Slide 1: Q1 2020 results
Q1 2020 results April 24, 2020
Slide 2: Important information
Important information Forward-Looking Statements and Risks & Uncertainties This document and the related oral presentation contain, and responses to questions following the presentation may contain, forward-looking statements that reflect the intentions, beliefs or current expectations and projectio
Slide 3: Content
Content Business and operational performance by Eric Rondolat Financial performance by René van Schooten Outlook & conclusion by Eric Rondolat Q&A 3
Slide 4: Q1 sales of EUR 1.4bn, operational profitability of 7.9% and FCF of 112m
Q1 20 sales of EUR 1.4bn, operational profitability of 7.9% and FCF of 112m Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 20 • Installed base of connected light points increased from 56m in -3.3% -4.2% -6.1% -5.0% Q4 19 to 60m in Q1 20 • CSG decreased by 15.3% -15.3% • Adj
Slide 5: COVID-19 update Q1 and actions
COVID-19 update Q1 and actions • Health & safety of employees our highest priority • Supported local partners and communities: donations of UV-C lamps and (solar) luminaires • Global manufacturing capacity restored to more than 80% • Broad range of mitigating actions to preserve profitability and ca
Slide 6: Growing profit engines: Adj. EBITA margin improved by 100 bps to 7.7%
Growing profit engines: Adj. EBITA margin improved by 100 bps to 7.7% Adj. EBITA Adj. Q1 20 CSG % vs LY (EURm) vs LY (bps) (EURm) EBITA % LED -16.2% 46 -8 10.9% -100 Professional -14.2% 43 +11 6.7% +140 Home -8.0% 1 +8 0.9% +700 Total -14.5% 90 +11 7.7% +100 6
Slide 7: LED Adj. EBITA margin declined by 100 bps, mainly due to lower sales volumes
LED Adj. EBITA margin declined by 100 bps, mainly due to lower sales volumes Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 20 -0.2% -1.8% 0.9% • CSG of -16.2%: -2.9% • Both LED lamps and LED electronics were impacted by -16.2% the COVID-19 pandemic • Initially the impact w
Slide 8: LED business highlights
LED business highlights Launched double-ended Introduced the External Launched next Launched Fortimo Cyan LEDtube in Growth Slim Downlight in Latin generation of high- Enhanced Spectrum LED Markets & Greater China America volume panel drivers boards for human centric lighting in offices • Plug-and-p
Slide 9: Professional Adj. EBITA margin improved by 140 bps to 6.7%
Professional Adj. EBITA margin improved by 140 bps to 6.7%, mainly driven by an improvement in gross margin and indirect cost savings Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 20 1.7% -1.5% -5.6% -1.5% • Nominal sales increase of 6.7% reflects consolidation of -14.2% C
Slide 10: Professional business highlights
Professional business highlights Launched Interact Retail Expanded collaboration Expanded solar lighting Helped Cologne to multisite management with Planet Farms to potential to northern become smart city with with Marks & Spencer provide horticulture LED countries Interact City • Centralizes retail
Slide 11: Home – Adj. EBITA margin improved by 700 bps
Home – Adj. EBITA margin improved by 700 bps supported by gross margin improvements and cost measures taken in 2019 Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 20 24.4% 19.0% • CSG of -8.0% • Home started with a solid performance at the beginning 191 of Q1 115 107 108 9.
Slide 12: Home business highlights
Home business highlights Philips Hue #21 in top Expanded Zones control Philips Hue products win Modular Lighting 100 greatest designs of in latest Philips Hue app five Red Dot design launched Hollow & modern times update awards Shellby Hollow Shellby • Fortune magazine ranks • Allows users to contro
Slide 13: Cash engine – Lamps Adj. EBITA margin remained solid at 17.6%
Cash engine – Lamps Adj. EBITA margin remained solid at 17.6% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 20 • Comparable sales decreased by 17.8% -17.9% -18.3% -17.8% -20.3% • Continue to deliver on ‘last company standing’ strategy -25.5% resulting in further market sha
Slide 14: Integration Cooper Lighting well underway, on track to achieve cost synergies
Integration Cooper Lighting well underway, on track to achieve cost synergies Cooper Lighting acquisition successfully completed on March 2, 2020 • Strengthens Signify’s market position • Better positions us to capture growth in the North American lighting market • Together, we’ll drive innovation a
Slide 15: Content
Content Business and operational performance by Eric Rondolat Financial performance by René van Schooten Outlook & conclusion by Eric Rondolat Q&A 15
Slide 16: Signify Adj. EBITA margin: improvement driven by ongoing cost reductions
Signify Adj. EBITA margin: improvement driven by ongoing cost reductions Adj. EBITA (in EURm) as % of sales 7.8% +10 bps 7.9% 115 (66) 14 112 56 1 (49) 42 Q1 19 Volume / Mix Price CoGS Indirect Costs Currency Scope/ Other Q1 20 16
Slide 17: Comparable indirect costs decreased by 11%
Comparable indirect costs decreased by 11%, adjusted for currencies and changes in scope Key observations as % of sales 31.4% +80 bps 32.2% • Underlying indirect cost reduction of EUR 56m In EURm 464 460 • Negative currency impact of EUR 5m 69 -56 Adj. R&D 67 • Impact from changes in scope of EUR 46
Slide 18: WoCa decreased by 320 bps as % of sales
WoCa decreased by 320 bps as % of sales, mainly due to solid inventory management, lower receivables and higher payables Working capital1 (in EURm & as % of sales) Inventories (in EURm & as % of sales) 15.9% 16.5% 9.4% 8.0% 13.6%2 13.3%3 6.0%2 6.1%3 503 588 388 470 999 1.030 874 1.019 -160 bps Q2 19
Slide 19: Net debt increased by EUR 1.2bn due to purchase of Cooper Lighting
Net debt increased by EUR 1.2bn due to purchase of Cooper Lighting partly offset by improved cash position In EURm 1,810 618 33 121 12 1,270 38 52 17 19 FCF: EUR +112m Net debt EBITDA Change in Net capex Change in Interest & Tax Other Purchase Other2 Net debt end of 2019 working provisions FCF items
Slide 20: Content
Content Business and operational performance by Eric Rondolat Financial performance by René van Schooten Outlook & conclusion by Eric Rondolat Q&A 20
Slide 21: Outlook
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. 21
Slide 22: Q&A
Q&A 22
Slide 23: Currency movements positively impacted sales and Adj. EBITA
Currency movements positively impacted sales and Adj. EBITA Q1 20 sales FX footprint (% of total) Key observations • Positive FX effect on sales of +1.3%, largely driven by appreciation US dollar EUR • Positive FX effect on Adj. EBITA of EUR +1m, and Other 30% Currencies neutral effect on the Adj. E
Slide 24: Net income decreased to EUR 27m
Net income decreased to EUR 27m, largely due to higher acquisition related charges and other incidentals From Adj. EBITA to net income (in EURm) Key observations Q1 19 Q1 20 Adj. EBITA 115 112 - Restructuring -20 -13 1 - Acquisition related charges 0 -18 1 Related to Cooper Lighting and Klite 2 - Ot
Slide 25: Free Cash Flow of EUR 112m
Free Cash Flow of EUR 112m Free cash flow (in EURm) Key observations Q1 19 Q1 20 • Free cash flow doubled to EUR 112m, mainly as a result Income from operations 69 43 of strong working capital management in our growing Depreciation and amortization 70 78 profit engines, and the consolidation of Coop
Slide 26: Sianty
Sianty