Signify reports full year 2020 sales of EUR 6.5 billion, an Adj. EBITA margin of 10.7% and a free cash flow of EUR 817 million


Press Release

January 29, 2021

Signify reports full year 2020 sales of EUR 6.5 billion, an Adj. EBITA margin of 10.7% and a free cash flow of EUR 817 million

Fourth quarter 20201

  • Sales of EUR 1,878 million; 7.4% nominal sales growth and CSG of -5.9%
  • Adj. indirect costs down EUR 18 million, or -3.9% excl. FX effects, changes in scope2 and provisions for the reimbursement of employee contributions
  • Adj. EBITA margin improved by 20 bps to 13.4%
  • Net income increased by 39.4% to EUR 137 million
  • Free cash flow of EUR 332 million (Q4 19: EUR 308 million)

Full year 2020

  • Signify’s installed base of connected light points increased from 56 million at YE 193 to 77 million at YE 20
  • Sales of EUR 6,502 million, nominal sales growth of 4.1% and CSG of -12.7%
  • LED-based sales represented 80% of total sales (FY 19: 79%4)
  • Adj. indirect costs down EUR 166 million, or -9.1% excl. FX effects and changes in scope2
  • Adj. EBITA grew by 7.2% to EUR 695 million
  • Adj. EBITA margin improved by 30 bps to 10.7%
  • Net income increased by 25.4% to EUR 335 million (FY 19: EUR 267 million)
  • Free cash flow amounted to EUR 817 million (FY 19: EUR 529 million), representing 12.6% of sales
  • Net debt position of 1,275 million at year-end 2020 with a net debt/EBITDA ratio of 1.7x
  • Cooper Lighting and Klite integration and synergies ahead of plan
  • Successful completion of Brighter Lives, Better World 2020 sustainability program and achievement of  carbon neutrality for all operations across the world


  • Proposal to pay extraordinary cash dividend of 1.35 per share, announced on January 13, 2021
  • Proposal to pay regular cash dividend of EUR 1.40 per share over 2020

Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s 2020 full year results.

“While our industry was severely impacted by the pandemic, we managed to strengthen our financial performance. Our gross margin increased due to rigorous price and cost management, resulting in our seventh consecutive year of Adjusted EBITA margin improvement. From the start of the crisis, we were disciplined in working capital management, allowing us to generate a record-high free cash flow of EUR 817 million. As per our strategy, the contribution from our digital divisions increased substantially in 2020. In line with our governance principles, we decided to pay back both our employees and our shareholders, who have supported us since the beginning of the crisis. At the same time, we confirmed a continued deleveraging commitment. It was also a year in which we increased the installed base of connected light points to 77 million, illustrating the growing interest for connected lighting. Lastly, we overachieved on our 2020 sustainability goals, including carbon neutrality,” said CEO Eric Rondolat.

“The ongoing nature of the pandemic means we remain cautious about market developments in 2021 but we are confident in our ability to further adapt, as demonstrated throughout 2020. As outlined during our Capital Markets Day in December, we are optimizing our costs in several ways to enhance our competitiveness in a rapidly transforming Lighting industry. We are making our central organization leaner in order to reduce our indirect costs as a percentage of sales, which have increased due to the COVID-19 pandemic. Regrettably, these changes will result in a number of positions being lost and we will support impacted employees. At the same time, we will continue to innovate and develop our growth platforms to capture new business opportunities in line with our strategy. I see the further integrations of Cooper and Klite positively impacting our performance. 2021 is also the first year of our new sustainability program and marks a great opportunity to embark on the exciting journey to double our positive impact on the environment and society in the next five years.”

Environment, Society & Governance

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 2020, Signify successfully completed its Brighter Lives, Better World 2020 sustainability program, even outperforming on many of its ambitious commitments.

Sustainable revenues:

  • 84.1% of revenues from a portfolio of sustainable products, systems and services, exceeding the 2020 target of 80%
  • 2.9 billion LED lamps and luminaires delivered since 2015 compared to a target of more than 2 billion

Sustainable operations:

  • Carbon neutrality for all operations across the world
  • Usage of 100% renewable electricity
  • Zero waste to landfill across all manufacturing sites
  • Best-ever safety performance (Total Recordable Case rate of 0.22, target <0.35)                                               
  • 99% performance rate in supplier sustainability (target 90%)
  • Lit the lives of 5 million people through expansion of solar lighting

In September 2020, Signify embarked on a course to have doubled its positive impact on the environment and society in 2025 with the following ambitions:

  • Double the pace at which we achieve the 1.5 C scenario of the Paris Agreement
  • Double our Circular revenues to 32%
  • Double our Brighter Lives revenues to 32%
  • Double our % of women in leadership to 34%

Signify’s commitment is recognized in the Dow Jones Sustainability World Index and the CDP A-List for Climate.


 Signify is committed to the following medium-term guidance for the period 2021-2023:

  • Yearly comparable sales growth of 0% to 5%
  • Adj. EBITA margin of 11% to 13% in 2023
  • Free cash flow above 8% of sales for the period 2021-2023
  • ROCE of at least 11% for the period 2021-2023

For 2021, Signify expects positive comparable sales growth, the level of which will depend on the recovery pattern in its markets. In addition, the company expects to continue its steady progress towards its medium-term Adj. EBITA margin objective. Cash flow, following two years of significant structural working capital improvements, is expected to exceed 8% of sales. As guided for the mid-term, this includes a higher initial cash outflow for cost restructuring and continued post-merger integration activities.

Capital allocation

Signify remains focused on maintaining a robust capital structure and is committed to an investment grade rating. The company plans to pay an increasing annual dividend per share in cash year-on-year and will continue to prioritize deleveraging to strengthen its balance sheet and return to a leverage ratio of reported net debt/EBITDA of less than 1x by the end of 2022. Signify will also continue to invest in R&D and other growth opportunities, while pursuing selective M&A opportunities in line with its strategic priorities.

In line with its commitment to its shareholders, Signify proposes to declare a cash dividend of EUR 1.40 per share for 2020. This is in addition to the previously proposed extraordinary cash dividend of EUR 1.35 per share, announced on January 13, 2021. The amount of extraordinary dividend is in line with the dividend proposal of EUR 1.35 for 2019, which was withdrawn to ensure the company's resilience and to strengthen its financial position during the COVID-19 crisis. Both dividend proposals will be subject to approval at the Annual General Meeting of Shareholders (AGM) to be held on May 18, 2021. Further details will be provided in the agenda for the AGM.

In addition to this, the company announced on January 13, 2021, that it intends to repay a minimum of EUR 350 million of debt in 2021, thereby confirming its commitment to further deleverage.

Financial review

Fourth quarter Twelve months
2019 2020 change in millions of EUR, except percentages 2019 2020* change
-5.9 %Comparable sales growth-12.7 %
-4.8 %Effects of currency movements-2.2 %
18.0 %Consolidation and other changes19.0 %
1,7501,878 7.4  % Sales6,2476,502 4.1  %
661 755 14.2  % Adjusted gross margin 2,360 2,556 8.3  %
37.8%40.2%Adj. gross margin (as % of sales)37.8%39.3%
-389 -458 Adj. SG&A expenses -1,544 -1,695
-68 -76 Adj. R&D expenses -270 -287
-457 -534 -16.7  % Adj. indirect costs -1,813 -1,982 -9.3  %
26.1%28.4%Adj. indirect costs (as % of sales)29.0%30.5%
232 251 8.3  % Adjusted EBITA 648 695 7.2  %
13.2%13.4%Adjusted EBITA margin10.4%10.7%
-67 -66 Adjusted items -148 -159
164 185 12.8  % EBITA 500 536 7.1  %
13815511.8 %Income from operations (EBIT)4014163.6 %
-11 -12 Net financial income/expense -43 -54
-29 -6 Income tax expense -93 -27
9813739.4 %Net income26733525.4 %
308 332 Free cash flow 529 817
0.74 1.05 Basic EPS (€) 2.08 2.58
32,005 37,926 Employees (FTE) 32,005 37,926

* For comparability purposes please note that FY 2020 includes only 10 months of Cooper Lighting performance

Fourth quarter
Sales amounted to EUR 1,878 million, a nominal increase of 7.4%. Adjusted for 18.0% changes in consolidation and other changes and 4.8% negative currency effects, comparable sales decreased by 5.9%. LED-based sales accounted for 82% of total sales. The adjusted gross margin increased by 240 bps to 40.2% largely driven by a robust performance in the connected home category, rigorous price management, procurement savings and the consolidation of Cooper Lighting. The adjusted indirect costs increased by EUR 77 million. Excluding currency effects, changes in scope, and provisions for the reimbursement of solidarity contributions to its employees, the adjusted indirect costs decreased by EUR 18 million, or -3.9%. Adjusted EBITA amounted to EUR 251 million, an 8.3% increase compared to the same period last year. The Adjusted EBITA margin improved by 20 bps to 13.4%, mainly driven by gross margin improvement.

Total restructuring costs were EUR 43 million and acquisition-related charges and other incidentals were EUR 22 million. Net income increased from EUR 98 million last year to EUR 137 million in Q4 20, driven by higher EBIT and lower income tax expense due to a one-time non-cash tax benefit resulting from the revaluation of deferred tax assets. Free cash flow amounted to EUR 332 million, reflecting profitability improvements and structural working capital improvement.

Full year
Sales amounted to EUR 6,502 million, a nominal increase of 4.1%. Adjusted for 19.0% changes in consolidation and other changes and 2.2% negative currency effects, comparable sales decreased by 12.7%. LED-based sales represented 80% of sales compared with 79% in 2019. Adjusted gross margin improved by 150 bps to 39.3%, driven by the consolidation of Cooper Lighting, a strong performance in connected home lighting and rigorous price and cost management. Adjusted indirect costs increased by EUR 169 million, or 150 bps as a percentage of sales. Excluding currency effects and changes in scope, adjusted indirect costs decreased by EUR 166 million, as a result of continued implementation of cost reduction initiatives. Adjusted EBITA amounted to EUR 695 million compared with EUR 648 million last year and was negatively impacted by EUR 38 million of currency effects. The Adjusted EBITA margin improved by 30 bps to 10.7%, including an adverse currency effect of 30 bps. This improvement was mainly driven by Digital Products and Digital Solutions, as both divisions are maturing their profit margin profile.

Total restructuring costs were EUR 83 million, acquisition-related charges were EUR 63 million and incidental items were EUR 13 million. Net income was EUR 335 million compared with EUR 267 million last year, largely driven by lower income tax expense, primarily due to a one-time non-cash tax benefit from changes in the organizational structure as well as from the revaluation of deferred tax assets. Free cash flow amounted to EUR 817 million compared with EUR 529 million last year, largely driven by a second year of structural working capital improvement and lower restructuring payout. Free cash flow was 12.6% of sales in 2020.

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 B, Reconciliation of non-IFRS financial measures, of this press release.
2Changes in scope relate to the consolidation of Cooper Lighting and Klite.
32019 includes pro-forma Cooper Lighting and WiZ.
42019 includes pro-forma Cooper Lighting.

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 fourth quarter and full year 2020 results. A live audio webcast of the conference call will be available via the Investor Relations website.

Financial calendar 2021
February 23, 2021              Annual Report publication
April 30, 2021                      First quarter results 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 38,000 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 2019 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 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 2019.

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 2019 and semi-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.

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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