Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s first-quarter 2020 results. “We were early to mobilize our teams worldwide and implement a broad range of actions to face the unprecedented situation caused by the COVID-19 pandemic. I am particularly satisfied with the successful measures we took to protect the health and safety of our employees and the people around us. We largely restored the performance of our supply chain to minimize the impact on our customers. We rapidly implemented a set of dedicated actions that enabled us to improve our operating margin and double our free cash flow despite a decline in demand,” said CEO Eric Rondolat. “We are building on these achievements to manage our performance in the second quarter as we expect demand to be further impacted. In addition, we are taking extra measures to protect our profitability and cash flow. We have also started to explore new business opportunities arising from the situation whilst remaining very close to our customers. I believe that all these measures will help us to strengthen our market positions.”
COVID-19 actions
From the start of the outbreak, we have been very agile and thorough in dealing with the challenges through global and local crisis response teams. We have implemented a variety of policies including a ban on domestic and international travel, access restrictions to our sites, homeworking, and very stringent hygiene and health measures across our plants, logistic hubs, and R&D centers. We provided protective equipment, such as hand sanitizers, masks, and temperature measurement tools.
We also implemented a broad range of mitigating actions to preserve profitability. These measures include savings in, amongst others, selling expenses, travel costs, and procurement costs. In addition, we have implemented a range of measures to safeguard cash flow, including rigorous working capital management, a curtailment of uncommitted and non-essential capital expenditure, and the withdrawal of the dividend proposal.
We are accelerating and extending mitigating measures, including:
- Supervisory Board and Leadership Team took a 20% salary reduction for Q2
- A significant part of our employees voluntarily supported a 20% worktime reduction and pro-rata pay adjustment for a period of 3 months
- A 6-month delay in merit increases, where possible
- An external hiring freeze
Outlook
Considering the uncertainty about the future course of the pandemic, and the length and depth of the impact on the global economy, Signify does not provide financial guidance at this point in time.
Successfully completed Cooper Lighting acquisition
On March 2, 2020, Signify completed the acquisition of Cooper Lighting Solutions from Eaton. Since the announcement of the transaction, Signify has worked intensively with the Cooper Lighting teams to finalize integration plans which enabled us to start the implementation from day one. As a result, key business systems have been successfully segregated from Eaton and Cooper Lighting is now operating as a business unit within Signify. The agents are committed to the go-to-market approach and associated benefits of the acquisition. The integration teams are also well on track to achieve the anticipated cost savings in procurement, supply chain, and sourcing optimization.