EINDHOVEN, the Netherlands – Signify today announced the company’s second-quarter 2021 results.
“In the second quarter we saw an acceleration of the pace of recovery in comparison to the first three months of the year. 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 ($320.24 million) of free cash flow,” said CEO Eric Rondolat.
“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.”
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 the 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 our 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 our 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, amongst which a first place ranking in our industry and top 5% of the ESG Risk Ratings Universe from Sustainalytics.
Outlook
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.
Conference call and audio webcast
Eric Rondolat (CEO) and Javier van Engelen (CFO) will host a conference call for analysts and institutional investors at 9:00 a.m. CET to discuss the 2021 second quarter results. A live audio webcast of the conference call will be available via the Investor Relations website.
Financial calendar 2021
October 29, 2021: Third quarter results 2021
January 29, 2022: Fourth quarter and full year results 2021
1This 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.
2 Excludes 2 million connected light points for Telensa, as acquisition closed on July 1, 2021