Signify Nv · EURONEXT:LIGHT
Signify Nv — Shareholder Meeting (May 2024)
56 slides from Signify Nv's shareholder meeting presentation, May 14, 2024
Slide 1: Annual General Meeting of Shareholders 2024
Slide 2: Presentation by CEO Eric Rondolat
|. Presentation by CEO Eric Rondolat ®ignify
Slide 3: Delivering our strategy in a challenging market
LED and Philips Dynalite- Finanzauto HQ, Spain Full year 2023 Delivering our strategy in a challenging market * Adjusted gross margin expanded to 38.2% (37.3% FY 22) * Free cash flow 8.7% sales (FY 22: 5.9%) * Adjusted EBITA margin was 10.0% * Connected lighting & growth platforms reached 30% sales
Slide 4: Brighter Lives, Better World 2025: 2023 results
Brighter Lives, Better World 2025: 2023 results Doubling our positive impact on the environment and society 2019 2023 2025 Baseline Result Target = 18350 . c Climate action Q Carbon reduction over value 0 394 MT s chain against Paris Agreement . oO Bp & Circular economy Circular revenues 16% (8% 32%
Slide 5: Signify's Frontiers strategy
Signify’s 5 Frontiers strategy
Slide 6: Build a customer-centric organization
Signify’s 5 Frontiers strategy Build a customer-centric organization Strong customer Net Promoter Score of 53 globally
Slide 7: Deliver differentiated lighting offers
Signify’s 5 Frontiers strategy Deliver differentiated lighting offers 4.2% of sales invested in R&D and 20,000 patent rights Double digit growth on offerings including b- brand, private label and ultra energy efficient
Slide 8: Drive growth for sustainability
Signify’s 5 Frontiers strategy Drive growth for sustainability Connected lighting and growth platforms reached 30% of sales LED now 85% of sales
Slide 9: Digitalize and transform for the future
Signify’s 5 Frontiers strategy Digitalize and transform for the future Direct online sales remained stable at 12.7% of revenues Generative Al deployed in customer care centers
Slide 10: Be a great place to work
10 Signify’s 5 Frontiers strategy Be a great place to work Employee Net Promoter Score of 26 63% active learners on digital learning platform
Slide 11: Signify is the world leader in lighting
Signify is the world leader in lighting We provide high-quality energy efficient lighting products, systems and services Light sources Luminaires Systems and Services 32,000 Conventional, LED people in 74 countries and Connected
Slide 12: Transition to LED and Connected lighting
Transition to LED and Gonnected lighting Transition from conventional to LED-based sales (in % of total sales) Conventional 85% Connected LED 22% 30% and growth platforms 2012 2023 12 Philips Radii auto-linkable Ultra Efficient solar lights
Slide 13: Our new operating model
Our new operating model Central functions Central functions Professional Consumer OEM Conventional i Conventional ‘Specialty lighting Digital projection Digital Solutions Digital Products Conventional Conventional lamps. lighting Agriculture Digital == Lamp ; electronics LED electronics * Offer * Of
Slide 14: First quarter 2024
Color Kinetics - Vienna City Hall, Austria First quarter 2024 * Sales of EUR 1.5 billion * Comparable sales of -10.1% * Operational profitability was 8.3% * Connected light points rose to 126 million - LED-based sales represented 87% of total sales ¢ Free cash flow of EUR 80 million @®ignify
Slide 15: Outlook 2024
15 Outlook 2024 Signify guidance for 2024 is: « Adjusted EBITA margin of up to 50bps ° Free cash flow between 6-7% of sales ingsdalen tunnel, Bybanen a
Slide 16: Connected Lighting Systems & Growth platforms
16 Gonnected Lighting Systems & Growth platforms ®ignify
Slide 17: Safety & security
17 Connected Lighting Systems & Growth platforms Safety & security Philips Hue and WiZ offer a complete connected lighting and monitoring system for the home ®ignify
Slide 18: Climate Action
18 Connected Lighting Systems & Growth platforms Climate Action Solar lights address the challenge of public lighting in a dramatic landscape in North Sumatra, Indonesia ®ignify
Slide 19: Circular economy
19 Connected Lighting Systems & Growth platforms Circular economy Custom, 3D-printed home luminaires for fans of Werder Bremen ®ignify
Slide 20: Food availability
20 Connected Lighting Systems & Growth platforms Food availability ATL Premium cucumbers, 52 weeks a year, with Philips horticulture solutions at Great Lakes Greenhouses, Canada ®ignify
Slide 21: Health & well-being
21 Connected Lighting Systems & Growth platforms Health & well-being F9 floor lamp expands EyeCare concept from the desktop to the whole room (GOOD HEALTH AND WELL-BEING ®ignify
Slide 22: Health & well-being
22 Connected Lighting Systems & Growth platforms Health & well-being ArcMED fixtures with VividTune Tunable White from Cooper Lighting Solutions for improved patient well-being at UMass Memorial Health, USA (GOOD HEALTH AND WELL-BEING ®ignify
Slide 23: Corporate Social Responsibility through the Foundation
Corporate Social Responsibility through the Foundation 9.4 million lives lit. On track to light 10 million lives by end-2025 Since 2023, Signify Foundation has 52 ongoing or completed projects in its new flagship program. Brighter living: informal or refugee settlements Brighter learning: schools, p
Slide 24: Thank you
Thank you — = ®ignify
Slide 25: 2. Remuneration report 2023
2. Remuneration report 2023 ®ignify
Slide 26: Remuneration Board of Management - Structure
Remuneration Board of Management - Structure Annual Cash Incentive Long-Term Equity-Based (STI)? Incentive (LT!)2 * CEO target - 80% * CEO target - 100% * Other Members target - 60% * Other Members target - 80% Performance range: Performance range: * Minimum - Ox * Minimum - Ox * Maximum - 2x * Maxi
Slide 27: The Annual Incentive 2021 consists of two major components
The Annual Incentive 2021 consists of two major components: • • • 27
Slide 28: Long-term Incentive 2023 Performance Measures
28 Long-term Incentive 2023 Performance Measures ( N\A 5 Frontiers strategy Brighter Lives, Better World 2025 Program Better World Climate action Circular economy Carbon footprint reduction comparedto Parisover value chain Circular revenues Brighter lives revenues ‘Women in leadership positions = Re
Slide 29: Annual Incentive (STI) Realization 2023
Annual Incentive (STI) Realization 2023 Financial Component (80% weighting) STI 2023 (€K) Threshold Weighted ‘50% Actual Pay-out ay-out EH.E.Rondolat 439.8 sams Y pey Comparable sales growth (3, (83 1 Overall financial H.M. Chitale ? 135.8 ie EES 10.6% 10.0% % outcome ~ 40.8% Free cash flow 6.0% 8.7
Slide 30: 2021 Long-term Incentive Grant Performance
2@2I| Long-term Incentive Grant Performance Achievement and Vesting Levels Relative TSR Performance 0% ROCE Performance 0% Free Cash Flow Performance Sustainability Performance 0% 141.7% Resulting final vesting 2021 LTI grant: 35.5% 0 ®ignify
Slide 31: Remuneration Supervisory Board 2023
Remuneration Supervisory Board 2023 Supervisory Board Membership Committees compensation! Total A.P.M. van der Poel € 110,000 € 25,000 € 5,000 € 140,000 G. van der Aast € 85,000 € 28,000 € 5,000 € 118,000 S. Bechu? € 46,875 € 14,075 € 17,500 € 78,450 P. Knapp € 75,000 € 32,500 € 17,500 € 125,000 R.S
Slide 32: Remuneration Board of Management - Outlook 2024
Remuneration Board of Management - Outlook 2024 ©ignity
Slide 33: Overview of Total Direct Compensation for the Board of Management
Overview of Total Direct Gompensation for the Board of Management Outlook 2024 total direct compensation for members of the Board of Management Short-Term Long-term . In EUR Base Salary Incentive 2 Incentive 2 Total Direct Jan 1, 20241 (% of Base Salary) (% of Base Salary) Compensation ? E.H.E. Rond
Slide 34: 3. Explanation of the policy on additions to reserves and dividends
3. Explanation of the policy on additions to reserves and dividends ®ignify
Slide 35: Proposed 2023 dividend of EUR 1.55 per share
Signify, as part of its overall capital allocation policy, proposes a 2023 dividend of EUR 1.55 to be paid in cash in 2024 Capital allocation policy Dividend per share since IPO (in Eur) * Continue to maintain a robust capital « Proposed dividend of EUR 1.55 per share (EUR structure to support our c
Slide 36: Signify's net debt reduced to EUR 1,071m driven by strong cash flow generation
Signify’s net debt reduced to EUR I,07Im driven by strong cash flow generation Characteristics at the end of 2023 Net debt development in 2023 (in EUR million) * Total net debt position of EUR 1,071 million 1,366 586 * Total gross debt of EUR 2,230 million ee + Main debt instruments! include EUR 1,2
Slide 37: 4. Implementation of the new Dutch corporate governance code
37 4. Implementation of the new Dutch corporate governance code in the company’s governance structure ®ignify
Slide 38: 5. Financial statements 2023; 6. Dividend; 7. Discharge
5. Financial statements 2023 6. Dividend 7. Discharge members of the Board of Management and Supervisory Board ®ignify
Slide 39: Agenda
Agenda 1. Audit approach & focus – scope, strategy & execution and conclusion 2. Key Audit Matters 3. Communication and interaction 4. Audit plan 2024 Page 39
Slide 40: Audit approach & focus
Audit approach & focus Scope Strategy/Execution Conclusion Statutory and consolidated financial statements Responsibilities Audit procedures Annual/Directors’ report, including: Teaming ► Key Audit Matters ► Core team and component teams ► Estimates ► Corporate Governance ► Experts ► Significant aud
Slide 41: 8. Composition of the Board of Management: re-appointment
8. Composition of the Board of Management: re-appointment ®ignify
Slide 42: Composition of the Supervisory Board: (re-)appointments
4. Composition of the Supervisory Board: (re-)appointments ®ignify
Slide 43: 9a. Remuneration policy Board of Management
43 I9a. Remuneration policy Board of Management ®ignify
Slide 44: Remuneration policy changes — base salary
Remuneration policy changes — base salary Proposed Current + Adjustment not higher than collective labor agreement (CLA) increase agreed for the CLA population in the Netherlands (NL) 44
Slide 45: Remuneration policy changes — short-term incentives
Remuneration policy changes — short-term incentives Current Proposed Financial Performance measures + 80% fixed Team/individual performance measures * 20% fixed Sales/Growth measure Profit measure (Cash measure Return/Cost measure Metrics Pre-defined li + Growth (such as comparable sales growth) Pro
Slide 46: Remuneration policy changes — Leaver arrangements
Remuneration policy changes — Leaver arrangements Current Severance arrangements + Any severance payment capped at maximum of one time the annual base salary Retirement + Upon (early) retirement Board members remain entitled to share awards granted in alignment with the Terms and Conditions of the L
Slide 47: Remuneration policy changes - Claw-back
Remuneration policy changes - Claw-back Current + Aligned to Dutch legislation Proposed + Clarified in accordance with service contracts + Extends beyond Dutch legislation and includes discretion of SB to: - Recoup incentive in case of serious violation of Signify Integrity code or applicable law -
Slide 48: Additional policy updates
Additional policy updates Labor Market Peer Group i + Four companies replaced per January 1, 2024: Boskalis, Siemens Gamesa, Osram Licht, and ASML + Replacements: Arcadis, Nordex, ams OSRAM, and ASMi, Dutch (cross-industry) a Group > Compared to the 2020 remuneration policy: * Cree replaced by MLS C
Slide 49: 10b. Remuneration policy Supervisory Board
IOb. Remuneration policy Supervisory Board ®ignify
Slide 50: Supervisory Board
Supervisory Board Remuneration Policy Remuneration Supervisory Board in EUR Supervisory Board fixed annual fee Chair 110.000 No changes are proposed to the Remuneration Vice Chair 85.000 Policy Member 75.000 Committee fees Audit Committee Updates: Chair 22.500 * Correspond to the Board of Management
Slide 51: 11. Appointment of the external auditor of the company 2026-2028
Il. Appointment of the external auditor of the company 2026-2028 ®ignify
Slide 52: 12. Authorizations of the Board of Management to issue shares
I2. Authorizations of the Board of Management to (a) issue shares or grant rights to acquire shares, and (b) restrict or exclude pre-emptive rights ®ignify
Slide 53: 13. Authorization of the Board of Management to acquire shares
13. Authorization of the Board of Management to acquire shares in the company ®ignify
Slide 54: 14. Cancellation of shares
54 14. Cancellation of shares ®ignify
Slide 55: 15. Any other business
55 I5. Any other business ®ignify
Slide 56: Signify
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