Signify Nv · EURONEXT:LIGHT
Signify Nv — Signify Nv Ord — Q4 2023 Earnings Presentation
25 slides from Signify Nv's earnings presentation, Jan 26, 2024
Slide 1: Q4 2023 results
Q4 2023 results January 26, 2024
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 Q4 23 Performance - Javier van Engelen Need to update photo Full Year 23 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 3
Slide 4: Q4 23 sales of EUR 1.7 billion, CSG of -7.7%, adj. EBITA margin 12.1%
Signify reported Q4 23 sales of EUR 1.7 billion, CSG of -7.7% and an adj. EBITA margin of 12.1% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 23 CSG -8.8% -7.7% -9.1% -8.6% -7.8% • 124 million connected light points (Q3 23: 121 million) • LED-based sales were 87% of total
Slide 5: Digital Solutions CSG of -2.9% and adj. EBITA margin of 12.4%
Digital Solutions reported a CSG of -2.9% and an adj. EBITA margin of 12.4% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 23 CSG -5.8% -2.9% -8.7% -5.7% -4.3% • Comparable sales decline of 2.9% • Continued strength in professional systems and services • Softness in indoor
Slide 6: Digital Solutions highlights
Digital Solutions highlights Winning the Prototype Upgrading the Nicola Reducing carbon footprint Modernizing the lighting in Phase of U.S. DoE’s L-Prize Ceravolo Stadium in by rethinking the classic more than 200 Netto stores competition Catanzaro to LED Copenhagen street lamp in Poland • Two winni
Slide 7: Digital Products CSG of -9.4% and adj. EBITA margin of 13.3%
Digital Products reported a CSG of -9.4% and an adj. EBITA margin of 13.3% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 23 CSG -12.9% -9.4% -10.1% -12.1% -10.3% • Comparable sales decline of 9.4% • Continued weakness in consumer and OEM • Sequential improvement in consume
Slide 8: Digital Products highlights
Digital Products highlights Introducing the WiZ A60 Launching the new Philips Introducing the battery- Launching a new collection filament ultra-efficient Radii auto-linkable Ultra powered Secure camera of 3D-printed pendants smart bulb Efficient solar lights • The WiZ A60 filament ultra- • The new
Slide 9: Conventional Products CSG of -29.6% and adj. EBITA margin of 17.3%
Conventional Products reported a CSG of -29.6% and an adj. EBITA margin of 17.3% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 23 CSG -11.4% -29.6% -8.5% -15.0% -21.0% • Comparable sales decline of 29.6% • Structural decline exacerbated by the fluorescent bans in Europe 20
Slide 10: Adjusted EBITA margin increased to 12.1%, driven by gross margin recovery
Adjusted EBITA margin increased to 12.1%, mainly driven by the recovery of gross margin As % of sales 10.2% +190 bps 12.1% +340 bps 0.3% 0.2% 0.0% 2.9% -2.0% -0.8% 1.3% Q4 22 Volume Mix Price COGS Indirect Costs Currency Other Q4 23 10
Slide 11: Working capital decreased to 6.9%
Working capital decreased to 6.9%, mainly due to lower inventories, lower receivables and other working capital items, partly offset by lower payables In EURm / as % of sales 7.4%1 -50 bps 6.9% 564 -21 461 -311 320 -90 Q4 22 Inventories Trade & other receivables Trade & other payables Other working
Slide 12: Content
Content Q4 23 Performance - Javier van Engelen Need to update photo Full Year 23 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 12
Slide 13: 2023 sales of EUR 6.7 billion, CSG of -8.3%, adj. EBITA margin 10.0%
Signify reported 2023 sales of EUR 6.7 billion, CSG of -8.3% and an adj. EBITA margin of 10.0% Sales (in EURm) & comparable sales growth (in %) Key observations for 2023 CSG 1.2% -8.3% • Connected lighting and growth platforms were 30% of total sales • Nominal sales decline of 10.8% (including FX im
Slide 14: Digital Solutions and Digital Products contribution to sales, EBITA, FCF
Digital Solutions and Digital Products contributing 91% to sales, 83% to Adj. EBITA and 88% to Free Cash Flow Sales contribution (in EURm) Adj. EBITA contribution (in EURm) Free Cash Flow contribution (in EURm) 2,469 2,452 2,117 339 297 383 291 205 87%1 89%1 82%1 91%1 86%1 85%1 88%1 83%1 170 3,524 4
Slide 15: Adjusted EBITA margin benefited from gross margin recovery in all divisions
Adjusted EBITA margin benefited from gross margin recovery in all divisions, offset by under-absorption of fixed costs – mainly in Digital Products Digital Solutions Digital Products Conventional Products 7.8% CSG% -5.4% -3.8% -10.5% -12.6% -18.4% FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 -230bps +600bps
Slide 16: Brighter Lives, Better World 2025 – Q4 2023 results
Brighter Lives, Better World 2025 – Q4 2023 results Doubling our positive impact on the environment and society 2019 Q4 2023 2025 Baseline Result Target Carbon reduction over value chain Better World Climate action 0 On track 324 MT against Paris Agreement Circular economy Circular revenues 16% 33%
Slide 17: Signify proposes a cash dividend of EUR 1.55 per share for 2023
Signify proposes a cash dividend of EUR 1.55 per share for 2023 Key observations Dividend per share since IPO (in EUR) • Proposed dividend1 of EUR 1.55 per share, a year-on-year increase of 5 cents per share 1.55 1.50 • Dividend yield of 5.1% over the year-end share price of 1.45 1.40 EUR 30.32 1.35
Slide 18: Content
Content Q4 23 Performance - Javier van Engelen Need to update photo Full Year 23 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 18
Slide 19: Outlook
Outlook For 2024, Signify expects: % • An Adjusted EBITA margin improvement of up to 50 bps, including first benefits from the announced restructuring program • Free cash flow generation of 6-7% of sales, including an incremental and non-recurring negative impact around EUR 150m related to the restr
Slide 20: Introducing the new operating model
Introducing the new operating model Signify – current structure Signify – new structure Central functions Central functions Professional Consumer OEM Conventional Digital Solutions Digital Products Conventional Prof. luminaires LED lamps & LED electronics Conventional luminaires lamps LED lamps & Co
Slide 21: Q&A
Q&A Need to update photo
Slide 22: Currency movements impact on sales and Adjusted EBITA margin
Currency movements had a negative impact on sales and a positive impact on Adjusted EBITA margin Q4 23 Sales FX Footprint (% of total) Key observations • Overall currency impact of -4.9% on sales, mainly from USD depreciation. • Positive impact of 0.3% on the Adjusted EBITA margin. 22
Slide 23: Net income decreased to EUR 59m
Net income decreased to EUR 59m, as higher Adjusted EBITA, lower financial expenses and lower income tax expense were offset by restructuring costs From Adjusted EBITA to net income (in EURm) Key observations Q4 22 Q4 23 1 Non-recurring by nature and relate to: Adjusted EBITA 202 209 • Impairment an
Slide 24: Free cash flow decreased to EUR 295m
Free cash flow decreased to EUR 295m, mainly due to a lower inflow from working capital Free cash flow (in EURm) Key observations Q4 22 Q4 23 • Free cash flow of EUR 295m Income from operations 137 89 • Lower inflow from working capital Depreciation and amortization 86 69 • Q4 last year benefited fr
Slide 25: Signify
Sianty