Signify Nv · EURONEXT:LIGHT
Signify Nv — FY2021 Earnings Presentation
29 slides from Signify Nv's earnings presentation, Jan 28, 2022
Slide 1: Q4 & Full Year 2021 results
Q4 & Full Year 2021 results January 28, 2022
Slide 2: Important information
Important information Forward-looking statements This release contains forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Signify, including statements regarding strategy, estimates of sales growth and future operational results. By their natur
Slide 3: Content
Content 2021 Highlights - Eric Rondolat Q4 21 Performance - Javier van Engelen Full Year 21 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 3
Slide 4: Full Year 2021 Highlights
Full Year 2021 Highlights • Connected lighting sales grew by 21% to EUR 1.4 billion • Our growth platforms grew by 19% to EUR 326 million • 8th consecutive year of adj. EBITA margin progression, improvement of 90 bps in 2021 • Digital Solutions and Digital Products representing more than 80% of sale
Slide 5: Content
Content 2021 Highlights - Eric Rondolat Q4 21 Performance - Javier van Engelen Full Year 21 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 5
Slide 6: Signify reported a Q4 sales of EUR 2.0 billion, adj. EBITA margin of 13.2%
Signify reported a Q4 21 sales of EUR 2.0 billion, an adj. EBITA margin of 13.2% and a free cash flow of EUR 257m Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 21 CSG -5.9% 4.5% 3.2% 14.1% -4.8% • 96 million connected light points (Q3 21: 92 million) • LED-based sales were
Slide 7: Digital Solutions reported a CSG of 11.2% and an adj. EBITA margin of 14.1%
Digital Solutions reported a CSG of 11.2% and an adj. EBITA margin of 14.1% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 21 CSG -10.2% 11.2% -1.8% 12.6% -7.3% • Comparable sales growth of 11.2% • Strong underlying growth • Solid contribution from Cooper Lighting 917 1,045
Slide 8: Digital Solutions highlights
Digital Solutions highlights Adding layer of protection Entering growing market Helping one of South Extending solar & hybrid to diners in Taiwan with with smart solutions for America’s largest airports street lighting benefits to UV-C Equinix datacenters generate energy savings municipalities in It
Slide 9: Digital Products reported a CSG of 1.6% and an adj. EBITA margin of 15.5%
Digital Products reported a CSG of 1.6% and an adj. EBITA margin of 15.5% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 21 CSG 2.5% 1.6% 15.7% 20.4% 2.5% • Comparable sales growth of 1.6% • Particularly strong performance of LED Electronics and Klite • Connected Home categ
Slide 10: Digital Products highlights
Digital Products highlights Expanding options to Accelerating fluorescent Offering unlimited ceiling Enhancing convenience disinfect the air in homes lighting replacement with light patterns with with new reading/desk with UV-C air cleaner new North American TLEDs HexaStyle Downlight lights • UV-C d
Slide 11: Conventional Products reported a CSG of -11.4% and an adj. EBITA of 16.9%
Conventional Products reported a CSG of -11.4% and an adj. EBITA of 16.9% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 21 CSG -11.6% -11.4% -6.1% 4.7% -13.2% • Comparable sales growth of -11.4% • Continued to outperform in declining market 242 219 227 213 202 Q4 20 Q4 21
Slide 12: Adjusted EBITA margin of 13.2% as positive price and sales mix fully compensate higher COGS
Adjusted EBITA margin of 13.2% as positive price and sales mix fully compensate higher COGS In EURm / as % of sales 13.4% -20 bps 13.2% 31 -35 27 -15 -14 265 251 22 EUR +23m Q4 20 Volume Mix Price COGS Indirect Costs Currency Q4 21 Positive mix mainly driven by Price increase, new product net of und
Slide 13: Continued improvement of working capital as higher payables compensate higher inventory levels
Continued improvement of working capital as higher payables compensate higher inventory levels In EURm / as % of sales 4.7%1 -110 bps 3.6% 43 525 -603 313 250 -27 Q4 20 Inventories Trade & other Trade & other payables Other working Q4 21 receivables capital items 13 1Includes sales of Cooper Lightin
Slide 14: Leverage ratio improved from 1.8x in Q3 to 1.4x in Q4 21; repaid EUR 350m of debt
Leverage ratio improved from 1.8x in Q3 21 to 1.4x in Q4 21; repaid EUR 350m of debt In EURm 1,411 1,275 -282 1,156 35 13 -16 3 -37 29 FCF: EUR +257m Net debt Net debt EBITDA Change in Net capex Change in Interest & Tax Other Other1 Net debt end of Q4 20 end of Q3 21 working capital provisions FCF i
Slide 15: Content
Content 2021 Highlights - Eric Rondolat Q4 21 Performance - Javier van Engelen Full Year 21 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 15
Slide 16: Digital Solutions and Digital Products further increased their contribution
Digital Solutions and Digital Products further increased their contribution to sales, Adj. EBITA and Free Cash Flow Sales contribution (in EUR m) Adj. EBITA contribution (in EUR m) Free Cash Flow contribution (in EUR m) 2,288 2,452 339 295 82%1 406 85%1 87%1 79%1 383 82%1 3,252 3,524 330 397 85%1 43
Slide 17: Connected lighting and Growth platforms strongly contributed to Signify's overall growth
Connected lighting and Growth platforms strongly contributed to Signify’s overall growth Sales contribution (in EUR m) • Connected lighting and growth platform sales increased to EUR 1.7 billion in 2021 1,701 1,413 • Connected lighting grew by 21%, driven by strong consumer +21% and professional dem
Slide 18: 2021 component and logistics crisis brought an unexpected challenge
2021 component and logistics crisis brought an unexpected challenge to Signify’s operational performance Supplier Lead-Time by commodity E-Components Scarcity Average number of weeks Number of top escalations All Passives Active Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 20 20 20 20 21 21 21 21
Slide 19: Continued Adjusted EBITA margin expansion despite supply chain constraints
Continued Adjusted EBITA margin expansion despite supply chain constraints and component shortages Digital Solutions CSG Digital Products CSG Conventional Products CSG & Adj. & Adj. EBITA margin (%) & Adj. EBITA margin (%) EBITA margin (%) CSG% 12.6% 11.2% 20.4% 4.7% 15.7% 3.4% 8.8% 2.5% 1.6% -1.8%
Slide 20: Brighter Lives, Better World 2025 results
Brighter Lives, Better World 2025 results Doubling our positive impact on the environment and society 2019 2021 2025 Baseline Result Target Carbon reduction over value chain Better World Climate action 0 60 MT 3241 MT against Paris Agreement Circular economy Circular revenues 16% 25% 32% Food availa
Slide 21: Agreement to acquire Fluence to strengthen Agriculture growth platform
Agreement to acquire Fluence to strengthen Agriculture growth platform Signify to acquire Fluence for USD 272 million in cash • Strengthens Signify’s Agriculture lighting growth platform in North America • Enables Signify to capture full potential of US market for bio- based and non-bio-based crops,
Slide 22: Signify proposes a cash dividend of EUR 1.45 per share for 2021
Signify proposes a cash dividend of EUR 1.45 per share for 2021 Key observations Dividend per share since IPO (in EUR) • The proposed dividend1 of EUR 1.45 per share (EUR 181m) represents a dividend yield of 3.6% over the year-end share 1.45 price of EUR 40.78 1.40 1.35 1.30 1.25 Capital allocation
Slide 23: Content
Content 2021 Highlights - Eric Rondolat Q4 21 Performance - Javier van Engelen Full Year 21 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 23
Slide 24: Outlook 2022
Outlook 2022 • Comparable sales growth in the range of 3-6% % • Continued Adjusted EBITA margin improvement of up to 50 bps • Free cash flow in excess of 8% of sales 24
Slide 25: Q&A
Q&A
Slide 26: Currency movements had a positive impact on sales and a negative impact on Adjusted EBITA
Currency movements had a positive impact on sales and a negative impact on Adjusted EBITA Q4 21 Sales FX Footprint (% of total) Key observations • Currency movements negatively impacted Adjusted EBITA and positively impacted Sales Other Currencies, EUR, 28% • Sales impact of +2.2%, mainly from US do
Slide 27: Net income increased to EUR 170m, benefiting from a higher EBIT and lower net financial expenses
Net income increased to EUR 170m, benefiting from a higher EBIT and lower net financial expenses From Adjusted EBITA to net income (in EURm) Key observations Q4 20 Q4 21 1 Mainly related to Cooper Lighting Adjusted EBITA 251 265 - Restructuring -43 -11 Non-recurring by nature and mainly related to 1
Slide 28: Free Cash Flow of EUR 257m
Free Cash Flow of EUR 257m Free cash flow (in EURm) Key observations Q4 20 Q4 21 • Free cash flow of EUR 257m Income from operations 155 205 • Higher profitability Depreciation and amortization 86 77 Additions to (releases of) provisions 75 30 • Yet, lower release of working capital Utilizations of
Slide 29: Sianty
Sianty