Signify reports third quarter sales of EUR 1.6 billion, operational profitability of 10.7% and a free cash flow of EUR 152 million

Press Release

October 27, 2023

Signify reports third quarter sales of EUR 1.6 billion, operational profitability of 10.7% and a free cash flow of EUR 152 million

Third quarter 20231

Signify's installed base of connected light points increased from 119 million in Q2 23 to 121 million in Q3 23
Reached the 2025 target for circular revenues in Brighter Lives, Better World 2025 sustainability program
Sales of EUR 1,649 million; nominal sales decline of -13.8% and CSG of -7.8%
LED-based sales represented 85% of total sales (Q3 22: 83%)
Adj. EBITA margin of 10.7% (Q3 22: 10.4%)
Net income of EUR 83 million (Q3 22: EUR 112 million)
Free cash flow of EUR 152 million (Q3 22: EUR 135 million)

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 2025In the third quarter of the year, Signify was on track to deliver on three of its Brighter Lives, Better World 2025 sustainability program commitments:

Double the pace of the Paris AgreementSignify 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.

Double Circular revenuesCircular 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.

Double Brighter lives revenuesBrighter 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.

Double the percentage of women in leadershipThe 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.

OutlookSignify 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 WebsiteThe analyst presentation is available via this link

¹ This 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.

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