Signify, the global leader in lighting, has announced its second quarter 2024 financial results, reflecting the company’s response to current market conditions and strategic advancements.
Financial Overview
In Q2 2024, Signify reported sales of EUR 1.5 billion, with an Adjusted EBITA margin of 7.9% and a free cash flow of EUR 51 million. Sales saw a nominal decline of -9.8% and a comparable sales growth (CSG) decline of -8.4%. However, LED-based sales rose to 86% of total sales, up from 84% in Q2 2023. Net income increased to EUR 63 million, compared to EUR 45 million in the previous year, demonstrating a positive trend despite market challenges.
Eric Rondolat, CEO of Signify, stated: “Our topline for Q2 was affected by the accelerated decline in Conventional lighting and ongoing market softness in Europe and China. Nevertheless, we are encouraged by the positive trend in connected lighting and the growth of our Consumer and OEM businesses outside China. Although the Adjusted EBITA margin of our Professional business declined, the improvements in our Consumer and OEM businesses are notable. Free cash flow met our expectations, reflecting anticipated restructuring costs.”
Market Dynamics and Strategic Insights
The quarter presented mixed results. The decline in Conventional lighting and market softness in Europe and China impacted performance. Despite this, connected lighting and the Consumer and OEM businesses showed positive trends. The company remains cautious about the Professional segment in Europe and China but expects growth in the Americas and continued strength in the OEM and Consumer segments.
Outlook
Signify is cautious regarding the Professional segment in Europe and China for the second half of the year. However, growth is anticipated in the Americas, and the OEM and Consumer segments are expected to perform well. Consequently, the company maintains its guidance with an Adjusted EBITA margin at the lower end of the 10.0-10.5% range and free cash flow generation of 6-7% of sales.
Sustainability Initiatives: Brighter Lives, Better World 2025
Signify’s Brighter Lives, Better World 2025 program continues to advance, aiming to double its positive environmental and societal impact. Key achievements include:
- GHG Emissions Reduction: Signify is ahead of schedule to reduce greenhouse gas emissions by 40% against a 2019 baseline, exceeding the Paris Agreement’s pace.
- Circular Revenues: Circular revenues increased to 35%, surpassing the 2025 target of 32%. This includes contributions from professional and consumer LED luminaires.
- Brighter Lives Revenues: These revenues held steady at 31%, on track to reach the 2025 target of 32%. Contributions include EyeComfort consumer products and Dark Sky compliant professional luminaires.
- Gender Diversity in Leadership: The percentage of women in leadership positions rose to 29%, up 1% from the previous quarter, with efforts continuing to reach the 2025 target of 34%.
Climate Transition Plan
In Q2 2024, Signify introduced its Climate Transition Plan, aligning with its SBTi-validated targets. The plan includes:
- Achieving net-zero GHG emissions across the entire value chain by 2040.
- Reducing scope 1, 2, and 3 GHG emissions by 50% by 2030 and 90% by 2040, based on 2019 levels.
Conference Call and Webcast
Eric Rondolat and Zeljko Kosanovic, CFO, will host a conference call at 9:00 a.m. CET to discuss the Q2 2024 results. A live audio webcast will be available on the Investor Relations section of the Signify website.
For more detailed information, review the full press release below.