Slide 1: Q3 2020 results
Q3 2020 results October 23, 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 and conclusion by Eric Rondolat Q&A 3
Slide 4: Q3 20 sales of EUR 1.7bn, operational profitability of 11.5% and FCF of 214m
Q3 20 sales of EUR 1.7bn, operational profitability of 11.5% and FCF of 214m Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 20 • Sales of EUR 1.7bn, nominal sales growth of 12.1% and CSG of -5.0% -4.2% -8.3% -8.3% -15.3% -22.5% • LED-based sales represented 82% of total sal
Slide 5: Growing profit engines: CSG of -7.9% and Adjusted EBITA margin improvement of 130 bps
Growing profit engines: CSG of -7.9% and Adjusted EBITA margin improvement of 130 bps Adjusted Adjusted Q3 20 CSG % vs LY (EURm) vs LY (bps) EBITA (EURm) EBITA % Adj. EBITA margin remained stable Digital Solutions -11.2% 107 +21 11.7% -60 YoY when including the pro- forma Cooper Digital Products -2.
Slide 6: Digital Solutions Adjusted EBITA margin remained stable year-on-year
Digital Solutions Adjusted EBITA margin remained stable year-on-year when including the pro-forma Cooper Lighting financials in Q3 19 Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 20 1.7% -1.5% • Nominal sales increase of 31.2% as a result of the -14.2% -11.2% consolidatio
Slide 7: Digital Solutions highlights
Digital Solutions highlights Equipped Port of Antwerp Signed partnership with ScaleAQ partnership EDZCOM partnership with smart lighting RB Leipzig to create accelerates switch to accelerates LiFi adoption infrastructure stadium of the future sustainable fish farming in manufacturing industry • Swit
Slide 8: Digital Products Adj. EBITA margin improved by 370 bps
Digital Products Adj. EBITA margin improved by 370 bps, mainly as a result of a strong performance in connected home and solid price management Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 20 0.1% • Nominal sales increased by 1.9%; CSG of -2.0% 0.1% • Connected-based sale
Slide 9: Digital Products highlights
Digital Products highlights Launched UV-C Launched new innovative Introduced Hue Play Extended smart lighting disinfection desk lamp for dual-zone ceiling range gradient lightstrip to step accessibility with new homes in Asia & ME for China up immersive experience WiZ products • Effectively disinfec
Slide 10: Conventional Products Adjusted EBITA margin remained robust at 17.9%
Conventional Products Adjusted EBITA margin remained robust at 17.9% Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 20 • Comparable sales decreased by 11.0% -11.0% • Benefited from strong demand for consumer lamps, UV-C -18.3% -17.8% and horticulture lighting; continued mar
Slide 11: Signify achieves carbon neutrality and sets course to double its positive impact
Signify achieves carbon neutrality and sets course to double its positive impact on the environment and society Year-to-date result Achievement 2020 target 83.6% Increasing energy Sustainable Sustainable revenues 80% revenues efficiency of portfolio LED lamps & 2.734 billion 137% of our commitment (
Slide 12: Content
Content Business and operational performance by Eric Rondolat Financial performance by René van Schooten Outlook and conclusion by Eric Rondolat Q&A 12
Slide 13: Signify Adj. EBITA margin improved by 50 bps as a result of solid pricing management
Signify Adj. EBITA margin improved by 50 bps as a result of solid pricing management, continued COGS and indirect cost savings Adjusted EBITA (in EURm) as % of sales 11.0% +50 bps 11.5% 42 199 169 (47) 22 (10) 53 (30) Q3 2019 Volume / Mix Price CoGS Indirect Costs Currency Scope/ Other Q3 2020 13
Slide 14: Comparable indirect costs reduced by EUR 22m
Comparable indirect costs reduced by EUR 22m, adjusted for currencies and changes in scope 28.7% Key observations as % of sales +140 bps 30.1% • Indirect cost reduction of EUR 22m In EURm 520 • Positive currency impact of EUR 12m 77 442 -22 Adj. R&D 408 • Impact from changes in scope of EUR 112m 65
Slide 15: WoCa decreased by 300 bps as % of sales
WoCa decreased by 300 bps as % of sales, reflecting solid inventory and receivables management Working capital1 (in EURm & as % of sales) Inventories (in EURm & as % of sales) 13.6%2 14.3%3 14.4%3 13.3%3 6.0%2 6.1%3 6.3%3 6.4%3 388 470 452 443 874 1.019 1.032 1.000 -300 bps -210 bps Q4 19 Q1 20 Q2 2
Slide 16: Net debt decreased by EUR 117m
Net debt decreased by EUR 117m In EURm 1,706 -213 1,589 66 -9 32 0 27 -46 26 FCF: EUR +214m Net debt EBITDA Change in Net capex Change in Interest & Tax Other Share Other1 Net debt end of Q2 20 working capital provisions FCF items repurchase end of Q3 20 Net leverage Net leverage of 2.4x of 2.2x 16
Slide 17: Content
Content Business and operational performance by Eric Rondolat Financial performance by René van Schooten Outlook and conclusion by Eric Rondolat Q&A 17
Slide 18: Outlook
Outlook • Given recent developments of the pandemic, Signify does not provide financial guidance for full year 2020 • Signify remains confident in the underlying resilience of its businesses and operating model, and that its liquidity needs are well covered by the financial framework it has in place
Slide 19: Q&A
Q&A 19
Slide 20: Currency movements negatively impacted sales and Adjusted EBITA
Currency movements negatively impacted sales and Adjusted EBITA Q3 20 Sales FX Footprint (% of total) Key observations • Negative FX effect on sales of -3.6%, largely driven by US dollar depreciation and emerging market EUR Other 25% currencies Currencies 30% • Negative FX effect on Adjusted EBITA o
Slide 21: Net income increased by EUR 16m to EUR 90m
Net income increased by EUR 16m to EUR 90m, mainly as a result of higher operational profitability From Adjusted EBITA to net income (in EURm) Key observations Q3 19 Q3 20 Adjusted EBITA 169 199 - Restructuring -24 -25 1 - Acquisition related charges -1 -14 1 Related to Cooper Lighting and Klite 2 -
Slide 22: Free Cash Flow of EUR 214m
Free Cash Flow of EUR 214m Free cash flow (in EURm) Key observations Q3 19 Q3 20 • Free cash flow of EUR 214m versus EUR 45m last year Income from operations 114 131 • Reflects higher profitability, strong working capital Depreciation and amortization 74 82 management and the consolidation of Cooper
Slide 23: Sianty
Sianty