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First quarter 20241
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 commitments that contribute to doubling its positive impact on the environment and society.
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.
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.
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.
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:
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 first quarter 2024 results. A live audio webcast of the conference call will be available via the Investor Relations website.
Financial calendar
May 14, 2024: Annual General Meeting
May 16, 2024: Ex-dividend date
May 17, 2024: Dividend record date
June 3, 2024: Dividend payment date
July 26, 2024: Second quarter and half-year results 2024
October 25, 2024: Third quarter results 2024
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 energy crisis in Europe, the expected recovery trajectory of China post COVID, 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 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.
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:
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
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
Signify (Euronext: LIGHT) is the world leader in lighting for professionals, consumers and the Internet of Things. Our Philips products, Interact systems and data-enabled services, deliver business value and transform life in homes, buildings and public spaces. In 2023, we had sales of EUR 6.7 billion, approximately 32,000 employees and a presence in over 70 countries. We unlock the extraordinary potential of light for brighter lives and a better world. We have been in the Dow Jones Sustainability World Index since our IPO for seven consecutive years and have achieved the EcoVadis Platinum rating for four consecutive years, placing Signify in the top one percent of companies assessed. News from Signify can be found in the Newsroom, on X, LinkedIn and Instagram. Information for investors is located on the Investor Relations page.
