Signify’s Commendable First Quarter Results 2023
May 12, 2023
Signify reports first quarter sales of EUR 1.7 billion, operational profitability of 8.9% and a free cash flow of EUR 51 million
First quarter 20231
- Signify’s installed base of connected light points increased from 114 million in Q4 22 to 117 million in Q1 23
- On track to double the pace of the Paris Agreement
- Sales of EUR 1,678 million; nominal sales decline of -6.1% and CSG of -9.1%
- LED-based sales represented 82% of total sales (Q1 22: 84%)
- Adj. EBITA margin of 8.9% (Q1 22: 10.5%)
- Net income of EUR 28 million (Q1 22: EUR 87 million)
- Free cash flow of EUR 51 million (Q1 22: EUR -189 million)
Signify recently announced the company’s first quarter 2023 results.
“Largely in line with expectations, Q1 2023 saw persistent weakness in the consumer segment and in the indoor professional business, as well as a slowdown in OEM sales. At the same time, we made progress with our 2023 priorities, such as continued price discipline and effective COGS management, which resulted in an improvement in our gross margin. The Adjusted EBITA margin performance of our Conventional Products division returned to historical levels. The company’s free cash flow further recovered, driven by working capital improvements. While our adjusted EBITA margin was impacted by lower fixed cost absorption, we remain steadfastly focused on applying our customary cost discipline,”
“While we expect the remainder of H1 2023 to remain challenging, we continue to see the potential for an improved second half. Given the structural improvements in our gross margin and free cash flow generation, as well as our intensified measures to reduce fixed costs, we confirm our guidance for the full year.”
Eric Rondolat, CEO of Signify
Brighter Lives, Better World 2025
In the first quarter of the year, Signify was on track for all of its Brighter Lives, Better World 2025 sustainability program commitments that contribute to doubling its positive impact on the environment and society.
- Double the pace of the Paris agreement:
Cumulative carbon reduction over the value chain is on track. This is mainly driven by energy-efficient and connected LED lighting, which drive emission reductions in the use phase.
- Double our Circular revenues to 32%:
Circular revenues were 29%, stable versus the previous quarter, yet on track to reach the 2025 target. Circular revenues continue to be driven by serviceable and circular luminaires.
- Double our Brighter lives revenues to 32%:
Brighter lives revenues were 27%, on track to reach the 2025 target. The main contribution continues to be the consumer well-being and Safety & security portfolios.
- Double the percentage of women in leadership positions to 34%:
The percentage of women in leadership positions was 29%, an increase versus the previous quarter and on track to reach the 2025 target. The improvement was mainly driven by new external hires and the internal promotion of women.
Outlook
Signify confirms its guidance for 2023. The company continues to focus its efforts on improving the Adjusted EBITA margin and free cash flow. Signify expects for 2023:
- An Adjusted EBITA margin in the range of 10.5-11.5%
- Free cash flow between 6-8% of sales
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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 first quarter 2023 results. A live audio webcast of the conference call will be available via the Investor Relations website.
Financial calendar
May 16, 2023: Annual General Meeting
May 18, 2023: Ex-dividend date
May 19, 2023: Dividend record date
June 5, 2023: Dividend payment date
July 28, 2023: Second quarter and half-year results 2023
October 27, 2023: Third quarter results 2023
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.
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