Signify Nv · EURONEXT:LIGHT
Signify Nv — Signify Nv Ord — Q1 2023 Earnings Presentation
22 slides from Signify Nv's earnings presentation, May 3, 2023
Slide 1: Q1 2023 results
Q1 2023 results May 3, 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 Business and operational performance - Eric Rondolat Need to update photo Financial performance - Javier van Engelen Outlook and closing remarks - Eric Rondolat Q&A 3
Slide 4: First quarter 2023 highlights
First quarter 2023 highlights • Persistent weakness in the consumer segment and the indoor professional business; slowdown in OEM sales • Recovery of gross margin thanks to price discipline and effective COGS management • Comparable sales growth of -9.1% % • Adjusted EBITA margin of 8.9%, impacted b
Slide 5: Signify reported Q1 sales of EUR 1.7 billion, CSG of -9.1% and adj. EBITA margin of 8.9%
Signify reported Q1 23 sales of EUR 1.7 billion, CSG of -9.1% and an adj. EBITA margin of 8.9% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 23 CSG 6.4% -9.1% 5.1% 4.3% -8.8% • 117 million connected light points (Q4 22: 114 million) • LED-based sales were 82% of total sale
Slide 6: Digital Solutions reported a CSG of -8.7% and an adj. EBITA margin of 8.7%
Digital Solutions reported a CSG of -8.7% and an adj. EBITA margin of 8.7% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 23 CSG 16.9% -8.7% 11.6% 12.0% -5.8% • Comparable sales decline of 8.7% • High base of comparison of 16.9% • Weak indoor professional business • Softnes
Slide 7: Digital Solutions highlights
Digital Solutions highlights Bringing energy-efficient Completing a large-scale Helping retailers become Bringing wireless outdoor lighting to West smart city project in more sustainable through broadband connectivity to Cambridge site Huanggang City new lighting solutions Eichenzell • Partnered wit
Slide 8: Digital Products reported a CSG of -10.1% and an adj. EBITA margin of 8.3%
Digital Products reported a CSG of -10.1% and an adj. EBITA margin of 8.3% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 23 CSG 0.2% -10.1% 2.6% -2.5% -12.9% • Comparable sales decline of 10.1% • Continued weakness in consumer connected and OEM businesses • Partly compensa
Slide 9: Digital Products highlights
Digital Products highlights Introducing the Philips Hue Helping customers switch Launching a new low Expanding the WiZ outdoor Sync TV app for Samsung from fluorescent to LED as voltage outdoor range portfolio with new TVs EU ban comes into effect products • The new Philips Hue Sync TV • From 24 Feb
Slide 10: Conventional Products reported a CSG of -8.5% and an adj. EBITA of 22.5%
Conventional Products reported a CSG of -8.5% and an adj. EBITA of 22.5% Sales (in EURm) & comparable sales growth (in %) Key observations for Q1 23 CSG -15.1% -8.5% -13.8% -9.5% -11.4% • Comparable sales decline of 8.5% • Continued strong price discipline • Volume decline in line with expectation a
Slide 11: Brighter Lives, Better World 2025 – Q1 2023 results
Brighter Lives, Better World 2025 – Q1 2023 results Doubling our positive impact on the environment and society 2019 Q1 2023 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 12: Content
Content Business and operational performance - Eric Rondolat Need to update photo Financial performance - Javier van Engelen Outlook and closing remarks - Eric Rondolat Q&A 12
Slide 13: Adjusted EBITA margin decreased to 8.9%, mainly due to under-absorption of fixed costs
Adjusted EBITA margin decreased to 8.9%, mainly due to under-absorption of fixed costs more than offsetting gross margin recovery In EURm / as % of sales 10.5% -160 bps 8.9% +260 bps 0.3% 0.3% -0.9% -0.5% -3.0% 2.2% 0.1% Q1 22 Volume Mix Price COGS Indirect Costs Currency Other Q1 23 13
Slide 14: Working capital increased year on year, due to lower payables
Working capital increased year on year, due to lower payables, partly offset by lower inventories and receivables In EURm / as % of sales 7.9% +40 bps 8.3%1 617 559 -12 -198 363 -96 Q1 22 Inventories Trade & other receivables Trade & other payables Other working Q1 23 capital items 14 1Includes sale
Slide 15: Leverage ratio at 1.4x, with improved cash flow offsetting lower profitability
Leverage ratio at 1.4x, with improved cash flow offsetting lower profitability In EURm 1,378 FCF: EUR 51m 1,356 1,331 26 -132 30 -25 27 -4 53 Net leverage 1.6x 1.3x 1.4x Net debt Net debt EBITDA Change in Net capex Change in Interest & Tax Other Other 1 Net debt end of Q1 22 end of Q4 22 working pro
Slide 16: Content
Content Business and operational performance - Eric Rondolat Need to update photo Financial performance - Javier van Engelen Outlook and closing remarks - Eric Rondolat Q&A 16
Slide 17: Outlook
Outlook • Signify confirms its guidance for 2023. The company continues to focus its efforts on improving the Adjusted EBITA margin and free cash flow. Signify expects for 2023: • An Adjusted EBITA margin in the range of 10.5-11.5% • Free cash flow between 6-8% of sales 17
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 margin
Currency movements had a positive impact on sales and a negative impact on the Adjusted EBITA margin Q1 23 Sales FX Footprint (% of total) Key observations • Overall currency impact on the Adjusted EBITA margin of -90 bps • Benefit on main currencies largely offset by hedging • Significant negative
Slide 20: Net income decreased to EUR 28m, mainly due to lower EBIT and higher financial expenses
Net income decreased to EUR 28m, mainly due to lower EBIT and higher financial expenses, partly offset by lower income tax expense From Adjusted EBITA to net income (in EURm) Key observations Q1 22 Q1 23 1 Non-recurring by nature and relate to among others: Adjusted EBITA 187 149 • Impairment and ot
Slide 21: Free cash flow of EUR 51m, mainly due to a lower cash outflow from working capital
Free cash flow of EUR 51m, mainly due to a lower cash outflow from working capital Free cash flow (in EURm) Key observations Q1 22 Q1 23 • Free cash flow of EUR 51m Income from operations 115 61 • Lower cash outflow from working capital, which Depreciation and amortization 76 71 benefited from impro
Slide 22: Signify
Sianty