Slide 1: Q3 2022 results
Q3 2022 results October 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 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: Third quarter 2022 highlights
Third quarter 2022 highlights • Increasingly volatile environment • Margin improvements vs. Q2 22; pressures from energy costs and currency movements continued to affect the P&L • 4.3% CSG driven by strong traction in professional segment; compensating lower consumer demand and the slowdown in China
Slide 5: Signify reported Q3 sales of EUR 1.9 billion, CSG of 4.3% and adj. EBITA margin of 10.4%
Signify reported Q3 22 sales of EUR 1.9 billion, CSG of 4.3% and an adj. EBITA margin of 10.4% Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 22 CSG -4.8% 4.3% 4.5% 6.4% 5.1% • 109 million connected light points (Q2 22: 103 million) • LED-based sales were 83% of total sales
Slide 6: Digital Solutions reported a CSG of 12.0% and an adj. EBITA margin of 11.2%
Digital Solutions reported a CSG of 12.0% and an adj. EBITA margin of 11.2% Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 22 CSG -7.3% 12.0% 11.2% 16.9% 11.6% • Comparable sales growth of 12.0% • Strong professional demand in most markets, particularly in the US and Europe
Slide 7: Digital Solutions highlights
Digital Solutions highlights Upgrading lighting Installing LED horticulture Becoming premium partner Lighting up the façade of solutions in every Everlast grow lights in a Korean for UV-C and LED lighting of the Basilica di Santa Maria gym across the UK tomato greenhouse Werder Bremen Novella in Flo
Slide 8: Digital Products reported a CSG of -2.5% and an adj. EBITA margin of 10.5%
Digital Products reported a CSG of -2.5% and an adj. EBITA margin of 10.5% Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 22 CSG 2.5% -2.5% 1.6% 0.2% 2.6% • Comparable sales decline of 2.5% • Solid demand for LED Electronics • Softness in the consumer channel and China 588
Slide 9: Digital Products highlights
Digital Products highlights Launching new Ultra Offering a new way of Teaming up with CORSAIR Introducing the Philips Efficient A-Class products automating WiZ lights to give you the ultimate CorePro LED HighBay gaming setup • Launched the world’s first • SpaceSense is a new way to • To support an i
Slide 10: Conventional Products reported a CSG of -9.5% and an adj. EBITA of 14.2%
Conventional Products reported a CSG of -9.5% and an adj. EBITA of 14.2% Sales (in EURm) & comparable sales growth (in %) Key observations for Q3 22 CSG -13.2% -9.5% -11.4% -15.1% -13.8% • Comparable sales decline of 9.5% • Price increases partially compensated volume declines 202 195 219 201 193 Q3
Slide 11: Brighter Lives, Better World 2025 – Q3 2022 results
Brighter Lives, Better World 2025 – Q3 2022 results Doubling our positive impact on the environment and society 2019 Q3 2022 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% 30%
Slide 12: 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 12
Slide 13: Adjusted EBITA margin decreased to 10.4%, mainly due to a strong negative currency effect
Adjusted EBITA margin decreased to 10.4%, mainly due to a strong negative currency effect, while price increases more than offset higher input costs In EURm / as % of sales 11.1% -70 bps 10.4% -45 91 0 -23 199 182 -6 -6 6 EUR +54m Q3 21 Volume Mix Price COGS Indirect Costs Currency Other Q3 22 13
Slide 14: Working capital continues to be impacted by higher inventories and receivables
Year on year, working capital continues to be impacted by higher inventories due to longer supplier lead times, and higher receivables In EURm / as % of sales 4.7% +600 bps 10.7%1 10 -96 820 196 395 316 Q3 21 Inventories Trade & other receivables Trade & other payables Other working Q3 22 capital it
Slide 15: Leverage ratio decreased from 1.7x at the end of Q2 to 1.5x at the end of Q3 22
Leverage ratio decreased from 1.7x at the end of Q2 22 to 1.5x at the end of Q3 22, mainly driven by positive free cash flow In EURm 1,749 1,685 -239 71 19 13 31 9 32 1,411 FCF: EUR 135m Net debt Net debt EBITDA Change in Net capex Change in Interest & Tax Other Other 1 Net debt end of Q3 21 end of
Slide 16: 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 16
Slide 17: Outlook
Outlook • Given the uncertain near-term outlook, the continued softness of the consumer segment and of the Chinese market, we now expect to achieve comparable sales growth between 2% and 3% for the full year 2022 • We are targeting the lower end of the range for both the 11.0-11.4% Adjusted EBITA ma
Slide 18: Q&A
Q&A Need to update photo
Slide 19: 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 Q3 22 Sales FX Footprint (% of total) Key observations • Currency movements positively impacted Sales and negatively impacted Adjusted EBITA Other EUR, 25% • Sales impact of +8.1%, mainly from US dollar Currenc
Slide 20: Net income increased to EUR 112m, mainly driven by higher EBIT
Net income increased to EUR 112m, mainly driven by higher EBIT, partly offset by higher income tax expense From Adjusted EBITA to net income (in EURm) Key observations Q3 21 Q3 22 1 Non-recurring by nature and relate to among others: Adjusted EBITA 182 199 • Separation - Restructuring -19 -6 • Trans
Slide 21: Free cash flow of EUR 135m, driven by strong income from operations
Free cash flow of EUR 135m, mainly driven by strong income from operations and a stabilization of working capital Free cash flow (in EURm) Key observations Q3 21 Q3 22 • Free cash flow of EUR 135m Income from operations 118 161 • Strong income from operations Depreciation and amortization 77 78 • St
Slide 22: Sianty
Sianty