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    Signify's third quarter results 2024

    October 25, 2024

    Signify reports third quarter sales of EUR 1.5 billion, operational profitability of 10.5% and a free cash flow of EUR 119 million

     

    Third quarter 20241

    • Signify's installed base of connected light points increased to 139 million in Q3 24
    • On track for three Brighter Lives, Better World 2025 sustainability program commitments
    • Sales of EUR 1,537 million; nominal sales decline of -6.8% and CSG of -5.2%
    • LED-based sales represented 90% of total sales (Q3 23: 85%)
    • Adj. EBITA margin of 10.5% (Q3 23: 10.7%)
    • Net income of EUR 108 million (Q3 23: EUR 83 million)
    • Free cash flow of EUR 119 million (Q3 23: EUR 152 million)

     

    Eindhoven, the Netherlands Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s third quarter 2024 results.

     

    Eric Rondolat, CEO of Signify, comments:

     

    "As anticipated, our comparable sales growth continues to improve sequentially. Our teams are effectively managing the accelerated decline of our Conventional business and continued slowness in the Chinese market, without which the decline would be limited to -1.3% for the third quarter.

     

    In the Professional business, we saw a recovery in agricultural lighting and continued growth for connected, while our European distribution channel remained weak, particularly in Eastern and Southern Europe. Our Consumer business delivered comparable sales growth of 2.6% excluding China, reflecting the recovery of our business across all other regions. Our OEM business demonstrated two consecutive quarters of growth, driven by a stabilization of inventory levels at our customers.

     

    Despite the shrinking contribution of the Conventional business to EBITA, we have maintained a resilient bottom-line as our cost reduction program delivers the expected benefits. Additionally, we delivered strong free cash flow for the quarter, resulting from our ongoing focus on cash conversion.

     

    We are now very focused on our performance for the fourth quarter and confirm our guidance for an adjusted EBITA margin at the lower end of the 10.0-10.5% range and free cash flow generation of 6-7% of sales for 2024.

     

    As we manage down our Conventional business, we are continuing to invest in connected and specialty lighting. These represent approximately 30% of our business and provide an attractive growth opportunities for our Professional, Consumer and OEM Businesses.

     

    The progress we have driven in the past years uniquely positions us to continue to lead our industry as it enters each new phase of innovation. More than ever, the complementary drivers of innovation and sustainability sit at the heart of everything we do, driving growth opportunities that create long-term value for all our stakeholders.”

    Brighter Lives, Better World 2025

     

    In the third quarter of the year, Signify continued to progress on its Brighter Lives, Better World 2025 sustainability program commitments that contribute to doubling its positive impact on environment and society.

     

    • Double the pace of the Paris Agreement

    Signify is ahead of 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.

     

    • Double Circular revenues

    Circular revenues increased to 36.7%, up 1.7% over last quarter and surpassing the 2025 target of 32%. The main contribution was from Professional serviceable luminaires in the Americas.

     

    • Double Brighter lives revenues

    Brighter lives revenues at 31.1%, on track to reach the 2025 target of 32%. This includes a strong contribution from consumer products, mainly EyeComfort that support health and well-being.

     

    • Double the percentage of women in leadership

    The percentage of women in leadership positions remained at 29.3%, behind the 2025 target of 34%. Signify continues its efforts to increase overall representation through focused hiring practices for diversity across all levels. Focus remains on building strong succession pipelines, and engagement actions to reduce attrition.

    Outlook

     

    Signify continues to expect an Adjusted EBITA margin at the lower end of the 10.0-10.5% range and free cash flow generation of 6-7% of sales.

    Conference call and audio webcast

    Eric Rondolat (CEO) and Željko Kosanović (CFO) will host a conference call for analysts and institutional investors at 9:00 a.m. CET to discuss the third quarter 2024 results. A live audio webcast of the conference call will be available via the Investor Relations website.

    Financial calendar

    January 24, 2025: Fourth quarter and full-year results 2024

    February 25, 2025: Annual Report 2024

    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, in particular the impacts of the Russia-Ukraine conflict, the conflict in the Middle East, the recovery trajectory  of the Chinese economy, 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 19 Reconciliation of non-IFRS measures” in the Annual Report 2023.

     

    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 2023 and the Semi-Annual Report 2024.

     

    Change in reportable segments

    Effective Q1 2024, Signify reports against four businesses with vertically integrated P&Ls, adapted from the previous three divisions as follows:

    • The Professional business will offer LED lamps, luminaires, connected lighting systems and services to customers in the professional segment.
    • The Consumer business will offer LED lamps, luminaires, and connected products, including Philips Hue and WiZ, to customers in the consumer segment.
    • The OEM business will offer lighting components to the industry.
    • The Conventional business will offer special lighting, digital projection, and lamp electronics.

     

    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

    Tom Lodge

    Tel: +31 6 5252 5416

    E-mail: tom.lodge@signify.com

    Media Assets

    Q3 Business Highlights
    Watch Q3 2024 business highlights video

    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 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, X, LinkedIn and Instagram. Information for investors can be found on the Investor Relations page.

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