July 27, 2021
“In the second quarter we saw an acceleration of the pace of recovery in comparison to the first three months of the year,” says CEO Eric Rondolat. “We successfully executed our strategy as demand for our connected lighting offers and our growth platforms remained strong.”
The consumer segment held its momentum and demand for conventional products proved resilient. The professional lighting segment showed sequential improvements, while still impacted by both extended lockdowns and supply constraints. Overall, we managed to improve the operating margin by 190 basis points and generated a solid free cash flow. We again progressed on our Brighter Lives, Better World 2025 program, well on track to achieving our four key objectives. Looking back at the first half year, we are pleased with the pace of our recovery in a volatile and disrupted environment, achieving more than 8 percent comparable sales growth with an operating margin improvement of 230 basis points and generating EUR 272 million of free cash flow.”
“While we are seeing increasing COVID-19 cases, new variants leading to continued lockdowns in parts of the world and supply constraints continuing to impact us into the second half of the year, we are confident that the measures we have taken will enable us to counter those challenges and deliver our guidance for the year.”
Here’s a summary of key results for the second quarter of 2021:
• Signify’s installed base of connected light points increased from 83 million in Q1 21 to 86 million in Q2 21
• sales of EUR 1,609 million; 9.6% nominal sales growth and CSG of 14.1%
• LED-based sales represented 82% of total sales (Q2 2020: 80%)
• Adj. EBITA margin improved by 190 bps to 10.9%
• net income increased to EUR 82 million (Q2 20: EUR 81 million)
• free cash flow of EUR 104 million (Q2 20: EUR 158 million)
• net debt/EBITDA ratio of 1.7x (Q2 20: 2.4x)
Brighter Lives, Better World 2025
In the second quarter of the year, Signify continued on the journey to achieving its ambitious goals for the Brighter Lives, Better World 2025 sustainability program, progressing on all four commitments that contribute to doubling its positive impact on environment and society:
• double the pace of the Paris agreement. Cumulative carbon reduction over value chain was 33 million tonnes, ahead of track for the 2025 target of 340 million tonnes. This is mainly caused by an accelerated shift to energy efficient and connected LED lighting in the first two quarters of 2021, decreasing our carbon emissions in the use phase.
• double the Circular revenues to 32%. circular revenues increased to 24%, compared to the 2019 baseline of 16%. We are on track for the 2025 target of 32%. This is mainly due to our strong portfolio of serviceable luminaires and the further expansion of our 3D printing footprint.
• double the Brighter lives revenues to 32%. Brighter lives revenues were 25%, progressing well towards the 2025 target of 32%. We had several customer wins that contribute to our Brighter lives revenues, including ‘quality of light’ EyeComfort products, horticulture lighting and UV-C disinfection lighting.
• double the percentage of women in leadership positions to 34%. The percentage of women in leadership positions was 25%, on track to reach the 2025 target of 34%. This target is part of a broader program, where we focus our efforts on attracting, retaining and developing diverse talents, while ensuring equal opportunities, fairness and impartiality for all.
In addition, Signify received recognition for its leadership in sustainability, achieving a first place ranking in the industry and top 5% of the ESG Risk Ratings Universe from Sustainalytics.
Signify continues to expect 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 free cash flow to exceed 8% of sales for the full year 2021. As previously stated, the company reassesses its medium-term guidance after each financial year.