Chat with Filing

Ask questions about this document
Please log in or register to use the chat feature. Please register first.
ER - Signify reports full-year sales of EUR 6.1 billion, operational profitability of 9.9% and a free cash flow of 7.1% of sales; launches share repurchase program

Company: Signify N.V. Date: 2025-01-24 Language: English Register to download
Loading document preview...
Document Preview Not Available

The file type (.pdf) cannot be displayed directly here.
Open Original File
Error loading document preview. Please try the 'Open Original File' link.
You're One Click Away From The Full Filing

Instantly access this document—and 2.8M more—for free. Select your preferred method:
Continue with Google Continue with Microsoft Continue with Facebook Continue with Amazon
# Press Release

January 24, 2025

### **Signify reports full-year sales of EUR 6.1 billion, operational profitability of 9.9% and a free cash flow of 7.1% of sales; launches share repurchase program**

#### **Full year 2024<sup>1</sup>**

- Signify's installed base of connected light points increased to 144 million at YE 24
- Included in the Dow Jones Sustainability World Index for the eighth consecutive year
- Sales of EUR 6,143 million; comparable sales growth (CSG) of -6.6%
- LED-based sales represented 93% of total sales (FY 23: 85%)
- Adj. EBITA margin of 9.9% (FY 23: 10.0%)
- Successful implementation of cost reduction program, delivering savings of EUR 131 million
- Net income of EUR 334 million (FY 23: EUR 215 million)
- Free cash flow of EUR 438 million (FY 23: EUR 586 million), representing 7.1% of sales

#### **Fourth quarter 2024**

- Sales of EUR 1,655 million; CSG of -2.8%
- Adj. EBITA margin of 12.4% (Q4 23: 12.1%)
- Net income of EUR 119 million (Q4 23: EUR 59 million)
- Free cash flow of EUR 188 million (Q4 23: EUR 295 million)

#### **Capital Allocation**

- Successful reduction of EUR 440 million of gross debt in 2024
- Proposal to increase cash dividend to EUR 1.56 per share over 2024 (FY 23: EUR 1.55)
- Launch of share repurchase program of up to EUR 150 million for 2025 starting in Q1 2025; plan to repurchase EUR 350-450 million of shares until the end of 2027

**Eindhoven, the Netherlands** – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company's fourth quarter and full-year 2024 results.

Eric Rondolat, CEO of Signify, comments:

"Today's results show the continued momentum of our business. Despite headwinds in China and in the Professional business in Europe, we achieved further sequential improvements in the fourth quarter, with a particularly strong performance from the Consumer business.

We are encouraged by the improvements we have seen over the past quarters. We successfully managed the decline of the Conventional business, as the rest of the business performed in line with our markets. We continued to see growth in our connected and specialty lighting businesses, driven by underlying demand for energy efficient and innovative solutions.

We maintained a strong gross margin as we fully compensated price pressure in some markets with COGS savings. The cost reduction program we successfully implemented delivered EUR 131 million of savings in line  with our commitment, supporting a resilient bottom line. Our Adjusted EBITA is 9.9% for the full year and includes a drag effect of 40 bps from the slowing contribution of the Conventional Business, highlighting our ability to navigate challenging market conditions with our three digital businesses. 

We achieved a strong free cash flow of 7.1% of sales, which includes a cash out related to the restructuring program and a reduction of our US pension liabilities. Available free cash flow was used to reduce EUR 440 million of debt. As a result, we have strengthened our balance sheet and reduced interest charges for the coming years. 

Thanks to these achievements, we are updating our capital allocation policy. We will increase our dividend to 1.56 EUR per share in 2025 and will launch a share buyback program in Q1 of up to EUR 150 million to be executed by year-end. This is part of a planned EUR 350-450 million share buyback program planned until the end of 2027. 

Looking to 2025, we expect the momentum in our business will build throughout the year, resulting in low single digit topline growth for Signify excluding Conventional and a stable EBITA margin compared to 2024. On top of this, we are expecting a free cash flow generation in the range of 7-8% for the year. 

We are closing the year in a significantly stronger position than we entered it. While work remains to accelerate our progress and ensure our businesses deliver sustained growth for the years ahead, we have the structure and strategy in place to achieve our goals. Our accomplishments are made possible by the outstanding commitment of Signify employees around the world who have consistently approached complexity and change with dedication and adaptability."

### Brighter Lives, Better World 2025

Signify completed its fourth year of its Brighter Lives, Better World 2025 sustainability program, making continued progress towards doubling its positive impact on the environment and society by the end of 2025. Signify was on track to deliver on three of its sustainability program commitments:

#### **Double the pace of the Paris Agreement**

Signify is on track to reduce emissions across the entire value chain by 40% against the 2019 baseline - double the pace required by the Paris Agreement. This is driven by Signify's leadership in energy efficient and connected LED lighting solutions, which significantly reduce emissions during the use phase. 

#### **Double Circular revenues**

Circular revenues decreased slightly from third quarter to 35% this quarter, still well ahead of the 2025 target of 32%. The main contribution was from serviceable luminaires. The decline was caused by the discontinuation of one specific luminaire family.

#### **Double Brighter lives revenues**

Brighter lives revenues increased to 33% this quarter, putting us ahead of our 2025 target of 32%. This includes strong performance from both professional luminaires and consumer light sources.

#### **Double the percentage of women in leadership**

The percentage of women in leadership positions dropped to 28%, off track versus the 2024 target. Signify continues its efforts to increase overall representation through focused hiring practices for diversity across all levels. Focus remains on building strong succession pipelines, and engagement actions to reduce attrition.

In the fourth quarter, Signify received several external recognitions for its leadership in Sustainability. Signify was included in the DJSI World Index for the 8th consecutive year and achieved the EcoVadis Platinum rating for the 5th consecutive year.

### Outlook

For 2025, Signify expects sales momentum to build throughout the year, leading to low single digit comparable sales growth excluding Conventional. 

Signify also expects a stable Adjusted EBITA margin vs. 2024 with the Professional, Consumer and OEM combined compensating the drag of the Conventional business. 

Signify targets a free cash flow generation of 7-8% of sales.

### Capital allocation

#### **Capital allocation policy**

Signify's capital allocation policy is 

- to maintain a robust capital structure and maintain an investment grade credit rating,
- to pay an increasing annual cash dividend per share year on year,
- to continue to invest in organic and inorganic growth opportunities in line with its strategic priorities, and
- to provide additional capital return to shareholders with residual available cash.

#### **Debt Repayment**

In 2024, Signify successfully repaid EUR 440 million of gross debt and reduced its US pension liabilities by USD 48 million by settling the main defined benefit plan. The net debt/EBITDA leverage ratio reduced to 1.3x, from 1.7x in 2023, while avoiding a significant increase of annual interest charges in the coming years.

#### **Dividend**

Signify proposes a cash dividend of EUR 1.56 per share for 2024, in line with its policy to pay an increasing annual cash dividend per share year on year. The dividend proposal is subject to approval at the Annual General Meeting of Shareholders (AGM) to be held on April 25th, 2025. Further details will be provided in the agenda for the AGM.

#### **Launch of share repurchase program**

Signify announces a share repurchase program for a total of EUR 350-450 million of shares until the end of 2027. This will include share repurchases to cover share-based remuneration obligations. Signify intends to cancel the remainder of the shares repurchased. This initiative underscores our commitment to create value for shareholders while maintaining financial flexibility to support growth opportunities.

As part of this program, Signify intends to repurchase shares for an amount of up to EUR 150 million to be completed by the end of 2025, starting in Q1. This will include an allocation of approx. EUR 30 million to cover share-based remuneration obligations, with the remainder allocated for the cancellation of shares.

Signify is committed to the planned three-year share repurchase program, subject to changes in corporate activities, such as M&A, or material changes in the business environment. The share repurchase program will be executed within the limitations of the existing authority granted by the AGM held on May 14, 2024 and of the authority to be granted by future AGMs.

### Financial review

| Fourth	quarter |        |         |                                        | Twelve	months |        |        |
|----------------|--------|---------|----------------------------------------|---------------|--------|--------|
| 2023           | 2024   | change  | in	millions	of	EUR,	except	percentages | 2023          | 2024   | change |
|                |        | -2.8	%  | Comparable	sales	growth                |               |        | -6.6	% |
|                |        | -1.8	%  | Currency	effects                       |               |        | -1.8	% |
|                |        | —	%     | Consolidation	effects                  |               |        | —	%    |
| 1,734          | 1,655  | -4.6	%  | Sales                                  | 6,704         | 6,143  | -8.4	% |
| 707            | 673    | -4.8	%  | Adjusted	gross	margin                  | 2,660         | 2,501  | -6.0	% |
| 40.8	%         | 40.7	% |         | Adj.	gross	margin	(as	%	of	sales)      | 39.7	%        | 40.7	% |        |
| -445           | -425   |         | Adj.	SG&A	expenses                     | -1,791        | -1,701 |        |
| -75            | -61    |         | Adj.	R&D	expenses                      | -284          | -264   |        |
| -520           | -486   | -6.4	%  | Adj.	indirect	costs                    | -2,075        | -1,965 | -5.3	% |
| 30.0	%         | 29.4	% |         | Adj.	indirect	costs	(as	%	of	sales)    | 31.0	%        | 32.0	% |        |
| 209            | 205    | -1.9	%  | Adjusted	EBITA                         | 670           | 606    | -9.6	% |
| 12.1	%         | 12.4	% |         | Adjusted	EBITA	margin                  | 10.0	%        | 9.9	%  |        |
| -101           | -11    |         | Adjusted	items                         | -221          | -63    |        |
| 108            | 194    | 78.7	%  | EBITA                                  | 449           | 543    | 20.9	% |
| 89             | 179    | 101.4	% | Income	from	operations	(EBIT)          | 369           | 477    | 29.4	% |
| -18            | -23    |         | Net	financial	income/expense           | -102          | -82    |        |
| -12            | -37    |         | Income	tax	expense                     | -53           | -60    |        |
| 59             | 119    | 101.3	% | Net	income                             | 215           | 334    | 55.3	% |
| 295            | 188    |         | Free	cash	flow                         | 586           | 438    |        |
| 0.44           | 0.92   |         | Basic	EPS	(€)                          | 1.61          | 2.60   |        |
| 31,920         | 29,459 |         | Employees	(FTE)                        | 31,920        | 29,459 |        |

#### **Full year**

Nominal sales decreased by 8.4% to EUR 6,143 million, including a negative currency effect of 1.8% from USD and CNY depreciation. Comparable sales declined by 6.6%, mainly due to the accelerated decline in Conventional business, weakness in the European professional lighting business and in China. The agriculture lighting segment rebounded after experiencing a temporary slowdown in 2023.

The Adjusted gross margin improved by 100 bps to 40.7%, as positive sales mix and effective COGS management more than compensated price pressure in some of Signify's markets. Adjusted indirect costs as a percentage of sales increased by 100 bps to 32.0%, as benefits from the cost reduction program were offset by the decline in the topline.

Adjusted EBITA was EUR 606 million. The Adjusted EBITA margin was 9.9%, as the gross margin improvement was offset by an under-absorption of fixed costs. The continued decline of the Conventional business had a adverse effect of 40 bps on the Adjusted EBITA margin. 

Adjusted items were EUR -63 million, as restructuring costs were partly compensated by a gain from real estate transactions and other items. In the previous year, Adjusted items amounted to EUR -221 million including -167 million of restructuring costs. 

Net income increased to EUR 334 million, mainly attributable to lower restructuring costs and financial expense.

#### **Fourth quarter**

Nominal sales decreased by 4.6% to EUR 1,655 million, including a negative currency effect of 1.8% caused by a mix of different currencies. Comparable sales declined by 2.8%, still impacted by softness in China and Europe Professional markets, partly offset by good performance in the Agriculture lighting segment.

The Adjusted gross margin remained broadly stable at 40.7%, as positive sales mix and effective COGS management largely compensated price pressure in some of Signify's markets. Adjusted indirect costs as a percentage of sales decreased by 60 bps to 29.4%, mainly reflecting the acceleration of the cost reduction program.

Adjusted EBITA increased to EUR 205 million. The Adjusted EBITA margin increased by 30 bps to 12.4%, mainly driven by lower indirect costs.

Adjusted items were EUR -11 million as restructuring costs of EUR 30 million were partly offset by incidental items of EUR 13 million related to a gain in a real estate transaction, and acquisition-related gains of EUR 5 million mainly related to balances of prior acquisitions.

Net income increased to EUR 119 million, mainly resulting from lower restructuring costs compared to last year.

The number of employees (FTE) decreased from 31,920 at the end of Q4 23 to 29,459 at the end of Q4 24. The year-on-year decrease is mostly related to the 2023 restructuring program and a reduction of factory personnel due to lower production volumes. In general, the number of FTEs is affected by fluctuations in volume and seasonality.

### Professional

| Fourth	quarter |        |         |                                                | Twelve	months |        |         |
|----------------|--------|---------|------------------------------------------------|---------------|--------|---------|
| 2023           | 2024   | change  | in	millions	of	EUR,	unless	otherwise	indicated | 2023          | 2024   | change  |
| -3.0	%         | -3.4	% |         | Comparable	sales	growth                        | -4.4	%        | -5.8	% |         |
| 1,095          | 1,036  | -5.4	%  | Sales                                          | 4,254         | 3,933  | -7.6	%  |
| 128            | 111    | -13.2	% | Adjusted	EBITA                                 | 412           | 367    | -10.9	% |
| 11.7	%         | 10.8	% |         | Adjusted	EBITA	margin                          | 9.7	%         | 9.3	%  |         |

*Includes Intelligent Lighting Controls since March 1, 2023*

#### **Full year**

Nominal sales decreased by 7.6% to EUR 3,933 million, including a negative currency effect of 1.8%. Comparable sales decreased by 5.8%, impacted by challenges faced in the indoor professional lighting market in Europe, as well as the weaker construction sector in China. The Adjusted EBITA margin decreased by 40 bps to 9.3%, mainly explained by under-absorption of fixed costs.

#### **Fourth quarter**

Nominal sales decreased by 5.4% to EUR 1,036 million, including a negative currency effect of 2.0%. Comparable sales decreased by 3.4%, mainly due to weakness in Europe and China. The Adjusted EBITA margin decreased by 90 bps to 10.8%, mainly due to the under-absorption of fixed costs. 

### Consumer

| Fourth	quarter |        |        |                                                | Twelve	months |        |        |
|----------------|--------|--------|------------------------------------------------|---------------|--------|--------|
| 2023           | 2024   | change | in	millions	of	EUR,	unless	otherwise	indicated | 2023          | 2024   | change |
| -5.3	%         | 4.0	%  |        | Comparable	sales	growth                        | -9.3	%        | -1.2	% |        |
| 387            | 396    | 2.5	%  | Sales                                          | 1,342         | 1,297  | -3.4	% |
| 55             | 69     | 25.8	% | Adjusted	EBITA                                 | 120           | 144    | 20.5	% |
| 14.2	%         | 17.4	% |        | Adjusted	EBITA	margin                          | 8.9	%         | 11.1	% |        |

#### **Full year**

Nominal sales decreased by 3.4% to EUR 1,297 million, including a negative currency effect of 2.2%. Comparable sales decreased by 1.2% as the sales growth in most markets was offset by a weak performance in China. The Adjusted EBITA margin increased by 220 bps to 11.1%, primarily coming from effective COGS management and lower indirect costs. 

#### **Fourth quarter**

Nominal sales increased by 2.5% to EUR 396 million, including a negative currency effect of 1.5%. Comparable sales increased by 4.0%, driven by strong connected sales during the main selling season. The Adjusted EBITA margin increased by 320 bps to 17.4%, driven by top-line recovery, a strong connected consumer performance and benefits from the cost reduction program.

### OEM

| Fourth	quarter |         |        |        |                                                | Twelve	months |        |        |
|----------------|---------|--------|--------|------------------------------------------------|---------------|--------|--------|
|                | 2023    | 2024   | change | in	millions	of	EUR,	unless	otherwise	indicated | 2023          | 2024   | change |
|                | -23.7	% | -1.2	% |        | Comparable	sales	growth                        | -23.0	%       | -2.0	% |        |
|                | 107     | 103    | -3.5	% | Sales                                          | 457           | 437    | -4.5	% |
|                | 9       | 9      | 2.1	%  | Adjusted	EBITA                                 | 43            | 48     | 12.3	% |
|                | 8.1	%   | 8.5	%  |        | Adjusted	EBITA	margin                          | 9.4	%         | 11.1	% |        |

### **Full year**

Nominal sales decreased by 4.5% to EUR 437 million, including a negative currency effect of 2.5%. Comparable sales decreased by 2.0%. The Adjusted EBITA margin increased by 170 bps to 11.1%, driven by the stabilization of the topline and benefits from the cost reduction program.

### **Fourth quarter**

Nominal sales decreased by 3.5% to EUR 103 million, including a negative currency effect of 2.3%. Comparable sales decreased by 1.2%, as growth in Europe was offset by a weaker performance in China. The Adjusted EBITA margin increased by 40 bps to 8.5%, reflecting the benefits from the cost reduction program.

### Conventional

| Fourth	quarter |         |         |                                                | Twelve	months |         |         |
|----------------|---------|---------|------------------------------------------------|---------------|---------|---------|
| 2023           | 2024    | change  | in	millions	of	EUR,	unless	otherwise	indicated | 2023          | 2024    | change  |
| -29.6	%        | -24.5	% |         | Comparable	sales	growth                        | -18.4	%       | -29.2	% |         |
| 136            | 101     | -25.4	% | Sales                                          | 627           | 437     | -30.2	% |
| 23             | 20      | -15.8	% | Adjusted	EBITA                                 | 127           | 78      | -38.3	% |
| 17.1	%         | 19.3	%  |         | Adjusted	EBITA	margin                          | 20.3	%        | 17.9	%  |         |

#### **Full year**

Nominal sales decreased by 30.2% to EUR 437 million, including a negative currency effect of 1.0%. Comparable sales decreased by 29.2%, due to the structural decline of the business, which was exacerbated by continued impact of the fluorescent bans in Europe. The Adjusted EBITA margin decreased by 240 bps to 17.9%, mainly due to an under-absorption of fixed costs.

#### **Fourth quarter**

Nominal sales decreased by 25.4% to EUR 101 million, including a negative currency effect of 0.9%. Comparable sales decreased by 24.5%. The Adjusted EBITA margin improved by 220 bps to 19.3%.

### Other

#### **Full year**

'Other' represents amounts not allocated to the businesses and mainly includes costs related to ventures, exploratory research and audits. Adjusted EBITA was EUR -32 million (2023: EUR -31 million).

#### **Fourth quarter**

Adjusted EBITA was EUR -4 million (Q4 23: EUR -6 million).

### Working capital

| in	millions	of	EUR,	unless	otherwise	indicated | Dec	31,	2023 | Sep	30,	2024 | Dec	31,	2024 |
|------------------------------------------------|--------------|--------------|--------------|
| Inventories                                    | 1,050        | 1,089        | 1,035        |
| Trade	and	other	receivables1                   | 1,012        | 979          | 1,018        |
| Trade	and	other	payables                       | -1,539       | -1,548       | -1,588       |
| Other	working	capital	items                    | -62          | -41          | -43          |
| Working	capital                                | 461          | 480          | 422          |
| As	%	of	LTM	sales2                             | 6.9	%        | 7.7	%        | 6.9	%        |

1 As at December 31, 2024 and September 30, 2024,Trade and other receivables exclude USD 50 million and USD 50 million, respectively, of insurance receivables for which a legal provision is recognized for the same amount

2 *LTM: last twelve months 6,614 6,336 6,275* 

#### **Fourth quarter**

Compared to September 2024, working capital decreased by EUR 58 million to EUR 422 million, coming from a reduction of inventories and an increase of payables partly offset by higher receivables. As a percentage of last twelve-month sales, working capital decreased by 80 bps to 6.9%.

Compared to December 2023, working capital decreased by EUR 39 million, driven by lower inventories, and higher payables. As a percentage of last twelve-month sales, working capital remained stable at 6.9%.

### Cash flow analysis

| Fourth	quarter |      |                                                  | Twelve	months |      |
|----------------|------|--------------------------------------------------|---------------|------|
| 2023           | 2024 | in	millions	of	EUR                               | 2023          | 2024 |
| 89             | 179  | Income	from	operations	(EBIT)                    | 369           | 477  |
| 69             | 63   | Depreciation	and	amortization                    | 274           | 255  |
| 107            | 39   | Additions	to	(releases	of)	provisions            | 266           | 140  |
| -46            | -98  | Utilizations	of	provisions                       | -192          | -289 |
| 121            | 77   | Changes	in	working	capital                       | 87            | 48   |
| -1             | -13  | Net	interest	and	financing	costs	received	(paid) | -41           | -53  |
| -23            | -28  | Income	taxes	paid                                | -81           | -66  |
| -28            | -17  | Net	capex                                        | -110          | -77  |
| 8              | -14  | Other                                            | 15            | 1    |
| 295            | 188  | Free	cash	flow                                   | 586           | 438  |

#### **Full year**

Free cash flow decreased to EUR 438 million, mainly reflecting the non-recurring cash impact related to the 2023 restructuring program and the reduction of US pension liabilities. Free cash flow included a total restructuring payout of EUR 133 million (2023: EUR 69 million).

|                        | Twelve	months |  |
|------------------------|---------------|--|
| In	millions	of	EUR     | 2024          |  |
| Professional           | 397           |  |
| Consumer               | 147           |  |
| OEM                    | 81            |  |
| Conventional           | 55            |  |
| Other*                 | -243          |  |
| Signify	free	cash	flow | 438           |  |

*\* Non-allocated free cash flow items (e.g. tax, interest and costs in 'Other' not allocated to the businesses).*

In 2024, the Professional, Consumer and OEM Businesses generated the majority of the company's free cash flow, contributing 92% of Signify's free cash flow excluding 'Other'.

#### **Fourth quarter**

Free cash flow decreased to EUR 188 million, mainly resulting from the reduction of the US pensions liabilities, higher utilization of provisions and a lower working capital inflow, as Q4 last year benefited from a stronger reduction of inventories. Free cash flow included a restructuring payout of EUR 28 million (Q4 23: 16 million).

### Net debt and total equity

| in	millions	of	EUR        | Dec	31,	2023 | Sep	30,	2024 | Dec	31,	2024 |
|---------------------------|--------------|--------------|--------------|
| Short-term	debt           | 1,038        | 567          | 416          |
| Long-term	debt            | 1,192        | 1,141        | 1,137        |
| Gross	debt                | 2,230        | 1,708        | 1,553        |
| Cash	and	cash	equivalents | 1,158        | 612          | 633          |
| Net	debt                  | 1,071        | 1,096        | 920          |
| Total	equity              | 2,947        | 2,903        | 3,267        |

#### **Fourth quarter**

Compared with the end of September 2024, the cash position increased by EUR 21 million to EUR 633 million, mainly driven by free cash flow generation. During the quarter, Signify repaid EUR 488 million of short term debt originally maturing in November 2024 and January 2025. At the same time, the company issued EUR 325 million of short-term debt. As a result, gross debt decreased by EUR 155 million to EUR 1,553 million. Net debt reduced to EUR 920 million mainly attributable to a higher cash position and reduction in gross debt. Total equity increased to EUR 3,267 million (Q3 24: EUR 2,903 million), primarily due to currency translation results and net income.

Compared with the end of December 2023, the cash position decreased by EUR 525 million and the gross debt decreased by EUR 677 million. As a result, the net debt reduced by EUR 151 million. At the end of December 2024, the net debt/EBITDA ratio was 1.3x (Q4 23: 1.7x).

### Other information

Appendix A – Selection of financial statements Appendix B – Reconciliation of non-IFRS financial measures Appendix C – Financial Glossary

#### **Conference call and audio webcast**

Eric Rondolat (CEO) and Željko Kosanović (CFO) will host a conference call for analysts and institutional investors at 9:00 a.m. CET to discuss the fourth quarter and full-year 2024 results. A live audio webcast of the conference call will be available via the [Investor Relations website.](https://www.signify.com/global/our-company/investors)

#### **Financial calendar**

| Annual	Report	2024                        |
|-------------------------------------------|
| First		quarter	results	2025               |
| Annual	General	Meeting                    |
| Ex-dividend	date                          |
| Dividend	record	date                      |
| Dividend	payment	date                     |
| Second	quarter	and	half-year	results	2025 |
| Third	quarter	results	2025                |
|                                           |

### **For further information, please contact:**

**Signify Investor Relations** Thelke Gerdes Tel: +31 6 1801 7131 E-mail: [thelke.gerdes@signify.com](mailto:thelke.gerdes@signify.com)

#### **Signify Corporate Communications**

Tom Lodge Tel: +31 6 5252 5416 E-mail: [tom.lodge@signify.com](mailto:tom.lodge@signify.com)

#### **About Signify**

[Signify](https://www.signify.com/) (Euronext: LIGHT) is the world leader in lighting for professionals, consumers and the Internet of Things. Our [Philips](https://www.lighting.philips.com/) products, [Interact](https://www.interact-lighting.com/en)  systems and data-enabled services, deliver business value and transform life in homes, buildings and public spaces. In 2024, we had sales of EUR 6.1 billion, approximately 29,000 employees and a presence in over 70 countries. We unlock the extraordinary potential of light for brighter lives and a better world. We have been in the [Dow Jones Sustainability World Index](https://www.spglobal.com/spdji/en/indices/esg/dow-jones-sustainability-world-index/#overview) since our IPO for eight consecutive years and have achieved the [EcoVadis](https://ecovadis.com/) Platinum rating for five consecutive years, placing Signify in the [top one percent](https://www.signify.com/global/our-company/news/press-releases/2023/20231129-signify-achieves-ecovadis-platinum-rating-for-the-fourth-consecutive-year) of companies assessed. News from Signify can be found in the [Newsroom,](https://www.signify.com/news)  on [X,](https://twitter.com/SignifyCompany/) [LinkedIn](https://www.linkedin.com/company/signifycompany/mycompany/)  and [Instagram.](https://www.instagram.com/signifycompany/) Information for investors is located on the [Investor Relations](https://www.signify.com/investors) page.

### Important information

#### **Forward-Looking Statements and Risks & Uncertainties**

This document and the related oral presentation contain, and responses to questions following the presentation may contain, forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Signify N.V. (the "Company", and together with its subsidiaries, the "Group"), including statements regarding strategy, estimates of sales growth and future operational results.

By their nature, these statements involve risks and uncertainties facing the Company and its Group companies, and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties and other important factors include but are not limited to: adverse economic and geopolitical developments including the potential impact of trade tariffs, the impact of the increasing conflicts globally, volatility in interest rates, inflation and currency fluctuations, changes in international tax laws, economic downturns in key geographies to the company, supply chain disruptions, new technological disruptions, cybersecurity risk, competition in the general lighting market, reputational and adverse effects on business due to activities in Environment, Health & Safety, compliance risks, ability to attract and retain talented personnel, pension liabilities.

Additional risks currently not known to the Group or that the Group has not considered material as of the date of this document could also prove to be important and may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group or could cause the forward-looking events discussed in this document not to occur. The Group undertakes no duty to and will not necessarily update any of the forward-looking statements in light of new information or future events, except to the extent required by applicable law.

#### **Market and Industry Information**

All references to market share, market data, industry statistics and industry forecasts in this document consist of estimates compiled by industry professionals, competitors, organizations or analysts, of publicly available information or of the Group's own assessment of its sales and markets. Rankings are based on sales unless otherwise stated.

#### **Non-IFRS Financial Measures**

Certain parts of this document contain non-IFRS financial measures and ratios, such as comparable sales growth, adjusted gross margin, EBITA, adjusted EBITA, free cash flow, and other related ratios, which are not recognized measures of financial performance or liquidity under IFRS. The non-IFRS financial measures presented are measures used by management to monitor the underlying performance of the Group's business and operations and, accordingly, they have not been audited nor reviewed. Not all companies calculate non-IFRS financial measures in the same manner or on a consistent basis and these measures and ratios may not be comparable to measures used by other companies under the same or similar names. A reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures is contained in this document. For further information on non-IFRS financial measures, see "Chapter 19 Reconciliation of non-IFRS measures" in the Annual Report 2023.

#### **Presentation**

All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up to totals provided. All reported data are unaudited. Unless otherwise indicated, financial information has been prepared in accordance with the accounting policies as stated in the Annual Report 2023 and the Semi-Annual Report 2024.

#### **Change in reportable segments**

Effective Q1 2024, Signify reports against four businesses with vertically integrated P&Ls, adapted from the previous three divisions as follows:

- The **Professional** business will offer LED lamps, luminaires, connected lighting systems and services to customers in the professional segment.
- The **Consumer** business will offer LED lamps, luminaires, and connected products, including Philips Hue and WiZ, to customers in the consumer segment.
- The **OEM** business will offer lighting components to the industry.
- The **Conventional** business will offer special lighting, digital projection, and lamp electronics.

#### **Market Abuse Regulation**

This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

## Appendix A – Financial statement information

### A. Condensed consolidated statement of income

*In millions of EUR unless otherwise stated*

|                                                                | Fourth	quarter |         | January	to	December |         |
|----------------------------------------------------------------|----------------|---------|---------------------|---------|
|                                                                | 2023           | 2024    | 2023                | 2024    |
| Sales                                                          | 1,734          | 1,655   | 6,704               | 6,143   |
| Cost	of	sales                                                  | (1,048)        | (1,002) | (4,146)             | (3,701) |
| Gross	margin                                                   | 686            | 653     | 2,558               | 2,442   |
| Selling,	general	and	administrative	expenses                   | (503)          | (438)   | (1,882)             | (1,736) |
| Research	and	development	expenses                              | (93)           | (61)    | (308)               | (266)   |
| Impairment	of	goodwill                                         | –              | –       | –                   | –       |
| Other	business	income                                          | 3              | 25      | 24                  | 41      |
| Other	business	expenses                                        | (4)            | –       | (23)                | (3)     |
| Income	from	operations                                         | 89             | 179     | 369                 | 477     |
| Financial	income                                               | 14             | 9       | 32                  | 42      |
| Financial	expenses                                             | (32)           | (33)    | (134)               | (124)   |
| Results	relating	to	investments	in	associates                  | –              | –       | –                   | (1)     |
| Income	before	taxes                                            | 71             | 156     | 268                 | 394     |
| Income	tax	expense                                             | (12)           | (37)    | (53)                | (60)    |
| Net	income                                                     | 59             | 119     | 215                 | 334     |
|                                                                |                |         |                     |         |
| Attribution	of	net	income	for	the	period:                      |                |         |                     |         |
| Net	income	(loss)	attributable	to	shareholders	of	Signify	N.V. | 56             | 116     | 203                 | 328     |
| Net	income	(loss)	attributable	to	non-controlling	interests    | 3              | 3       | 12                  | 6       |
|                                                                |                |         |                     |         |
| Earnings	per	ordinary	share	attributable	to	shareholders       |                |         |                     |         |
| Weighted	average	number	of	ordinary	shares	outstanding         |                |         |                     |         |
| used	for	calculation	(in	thousands):                           |                |         |                     |         |
| Basic                                                          | 126,313        | 126,169 | 125,951             | 126,222 |
| Diluted                                                        | 127,262        | 127,444 | 127,338             | 127,536 |
| Net	income	attributable	to	shareholders	per	ordinary	share     |                |         |                     |         |
| in	EUR:                                                        |                |         |                     |         |
| Basic                                                          | 0.44           | 0.92    | 1.61                | 2.60    |
| Diluted                                                        | 0.44           | 0.91    | 1.59                | 2.57    |

### B. Condensed consolidated statement of comprehensive income

*in millions of EUR*

|                                                                  | Fourth	quarter |      |       | January	to	December |  |
|------------------------------------------------------------------|----------------|------|-------|---------------------|--|
|                                                                  | 2023           | 2024 | 2023  | 2024                |  |
| Net	income	(loss)                                                | 59             | 119  | 215   | 334                 |  |
| Pensions	and	other	post-employment	plans:                        |                |      |       |                     |  |
| Remeasurements                                                   | (13)           | 8    | (14)  | 11                  |  |
| Income	tax	effect	on	remeasurements                              | 2              | (2)  | 2     | (3)                 |  |
| Total	of	items	that	will	not	be	reclassified	to	profit	or	loss   | (11)           | 6    | (12)  | 8                   |  |
| Currency	translation	differences:                                |                |      |       |                     |  |
| Net	current	period	change,	before	tax                            | (181)          | 236  | (143) | 181                 |  |
| Income	tax	effect                                                | –              | –    | –     | –                   |  |
| Net	investment	hedge                                             |                |      |       |                     |  |
| Net	current	period	change,	before	tax                            | 2              | –    | (3)   | –                   |  |
| Income	tax	effect                                                | 1              | –    | 1     | –                   |  |
| Cash	flow	hedges:                                                |                |      |       |                     |  |
| Net	current	period	change,	before	tax                            | 4              | 5    | 25    | 8                   |  |
| Income	tax	effect                                                | (1)            | (1)  | (6)   | (2)                 |  |
| Total	of	items	that	are	or	may	be	reclassified	to	profit	or	loss | (176)          | 240  | (126) | 187                 |  |
|                                                                  |                |      |       |                     |  |
| Other	comprehensive	income	(loss)                                | (187)          | 247  | (138) | 196                 |  |
| Total	comprehensive	income	(loss)                                | (128)          | 365  | 77    | 529                 |  |
|                                                                  |                |      |       |                     |  |
| Total	comprehensive	income	(loss)	attributable	to:               |                |      |       |                     |  |
| Shareholders	of	Signify	N.V.                                     | (125)          | 357  | 71    | 518                 |  |
| Non-controlling	interests                                        | (2)            | 8    | 6     | 11                  |  |

### C. Condensed consolidated statement of financial position

*In millions of EUR*

|                                                     | 2023  | 2024  |
|-----------------------------------------------------|-------|-------|
| Non-current	assets                                  |       |       |
| Property,	plant	and	equipment                       | 633   | 568   |
| Goodwill                                            | 2,755 | 2,903 |
| Intangible	assets,	other	than	goodwill              | 641   | 608   |
| Investments	in	associates                           | 12    | 7     |
| Financial	assets                                    | 91    | 38    |
| Deferred	tax	assets                                 | 402   | 391   |
| Other	assets                                        | 32    | 26    |
| Total	non-current	assets                            | 4,566 | 4,541 |
| Current	assets                                      |       |       |
| Inventories                                         | 1,050 | 1,035 |
| Financial	assets                                    | 2     | –     |
| Other	assets                                        | 147   | 147   |
| Derivative	financial	assets                         | 14    | 17    |
| Income	tax	receivable                               | 54    | 52    |
| Trade	and	other	receivables                         | 1,012 | 1,066 |
| Cash	and	cash	equivalents                           | 1,158 | 633   |
| Assets	classified	as	held	for	sale                  | –     | 13    |
| Total	current	assets                                | 3,438 | 2,964 |
| Total	assets                                        | 8,004 | 7,505 |
|                                                     |       |       |
| Equity                                              |       |       |
| Shareholders'	equity                                | 2,817 | 3,162 |
| Non-controlling	interests                           | 129   | 105   |
| Total	equity                                        | 2,947 | 3,267 |
|                                                     |       |       |
| Non-current	liabilities                             |       |       |
| Debt                                                | 1,192 | 1,137 |
| Post-employment	benefits                            | 322   | 255   |
| Provisions                                          | 263   | 192   |
| Deferred	tax	liabilities                            | 20    | 17    |
| Income	tax	payable                                  | 79    | 68    |
| Other	liabilities                                   | 154   | 145   |
| Total	non-current	liabilities                       | 2,030 | 1,815 |
|                                                     |       |       |
| Current	liabilities                                 |       |       |
| Debt,	including	bank	overdrafts                     | 1,038 | 416   |
| Derivative	financial	liabilities                    | 17    | 11    |
| Income	tax	payable                                  | 20    | 19    |
| Trade	and	other	payables                            | 1,539 | 1,588 |
| Provisions                                          | 206   | 192   |
| Other	liabilities                                   | 206   | 196   |
| Liabilities	from	assets	classified	as	held	for	sale | –     | –     |
| Total	current	liabilities                           | 3,027 | 2,423 |
| Total	liabilities	and	total	equity                  | 8,004 | 7,505 |

### D. Condensed consolidated statement of cash flows

*In millions of EUR*

|                                                                    |                |       | January	to |         |
|--------------------------------------------------------------------|----------------|-------|------------|---------|
|                                                                    | Fourth	quarter |       | December   |         |
|                                                                    | 2023           | 2024  | 2023       | 2024    |
| Cash	flows	from	operating	activities                               |                |       |            |         |
| Net	income	(loss)                                                  | 59             | 119   | 215        | 334     |
| Adjustments	to	reconcile	net	income	(loss)	to	net	cash	provided	by |                |       |            |         |
| operating	activities:                                              | 209            | 148   | 705        | 541     |
| •		Depreciation,	amortization	and	impairment	of	non-financial      |                |       |            |         |
| assets                                                             | 69             | 63    | 274        | 255     |
| •		Result	on	sale	of	assets                                        | (1)            | (16)  | 6          | (18)    |
| •		Net	interest	expense	on	debt,	borrowings	and	other	liabilities  | 10             | 13    | 43         | 42      |
| •		Income	tax	expense                                              | 12             | 37    | 53         | 60      |
| •		Additions	to	(releases	of)	provisions                           | 101            | 30    | 243        | 120     |
| •		Additions	to	(releases	of)	post-employment	benefits             | 6              | 9     | 23         | 21      |
| •		Other	items                                                     | 14             | 11    | 64         | 61      |
| Changes	in	working	capital:                                        | 121            | 77    | 87         | 48      |
| •		Changes	in	trade	and	other	receivables                          | 52             | (14)  | 50         | 3       |
| •		Changes	in	inventories                                          | 157            | 88    | 267        | 35      |
| •		Changes	in	trade	and	other	payables                             | (110)          | (13)  | (272)      | 28      |
| •		Changes	in	other	current	assets	and	liabilities                 | 22             | 16    | 42         | (17)    |
| Changes	in	other	non-current	assets	and	liabilities                | 3              | 1     | 3          | (1)     |
| Utilizations	of	provisions                                         | (38)           | (50)  | (153)      | (215)   |
| Utilizations	of	post-employment	benefits                           | (8)            | (48)  | (38)       | (73)    |
| Net	interest	and	financing	costs	received	(paid)                   | (1)            | (13)  | (41)       | (53)    |
| Income	taxes	paid                                                  | (23)           | (28)  | (81)       | (66)    |
| Net	cash	provided	by	(used	for)	operating	activities               | 323            | 205   | 696        | 514     |
|                                                                    |                |       |            |         |
| Cash	flows	from	investing	activities                               |                |       |            |         |
| Net	capital	expenditures:                                          | (28)           | (17)  | (110)      | (77)    |
| •		Additions	of	intangible	assets                                  | (19)           | (15)  | (67)       | (48)    |
| •		Capital	expenditures	on	property,	plant	and	equipment           | (11)           | (14)  | (51)       | (51)    |
| •		Proceeds	from	disposal	of	property,	plant	and	equipment         | 2              | 12    | 8          | 22      |
| Net	proceeds	from	(cash	used	for)	derivatives	and	other	financial  |                |       |            |         |
| assets                                                             | (2)            | 5     | 7          | (4)     |
| Purchases	of	businesses,	net	of	cash	acquired                      | 3              | 8     | (13)       | 8       |
| Proceeds	from	sale	of	businesses,	net	of	cash	disposed	of          | –              | –     | –          | –       |
| Net	cash	provided	by	(used	for)	investing	activities               | (26)           | (3)   | (115)      | (72)    |
| Cash	flows	from	financing	activities                               |                |       |            |         |
| Dividend	paid                                                      | (12)           | (18)  | (210)      | (221)   |
| Proceeds	from	issuance	of	debt                                     | 222            | 328   | 233        | 513     |
| Repayment	of	debt                                                  | (18)           | (507) | (83)       | (1,238) |
| Transactions	with	minority	shareholders                            | –              | 1     | –          | (11)    |
| Purchase	of	treasury	shares                                        | –              | –     | (7)        | (14)    |
| Net	cash	provided	by	(used	for)	financing	activities               | 192            | (196) | (67)       | (970)   |
| Net	cash	flows                                                     | 488            | 6     | 514        | (527)   |
| Effect	of	changes	in	exchange	rates	on	cash	and	cash	equivalents   |                |       |            |         |
| and	bank	overdrafts                                                | (18)           | 15    | (31)       | 2       |
| Cash	and	cash	equivalents	and	bank	overdrafts	at	the	beginning	of  |                |       |            |         |
| the	period	1                                                       | 688            | 612   | 676        | 1,158   |
| Cash	and	cash	equivalents	and	bank	overdrafts	at	the	end	of	the    |                |       |            |         |
| period	2                                                           | 1,158          | 633   | 1,158      | 633     |

1 For Q4 2024 and Q4 2023, included bank overdrafts of EUR 0 million and EUR 1 million, respectively. For January to December of 2024 and 2023, included bank overdrafts of EUR 0 million and EUR 1 million, respectively.

2 Included bank overdrafts of EUR 1 million and EUR 0 million as at December 31, 2024 and 2023, respectively.

### Appendix B - Reconciliation of non-IFRS financial measures

**Sales growth composition per business in %**

|              | Fourth	quarter       |                  |                          |                |
|--------------|----------------------|------------------|--------------------------|----------------|
| 2024	vs	2023 | Comparable<br>growth | Currency	effects | Consolidation<br>effects | Nominal	growth |
| Professional | (3.4)                | (2.0)            | –                        | (5.4)          |
| Consumer     | 4.0                  | (1.5)            | –                        | 2.5            |
| OEM          | (1.2)                | (2.3)            | –                        | (3.5)          |
| Conventional | (24.5)               | (0.9)            | –                        | (25.4)         |
| Signify      | (2.8)                | (1.8)            | –                        | (4.6)          |

|              | Fourth	quarter       |                  |                          |                |
|--------------|----------------------|------------------|--------------------------|----------------|
|              | Comparable<br>growth | Currency	effects | Consolidation<br>effects | Nominal	growth |
| 2023	vs	2022 |                      |                  |                          |                |
| Professional | (3.0)                | (5.0)            | 0.4                      | (7.6)          |
| Consumer     | (5.3)                | (5.1)            | 0.0                      | (10.4)         |
| OEM          | (23.7)               | (4.8)            | 0.0                      | (28.5)         |
| Conventional | (29.6)               | (3.4)            | 0.0                      | (33.0)         |
| Signify      | (7.7)                | (4.9)            | 0.2                      | (12.3)         |

|              | January	to	December  |                  |                          |                |
|--------------|----------------------|------------------|--------------------------|----------------|
|              | Comparable<br>growth | Currency	effects | Consolidation<br>effects | Nominal	growth |
| 2024	vs	2023 |                      |                  |                          |                |
| Professional | (5.8)                | (1.8)            | 0.1                      | (7.6)          |
| Consumer     | (1.2)                | (2.2)            | –                        | (3.4)          |
| OEM          | (2.0)                | (2.5)            | –                        | (4.5)          |
| Conventional | (29.2)               | (1.0)            | –                        | (30.2)         |
| Signify      | (6.6)                | (1.8)            | –                        | (8.4)          |

|              | January	to	December |                  |               |                |
|--------------|---------------------|------------------|---------------|----------------|
|              | Comparable          |                  | Consolidation |                |
|              | growth              | Currency	effects | effects       | Nominal	growth |
| 2023	vs	2022 |                     |                  |               |                |
| Professional | (4.4)               | (3.1)            | 1.4           | (6.0)          |
| Consumer     | (9.3)               | (4.0)            | 0.0           | (13.4)         |
| OEM          | (23.0)              | (3.6)            | 0.0           | (26.6)         |
| Conventional | (18.4)              | (2.5)            | 0.0           | (20.9)         |
| Signify      | (8.3)               | (3.3)            | 0.8           | (10.8)         |

#### **Adjusted EBITA to Income from operations (or EBIT) in millions of EUR**

|                                  | Signify | Professional | Consumer | OEM | Conventional | Other |
|----------------------------------|---------|--------------|----------|-----|--------------|-------|
| Fourth	quarter	2024              |         |              |          |     |              |       |
| Adjusted	EBITA                   | 205     | 111          | 69       | 9   | 20           | (4)   |
| Restructuring                    | (30)    |              |          |     |              |       |
| Acquisition-related	charges      | 5       |              |          |     |              |       |
| Incidental	items                 | 13      |              |          |     |              |       |
| EBITA                            | 194     |              |          |     |              |       |
| Amortization	1                   | (15)    |              |          |     |              |       |
| Income	from	operations	(or	EBIT) | 179     |              |          |     |              |       |
| Fourth	quarter	2023              |         |              |          |     |              |       |
| Adjusted	EBITA                   | 209     | 128          | 55       | 9   | 23           | (6)   |
| Restructuring                    | (83)    |              |          |     |              |       |
| Acquisition-related	charges      | (5)     |              |          |     |              |       |
| Incidental	items                 | (13)    |              |          |     |              |       |
| EBITA                            | 108     |              |          |     |              |       |
| Amortization	1                   | (20)    |              |          |     |              |       |
| Income	from	operations	(or	EBIT) | 89      |              |          |     |              |       |

1 Amortization and impairments of acquisition related intangible assets and goodwill. 

|                                  | Signify | Professional | Consumer | OEM | Conventional | Other |
|----------------------------------|---------|--------------|----------|-----|--------------|-------|
| January	to	December	2024         |         |              |          |     |              |       |
| Adjusted	EBITA                   | 606     | 367          | 144      | 48  | 78           | (32)  |
| Restructuring                    | (74)    |              |          |     |              |       |
| Acquisition-related	charges      | 5       |              |          |     |              |       |
| Incidental	items                 | 7       |              |          |     |              |       |
| EBITA                            | 543     |              |          |     |              |       |
| Amortization	1                   | (66)    |              |          |     |              |       |
| Income	from	operations	(or	EBIT) | 477     |              |          |     |              |       |
|                                  |         |              |          |     |              |       |
| January	to	December	2023         |         |              |          |     |              |       |
| Adjusted	EBITA                   | 670     | 412          | 120      | 43  | 127          | (31)  |
| Restructuring                    | (167)   |              |          |     |              |       |
| Acquisition-related	charges      | (14)    |              |          |     |              |       |
| Incidental	items                 | (40)    |              |          |     |              |       |
| EBITA                            | 449     |              |          |     |              |       |
| Amortization	1                   | (80)    |              |          |     |              |       |
| Income	from	operations	(or	EBIT) | 369     |              |          |     |              |       |

1 Amortization and impairments of acquisition related intangible assets and goodwill.

|                                              |          |          | Acquisition |            |          |
|----------------------------------------------|----------|----------|-------------|------------|----------|
|                                              |          | Restruc  | related     | Incidental |          |
|                                              | Reported | turing	2 | charges     | items	1    | Adjusted |
| Fourth	quarter	2024                          |          |          |             |            |          |
| Sales                                        | 1,655    | –        | –           | –          | 1,655    |
| Cost	of	sales                                | (1,002)  | 20       | 1           | –          | (982)    |
| Gross	margin                                 | 653      | 20       | 1           | –          | 673      |
| Selling,	general	and	administrative	expenses | (438)    | 10       | –           | 2          | (425)    |
| Research	and	development	expenses            | (61)     | –        | –           | –          | (61)     |
| Indirect	costs                               | (499)    | 10       | –           | 2          | (486)    |
| Impairment	of	goodwill                       | –        | –        | –           | –          | –        |
| Other	business	income                        | 25       | –        | (6)         | (15)       | 3        |
| Other	business	expenses                      | –        | –        | –           | –          | –        |
| Income	from	operations                       | 179      | 30       | (5)         | (13)       | 190      |
| Amortization                                 | (15)     | –        | –           | –          | (15)     |
| Income	from	operations	excluding             |          |          |             |            |          |
| amortization	(EBITA)                         | 194      | 30       | (5)         | (13)       | 205      |
|                                              |          |          |             |            |          |
| Fourth	quarter	2023                          |          |          |             |            |          |
| Sales                                        | 1,734    | –        | –           | –          | 1,734    |
| Cost	of	sales                                | (1,048)  | 9        | 1           | 12         | (1,026)  |
| Gross	margin                                 | 686      | 9        | 1           | 12         | 707      |
| Selling,	general	and	administrative	expenses | (503)    | 57       | 3           | (1)        | (445)    |
| Research	and	development	expenses            | (93)     | 18       | –           | –          | (75)     |
| Indirect	costs                               | (596)    | 74       | 3           | (1)        | (520)    |
| Impairment	of	goodwill                       | –        | –        | –           | –          | –        |
| Other	business	income                        | 3        | –        | –           | –          | 3        |
| Other	business	expenses                      | (4)      | –        | 1           | 2          | (2)      |
| Income	from	operations                       | 89       | 83       | 5           | 13         | 189      |
| Amortization                                 | (20)     | –        | –           | –          | (20)     |
| Income	from	operations	excluding             |          |          |             |            |          |
| amortization	(EBITA)                         | 108      | 83       | 5           | 13         | 209      |

#### **Fourth quarter 2024 Income from operations to Adjusted EBITA in millions of EUR**

<sup>1</sup> Q4 2024:Incidental items are mainly related to a gain in a real estate transaction amounting to EUR 15 million in Conventional

 Q4 2023: Incidental items are mainly related to the one-day FX loss from the devaluation of the Argentine peso by the Argentinian government (EUR 11 million, in Professional and Consumer). 

<sup>2</sup> Q4 2024:Restructuring costs consisted of EUR 26 million of employee termination benefits and EUR 4 million of other costs related to restructuring programs. 

Q4 2023:Restructuring costs consisted of EUR 77 million of employee termination benefits and EUR 6 million of other costs related to restructuring programs.

|                                                          |          |                     | Acquisition        |                       |          |
|----------------------------------------------------------|----------|---------------------|--------------------|-----------------------|----------|
|                                                          | Reported | Restruc<br>turing	2 | related<br>charges | Incidental<br>items	1 | Adjusted |
| January	to	December	2024                                 |          |                     |                    |                       |          |
| Sales                                                    | 6,143    | –                   | –                  | –                     | 6,143    |
| Cost	of	sales                                            | (3,701)  | 47                  | 1                  | 11                    | (3,642)  |
| Gross	margin                                             | 2,442    | 47                  | 1                  | 11                    | 2,501    |
| Selling,	general	and	administrative	expenses             | (1,736)  | 25                  | 4                  | 6                     | (1,701)  |
| Research	and	development	expenses                        | (266)    | 2                   | –                  | –                     | (264)    |
| Indirect	costs                                           | (2,002)  | 27                  | 4                  | 6                     | (1,965)  |
| Impairment	of	goodwill                                   | –        | –                   | –                  | –                     | –        |
| Other	business	income                                    | 41       | –                   | (10)               | (25)                  | 7        |
| Other	business	expenses                                  | (3)      | –                   | –                  | –                     | (3)      |
| Income	from	operations                                   | 477      | 74                  | (5)                | (7)                   | 540      |
| Amortization                                             | (66)     | –                   | –                  | –                     | (66)     |
| Income	from	operations	excluding                         |          |                     |                    |                       |          |
| amortization	(EBITA)                                     | 543      | 74                  | (5)                | (7)                   | 606      |
| January	to	December	2023                                 |          |                     |                    |                       |          |
| Sales                                                    | 6,704    | –                   | –                  | –                     | 6,704    |
| Cost	of	sales                                            | (4,146)  | 62                  | 3                  | 36                    | (4,044)  |
| Gross	margin                                             | 2,558    | 62                  | 3                  | 36                    | 2,660    |
| Selling,	general	and	administrative	expenses             | (1,882)  | 81                  | 11                 | (1)                   | (1,791)  |
| Research	and	development	expenses                        | (308)    | 24                  | –                  | –                     | (284)    |
| Indirect	costs                                           | (2,191)  | 105                 | 11                 | (1)                   | (2,075)  |
| Impairment	of	goodwill                                   | –        | –                   | –                  | –                     | –        |
| Other	business	income                                    | 24       | –                   | (2)                | (11)                  | 10       |
| Other	business	expenses                                  | (23)     | –                   | 2                  | 16                    | (5)      |
| Income	from	operations                                   | 369      | 167                 | 14                 | 40                    | 590      |
| Amortization                                             | (80)     | –                   | –                  | –                     | (80)     |
| Income	from	operations	excluding<br>amortization	(EBITA) | 449      | 167                 | 14                 | 40                    | 670      |

### **January to December 2024 Income from operations to Adjusted EBITA in millions of EUR**

<sup>1</sup> Q1-Q4 2024: Incidental items mainly related to one-day FX loss from the devaluation of the Egyptian pound by the Egyptian government (EUR 10 million, mainly in Professional), environmental provisions for inactive sales and the discounting effect of long-term provisions (EUR 7 million, mainly in Other), gains from movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation (EUR 9 million, in Other), and gain in real estate transactions (EUR 15 million, in Conventional). 

 Q1-Q4 2023: Incidental items relate to results on real estate transactions (EUR 13 million, in Other), environmental provision for inactive sites and the discounting effect of long-term provisions (EUR 16 million, mainly in Conventional), operations in Russia and Ukraine (EUR 3 million, in Professional and Conventional), incidental warranty costs (EUR 5 million, in Professional), one-day FX loss from the devaluation of Argentinian peso by the Argentinian government (EUR 11 million, in Professional and Consumer), gains from movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation (EUR 9 million, in Other), and other insignificant items of EUR 1 million. 

<sup>2</sup> Q1-Q4 2024: Restructuring costs consisted of EUR 57 million of employee termination benefits and EUR 17 million of other costs related to restructuring programs. Q1-Q4 2023: Restructuring costs consisted of EUR 150 million of employee termination benefits and EUR 18 million of other costs related to restructuring programs.

### Appendix C – Financial glossary

#### **Acquisition-related charges**

Costs that are directly triggered by the acquisition of a company, such as transaction costs, purchase accounting related costs and integration-related expenses.

#### **Adjusted EBITA**

EBITA excluding restructuring costs, acquisitionrelated charges, and other incidental items.

#### **Adjusted EBITA margin**

Adjusted EBITA divided by sales to third parties (excluding intersegment). 'Operational profitability' also refers to this metric.

#### **Adjusted gross margin**

Gross margin, excluding restructuring costs, acquisition-related charges, and other incidental items attributable to cost of sales.

#### **Adjusted indirect costs**

Indirect costs, excluding restructuring costs, acquisition-related charges, and other incidental items attributable to indirect costs.

#### **Adjusted R&D expenses**

Research and development expenses, excluding restructuring costs, acquisition-related charges, and other incidental items attributable to research and development expenses.

#### **Adjusted SG&A expenses**

Selling, general and administrative expenses, excluding restructuring costs, acquisition-related charges, and other incidental items attributable to selling, general and administrative expenses.

#### **Brighter lives revenues**

Percentage of total revenues coming from all products, systems and services contributing to Food availability, Safety & security, or Health & well-being.

#### **Circular revenues**

Revenues measured as a percentage of total revenues coming from products, systems and services designed to preserve value and avoid waste categorized as Serviceable luminaires (incl. 3D printing), Circular components, Intelligent systems or Circular services.

#### **Comparable sales growth (CSG)**

The period-on-period growth in sales excluding the effects of currency movements and changes in consolidation.

#### **EBIT**

Income from operations.

#### **EBITA**

Income from operations excluding amortization and impairment of acquisition-related intangible assets and goodwill.

#### **EBITDA**

Income from operations excluding depreciation, amortization, and impairment of non-financial assets.

#### **Consolidation effects**

In the event a business is acquired (or divested), the impact of the consolidation (or deconsolidation) on the Group's figures is included (or excluded) in the calculation of the comparable sales growth figures.

#### **Currency effects**

Calculated by translating the foreign currency financials of the previous period and the current period into euros at the same average exchange rates.

#### **Employees**

Employees of Signify at the end of the period, expressed on a full-time equivalent (FTE) basis.

#### **Free cash flow**

Net cash provided by operating activities minus net capital expenditures. Free cash flow includes interest paid and income taxes paid**.**

#### **Gross margin**

Sales minus cost of sales.

#### **Incidental items**

Any item with an income statement impact (loss or gain) that is deemed to be both significant and not part of normal business activity. Other incidental items may extend over several quarters within the same financial year.

#### **Indirect costs**

The sum of selling, general and administrative expenses and R&D expenses.

#### **Net capital expenditures**

Additions of intangible assets, capital expenditures on property, plant and equipment and proceeds from disposal of property, plant and equipment.

#### **Net debt**

Short-term debt, long-term debt minus cash and cash equivalents.

#### **Net leverage ratio**

The ratio of consolidated reported net debt to consolidated reported EBITDA for the purpose of calculating the financial covenant.

#### **R&D expenses**

Research and development expenses.

#### **Restructuring costs**

The estimated costs of initiated reorganizations which have been approved by the company, and generally involve the realignment of certain parts of the organization. Restructuring costs include costs for employee termination benefits for affected employees and other costs directly attributable to the restructuring, such as impairment of assets and inventories.

#### **SG&A expenses**

Selling, general and administrative expenses.

#### **Working capital**

The sum of inventories, trade and other receivables (excluding insurance receivables for which a legal provision is recognized for the same amount), other current assets, derivative financial assets minus the sum of trade and other payables, derivative financial liabilities and other current liabilities (excluding dividend-related payables).