ROBUST GROWTH IN 2007 EARNINGS

Legrand’s net sales advanced significantly in 2007, by 10.5% over 2006, to €4,129 million. Organic growth was very robust at 8.6%, and acquisitions contributed 3.6% to the group’s growth. Recurring adjusted operating income rose by 14.4% to €732 million. Finally, net income rose sharply compared with 2006 to €423 million in 2007.

STRUCTURAL IMPROVEMENT IN THE BUSINESS MODEL.

Legrand’s 2007 performance illustrated the structural change that has taken place in the group’s business model, which now combines improved fi nancial strength with a tangible acceleration in the rate of growth.

Over the past several years, Legrand has improved the coverage of its sales forces and technical staff worldwide. It has gradually become a group with several large, fast-growing regions such as Mexico, Brazil, China, India, Russia, Poland and Turkey.

With nearly 25% of sales deriving from emerging market countries, Legrand has improved its growth profile and diversifi ed its market positions. Net sales in these countries increased by 18% on a like-for-like basis, thereby contributing around 50% of the group’s organic growth.

Legrand also signifi cantly improved its cost structure. Fifty-four percent of production staff are now located in low-cost countries and more than half of operating costs are variable. Finally, Legrand systematically exploits new, promising market segments such as lighting control, energy efficiency, voice-data-image networks and home automation. All of these businesses posted double-digit growth in 2007.

ACTIVE POLICY OF TARGETED ACQUISITIONS

Self-fi nanced acquisitions, or the group’s recurrent ability to generate external growth, has accelerated. Over the last three years, Legrand has purchased 15 companies, including six in 2007. Annualized, this represents acquired net sales of more than $0.5 billion. These targeted acquisitions have given Legrand access to fast-growing markets in emerging economies (TCL and Shidean in China, Cemar in Brazil, Kontaktor in Russia, Macse in Mexico) and in home automation (OnQ, Vantage and UStec) and have made a strong contribution to the group’s expansion in both manufacturing and services sectors (Van Geel, Zucchini, ICM-Cablofi l, Alpes Technologies).

For 2008, the group has already announced the acquisition of PW Industries, North American specialist in ceiling cable tray systems for manufacturing facilities and service companies.

STRONG FREE CASH FLOW GENERATION

Because earnings rose signifi cantly and capital employed was kept under control, free cash flow(1) advanced by 21% in 2007 to €553 million, or 13% of sales.

For the fourth year in a row, free cash fl ow was appreciably above 10% of sales, compared with 6% historically, indicating that Legrand’s structuralability to generate very signifi cant levels of recurrent cash fl ow has improved.

OUTLOOK

For 2008, taking into account the economic slowdown and assuming no major cyclical changes in its markets, Legrand is confident it will be able to grow its top line by 7-9%, excluding currency effects but including acquisitions. It expects its adjusted operating margin to be near its 2007 level.

(1) Free cash fl ow is defi ned as cash fl ows from ordinary operations, plus net cash from asset disposals, minus investments and capitalized development costs.