Third quarter 20221
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s third quarter 2022 results.
“In the third quarter, we delivered solid topline growth in an increasingly volatile environment. The strong performance of our professional business compensated lower consumer demand and the continued slowdown in China. We managed to improve profitability compared to the second quarter despite the impact of energy costs and currency movements. As expected, our free cash flow generation strengthened, driven by improved profitability and the stabilization of our working capital. Given the uncertain near-term outlook, the continued softness of the consumer segment and of the Chinese market, we now expect to achieve comparable sales growth between 2% and 3% for the full year 2022. Regarding the adjusted EBITA margin and free cash flow, we are targeting the lower end of both guidance ranges,” said CEO Eric Rondolat.
“As we enter the final quarter of 2022, we have shifted gears to adapt the company to a structurally weaker external environment in the coming quarters, when current headwinds and volatility are likely to persist. We will therefore focus on measures to control costs and cash flow, in line with our track record of delivering margin expansion and strong free cash flow generation in difficult environments. While some areas will be more affected, connected energy efficient lighting solutions will continue to benefit from strong demand given the energy prices surge.”
Brighter Lives, Better World 2025
In the third quarter of the year, Signify continued to deliver on its Brighter Lives, Better World 2025 sustainability program commitments that contribute to doubling its positive impact on the environment and society.
Cumulative carbon reduction over the value chain is on track, mainly driven by energy-efficient and connected LED lighting
Circular revenues were at 30% and on track. This positive trend is driven by serviceable and circular luminaires
Brighter lives revenues increased to 28%, mainly driven by the Safety & security and consumer well-being portfolios
The percentage of women in leadership positions was 27%, stable with Q2. Signify continued to create action plans to address gaps and accelerate its progress. In addition, Signify published its first-ever Diversity, Equity, and Inclusion report.
Given the uncertain near-term outlook and the continued softness both of the consumer segment and of the Chinese market, we now expect to achieve comparable sales growth between 2% and 3% for the full year 2022. We are targeting the lower end of the range for both the 11.0-11.4% Adjusted EBITA margin guidance and the 5-7% free cash flow guidance.
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 2022 results. A live audio webcast of the conference call will be available via the Investor Relations website.
Financial calendar 2023
January 27, 2023: Fourth quarter and full-year results 2022
February 28, 2023: Annual Report 2022
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 energy crisis in Europe, the impacts of COVID-19, supply chain constraints, 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, 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 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 2021.
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 2021 and the Semi-Annual Report 2022.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Signify Investor Relations
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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. In 2022, we had sales of EUR 7.5 billion, approximately 35,000 employees and a presence 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 six 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.