Signify Nv · EURONEXT:LIGHT
Signify Nv — Q4 2020 Earnings Presentation
27 slides from Signify Nv's earnings presentation, Jan 29, 2021
Slide 1: Q4 & Full Year 2020 results
Q4 & Full Year 2020 results January 29, 2020
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 Summary performance 2020 by Eric Rondolat Financial performance for Q4 20 by Javier van Engelen FY 20 highlights by Eric Rondolat Outlook & conclusion by Eric Rondolat Q&A 3
Slide 4: Summary financial & business performance 2020
Summary financial & business performance 2020 • LED-based sales represented 80% of sales • Signify’s installed base of connected light points increased from 56m at YE191 to 77m at YE20 • Adj. EBITA margin improved by 30 bps to 10.7%, despite a negative currency impact of 30 bps % • Adj. indirect cos
Slide 5: Content
Content Summary performance 2020 by Eric Rondolat Financial performance for Q4 20 by Javier van Engelen FY 20 highlights by Eric Rondolat Outlook & conclusion by Eric Rondolat Q&A 5
Slide 6: Signify achieves Q4 20 sales of EUR 1,878m, an Adj. EBITA margin of 13.4%
Signify achieves Q4 20 sales of EUR 1,878m, an Adj. EBITA margin of 13.4% and free cash flow of EUR 332m Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 20 • Installed base of connected light points increased from -4.2% -5,9% 71m in Q3 20 to 77m in Q4 20 -8.3% -15.3% -22.5%
Slide 7: Digital Solutions delivers 27.3% nominal sales growth and continues sequential CSG improvement
Digital Solutions delivers 27.3% nominal sales growth and continues to show sequential CSG improvement Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 20 -1.5% • LED-based sales accounted for 89% of total sales and -11.2% -10,2% connected-based sales represented 22%3 of tota
Slide 8: Digital Solutions highlights
Digital Solutions highlights Expanding UV-C portfolio Providing extra protection Improving occupant Harnessing power of the for professionals in Asia- layer to shoppers EDEKA experience through sun to improve road Pacific & Middle East Clausen with UV-C Honeywell partnership safety on Leipsoi island
Slide 9: Digital Products Adj. EBITA margin improved by 230 bps
Digital Products Adj. EBITA margin improved by 230 bps, mainly driven by robust gross margin improvement from higher connected home sales Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 20 0.1% 2,5% • Connected-based sales represented 30% of sales -2.0% • CSG increased by 2.
Slide 10: Digital Products highlights
Digital Products highlights Offering consumers more Providing customers in Answering customer Supporting OEMs in Asia ways of protection with India with more LED shapes needs with retractable by expanding Electronic UV-C disinfection lighting by launching Radial Lamp ceiling fan light Outdoor Driver
Slide 11: Conventional Products delivers robust Q4 Adj. EBITA performance and market share gains
Conventional Products delivers robust Q4 Adj. EBITA performance and continued market share gains Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 20 -11.0% • Market share gains driven by successful continuation of -11,6% “last company standing” strategy -18.3% -17.8% -25.2% •
Slide 12: Adj. EBITA growth and margin expansion driven by procurement savings and productivity gains
Adj. EBITA growth and margin expansion driven by procurement savings and productivity gains offsetting the effect of lower volume and price erosion Adjusted EBITA (in EURm) as % of sales 13.2% +20 bps 13.4% 29 251 232 (25) 48 3 (12) (23) Q4 2019 Volume / Mix Price CoGS Indirect Costs Currency Scope/
Slide 13: Working Capital improved by 130 bps
Working Capital improved by 130 bps, reflecting structural changes in receivables, other working capital items and payables Working capital1 (in EURm & as % of sales) Trade and other receivables (in EURm & as % of sales) 16,6%3 16,9%4 15,3%3 15,2%3 6.1%3 6.3%3 6.4%3 4,7%4 -220 bps 470 452 443 313 1.
Slide 14: Reduction of leverage ratio from 2.2x in Q3 to 1.7x in Q4
Reduction of leverage ratio from 2.2x in Q3 to 1.7x in Q4 driven by strong free cash flow generation of EUR 332m In EURm 1,589 -241 1,275 -16 29 -13 19 -119 27 FCF: EUR +332m Net debt EBITDA Change in Net capex Change in Interest & Tax Other FCF items Other1 Net debt end of Q3 20 working capital pro
Slide 15: Content
Content Summary performance 2020 by Eric Rondolat Financial performance for Q4 20 by Javier van Engelen FY 20 highlights by Eric Rondolat Outlook & conclusion by Eric Rondolat Q&A 15
Slide 16: Digital Solutions and Digital Products significantly increased profitability and Free Cash Flow contribution
Digital Solutions and Digital Products significantly increased their profitability and Free Cash Flow contribution Adj. EBITA margin (%) Adj. EBITA contribution (in EUR m) Free Cash Flow (in EUR m) Digital Solutions & Digital Products +90 bps 11,3% 295 10,4% 260 70%1 79%1 406 240 82%1 265 330 72%1 3
Slide 17: Adj. EBITA margin improvement despite COVID-19 impact on topline
Adj. EBITA margin improvement despite COVID-19 impact on topline Digital Solutions CSG Digital Products CSG Conventional Products CSG & FCF (in & Adj. EBITA margin (%) & Adj. EBITA margin (%) % and EUR m) CSG -1.7% -14.4% CSG 1.4% -8.3% CSG -20.5% -16.5% 222 188 12,9% 10,8% 10,0% 10,2% 2019 2020 201
Slide 18: Adj. indirect costs decreased by EUR 166 million in FY20
Adj. indirect costs excl. currency/scope effect decreased by EUR 166 million in FY20 Adj. indirect cost savings (in EUR m & as % of sales) Key observations • EUR 166m saved in FY20; down 9.1%, 29.0% +150 bps 30.5% excl. FX and scope changes 1,982 1,813 361 -166 1,621 -26 Adj. indirect Indirect Curre
Slide 19: Signify overachieved its 2020 Sustainability targets
Signify overachieved its 2020 Sustainability targets Q4 2020 result Achievement 2020 target Sustainable Sustainable revenues 84.1% Overachieved 80% revenues LED lamps & 2.923 billion 146% of our commitment >2 billion luminaires delivered (cumulative from 2015) completed Carbon footprint Signify is c
Slide 20: Signify proposes 2020 dividend of EUR 1.40 plus an extraordinary dividend of EUR 1.35
Signify proposes 2020 dividend of EUR 1.40 plus an extraordinary dividend of EUR 1.35 to be paid in cash in 20211 Key observations Dividend per share since IPO (in EUR) • The proposed extraordinary dividend1 of EUR 1.35 per share (EUR 170m), announced on January 13, 2021, is in line with the dividen
Slide 21: Content
Content Summary performance 2020 by Eric Rondolat Financial performance for Q4 20 by Javier van Engelen FY 20 highlights by Eric Rondolat Outlook & conclusion by Eric Rondolat Q&A 21
Slide 22: Outlook 2021
Outlook 2021 % • Signify expects positive comparable sales growth, the level of which will depend on the recovery pattern in its markets • Progress towards its medium-term adjusted EBITA margin objective • Free Cash Flow, is expected to exceed 8% of sales 22
Slide 23: Q&A
Q&A 23
Slide 24: Currency movements had a negative impact on sales and Adj. EBITA
Currency movements had a negative impact on sales and Adj. EBITA Q4 20 Sales FX Footprint (% of total) Key observations • Currency movements negatively impacted sales and Adjusted EBITA • Sales impact of -4.8%, mainly from US dollar Other Currencies; EUR; 28% 31% depreciation. • Adjusted EBITA impac
Slide 25: Net income increased by EUR 39m to EUR 137m
Net income increased by EUR 39m to EUR 137m, mainly as a result of higher operational profitability and lower income tax expense From Adjusted EBITA to net income (in EURm) Key observations Q4 19 Q4 20 Adjusted EBITA 232 251 - Restructuring -42 -43 1 - Acquisition related charges -11 -16 1 Related t
Slide 26: Free Cash Flow of EUR 332m
Free Cash Flow of EUR 332m Free cash flow (in EURm) Key observations 4Q19 4Q20 • Free cash flow of EUR 332m versus EUR 308m last year Income from operations 138 155 • Reflects higher income from operations and structural Depreciation and amortization 77 86 working capital improvement Additions to (r
Slide 27: Sianty
Sianty