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%


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 growth3.2 %
Effects of currency movements-6.4 %
Consolidation and other changes15.2 %
Sales1,4271,599 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 margin7.9%10.8%
Adjusted items -42 -57
EBITA 70 115 63.9  %
Income from operations (EBIT)438597.6 %
Net financial income/expense -10 -10
Income tax expense -6 -15
Net income2760123.5 %
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 quarter
Sales 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 here

For the presentation click here

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 2021 first quarter results. A live audio webcast of the conference call will be available via the Investor Relations website.

Financial calendar 2021
May 18, 2021   -   Annual General Meeting
May 20, 2021   -   Ex-dividend date
May 21, 2021   -   Dividend record date
June 1, 2021   -   Dividend payment date
July 23, 2021   -   Second quarter results 2021
October 29, 2021   -   Third quarter results 2021

For further information, please contact:
Signify Investor Relations
Thelke Gerdes
Tel: +31 6 1801 7131

Signify Corporate Communications
Elco van Groningen
Tel: +31 6 1086 5519

About Signify
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 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 & 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 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 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 2020.

Change in reporting segments
Effective 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.

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 2020.

Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

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