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    LIGHT   NL0011821392

SIGNIFY N.V.

(LIGHT)
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43.31 EUR   -1.39%
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Q1 results, April 30, 2021, 07:00 CET

04/30/2021 | 01:06am EDT

Press Release

April 30, 2021

Signify reports first quarter sales of EUR 1.6 billion, operational profitability of 10.8% and a free cash flow of EUR 168 million

First quarter 20211

  • Signify's installed base of connected light points increased from 77 million in Q4 20 to 83 million in Q1 21
  • Sales of EUR 1,599 million; 12.0% nominal sales growth and CSG of 3.2%
  • LED-basedsales represented 82% of total sales (Q1 2020: 79%2)
  • Adj. EBITA margin improved by 290 bps to 10.8%
  • Net income increased to EUR 60 million (Q1 20: EUR 27 million)
  • Free cash flow increased to EUR 168 million (Q1 20: EUR 112 million)
  • Net debt/EBITDA ratio of 1.4x (Q1 20: 2.7x)

Eindhoven, the Netherlands - Signify (Euronext: LIGHT), the world leader in lighting, today announced the company's first quarter 2021 results.

"Our first quarter performance demonstrates the execution of our strategy, as we report growth driven by our connected businesses and our growth platforms. The adaptive measures we took in 2020, combined with continued pricing discipline, cost and working capital management, resulted in improvements in our operating margin and free cash flow. Our teams have also begun to execute our new 'Brighter Lives, Better World 2025' sustainability program, which aims to double our positive impact on the environment and society in 2025," said CEO Eric Rondolat.

"While we see signs of an economic recovery, supply chain performance is being challenged by component shortages, which are impacting the first half, and will, to a lesser extent, impact the second half of the year. We expect the continued vaccination rollouts and easing of lockdowns to drive an upswing in demand for our professional portfolio in the second half of the year. We are therefore aiming for mid-single digit full-year comparable sales growth and further year-on-year operating margin improvements, driven by our digital businesses."

  • This press release contains certain non-IFRS financial measures and ratios, such as comparable sales growth, EBITA, adjusted EBITA and free cash flow, and related ratios, which are not recognized measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures, see appendix B, Reconciliation of non-IFRS financial measures, of this press release.
    2 2020 includes pro-forma Cooper Lighting for January and February.

2

Brighter Lives, Better World 2025

In the first quarter of the year, Signify made its first steps to achieve the ambitious goals it set for the Brighter Lives, Better World 2025 sustainability program, making progress on all four commitments that contribute to doubling its positive impact on the environment and society. In addition, the CDP Awards 2021 recognized Signify's leadership in Climate action, after the company had achieved carbon neutrality for all its operations in the world in 2020.

In Q1 2021, the company has started to make progress against its ambition of doubling its positive impact on the environment and society in 2025:

  • Double the pace of the Paris agreement:
    Carbon reduction over value chain was 18 million tonnes, for which we set a 2025 target of 340 million tonnes
  • Double our Circular revenues to 32%:
    Circular revenues were 19%, versus the 2019 baseline of 16% and the 2025 target of 32%
  • Double our Brighter lives revenues to 32%:
    Brighter lives revenues were 23%, versus the 2019 baseline of 16% and the 2025 target of 32%
  • Double the percentage of women in leadership positions to 34%:
    The percentage of women in leadership positions was 24%, versus the 2019 baseline of 17% and the 2025 target of 34%

Outlook

Following the operational performance in the first quarter and based on current visibility, Signify now anticipates comparable sales growth of 3% to 6% for the full year 2021. In addition, Signify expects to achieve an Adjusted EBITA margin of 11.5% to 12.5% and continues to expect free cash flow to exceed 8% of sales for the full year 2021. The company reassesses its medium-term guidance for the period 2021-2023 after each financial year.

Signify has refinanced EUR 350 million of its long-term debt with short-term loans with a maturity of December 2021 and is therefore fully committed to repaying EUR 350 million of debt in Q4 2021.

3

Financial review

First quarter

in € million, except percentages

2020*

2021

change

Comparable sales growth

3.2%

Effects of currency movements

-6.4%

Consolidation and other changes

15.2%

Sales

1,427

1,599

12.0%

Adjusted gross margin

545

637

16.9%

Adj. gross margin (as % of sales)

38.2%

39.8%

Adj. SG&A expenses

-393

-424

Adj. R&D expenses

-67

-72

Adj. indirect costs

-460

-496

-7.9%

Adj. indirect costs (as % of sales)

32.2%

31.0%

Adjusted EBITA

112

172

53.3%

Adjusted EBITA margin

7.9%

10.8%

Adjusted items

-42

-57

EBITA

70

115

63.9%

Income from operations (EBIT)

43

85

97.6%

Net financial income/expense

-10

-10

Income tax expense

-6

-15

Net income

27

60

123.5%

Free cash flow

112

168

Basic EPS (€)

0.24

0.47

Employees (FTE)

38,446

37,356

* For comparability purposes please note that first quarter 2020 includes only 1 month of Cooper Lighting performance

First quarter

Sales amounted to EUR 1,599 million, a nominal increase of 12.0%, including a 6.4% negative currency effect. After adjusting for a 15.2% change in consolidation and other changes (mainly related to the consolidation of Cooper Lighting in 2020), comparable sales increased by 3.2%. The return to growth was driven by strong sales in the connected home category, the recovery in China as well as an improved performance in most of Europe, India and the Middle East. LED-based sales accounted for 82% of total sales (Q1 2020: 79%1). The adjusted gross margin increased by 160 bps to 39.8%, largely driven by a positive mix effect from strong connected home sales, pricing discipline compensating the initial impact of material cost inflation, and the consolidation of Cooper Lighting. Adjusted indirect costs as percentage of sales decreased by 120 bps to 31.0%, supported by continued spending discipline and positive operating leverage. Adjusted EBITA amounted to EUR 172 million, representing a EUR 60 million increase versus the same period last year. The Adjusted EBITA margin improved by 290 bps to 10.8%, with gross margin and SG&A efficiency equally contributing to the improvement. Total restructuring costs of EUR 47 million mainly related to the restructuring of the central organization. Acquisition-related charges were EUR 14 million and incidental items generated a EUR 4 million benefit. As a result of the higher income from operations, net income improved from EUR 27 million to EUR 60 million compared to the first quarter of last year.

  • 2020 includes pro-forma Cooper Lighting for January and February.

4

Digital Solutions

First quarter

in millions of EUR, unless otherwise indicated

2020*

2021

change

Comparable sales growth

-1.8%

Sales

639

793

24.1%

Adjusted EBITA

43

71

66.9%

Adjusted EBITA margin

6.7%

9.0%

EBITA

18

48

Income from operations (EBIT)

-7

20

* For comparability purposes please note that first quarter 2020 includes only 1 months of Cooper Lighting performance

First quarter

Sales amounted to EUR 793 million, a nominal increase of 24.1%, reflecting the consolidation impact of Cooper Lighting. Comparable sales declined by 1.8%, on the back of continued lockdowns, component shortages, continued macroeconomic softness in the Americas, yet a strong performance in China, the Middle East and India, and a partial recovery across Europe. LED-based sales accounted for 92% of total sales including Cooper Lighting. Adjusted EBITA was EUR 71 million, resulting in an Adjusted EBITA margin expansion of 230 bps to 9.0%, mainly driven by continued cost management and the consolidation impact of Cooper Lighting.

Digital Products

First quarter

in millions of EUR, unless otherwise indicated

2020

2021

change

Comparable sales growth

15.7%

Sales

529

575

8.7%

Adjusted EBITA

47

82

73.1%

Adjusted EBITA margin

8.9%

14.2%

EBITA

38

76

Income from operations (EBIT)

36

74

First quarter

Sales amounted to EUR 575 million, a nominal increase of 8.7%. On a comparable basis, sales improved by 15.7%, mainly driven by continued strong growth in the consumer segment for both the connected home and LED lamps and luminaires categories, partially offset by a lower recovery speed in the professional segment. Adjusted EBITA was EUR 82 million, resulting in an Adjusted EBITA margin of 14.2%, up from 8.9% in the first quarter of last year, mainly driven by the strong sales recovery, the resulting operating leverage, a solid gross margin and a higher contribution and improvement from connected home products.

  • 2020 includes pro-forma Cooper Lighting for January and February.

5

Conventional Products

First quarter

in millions of EUR, unless otherwise indicated

2020

2021

change

Comparable sales growth

-6.1%

Sales

257

227

-11.7%

Adjusted EBITA

45

47

3.3%

Adjusted EBITA margin

17.6%

20.6%

EBITA

39

53

Income from operations (EBIT)

39

53

First quarter

Sales amounted to EUR 227 million, translating into a comparable decline of 6.1%, positively affected by continued strong traction in the consumer and horticulture segments. The Adjusted EBITA margin improved by 300 bps to 20.6%, driven by pricing discipline and operational efficiencies.

Other

First quarter

'Other' represents amounts not allocated to the operating segments and includes costs related both to central R&D activities to drive innovation and to group enabling functions. 'Other' Adjusted EBITA amounted to EUR -28 million (Q1 20: EUR -23 million). 'Other' EBITA amounted to EUR -62 million (Q1 20: EUR -25 million), which includes restructuring costs of EUR -34 million (Q1 20: EUR -2 million).

Sales by market

First quarter

in millions of EUR, except percentages

2020

2021

Change

CSG

Europe

502

523

4.1%

6.0%

Americas

486

589

21.2%

-7.7%

Rest of the World

325

370

13.8%

22.9%

Global businesses

115

118

3.0%

1.7%

Total

1,427

1,599

12.0%

3.2%

Americas includes Cooper Lighting and Global businesses includes Klite

Wiz Connected is included in Market Groups Europe, Americas and Rest of the World (was previously part of Global businesses)

First quarter

Comparable sales in Europe grew by 6.0%, as most markets saw a partial recovery despite ongoing COVID-19 related measures. In the Americas, comparable sales declined by 7.7% as most countries continued to face a challenging macroeconomic environment at the start of the first quarter, yet with a stronger performance in March. In the Rest of the World, China showed a strong recovery. Together with India and the Middle East, China benefited from a low comparison base.

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

Signify NV published this content on 30 April 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 30 April 2021 05:05:04 UTC.


ę Publicnow 2021
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Sales 2021 6 869 M 8 048 M 8 048 M
Net income 2021 372 M 436 M 436 M
Net Debt 2021 1 121 M 1 314 M 1 314 M
P/E ratio 2021 14,9x
Yield 2021 3,38%
Capitalization 5 406 M 6 331 M 6 334 M
EV / Sales 2021 0,95x
EV / Sales 2022 0,87x
Nbr of Employees 39 143
Free-Float 92,8%
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Number of Analysts 12
Last Close Price 43,92 €
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Managers and Directors
╔ric Rondolat Chief Executive Officer
Engelen Van Chief Financial Officer
Arthur P. M. van der Poel Chairman-Supervisory Board
Tony Thomas Chief Digital & Information Officer
Rita S. Lane Member-Supervisory Board
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