Signify reports first quarter sales of EUR 1.6 billion, operational
profitability of 10.8% and a free cash flow of EUR 168 million
Press Release
April 30, 2021
Signify reports first quarter sales of EUR 1.6 billion,
operational profitability of 10.8% and a free cash flow of EUR 168
million
First quarter 20211
- Signify's installed base of connected light points increased
from 77 million in Q4 20 to 83 million in Q1 21
- Sales of EUR 1,599 million; 12.0% nominal sales growth and CSG
of 3.2%
- LED-based sales represented 82% of total sales (Q1 2020:
79%2)
- Adj. EBITA margin improved by 290 bps to 10.8%
- Net income increased to EUR 60 million (Q1 20: EUR 27
million)
- Free cash flow increased to EUR 168 million (Q1 20: EUR 112
million)
- Net debt/EBITDA ratio of 1.4x (Q1
20: 2.7x)
Eindhoven, the Netherlands – Signify (Euronext:
LIGHT), the world leader in lighting, today announced the company’s
first quarter 2021 results.
“Our first quarter performance demonstrates the execution of our
strategy, as we report growth driven by our connected businesses
and our growth platforms. The adaptive measures we took in 2020,
combined with continued pricing discipline, cost and working
capital management, resulted in improvements in our operating
margin and free cash flow. Our teams have also begun to execute our
new 'Brighter Lives, Better World 2025' sustainability program,
which aims to double our positive impact on the environment and
society in 2025,” said CEO Eric Rondolat.
“While we see signs of an economic recovery, supply chain
performance is being challenged by component shortages, which are
impacting the first half, and will, to a lesser extent, impact the
second half of the year. We expect the continued vaccination
rollouts and easing of lockdowns to drive an upswing in demand for
our professional portfolio in the second half of the year. We are
therefore aiming for mid-single digit full-year comparable sales
growth and further year-on-year operating margin improvements,
driven by our digital businesses.”
Brighter Lives, Better World 2025
In the first quarter of the year, Signify made its first steps
to achieve the ambitious goals it set for the Brighter Lives,
Better World 2025 sustainability program, making progress on all
four commitments that contribute to doubling its positive impact on
the environment and society. In addition, the CDP Awards 2021
recognized Signify's leadership in Climate action, after the
company had achieved carbon neutrality for all its operations in
the world in 2020.
In Q1 2021, the company has started to make progress against its
ambition of doubling its positive impact on the environment and
society in 2025:
- Double the pace of the Paris agreement:Carbon
reduction over value chain was 18 million tonnes, for which we set
a 2025 target of 340 million tonnes
- Double our Circular revenues to 32%:Circular
revenues were 19%, versus the 2019 baseline of 16% and the 2025
target of 32%
- Double our Brighter lives revenues to
32%:Brighter lives revenues were 23%, versus the 2019
baseline of 16% and the 2025 target of 32%
- Double the percentage of women in leadership positions
to 34%:The percentage of women in leadership positions was
24%, versus the 2019 baseline of 17% and the 2025 target of
34%
Outlook
Following the operational performance in the first quarter and
based on current visibility, Signify now anticipates comparable
sales growth of 3% to 6% for the full year 2021. In addition,
Signify expects to achieve an Adjusted EBITA margin of 11.5% to
12.5% and continues to expect free cash flow to exceed 8% of sales
for the full year 2021. The company reassesses its medium-term
guidance for the period 2021-2023 after each financial year.
Signify has refinanced EUR 350 million of its long-term debt
with short-term loans with a maturity of December 2021 and is
therefore fully committed to repaying EUR 350 million of debt in Q4
2021.
Financial review
|
First quarter |
in €
million, except percentages |
2020* |
2021 |
change |
Comparable sales growth |
|
|
3.2 |
% |
Effects of currency
movements |
|
|
-6.4 |
% |
Consolidation and other
changes |
|
|
15.2 |
% |
Sales |
1,427 |
1,599 |
12.0 |
% |
Adjusted gross margin |
545 |
637 |
16.9 |
% |
Adj. gross margin (as
% of sales) |
38.2% |
39.8% |
|
|
|
|
|
Adj. SG&A expenses |
-393 |
-424 |
|
Adj. R&D expenses |
-67 |
-72 |
|
Adj. indirect costs |
-460 |
-496 |
-7.9 |
% |
Adj. indirect costs
(as % of sales) |
32.2% |
31.0% |
|
|
|
|
|
Adjusted EBITA |
112 |
172 |
53.3 |
% |
Adjusted EBITA
margin |
7.9% |
10.8% |
|
Adjusted items |
-42 |
-57 |
|
EBITA |
70 |
115 |
63.9 |
% |
|
|
|
|
Income from operations
(EBIT) |
43 |
85 |
97.6 |
% |
Net financial
income/expense |
-10 |
-10 |
|
Income tax expense |
-6 |
-15 |
|
Net
income |
27 |
60 |
123.5 |
% |
|
|
|
|
Free cash flow |
112 |
168 |
|
Basic EPS (€) |
0.24 |
0.47 |
|
Employees (FTE) |
38,446 |
37,356 |
|
* For comparability purposes please note that
first quarter 2020 includes only 1 month of Cooper Lighting
performance
First quarterSales amounted to EUR 1,599
million, a nominal increase of 12.0%, including a 6.4% negative
currency effect. After adjusting for a 15.2% change in
consolidation and other changes (mainly related to the
consolidation of Cooper Lighting in 2020), comparable sales
increased by 3.2%. The return to growth was driven by strong sales
in the connected home category, the recovery in China as well as an
improved performance in most of Europe, India and the Middle East.
LED-based sales accounted for 82% of total sales (Q1 2020: 79%1).
The adjusted gross margin increased by 160 bps to 39.8%, largely
driven by a positive mix effect from strong connected home sales,
pricing discipline compensating the initial impact of material cost
inflation, and the consolidation of Cooper Lighting. Adjusted
indirect costs as percentage of sales decreased by 120 bps to
31.0%, supported by continued spending discipline and positive
operating leverage. Adjusted EBITA amounted to EUR 172 million,
representing a EUR 60 million increase versus the same period last
year. The Adjusted EBITA margin improved by 290 bps to 10.8%, with
gross margin and SG&A efficiency equally contributing to the
improvement. Total restructuring costs of EUR 47 million mainly
related to the restructuring of the central organization.
Acquisition-related charges were EUR 14 million and incidental
items generated a EUR 4 million benefit. As a result of the higher
income from operations, net income improved from EUR 27 million to
EUR 60 million compared to the first quarter of last year.
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. 2 2020 includes pro-forma Cooper Lighting for January and
February.
For the full and original version of the press release click
hereFor the presentation click here
Conference call and audio webcastEric 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 2021 first quarter results. A live audio webcast of the
conference call will be available via the Investor Relations
website.
Financial calendar 2021May 18,
2021 - Annual General MeetingMay 20,
2021 - Ex-dividend dateMay 21, 2021
- Dividend record dateJune 1, 2021
- Dividend payment dateJuly 23, 2021
- Second quarter results 2021October 29,
2021 - Third quarter results 2021
For further information, please
contact:Signify Investor RelationsThelke
GerdesTel: +31 6 1801 7131E-mail: thelke.gerdes@signify.com
Signify Corporate
CommunicationsElco van Groningen Tel: +31 6 1086 5519
E-mail: elco.van.groningen@signify.com
About SignifySignify (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 2020 sales of EUR 6.5 billion, we
have approximately 37,000 employees and are present in over 70
countries. We unlock the extraordinary potential of light for
brighter lives and a better world. We achieved carbon neutrality in
2020, have been in the Dow Jones Sustainability World Index since
our IPO for four consecutive years and were named Industry Leader
in 2017, 2018 and 2019. News from Signify is located at the
Newsroom, Twitter, LinkedIn and Instagram. Information for
investors can be found on the Investor Relations page.
Important Information
Forward-Looking Statements and Risks &
UncertaintiesThis 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 COVID-19, 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. Please
see “Risk Factors and Risk Management” in Chapter 12 of the Annual
Report 2020 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 2020.
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 InformationAll 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 MeasuresCertain 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 2020.
Change in reporting segmentsEffective Q2 2020,
to further adapt to the industry transition and strengthen customer
centricity, Signify changed the organizational structure, which
included changing the previously four business groups (BG’s) to
three divisions. Division Digital Solutions (formerly BG
Professional, including Cooper Lighting Solutions) offers
luminaires, lighting systems and services for the Internet of
Things to the customers in the professional segment; Division
Digital Products (combines BG LED and BG Home). This division
offers LED lamps, LED luminaires and connected products, including
Hue and Wiz, and LED electronics to professional customers, OEM
partners and consumers. By bringing together its entire consumer
LED portfolio, Signify can better manage this lighting category for
its channel partners; and Division Conventional Products (formerly
BG Lamps) continues to focus on conventional lamps and electronics
for professional customers, OEM partners and consumers. It is
organized separately to bring a clear distinction between
conventional and digital offerings.
In line with this change, effective Q2 2020, Signify's operating
segments are Digital Solutions, Digital Products, and Conventional
Products. The segments are organized based on the nature of the
products and services. ‘Other’ represents amounts not allocated to
the operating segments and includes certain costs related to
central R&D activities to drive innovation as well as group
enabling functions.
PresentationAll 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 2020.
Market Abuse RegulationThis press release
contains information within the meaning of Article 7(1) of the EU
Market Abuse Regulation.
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