and thereby validates the Group’s choices and positioning (international coverage, innovation, digital transformation, etc.).

PARENT COMPANY DATA —

Over the year ended 31 December 2017, Somfy SA generated sales of €3.2 million. Net financial income amounted to €89.1 million, including €92.5 million in dividends paid by the subsidiaries in respect of their net profit for the year to 31 December 2016. Net profit was €107.1 million, after inclusion of an income tax refund of €25.5 million, including the tax reliefs. CONSOLIDATED DATA — SALES Sales increased by 10.1% over the financial year just ended to €1,246.6 million. They benefitted from a positive scope effect of €11.2 million and suffered from a negative currency impact of €12.8 million.

SALES BY CUSTOMER LOCATION

31/12/17

31/12/16

Change N/N-1

Change N/N-1 like-for-like

€ thousands

France

312,460 180,394 114,942 133,063 219,135 151,629 134,950

272,611 176,430 105,689 118,635 207,226 127,763 123,384

14.6%

11.3%

Germany

2.2% 8.8%

2.4%

Northern Europe

10.5% 11.1%

Central and Eastern Europe

12.2%

Southern Europe, Middle East and Africa

5.7%

7.9%

Asia-Pacific

18.7%

20.7% 11.5% 10.3%

Americas

9.4%

TOTAL SALES

1,246,573

1,131,739

10.1%

RESULTS

Ultimately, profitability remained at a very satisfactory level with a return on capital invested (ROCE) of 19.7% (2) . Detailed calculations of current operating result and ROCE (IAP) is detailed in note 4.3 to the consolidated financial statements.

Current operating result stood at €168.4 million over the financial year, down 5.2%, and represented 13.5% of sales (current operating margin). This decline resulted from factors that are both cyclical and structural, namely gaining market share, the rise in the price of raw materials, fluctuations in the main invoicing currencies and the integration of recently-acquired companies (iHome Systems, Myfox). On a like-for-like basis, current operating result would have been virtually stable at €178.0 million, and as such would have represented 14.3% of sales. Consolidated net profit was €157.7 million, an increase of 10.1%. It takes into account a negligible net non-recurring operating expense, a net financial expense of €5.9 million, which mainly includes unrealised exchange differences, and income tax of €3.1 million, a particularly low level due notably to the recovery of the tax on dividends. Excluding tax rebates, net profit would have been €135.4 million, and would have fallen by 5.5%.

FINANCIAL POSITION

The balance sheet was further strengthened. The net cash surplus rose indeed from €15.5 million to €104.6 million year-on-year, an increase of €89.1 million, and shareholders’ equity grew to €770.7 million. The net financial debt corresponds to the difference between financial assets and financial liabilities. Notably it takes into account unlisted bonds receivable, issued by certain companies in which shares are held or related entities, earnout on acquisitions, liabilities relating to options granted to minority shareholders in fully-consolidated companies and deferred settlements of a financial nature. Not included are securities in non-controlling equity investments, deposits & guarantees and government grants. Net financial debt is detailed in note 7.2.3 to the consolidated financial statements.

Germany, America, Asia-Pacific, Central and Eastern Europe, Northern Europe, Southern Europe and France are the geographic regions used to monitor (1) sales. Their sales are calculated based on customer location and therefore the destination of the sales. Return on capital invested or employed (ROCE) is equal to the ratio between current operating result, after normative tax, and the sum of shareholders’ (2) equity (with the effects of goodwill impairment being neutralised) and the net financial debt.

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SOMFY – ANNUAL FINANCIAL REPORT 2017