Press Release
April 26, 2024
Signify reports first quarter sales of EUR 1.5 billion, operational
profitability of 8.3% and a free cash flow of EUR 80 million
First quarter 2024(1)
* Signify's installed base of connected light points increased from 124
million in Q4 23 to 126 million in Q1 24
* Achieved reasonable assurance on full Brighter Lives, Better World 2025
program, including scope 3 emissions
* Sales of EUR 1,468 million; nominal sales decline of -12.5% and CSG of
-10.1%
* LED-based sales represented 87% of total sales (Q1 23: 82%)
* Adj. EBITA margin of 8.3% (Q1 23: 8.9%)
* Net income of EUR 44 million (Q1 23: EUR 28 million)
* Free cash flow of EUR 80 million (Q1 23: EUR 51 million)
Eindhoven, the Netherlands - Signify (Euronext: LIGHT), the world leader in
lighting, today announced the company's first quarter 2024 results.
"In the first quarter, we saw improving dynamics in our US Professional, OEM and
Consumer businesses, while the market in China remained soft and the European
Professional business was substantially below our expectation. Our operating
margin was resilient, thanks to gross margin expansion as price dynamics
normalize, compensated by bill of material improvements. We also began to see
the positive impact of our cost reduction program and strong free cash flow
generation, as we continued to improve our working capital," said Eric Rondolat,
CEO of Signify.
"On April 1, we successfully implemented our new organizational structure. The
new model brings enhanced focus and accountability to our business from an end-
customer perspective, and has earned strong support internally and externally.
As the year progresses, we anticipate a sequential comparable sales growth
improvement, driven by momentum in the Americas and our OEM and Consumer
businesses. The continued effort to manage the gross margin, combined with the
implementation of our cost reduction program, will deliver a positive effect on
our operating margin in the quarters ahead, in line with our guidance for the
full year."
Brighter Lives, Better World 2025
The first quarter of 2024 marks the start of Signify's fourth year of its
Brighter Lives, Better World 2025 sustainability program
(https://www.signify.com/global/sustainability/brighter-lives-better-world-
2025) commitments that contribute to doubling its positive impact on the
environment and society.
Double the pace of the Paris Agreement
Signify is ahead of schedule to achieve its 2025 target to reduce emissions
across the full value chain by 40% against its 2019 baseline - double the pace
required by the Paris Agreement 1.5 degree scenario. In addition, the company
has received approval from the Science Based Targets initiative (SBTi) for its
ambitious 2040 Net Zero target with a 90% absolute reduction of scope 1, 2 and
3 emissions.
Double Circular revenues
Circular revenues increased to 34%, surpassing the 2025 target of 32%. The main
contribution was from serviceable luminaires, with a strong performance from
both consumer and professional.
Double Brighter lives revenues
Brighter lives revenues remained at 31%, on track to reach the 2025 target of
32%. This includes a strong contribution from consumer products that support
health and well-being, mainly EyeComfort.
Double the percentage of women in leadership
The percentage of women in leadership positions decreased to 28%, a 1% decrease
versus last quarter, and slightly behind target. Signify continues its actions
to increase women representation through focused hiring practices for diversity
across all levels, and through retention and engagement actions to reduce
attrition.
In the first quarter, Signify received several external recognitions for its
leadership in Sustainability. Signify was placed on CDP's 2023 Climate A-List
for the seventh consecutive year. It was also recognized on CDP's 2023 Supplier
Engagement Leaderboard for its commitment to engagement in its supply chain to
decrease carbon emissions. Lastly, Signify is recognized on the Clean200, a list
of companies putting sustainable investments at the heart of their strategy.
In addition, Signify released Environmental Product Declarations that advance
transparency and sustainable innovation, covering the vast majority of its LED
portfolio. Signify has committed to sharing the environmental impact of its full
range of LED products. Being transparent about our products' environmental
impact gives customers the information they need to make informed decisions.
Outlook
For 2024, Signify continues to expect:
* An Adjusted EBITA margin improvement of up to 50 bps, including first
benefits from the announced restructuring program
* Free cash flow generation of 6-7% of sales, including an incremental and
non-recurring negative impact of around EUR 150 million related to the
restructuring program and a reduction of US pension liabilities.
Conference call and audio webcast
Eric Rondolat (CEO) and Zeljko Kosanovic (CFO) will host a conference call for
analysts and institutional investors at 9:00 a.m. CET to discuss the first
quarter 2024 results. A live audio webcast of the conference call will be
available via the Investor Relations Website
(https://www.signify.com/global/our-company/investors/webcast)
The analyst presentation is available via this link
(https://www.signify.com/static/quarterlyresults/2024/q1_2024/signify-first-
quarter-results-2024-presentation.pdf)
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.
Â