EINDHOVEN, the Netherlands – Signify announced the company’s third quarter 2022 results.
“In the third quarter, we delivered solid topline growth in an increasingly volatile environment. The strong performance of our professional business compensated lower consumer demand and the continued slowdown in China. We managed to improve profitability compared to the second quarter despite the impact of energy costs and currency movements. As expected, our free cash flow generation strengthened, driven by improved profitability and the stabilization of our working capital. Given the uncertain near-term outlook, the continued softness of the consumer segment and of the Chinese market, we now expect to achieve comparable sales growth between 2% and 3% for the full year 2022. Regarding the adjusted EBITA margin and free cash flow, we are targeting the lower end of both guidance ranges,” said CEO Eric Rondolat.
“As we enter the final quarter of 2022, we have shifted gears to adapt the company to a structurally weaker external environment in the coming quarters, when current headwinds and volatility are likely to persist. We will therefore focus on measures to control costs and cash flow, in line with our track record of delivering margin expansion and strong free cash flow generation in difficult environments. While some areas will be more affected, connected energy efficient lighting solutions will continue to benefit from strong demand given the energy prices surge.”
Third quarter 20221
- Signify’s installed base of connected light points increased from 103 million in Q2 22 to 109 million in Q3 22
- Sales of EUR 1,912 million; nominal sales increase of 16.3% and CSG of 4.3%
- LED-based sales represented 83% of total sales (Q3 21: 83%)
- Adj. EBITA margin of 10.4% (Q3 21: 11.1%)
- Net income of EUR 112 million (Q3 21: EUR 94 million)
- Free cash flow of EUR 135 million (Q3 21: EUR 85 million)
- Net debt/EBITDA ratio of 1.5x (Q3 21: 1.8x)
Brighter Lives, Better World 2025
In the third quarter of the year, Signify continued to deliver on 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, mainly driven by energy-efficient and connected LED lighting - Double Circular revenues to 32%:
Circular revenues were at 30% and on track. This positive trend is driven by serviceable and circular luminaires - Double Brighter lives revenues to 32%:
Brighter lives revenues increased to 28%, mainly driven by the Safety & security and consumer well-being portfolios - Double the percentage of women in leadership positions to 34%:
The percentage of women in leadership positions was 27%, stable with Q2. Signify continued to create action plans to address gaps and accelerate its progress. In addition, Signify published its first-ever Diversity, Equity, and Inclusion report.
Outlook
Given the uncertain near-term outlook and the continued softness both of the consumer segment and of the Chinese market, we now expect to achieve comparable sales growth between 2% and 3% for the full year 2022. We are targeting the lower end of the range for both the 11.0-11.4% Adjusted EBITA margin guidance and the 5-7% free cash flow guidance.
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