Slide 1: Q4 2022 results
Q4 2022 results January 27, 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 2022 Highlights - Eric Rondolat Need to update photo Q4 22 Performance - Javier van Engelen Full Year 22 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 3
Slide 4: Full year 2022 highlights
Full year 2022 highlights • Connected lighting sales grew to EUR 1.6 billion • Our growth platforms grew to EUR 0.4 billion • Digital Solutions and Digital Products representing more than 85% of sales, profit and cash • Continued progress in the second year of our Brighter Lives, Better World 2025 s
Slide 5: Content
Content 2022 Highlights - Eric Rondolat Need to update photo Q4 22 Performance - Javier van Engelen Full Year 22 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 5
Slide 6: Signify reported Q4 sales of EUR 2.0 billion, CSG of -8.8% and adj. EBITA margin of 10.2%
Signify reported Q4 22 sales of EUR 2.0 billion, CSG of -8.8% and an adj. EBITA margin of 10.2% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 22 CSG 4.5% -8.8% 6.4% 5.1% 4.3% • 114 million connected light points (Q3 22: 109 million) • LED-based sales were 82% of total sale
Slide 7: Digital Solutions reported a CSG of -5.8% and an adj. EBITA margin of 9.7%
Digital Solutions reported a CSG of -5.8% and an adj. EBITA margin of 9.7% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 22 CSG 11.2% -5.8% 16.9% 11.6% 12.0% • Comparable sales decline of 5.8% • High base of comparison • Chinese market impacted by COVID-related disruptions
Slide 8: Digital Solutions highlights
Digital Solutions highlights Helping NSG Group achieve Switching Den Haan Equipping a Berlin school Helping the city of Chieti their sustainability and Greenhouses to LED with Trulifi technology transition to connected LED smart factory goals lighting lighting • NSG Group installed a suite of • Inst
Slide 9: Digital Products reported a CSG of -12.9% and an adj. EBITA margin of 14.1%
Digital Products reported a CSG of -12.9% and an adj. EBITA margin of 14.1% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 22 CSG 1.6% -12.9% 0.2% 2.6% -2.5% • Comparable sales decline of 12.9% • Lower consumer sales • COVID-related disruptions in China impacting Klite • Lo
Slide 10: Digital Products highlights
Digital Products highlights Winning the prestigious Offering a personalized Certifying all WiZ products Addressing the retrofit Gold IDEA 2022 design lighting experience during to work with Matter tunnel lighting market in award the holiday season China • The sustainable 3D-printed • Philips Hue Fes
Slide 11: Conventional Products reported a CSG of -11.4% and an adj. EBITA of 12.9%
Conventional Products reported a CSG of -11.4% and an adj. EBITA of 12.9% Sales (in EURm) & comparable sales growth (in %) Key observations for Q4 22 CSG -11.4% -11.4% -15.1% -13.8% -9.5% • Comparable sales decline of 11.4% • Price increases partially compensated volume declines 219 203 201 193 195
Slide 12: Adjusted EBITA margin decreased to 10.2%, mainly due to lower volume and under-absorption of fixed costs
Adjusted EBITA margin decreased to 10.2%, mainly due to lower volume and an under-absorption of fixed costs In EURm / as % of sales 13.2% -300 bps 10.2% 265 EUR +16m -103 -16 202 -45 47 69 -8 -8 Q4 21 Volume Mix Price COGS Indirect Costs Currency Other Q4 22 12
Slide 13: Working capital increased year on year
Working capital increased year on year, as payments for the 2021 inventory build-up were settled, partly offset by lower receivables and inventories In EURm / as % of sales 3.6% +380 bps 7.4%1 -33 564 475 250 -49 -81 Q4 21 Inventories Trade & other receivables Trade & other payables Other working Q4
Slide 14: Leverage ratio improved from 1.5x to 1.3x
Leverage ratio improved from 1.5x at the end of Q3 22 to 1.3x at the end of Q4 22 driven by a strong free cash flow generation In EURm 1,685 FCF: EUR 364m -223 1,356 -247 14 35 15 41 36 Net leverage 1.5x 1.3x 1.0x Net debt EBITDA Change in Net capex Change in Interest & Tax Other Other 1 Net debt Ex
Slide 15: Content
Content 2022 Highlights - Eric Rondolat Need to update photo Q4 22 Performance - Javier van Engelen Full Year 22 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 15
Slide 16: Digital Solutions and Digital Products further increased their contribution
Digital Solutions and Digital Products further increased their contribution to sales, Adj. EBITA and Free Cash Flow Sales contribution (in EUR m) Adj. EBITA contribution (in EUR m) Free Cash Flow contribution (in EUR m) 2,469 2,452 339 297 383 87%1 89%1 82%1 86%1 85%1 170 3,524 4,231 397 424 364 90%
Slide 17: Sales of Connected lighting and Growth platforms grew to EUR 1.9b
Sales of Connected lighting and Growth platforms grew to EUR 1.9b Sales contribution (in EUR m) • Connected lighting and growth platforms sales increased to EUR 1.9 billion in 2022 1.9 1.7 • Connected lighting grew to EUR 1.6 billion: 1.4 1.6 • Strong professional demand for our global connected 1.4
Slide 18: Adjusted EBITA margin of all divisions impacted by adverse currency impact
Adjusted EBITA margin of all divisions impacted by adverse currency impact; fixed cost under-absorption in Digital Products and Conventional Products Digital Solutions Digital Products Conventional Products 7.8% 8.8% 3.4% CSG% -3.8% -6.9% -12.6% FY 21 FY 22 FY 21 FY 22 FY 21 FY 22 -180bps 18.7% -410
Slide 19: Brighter Lives, Better World 2025 – Q4 2022 results
Brighter Lives, Better World 2025 – Q4 2022 results Doubling our positive impact on the environment and society 2019 Q4 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% 29%
Slide 20: Signify proposes a cash dividend of EUR 1.50 per share for 2022
Signify proposes a cash dividend of EUR 1.50 per share for 2022 Key observations Dividend per share since IPO (in EUR) • Proposed dividend1 of EUR 1.50 per share, a year-on-year increase of 5 cents per share 1.50 • Dividend yield of 4.8% over the year-end share price of 1.45 1.40 EUR 31.38 1.35 • To
Slide 21: Content
Content 2022 Highlights - Eric Rondolat Need to update photo Q4 22 Performance - Javier van Engelen Full Year 22 Performance - Eric Rondolat Outlook & closing remarks - Eric Rondolat Q&A 21
Slide 22: Outlook
Outlook • Signify continues to aim for growth, both organic and through selected acquisitions. Given the volatility of the current macro environment, Signify does not provide a comparable sales growth guidance for 2023. The company will focus its efforts on improving its Adjusted EBITA margin and fr
Slide 23: Q&A
Q&A Need to update photo
Slide 24: 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 Q4 22 Sales FX Footprint (% of total) Key observations • Currency movements benefited Sales and negatively Other impacted Adjusted EBITA Currencies; • Sales impact of +4.7%, mainly from US dollar 29% EUR; 29% a
Slide 25: Net income decreased to EUR 86m
Net income decreased to EUR 86m, mainly driven by lower EBIT and higher financial expenses From Adjusted EBITA to net income (in EURm) Key observations Q4 21 Q4 22 1 Non-recurring by nature and relate to among others: Adjusted EBITA 265 202 • Impairment and other non-cash charges related to - Restru
Slide 26: Free cash flow of EUR 364m
Free cash flow of EUR 364m, mainly driven by strong improvement of working capital, partly offset by lower income from operations Free cash flow (in EURm) Key observations Q4 21 Q4 22 • Free cash flow of EUR 364m Income from operations 205 137 • Strong improvement of working capital Depreciation and
Slide 27: Sianty
Sianty