Signify Reports €6.1 Billion in 2024 Sales, a 6.6% Decline. Launches Share Repurchase Program
Signify has reported its financial results for the fourth quarter and full year of 2024. The company recorded total sales of €6.1 billion, with an adjusted EBITA margin of 9.9% and free cash flow representing 7.1% of total sales. Despite market challenges and a 6.6% decline in sales, Signify has announced a share repurchase program of up to €150 million to be executed in 2025, with plans to repurchase €350-450 million in shares through 2027.
Full-Year 2024 Performance Highlights
- Sales: €6,143 million, reflecting a comparable sales growth (CSG) decline of 6.6%.
- LED-Based Revenue: Increased to 93% of total sales, up from 85% in 2023.
- Cost Reduction Achievements: Successfully implemented a cost reduction program, yielding savings of €131 million.
- Net Income: €334 million, a significant rise from €215 million in 2023.
- Cash Flow: Free cash flow of €438 million, representing 7.1% of sales.
Fourth Quarter 2024 Results
- Sales: €1,655 million with a CSG decline of 2.8%.
- Adjusted EBITA Margin: Improved to 12.4%, compared to 12.1% in Q4 2023.
- Net Income: €119 million, up from €59 million in the same period last year.
- Free Cash Flow: €188 million, down from €295 million in Q4 2023.
Strategic Initiatives and Market Outlook
Eric Rondolat, CEO of Signify, highlighted the company’s resilience despite economic headwinds in key markets such as China and the European professional lighting sector. He emphasized the growth in the connected and specialty lighting businesses, driven by the demand for energy-efficient and innovative solutions.
“We have successfully navigated the decline of our conventional business while maintaining a strong performance in our digital lighting divisions. Our cost reduction efforts and strategic focus have positioned us for sustained growth,” said Rondolat.
Looking ahead to 2025, Signify expects low single-digit topline growth, excluding conventional products, with a stable EBITA margin. Free cash flow generation is projected to remain in the range of 7-8% of sales.
Analysis: What Does This Mean for Signify?
The latest financial results indicate that Signify is navigating a challenging market environment with a strategic focus on efficiency and digital transformation. Despite declining overall sales, the company has maintained profitability through cost-saving measures and a growing emphasis on LED and connected lighting solutions.
The increase in LED-based revenue to 93% of total sales highlights the industry-wide transition towards energy-efficient lighting. However, the decline in comparable sales growth suggests persistent challenges in traditional markets, particularly in the professional sector in Europe and China.
The announced share repurchase program signals confidence in the company’s long-term outlook and its commitment to returning value to shareholders. The reduction in gross debt by €440 million strengthens Signify’s balance sheet, potentially improving financial flexibility for future investments and acquisitions.
On the sustainability front, Signify continues to demonstrate leadership with its Brighter Lives, Better World 2025 program. The company is making significant strides in reducing emissions and driving circular economy initiatives, positioning itself well in an increasingly environmentally conscious market.
Overall, while Signify faces macroeconomic pressures and sector-specific challenges, its strategic focus on digitalization, cost control, and sustainability provides a solid foundation for long-term growth and profitability.
Sustainability Commitments
Signify continues to make progress on its “Brighter Lives, Better World 2025” sustainability program. Key milestones include:
- Emission Reduction: On track to reduce emissions by 40% against the 2019 baseline, surpassing the Paris Agreement goals.
- Circular Economy: Achieved 35% circular revenues, ahead of the 2025 target of 32%.
- Social Impact: Brighter Lives revenues increased to 33%, exceeding the 2025 target.
- Diversity Efforts: The percentage of women in leadership roles fell to 28%, below the 2024 target, with ongoing initiatives to address the gap.
Financial Strength and Capital Allocation
In 2024, Signify successfully reduced its gross debt by €440 million and proposed an increased cash dividend of €1.56 per share, up from €1.55 in 2023. The company’s share repurchase program aims to provide additional value to shareholders while maintaining financial flexibility.
“We are entering 2025 in a much stronger position, with a focus on accelerating growth and delivering value to stakeholders,” concluded Rondolat.
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