Signify reports second quarter sales of EUR 1.5 billion, operational profitability of 7.9% and a free cash flow of EUR 51 million

Second quarter 2024¹

• Installed base of connected light points increased to 136 million in Q2 24
• Released Climate Transition Plan with SBTi-validated net-zero targets
• Sales of EUR 1,483 million; nominal sales decline of -9.8% and CSG of -8.4%
• LED-based sales represented 86% of total sales (Q2 23: 84%)
• Adj. EBITA margin of 7.9% (Q2 23: 8.3%)
• Net income of EUR 63 million (Q2 23: EUR 45 million)
• Free cash flow of EUR 51 million (Q2 23: EUR 88 million)

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

“Our topline for the second quarter was impacted by the accelerated decline in Conventional lighting and continued market softness in Europe for the Professional business and in China. At the same time, we are encouraged by the positive trend in connected lighting, as well as the return to growth for our Consumer business outside of China and our OEM business. While the Adjusted EBITA margin of our Professional business was impacted, our Consumer and OEM businesses showed substantial improvements. Our free cash flow was in line with our expectations, reflecting the anticipated cash outflow from the restructuring program,” said Eric Rondolat, CEO of Signify.

“We remain cautious on Professional Europe and on China for the second semester, but expect to see positive traction for Professional in the Americas, as well as the OEM and Consumer businesses. As a result, we maintain our guidance, with 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.”

Brighter Lives, Better World 2025

In the second quarter of the year, Signify continued to advance its Brighter Lives, Better World 2025 sustainability program which commits 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 greenhouse gas (GHG) emissions across its full value chain by 40% against a 2019 baseline - double the pace required by the Paris Agreement 1.5 degree scenario.

• Double Circular revenues

Circular revenues increased to 35%, up 1% on last quarter and ahead of the 2025 target of 32%. The main contribution came from serviceable luminaires for the professional segment and LED luminaires for the consumer segment.

• 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, and professional luminaires that are Dark Sky compliant, reducing the impact on nature.

• Double the percentage of women in leadership

The percentage of women in leadership positions increased to 29%, a 1% improvement over last quarter, slightly behind the 2025 target of 34%. Signify continues its efforts to increase representation through focused hiring practices for diversity at all levels, and through retention and engagement activities to reduce attrition.

• Climate Transition Plan

In the second quarter, Signify released its Climate Transition Plan, which sets out the company's climate strategy in line with its SBTi-validated 2040 net-zero targets:

• Net-zero GHG emissions across its entire value chain by 2040.
• Absolute reduction of scope 1, 2 and 3 GHG emissions of 50% by 2030, and 90% by 2040, against a 2019 baseline.

Outlook

We remain cautious on Professional Europe and on China for the second semester, but expect to see positive traction for Professional in the Americas, as well as the OEM and Consumer businesses. As a result, we maintain our guidance, with 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 second quarter 2024 results. A live audio webcast of the conference call will be available via the Investor Relations website.

Financial calendar

October 25, 2024: Third quarter results 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 A, Reconciliation of non-IFRS financial measures, of this press release.