Press Release
Signify reports first quarter sales of
First quarter 20221
- Signify's installed base of connected light points increased from 96 million in Q4 21 to 100 million in Q1 22
- Sales of
EUR 1,788 million ; nominal sales increase of 11.8% and CSG of 6.4% - LED-based sales represented 84% of total sales (Q1 21: 82%)
- Adj. EBITA margin of 10.5% (Q1 21: 10.8%)
- Net income of
EUR 87 million (Q1 21:EUR 60 million ) - Free cash flow of
EUR -189 million (Q1 21:EUR 168 million ) - Net debt/EBITDA ratio of 1.6x (Q1 21: 1.4x)
Eindhoven,
“Our main priority in the first quarter was to safeguard and support our Ukrainian employees and their families to the best extent possible. We are happy to report that all of our people are safe, and we were proud to see the very strong engagement from our colleagues and the
“Given the world’s growing need for sustainable, connected and energy efficient lighting, we remain more focused than ever on our strategic priorities. For the remainder of the year, we anticipate a lower performance from our consumer-focused business due to inflationary headwinds. At the same time, we still expect strong demand for our professional business, driven by ongoing investments in the energy transition. Moving forward, our guidance for the year remains within reach, assuming the Chinese market and global supply chain dynamics do not deteriorate further.”
Brighter Lives, Better World 2025
In the first quarter of the year, Signify was on track for most 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 due to the accelerated shift to energy efficient and connected LED lighting, which decreases carbon emissions in the use phase, and Signify's ongoing efforts to decarbonize its supply chain.
- Double our Circular revenues to 32%:
Circular revenues increased to 30%, well on track to reach the target. This positive trend is attributable to the recent upgrade of a family of luminaires, which are now serviceable, and to the further expansion of the serviceable portfolio in outdoor luminaires.
- Double our Brighter lives revenues to 32%:
Brighter lives revenues were 27%, on track to reach the target. The main contributions come from the consumer well-being portfolio, as well as UV-C disinfection and emergency lighting.
- Double the percentage of women in leadership positions to 34%:
The percentage of women in leadership positions was 26%, slightly off track, yet Signify expects to see further progress during the year. In Q1, Signify conducted the first all-employee session of the Powering Inclusion Series with more than 5,000 participants across the company, and celebrated International Women's Day with its global #BreakTheBias campaign. Signify participated in the UN Global Compact’s Target Gender Equality event to share its mentoring practices for improving diverse representation in its organization.
Outlook
Following the solid performance in the first quarter, the strong order intake and the continued momentum in the professional segment, Signify maintains its guidance for 2022. This assumes that the Chinese market and global supply chain dynamics do not deteriorate further.
- Comparable sales growth in the range of 3-6%
- Continued Adjusted EBITA margin improvement of up to 50 bps
- Free cash flow in excess of 8% of sales
Financial review
First quarter | |||
in millions of EUR, except percentages | 2021 | 2022 | change |
Comparable sales growth | 6.4% | ||
Effects of currency movements | 5.2% | ||
Consolidation and other changes | 0.2% | ||
Sales | 1,599 | 1,788 | 11.8% |
Adjusted gross margin | 637 | 684 | 7.5% |
Adj. gross margin (as % of sales) | 39.8 % | 38.3 % | |
Adj. SG&A expenses | -424 | -456 | |
Adj. R&D expenses | -72 | -72 | |
Adj. indirect costs | -496 | -528 | -6.3 % |
Adj. indirect costs (as % of sales) | 31.0 % | 29.5 % | |
Adjusted EBITA | 172 | 187 | 8.6% |
Adjusted EBITA margin | 10.8% | 10.5% | |
Adjusted items | -57 | -41 | |
EBITA | 115 | 146 | 27.1% |
Income from operations (EBIT) | 85 | 115 | 35.5% |
Net financial income/expense | -10 | -6 | |
Income tax expense | -15 | -22 | |
Net income | 60 | 87 | 44.7% |
Free cash flow | 168 | -189 | |
Basic EPS (€) | 0.47 | 0.69 | |
Employees (FTE) | 37,356 | 36,884 |
First quarter
Sales increased by 11.8% to
During the quarter, energy prices increased significantly. Together with higher transportation costs, the increase in energy costs impacted the adjusted gross margin, mainly in Conventional Products due to its energy intensive production processes. As a result of these cost increases, the Adjusted gross margin decreased by 150 bps to 38.3%, yet on the back of a high comparison base in Q1 2021. The company is implementing further price increases to compensate for these effects.
Adjusted indirect costs as a percentage of sales decreased by 150 bps to 29.5%, driven by operating leverage and structural cost savings.
Adjusted EBITA increased by 8.6% to
Restructuring costs were
Net income increased by
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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Conference call and audio webcast
Financial calendar 2022
May 17, 2022 Annual General Meeting
May 19, 2022 Ex-dividend date
May 20, 2022 Dividend record date
May 31, 2022 Dividend payment date
July 29, 2022 Second quarter and half-year results 2022
October 28, 2022 Third quarter results 2022
For further information, please contact:
Signify Investor Relations
Tel: +31 6 1801 7131
E-mail: thelke.gerdes@signify.com
Tel: +31 6 3928 0201
E-mail: leanne.carmody@signify.com
Tel: +31 6 2939 3895
E-mail: abigail.levene@signify.com
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,
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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 2021.
Presentation
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