Eindhoven, the Netherlands – Signify (Euronext: LIGHT), today announced the company’s 2019 third-quarter results. “We are pleased with the comparable sales growth and improved operational profitability of our growing profit engines in the third quarter, against the backdrop of ongoing economic headwinds across the world. In the first nine months, we delivered a solid improvement in operational profitability, net income and free cash flow,” said CEO Eric Rondolat. “While market conditions continue to deteriorate, we remain confident that we will be able to improve our profitability for 2019, albeit somewhat less than we previously anticipated.”
Third quarter 20191
- Signify’s installed base of connected light points increased from 50 million in Q2 19 to 53 million in Q3 19
- CSG growing profit engines +1.0%; CSG total Signify -5.0%
- LED-based comparable sales grew by 2.6% to 78% of sales (Q3 18: 70%)
- Adj. indirect costs down EUR 22 million on a currency comparable basis, a reduction of 4.7%
- Adj. EBITA margin reduced by 100 bps to 11.0%, due to a very high comparison base in BG Lamps and currency impact of -30 bps
- Adj. EBITA margin of the growing profit engines increased by 80 bps with each of the three BGs improving
- Net income of EUR 74 million (Q3 18: EUR 93 million), reflecting lower operational profitability and higher restructuring costs
- Free cash flow amounted to EUR 45 million (Q3 18: EUR 64 million) reflecting phasing of payables and receivables as previously indicated at the end of Q2
Although sales in the second half of the year are impacted by continuing deteriorating market conditions, Signify remains confident that it will be able to improve its Adjusted EBITA margin for 2019, albeit somewhat less than previously anticipated. Signify now expects the Adjusted EBITA margin to be in the range of 10.3% to 10.6%.
The comparable sales growth of the growing profit engines (LED, Professional and Home combined) for 2019 is expected to be flat. The comparable sales growth of BG Lamps for 2019 is expected to decline at a pace which is towards the higher end of the previously indicated range of -24% to -21%.
The company confirms that its free cash flow, excluding the positive impact from IFRS 16, is expected to be above 5% of sales.Tagged with financial, Signify