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Third quarter 20231
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s third quarter 2023 results.
“In the third quarter, we continued to recover our gross margin, which is a 2023 priority. Operating margin and free cash flow growth were in line with our expectations. While we see persistent weakness in China, in the connected consumer and LED electronics businesses, we gained market share in the professional segment, driven by strong demand for connected systems and services. We are also pleased to report that we have been able to bring our Conventional Products division back to its historical performance levels,” said Eric Rondolat, CEO of Signify.
“With the visibility we have into the final quarter, we confirm our guidance for the full year. However, we expect macroeconomic external factors to continue to put pressure on our topline in the quarters ahead. We are well positioned by the cost reduction actions that began earlier this year. Further structural measures will be implemented through Q1 2024 to improve our efficiency, speed of execution, and enhance our focus on the growth opportunities presented by the accelerating transition to ultra-efficient LED and connected lighting technologies.”
Brighter Lives, Better World 2025
In the third quarter of the year, Signify was on track to deliver on three of its Brighter Lives, Better World 2025 sustainability program commitments:
Signify is on track to reduce emissions across the entire value chain by 40% against the 2019 baseline - double the pace required by the Paris Agreement. This is driven by Signify's leadership in energy efficient and connected LED lighting solutions, which significantly reduce emissions during the use phase.
Circular revenues increased to 32%, hitting the 2025 target of 32%. The main contribution was from serviceable and upgradeable luminaires, with a strong performance from Cooper this quarter.
Brighter lives revenues increased to 31%, on track to reach the 2025 target of 32%. This was driven by a strong performance from tunable products that support well-being.
The percentage of women in leadership positions decreased to 29%, slightly off track to reach the 2025 target of 34%. Actions to increase women in leadership positions continue, including focused hiring practices for diversity across all levels, and through retention and engagement actions to reduce attrition.
Outlook
Signify confirms its guidance for the full year 2023. The company expects an Adjusted EBITA margin of 9.5-10.5% and free cash flow generation at the higher end of the 6-8% range.
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 third quarter 2023 results. A live audio webcast of the conference call will be available via the Investor Relations website.
Financial calendar 2024
January 26, 2024: Fourth quarter and full-year results 2023
February 27, 2024: Annual Report 2023
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, in particular the impacts of the Russia-Ukraine conflict, the conflict in the Middle East, the energy crisis in Europe, the expected recovery trajectory of China post COVID, component shortages, cost inflation, 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.
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, 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 nor 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 2022.
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 2022 and the Semi-Annual Report 2023.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Signify Investor Relations
Thelke Gerdes
Tel: +31 6 1801 7131
E-mail: thelke.gerdes@signify.com
Signify Corporate Communications
Tom Lodge
Tel: +31 6 5252 5416
E-mail: tom.lodge@signify.com
Signify (Euronext: LIGHT) is the world leader in lighting for professionals, consumers and the Internet of Things. Our Philips products, Interact systems and data-enabled services, deliver business value and transform life in homes, buildings and public spaces. In 2023, we had sales of EUR 6.7 billion, approximately 32,000 employees and a presence in over 70 countries. We unlock the extraordinary potential of light for brighter lives and a better world. We have been in the Dow Jones Sustainability World Index since our IPO for seven consecutive years and have achieved the EcoVadis Platinum rating for four consecutive years, placing Signify in the top one percent of companies assessed. News from Signify can be found in the Newsroom, on X, LinkedIn and Instagram. Information for investors is located on the Investor Relations page.
