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Signify Announces 4Q Results, Discusses Layoffs

Signify Announces 4Q Results, Discusses Layoffs

EINDHOVEN, the Netherlands – Signify announced the company’s fourth quarter and full-year 2023 results.

“In Q4, our gross margin was again strong, confirming our improving operational performance. This brought our adjusted EBITA margin into double digits for the full year. While we continued to face adverse market conditions in some geographies and in the consumer and OEM segments, we have gained share with our professional connected systems. We over-delivered against our free cash flow guidance, with close to EUR 600m in cash, representing 8.7% of sales. We are also proud to have surpassed the circular revenues sustainability target two years ahead of schedule. I would like to thank our employees and partners for their continued hard work and dedication to help us achieve these results,” said Eric Rondolat, CEO of Signify.

“While we anticipate challenging conditions will persist through the year ahead, I am confident in our strategy and in our proven ability to adapt. In the past quarter, we introduced a new operating model and measures that will enhance our performance and deliver annualized savings in excess of EUR 200 million. We will continue to protect our gross margin and enhance our focus on costs. We have developed strategic advantages that will help us to gain share and improve profitability while generating a strong free cash flow in 2024.”

Brighter Lives, Better World 2025

Signify completed the third year of its Brighter Lives, Better World 2025 sustainability program, making continued progress towards doubling its positive impact on the environment and society by the end of 2025. Signify is on track to deliver on three of its sustainability program commitments.

  • Double the pace of the Paris Agreement
    Signify is on track to reduce emissions across the entire value chain by 40% against the 2019 baseline – double the pace required by the Paris Agreement. This is driven by Signify’s leadership in energy efficient and connected LED lighting solutions, which significantly reduce emissions during the use phase.
  • Double Circular revenues
    Circular revenues increased to 33%, up 1% over the third quarter, surpassing the 2025 target of 32%. The main contribution was from serviceable luminaires, with a strong performance from both consumer and professional.
  • Double Brighter Lives revenues
    Brighter Lives revenues remained at 31%, on track to reach the 2025 target of 32%. This includes a strong contribution from professional luminaires that support the well-being of wildlife.
  • Double the percentage of women in leadership
    The percentage of women in leadership positions remained at 29%, slightly off track versus the 2023 target. Signify continues its actions to increase representation through focused hiring practices for diversity across all levels, and through retention and engagement actions to reduce attrition.

In the fourth quarter, Signify received several external recognitions for its leadership in Sustainability. Signify was included in the DJSI World Index for the 7th consecutive year, was included in the DJSI Europe Index for the 6th time, and achieved the EcoVadis Platinum rating for the 4th consecutive year.


For 2024, Signify expects:

  • An Adjusted EBITA margin improvement of up to 50 bps, including first benefits from the announced restructuring program
  • Free cash flow generation of 6-7% of sales, including an incremental and non-recurring negative impact of around EUR 150 million related to the restructuring program and a reduction of US pension liabilities

For the full and original version of the press release click here.

In the earnings call on January 26th, Signify’s CEO and Chairman of the Board of Management gave further details for the company’s restructuring plan, announced in December.

In the past 10 years, we have been organized with a clear focus on processes and also on improving processes. This structure served us well as we transitioned from 74% conventional lighting in 2013 to 85% of LED lighting today. The new model will increase accountability by giving the new businesses end-to-end P&L responsibility from offer development to manufacturing and sales and marketing, enabling simple process, alignment and execution. In addition, by reallocating resources and reducing centralization, we are simplifying our structure and reducing our nonmanufacturing cost by over of EUR 200 million.

These changes to our organization and the cost restructuring program will be implemented through 2024 with the majority being achieved by Q2. The implementation itself is subject to proceeding with the Signify’s social partners.

Overall, around 1,000 people will be impacted, representing 7% of our nonmanufacturing cost population. The plan will affect people in 37 countries with still ongoing negotiations for 28 social plans. We will only be able to implement the new structure fully after having concluded negotiations with our social partners. At that point in time, we will report under the new structure and provide comparable financials.

But for Q1 financial results, we will report the financials at group level as we normally do. We’ll report the sales level and comparable sales growth for the 4 new businesses.

And if the discussion with our social partners are finalized before the end of March, we will start reporting fully under the new structure, including adjusted EBITA for each of the businesses. If not, the profitability by business will be disclosed as of Q2.

Now with regards to the EUR 200 million of cost savings, approximately 2/3 of the savings are expected to come through in full year 2024 and the remainder in 2025. This means that the nonmanufacturing cost level for the full year 2025 is expected to show a EUR 200 million reduction against full year 2023.

Now let me go to the restructuring costs. So the restructuring costs related to the new organizational setup and cost measures are split across 2023 and 2024, of which, the majority was already taken at the back end of 2023. Most of the cash outflow, however, will occur in 2024. And as stated in the press release, we are expecting an incremental cash outflow of approximately EUR 150 million, which breaks down into EUR 100 million due to the incremental impact of restructuring in 2024 and EUR 50 million reduction of our U.S. pension liabilities.


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