Signify Nv · EURONEXT:LIGHT
Signify Nv — Signify Nv Ord — Q2 2023 Earnings Presentation
23 slides from Signify Nv's earnings presentation, Jul 28, 2023
Slide 1: Q2 2023 results
Q2 2023 results July 28, 2023
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 Business and operational performance - Eric Rondolat Need to update photo Financial performance and highlights - Javier van Engelen Outlook & closing remarks - Eric Rondolat Q&A 3
Slide 4: Second quarter 2023 highlights
Second quarter 2023 highlights • Persistent weakness in the indoor professional, the consumer and OEM businesses • Recovery of Chinese market slower than anticipated • Positive traction in the outdoor professional and professional connected lighting businesses • Recovery of gross margin thanks to pr
Slide 5: Q2 23 sales of EUR 1.6 billion, CSG of -8.6%, adj. EBITA margin 8.3%
Signify reported Q2 23 sales of EUR 1.6 billion, CSG of -8.6% and an adj. EBITA margin of 8.3% Sales (in EURm) & comparable sales growth (in %) Key observations for Q2 23 CSG 5.1% -8.6% 4.3% -8.8% -9.1% • 119 million connected light points (Q1 23: 117 million) • LED-based sales were 84% of total sal
Slide 6: Digital Solutions CSG of -5.7% and adj. EBITA margin of 10.0%
Digital Solutions reported a CSG of -5.7% and an adj. EBITA margin of 10.0% Sales (in EURm) & comparable sales growth (in %) Key observations for Q2 23 CSG 11.6% -5.7% 12.0% -5.8% -8.7% • Comparable sales decline of 5.7% • High base of comparison of 11.6% • Weak indoor professional business • Softne
Slide 7: Digital Solutions highlights
Digital Solutions highlights Upgrading the lighting on Lighting up the Finanzauto Supporting Dublin Port Installing new smart two Scandlines ferries headquarters in Arganda Tunnel with a fast route to lighting at Friends Arena in del Rey, Spain energy efficiency Solna, Sweden • Installed 3D-printed
Slide 8: Digital Products CSG of -12.1% and adj. EBITA margin of 6.9%
Digital Products reported a CSG of -12.1% and an adj. EBITA margin of 6.9% Sales (in EURm) & comparable sales growth (in %) Key observations for Q2 23 CSG 2.6% -12.1% -2.5% -12.9% -10.1% • Comparable sales decline of 12.1% • Continued weakness in the consumer connected and OEM businesses, as well as
Slide 9: Digital Products highlights
Digital Products highlights Launching new WiZ home Launching new Philips Hue Winning eight Red Dot Introducing new monitoring technology products and app features awards and eight iF Design UltraEfficient A-Class awards Philips LED outdoor lights • Combining lighting and • Introduced the new Philips
Slide 10: Conventional Products CSG of -15.0% and adj. EBITA margin of 20.5%
Conventional Products reported a CSG of -15.0% and an adj. EBITA margin of 20.5% Sales (in EURm) & comparable sales growth (in %) Key observations for Q2 23 CSG -13.8% -15.0% -9.5% -11.4% -8.5% • Comparable sales decline of 15.0% • Volume decline in line with expectation, partly offset by strong pri
Slide 11: Brighter Lives, Better World 2025 – Q2 2023 results
Brighter Lives, Better World 2025 – Q2 2023 results Doubling our positive impact on the environment and society 2019 Q2 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% 29%
Slide 12: Powering our European operations with clean electricity
Powering our European operations with clean electricity • Signify, HEINEKEN, Nobian and Philips secured a renewable electricity guarantee from the new Mutkalampi wind farm in Finland • Owned and operated by Neoen, the new facility is the largest operating wind farm in Finland • The 10-year agreement
Slide 13: Content
Content Business and operational performance - Eric Rondolat Need to update photo Financial performance and highlights - Javier van Engelen Outlook & closing remarks - Eric Rondolat Q&A 13
Slide 14: Adjusted EBITA margin decreased to 8.3%
Adjusted EBITA margin decreased to 8.3%, mainly due to under-absorption of fixed costs offsetting structural gross margin recovery As % of sales 9.5% -120 bps 8.3% +250 bps 1.0% -0.9% -0.2% -0.2% -2.5% 1.1% 0.4% Q2 22 Volume Mix Price COGS Indirect Costs Currency Other Q2 23 14
Slide 15: Working capital decreased year on year
Working capital decreased year on year, mainly driven by a reduction of inventories and lower receivables, partly offset by lower payables In EURm / as % of sales 10.5%1 -160 bps 8.9% 783 640 -347 -29 422 -189 Q2 22 Inventories Trade & other receivables Trade & other payables Other working Q2 23 cap
Slide 16: H1 2023 free cash flow back to positive
In H1 2023, the free cash flow generation is back to positive, while the Adjusted EBITA margin is impacted by under-absorption of fixed costs Sales & comparable sales Adjusted EBITA Free Cash Flow growth (in EURm and % of sales) (in EURm) (in EURm and %) 8.4% 5.8% 10.8% 10.0% -8.9% 8.6% 272 139 3,20
Slide 17: Content
Content Business and operational performance - Eric Rondolat Need to update photo Financial performance and highlights - Javier van Engelen Outlook & closing remarks - Eric Rondolat Q&A 17
Slide 18: Outlook
Outlook • The continued economic softness has led us to apply caution in our outlook for the full year and adjust our Adjusted EBITA margin guidance to 9.5-10.5%. % • On the other hand, our free cash flow generation has and will continue to benefit from supply chain lead time improvements and effect
Slide 19: Q&A
Q&A Need to update photo
Slide 20: Currency movements had a negative impact on sales and Adjusted EBITA margin
Currency movements had a negative impact on sales and the Adjusted EBITA margin Q2 23 Sales FX Footprint (% of total) Key observations • Overall currency impact on the Adjusted EBITA margin of -20 bps • Benefit on main currencies largely offset by hedging • Negative FX impact due to devaluation of E
Slide 21: Net income decreased to EUR 45m
Net income decreased to EUR 45m, mainly due to lower EBIT and higher financial expenses, partly offset by lower income tax expense From Adjusted EBITA to net income (in EURm) Key observations Q2 22 Q2 23 1 Non-recurring by nature and relate to: Adjusted EBITA 174 136 • Impairment and other non-cash
Slide 22: Free cash flow was EUR 88m
Free cash flow was EUR 88m, as a lower income from operations was partly offset by a lower cash outflow from working capital Free cash flow (in EURm) Key observations Q2 22 Q2 23 • Free cash flow of EUR 88m Income from operations 306 88 • Lower income from operations Depreciation and amortization 79
Slide 23: Signify
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