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    Signify's fourth quarter and full year results 2021

    January 28, 2022

    Signify reports full-year sales of EUR 6.9 billion, operational profitability of 11.6% and a free cash flow of EUR 614 million

     

    Fourth quarter 20211

    • Sales of EUR 2,008 million; comparable sales growth of 4.5%
    • Order book increase of 67% in Q4 21 vs. Q4 20
    • Adj. EBITA margin of 13.2% (Q4 20: 13.4%)
    • Net income of EUR 170 million (Q4 20: EUR 137 million)
    • Free cash flow of EUR 257 million (Q4 20: EUR 332 million)
    • Repayment of EUR 350 million of debt, as committed

     

    Full year 2021

    • Signify's installed base of connected light points increased from 77 million at YE 20 to 96 million at YE 21
    • Sales of EUR 6,860 million; comparable sales growth of 3.8%
    • LED-based sales represented 83% of total sales (FY 20: 80%)
    • Adj. EBITA margin of 11.6% (FY 20: 10.7%)
    • Net income of EUR 407 million (FY 20: EUR 335 million)
    • Free cash flow of EUR 614 million, 8.9% of sales (FY 20: EUR 817 million)
    • Net debt/EBITDA ratio of 1.4x (YE 20: 1.7x)

     

    Dividend

    • Proposal to pay a cash dividend of EUR 1.45 per share over 2021

     

    Eindhoven, the NetherlandsSignify (Euronext: LIGHT), the world leader in lighting, today announced the company’s fourth quarter and full-year 2021 results.

     

    “The strong demand for connected lighting and our growth platforms, paired with the delivery of delayed orders, enabled us to achieve a comparable sales growth of 4.5% in the fourth quarter. Our teams’ relentless focus on the execution of our strategy enabled us to deliver against our objectives for the year. This, in an external environment that was possibly even more challenging than in 2020. Despite the significant cost increases of raw materials, components, and logistics, we expanded our operational profit margin for the eighth consecutive year, with an improvement of 90 basis points. This was driven by the strong performance of our two digital divisions, which combined now account for more than 80% of our sales, profit and cash flow. Finally, during the year we continuously made significant progress on our journey to double our positive impact on the environment and society,” said CEO Eric Rondolat.

     

    “While we expect uncertainty to remain high in the first half of this year, we’re confident that we will manage this volatility with the same agility as we demonstrated in the past two years. Our 2021 results provide us with a solid base on which to deliver another year of growth in 2022. This will be driven by continued investments in our growth platforms, such as the intended acquisition of Fluence. The world's demand for energy-efficient and digital lighting technologies continues to accelerate and Signify is well positioned to capture the potential this creates.”

    Brighter Lives, Better World 2025

     

    In the fourth quarter, Signify completed the first year of its Brighter Lives, Better World 2025 program, making substantial progress towards doubling its positive impact on the environment and society:

     

    • Double the pace of the Paris agreement:

    Cumulative carbon reduction over the value chain was 60 million tonnes, and is ahead of track. All of Signify's divisions had CO2 emission reductions. The main driver remains the accelerated shift to energy efficient and connected LED lighting in 2021, which decreases the carbon emissions in the use phase.

     

    • Double our Circular revenues to 32%:

    Circular revenues increased to 25%, compared with the 2019 baseline of 16%. Signify is on track to achieve the 2025 target of 32%. This positive trend is driven by the further expansion of serviceable professional luminaires, and the continuous, stable contribution of consumer luminaires and circular components.

     

    • Double our Brighter lives revenues to 32%:

    Brighter lives revenues were 27%, with a strong contribution from the consumer well-being portfolio. With this performance, Signify is making good progress towards the 2025 target of 32%.

     

    • Double the percentage of women in leadership to 34%:

    The percentage of women in leadership positions was 25%, stable when compared with last quarter. This performance is slightly behind the 2021 intermediary step aimed at reaching the 2025 target of 34%. In Q4, Signify launched the Powering Inclusion Series, which increases the awareness of its leaders and people managers on how to foster inclusion.


    Signify is in the top 1% of its industry in the S&P Global Corporate Sustainability Assessment and is included in the Dow Jones Sustainability World Index for the fifth consecutive year, illustrating its drive for leadership in sustainability.

    Outlook

     

    As Signify continues to proactively navigate through the gradually improving component and logistics environment, it provides the following outlook for 2022:

     

    • Comparable sales growth in the range of 3-6%
    • Continued Adjusted EBITA margin improvement of up to 50 bps
    • Free cash flow in excess of 8% of sales

    Capital allocation

     

    Signify proposes a cash dividend of EUR 1.45 per share for 2021, in line with its plan to pay an increasing annual cash dividend per share year on year. The dividend proposal will be subject to approval at the Annual General Meeting of Shareholders (AGM) to be held on May 17, 2022. Further details will be provided in the agenda for the AGM.

     

    The company expects to progress towards a leverage ratio of reported net debt/EBITDA of 1x by the end of 2022. This now includes the cash outflow from the intended Fluence acquisition, and the 2022 cash inflow from its operations and the continued rationalization of the company’s real estate portfolio.

     

    Finally, Signify will continue to invest in organic and inorganic growth opportunities in line with its strategic priorities.

    Conference call and audio webcast

    Eric Rondolat (CEO) and Javier van Engelen (CFO) will host a conference call for analysts and institutional investors at 9:00 a.m. CET to discuss the fourth quarter and full-year 2021 results. A live audio webcast of the conference call will be available via the Investor Relations website.

    Financial calendar 2022

    February 22, 2022: Annual Report 2021

    April 29, 2022: First quarter results 2022

    May 17, 2022: Annual General Meeting

    May 19, 2022: Ex-dividend date

    May 20, 2022: Dividend record date

    May 31, 2022: Dividend payment date

    July 29, 2022: Second quarter and half-year results 2022

    October 28, 2022: Third quarter results 2022

    1This press release contains certain non-IFRS financial measures and ratios, such as comparable sales growth, EBITA, adjusted EBITA and free cash flow, and related ratios, which are not recognized measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures, see appendix B, Reconciliation of non-IFRS financial measures, of this press release.

    Important information

     

    Forward-Looking Statements and Risks & Uncertainties

    This document and the related oral presentation contain, and responses to questions following the presentation may contain, forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Signify N.V. (the “Company”, and together with its subsidiaries, the “Group”), including statements regarding strategy, estimates of sales growth and future operational results.

     

    By their nature, these statements involve risks and uncertainties facing the Company and its Group companies, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties and other important factors include but are not limited to: adverse economic and political developments, the impacts of COVID-19, supply chain constraints, component shortages, rapid technological change, competition in the general lighting market, development of lighting systems and services, successful implementation of business transformation programs, impact of acquisitions and other transactions, reputational and adverse effects on business due to activities in Environment, Health & Safety, compliance risks, ability to attract and retain talented personnel, adverse currency effects, pension liabilities, and exposure to international tax laws. Please see “Risk Factors and Risk Management” in Chapter 12 of the Annual Report 2020 for discussion of material risks, uncertainties and other important factors which may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group. Such risks, uncertainties and other important factors should be read in conjunction with the information included in the Company’s Annual Report 2020 and Semi-Annual Report 2021.

     

    Additional risks currently not known to the Group or that the Group has not considered material as of the date of this document could also prove to be important and may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group or could cause the forward-looking events discussed in this document not to occur. The Group undertakes no duty to and will not necessarily update any of the forward-looking statements in light of new information or future events, except to the extent required by applicable law.

     

    Market and Industry Information

    All references to market share, market data, industry statistics and industry forecasts in this document consist of estimates compiled by industry professionals, competitors, organizations or analysts, of publicly available information or of the Group’s own assessment of its sales and markets. Rankings are based on sales unless otherwise stated.

     

    Non-IFRS Financial Measures

    Certain parts of this document contain non-IFRS financial measures and ratios, such as comparable sales growth, adjusted gross margin, EBITA, adjusted EBITA, and free cash flow, and other related ratios, which are not recognized measures of financial performance or liquidity under IFRS. The non-IFRS financial measures presented are measures used by management to monitor the underlying performance of the Group’s business and operations and, accordingly, they have not been audited or reviewed. Not all companies calculate non-IFRS financial measures in the same manner or on a consistent basis and these measures and ratios may not be comparable to measures used by other companies under the same or similar names. A reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures is contained in this document. For further information on non-IFRS financial measures, see “Chapter 18 Reconciliation of non-IFRS measures” in the Annual Report 2020.

     

    Presentation

    All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up to totals provided. All reported data are unaudited. Unless otherwise indicated, financial information has been prepared in accordance with the accounting policies as stated in the Annual Report 2020 and Semi-Annual Report 2021.

     

    Market Abuse Regulation

    This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

    For further information, please contact:

    Signify Investor Relations

    Thelke Gerdes

    Tel: + 31 6 1801 7131

    E-mail: thelke.gerdes@signify.com

     

    Signify Corporate Communications

    Elco van Groningen

    Tel: +31 6 1086 5519

    E-mail: elco.van.groningen@signify.com

    About Signify

     

    Signify (Euronext: LIGHT) is the world leader in lighting for professionals and consumers and lighting for the Internet of Things. Our Philips products, Interact connected lighting systems and data-enabled services, deliver business value and transform life in homes, buildings and public spaces. With 2021 sales of EUR 6.9 billion, we have approximately 37,000 employees and are present in over 70 countries. We unlock the extraordinary potential of light for brighter lives and a better world. We achieved carbon neutrality in 2020, have been in the Dow Jones Sustainability World Index since our IPO for four consecutive years and were named Industry Leader in 2017, 2018 and 2019. News from Signify is located at the Newsroom, Twitter, LinkedIn and Instagram. Information for investors can be found on the Investor Relations page.

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