Slide 1: Q1 2022 results
Q1 2022 results April 29, 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 Financial performance - Javier van Engelen Outlook & closing remarks - Eric Rondolat Q&A 3
Slide 4: First quarter 2022 highlights
First quarter 2022 highlights • Top-line growth driven by continued strong momentum in the Digital Solutions division • Challenging operating environment • Investments in Russia were stopped and all new business paused since February 25th • Inflationary headwinds • Reinstatement of lockdowns in Chin
Slide 5: Signify reported Q1 sales of EUR 1.8 billion, CSG of 6.4%
Signify reported a Q1 22 sales of EUR 1.8 billion, CSG of 6.4% and an adj. EBITA margin of 10.5% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 22 CSG 3.2% 6.4% 14.1% -4.8% 4.5% • 100 million connected light points (Q4 21: 96 million) • LED-based sales were 84% of total sal
Slide 6: Digital Solutions reported a CSG of 16.9% and an adj. EBITA margin of 9.7%
Digital Solutions reported a CSG of 16.9% and an adj. EBITA margin of 9.7% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 22 CSG -1.8% 16.9% 12.6% -7.3% 11.2% • Comparable sales growth of 16.9% • Continued good traction of the professional segment, particularly the US • Str
Slide 7: Digital Solutions highlights
Digital Solutions highlights Illuminating the world’s Equipping Belgian schools Signify LED lights power Installing solar lighting in largest winter sports event with fast, secure and Iceland’s first vertical farm the Algarve in China reliable LiFi connectivity • The site combines LEDs from • Trulif
Slide 8: Digital Products reported a CSG of 0.2% and an adj. EBITA margin of 12.8%
Digital Products reported a CSG of 0.2% and an adj. EBITA margin of 12.8% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 22 CSG 15.7% 0.2% 20.4% 2.5% 1.6% • Comparable sales growth of 0.2% • Strong Q1 21 comparable base • Connected home sales maintained at good levels 575 6
Slide 9: Digital Products highlights
Digital Products highlights Launching the Philips Ultra Making your home cozier Expanding the WiZ offering Launching new outdoor Definition in North America with new effects features in the Indian market luminaire range in Europe in the Philips Hue app • Philips Ultra Definition is the • Adding “Eff
Slide 10: Conventional Products reported a CSG of -15.1% and an adj. EBITA of 16.0%
Conventional Products reported a CSG of -15.1% and an adj. EBITA of 16.0% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 22 CSG -6.1% -15.1% 4.7% -13.2% -11.4% • Comparable sales growth of -15.1% 227 201 213 202 219 Q1 21 Q1 22 Q2 21 Q3 21 Q4 21 Adjusted EBITA (in EURm & as
Slide 11: Brighter Lives, Better World 2025 Q1 2022 results
Brighter Lives, Better World 2025 Q1 2022 results Doubling our positive impact on the environment and society 2019 Q1 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% 32
Slide 12: Content
Content Business and operational performance - Eric Rondolat Financial performance - Javier van Engelen Outlook & closing remarks - Eric Rondolat Q&A 12
Slide 13: Adjusted EBITA margin remaining strong at 10.5%
Adjusted EBITA margin remaining strong at 10.5%, as higher COGS were partially compensated by price increases and operating leverage In EURm / as % of sales 10.8% -30 bps 10.5% -42 63 -7 -13 187 172 14 4 -4 EUR +25m Q1 21 Volume Mix Price COGS Indirect Costs Currency Other Q1 22 13
Slide 14: Working capital mostly impacted by higher inventory levels
Working capital mostly impacted by higher inventory levels due to longer supplier lead times, partly offset by higher payables In EURm / as % of sales 3.5% +440 bps 7.9% 54 -289 559 589 -29 236 Q1 21 Inventories Trade & other receivables Trade & other payables Other working Q1 22 capital items 14
Slide 15: Leverage ratio increased to 1.6x
Leverage ratio increased to 1.6x due to negative free cash flow and the repurchase of shares for long-term incentives In EURm 1,378 24 -9 32 24 27 1,141 1,156 315 -191 FCF: EUR -189m Net debt Net debt EBITDA Change in Net capex Change in Interest & Tax Other Other 1 Net debt end of Q1 21 end of Q4 2
Slide 16: Content
Content Business and operational performance - Eric Rondolat Financial performance - Javier van Engelen Outlook & closing remarks - Eric Rondolat Q&A 16
Slide 17: EU Green Deal projects gaining traction
EU Green Deal projects gaining traction • The project pipeline of EU • Installing energy efficient Green Deal related projects is LED Road & Street growing luminaires in Homburg • Increasing energy prices create • Improving energy efficiency an even stronger incentive to in Bad Salzuflen through our
Slide 18: Outlook
Outlook • Signify maintains its outlook for 2022. This assumes that the Chinese market and % global supply chain dynamics do not deteriorate further • Comparable sales growth in the range of 3-6% • Continued Adjusted EBITA margin improvement of up to 50 bps • Free cash flow in excess of 8% of sales
Slide 19: Q&A
Q&A
Slide 20: 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 Q1 22 Sales FX Footprint (% of total) Key observations • Currency movements negatively impacted Adjusted EBITA and positively impacted Sales • Sales impact of +5.2%, mainly from US dollar Other Currencies, EUR,
Slide 21: Net income increased to EUR 87m
Net income increased to EUR 87m, mainly driven by higher EBIT, partly reduced by impairments related to our operations in Russia and Ukraine From Adjusted EBITA to net income (in EURm) Key observations Q1 21 Q1 22 1 Non-recurring by nature and relate to: Adjusted EBITA 172 187 • Impairment and other
Slide 22: Free cash flow was EUR -189m
Free cash flow was EUR -189m, mostly due to a strong outflow from working capital, as payables reduced as a result of the settlement of payments Free cash flow (in EURm) Key observations Q1 21 Q1 22 • Free cash flow of EUR -189m Income from operations 85 115 • Lower payables, due to the settlement o
Slide 23: Signify
Sianty