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Full year 20191
Fourth quarter 20191
Shareholder returns
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s fourth quarter and full-year 2019 results. “We are pleased that we’ve improved our Adjusted EBITA margin for the sixth consecutive year, which has led to a 400 basis points increase since 2013. During the same period, our LED-based sales increased from 26% to 78%, reflecting our successful transformation from conventional lighting technologies to LED lighting products, systems and services. Our free cash flow of EUR 529 million is at the highest level since the IPO. The profit and cash contribution from the growing profit engines is now more than twice that of Lamps. This demonstrates that we have significantly strengthened the business and financial profile of the company.
We are also seeing positive traction from the acquisitions we completed in 2019 and look forward to welcoming Cooper Lighting Solutions in 2020, which will strengthen our market position in North America and our overall business mix,” said CEO Eric Rondolat. “We propose a dividend of EUR 1.35 per share which brings the total return to shareholders to more than EUR 1.2 billion since the IPO. While we continue to face challenging market conditions, we are confident that our relentless focus on our growth initiatives will further strengthen our market leadership and progressively improve our growth profile.”
Sustainability
Sustainability is central to Signify’s strategy. It is the company’s purpose to unlock the extraordinary potential of light for brighter lives and a better world. In 2019, 82.5% of the company’s revenues came from its portfolio of sustainable products, systems and services, exceeding its 2020 target of 80%. Signify sold 2.3 billion LED lamps and luminaires in 2015-2019, in line with its commitment to deliver more than 2 billion LED lamps and luminaires by the end of 2020. The company also decreased its waste to landfill by 70% and is ahead of its targets related to a safe & healthy workplace and a sustainable supply chain. The company reduced its carbon footprint by 10%, achieving carbon neutrality in 15 out of its 19 markets, demonstrating it is well on track to become carbon neutral this year. In 2019, Signify was named Industry Leader in the Dow Jones Sustainability Index for the third consecutive year and is included in CDP’s prestigious ‘A List’ for climate change since the IPO.
Outlook
For 2020, Signify aims to achieve a further improvement in the Adjusted EBITA margin and to deliver a free cash flow of at least 6% of sales. This outlook excludes the announced acquisition of Cooper Lighting Solutions. An update on the outlook will be provided after the closing of the Cooper Lighting Solutions acquisition, which is expected in Q1 2020, as previously indicated.
Capital allocation
Capital allocation
Signify intends to maintain a robust capital structure and continues to aim towards a financing structure that is compatible with an investment grade profile. Following the announced acquisition of Cooper Lighting Solutions, the company will prioritize deleveraging with strong free cash flows expected to drive down Signify’s net leverage ratio from around 2x at closing to below 1x net debt/EBITDA within three years. The company intends to use EUR 350 million to reduce its debt in 2020.
The company plans to continue to pay a stable to increased dividend per share. While Signify will prioritize deleveraging, it will continue to invest in R&D and other organic growth opportunities. As Signify will focus on integrating Cooper Lighting Solutions, M&A will have a lower priority.
Dividend
The company proposes to pay a dividend of EUR 1.35 per share in cash related to full year 2019, which represents an increase of 3.8% compared with last year, and a pay-out ratio of 47%. The dividend payment is subject to approval by the Annual General Meeting of Shareholders (AGM) to be held on May 19, 2020. Further details will be provided in the agenda for the AGM.
Conference call and audio webcast
Eric Rondolat (CEO) and Stéphane Rougeot (CFO) will host a conference call for analysts and institutional investors at 9:00 a.m. CET to discuss fourth quarter and full-year 2019 results 2020. A live and on-demand audio webcast of the conference call will be available via the Investor Relations website.
Financial calendar
February 25, 2020: Annual report 2019
April 24, 2020: First quarter results 2020
May 19, 2020: Annual General Meeting of Shareholders
May 21, 2020: Ex-dividend date
May 22, 2020: Dividend record date
June 2, 2020: Dividend payment date
June 18, 2020: Capital Markets Day
July 24, 2020: Second quarter and half year results 2020
October 23, 2020: Third quarter results 2020
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, the impacts of 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, establishment of corporate and brand identity, adverse currency effects, pension liabilities, and exposure to international tax laws. Please see “Risk Factors and Risk Management” in Chapter 12 of the Annual Report 2018 for discussion of material risks, uncertainties and other important factors which may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group. Such risks, uncertainties and other important factors should be read in conjunction with the information included in the Company’s Annual Report 2018 and semi-annual report 2019.
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 or 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 18 Reconciliation of non-IFRS measures” in the Annual Report 2018.
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 2018 and semi-annual report 2019.
Changes to financial reporting following announced organizational changes
On January 20, 2020, Signify announced its intent to adapt its business structure to enable a stronger customer focus and enhanced specialization to further increase execution speed. To this end, the company intends to move from its current four business groups (BG) to three divisions: Digital Solutions, formerly known as BG Professional, Digital Products, which combines BG LED and BG Home, and Conventional Products, which is the current BG Lamps. As a consequence, Signify intends to adapt its segment reporting accordingly.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
Signify Investor Relations
Robin Jansen
Tel: +31 6 1594 4569
E-mail: robin.j.jansen@signify.com
Signify Corporate Communications
Elco van Groningen
Tel: +31 6 1086 5519
E-mail: elco.van.groningen@signify.com
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 2019 sales of EUR 6.2 billion, we have approximately 32,000 employees and are present in over 70 countries. We unlock the extraordinary potential of light for brighter lives and a better world. We 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, Twitter, LinkedIn and Instagram. Information for investors can be found on the Investor Relations page.
