Slide 1: Q1 2019 results
Q1 2019 results April 26, 2019
Slide 2: Important information
Important information Forward-Looking Statements and Risks & Uncertainties This document and the related oral presentation contain, and responses to questions following the presentation may contain, forward-looking statements that reflect the intentions, beliefs or current expectations and projectio
Slide 3: Content
Content Business and operational performance by Eric Rondolat Financial performance by Stéphane Rougeot Outlook & conclusion by Eric Rondolat Q&A 3
Slide 4: Q1 sales of EUR 1.5bn, operational profitability of 7.8% and FCF of 55m
Q1 19 sales of EUR 1.5bn, operational profitability of 7.8% and FCF of 55m Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 19 • CSG decreased by 3.3% -3.5% -3.4% -3.2% -3.3% • LED-based sales grew by 3.6%, accounting for 73% of sales -7.3% • Currency comparable adjusted indi
Slide 5: Growing profit engines: CSG of 1.1% and Adjusted EBITA margin improvement of 210 bps
Growing profit engines: CSG of 1.1% and Adjusted EBITA margin improvement of 210 bps Adjusted EBITA Adjusted Q1 19 CSG % vs LY (EURm) vs LY (bps) (EURm) EBITA % LED -0.2% 54 +11 11.9% +230 Professional -1.5% 32 +1 5.3% +10 Home 24.4% -7 +14 -6.1% +1,700 Total 1.1% 79 +26 6.7% +210 5
Slide 6: LED Adjusted EBITA margin increased by 230 bps, mainly as a result of procurement savings
LED Adjusted EBITA margin increased by 230 bps, mainly as a result of procurement savings and lower indirect costs Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 19 • CSG of -0.2%; LED lamps showed a solid performance while growth in LED electronics slowed down in Europe 3.
Slide 7: LED business highlights
LED business highlights Launching the TrueForce Winning private label Launching ‘Edge’ system Launching the world’s Urban G3 Europe tenders (driver & module) for smartest outdoor LED high-bay fixtures in US driver • Creates pleasant and • We won 4 private label • Cost effective combi- • Enables conn
Slide 8: Professional Adjusted EBITA margin stable at 5.3%, despite lower market activity
Professional Adjusted EBITA margin stable at 5.3%, despite lower level of market activity in Europe and China Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 19 3.6% • CSG of -1.5%, due to a lower level of market activity in 3.2% 0.4% -1.5% Europe and China, partly offset by
Slide 9: Professional business highlights
Professional business highlights Using robotics to install Enabling Prime Delica to Transforming two Experiencing lighting pitch lighting at Toyota grow healthier and safer landmark bridges in before you buy with VR Stadium in Japan crops Indonesia app • Robotics measurement • Developed optimal ligh
Slide 10: Home – strong rebound in CSG and substantial improvement in profitability
Home – strong rebound in CSG and substantial improvement in profitability Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 19 • CSG of 24.4%, on the back of a low comparison base in 24.4% the US while we experienced strong demand for connected offers -2.6% -1.4% -6.4% -5.9% 9
Slide 11: Home business highlights
Home business highlights Winning iF Design Continuously increasing Launching the Gentle Introducing two new Awards for Philips Hue user appreciation of Sleep & Wake feature ranges of architectural Philips Hue products downlights • The redesigned Philips • In Q1 users gave an • In partnership with •
Slide 12: Cash engine – Lamps Adjusted EBITA margin remained solid at 20.5%
Cash engine – Lamps Adjusted EBITA margin remained solid at 20.5% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 19 -11.1% • Comparable sales decreased by 17.9% -17.6% -16.4% -17.9% • Continued market share gains -19.3% 370 351 361 345 309 Q1 18 Q2 18 Q3 18 Q4 18 Q1 19 Adju
Slide 13: Acquisition of WiZ Connected further expands our leadership in connected lighting
Acquisition of WiZ Connected further expands our leadership in connected lighting Signify announced the acquisition of WiZ Connected: • Developers of the Wi-Fi based WiZ connected lighting ecosystem • Headquartered in Hong Kong • WiZ Connected offers Wi-Fi-based connected products such as bulbs, lum
Slide 14: Content
Content Business and operational performance by Eric Rondolat Financial performance by Stéphane Rougeot Outlook & conclusion by Eric Rondolat Q&A 14
Slide 15: Signify Adj. EBITA margin: improvement driven by ongoing cost reductions
Signify Adj. EBITA margin: improvement driven by ongoing cost reductions Adjusted EBITA (in EURm) as % of sales 7.0% +80 bps 7.8% 39 (18) (2) 115 106 (6) (57) 53 Q1 18 Volume / Mix Price CoGS Indirect Costs Currency Other Q1 19 15
Slide 16: Adjusted currency comparable indirect costs decreased by 8%
Adjusted currency comparable indirect costs decreased by 8% Key observations as % of sales 33.2% -180 bps 31.4% • Indirect cost reduction of EUR 39m In EURm 498 -39 464 • Negative currency impact of EUR 6m Adj. R&D 81 6 • Continue to execute initiatives to further 69 reduce the indirect cost base Ad
Slide 17: Working capital as % of sales improved by 20 bps y-o-y, excluding FX
Working capital as % of sales improved by 20 bps y-o-y, excluding FX Working capital1 (in EURm & as % of sales) Inventories (in EURm & as % of sales) 10.5% 10.1% 9.3% 15.3% 15.2% 14.9% 8.4% 13.8% 694 659 536 587 1.009 994 878 943 +30 bps + 80 bps Q2 18 Q3 18 Q4 18 Q1 19 Q2 18 Q3 18 Q4 18 Q1 19 12.5%
Slide 18: Net debt, excl. the impact from IFRS 16, improved by EUR 59m
Net debt, excl. the impact from IFRS 16, improved by EUR 59m In EURm 848 789 139 5 3 259 16 23 10 29 589 FCF: EUR +55m Net debt Impact Net debt EBITDA Change in Net capex Change in Interest & Tax Other Other* Net debt end of Q4 18 IFRS 16 post IFRS 16 working provisions FCF items end of Q1 19 capita
Slide 19: Content
Content Business and operational performance by Eric Rondolat Financial performance by Stéphane Rougeot Outlook & conclusion by Eric Rondolat Q&A 19
Slide 20: 2019 Outlook confirmed
2019 Outlook confirmed • Our growing profit engines (LED, Professional and Home combined), are expected to deliver a CSG in the range of 2 to 5% • Our cash engine, Lamps, is expected to decline at a slower pace than the market in the range of -21 to -24% on a comparable basis. % • For total Signify,
Slide 21: Q&A
Q&A 21
Slide 22: Currency movements positively impacted sales and negatively impacted Adjusted EBITA
Currency movements positively impacted sales and negatively impacted Adjusted EBITA Q1 19 Sales FX Footprint (% of total) Key observations • Positive FX effect on sales of +1.1%, largely driven by US dollar appreciation Other EUR 30% • Negative FX effect on Adjusted EBITA of EUR -18m, Currencies and
Slide 23: Net income improved to EUR 44m, mainly as a result of improved operational profitability
Net income improved to EUR 44m, mainly as a result of improved operational profitability and lower restructuring From Adjusted EBITA to net income (in EURm) Key observations Q1 18 Q1 19 Adjusted EBITA 106 115 - Restructuring -39 -20 - Acquisition related charges 0 0 - Other incidental items -4 -2 EB
Slide 24: Free Cash Flow of EUR 55m
Free Cash Flow of EUR 55m Free cash flow (in EURm) Key observations Q1 18 Q1 19 • Free cash flow of EUR 55m as a result of improved Income from operations 39 69 operational profitability, lower restructuring cash-out Depreciation and amortization 58 70 and lower income tax paid Additions to (release
Slide 25: Sianty
Sianty