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    Signify's third quarter results 2021

    October 29, 2021 

    Signify reports third quarter sales of EUR 1.6 billion, operational profitability of 11.1% and a free cash flow of EUR 85 million

     

    Third quarter 20211

    • Signify's installed base of connected light points increased from 86 million in Q2 21 to 92 million in Q3 21
    • Sales of EUR 1,643 million; Comparable Sales Growth of -4.8%, impacted by global supply chain disruptions
    • Order book increased by 90% in Q3 21 vs. Q3 20
    • LED-based sales represented 83% of total sales (Q3 20: 82%)
    • Adj. EBITA margin of 11.1% (Q3 20: 11.5%)
    • Net income of EUR 94 million (Q3 20: EUR 90 million)
    • Free cash flow of EUR 85 million (Q3 20: EUR 214 million)
    • Net debt/EBITDA ratio of 1.8x (Q3 20: 2.2x)

     

    Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s third quarter 2021 results.

     

    “I am encouraged by the strong demand for connected lighting and the performance of our growth platforms in what has been a particularly disrupted external environment this quarter. This is evidenced by a healthy order book, which increased by 90% in comparison to the same period last year. At the same time, global supply chain issues caused by component shortages and logistics challenges impaired our ability to meet the high demand. We swiftly took multiple mitigating actions, while simultaneously managing our prices to offset the structural part of the inflation. These actions have enabled us to deliver a double digit adjusted EBITA margin, while continuing to invest in our digital initiatives,” said Eric Rondolat, CEO of Signify.

     

    “With the understanding we have today of the external uncertainties for Q4, we are set to achieve the lower end of our 2021 guidance range. We have the plans in place to deliver backlog orders and minimize disruption to our customers. We believe that these unprecedented supply chain issues are transitory and are confident in our ability to convert demand into sales growth as the situation stabilizes. The fundamentals of our business are stronger than ever, driven by the ever-growing need for energy-efficient and digital lighting technologies.”

    Brighter Lives, Better World 2025

     

    In the third quarter of the year, Signify celebrated one year of carbon neutrality in its operations and has continued to progress on all of the Brighter Lives, Better World 2025 sustainability program commitments:

     

    • Double the pace of the Paris agreement:
      Cumulative carbon reduction over value chain was 48 million tonnes, ahead of track. This was mainly achieved by an accelerated shift to energy-efficient and connected LED lighting in the first three quarters of 2021, thereby decreasing Signify's carbon emissions in the use phase.
    • Double our circular revenues to 32%:
      Circular revenues increased to 24%, compared with the 2019 baseline of 16%. Signify is on track for the 2025 target of 32%. This is mainly driven by the strong portfolio of serviceable luminaires and the further expansion of both the home luminaire and modular businesses.
    • Double our brighter lives revenues to 32%:
      Brighter lives revenues were 26%, making good progress towards the 2025 target of 32%. This positive trend can be explained by a strong contribution of the wellbeing portfolio, including 'quality of light' EyeComfort, Hue and WiZ products.
    • Double the percentage of women in leadership to 34%:
      The percentage of women in leadership positions was 25%, stable compared with last quarter, while slightly below our 2021 intermediary step to reach the 2025 target of 34%. In Q3, Signify signed the UN Women Empowerment Principles to emphasize its commitment to gender equality and it continued to diversify the talent pipeline while ensuring equal opportunities, fairness and impartiality for all.

    Outlook

     

    Signify expects that electronic components shortages and logistics disruptions will continue to have an impact over the coming months. As a result, and with no further deterioration of the supply chain, the company expects to end at the lower end of its 2021 guidance ranges of 3-6% comparable sales growth, an adj. EBITA margin of 11.5-12.5% and free cash flow exceeding 8% of sales.

    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 2021 third quarter results. A live audio webcast of the conference call will be available via the Investor Relations website.

    Financial calendar 2021

    January 28, 2022: Fourth quarter and full year results 2021

    February 22, 2022: Annual Report 2021

    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, 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 2019 sales of EUR 6.2 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 and have been named Industry Leader in the Dow Jones Sustainability Index for three years in a row. 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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