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
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 20241
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.
Conference call and audio webcast
Eric Rondolat (CEO) and Zeljko Kosanovic (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
1 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
