EINDHOVEN, the Netherlands – Signify today announced the company’s 2020 second quarter results.
“In Q2, the engagement of our teams to face the challenges posed by the pandemic have been second to none. The implementation of the safety measures helped to keep our people safe. We successfully managed to maintain operational profitability while improving free cash flow in adverse conditions. I am proud to finish the quarter with a strengthened cohesion across the organization, evidenced by our highest ever employee Net Promotor Score,” said CEO Eric Rondolat. “We remain very cautious about market developments but confident on our ability to further adapt. The disciplined execution of our strategy and the acceleration of the integration of Cooper Lighting will continue to drive our growth platforms and new business opportunities. Last but not least, let me share our excitement for achieving carbon neutrality in 2020, and for renewing our five-year sustainability program with even more ambitious commitments later in the year.”
Resilience in a challenging quarter
Health & safety of Signify’s employees and stakeholders remained the number one priority. 79% of all our locations are open. The supply chain is 98% operational and employees are gradually returning to the offices in a structured and safe way. At a very early stage of the COVID-19 outbreak, Signify identified a broad range of mitigating actions to preserve profitability. These measures included non-structural cost savings of EUR 43 million in the second quarter, related to solidarity measures which were supported by our employees and government contributions. Next to this, the company has also implemented a range of measures to safeguard free cash flow, of which EUR 40 million was related to a temporary positive impact from real estate proceeds and government-extended payment terms for taxes.
Continuous commitment to Sustainability
In the first half of 2020:
- Sustainable revenues represented 83% of the total revenues, exceeding 2020 target of 80%.
- Signify sold 2.6 billion LED lamps and luminaires in the period from 2015 till the first half of 2020, well ahead of its commitment to deliver more than 2 billion LED lamps and luminaires by the end of 2020.
- The company also decreased its waste to landfill in Q2 by 89% compared with last year and is ahead of its targets related to a safe & healthy workplace and a sustainable supply chain.
- The company reduced its carbon footprint by 26% compared with last year and is well on track to achieve carbon neutrality this year.
In June 2020, Signify announced that it will start phasing out plastics with the aim to be plastic-free on all consumer-related packaging in 2021.
New sustainability targets as part of our coming five-year program will be announced in the second half of 2020.
Outlook
Considering the persistent uncertainty about the future course of the pandemic, and the length and depth of the impact on the global economy, Signify still does not provide financial guidance at this point in time. However, Signify is confident in the underlying resilience of its businesses and operating model, and that its liquidity needs are well covered by the financial framework it has in place. In line with the company’s policy to prioritize future deleveraging, Signify confirms its intention to utilize up to EUR 350 million to reduce gross debt in 2020.
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 Excluding Cooper Lighting
3 Pro-forma incl. Cooper Lighting and Klite