Annual Report 2019

Our purpose  
is to unlock  
the extraordinary 
potential of light  
for brighter lives  
and a better world
Signify is the world leader in 
lighting. We provide our customers 
with high-quality, energy-efficient  
lighting products, systems and 
services.  
 
By turning light sources into data 
collection points, we can connect  
more devices, places and people  
through light, contributing to a 
safer, more productive and smarter 
world.
Our values provide our people with a common understanding of 
what matters to us and how we work
“Signify has worldwide experience in growing 
high-wire cucumbers under LED lighting, so they can 
provide us with good advice and support from their 
plant specialists.”  
Vincent Olivon, co-owner of Jardins Réunis, France
Our agreement with Signify marks the beginning of a 
collaboration between two industry leaders, bringing 
together the worlds of telecommunications and lighting.”  
Gerhard Mack, Head of Technology at Vodafone 
Deutschland
“Signify is helping the industry by promoting 
recycling as a key element of the smart home 
formula, […] this type of initiative shows that it will 
become more important for big tech players to lead 
the way in producing eco-friendly products.”  
Ovum, Industry analysts
“What’s exciting for me is the opportunity for 
growth. As the company is evolving, I feel even more 
proud that it’s not just about my personal impact but 
the impact the company can make.”  
Jen Bihlmier, Demand Planning Manager, Signify US
“Integrity means that whatever we do, we do it correctly not only once but 
every time – and we adhere to it also in the most difficult situations we face.”  
Asesh Kumar Dasgupta, Sales Manager for Professional Trade, Signify India
Our values
Always act with integrity
Signify Annual Report 2019

In 2019, Signify leveraged 128 years of leadership in lighting to create 
dynamic, innovative and human-centric projects. In homes, offices, 
shops, sports stadiums, cities, greenhouses and factories – as well 
as through the Signify Foundation – we’re unlocking the 
extraordinary potential of light for brighter lives and a better world.
We are Signify
1	
Performance highlights	
5
2	
CEO message	
7
3	
Creating value	
10
4	
Corporate performance	
23
5	
Three-year overview	
31
Governance
6	
Board of Management	
33
7	
Supervisory Board	
34
8	
Supervisory Board report	
36
9	
Remuneration report	
42
10	
Corporate governance	
54
11	
Investor relations	
60
12	
Risk factors and risk management	
63
13	
Statement of the Board of Management	
71
Corporate statements
14	
Consolidated financial statements	
74
15	
Signify N.V. financial statements	
125
16	
Sustainability statements	
132
17	
Combined independent auditor’s report	
157
18	
Reconciliation of non-IFRS financial measures	
169
19	
Definitions and abbreviations	
174
20	 Forward-looking statements and other information	
178
Forward-looking statements and risks & uncertainties  
Please refer to chapter 20, Forward-looking statements and other information, of this Annual Report,  
for more information about forward looking statements, market and industry information, fair value 
information, IFRS basis of presentation, use of non-IFRS financial measures and statutory financial 
statements.
Table of contents
3
Signify Annual Report 2019
We are Signify
Creating value
Corporate performance
Governance
Consolidated financial statements
Corporate statements
Sustainability statements

We are Signify
4
Signify Annual Report 2019
We are Signify
Creating value
Corporate performance
Governance
Consolidated financial statements
Corporate statements
Sustainability statements

1	 Performance highlights
1.1	
Financial performance
2018
2019
Comparable sales growth
(4.4)%
(4.6)%
LED-based sales
71%
78%
Adjusted EBITA margin
10.1%
10.4%
Net income
261
267
Free cash flow
306
529
 
Business Groups
LED
Professional
Home
Lamps
Sales
1,891
2,649
521
1,159
Nominal sales growth
4.4%
0.5%
11.6%
(18.8)%
Comparable sales growth
(1.1)%
(1.7)%
11.3%
(20.5)%
EBITA margin
11.5%
8.4%
1.0%
14.5%
Adjusted EBITA margin
12.7%
10.0%
3.8%
19.2%
This chapter 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. These measures are further discussed in chapter 4, Corporate performance, of this Annual Report. For a reconciliation 
of these non-IFRS financial measures to the most directly comparable IFRS financial measures, see chapter 18, Reconciliation 
of non-IFRS financial measures, of this Annual Report.
Sales by geography
Europe
Americas
Rest of the World
Global businesses
36%
28%
30%
6%
Sales by Business Group
Lamps
LED
Professional
Home
43%
19%
30%
8%
5
Signify Annual Report 2019
We are Signify
Creating value
Corporate performance
Sustainability statements
Governance
Consolidated financial statements
Corporate statements

1.2	
Sustainability performance
Brighter Lives highlights
2018
2019
Employees (full-time equivalent)
29,237
32,005
Employee Net Promoter Score
13
18
Female executives (% of total)
17%
17%
Safety at work (TRC rate)
0.29
0.32
Supplier sustainability performance
93%
99%
Better World highlights
2018
2019
Sustainable revenues
79.0%
82.5%
Carbon footprint (gross, kilotonnes)
401
363
Carbon footprint (net, kilotonnes)
146
64
Renewable electricity
89%
94%
Total waste to landfill (kilotonnes)
2.4
0.7
Sustainable revenues
% of total revenues
80
60
40
20
2017
2018
2019
82.5%
77.3%
79.0%
Operational carbon footprint
(gross)
Kilotonnes CO2 equivalent
600
450
300
150
2017
2018
2019
363
519
401
Supplier sustainability 
performance
Performance rate
80
100
60
40
20
2017
2018
2019
99%
95%
93%
6
Signify Annual Report 2019
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Corporate performance
Sustainability statements
Governance
Consolidated financial statements
Corporate statements

2	 CEO message
2019 – A year of strengthening our industry 
leadership amid economic 
challenges
“I’m very proud of our employees and the progress we made in 2019 in improving our 
business, in developing new innovations and in making our business even more 
sustainable. We further increased our leadership in LED lighting, made some key 
moves in terms of acquisitions, strengthened the offerings of our growth platforms 
and boosted our sustainability profile, all while lowering our costs.” – Eric Rondolat, 
Signify CEO
 
2019 was a year of rapid change and global 
uncertainty, due to political volatility, market 
instability and technological advancements. 
Against this backdrop we adapted 
effectively, making necessary adjustments, 
seizing ambitious inorganic growth 
opportunities and defining new possibilities 
for lighting through our technology.
A spirit of change and development runs 
through our organization, powering our 
industry leadership and resilience. And with 
programs such as Horizon, we’re speeding 
up our transformation, bringing us closer to 
where we need to be to achieve our 
business ambition.
Thanks to our continued dedication to 
simplification and cost reduction measures, 
our operational profitability continues to 
improve, and free cash flow is strong. 
Exciting developments in our growth 
platforms - connected systems, IoT ­ 
services, horticulture, solar, and LiFi - 
continue to show that we’re leading the 
industry toward a new era. All of this, 
amid some challenging market conditions, 
increase my confidence that we’re on the 
right track.
We announced several acquisitions this year: 
Klite in China for private and branded LED 
labels; WiZ in Hong Kong for WiFi-based 
connected lighting; US-based Once Inc. 
and iLOX in Germany for animal-centric 
lighting; and Cooper Lighting Solutions in 
the US for professional lighting in North 
America. These strategically sound moves 
contribute to differentiating us structurally, 
while enhancing our ability to serve our 
customers.
Strategic focus
We continue to execute against our 
strategic priorities, transforming our 
industry and building on our heritage.
•	 Our LED sales increased by 10% to 78% of 
our total sales at the end of the year
•	 We installed 12 million connected light 
points, bringing our total to 56 million 
globally
•	 Our continuous innovation and 
responsiveness to customer needs are 
demonstrated by the launch of 
BrightSites smart poles and the Philips 
Hue HDMI SyncBox, as well as the 
continued enhancements to our LiFi 
offering (to name but a few)
•	 We again increased our market share in 
conventional lamps, sustaining a high 
level of profitability, benefiting from our 
‘last company standing’ strategy 
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will improve our business mix, with  
Professional revenues increasing from 42% 
to 53% of total sales, based on 2018 figures.
Our financial performance
In 2019 we increased our profitability for the 
sixth consecutive year, resulting in further 
improvement to our adjusted EBITA margin, 
as well as the highest level of free cash flow 
since our IPO. The profit and cash 
contribution of the growing profit engines 
increased in 2019 and now stands at more 
than twice the contribution of Lamps, as we 
continue to shift from conventional lamps to 
lighting products, systems and services. 
This strong performance has been achieved 
in a challenging macro-environment; lower 
activity in several markets - including India, 
Europe and the US.
These positive indicators show the success 
of our strategy, even in the face of 
continued challenging market conditions. I’m 
confident that our relentless focus on our 
growing profit engines and new growth 
platforms will further strengthen our market 
leadership and progressively improve our 
growth profile.
Our commitment to innovation
In 2019, we invested 4.5% of our sales in 
R&D, the cornerstone of our business. 
As part of our commitment to unlocking the 
extraordinary potential of light, we launched 
Trulifi, our own high-speed LiFi technology. 
This enables highly reliable, secure and fast 
wireless communication that leverages 
existing and future lighting infrastructure.
Together with Vodafone we’re planning to 
link the best of 5G and LiFi technology, 
extending the benefits of these 
technologies from outdoors to indoors, 
while we also partner with Latécoère to 
bring LiFi connectivity to commercial 
airplanes, and with Ellamp to enable bus and 
train passengers to reap the benefits of LiFi 
to the fullest.
As part of our commitment to sustainable 
innovation, we launched a 3D printing 
service that enables customers to custom-
design or tailor their luminaires. We then 3D 
print and deliver their luminaires, saving on 
time, energy, waste and packaging. All these 
luminaires are recyclable, as part of our 
move to a circular economy.
Additionally, we’re expanding growth areas 
like aquacultural, horticultural and solar 
lighting with best-in-class products and 
systems.
Our commitment to sustainability
Thanks to the efforts and collaborations of 
our teams around the world, we’re on track 
to achieve our Brighter Lives, Better World 
commitments and are taking urgent action 
to contribute to the United Nations 
Sustainable Development Goals. At the end 
of 2019, 15 of our 19 markets were carbon 
neutral and we’re proud to already generate 
more than 80% of our revenues from 
sustainable products and systems. For the 
third year in a row, we’ve been recognized as 
the Industry Leader in the Electrical 
Components and Equipment category of the 
Dow Jones Sustainability Index. And we 
continue to push for more ambitious action. 
At Climate Week 2019, I called upon 
companies and countries to join the 3% 
“Horizon aims to speed 
up our execution, improve 
our top line, profitability 
and cash, and boost our 
organizational health”
•	 Our transformation program Horizon aims 
to speed up our execution, improve our 
top line, profitability and cash, and boost 
our organizational health
Our acquisitions
We’ve taken several steps this year which 
illustrate our focus on strategic growth 
areas and attractive markets. We expanded 
our connected lighting offering through the 
acquisition of WiZ Connected, allowing us to 
extend our leadership in the smart home by 
stepping into the WiFi-based lighting 
market. This perfectly complements Signify’s 
existing offers and will help us to continue to 
deliver an experience rich in light and 
intuitive in use for our customers.
As part of our commitment to agricultural 
lighting, we increased our exposure to the 
promising market of animal-centric lighting 
by acquiring experts Once Inc. and iLOX. 
These tailor-made lighting systems improve 
the quality of life for livestock, which leads 
to healthier animals and enhanced 
production for the farmer.
By acquiring a majority stake in Klite, 
we secured an independent supply chain in 
China and strengthened our position in the 
fast-growing private and branded label 
segments. This move strengthens our 
position in the supply chain of LED lamps and 
luminaires, and the enhanced distribution 
scale will help us deliver cost-efficient 
innovations to customers faster, including 
connected lighting offerings.
Finally, with our intention to acquire Cooper 
Lighting Solutions, we expect to strengthen 
our position in the attractive North 
American lighting market, with increased 
innovation power and more competitive 
offerings. At a stroke, this major acquisition 
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Consolidated financial statements
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Club, a group of 15 countries and 10 
companies who are driving an increase of 3% 
energy efficiency each year using existing, 
cost-effective technologies and policy 
instruments.
Our commitment to our customers
Customer satisfaction is one of our four 
company values, and at the core of our Road 
to Excellence, a company-wide journey to 
streamline our business processes and allow 
for better cooperation. This will ensure 
faster and more accurate reaction to 
customer needs and already led to a 10% 
increase in customer NPS over the year. 
This resulted in a customer NPS of 35 at the 
end of Q4.
The use of digital tools will allow us to 
anticipate future needs, giving us a 
competitive advantage by adjusting our 
business processes. This focus on 
prevention was the key success factor in 
2019 and a major part of our Quality Culture. 
Additionally, we have worked on the further 
maturation of the organization by driving the 
European Foundation for Quality 
Management excellence model into our DNA.
Our commitment to people 
development
In 2019 we rolled out Learning@Signify as 
our new global learning platform, as part of 
our commitment to foster a learning culture 
and help our employees skill up and reskill. 
By year-end 59% of our employees were 
active users. We’ve also strengthened 
detailed succession plans to help develop 
and promote people internally. In 2019, 70% 
of our leadership positions were staffed 
internally, demonstrating success in our 
efforts to build a strong internal succession 
pipeline. We continued with our quarterly 
employee survey to measure employee 
engagement. Our employee NPS has 
improved, from 13 in 2018 to 18 in 2019, 
with participation levels of 83% in Q4 2019.
Our Board of Management
Stéphane Rougeot, who joined Signify in 
September 2016, has decided to leave the 
company for personal reasons. I would like 
to personally thank Stéphane for having 
been such a strong partner and for being 
instrumental in driving many of the  
improvements at Signify over the past 
3.5 years. I’m very pleased that René van 
Schooten, who knows Signify very well and 
served in this capacity during the IPO, takes 
over the CFO role on an ad interim basis. 
I am also happy that Maria Letizia Mariani has 
been proposed as a member of the Board of 
Management where she will bring extensive 
business and commercial experience.
Our thanks
On behalf of our Board of Management and 
our leadership team I extend my sincere 
gratitude to our employees, who show 
unwavering dedication to transforming our 
business and unlocking the extraordinary 
potential of light for brighter lives and a 
better world.
I also thank our customers for their trust 
and loyalty, which motivates us to do our 
best work every day. And finally, I thank our 
shareholders for their confidence in us and 
in our strategy.
We’re currently leading the next wave of 
lighting transformation, turning connected 
light sources into data collection points, 
and continuing to shape the future of our 
industry.
Eric Rondolat
CEO Signify
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Sustainability statements
Governance
Consolidated financial statements
Corporate statements

3	 Creating value
3.1	
Our strategic focus
Strategic priorities 2019
Proof points 2019
Create segmented and differentiated LED offers to increase our share – Our global reach and client proximity allow us to deliver 
a product portfolio that addresses local market needs with both high-volume products and differentiating propositions, 
addressing customer needs across all product segments.
LED lighting share increased from 71% to 78% of 
total sales
Drive systems growth to increase our connected installed base – Connected lighting is becoming increasingly important in the 
general and specialty lighting markets. We’re actively shaping the industry migration to lighting systems in both the professional 
and consumer markets.
Installed light points using our connected lighting 
products increased by 27% to 56 million connected 
light points
Develop recurring data-enabled services revenues – We’re realizing additional revenues from our installed base by offering new, 
value-added services. In doing so, we make people’s lives safer, more productive, and more comfortable; businesses and cities 
more efficient and liveable; and the world more sustainable.
Bolstered Interact platform with further 
enhancements of Interact Indoor Navigation and 
launch of Interact Smart Workspaces and Interact 
Asset Tracking
Invest in growth, organically and inorganically – We invest to help define what’s next in lighting and remain ahead of the industry. 
From 3D luminaires to LiFi, we’re redefining the capabilities of lighting to help our customers solve more complex problems. Our 
investments can also include the acquisition of (stakes in a) business complementing our portfolio.
4.5% of sales invested in R&D
Acquisitions of Cooper Lighting Solutions and Klite 
will strengthen our position in North America and in 
the supply chain of LED lamps and luminaires
Grow a leading market share in conventional – While the overall conventional market continues to decline, we expect to decrease 
less than the market, capture market share and optimize our free cash flow. Our manufacturing footprint rationalization and 
product portfolio simplification brings additional efficiency gains and cost reductions.
Continued strong free cash flow of Lamps at 19%  
of sales
Digitalize and improve our commercial and supply chain processes for our customers – We continuously strengthen our 
commercial excellence capabilities across all channels. By investing in digitalization, we aim to further improve our longstanding 
local customer relations and global distribution network.
Our average DRM (Delivery Reliability Metric) 
improved by 160 basis points
Achieve world-class operational excellence – We aim to leverage operational excellence capabilities across the organization by 
implementing programs that focus on minimizing waste, reducing defects and increasing the efficiency of our entire value chain 
while reducing our fixed costs.
Adjusted EBITA margin improved by 30 basis points 
to 10.4%
Signify, headquartered in Eindhoven, the Netherlands, is the world market leader with 
recognized expertise in the development, manufacture and sale of innovative, energy-
efficient lighting systems and services. We have pioneered many key breakthroughs in 
lighting over the past 128 years and have been a driving force behind several leading 
technological innovations. We employ 32,000 people in 74 countries.
We have been in a leading position as the 
lighting industry transitions from 
conventional to LED lighting, and we’re now 
leading the next transition, as the industry 
moves toward connected lighting. Our track 
record in innovation is strong and we invest 
heavily in R&D to stay at the forefront of 
technological developments. Our size and 
position across the value chain provide 
significant economies of scale, allowing us to 
leverage the development of innovative 
technologies, products and services. 
Signify Annual Report 2019
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Creating value
Corporate performance
Sustainability statements
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Governance
Consolidated financial statements
Corporate statements

Our position as an industry leader in connected lighting 
for the Home and Professional segments makes Signify the 
lighting company for the Internet of Things (IoT). By 
extending our industry leadership into the IoT, we’re 
unlocking additional value by offering our customers new 
apps and services.
Today’s lighting technology can do much more than simply provide 
illumination. At Signify, we’re turning light sources into data 
collection points, connecting devices, places and people through 
light. In doing so, we make people safer, more productive, 
and comfortable; businesses and cities more energy efficient and 
livable; and the world more sustainable.
Add in a networked layer of intelligence, in both professional 
spaces and at home, and it’s clear that we’re harnessing data to 
unlock new applications and create additional value from light and 
light sources.
In 2019 we: made agreements to put Trulifi, our own highly 
stable and energy-efficient alternative to WiFi, in planes and on 
buses; launched Brightsites by Signify, smart utility poles that 
accommodate a wide variety of IoT sensors and cameras, offering 
environmental monitoring and enhanced security options such 
as incident detection; and we hosted a Hackathon to leverage 
the rich set of Interact APIs to facilitate innovative, scalable, 
and integrated implementations into the Interact IoT platform.
These are just a selection of the projects we’re undertaking and 
products we’re taking to market in order to create new value for 
our customers. Innovations like these are possible because we 
bring over a century of lighting industry knowledge to visionary 
R&D.
The lighting company for 
the Internet of Things
Signify Annual Report 2019
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Consolidated financial statements
Corporate statements

The new Atea office building in Stavanger, Norway, has been conceived from the 
ground up as a living lab – a test bed and showcase for connected and integrated 
systems.
Turning Atea’s office in Stavanger Norway 
into a living lab
Customer challenge
Atea, the leader in IT infrastructure in Norway 
and the Baltics, wanted to move into smart 
building solutions. To do this, they decided to 
create a living lab, where employees test 
products and services by using them 
themselves. This would unlock new insights into 
the challenges their customers face, and ways 
to test solutions and achieve operational 
excellence.
Solution
By partnering with Signify and networking giant 
Cisco, Atea was able to design and engineer a 
truly integrated smart building from the bottom 
up. New technologies include a personal 
control app for the lighting system, a highly 
accurate indoor location system, multisensors, 
“By being in a living lab, we’re 
constantly evolving, we’re 
constantly trying and testing our 
own products and our partners’ 
products by using them 
ourselves.”
Espen Riska, Smart buildings 
director at Atea Stavanger
and even LiFi for light-based, high-bandwidth 
wireless communications. As a smart office 
solution showcase, the new building allows the 
company to demonstrate what they can do with 
a converged infrastructure.
Atea regularly welcomes potential customers 
to their offices in Stavanger to see for 
themselves how smart buildings can be 
configured, maintained and managed. 
More people visited the new building in six 
months, in fact, than had visited the old Atea 
building in over ten years.
Because the building houses Atea’s Stavanger 
workforce, the company also makes employee 
comfort and productivity as high priority as 
showcasing multiple smart solutions and their 
integration.
Interact Office
The Interact Office system creates a platform 
for distributing intelligence throughout the 
building’s illuminated spaces. It’s embedded 
into the office environment, supporting both 
employee well-being and operational 
efficiency, so that all building systems work 
together seamlessly. The converged IT 
infrastructure integrates systems, collecting 
rich, actionable data for monitoring, modeling, 
and AI applications.
ATEA office – Stavanger, Norway
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To showcase two big sporting events, Shaoxing Shangyu Sports Center was 
outfitted with a connected lighting system capable of wowing the in-house 
audience and those watching on TV at home - and providing athletes with the best 
possible conditions for competition.
Splashy connected lighting system at 
Shaoxing Shangyu Sports Center
Customer Challenge
Shaoxing Shangyu Sports Center,  
the largest sports facility construction 
project in the history of Shangyu city, China, 
wanted an interconnected lighting system to 
provide a better viewing experience during 
two major sporting events. Due to time 
constraints, it needed to be installed quickly 
and easy to operate.
Solution
Signify provided professional lighting 
systems that bathed the swimming pool in 
the best quality light. 88 sets of Philips 
SportsStar and 622 LED flood lights tailored 
for sports lighting – and meeting the 
broadcast requirements of various 
international events – were installed to 
provide maximum coverage of the space. 
Managed by the Interact Sports connected 
lighting system, the operator can control 
the lighting of the venue through an intuitive 
interface and application suite.
The adaptable lighting system can be used 
for major international competitions 
broadcast on TV, professional and amateur 
tournaments, as well as training and 
entertainment activities. Modes can be 
navigated with a single click; combining 
high-quality venue flood lighting and 
dynamic light performances which can be 
synced to music to create experience 
enhancing light shows.
Now, competitors, fans and TV viewers can all 
better enjoy their experience. The Interact 
Sports connected lighting systems also helps 
operators optimize usage and create an 
impressive lighting experience.
Interact Sports
The Interact Sports connected lighting 
system can monitor, manage and control all 
lighting assets in real time. The tailor-made 
software application brings together 
connected lighting systems – and the data 
those systems collect – with other IoT 
solutions. Through real-time visualization of 
data, it improves operational and 
maintenance efficiency, while offering new 
possibilities for lighting and fan experiences.
“The responsiveness of the 
management interface has 
allowed us to create a truly 
dynamic atmosphere, for both 
spectators and competitors.”
Dawei Xu, Engineering Manager of 
Shangyu Stadium
Sports Center – Shangyu, China
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With indoor navigation integrated into the ‘Find my product’ app, Albert Heijn in 
Hoofddorp, the Netherlands can now efficiently help shoppers find everything they 
need, enhancing the shopping experience and avoiding lost sales.
Better shopping experience with  
‘Find my product’ app
Customer challenge
Albert Heijn is committed to making grocery 
shopping and cooking easier for its 
customers. This can be a challenge if 
customers can’t find all the products on 
their list. Independent research* conducted 
among 1,000 Dutch shoppers found that 14% 
occasionally can’t find products when 
shopping. This relates to many products, 
not just ones they shop for occasionally.
As a result, 44% of those shoppers leave the 
store having bought at least one less item 
than they planned. Albert Heijn needed a 
way to help shoppers to find every product 
quickly and easily.
Solution
Our solution connects the Interact Retail 
Indoor navigation system to Albert Heijn’s 
product database in one app, making it 
possible to locate every item sold in the 
store to within 30 cm.
“This technology truly offers 
infinite possibilities.”
Steven de Kroes, Format 
developer at Albert Heijn
Each light point in the store sends a unique 
code that’s captured by the front camera of 
a smart device, providing the location of the 
shopper and combining that with the 
location of the product. Customers can then 
follow dynamic directions on a digital map 
that takes them to the product using the 
shortest route. The system also provides 
retailers with location analytics such as 
dwell time, footfall and density helping them 
to improve business and marketing 
initiatives.
Interact - Shopping made easy
The ‘Find my product’ app harnesses the 
power of connected lighting in the store by 
using the Interact Retail navigation system 
to create a dynamic locations system. 
Research** shows that users appreciate the 
speed, convenience and independence of 
being able to find a product without 
searching or asking, with 84% giving it a 
‘thumbs up’, showing a strong appreciation 
for its benefits.
*	
CG Research commissioned by Signify,  
October 2018
**	
Research by PAM research & advice, commissioned 
by Signify, October 2018
Albert Heijn supermarket – Hoofddorp, Netherlands
Albert Heijn supermarket – Hoofddorp, Netherlands
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3.2	 Brighter Lives, Better World
Our world is increasingly feeling the pressures of population growth, resource scarcity and 
climate change. At the same time, our stakeholders pay increasing attention to the circular 
economy, food availability and health & well-being. As a purpose driven organization, 
we understand the importance of taking urgent action and this is why we align our business 
strategies with the UN Sustainable Development Goals (UN SDGs). 
As part of our Brighter Lives, Better World program, we have defined commitments for 2020 
which are aligned with the UN SDGs: 80% Sustainable revenues; Deliver >2 billion LED lamps 
and luminaires (cumulative from 2015); 100% carbon neutral and 100% renewable electricity; 
Zero waste to landfill; Safe and healthy workplace with a TRC of < 0.35; Sustainable supply 
chain with a 90% performance rate. Furthermore, we have committed to reaching 5 million 
lives with renewably powered lighting and supporting 10,000 people with technical and 
business skills development (cumulative from 2017). By the end of 2019, we were well on track 
achieving all of these commitments. Additionally, and for the third consecutive year, Signify 
achieved the status of Industry Leader in the Electrical Components and Equipment category 
of the 2019 Dow Jones Sustainability Index (DJSI), with top scores (100/100) obtained in 
Materiality, Innovation Management, Environmental Reporting, Operational Eco-Efficiency and 
Labor Practices Indicators.
We contribute directly or indirectly to all SDGs, but there are six SDGs where we can make the 
biggest impact through our business activities and sustainability programs: SDGs 3, 7, 8, 11, 
12 and 13. Partnerships play a strong role in helping us to accelerate our progress: these 
include GOGLA, South Pole, RE100, the Carbon Disclosure Project, The Climate Group, 
the World Green Building Council, the Responsible Business Alliance, the UN Environment 
Program and the World Economic Forum.
Our contribution
2020 Commitments
2019 Progress
We increase food availability and quality through 
horticulture and animal lighting and increase wellbeing 
through human centric lighting
•	80% Sustainable revenues
•	5 million lives lit
•	82.5% Sustainable revenues
•	+3.8 million lives lit 
We deliver cleaner solutions through energy efficient 
and solar lighting and are committed to 100% renewable 
electricity in our operations
•	80% Sustainable revenues
•	2 billion LED lamps & luminaires delivered
•	100% Renewable electricity
•	82.5% Sustainable revenues
•	2.3 billion LED lamps & luminaires delivered
•	94% Renewable electricity
We foster decent work and economic growth by improving 
the safety & wellbeing of employees and suppliers and 
training lighting entrepreneurs 
•	TRC rate of < 0.35
•	Sustainability supplier performance rate of 90% 
•	10,000 people with technical and business skills
•	0.32 TRC rate 
•	99% supplier performance rate
•	+8,000 people supported with technical and business 
skills
We enable smart cities, increase the safety & security 
of roads and urban areas, enable safe & sustainable 
workplaces in offices and industry, and light lives in off-grid 
areas
•	80% Sustainable revenues
•	5 million lives lit
•	82.5% Sustainable revenues
•	+3.8 million lives lit
We are transitioning to a circular economy through circular 
products and services, responsible packaging, zero waste 
to landfill and increased recycling
•	Zero Waste sent to landfill
•	2% waste sent to landfill, a 70% reduction compared 
to 2018
•	90% of all manufacturing waste recycled
We drive climate action by going beyond carbon neutral 
operations to also reduce the carbon footprint of our 
products, logistics and suppliers
•	Carbon Neutrality 
•	250 suppliers reporting on scope 1 and 2 emissions
•	200 suppliers reporting on emission reduction
•	82% carbon neutral
•	15 markets carbon neutral
•	157 suppliers reporting scope 1 and 2 emissions and 
160 suppliers reporting emission-reduction activities
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Fashion and food retailer Marks and Spencer (M&S) is making significant strides in 
becoming more sustainable by installing 3D printed luminaires, manufactured using 
a 100% recyclable polycarbonate material.
Boosting M&S’ sustainability profile with 
3D printed luminaires
Customer challenge
M&S was the first major retailer to become 
carbon neutral, back in 2012. As part of its 
commitment to become even greener the 
retailer was looking for a retail lighting 
application that would reduce the carbon 
footprint of its stores and complement its 
sustainability strategy by delivering energy 
savings.
Solution
M&S installed thousands of 3D printed LED 
luminaires from Signify in stores in the UK, 
including London, Manchester, Belfast as 
well as Dublin and Cork in Ireland. These 
luminaires are nestled into the existing 
fittings, ensuring the continued use of 
current ceiling tiles.
“3D printing has been around for a 
while, but these luminaires are the 
first real retail lighting application 
we’ve seen that improves the 
sustainability of our stores and 
are extremely complementary to 
our sustainability strategy.”
Oliver Knowles, Research & 
Development Manager within the 
Property Group, Marks and 
Spencer
3D printing of luminaires provides a more 
flexible, fast and more environmentally 
friendly way to manufacture. A typical 3D 
printed luminaire (excluding electronics and 
optics) has a 47% lower carbon footprint 
than a conventionally manufactured metal 
luminaire and Signify uses a 100% recyclable 
polycarbonate material. The luminaires 
weigh less, reducing the carbon emissions in 
shipping by 35%. By keeping production 
close to urban areas, Signify further 
reduces the footprint, and nearly every 
component may be reused or recycled, 
supporting the idea of a circular economy.
3D printed luminaires
Signify aims to have 500 3D printers of 
different sizes with the ability to create 
luminaires up to 60 cm height and width. 
Its facilities include Maarheeze in the 
Netherlands, and Burlington, Massachusetts 
in the US, serving both professional and 
consumer markets. Additional facilities in 
Noida, India and Jakarta, Indonesia will 
follow in 2020.
Marks and Spencer – UK
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Thanks to our LED lighting installation, the fish farming process has become more 
responsible and efficient. It helps the fish convert feed better, reducing the amount 
of fish food being used, resulting in lower cost and cleaner water. 
Signify LEDs light up Australis Seafoods 
sustainable marine-based Chilean fish farm
Customer challenge
According to the UN, nearly 90% of the 
world’s marine fish stocks are now fully 
exploited, overexploited or depleted. 
Responsible fish farming can help alleviate 
the pressure on wild fish stocks. Australis 
Seafoods, which specializes in the sale of 
salmon and trout, is committed to ensuring 
the long-term viability of the fish farming 
industry. The company needed a lighting 
solution that would promote the health and 
growth of their fish and improve the 
efficiency of their operations.
Solution
The first aquaculture LED lights were 
installed in Australis’ Moraleda fish farm in 
Aysén, Chile. These underwater lights, up to 
100,000 lumens, mimic the summer sun, 
aiding growth and helping the fish convert 
feed better, meaning faster growth from 
less fish food.  
This lowers cost and keeps the water 
cleaner. By installing the lights five meters 
below the surface, the fish are attracted to 
that depth, dramatically reducing infections 
by sea lice, who live closer to the surface.
The site realized one of the best production 
results in Australis Seafoods’ records and 
was named the best Skretting 2019 Fish farm 
in the XI region of Aysén. 
“For several years, Signify has been 
providing the Chilean salmon industry with 
innovative photoperiod systems, controlling 
light duration and further optimizing salmon 
production. With our LED lighting we help 
customers improve feed conversion rates, 
reduce food costs and lower the risk of 
infection, creating greater overall efficiency 
in sea-based salmon farms,” says Bill Bien, 
Leader of Signify’s Agricultural Lighting 
business.
Aquaculture
LED lighting is a powerful tool for enhancing 
fish production and welfare. The adjustable 
LED technology allows the creation of 
specific lighting conditions to optimize 
aquatic environments as fish develop. 
Aquaculture LED solutions improve feed 
conversation rates, limit sexual maturation 
and lower parasite infestations.
“Signify is an innovative player in 
the Chilean aquaculture industry 
in relation to lighting. Therefore, 
and after a comparative evaluation 
of the different solutions and 
alternatives, we selected them to 
be our main photoperiod provider 
for our fish production.”
Lucas Correa, Deputy Manager of 
Maintenance and Structures at 
Australis Seafoods
Australis Seafoods – Aysén, Chile
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The Women Entrepreneurship through the Solar Value chain for Economic 
development, or WE SOLVE in short, partnership between Solar Sister, BRAC and 
Signify is committed to bringing access to green-powered lighting technology while 
also enabling entrepreneurship opportunities for women in rural Tanzania. 
Together, the three partners provide training for women, products and 
microfinancing to sell clean energy products in their own and neighboring 
communities.
The women entrepreneurs  
lighting up Tanzania
Challenge
Rural communities in Tanzania face several 
important challenges. First, there’s the lack 
of employment and economic opportunities 
for women. Then the communities lack 
access to clean energy, meaning that many 
communities are still forced to use toxic 
kerosene-powered resources. And lastly, 
these communities are underserved by 
banks, limiting people in their ability to start 
businesses of their own and become 
entrepreneurs.
conditions, and provides up to 20 hours of 
lighting, depending on the lumen output 
users choose. The lanterns also have a USB 
port for charging phones and other devices.
“I’m very happy to see how joining 
our forces, covering every 
segment of the value chain, has 
now resulted in the start of such 
an impactful project, enabling so 
many more women in Tanzania to 
become solar entrepreneurs. Our 
model helps the women to create 
a sustainable livelihood, while 
helping their families, friends and 
communities with clean, safe 
lighting.”
Katherine Lucey, Founder and 
CEO, Solar Sister
Solution
By combining forces and their expertise, 
Solar Sister, BRAC and Signify are 
supporting the rise of a new and unique 
ecosystem. In Tanzania alone, Solar Sister 
has trained over 1,900 Solar Sister 
Entrepreneurs (SSEs) to sell clean energy 
products. Signify – and other providers 
– are ensuring that Solar Sister 
entrepreneurs have high-quality, energy-
efficient, reliable and safe lighting to sell. 
BRAC then provides microloans, enabling 
people without access to traditional 
financing to purchase solar energy products 
such as lights and phone chargers.
This innovative, joined-up approach, 
between a diverse combination of partners, 
effectively supports sustainable 
development in these communities.  
Using this unique model, the partners 
expect to reach 260,000 households, 
providing over one million Tanzanians with 
clean, renewable energy, improving lives and 
harnessing the energy of the sun to power 
the latest solar technology – and the local 
women of Tanzania.
Solar lanterns
The Philips LifeLight solar lantern is uniquely 
designed to support the needs of people in 
off-grid communities. The lanterns’ battery 
fully charges under eight to ten hours of 
direct sunlight, depending on weather 
WE SOLVE – Tanzania
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3.3	
Value Creation Model
At Signify, our strategic priorities aim to address global trends and our stakeholders’ expectations, while contributing to the achievement of the UN SDGs. With our purpose to unlock the 
extraordinary potential of light for brighter lives and a better world, we create long-term value beyond financial performance. Our approach is to optimize value through financial, environmental 
and social resources. Our activities and our way of doing business impact customers, employees, investors and society at large. By expressing these impacts in monetary terms, stakeholders 
can consider the indirect economic, social, and environmental effects of our business more effectively. For a trend analysis of our impact, please refer to our Methodology for calculating 
societal impact on our Sustainability downloads webpage: https://www.signify.com/global/sustainability/downloads.
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Our purpose 
is to unlock 
the extraordinary 
potential of light for
brighter lives and 
a better world
•  EUR 270 million R&D investments 
with 83.5% sustainable innovation
•  EUR 2,324 million total equity
•  EUR 6,715 million total assets
•  3,885 terajoules energy with 
94% renewable electricity
•  EUR 2,810 million materials
•  944 thousands of m3 water
•  32,005 FTE in 74 countries
•  17,500 learning modules offered
•  EUR 4.25 million spent on training
•  73 supplier audits
•  EUR 2.1 million to the Signify 
Foundation
Social
Environmental
Financial
Input
•  384,000+ e-learnings courses 
booked
•  99% supplier sustainability 
performance
•  59 projects delivered through 
the Signify foundation
•  0.32 total recordable case rate 
•  64 kilotonnes net CO2 emitted
•  36.4 kilotonnes waste with 
90% recycled
•  2,344 million LED lamps & 
luminaires, avoiding 56,943 
kilotonnes of CO2 
•  82.5% sustainable revenues
•  EUR 6,247 million sales
•  EUR 648 million adjusted EBITA
•  EUR 529 million free cash flow
•  19,400 patent rights
Output
Impact
Brighter Lives
We created EUR 298 million in 
value for society through 
total shareholder returns, tax 
and interest payments.
We created EUR 1,000 million 
in value for society through 
employees’ salaries & wages 
and learning & development 
combined with the costs to 
society of injuries & illnesses 
at work.
Better World
We caused EUR 8.9 million in 
costs to society through our 
own environmental footprint. 
At the same time, we helped 
create EUR 1,339 million in 
value through CO2 avoided by 
shifting to LED, solar LED and 
increased biodiversity*.
Demographic change
& Urbanization
Climate change
& Resource scarcity
Stakeholders
* 
Avoided emissions from LED are based on the difference in energy use between 
conventional and LED light technologies. Energy use of our LED lamps & luminaires results 
in 10,801 kilotonnes CO2, equivalent to EUR 1,145 million in costs to society.
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fault notifications are sent via SMS to 
registered mobile devices, so that 
maintenance crews can more easily and 
swiftly fix or replace them, minimizing 
downtime.
The result of this ambitious installation has 
been an overall improvement in street 
lighting levels, reduction of downtime and 
reduced energy consumption. The Interact 
City system has also improved the street 
lighting systems’ performance and enhanced 
road safety for citizens.
Interact City
The Interact City connected LED lighting 
system and management software provides 
customers with a robust infrastructure to 
enhance city services, improve public safety, 
beautify public spaces, engage with citizens 
Pune is transforming into a smart city thanks to our connected streetlights. The 
municipality installed new LED luminaires, as well as remote group control and 
monitoring through Interact City. The project was fully self-financed through 
energy and maintenance cost savings.
Connected streetlights create cost  
and energy savings in Pune, India
Customer challenge
The historic city of Pune in western India is 
home to approximately three million people 
and is also a popular stop on the tourist trail. 
The city’s conventional streetlights were 
costly and used a lot of energy. At the same 
time, planners were keen to establish more 
even light levels and secure consistent 
maintenance. A new road lighting solution 
was proposed to reduce expenses and 
streamline operations.
Solution
This public-private partnership was the first 
of its kind in India and is fully self-financed 
and encourage civic pride. It also reduces 
energy costs and increases efficiency by 
collecting and analyzing data, enabling 
better planning of maintenance, 
and delivering better service for citizens.
through the energy savings and reductions 
in maintenance costs that LED technology 
brings about, meaning the entire project 
resulted in no additional expenses for the 
city.
In addition to replacing 80,000 halogen 
lights with energy-saving LED luminaires, 
we ensured that all the street lighting is 
remotely connected and can be monitored 
and controlled from a single Command & 
Control room through the Interact City 
system. This allows city authorities to dim 
groups of lights. Remote monitoring 
identifies faulty streetlights, and automatic 
“Our vision is for Pune to become 
a smart city, transforming the 
lives of residents using 
technology. We’re not only 
replacing the streetlights with 
LED, but also controlling them 
centrally.”
Kunal Kumar, IAS, Commissioner, 
Pune Municipal Corporation
Pune municipality, India
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German football club Hamburger SV provided journalists and photographers with 
fast, secure and reliable connectivity as it equipped the press center’s new 
luminaires with the latest Trulifi system.
Reporting at light speed  
as Hamburger SV installs Trulifi
Customer challenge
Football stadiums are places where many 
people gather, all excited to share pictures 
and clips from the match through their 
devices. The Volksparkstadion in Hamburg 
has a capacity of 57,000 and like many 
stadiums, the wireless signal in its busy 
press center was prone to overloading. 
This was due to journalists accessing the 
network and interference from the mobile 
devices of fans, staff and officials, all pinging 
the wireless router.
Solution
Signify installed 84 Philips PowerBalance 
gen2 LED recessed luminaires in the 
stadium’s press center. Eight of the 
“We opted for LiFi given the 
increasing demand for bandwidth 
from journalists using our press 
center. For them a reliable 
wireless connection is 
everything.”
Daniel Nolte, segment leader area 
organization & infrastructure, 
Hamburger SV
luminaires have an integrated Trulifi 6002 
transceiver, which modulates infrared light 
waves to provide an Internet connection of 
up to 150 megabits per second (Mbps), 
a capacity substantially greater than either 
4G or WiFi.
Journalists using the system receive a USB 
Access Key, which plugs into their laptop. 
This picks up the LiFi signal and transmits 
data back to the luminaire. The LiFi system is 
free from interference and encrypted. Also, 
an extra layer of security is built-in as light 
waves cannot pass through walls.
Thanks to Trulifi, journalists won’t miss a 
deadline and photographers can file their 
pictures at light speed.
Trulifi
Signify launched its Trulifi systems in 2019 
and has installed more than 100 projects 
worldwide, showing a growing demand for 
the technology in offices, the hospitality 
sector, government institutions, industry 
and transportation. Trulifi combines 
energy-efficient LED lighting with a reliable, 
secure and high-speed two-way wireless 
connection, with speeds of up to 250 Mbps 
for the downlink and the uplink.
Volksparkstadion – Hamburg, Germany
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You’ve heard of surround sound, but 
have you heard of surround lighting? 
Supercharging in-home entertainment 
with Philips Hue Play HDMI Sync Box
Challenge
Philips Hue leads the smart lighting industry 
with a comprehensive portfolio of indoor 
and outdoor smart light bulbs, fixtures, 
and accessories. Its smart lighting 
ecosystem offers routines to automate your 
home lighting, preset and custom light 
scenes to set the mood in any room of your 
home, integration with other smart home 
assistants and products, and more.
In 2018, Philips Hue launched the Hue Sync 
desktop app, a proprietary computer 
software that allows color-capable smart 
lights to react to the content on a computer 
“The Philips Hue Play HDMI Sync 
Box opens new ways of enjoying 
entertainment with light. It adds 
another dimension to the content 
and increases overall enjoyment 
of consuming entertainment as 
we know it.”
Niek Janssen, product manager, 
Home Systems and Luminaires at 
Signify
screen. The feature was lauded – but users 
still wanted more. They wanted the ability to 
use Hue Sync with their home entertainment 
setup.
Solution
In 2019, Signify released the Philips Hue Play 
HDMI Sync Box and the accompanying Hue 
Sync mobile app. The sync box allows users 
to connect their color-capable Philips Hue 
bulbs, fixtures, and lamps to the HDMI-
connected content on their TV screen, while 
the Hue Sync mobile app lets users control 
the sync box and customize the way their 
lights react to the content on their TV 
Philips Hue Play HDMI Sync Box – USA
screen. During the first month after launch, 
the sync box sold 4,904 units in the United 
States; an average of 95% of consumers 
now use the device daily.
The Philips Hue Play HDMI Sync Box
With four inputs and one output, users can 
connect up to four HDMI devices, such as 
gaming consoles and streaming devices, 
to the sync box. The sync box acts as a 
middleman between the devices and TV, 
relaying the signals from the HDMI devices 
to the lights and making them dim, brighten, 
dance, and flash along with the TV content.
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4	 Corporate 
performance
4.1	
Financial 
performance
4.1.1	
Company performance
2019 was a year of solid progress, during 
which Signify reported sales of EUR 6,247 
million, improved its Adjusted EBITA margin 
by 30 basis points to 10.4%, increased net 
income to EUR 267 million and delivered net 
cash provided by operating activities of EUR 
599 million.
Signify reported sales of EUR 6,247 million, 
a reduction of 1.8% on a nominal basis. 
Adjusted for 1.6% currency effects and 1.3% 
consolidation impact, comparable sales 
declined by 4.6%.
The performance in 2019 reflected a 
challenging macro-environment, with higher 
overall uncertainty and lower market activity 
in certain markets, most notably in Europe, 
India and the United States. This mainly 
impacted the Professional and LED 
electronics businesses and was partly offset 
by a strong performance in Home. 
Comparable LED-based sales grew by 1.4% 
and represented 78% of total sales 
compared with 71% in 2018.
Signify’s gross margin amounted to EUR 
2,307 million in 2019 compared with EUR 
2,382 million in 2018. The adjusted gross 
margin as percentage of sales reduced by 
50 basis points to 37.8%, including a 
negative currency effect of 30 basis points.
Indirect costs decreased by EUR 67 million, 
as a result of the continued rigorous 
implementation of cost reduction initiatives 
during the year. Adjusted indirect costs 
decreased by EUR 83 million, or 80 basis 
points as a percentage of sales. In 2019, 
the company continued its journey to 
operational excellence. Initiatives included 
accelerating new growth platforms, driving 
sales excellence, and increasing efficiency in 
manufacturing, supply chain, procurement 
and support functions.
The company reported EBITA of EUR 500 
million. The Adjusted EBITA amounted to EUR 
648 million. This resulted in a 30 basis points 
improvement in the Adjusted EBITA margin to 
10.4%.
R&D expenses amounted to EUR 283 million 
compared with EUR 312 million in 2018. 
This included EUR 13 million of restructuring 
charges compared with EUR 25 million in 
2018, resulting in adjusted R&D expenses of 
EUR 270 million in 2019. As a percentage of 
sales, adjusted R&D expenses decreased 
from 4.5% in 2018 to 4.3% in 2019.
Income from operations decreased from 
EUR 410 million in 2018 to EUR 401 million in 
2019. The delta can mainly be explained by 
higher acquisition-related charges and 
incidental items. Acquisition-related 
charges amounted to EUR 13 million and are 
mainly related to the intended acquisition of 
Cooper Lighting Solutions and the 
acquisition of Klite. Incidental items 
amounted to EUR 36 million. These items 
have a non-recurring nature and relate to, 
Key figures in millions of EUR unless otherwise stated
2018
2019
Sales
6,358
6,247
Comparable sales growth 1
(4.4)%
(4.6)%
Gross margin
2,382
2,307
 as a % of sales
37.5%
36.9%
Income from operations
410
401
Financial income and expenses
(41)
(43)
Income tax expense
(106)
(93)
Net income
261
267
Adjusted gross margin 1
2,433
2,360
Adjusted indirect costs 1
(1,896)
(1,813)
Adjusted EBITA 1
640
648
 as a % of sales
10.1%
10.4%
Restructuring, acquisition and incidental items 1
(136)
(148)
EBITA 1
504
500
Basic earnings per share in EUR
1.95
2.08
Dividend per share in EUR 2
1.30
1.35
Shareholders’ equity
2,041
2,181
Net debt 1
589
618
Working capital 1
536
388
Net cash provided by operating activities
381
599
Free cash flow 1
306
529
 as a % of sales
4.8%
8.5%
1	
For a reconciliation to the most directly comparable IFRS financial measure, see chapter 18, Reconciliation of 
non-IFRS financial measures, of this Annual Report.
2	
2019 Dividend subject to approval by the 2020 Annual General Meeting of Shareholders.
23
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unleashing new growth platforms. 
The growing profit engines reported sales of 
EUR 5,061 million, a nominal increase of 3.0%, 
particularly driven by acquisitions made. 
Comparable sales growth of the growing 
profit engines was -0.3%, mainly due to a 
challenging macro environment resulting in 
lower market activity in Europe, India and the 
United States. Our growth platforms, 
connected systems, IoT platform services, 
Horticulture, Solar, LiFi and 3D printing, 
showed positive momentum in 2019. 
The Adjusted EBITA margin of the growing 
profit engines improved by 180 basis points 
to 10.4%, with each of the three business 
groups improving profitability. The growing 
profit engines substantially increased free 
cash flow to EUR 559 million in 2019 and each 
of the three business groups generated 
positive free cash flow. 
As of December 31, 2019, Signify had a net 
pension liability of EUR 437 million, compared 
to EUR 474 million at December 31, 2018. 
During 2019, Signify made a contribution of 
USD 20 million to the pension fund in the 
United States.
Signify employed 32,005 full-time 
equivalents (FTEs) at year-end 2019, 
compared with 29,237 at year-end 2018. 
The increase in FTEs is driven by the 
acquisitions that were completed in 2019.
4.1.2	
Growing profit engines
The growing profit engines - LED, 
Professional and Home - represent the 
foundations Signify is building on and 
investing in, in line with the company’s 
strategy to move to LED and connectivity, 
Shareholders’ equity increased by EUR 140 
million to EUR 2,181 million, primarily driven by 
net income, partially offset by the dividend 
distribution. In 2019, EUR 164 million of 
capital was returned to the shareholders 
through the company’s annual dividend 
payment.
Net debt at year-end increased by EUR  
29 million to EUR 618 million compared with 
the same period of 2018, due to a EUR 200 
million increase in gross debt mainly related 
to IFRS 16 which was partly offset by an 
increase in the cash position. Working 
capital decreased year-on-year by EUR 148 
million to EUR 388 million. As a percentage of 
sales, working capital improved by 220 bps 
to 6.2% of sales, mainly driven by the 
consolidation of Klite as of October 1, 2019, 
higher payables and lower accounts 
receivable.
among other items, transformation 
initiatives and real estate gains. 
Restructuring costs were EUR 99 million in 
2019, with the majority of costs related to 
Lamps and Professional. Net income 
amounted to EUR 267 million compared with 
EUR 261 million in 2018, and benefited from 
lower income tax expense.
Net cash provided by operating activities 
increased from EUR 381 million to EUR 599 
million, mainly driven by better working 
capital, lower income taxes paid, and EUR 71 
million positive impact from the application 
of IFRS 16 in 2019. Free cash flow increased 
from EUR 306 million in 2018 to EUR 529 
million, or 8.5% of sales, in 2019. Net capital 
expenditures amounted to EUR 70 million in 
2019, or 1.1% of sales. For 2020, net capital 
expenditures are expected to be in the 
range of 1.0% to 1.5% of sales.
Growing profit engines in millions of EUR unless otherwise stated
Sales
CSG 1, 2
Adj. EBITA margin
Free cash flow 2, 3
2018
2019
2018
2019
2018
2019
2018
2019
LED
1,812
1,891
0.4%
(1.1)%
11.7%
12.7%
 
 
Professional
2,635
2,649
(0.4)%
(1.7)%
9.5%
10.0%
 
 
Home
467
521
(3.8)%
11.3%
(8.1)%
3.8%
 
 
Growing profit engines
4,914
5,061
(0.4)%
(0.3)%
8.6%
10.4%
370
559
1	
Comparable sales growth.
2	
For a reconciliation to the most directly comparable IFRS financial measure, see chapter 18, Reconciliation of non-IFRS financial measures, of this Annual Report.
3	
Excluding non-allocated free cash flow items (e.g. tax, interest).
24
Signify Annual Report 2019
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Creating value
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Consolidated financial statements
Corporate statements

2019 Financial performance
Sales were EUR 1,891 million, reflecting a 
nominal sales increase of 4.4% as a result of 
the 51% stake in Klite. Comparable sales 
declined by 1.1%. LED lamps delivered a solid 
performance, out-growing the market 
mainly in Europe and Asia, while sales in LED 
electronics were impacted by lower 
customer demand in most regions.
Income from operations increased to EUR 
212 million compared with EUR 200 million in 
2018, driven by management of price and 
mix. Adjusted EBITA amounted to EUR 240 
million. This resulted in an improvement of 
the Adjusted EBITA margin of 100 basis 
points to 12.7%.
Market developments
There is a transition in both professional and 
consumer segments from LED lamps to 
functional LED luminaires and connected 
solutions, as anticipated in the company’s 
strategy. This trend is driven by an 
increasingly compelling proposition of both 
integrated LED luminaires and connected 
solutions in particular, whilst at the same 
time the replacement cycle of LED Lamps 
reduces due to its longer lifetime. 
The company expects this trend to continue 
for the foreseeable future. This provides a 
solid growth path with the ambition to drive 
market share gains and leadership in 
functional luminaires as connected lighting. 
Signify continues to expect that the LED 
lamps market will peak in 2020 in terms of 
volumes. The LED electronics market is 
expected to grow, particularly driven by the 
shift to connected lighting. LED will drive 
growth in LED electronics through the 
transition to smart lighting via innovation 
2019 Business highlights
•	 UniversalFit TLED in North America: this 
product is compatible with any ballast, 
making replacement of fluorescent tubes 
easier than ever before.
•	 TrueForce Urban in Europe: this lamp is 
used to replace conventional High-
Intensity Discharge lamps. It creates a 
pleasant and safe atmosphere in outdoor 
environments with LED retrofit. The lamp 
is easy to install, creates 80% energy 
savings and has a payback period of less 
than two years.
•	 Wi-Fi based smart lighting in the United 
States, Europe and India: provides 
consumers with easy-to-install smart 
lighting, which operates with the WiZ 
Connected Ecosystem via the WiZ App. 
The retrofit light bulbs fit any table lamp, 
luminaire or downlight.
•	 Dual-zone ceiling luminaires in China with 
an RF remote control to set innovative 
unique light effects and light features 
such as ‘going to sleep’. The product is 
offered in many different design styles to 
seamlessly integrate in various interiors.
•	 Launch of world’s smartest outdoor LED 
driver: enables connect-ready and 
connected outdoor lighting. The driver 
offers IntelliStart, enabling a maximum 
number of light poles on a single circuit 
breaker and energy metering with 99% 
accuracy.
•	 Private label wins: LED’s private label 
business showed a solid performance 
with 22 tenders won in 2019.
Strategic priorities
LED aims to further strengthen its 
leadership position in LED lamps and LED 
electronics by continuously improving 
customer value through feature 
differentiation (e.g. EyeComfort) and leading 
the transition towards connectivity. On the 
LED lamps side, this includes winning market 
share by providing the most complete and 
compelling offering to its customers and 
enlarging distribution. In LED electronics, 
the aim is to lead the transition to smart 
lighting through innovation leadership in 
connected components and digitization of 
design and supply chain to serve its OEM 
partners.
Acquisitions
In 2019, Signify closed the acquisition of 
Klite which will strategically strengthen the 
company’s position in the supply chain of 
LED lamps and luminaires. The combined 
expertise, innovation power and distribution 
scale will help to deliver cost-efficient 
innovations to customers faster, including 
connected lighting offers. In addition, Klite 
will allow LED to capture more value from 
the growing private label segment.
Signify also acquired WiZ Connected, 
developers of the WiZ Wi-Fi-based 
connected lighting ecosystem. The addition 
of WiZ enables Signify to extend its 
leadership by stepping into the Wi-Fi-based 
smart lighting market.
4.1.3	
Performance by 
Business Group
Performance LED
About LED
LED sells a wide variety of LED lamps, namely 
spots, bulbs and tubes, to the professional 
and consumer channels. In addition, 
the Business Group sells LED electronic 
components, consisting of LED drivers and 
LED modules, to luminaire OEMs for 
professional luminaire applications in the 
retail, office, industry and outdoor 
segments. In 2019, Signify acquired a 51% 
stake in Klite, one of the leading providers of 
high-quality, cost-efficient LED lamps and 
luminaires. 
Based on research performed internally, 
the company believes that LED held the 
number one position in sales in the global 
LED lamps and electronics market in 2019.
Key figures LED  
in millions of EUR unless otherwise stated
2018
2019
Sales
1,812
1,891
Nominal sales growth
(4.7)%
4.4%
Comparable sales growth 1
0.4%
(1.1)%
Income from operations 
(or EBIT)
200
212
EBITA 1
204
217
Adjusted EBITA 1
212
240
as a % of sales
11.7%
12.7%
Number of employees  
(in FTEs)
5,979
11,790
1	
For a reconciliation to the most directly 
comparable IFRS financial measure, see chapter 
18, Reconciliation of Non-IFRS Financial Measures, 
of this Annual Report.
25
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Consolidated financial statements
Corporate statements

•	 Installation of Philips SunStay solar 
streetlights in park in Seville: helps 
Seville, a city committed to sustainability 
and ecology, to reduce energy costs and 
improve its carbon footprint, while 
enhancing the safety of visitors to the 
park.
•	 Enabled Prime Delica to grow healthier 
and safer crops for 7-Eleven customers 
in Japan: through research, Signify 
helped Prime Delica to develop an optimal 
light recipe to increase vitamin levels and 
the nutritional value of lettuce.
2019 Financial performance
Sales increased 0.5% on a nominal basis to 
EUR 2,649 million. This represents a 
decrease of 1.7% on a comparable basis. 
During the year, Professional was impacted 
by weak market conditions, most notably in 
certain markets in Europe and in India.
Professional reported income from 
operations of EUR 133 million in 2019. 
Adjusted EBITA amounted to EUR 265 million. 
The Adjusted EBITA margin improved by 50 
basis points to 10.0%, as procurement and 
indirect cost savings more than offset the 
negative impact of price and mix. 
Restructuring charges amounted to EUR 22 
million, mainly related to simplification of 
business structures, reduction of indirect 
costs and industrial footprint rationalization.
Market developments
The professional lighting market is a large, 
growing and resilient market. As the global 
leader in this market, Signify is well 
positioned to benefit from powerful global 
trends such as the shift to connected 
lighting. Signify’s Interact platform is 
the acquisition will improve the business mix 
with Professional revenues increasing from 
42% to 53% of total sales. Cooper Lighting 
Solutions has about 5,100 employees. 
Closing is subject to regulatory approvals 
and expected to take place in the first 
quarter of 2020.
In 2019, Signify acquired animal-centric 
lighting experts Once Inc. and iLOX to 
capture attractive growth in agricultural 
lighting. With this acquisition, Signify adds 
know-how, technology and expertise in 
animal lighting that complements the 
horticulture lighting business. These 
tailor-made lighting systems improve the 
quality of life for livestock, which leads to 
healthier and enhanced production for the 
farmer.
2019 Business highlights
•	 Launch of tailor-made 3D printed 
luminaires for circular economy: 3D 
printing reduces the carbon footprint by 
47% compared with metal luminaires. 
Signify expands 3D printing capabilities 
with facilities in the United States, India 
and Indonesia.
•	 Launch of Trulifi: the world’s fastest 
commercial LiFi systems provides highly 
reliable and secure high-speed wireless 
communication through existing and 
future lighting infrastructure. Signify has 
extended partnerships with key players 
including Vodafone for 5G, Latecoere for 
commercial airplanes, and Ellamp for 
buses and trains. There are already more 
than 100 pilots worldwide using Trulifi.
•	 Launch of BrightSites: offers a ready 
platform for lighting and city-wide 4G/5G 
and WiFi infrastructure. It accommodates 
a wide variety of IoT sensors.
Key figures Professional  
in millions of EUR unless otherwise stated
2018
2019
Sales
2,635
2,649
Nominal sales growth
(4.2)%
0.5%
Comparable sales  
growth 1
(0.4)%
(1.7)%
Income from operations 
(or EBIT)
121
133
EBITA 1
208
222
Adjusted EBITA 1
251
265
as a % of sales
9.5%
10.0%
Number of employees  
(in FTEs)
11,275
10,570
1	
For a reconciliation to the most directly 
comparable IFRS financial measure, see chapter 
18, Reconciliation of Non-IFRS Financial Measures, 
of this Annual Report.
Strategic priorities
Professional focuses on strengthening its 
global lighting leadership position by further 
innovating in LED products, winning in 
Systems & Services and unlocking the 
potential in businesses such as Horticulture, 
Solar, LiFi and 3D printing. Systems & 
Services accounted for 24% of sales in 2019. 
At the same time, Professional leverages its 
scale to reduce cost of production. Another 
strategic priority is to successfully integrate 
the recently announced acquisition of 
Cooper Lighting Solutions.
Acquisitions
In October 2019, Signify has entered into a 
definitive agreement with Eaton to acquire 
Cooper Lighting Solutions. The acquisition 
will strengthen Signify’s position in the 
attractive North American lighting market, 
with increased innovation power and more 
competitive offerings. In addition, 
leadership in connected components and by 
expanding the market position in indoor LED 
electronics.
2020 and beyond
In 2020, LED will continue to drive LED sales 
growth through gaining market share and by 
driving the transition to connected lighting, 
functional LED luminaires and indoor 
electronics. At the same time, LED will 
continue to focus on further improving its 
profitability and cash profile through 
product differentiation, cost reductions and 
working capital improvements by leveraging 
the Klite acquisition. Furthermore, 
organizational efficiencies will benefit the 
indirect costs.
Performance Professional
About Professional
Based on research performed internally, 
Signify believes that it is the global leader in 
the professional lighting market for 
products such as LED and conventional 
luminaires, systems and services, 
with strong positions across key 
geographies. Professional products, 
systems and services are used in multiple 
market segments such as offices, 
commercial buildings, shops, hospitality, 
industry and outdoor environments including 
smart cities. The products in the 
professional business have historically 
experienced a rapid shift from conventional 
to LED lighting and have been integrated 
into broader Systems and Services 
capabilities.
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Income from operations amounted to EUR 3 
million compared with EUR (44) million last 
year, driven by a higher top-line, gross 
margin improvement and cost optimization. 
Adjusted EBITA amounted to EUR 20 million, 
resulting in an Adjusted EBITA margin of 
3.8%.
Market developments
The consumer lighting market is expected to 
benefit from the transition to LED luminaires 
and the increasing adoption of connected 
home lighting systems. The market for smart 
home lighting systems is expanding rapidly. 
At the same time, Home is experiencing 
more connected lighting offerings coming to 
the market.
2020 and beyond
Home will continue to focus on driving 
profitable growth by retaining its market 
leadership position and expanding the 
reach, breadth and richness of the Philips 
Hue offering.
Performance Lamps
About Lamps
Lamps is the global market leader in the 
conventional lighting business and 
comprises the company’s conventional 
lamps and lamp electronics businesses. 
It produces and sells lamps, based on a wide 
variety of non-LED based technologies. 
This includes HID, TL, compact fluorescent, 
halogen, incandescent, as well as electronic 
components (electronic ballasts and 
drivers) and specialty lighting. Conventional 
lamps are used in a wide variety of 
residential and professional applications 
and are bought by consumers, electrical 
Strategic priorities
Home aims to further realize profitable 
growth by driving the transition to 
connected lighting for consumers in and 
around the house. Its strategic priorities 
include expanding the reach, breadth and 
richness of Philips Hue. The aim is to achieve 
this by investing in marketing and broadening 
the portfolio to drive volumes and to further 
expand in growth markets.
2019 Business highlights
•	 Launch of Philips Hue with Bluetooth: this 
new offering enables direct light control 
from a smart device without the need for 
a bridge, and provides consumers with an 
easy entry into the smart home lighting 
market.
•	 Introduction of Philips Hue Play HDMI 
Sync box: provides an easy way to 
synchronize all digital content with up to 
ten Philips Hue lights. It is compatible with 
movies, TV shows and games, 
and complements screen action in the 
living room.
•	 Launch of smart accessories: the smart 
button allows consumers to control their 
Philips Hue lights with a single press, 
or press and hold to brighten and dim. 
The smart plug turns any light point with 
power plug into a Philips Hue smart light.
2019 Financial performance
Sales amounted to EUR 521 million in 2019, 
with a nominal sales increase of 11.6% and 
comparable sales growth of 11.3%. This was 
on the back of a particularly strong 
performance in Europe as Home 
experienced robust demand for connected 
offers.
connected lighting systems and luminaires. 
For the development of its offering, 
Home builds on the company’s strong 
in-house R&D capabilities and knowledge in 
LED and lighting applications, complemented 
by extensive qualitative and quantitative 
consumer research.
Philips Hue, introduced in 2012, is the market 
leader in connected lighting for consumers. 
The system enables users to personalize 
their lighting to suit their preferences and 
needs. Users can control lights wirelessly 
through apps and smart devices, with their 
voice or with remote control switches. 
The Philips Hue offering is continuously 
expanding. Recent examples of new 
innovations include the launch of the Philips 
Hue Bluetooth bulbs, the Philips Hue Play 
HDMI Sync box and new smart accessories 
such as the smart button and the smart 
plug.
Key figures Home  
in millions of EUR unless otherwise stated
2018
2019
Sales
467
521
Nominal sales growth
 (8.0)%
11.6%
Comparable sales  
growth 1
 (3.8)%
11.3%
Income from operations 
(or EBIT)
 (44 )
3
EBITA 1
 (43 )
5
Adjusted EBITA 1
 (38 )
20
as a % of sales
 (8.1)%
3.8%
Number of employees  
(in FTEs)
1,656
1,516
1	
For a reconciliation to the most directly 
comparable IFRS financial measure, see chapter 
18, Reconciliation of Non-IFRS Financial Measures, 
of this Annual Report.
designed to handle data collected from the 
growing number of connected light points, 
sensor devices and systems. The transition 
to connected lighting is occurring rapidly, 
particularly in developed countries. 
Professional systems typically control a 
large network of lights. Potential savings for 
customers based on total cost of ownership 
tend to be significant. As an example, 
Interact City enables cities to centrally 
manage street lighting and adapt intensity 
depending on weather, traffic movement or 
organized events, thereby realizing 
significant energy cost savings. Up till now, 
Signify has completed over 1,900 road & 
street lighting projects in close to 60 
countries. In 2019, Signify installed 12 million 
connected light points world-wide to a total 
of 56 million across all segments (both 
professional and consumer). The total 
number of existing light points worldwide is 
around 26 billion, showing that the 
connected lighting market continues to 
offer significant growth potential for Signify.
2020 and beyond
Professional continues to implement its 
strategy focused on innovating in LED 
products, winning in Systems & Services, 
and unlocking potential in growth platforms 
such as Horticulture, Solar, LiFi and 3D 
printing, while continuing the optimization of 
its cost structure.
Performance Home
About Home
Home is the global market leader in 
connected home systems and a top-three 
player in selected home luminaires markets. 
The Business Group develops and sells 
27
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Performance Other
Other reported income from operations of 
EUR (114) million and EBITA of EUR (112) 
million, including restructuring costs of EUR 
14 million. Other represents amounts not 
allocated to the operating segments and 
includes certain costs related to central 
R&D activities to drive innovation as well as 
company-enabling functions. Adjusted EBITA 
amounted to EUR (100) million in 2019, 
compared with EUR (87) million in 2018. 
The number of FTEs was 817 at the end of 
2019, versus 935 at the end of 2018.
4.1.4	
Performance by 
geographic cluster
Comparable sales in Europe decreased by 
4.4%, mainly reflecting challenging market 
conditions in Germany, Italy and France. 
Comparable sales in the Americas 
decreased by 7.5%, mainly as a result of the 
ongoing decline of conventional and more 
challenging market conditions in LED 
electronics and Home. In the Rest of the 
World, comparable sales decreased by 2%, 
particularly due to India.
continues to deliver on its ‘last company 
standing’ strategy, which resulted in further 
market share gains and strong free cash 
flow generation of EUR 222 million in 2019.
Market developments
Signify estimates that the conventional 
lighting market declined at a faster pace 
than its Lamps business in 2019 and thus, 
continued to gain market share.
The conventional lamps market is expected 
to continue to decline in the coming years 
due to the ongoing adoption of LED lighting 
technologies.
2020 and beyond
The performance of Lamps in 2019 reflected 
the successful execution of the ‘last 
company standing’ strategy to extract value 
from the conventional business. In 2020, 
Lamps will continue to execute its strategy 
and optimize free cash flow by leveraging 
the Business Group’s cost advantage, scale, 
global footprint and lean manufacturing 
capabilities while responding to customer 
demand for conventional products.
Lamps continues to proactively manage its 
manufacturing footprint and reduce 
operational costs.
2019 Business highlights
Legislation to ban certain conventional 
technologies remains an important factor 
impacting the development of the 
conventional market. Lamps invests in R&D 
to maintain a legislation-compliant portfolio 
and still looks at opportunities for innovation 
such as for specialty lighting and 
conventional horticultural lighting.
As part of its strategy, Lamps is proactively 
managing its manufacturing footprint. 
Signify operated 13 manufacturing plants for 
conventional lamps at the end of 2019 
compared with 45 at the end of 2008. In the 
fourth quarter of 2019, the production site 
in Hamilton, United Kingdom, was closed.
2019 Financial performance
Sales for 2019 amounted to EUR 1,159 million, 
a decline of 18.8% on a nominal basis and 
20.5% on a comparable basis.
Income from operations reduced to EUR 168 
million, due to the ongoing decrease in sales 
and higher restructuring costs, partly offset 
by proactive rationalization of the 
manufacturing footprint and a reduction in 
indirect costs. Restructuring costs 
amounted to EUR 44 million and were mainly 
related to further optimization of the 
manufacturing footprint. Adjusted EBITA for 
2019 decreased to EUR 222 million 
compared with EUR 302 million in 2018. 
The Adjusted EBITA margin remained robust 
at 19.2% in 2019. As a cash engine, Lamps 
installers and professional end-users 
through a wide range of channels. 
Lamp electronics are mainly sold to 
luminaire manufacturers directly and as 
replacement products to electrical 
wholesalers. Finally, Lamps sells digital 
projection lamps and drivers to the original 
equipment manufacturers (OEMs) market 
and the replacement market.
Key figures Lamps  
in millions of EUR unless otherwise stated
2018
2019
Sales
1,428
1,159
Nominal sales growth
 (20.1)%
(18.8)%
Comparable sales  
growth 1
 
(16.2)%
(20.5)%
Income from operations 
(or EBIT)
 269 
168
EBITA 1
 270 
168
Adjusted EBITA 1
 302 
222
as a % of sales
 21.1% 
19.2%
Free cash flow 1, 2
308
222
Number of employees  
(in FTEs)
9,393
7,312
1	
For a reconciliation to the most directly 
comparable IFRS financial measure, see chapter 
18, Reconciliation of Non-IFRS Financial Measures, 
of this Annual Report.
2	
Excluding non-allocated free cash flow items (e.g. 
tax, interest).
Strategic priorities
Lamps, the cash engine, enables Signify to 
leverage strong commercial synergies in 
brand coverage and customer reach and 
aims to optimize free cash flow. While the 
overall conventional market continues to 
decline, Lamps’ focus is on winning market 
share in key segments and markets to 
remain the ‘the last company standing’. 
Sales by geography in millions of EUR unless otherwise stated
2018
2019
Change
CSG 1, 2
Europe 3
2,337
2,238
(4.3)%
(4.4)%
Americas 3
1,830
1,747
(4.5)%
(7.5)%
Rest of the world 3
1,840
1,855
0.8%
(2.0)%
Global businesses 3
352
406
15.5%
(4.4)%
Total
6,358
6,247
(1.8)%
(4.6)%
1	
For a reconciliation to the most directly comparable IFRS financial measure, see chapter 18, Reconciliation of 
Non-IFRS Financial Measures, of this Annual Report.
2	
Comparable sales growth.
3	
Horticulture is included in Market Groups Europe, Americas and Rest of the World (was previously part of 
Global businesses).
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Sustainable performance per market
FTEs
Manufacturing 
sites
Safety  
TRC rate
CO2 emitted 
(kilotonnes)
Waste  
recycled
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
Europe
12,697
11,442
16
16
0.31
0.36
126
119
81%
86%
Benelux
3,620
3,294
4
5
0.29
0.41
22
18
88%
82%
Eastern Europe
6,572
5,836
6
7
0.24
0.16
74
73
75%
87%
DACH (Germany, Austria, and Switzerland)
425
401
0
0
0.17
0.00
5
4
- 
-
France
619
572
0
0
2.29
5.53
10
10
-
-
Iberia
658
688
2
2
0.85
0.79
6
6
84%
80%
Italy, Israel, and Greece
256
183
2
1
0.00
0.46
3
3
-
-
Nordics
243
238
1
1
0.00
0.00
2
2
-
-
UK & Ireland
304
231
1
0
0.00
0.00
4
3
85%
- 
Americas
7,587
6,100
16
15
0.40
0.31
136
133
88%
89%
Canada
669
592
2
2
1.30
0.18
9
10
92%
93%
Latin America
4,356
3,453
6
6
0.17
0.15
25
26
89%
90%
United States of America
2,563
2,056
8
7
0.54
0.68
102
97
87%
86%
Rest of the world
8,953
14,463
10
13
0.15
0.25
139
111
75%
98%
Africa
123
112
0
0
n.a.
-
5
4
-
-
ASEAN
463
458
0
0
0.00
0.00
6
4
-
-
Indonesia
173
180
0
0
0.00
0.00
3
2
-
-
Greater China
4,664
10,431
4
8
0.10
0.16
45
37
96%
97%
India
2,440
2,389
2
1
0.21
0.12
60
47
100%
100%
Far East
75
75
0
0
0.00
0.00
3
2
-
-
Middle East & Turkey
839
649
3
3
0.38
0.95
8
7
25%
89%
Pacific
177
170
1
1
0.00
1.80
9
8
-
-
4.2	 Sustainability 
performance
Brighter Lives performance
In 2019, our workforce increased to 32,005 
FTEs (2018: 29,237 FTEs). This was primarily 
due to Signify’s new acquisitions over 2019. 
Employee engagement is measured through 
the employee Net Promoter Score (NPS). 
Our NPS greatly improved in 2019 with an 
overall score of 18 (2018: 13). Our safety 
performance indicator (TRC rate) was 0.32 
per 100 FTEs (0.29 in 2018). This is a 56% 
improvement from our 2015 baseline and 
already meets our 2020 target on safety.
Better World performance
Our operational carbon footprint was 363 
kilotonnes, a decrease of 9.5% compared 
with 2018. This was due to a decrease in 
emissions from logistics and manufacturing 
activities. We also invested in carbon offsets 
resulting in a 56% net carbon footprint 
reduction year-on-year. In 2019, we were 
able to effectively reduce the amount of 
waste sent to landfill, as defined by our 
commitment, by 70% compared to 2018. 
In 2019, 90% of our total waste was recycled.
Through our global presence, we drive 
sustainability across 19 markets.
29
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4.4	
Outlook
For 2020, Signify aims to achieve a further 
improvement in the Adjusted EBITA margin 
and to deliver a free cash flow of at least 6% 
of sales. This outlook excludes the 
announced acquisition of Cooper Lighting 
Solutions. An update on the outlook will be 
provided after the closing of the Cooper 
Lighting Solutions acquisition, which is 
expected in the first quarter of 2020 as 
previously indicated.
4.3	
Proposed 
distribution to 
shareholders
Pursuant to Article 10 of the Articles of 
Association of Signify N.V., a dividend will 
first be declared on preference shares out 
of net income. The remainder of the net 
income, after reservations made with the 
approval of the Supervisory Board, shall be 
available for distribution to holders of 
ordinary shares subject to shareholder 
approval after year-end. As of December 31, 
2019, the issued share capital consists only 
of ordinary shares; no preference shares 
have been issued. Under Article 10 of the 
Articles of Association of Signify N.V., 
the Board of Management can determine 
what portion of the net income shall be 
retained by way of reserve, subject to the 
approval of the Supervisory Board.
A proposal will be submitted to the 2020 
Annual General Meeting of Shareholders to 
declare a dividend of EUR 1.35 per share, 
in cash, from the net income for full-year 
2019, which represents an increase of 3.8% 
compared with 2018, and a pay-out ratio of 
47%.
The balance sheet presented in this report, 
as part of the company financial statements 
for the period ended December 31, 2019, 
is before appropriation of the result for the 
financial year 2019.
4.5	
Organizational 
change
On January 20, 2020, Signify announced its 
intent to adapt its business structure to 
enable a stronger customer focus and 
enhanced specialization to further increase 
execution speed. To this end, the company 
intends to move from its current four 
business groups (BG) to three divisions: 
Digital Solutions, formerly known as BG 
Professional, Digital Products, which 
combines BG LED and BG Home, 
and Conventional Products, which is the 
current BG Lamps. As a consequence, 
Signify intends to adapt its segment 
reporting accordingly.
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Governance
Consolidated financial statements
Corporate statements

5	 Three-year overview
Three-year sustainability summary
2017
2018
2019
Sustainable revenues, in millions of euros
5,363
5,005
5,102
Sustainable revenues, as a % of total sales
77.3%
79.0%
82.5%
Sustainable innovation, in millions of euros
277
236
225
Sustainable innovation, as a % of adjusted 
research & development spend
82.7%
82.2%
83.5%
Operational gross carbon footprint,  
in kilotonnes CO2-equivalent
519
401
363
Operational energy consumption,  
in terajoules
4,408
4,054
3,885
Operational energy efficiency, in terajoules 
per million euro sales
0.63
0.64
0.62
Renewable electricity, as a % of total 
electricity usage
80%
89%
94%
Water intake, in thousands m3
1,321
1,266
944
Total waste to landfill in scope of our 
commitment, in kilotonnes
2.9
2.4
0.7
Materials provided for recycling via external 
contractor per total waste, in %
84%
82%
90%
Restricted substances, in kilograms
5
4
1
Emissions of VOCs in lacquering processes
1,682
1,463
967
ISO-14001 certification, as a % of all 
reporting organizations
85%
79%
77%
Employee net promoter score
14
13
18
Female executives, in % of total
17%
17%
17%
Total recordable cases, per 100 FTEs
0.41
0.29
0.32
Lost workday injuries, per 100 FTEs
0.27
0.18
0.19
Fatalities
1
1
1
Initial and continual supplier conformance 
audits, number of audits
112
96
73
Suppliers audits, performance rate, in %
95%
93%
99%
Three-year financial summary in millions of EUR unless otherwise stated
2017
2018
2019
Income statement
Sales
6,965
6,358
6,247
Comparable sales growth 1
0.5%
(4.4)%
(4.6)%
Nominal sales growth
(2.1)%
(8.7)%
(1.8)%
Sales of LED based products (as a % of sales)
65%
71%
78%
Gross margin 
2,704
2,382
2,307
 as a % of sales
38.8%
37.5%
36.9%
Income from operations (EBIT)
441
410
401
Net income
281
261
267
Adjusted EBITA 1
669
640
648
 as a % of sales
9.6%
10.1%
10.4%
EBITA 1
571
504
500
Net income attributable to shareholders
294
263
262
Basic earnings per share in EUR
2.04
1.95
2.08
Dividend per share in EUR 2
1.25
1.30
1.35
Balance sheet
Total assets
6,678
 6,181 
6,715
Shareholders’ equity
2,242
 2,041 
2,181
Net debt 1
367
 589 
618
Working capital 1
597
 536 
388
Investments and cash flow
Cash flow from operating activities
 435 
 381 
599
Net Capital expenditure
 (31)
 (75)
(70)
Free Cash Flow 1
 403 
 306 
529
1	
For a reconciliation to the most directly comparable IFRS financial measure, see chapter 18, Reconciliation of 
Non-IFRS Financial Measures, of this Annual Report.
2	
2019 Dividend subject to approval by the 2020 Annual General Meeting of Shareholders.
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Governance
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Signify N.V. is managed by a Board of 
Management entrusted with the 
management of the company.
The Board of Management operates under 
the chairmanship of the Chief Executive 
Officer and is responsible for the 
deployment of the company’s strategy and 
the achievement of the operational and 
financial objectives of the company. 
The Board of Management is accountable 
for its actions and decisions to the 
6	 Board of Management
Stéphane Rougeot 1
Born 1968,  
French
Chief Financial Officer  
Member of the  
Board of Management  
since May 2017
Eric Rondolat 
Born 1966, 
Italian/French
Chief Executive Officer  
Chairman of the  
Board of Management  
since May 2016
René van Schooten
Born 1959, 
Dutch
Member of the  
Board of Management  
since May 2016
Supervisory Board and is answerable to 
shareholders of the company at the Annual 
General Meeting of Shareholders. The Rules 
of Procedure of the Board of Management 
are published on the company’s website.
Corporate governance
A full description of the company’s 
corporate governance structure is 
published in chapter 10, Corporate 
governance, of this Annual Report.
1	
As announced earlier, Stéphane Rougeot will leave Signify as of March 1, 2020. René van Schooten will take over the responsibility as CFO as of that date.
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7	 Supervisory Board
The Supervisory Board supervises the 
policies and management and the 
general affairs of Signify. It also 
provides advice to the Board of 
Management. The Supervisory Board, in 
the two-tier corporate structure under 
Dutch law, is a separate body that is 
independent of the Board of 
Management. 
The Rules of Procedure of the Supervisory 
Board are published on the company’s 
website. For details on the activities of the 
Supervisory Board see chapter 8, 
Supervisory Board report, and chapter 9, 
Remuneration report, of this Annual Report.
Arthur van der Poel
Born 1948,
Dutch
Chairman
Committee(s) B,C
Chairman of the Corporate Governance and 
Nomination & Selection Committee
Member of the Supervisory Board since 
2016; first term expires in 2020
Former member of the Board of Management 
of Royal Philips. Currently Chairman of the 
Supervisory Board of BDR Thermea 
Group B.V.
Gerard van de Aast
Born 1957,
Dutch
Vice-Chairman
Committee(s) A,B
Chairman of the Remuneration Committee
Member of the Supervisory Board since 
2017; first term expires in 2021
Former Chairman of the Boards of 
Management of Imtech and VolkerWessels. 
Currently Chairman of the Supervisory 
Board of Nederlandse Spoorwegen (Dutch 
Railways) and member of the Supervisory 
Board of Witteveen+Bos.
A	
Member of the Audit Committee
B	
Member of the Remuneration Committee
C	
Member of the Corporate Governance 
and Nomination & Selection Committee
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Supervisory Board
Eelco Blok
Born 1957,
Dutch
Committee(s) A,C
Member of the Supervisory Board since 
2018; first term expires in 2022
Former Chief Executive Officer of KPN. 
Currently advisor of privately-held 
investment company Reggeborgh, member 
of the Supervisory Boards of PostNL, 
VolkerWessels and non-executive Director 
of Telstra and of the OTE Group.
Rita Lane
Born 1962,
American
Committee(s) B,C
Member of the Supervisory Board since 
2016; first term expires in 2020
Former Vice President of Operations at 
Apple Inc. Currently member of the Board of 
Directors of Sanmina Corp, member of the 
Board of Directors of L3Harris Technologies.
Jill Lee
Born 1963,
Singaporean
Committee(s) A
Chair of the Audit Committee
Member of the Supervisory Board since 
2017; first term expires in 2021
Currently Chief Financial Officer and 
member of the Executive Committee of 
Sulzer, nominated as an independent 
member of the Board of Directors of 
Schneider Electric.
A	
Member of the Audit Committee
B	
Member of the Remuneration Committee
C	
Member of the Corporate Governance 
and Nomination & Selection Committee
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8	 Supervisory Board 
report
8.1	
Introduction 
by the 
Chairman
I am pleased to present our Supervisory 
Board report for 2019. This report provides 
information on how the Supervisory Board 
and its committees performed their duties in 
2019.
The year 2019 marks the third full year of 
Signify as an independent and publicly listed 
company. Over the last few years it has 
continued its transformation from 
conventional lighting technologies to LED, 
smart and connected lighting and launched 
its new company name: Signify. In 2019 Royal 
Philips sold its remaining shares in 
Signify N.V. By doing so, the remaining 10.7% 
of the company’s shares came into the 
hands of other investors with whom we are 
dedicated to build a solid and long-lasting 
relationship. 2019 was also the year in which 
Signify announced its intent to acquire 
Cooper Lighting Solutions; a leading provider 
of professional lighting, lighting controls and 
connected lighting in North America. This is 
an ambitious and strategic move that 
reinforces the company’s position in the 
Americas and worldwide. The closing of the 
transaction is still subject to regulatory 
approvals and other customary conditions 
and is expected to take place in the first 
quarter of 2020. To summarize it: we can 
look back at an eventful year with important 
developments for the company. Looking 
forward, we believe that these developments 
support a solid strategy and provide the 
right ingredients for a bright future.
The Supervisory Board has three 
committees that cover key areas in greater 
detail: the Audit Committee, the Corporate 
Governance and Nomination & Selection 
Committee, and the Remuneration 
Committee. The charters of the committees 
are published on the company’s website.
8.2	 Key discussion 
topics and 
meetings in 
2019
Meetings and information
The Supervisory Board held thirteen 
meetings in 2019, either in person or by 
means of a conference call. The Supervisory 
Board and committee meetings were well 
attended. In case of absence, pre-
discussions on the topics always took place 
with the Chairman. The Supervisory Board 
consists fully of independent members. 
There were no apparent conflicts of interest 
of material significance in 2019.
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company’s digital strategy. We also 
discussed and reviewed the company’s 
cyber security related risks and steps it is 
taking to mitigate such risks. For more 
information on risk management and the 
company’s business control framework, 
refer to chapter 12, Risk factors and risk 
management, of this Annual Report. 
•	 M&A 
In 2019, a substantial amount of the 
Supervisory Board’s time was dedicated 
to various acquisitions. The Supervisory 
Board held multiple additional calls and 
meetings to review these projects. 
One of these transactions was the 
acquisition of a 51% stake in Klite 
Lighting. This China-based company is 
one of the leading providers of high-
quality, cost-efficient LED lamps and 
luminaires. The acquisition was 
announced in July 2019 and closed in 
October 2019. A very significant 
transaction was the acquisition of 
Cooper Lighting Solutions, which was 
announced in October 2019. The closing 
of the transaction is still subject to 
regulatory approvals and other 
customary conditions and is expected to 
take place in the first quarter of 2020. 
•	 Operating plan for 2020 
We discussed and approved the 
company’s targets for 2020 within the 
context of its 2020 operating plan. 
•	 Capital allocation policy 
We reviewed the capital allocation policy 
of the company. In this context we also 
discussed expectations as to cash 
•	 Financial reporting 
We discussed the quarterly results and 
the (semi-)annual financial statements 
for 2019, including related reports from 
the internal and external auditors and 
non-financial information. The Board of 
Management provided us with updates 
and feedback from investors and other 
stakeholders following each publication 
of financial results. 
•	 Organizational Structure 
The Supervisory Board reviewed the 
company’s organizational structure and 
supported the proposal by the Board of 
Management to adapt the organizational 
structure. This resulted in the 
announcement in January 2020 in which 
the company made public its intention to 
move to three divisions (i) Division Digital 
Solutions, (ii) Division Digital Products 
and (iii) Division Conventional Products. 
•	 Risk management and internal controls 
We also discussed the company’s risk 
management and internal controls, 
including any significant changes and 
improvements thereto. The Supervisory 
Board had a dedicated session on the 
November in which the company 
presented its strategic plan together 
with its longer-term financial objectives. 
On an ongoing basis, we have reviewed, 
challenged and advised the Board of 
Management on the company’s 
implementation of its strategic plan and 
strategic priorities. Part of the meeting in 
November was spent in one of the 
company’s 3D printing facilities. 
The company’s innovation department 
guided the Supervisory Board around the 
facility and, at its premises in Eindhoven, 
gave demonstrations of future 
technologies being developed. 
•	 Business performance 
During each Supervisory Board meeting, 
we discussed the company’s business 
performance. These included updates on 
the company’s financial performance, 
business transformation, cost reduction 
initiatives, developments in working 
capital, the level of inventories and 
collection of receivables. 
The Supervisory Board also had in-depth 
sessions to review and discuss 
developments in specific markets such as 
the Kingdom of Saudi Arabia and India. 
Supervisory Board and Committee Attendance Record
Supervisory 
Board physical 
meetings
Supervisory 
Board calls
Audit  
Committee
Nomination &  
Selection  
Committee
Remuneration 
Committee
Arthur van der Poel
7/7
6/6
7/7
4/4
Gerard van de Aast
7/7
6/6
5/5
4/4
Rita Lane
7/7
6/6
7/7
4/4
Jill Lee
7/7
6/6
5/5
Eelco Blok
7/7
3/6
5/5
7/7
Each of the Supervisory Board committees 
regularly convened and reported back on 
their activities to the full Supervisory Board. 
The Chairman of the Supervisory Board and 
the CEO met regularly for bilateral 
discussions about the progress of the 
company on a variety of matters. 
Our members also individually interacted 
with members of the Board of Management 
and with senior management outside the 
formal Supervisory Board meetings. 
Whenever one of our members wanted to be 
informed on a specific topic, he or she 
requested this, and follow-up was provided 
by the Board of Management or senior 
management.
Last year, the Supervisory Board discussed 
a range of topics, including:
•	 Strategy and innovation 
We had in-depth discussions on industry 
trends as well as opportunities and risks 
related to the Signify business model. 
In September 2019, we had a dedicated 
session to discuss market developments 
and the competitive landscape, 
the company’s current position and the 
company’s strategy for the coming years. 
This was followed by a session in 
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the external auditor. The committee also 
reviewed the professional fitness and good 
standing of the external auditor and its 
engagement partners. For information on 
the fees of Ernst & Young Accountants LLP, 
refer to note B, Audit fees, to the Company 
financial statements. The Audit Committee 
also reviewed its own charter.
As also reflected in the company’s Auditor 
Policy, the external auditor is appointed 
for a maximum period of four years. Ernst 
& Young Accountants LLP was appointed 
for four years in 2016, with 2019 being the 
fourth year of their current engagement. 
In 2019 the Committee, jointly with 
management, conducted a thorough 
assessment of the performance of the 
external auditor. Following that assessment, 
the Committee resolved to recommend to 
the Supervisory Board the re-appointment 
of Ernst & Young Accountants LLP for 
a period of three years (2020 - 2022). 
This resulted in the Supervisory Board 
proposing and recommending the re-
appointment of Ernst & Young Accountants 
LLP as the company’s external auditor at 
the upcoming 2020 Annual General Meeting 
of Shareholders. More information will be 
included in the agenda and explanatory 
notes thereto.
In 2019, the Audit Committee, as part of its 
standing agenda, had in-depth discussions 
on the company’s periodic financial reports 
and related press releases. It also discussed 
with the Head of Internal Audit and the 
Board of Management major areas of risk 
and other attention points as identified 
through internal audits, and progress and 
effectiveness of associated mitigation 
actions. The Audit Committee reviewed 
the internal audit plan and programs for 
each quarter. It also reviewed the internal 
audit charter, yearly audit plan (its scope, 
coverage and relation to that of the external 
audit plan), as well as the functioning, 
budget, staffing, independence and 
organizational structure of the internal audit 
function. Finally, the committee discussed, 
with the Board of Management and the Head 
of Internal Audit, the company’s business 
control framework and any significant 
changes and improvements thereto. 
This framework sets the standard for risk 
management and business controls in the 
company. The Audit Committee reported on 
these matters to the full Supervisory Board.
Regarding the company’s external auditors, 
the discussions also covered matters 
related to accounting policies, financial 
risks, and compliance with accounting 
standards, as well as compliance with 
(financial) legal requirements and relevant 
legal proceedings and related provisions. 
Other areas of Audit Committee review 
included the proposed external audit scope, 
approach, fees and the independence of 
8.3	
Key activities 
of the 
Supervisory 
Board 
committees in 
2019
8.3.1	
Audit Committee
The Audit Committee assists the 
Supervisory Board in fulfilling its 
supervisory responsibilities in a number 
of ways, including ensuring the integrity 
of the company’s financial statements and 
reviewing the company’s internal controls. 
Jill Lee (chair), Gerard van de Aast and Eelco 
Blok are members of this committee.
The Audit Committee met five times in 
2019, upon the conclusion of each quarter 
and additionally in December. A combined 
meeting of the Supervisory Board and the 
Audit Committee took place in February 
2019 to review and approve the company’s 
2018 annual report. The Audit Committee 
reported its findings to the full Supervisory 
Board after every meeting. Generally, 
the CEO, CFO, Group Controller, Head of 
Internal Audit, Chief Legal Officer and 
external auditor (Ernst & Young Accountants 
LLP) also attend these meetings.
generation, distributions, investments in 
innovation and M&A as well as implications 
for credit ratings. We discussed the 
company’s financing structure and 
approved the refinancing of the 
company’s term loans and revolving 
credit facility. We also discussed and 
approved the company’s dividend 
proposal. 
•	 Talent management 
The company’s human resources 
department presented its annual update 
on talent management to us. We also 
discussed the performance and 
succession planning of employees who 
are in key positions. 
•	 Sustainability 
In 2019, we were updated on the 
company’s sustainability and corporate 
social responsibility programs and 
progress made towards their respective 
goals. We are very pleased with the 
commitment and results on these 
programs and are proud that the 
company is recognized as a role model 
and leader in these areas. We also 
discussed stakeholders’ expectations 
and strategic topics for Signify to work 
on as we move forward. More information 
is provided in chapter 16, Sustainability 
statements, of this Annual Report.
 
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The committee also devoted attention to 
the size, composition and diversity of the 
Board of Management. The membership 
terms of two members of the Board of 
Management, Eric Rondolat and René van 
Schooten, end in 2020. Following a proposal 
by the committee, the Supervisory Board 
decided to nominate for re-appointment 
Eric Rondolat as CEO and Chairman of the 
Board of Management for another four 
years and René van Schooten as a member 
of the Board of Management for another 
year. Both these members of the Board 
of Management will be proposed to be 
re-appointed at the General Meeting of 
Shareholders to be held in May 2020.
Following a review and assessment, 
the committee proposed the Supervisory 
Board to nominate Maria Letizia Mariani 
for appointment as member of the Board 
of Management. The Supervisory Board 
subsequently decided to propose the 
appointment of Maria Letizia Mariani as a 
member of the Board of Management at the 
Annual General Meeting of Shareholders 
to be held in May 2020. In addition to 
her role as lead Strategy and Marketing, 
she will take over the responsibility for the 
Business Group Lamps. In January 2020, 
Stéphane Rougeot announced his decision 
to leave the company. René van Schooten 
will take over the role of CFO as of March 1, 
2020 until a new CFO has been appointed. 
The Committee has started a selection 
process to find a replacement for that 
position.
Supervisory Board Skills and Expertise matrix
Indicating fields in which our Supervisory Board members have a particular skill or expertise
Skill/experience item
Arthur van 
der Poel
Gerard  
van de  
Aast
Rita Lane 
Jill Lee 
Eelco Blok 
CEO role
Recent executive role
Industrial experience
Finance, expert level
Projects
Buildings/infrastructure
Business transformation
IT, IT risks, cybersecurity
Technology/innovation
Logistics, supply chain
Geographies
Europe
Europe / 
USA
USA
Asia /  
Europe 
Europe
Diversity elements: 
Gender, age, nationality
Male
71 
Dutch
Male
62 
Dutch
Female
57 
American
Female
56 
Singaporean
Male
62 
Dutch
The committee devoted specific attention 
to the size, composition and diversity of the 
Supervisory Board. Following a selection 
process, the committee proposed the 
Supervisory Board to nominate Frank 
Lubnau and Pamela Knapp for appointment 
as members of the Supervisory Board. 
The Supervisory Board subsequently 
decided to propose the appointment of 
Frank Lubnau and Pamela Knapp as members 
of the Supervisory Board at the Annual 
General Meeting of Shareholders to be held 
in May 2020 (AGM). Mr. Lubnau attended 
several Supervisory Board meetings as an 
observer.
8.3.2	
Corporate Governance 
and Nomination & 
Selection Committee
The Corporate Governance and Nomination 
& Selection Committee is responsible 
for the review of selection criteria and 
appointment procedures for the Board of 
Management, certain other key management 
positions as well as the Supervisory 
Board. The committee is also charged with 
reviewing the corporate governance of the 
company (for more information on corporate 
governance refer to chapter 10, Corporate 
governance, of this Annual Report). Arthur 
van der Poel (chair), Rita Lane and Eelco 
Blok are members of this committee. 
The committee met seven times in 2019 and 
reported its findings to the full Supervisory 
Board after every meeting.
During its meetings, the committee 
discussed changes in key personnel 
positions, succession planning as well 
as the functioning of its members, 
and legislative developments as well as the 
Supervisory Board’s performance evaluation 
procedures. In addition, the committee 
discussed the company’s corporate 
governance structure and discussed the 
committee’s own charter.
The membership terms of two members of 
the Supervisory Board, Arthur van der Poel 
and Rita Lane, end in 2020. The committee 
dedicated time on the re-appointment 
of these members. This resulted in the 
proposal by the Supervisory Board to re-
appoint both these members at the General 
Meeting of Shareholders to be held in 
May 2020. As Arthur van der Poel and Rita 
Lane are both members of this committee, 
neither took part in the decision-making 
process concerning their subsequent re-
appointment proposals.
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8.4	
Performance 
evaluation 
We performed an evaluation of the 
performance of the Board of Management 
and of the Supervisory Board and 
its committees in 2019. The Board of 
Management performed a self-evaluation 
of its functioning and the functioning of 
its individual members. The results of this 
evaluation were reported to the Chairman 
and discussed in the Supervisory Board.
As we are reaching the fourth year since the 
company’s listing, and as the first four-year 
membership terms of two Supervisory Board 
members come to an end, we engaged 
an external party to facilitate this year’s 
annual Supervisory Board self-evaluation. 
The selected external party conducted 
interviews with each individual Supervisory 
Board member, Board of Management 
member, with the General Secretary and 
with the lead partner of the company’s 
external auditor. The interviews were 
followed by a questionnaire which evaluates 
the functioning of the Supervisory Board 
and its committees. The objective of the 
questionnaire was to gain better insight 
into the functioning of the Supervisory 
Board, to identify strengths that we want 
to keep and to identify matters which 
the Supervisory Board or company can 
improve. The questionnaire addressed the 
Supervisory Board’s group dynamics, social 
Following those consultations, it prepared 
decisions and advised the Supervisory 
Board.
Matters discussed by the Remuneration 
Committee in 2019 included a remuneration 
scenario analysis, the results from a 
benchmark on the remuneration levels 
of the company’s Board of Management, 
interim performance results and the 
internal pay ratio. In 2019, the committee 
also initiated a review of the remuneration 
policies for both the Board of Management 
and the Supervisory Board, supported by 
the rewards experts of the company and an 
external advisory firm considering, amongst 
others, market- and best practices, 
the Dutch Corporate Governance Code and 
the Dutch implementation of the revised 
European Shareholders Rights Directive 
(SRD II). This resulted in some changes being 
proposed to the company’s remuneration 
policy for the Board of Management. 
The remuneration policies for the Board of 
Management and the Supervisory Board will 
be submitted for adoption by the General 
Meeting of Shareholders to be held in May 
2020. For details of the proposed changes 
we refer to chapter 9, Remuneration report, 
of this Annual Report.
Please also refer to chapter 9, 
Remuneration report, of this Annual Report, 
for further information on the remuneration 
policy for the Board of Management and how 
it was implemented in 2019.
within Signify, that could play a role in 
the achievement of our diversity targets. 
For more details on the profile including 
diversity of the Board of Management and 
Supervisory Board, please refer to chapter 
10, Corporate governance, of this Annual 
Report. For more information on diversity 
and inclusion in the company, please refer 
to sub-section 16.3, Diversity & Inclusion, 
of this Annual Report.
8.3.3	
Remuneration 
Committee
The Remuneration Committee is responsible 
for preparing decisions of the Supervisory 
Board on the remuneration of individual 
members of the Board of Management and 
certain other key management positions. 
Gerard van de Aast (chair), Arthur van 
der Poel and Rita Lane are members of 
this committee. In performing its duties 
and responsibilities, the Remuneration 
Committee is assisted by an external 
consultant and an in-house remuneration 
expert. Currently, no member of the 
Remuneration Committee is a member of 
the management board of another listed 
company.
The Remuneration Committee met four 
times in 2019. The committee also consulted 
with the CEO, the Board of Management and 
certain other key management employees. 
We believe that it is of strategic importance 
that our Board of Management and 
Supervisory Board are composed in line 
with Dutch and international corporate 
governance best practices and that they 
have the expertise needed for a good 
understanding of current affairs and 
long-term risks and opportunities related 
to the company’s business, taking into 
account our objectives that promote 
diversity at board level. In 2019, the Board 
of Management’s gender diversity did not 
meet our policy targets. At the time of the 
IPO, the CEO and business leader Lamps 
of the Lighting business of Royal Philips 
were appointed as board members of the 
company. These appointments recognize 
the importance of continuity of the 
business while transforming and starting 
to operate as a standalone company. 
The departure of Stéphane Rougeot 
and the proposed appointment of Maria 
Letizia Mariani, subject to approval by the 
Annual General Meeting of Shareholders, 
will result in the Board of Management 
meeting the gender diversity targets. 
The Supervisory Board meets the gender 
diversity targets. For any potential future 
vacancies of the Board of Management and 
the Supervisory Board, the company will 
continue to take into account the profile 
and all diversity objectives. We note that 
there may be various pragmatic reasons, 
such as other relevant selection criteria 
and the availability of suitable candidates 
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interactions, discussion and decision-taking 
and hierarchy. The conclusions from the 
interviews and the questionnaires were 
discussed in a plenary session with the 
Supervisory Board only, and in a plenary 
session with the Supervisory Board and 
the Board of Management together. During 
those sessions we focused on the current 
and the desired level of involvement 
of the Supervisory Board relating to 
different aspects of the company such 
as the company’s purpose and values, 
strategy, performance, governance 
and stakeholder management. This was 
followed by an in-depth discussion on 
the quality of the interaction among the 
Supervisory Board members themselves, 
and between the Supervisory Board and the 
company’s management. These sessions 
provided valuable insights on how we 
evolved as a team over the last few years. 
The Supervisory Board experienced a 
constructive working environment in 2019 
and formulated attention points and actions 
for the year to come.
8.5	
Financial 
statements 
2019 and 
dividend
Signify’s Consolidated and Company 
financial statements for 2019, as prepared 
by the Board of Management, have been 
audited by Ernst & Young Accountants 
LLP as independent external auditor 
appointed by the General Meeting of 
Shareholders. Its report has been included 
in the Combined independent auditor’s 
report. We have approved these financial 
statements.
We recommend the General Meeting 
of Shareholders to adopt the financial 
statements for 2019. We likewise 
recommend to shareholders that they adopt 
the proposal by the Board of Management to 
make a distribution of EUR 1.35 per ordinary 
share in cash, from the 2019 net income.
8.6	
Appreciation
We would like to express our thanks to the 
Board of Management and to all employees, 
for their dedication and hard work for the 
company in 2019. We would also like to thank 
Stéphane Rougeot for his contributions as 
CFO and for being instrumental in driving the 
many improvements at Signify.
February 25, 2020
Supervisory Board
Arthur van der Poel
Gerard van de Aast
Eelco Blok
Rita Lane
Jill Lee
41
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Creating value
Corporate performance
Sustainability statements
We are Signify
Consolidated financial statements
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9	 Remuneration 
report
Introduction
Signify has a balanced compensation policy for all its employees, from our CEO and 
other members of the Board of Management to all employees worldwide. Our policy 
aims to stimulate sustainable value creation, both short- and long-term. Therefore, 
the performance measures used in the variable compensation components are 
linked to quantitative financial, non-financial and sustainability targets. The 
remuneration policy also serves a communication purpose as it clearly stipulates 
and supports a common approach to deliver on the company’s strategy.
9.1	
Remuneration 
policy of the 
Board of 
Management
The following principles apply for the 
remuneration policy of the Board of 
Management:
•	 Signify’s remuneration policy aims to 
attract, reward and retain qualified 
leaders for pursuing the company’s 
purpose and long-term strategic 
objectives, whilst taking the interest of 
all the company’s stakeholders into 
account.
•	 Remuneration levels are to be 
competitive and in line with market 
practice of comparable companies, 
and support a pay-for-performance 
philosophy.
•	 During the policy design and review 
process, stakeholder feedback and legal 
provisions, including the Dutch Corporate 
Governance Code are taken into 
consideration.
The remuneration package of the Board of 
Management consists of the following fixed 
and variable components: base salary, 
annual cash incentive, long-term equity-
based incentive, pensions and other 
benefits. The combination of a member’s 
base salary, annual cash incentive and 
long-term equity-based incentive are 
together referred to as the “total direct 
compensation”. The targeted total direct 
compensation is around the median level of 
various reference groups, indices and 
markets and takes the internal pay ratios 
within the company into account. 
The reference groups are established based 
on industry, ownership type, geographical 
presence, business characteristics and 
scope parameters.
The Board of Management’s total direct 
compensation for 2019 is listed in the table 
below.
Total direct compensation Board of Management 2019 in EUR
Base  
compensation/
salary
Annual cash  
incentive 
(on-target)
Long-term  
equity-based 
component 
(on-target)
E.H.E. Rondolat
871,000
80%  
of annual base
100%  
of annual base
S.L.A. Rougeot
570,000
60%  
of annual base
80%  
of annual base
C.L. van Schooten
569,000
60%  
of annual base
80%  
of annual base
Signify’s value creation model: 
The value created by Signify goes beyond financial performance alone. Our approach is to 
optimize value through financial, environmental and social resources. Our activities and 
our way of doing business impact customers, employees, investors and society at large. 
Signify expresses these impacts in monetary terms in chapter 3.3, Value creation model, 
of this annual report.
The current remuneration policy for the Board of Management was adopted by the Annual 
General Meeting of Shareholders (AGM) in 2017. The remuneration for the Supervisory Board 
was adopted at the time of the IPO in 2016. The effectuation of these policies in 2019 is 
discussed in part 9.3 and 9.4 of this remuneration report.
In 2019, the Remuneration Committee initiated a review of the remuneration policy both for 
the Board of Management and for the Supervisory Board. The Supervisory Board will submit 
both policies for adoption by the shareholders at the AGM to be held in May 2020.
The report included in this Chapter 9 constitutes the remuneration report within the meaning 
of Section 2:135b of the Dutch Civil Code.
42
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Sustainability statements
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achievement of financial performance 
measures applies, below which there will be 
no pay-out. Following the end of the 
relevant performance period, actual 
performance to the targets set will be 
assessed. On that basis, the achievement 
per performance measure and target will be 
determined.
9.1.4	
Long-term equity-
based incentive
Members of the Board of Management are 
eligible for a long-term equity-based 
incentive under the Signify Long-term 
Incentive Plan (LTI Plan). The objective of the 
long-term incentive is to link pay with 
long-term sustainable value creation.
In addition to the Board of Management, 
another approximately 600 employees 
globally are eligible for participation in a 
similar long-term incentive plan. The main 
characteristics of the long-term incentive 
plan for the Board of Management are as 
follows.
The annual on-target grant value is a 
percentage of the base salary. For the CEO, 
the annual on-target grant value is set at 
100% of base salary and for the other 
members of the Board of Management at 
80% of base salary.
member, the maximum annual incentive is 
capped at twice the on-target percentage 
(minimum is 0%). 80% of the annual cash 
incentive is related to financial performance 
measures and 20% to team and individual 
performance measures.
The Supervisory Board can select annually 
two or three financial performance 
measures (and determine their relative 
weightings) from the following list: 
Comparable Sales Growth (CSG), Adjusted 
Earnings before Interest Taxes and 
Amortizations (Adj. EBITA), Average Working 
Capital (AWoCa), Free Cash Flow (FCF), 
Return on Capital Employed (RoCE) and Net 
Income. These measures have the meaning 
as used or defined in this annual report, 
subject to minor adjustments if required in 
order to provide a better indicator of the 
performance of the Board of Management. 
Adj. EBITA, AWoCa and Net Income are 
measured as a percentage of sales.
The possibility to select annually financial 
performance measures from the above list 
gives the Supervisory Board a certain level 
of flexibility to ensure continuous alignment 
of the performance measures with the 
company’s strategy and financial objectives 
for the mid-term.
The target definition includes target 
intervals and correlating pay-out schemes, 
being defined incremental steps in 
performance and respective pay-out. 
In addition, a minimum threshold for the 
sustainable performance. Variable pay is 
based on both financial and non-financial 
performance measures. In selecting 
performance measures, their respective 
weights and targets for a performance 
period, the following is considered:
•	 Performance measures are selected 
based on relevance to the company’s 
strategy.
•	 The company’s strategy determines the 
targets and intervals for the 
performance measures.
•	 Targets are set ambitiously yet 
realistically, taking the company’s risk 
appetite into account.
•	 Alignment with stakeholders’ interests 
and expectations is essential.
9.1.3	
Annual (cash) incentive
Members of the Board of Management are 
eligible for an annual cash incentive. 
The annual incentive is designed to reward 
the achievement of annual financial and 
operational objectives and personal 
performance. The purpose is to ensure 
alignment with the company’s annual 
business plan setting the strategic priorities 
for that year, which in turn contribute to the 
company’s long-term objectives.
The on-target annual incentive level for the 
CEO is set at 80% of base salary, while for 
the other members of the Board of 
Management the on-target annual incentive 
is set at 60% of their base salary. For each 
Scenario analyses are prepared regularly to 
estimate future pay-out levels as input to 
determine the IFRS costs and any hedging 
strategy that might be employed. 
Furthermore, estimated future 
remuneration levels are assessed against 
the potential achievement of strategic 
objectives. Based on the scenario analyses 
performed, the Supervisory Board has 
concluded that the policy supports the 
pay-for-performance philosophy. 
 
9.1.1	
Base salary
The base salary of the members of the Board 
of Management compensates for the 
individual’s experience, skills, duties, 
responsibilities and his or her contribution 
within Signify. The base salary of each 
member of the Board of Management is a 
fixed cash compensation paid on a monthly 
basis. The Supervisory Board determines the 
base salary and may, at its discretion, apply 
an increase in accordance with the 
remuneration policy.
9.1.2	
Variable remuneration
The variable remuneration of the members 
of the Board of Management consists of an 
annual cash incentive and a long-term 
equity-based incentive.
The design of the incentives aims to achieve 
a balance between short-term objectives 
and long-term value creation and 
43
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Performance-incentive zone for TSR in % of grant value
Ranking
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
Payout
0
0
0
0
0
60
80
100
120
140
160
180
200
200
200
Free cash flow
The vesting of another 40% of the annual 
long-term incentive grant is linked to 
performance measured by a free cash flow 
target over the three-year performance 
period. The targets and intervals around 
these measures are determined by the 
Supervisory Board, based on the company’s 
strategic, multi-year plan.
Sustainability
The vesting of the remaining 20% of the 
annual long-term incentive grant is 
dependent on how well Signify performs 
against the targets set with respect to the 
sustainability condition.
The targets and intervals around these 
measures are determined by the 
Supervisory Board, based on the company’s 
strategic, multi-year plan. As targets set are 
usually both qualitative and quantitative, 
set ambitious and adjusted regularly, 
the assessment of the performance is at the 
discretion of the Supervisory Board. 
The discretionary decision will use tracked 
performance as input.
companies included in the peer group 
specifically compiled for this purpose. 
The TSR performance is determined for each 
company in the peer group and, 
the performances are ranked from top to 
bottom. Signify’s position in the ranking, 
together with the pay-out curve, determines 
the pay-out level. Currently, the peer group 
consists of the following companies:
TSR Peer Group
ABB
Johnson Controls
Acuity Brands
Legrand
Cree
Panasonic
Eaton Corporation
Signify
Fagerhult
Schneider Electric
Hitachi
Toshiba
Honeywell Int.
Zumtobel Group
Hubbel
The peer group is reviewed on a regular 
basis to ensure that the companies in the 
group remain relevant peers. In case a peer 
needs to be replaced due to a corporate 
event (merger, acquisition, etc.) the 
Supervisory Board will ensure that the 
adjusted peer group remains aligned with 
the strategic objectives, the geographical 
spread and the business characteristics of 
Signify.
Key features:
•	 The long-term incentive is granted in 
performance shares only and are 
conditionally granted annually.
•	 The vesting of performance shares is 
conditional upon the achievement of 
performance conditions measured over a 
period of three financial years.
•	 Performance is measured using three 
performance measures: relative total 
shareholder return (40%), free cash flow 
(40%) and sustainability (20%).
•	 Pay-out per performance measure can 
vary between 0% and 200%.
Relative TSR
The vesting of 40% of the shares granted is 
subject to a TSR condition. Relative TSR 
measures the share price growth plus 
dividends paid over the three-year 
performance period. Relative TSR 
calculations are conducted by using the 
following approach: Return index data are 
averaged over a three-month period (of daily 
data) preceding the start and the end of the 
measurement period. This performance is 
expressed as a percentage. This percentage 
is compared to the TSR performance of 
9.1.5	
Share ownership 
guidelines and holding 
requirement
Under the Signify share ownership 
guidelines, members of the Board of 
Management must hold a certain value in 
shares in the company. These guidelines are 
designed to further align the interest of the 
members of the Board of Management (and 
certain other leaders within Signify) with the 
interests of its shareholders. For the CEO, 
the value in Signify shares to be held is 300% 
of base salary and for the other members of 
the Board of Management it is 200% of base 
salary. The guidelines require that all 
after-tax shares be retained until the 
required level is met.
In addition, members of the Board of 
Management shall comply with holding 
requirements under the Dutch corporate 
governance code. This effectively means 
that members of the Board of Management 
shall hold all after-tax shares received 
under the long-term incentive plan for a 
period of at least five years after the grant 
date.
Once the requirements under the Signify 
share ownership guidelines and under the 
Dutch corporate governance code are met, 
shares may be sold, subject to insider 
trading rules.
Performance measures 
Relative TSR
Free Cash Flow
Sustainability
40%
40%
20%
44
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Sustainability statements
We are Signify
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reimbursement. The company has also 
provided liability insurance (D&O - Directors 
& Officers) for the persons concerned.
9.1.9	
Contractual 
arrangements
Members of the Board of Management are 
engaged by a service contract 
(‘overeenkomst van opdracht’) with a 
four-year term ending on the date of the 
Annual General Meeting of Shareholders in 
the fourth calendar year after the 
appointment. Members of the Board of 
Management are appointed for a period of 
four years, subject to re-appointment by 
the General Meeting of Shareholders. 
Termination of the services contract is 
subject to a notice period of six months for 
either party. The terms and conditions of 
these service agreements have been aligned 
with the relevant Corporate Governance 
Code provisions. 
9.1.10	
Severance 
arrangements
Contractual severance arrangements of 
members of the Board of Management 
comply with the Dutch Corporate 
Governance Code and provide for 
compensation for the loss of income 
resulting from a termination of employment 
and are capped at one annual base salary.
incentive if it was granted on the basis of 
incorrect information on the fulfillment of 
the incentive goals or the conditions for 
payment of the incentive, and (c) recoup 
incentives in the circumstances set forth in 
the services contract with the member of 
the Board of Management concerned.
In the event of a change of control of the 
company, the Supervisory Board can, at its 
sole discretion, decide to accelerate the 
vesting of any unvested awards under the 
long-term incentive, subject to the 
achievement of the performance conditions 
up to the date of the completion of the 
change of control.
9.1.8	
Additional 
arrangements
Unless relevant law provides otherwise, 
the members of the Board of Management 
and of the Supervisory Board shall be 
reimbursed by the company for various 
costs and expenses, such as reasonable 
costs of defending claims, as formalized in 
the Articles of Association. Under certain 
circumstances, described in the Articles of 
Association, such as an action or failure to 
act by a member of the Board of 
Management or a member of the 
Supervisory Board that can be 
characterized as intentional (‘opzettelijk’), 
intentionally reckless (‘bewust roekeloos’) 
or seriously culpable (‘ernstig verwijtbaar’), 
there will be no entitlement to this 
•	 A temporary gross transition allowance, 
for a maximum period of eight years (first 
five years in full; year 6: 75%; year 7: 50%, 
year 8: 25%). The temporary gross 
transition allowance only applies to 
members of the Board of Management 
who were employed before January 1, 
2015 and still participated in the former 
executive pension plan, before the 
change to the flex pension plan per 
January 1, 2015 with the capping of 
pension accruals and increase of 
pensionable age in line with the 
retirement age for state pension (AOW). 
The level of the allowance is based on the 
age and salary of the Board Member on 
December 31, 2014.
Members of the Board of Management are 
also entitled to other benefits, such as 
expense and relocation allowances, medical 
insurance, accident insurance and company 
car arrangements. For more details, see 9.3, 
Effectuation of the remuneration policy of 
the Board of Management in 2019.
9.1.7	
Claw back and change 
of control
The annual cash incentive and the long-term 
incentive of the members of the Board of 
Management are subject to adjustment and 
claw back provisions. Pursuant hereto, 
the company can (a) revise an incentive prior 
to payment if unaltered payment would be 
unreasonable and unfair, (b) recover an 
9.1.6	
Pensions and other 
benefits
The design of the pension plan for the 
members of the Board of Management is the 
same as for all other Signify employees in 
the Netherlands which is referred to as a 
collective defined-contribution plan, based 
on career average salary.
The following pension arrangement is in 
place for the members of the Board of 
Management:
•	 The flex pension plan in the Netherlands, 
which is a collective defined-contribution 
plan with a fixed contribution of 30.3% up 
to the maximum pensionable salary of 
EUR 107,593 (2019).
•	 Members of the Board of Management 
pay 2% of the pension premium (in line 
with all other Signify employees In the 
Netherlands) up to the maximum 
pensionable salary of EUR 107,593 (2019).
•	 The flex pension plan has a target 
retirement age of 68 (in 2019) and a 
target accrual rate of 1.85%.
•	 The members of the Board of 
Management receive a gross pension 
allowance equal to 25% of the base 
compensation exceeding EUR 107,593 and 
can choose to participate in a net 
pension arrangement by investing the net 
(after-tax) amount. The net pension 
arrangement is in line with all other 
Signify employees in the Netherlands 
whose pensionable salary exceeds the 
cap. Participation in this net pension 
arrangement is voluntarily.
45
Signify Annual Report 2019
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Sustainability statements
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Consolidated financial statements
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9.2	 Remuneration 
policy of the 
Supervisory 
Board 
The remuneration of the individual members 
of the Supervisory Board, as well as the 
additional remuneration for its Chairman and 
the members of its committees, 
is determined by the General Meeting. 
The remuneration of a member of the 
Supervisory Board consists of a fixed 
amount depending on the member’s position 
on the board (chairman/vice chairman/other 
board members), an additional fee for the 
function of chair or member of committees 
and compensation for travel.
The remuneration of a Supervisory Board 
member is not dependent on the results of 
the company. Shares or rights to shares 
shall not be granted to a Supervisory Board 
member. The company does not grant loans 
to members of the Supervisory Board.
No severance is payable in case the 
agreement is terminated early at the 
initiative of the Board of Management 
member.
The Board of Management member shall not 
be entitled to a severance payment if the 
contract is terminated for urgent cause 
(‘dringende reden’), For the definition of 
urgent cause (‘dringende reden’), reference 
is made to article 7:678 of the Dutch Civil 
Code and further.
9.1.11	
Loans
The company does not grant loans to 
members of the Board of Management.
The fees and allowances for travel are as follows:
Remuneration Supervisory Board in EUR
Supervisory Board fixed annual fee
Chairman
110,000
Vice Chairman
85,000
Member
75,000
Committee fees
Audit Committee
Chairman
22,500
Member
13,000
Remuneration Committee
Chairman
15,000
Member
10,000
Nomination Committee
Chairman
15,000
Member
7,500
Allowance for travel
Intercontinental
5,000
Continental
2,500
46
Signify Annual Report 2019
Governance
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We are Signify
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9.3	
Effectuation of the remuneration policy of the Board of Management in 2019
The table below reflects the total remuneration as well as the remuneration costs of each of the members of the Board of Management in 2019. 
Remuneration and remuneration costs of individual members of the Board of Management in EUR
Base  
compensation/
salary
Annual  
incentive 1
Performance 
shares target 
value at grant
Performance 
shares costs 2
Restricted 
share rights 
costs 3
Pension  
allowances 
Pension 
scheme costs
Other  
compensation 4
Total  
remuneration 6
Total  
remuneration 
costs 7
2019
E.H.E. Rondolat
871,000
522,600
871,000
1,041,725
-
320,356
26,380
40,043
2,651,379
2,822,104
S.L.A. Rougeot
570,000
256,500
456,000
496,252
-
115,602
26,380
104,853
1,529,335
1,569,587
C.L. van Schooten
569,000
256,050
455,200
536,275
-
203,588
26,380
24,291
1,534,509
1,615,584
2,010,000
1,035,150
1,782,200
2,074,252
-
639,546
79,140
169,187
5,715,223
6,007,275
2018
E.H.E. Rondolat
850,000
410,720
850,000
912,497
899
315,735
25,708
48,747
2,500,910
2,564,306
S.L.A. Rougeot
556,000
201,494
444,800
292,109
-
113,856
25,708
138,350 5
1,480,208
1,327,517
C.L. van Schooten
555,000
201,132
444,000
437,072
176
206,342
25,708
23,770
1,455,952
1,449,200
1,961,000
813,346
1,738,800
1,641,678
1,075
635,933
77,124
210,867
5,437,070
5,341,023
1	
The annual incentives are related to the performance in the year reported which are paid out in the subsequent year.
2	
Costs of performance shares (Signify and Royal Philips) are based on accounting standards (IFRS) and do not reflect the value of the shares at the vesting/release date.
3	
Costs of restricted share rights (Royal Philips only) are based on accounting standards (IFRS) and do not reflect the value of the shares at the vesting/release date.Royal Philips restricted shares all vested prior to January 1, 2016. 
However, members of the Board of Management are entitled to receive premium shares if shares from restricted share rights release are kept for another 3 years. In 2018 E.H.E. Rondolat and C.L. van Schooten sold the Royal Philips 
premium shares they received. As a result, they do not hold any Royal Philips premium shares since.
4	
The stated amounts mainly concern (share of) allowances to members of the Board of Management that can be considered as remuneration. In a situation where such a share of an allowance can be considered as (indirect) 
remuneration (for example, private use of the company car), then the share is both valued and accounted for here. The method employed by the fiscal authorities in the Netherlands is the starting point for the value stated.
5	
Comparatives were revised to also include the housing allowance of EUR 94.288 for S.L.A. Rougeot that was accidentally not included in the table in Note 30 to the Consolidated financial statements for 2018.
6	
The total remuneration consists of base salary, annual incentive, performance shares target value at grant, pension allowances, pension scheme costs and other compensation.
7	
The total remuneration costs consists of base salary, annual incentive, performance shares costs and restricted shares costs (based on accounting standards IFRS), pension allowances, pension scheme 
All remuneration was paid in accordance with the remuneration policy. For a discussion on how the various components and the remuneration as a whole contribute to the
company’s long-term value creation, please be referred to chapter 9.1, Remuneration policy of the Board of Management.
47
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EUR 570,000. The annual base salary of René 
van Schooten was set at EUR 569,000.
The increases were based on 
comprehensive benchmark studies versus 
several peer groups. Furthermore, 
the general increases for the employee base 
in the Netherlands as agreed in the 
collective labor agreement and the 
development of the pay ratios were taken 
into consideration.
9.3.1	
Base salary
The annual compensation of the members of 
the Board of Management was reviewed in 
2019 as part of the regular remuneration 
review. The Remuneration Committee 
considered the input of the Board of 
Management members in setting their pay 
levels. The annual base salaries of the Board 
of Management were adjusted per January 1, 
2019. The annual base salary of Eric Rondolat 
was set at EUR 871,000. The annual base 
salary of Stéphane Rougeot was set at  
Annual incentive realization 2019
Performance measures
Weighting
Realized %
On-target % of 
annual base
Realized % of 
annual base 
(2019)
Realized annual 
incentive  
(in EUR)
E.H.E. Rondolat
Comparable Sales Growth
30%
0%
Adjusted EBITA
30%
50%
Free Cash Flow
20%
200%
Team and individual performance measures
20%
100%
Multiple achieved
75%
x
80%
=
60%
522,600
S.L.A. Rougeot
Comparable Sales Growth
30%
0%
Adjusted EBITA
30%
50%
Free Cash Flow
20%
200%
Team and individual performance measures
20%
100%
Multiple achieved
75%
x
60%
=
45%
256,500
C.L. van Schooten
Comparable Sales Growth
30%
0%
Adjusted EBITA
30%
50%
Free Cash Flow
20%
200%
Team and individual performance measures
20%
100%
Multiple achieved
75%
x
60%
=
45%
256,050
9.3.2	
Annual (cash) incentive
The financial performance measures used in 
the Annual Incentive to track performance 
over 2019 were Comparable Sales Growth, 
Adjusted EBITA (measured as a percentage 
of sales) and Free Cash Flow as the 
Supervisory Board considered these to 
ensure the best alignment with the 
company’s strategy and financial objectives 
for the mid-term.
The financial targets for 2019 were set 
within the context of the medium-term 
objectives of the company.
48
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9.3.3	
Long-term equity-
based incentive
In 2019, performance shares were granted 
to the members of the Board of 
Management. These grants are governed by 
the Signify LTI Plan.
The performance share awards granted by 
Royal Philips for the last time in 2016 to two 
members of Signify’s Board of Management 
vested in 2019.
The following tables provide an overview of 
both the Signify and Royal Philips 
performance shares awarded and held by 
the Board of Management.
Performance shares 2016-2019
Grant  
date
Number of  
performance 
shares  
originally 
granted
Value at  
grant date  
(in EUR)
End of  
vesting  
period
Number of  
performance
shares vested 
in 2019 
Value at  
vesting date  
in 2019  
(in EUR)
E.H.E. Rondolat
2016 1,2
36,080
880,000
2019
56,351
2,085,551
2017 3
31,253
850,000
2020
n.a.
n.a.
2018 3
28,103
850,000
2021
n.a.
n.a.
2019 3
35,148
871,000
2022
n.a.
n.a.
S.L.A. Rougeot
2017 3
16,355
444,800
2020
n.a.
n.a.
2018 3
14,708
444,800
2021
n.a.
n.a.
2019 3
18,400
456,000
2022
n.a.
n.a.
C.L. van Schooten
2016 1,2
15,785
385,000
2019
24,653
912,408
2017 3
16,325
444,000
2020
n.a.
n.a.
2018 3
14,680
444,000
2021
n.a.
n.a.
2019 3
18,370
455,200
2022
n.a.
n.a.
1	
Dividend performance shares not included.
2	
Shares under the Royal Philips Long-term Incentive Plan.
3	
Shares under the Signify Long-term Incentive Plan.
Number of Signify and Royal Philips performance shares (holdings) in number of shares
January 1,
 2019
Awarded  
2019
Awarded  
dividend shares 
2019
Realized 2019
December 31, 
2019
Vesting
date
E.H.E. Rondolat
39,132 1
-
-
56,351
-
29.04.2019
31,253 2
-
-
-
31,253
03.02.2020
28,103 2
-
-
-
28,103
01.02.2021
-
35,148 2
-
-
35,148
31.01.2022
S.L.A. Rougeot
16,355 2
-
-
-
16,355
03.02.2020
14,708 2
-
-
-
14,708
01.02.2021
-
18,400 2
-
-
18,400
31.01.2022
C.L. van Schooten
17,120 1
-
-
24,653
-
29.04.2019
16,325 2
-
-
-
16,325
03.02.2020
14,680 2
-
-
-
14,680
01.02.2021
-
18,370 2
-
-
18,370
31.01.2022
Performance shares (holdings)
177,676
71,918
0
81,004
193,342
1	
Awarded under Royal Philips Long-term Incentive Plan before date of appointment as a member of the Board of Management.
2	
Awarded under the Signify Long-term Incentive Plan.
At December 31, 2019, the members of the Board of Management held no options on Signify shares.
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Free Cash Flow (40% weighting)
The LTI Plan free cash flow pay-out and targets set at the beginning of the performance 
period were as follows:
Pay-out
Free Cash Flow 
(in mEUR)
As % of sales
Below threshold
0%
< 1,205
< 5.6%
Threshold
40%
1,205
5.6%
Target
100%
1,355
6.3%
Maximum 
200%
1,505
7.0%
The LTI Plan free cash flow target setting was based on anticipated sales figures. Over the 
three-year performance period, an amount of EUR 1,254 million free cash flow (excluding 
pension de-risking and IFRS 16) was generated, representing 6.4% of sales. In light thereof, 
the Supervisory Board determined the LTI Plan free cash flow achievement as 80%.
Sustainability (20% weighting)
Based on the following LTI Plan sustainability target setting and results over the performance 
period, the Supervisory Board determined the LTI Plan sustainability achievement as 200%.
Target 2019
Result 2019
Sustainable revenues
80.0%
82.5%
LED lamps & luminaires 
delivered
1.67 billion (cumulative from 2015)
2.344 billion
Carbon footprint
385 kilotonnes CO2 (annual cumulative)
363 gross kilotonnes
Waste to landfill
1.35 kilotonnes (annual cumulative)
0.7 kilotonnes
Safe & Healthy Workplace
TRC of < 0.39
TRC of 0.32
Sustainable Supply Chain
90% performance rate
99% performance rate
In view of the above, the following performance achievement and vesting levels have been 
determined by the Supervisory Board in respect of the 2017 grant of performance shares:
Achievement
Weighting
Vesting level
TSR
100%
40%
40%
Free cash flow
80%
40%
32%
Sustainability
200%
20%
40%
Total
112%
Realization of 2017 performance 
share grant
The three years performance period of 2017 
performance share grant ended on 
December 31, 2019.
The payout results are as follows.
Relative TSR (40% weighting)
The TSR achieved by Signify during the 
performance period was 36.7%. 
This positioned Signify as the 8th ranked 
company in the peer group shown in the 
following table, resulting in an achievement 
of 100%.
January 1, 2017 - December 31, 2019
Rank
Company
TSR  
Performance
1
Cree
87.5%
2
Honeywell
71.1%
3
Hitachi
55.9%
4
Eaton Corporation
49.7%
5
Schneider Electric
49.4%
6
Legrand
43.8%
7
Hubbell
40.0%
8
Signify
36.7%
9
ABB
10.3%
10
Johnson Controls
8.1%
11
Fagerhult
(4.7%)
12
Panasonic
(5.8%)
13
Toshiba
(5.8%)
14
Acuity Brands
(46.5%)
15
Zumtobel Group
(54.8%)
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9.3.4	
Share ownership
Signify Shares held by Board members in number of shares
December 31, 
2018
December 31, 
2019
E.H.E. Rondolat
44,000
44,000
S.L.A. Rougeot
10,000
10,000
C.L. van Schooten
12,500
12,500
9.3.5	
Pension
The accumulated annual pension entitlements and the pension costs of individual members of 
the Board of Management are as follows (in EUR): 
Accumulated annual pension entitlements and pension-related costs in EUR
Age at  
December  
31, 2019
Accumulated 
annual pension 
as of December 
31, 2018 1
Total pension-
related costs 
2018 2
Accumulated 
annual pension 
as of December 
31, 2019 1
Total pension-
related costs 
2019 2
E.H.E. Rondolat
53
33,907
341,443
38,379
346,736
S.L.A. Rougeot
51
3,903
139,564
5,859
141,982
C.L. van Schooten
60
208,929
232,050
228,407
229,968
Pension costs
713,057
718,686
1	
Total of entitlements under applicable pension scheme in Signify, including - if applicable - transferred pension 
entitlements under pension scheme(s) of previous employer(s).
2	
Cost include paid pension allowances as well as pension premium paid by employer to collective defined-
contribution plan.
9.3.6	
Change of remuneration and company performance
The table below reflects the annual change of remuneration of the members of the Board of 
Management, the employee average remuneration and Signify’s closing share price at 
year-end. The information is provided over the full financial years since the company’s IPO in 
May 2016.
BoM total remuneration versus employee average remuneration in EUR
2017
2018
2019
Employees 1
64,550
61,264
60,601
E.H.E. Rondolat 2
2,811,200
2,475,202
2,624,999
Pay ratio
44x
40x
43x
S.L.A . Rougeot 2
1,619,292
1,454,500
1,502,955
Pay ratio
25x
24x
25x
C.L. van Schooten 2
1,577,654
1,430,244
1,508,129
Pay ratio
24x
23x
25x
Closing share price on last business day 
December
30.6
20.47
27.86
1	
Employee average remuneration based on total employee benefit expenses and total employees in FTEs (third 
party workers excluded) as disclosed in note 5, Employee benefit expenses.
2	
BoM total remuneration consists of base salary + annual cash incentives (related to the performance in the 
years reported which are paid out in the subsequent years) + long-term incentives at fair value grant + pension 
allowances + other compensation (it excludes pension costs).
When pension rights are granted to members of the Board of Management, necessary 
payments (if insured) and all necessary provisions are made in accordance with the applicable 
accounting principles. In 2019, no (additional) pension benefits were granted to former 
members of the Board of Management. 
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9.3.7	
Signify’s internal pay 
ratio
In line with the Dutch Corporate Governance 
Code, Signify takes into account the internal 
pay ratios within the organization when 
formulating the remuneration policy and 
determining the remuneration of individual 
members of the Board of Management.
The pay ratios over the years 2017 through 
2019 are reflected in the table above.
In light of transparency and clarity, Signify 
applies a methodology to calculate the 
internal pay ratio that is IFRS-driven (i.e. 
linked to Signify’s notes to the Consolidated 
financial statements).
Signify’s internal pay ratio is calculated as 
the total CEO remuneration divided by the 
employee average remuneration. 
For purposes of this calculation:
•	 Total CEO remuneration consists of the 
following components for the full year 
2019: base salary EUR 871,000 (2018: EUR 
850,000) + annual cash incentive (related 
to the performance in the year reported, 
paid out in the subsequent year) EUR 
522,600 (2018: EUR 410,720) + long-term 
incentives at fair value at grant EUR 
871,000 (2018: EUR 850,000) + benefits 
EUR 360,399 (2018: EUR 364,482). 
All figures are full year, based on the 
information provided in 9.3, Effectuation 
of the remuneration policy of the Board 
of Management in 2019;
•	 Employee average remuneration based 
on total employee benefit expenses and 
total employees in FTEs (third party 
workers excluded) as disclosed in note 5, 
Employee benefit expenses.
Consequently, Signify’s calculated pay ratio 
in 2019 is 43 (2018: 40), implying that the 
CEO pay is 43 (2018: 40) times the average 
pay of an employee.
The pay ratios are reasonably stable. Lower 
pay ratio in 2018 was predominantly caused 
by a lower annual incentive pay-out. A lower 
annual incentive pay-out has less impact at 
the lower levels in the organization as 
employees have a relative lower variable pay 
component. The impact of the company 
performance on the other variable pay 
component (the long-term incentive) will 
only become noticeable as soon as the 2017 
long-term incentive grant will vest, three 
years after the vesting date (early 2020), 
in line with the remuneration policy.
9.3.8	
Pool size
The number of shares to be granted on a 
yearly basis to all eligible employees under 
the long-term incentive plan is approximately 
1.5 million. The number of shares to be 
granted depends on the eligible population, 
the overall at target value and the share 
price as the at target value is divided by the 
three months’ average share price 
preceding the date of grant to determine 
the number of shares to be granted.
9.4	
Effectuation of the remuneration 
policy of the Supervisory Board in 
2019
The table below reflects the total remuneration of each of the members of the Supervisory 
Board.
Remuneration of Key Management - the Supervisory Board in EUR
Membership
Committees
Other
compensation 5
Total
2019 1
A.P.M. van der Poel
110,000
25,000
2,500
137,500
G. van der Aast
85,000
28,000
0
113,000
E. Blok
75,000
20,500
0
95,500
R.S. Lane
75,000
17,500
29,189
121,689
J. Lee
75,000
22,500
17,500
115,000
420,000
113,500
49,189
582,689
2018 1
A.P.M. van der Poel
110,000
25,000
5,000
140,000
G. van der Aast
85,000
28,000
5,000
118,000
E. Blok 2
56,250
12,815
5,000
74,065
C.J.A. van Lede 3
28,125
11,000
0
39,125
R.S. Lane
75,000
18,625
27,500
121,125
J. Lee
75,000
20,125
20,000
115,125
A. Bhattacharya 4, 6
-
-
-
-
429,375
115,565
62,500
607,440
1	
The amounts mentioned in this table are excluding VAT.
2 	
Appointment as a member of the Supervisory Board in AGM 2018. The remuneration includes the observer 
period.
3 	
Stepped down as member of the Supervisory Board as per May 15, 2018.
4 	
Unsalaried.
5 	
The amounts mentioned under other compensation relate to the fee for (inter-)continental travel.
6 	
Stepped down as member of the Supervisory Board per December 31, 2018.
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At December 31, 2019, the members of the 
Supervisory Board held no Signify shares, 
options on Signify shares nor other Signify 
securities (2018: nil).
9.5	
Remuneration 
outlook 2020
In 2019, the Remuneration Committee 
initiated a review of the remuneration policy 
both for the Board of Management and for 
the Supervisory Board. The Supervisory 
Board will propose both policies for 
adoption by the shareholders at the AGM to 
be held in May 2020.
9.5.1	
Base salary
The Supervisory Board determines the base 
salary and may, at its discretion, apply an 
increase. The annual compensation of the 
members of the Board of Management was 
reviewed in 2019 as part of the regular 
remuneration review.
For 2020 it was decided to adjust the base 
salary levels for the members of the Board 
of Management by 2.5% per January 1, 
2020 and by 1% per April 1, 2020 similar to 
the increases as agreed under the collective 
labor agreement for employees in the 
Netherlands.
New base salaries Board of Management in 
2020 (in EUR)
January 1, 
2020
(+ 2.5%)
April 1, 
2020
(+ 1%)
E.H.E. Rondolat
892,775
901,703
C.L. van Schooten
583,225
589,057
9.5.2	
Annual (cash) incentive
For 2020 the Supervisory Board has decided 
to select the same financial performance 
measures and weighting as used in previous 
years: CSG (30%), Adjusted EBITA (30%) and 
Free Cash Flow (20%).
9.5.3	
Supervisory Board
No adjustments are foreseen to the 
remuneration of the members of the 
Supervisory Board.
The table below reflects the annual change 
of remuneration of each of the members of 
the Supervisory Board over the full financial 
years since the company’s IPO in May 2016.
Supervisory Board remuneration 2017 - 2019
2017 1
2018 1
2019 1
A.P.M. van der Poel
135,000
140,000
137,500
G. van der Aast
109,391
118,000
113,000
E. Blok 2
-
74,065
95,500
R.S. Lane
128,625
121,125
121,689
J. Lee
103,000
115,125
115,000
C.J.A. van Lede 3
109,275
39,125
-
F.A. van Houten 4, 5
0
-
-
A. Bhattacharya 4, 6
0
0
-
1	
The amounts mentioned in this table are excluding VAT.
2	
Appointment as a member of the Supervisory Board in AGM 2018.  
The remuneration includes the observer period.
3	
Stepped down as member of the Supervisory Board as per May 15, 2018.
4	
Unsalaried.
5	
Stepped down as member of the Supervisory Board per December 31, 2017.
6	
Stepped down as member of the Supervisory Board per December 31, 2018.
The main drivers of the overall 
compensation of members of the 
Supervisory Board are their role on the 
board and committees, number of meetings 
and required travel to attend in person. 
In accordance with the remuneration policy 
for the Supervisory Board as well as the 
role of a Supervisory Board under the Dutch 
corporate governance, its members did not 
receive variable remuneration based on the 
performance of Signify
53
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10	Corporate 
governance
Introduction
Signify N.V., a public company with limited liability organized under Dutch law, is the 
parent company of the Signify group. Signify became the new company name of 
Philips Lighting on May 15, 2018.
In May 2016, Royal Philips offered part of its 
shares in the share capital of Signify N.V. 
to the public and the shares in the capital of 
Signify N.V. were listed on Euronext 
Amsterdam. Royal Philips further decreased 
its stake via several sell downs in the years 
thereafter and in September 2019, it sold its 
remaining shares in the capital of Signify N.V. 
As a result of this sale by Royal Philips, 
the relationship agreement between 
Signify N.V. and Royal Philips entered into in 
the context of the IPO, which contains 
certain governance arrangements, 
was terminated.
Signify N.V. has a two-tier board structure 
consisting of a Board of Management and a 
Supervisory Board. The two boards are 
independent of each other and are 
accountable to the Annual General Meeting 
of Shareholders (AGM) for the performance 
of their duties.
The Board of Management and the 
Supervisory Board are responsible for 
maintaining an appropriate corporate 
governance structure of the company. 
Signify N.V.’s corporate governance 
framework is based on the company’s 
Articles of Association, the requirements of 
the Dutch Civil Code, the Dutch Corporate 
Governance Code, the Dutch Financial 
Markets Supervision Act and any other 
applicable laws and regulations. Additionally, 
the Board of Management has implemented 
a code of conduct, policies, directives and 
authorization schedules throughout Signify 
in order to strengthen its governance 
framework.
Deviations from aspects of the corporate 
governance structure of the company, 
when deemed necessary in the interests of 
the company, will be disclosed in the Annual 
Report. Substantial changes to the 
company’s corporate governance structure 
and to the company’s compliance with the 
Dutch Corporate Governance Code, if any, 
will be submitted to the AGM for discussion 
under a separate agenda item.
10.1	 Signify 
organization
Currently, Signify’s business is organized 
and managed on a functional basis by 
technology and end-markets through four 
operating Business Groups: Lamps, LED, 
Professional and Home. The Business 
Groups are responsible for the development 
of their strategy, product portfolio and the 
production and sourcing of their products.
In addition, the company’s commercial 
organization is structured along four 
geographical Market Groups to manage its 
global sales channels. The Market Groups 
are principally responsible for driving and 
managing sales, managing customer 
relationships and delivering the commercial 
activities of the business across the 
company’s markets, covering commercial 
activities in almost all countries in the world. 
The company operates in many countries via 
its subsidiaries and affiliated companies as 
well as via a limited number of branch 
offices, which primarily act under the Signify 
trade name.
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remuneration of the members of the Board of 
Management and the remuneration policy are 
described in chapter 9, Remuneration report, 
included in this Annual Report.
Diversity
Signify attaches great importance to 
diversity and it is its ambition to increase the 
diversity of the company’s entire workforce 
to better mirror its stakeholders and 
markets. Signify believes that this will 
positively impact the company’s business 
performance in all countries in which the 
company does business.
In view of the above, Signify aims for the 
Board of Management and the Supervisory 
Board to be composed of members that 
bring a diversity of skills and expertise 
relevant for achieving the company’s 
strategic and business objectives, different 
views and perspectives as well as different 
backgrounds (nationality, educational, 
working experience or otherwise), and that 
at least 30% are men and at least 30% are 
women. The latter is in line with Dutch 
legislation that was effective until December 
31, 2019. Recently, the Dutch government 
announced to introduce legislation requiring 
at least 30% of the seats of the supervisory 
boards of listed companies being held by 
men, and at least 30% by women, in due 
time.
For further information, please refer to 
chapter 8, Supervisory Board report, of this 
Annual Report.
Shareholders (the General Meeting) upon a 
nomination drawn up by the Supervisory 
Board, which nomination may be binding.
Members of the Board of Management are 
appointed for a term of four years, it being 
understood that this term expires at the end 
of the AGM to be held in the fourth year 
after the year of their appointment. 
Re-appointment is possible for consecutive 
terms of four years or, if applicable, until a 
later retirement date or other termination 
date in the fourth year, unless the General 
Meeting resolves otherwise. Members may 
be suspended by the Supervisory Board and 
the General Meeting, and dismissed by the 
latter.
The composition of the Board of 
Management follows the profile which aims 
for an appropriate combination of 
knowledge and experience among its 
members, encompassing marketing, 
manufacturing, technology, financial, 
economic, social & environmental, quality & 
regulatory and legal aspects of international 
business and society, in relation to the 
global character of its business. The size of 
the Board of Management may vary over 
time, as considered appropriate to support 
its profile.
Remuneration
The remuneration of the individual members 
of the Board of Management is determined by 
the Supervisory Board based on the 
remuneration policy adopted by the General 
Meeting. The composition of the 
In performing its duties, the Board of 
Management is guided by the interests of 
the company and its affiliated enterprises, 
taking into consideration the interests of its 
stakeholders.
The Board of Management is accountable 
for its actions and decisions to the 
Supervisory Board and is answerable to 
shareholders of the company at the AGM.
The Chief Executive Officer and other 
members of the Board of Management have 
regular contact with the Chairman and other 
members of the Supervisory Board, attend 
most parts of the Supervisory Board 
meetings, and provide the Supervisory 
Board with all the information it needs to 
fulfil its own responsibilities.
Certain decisions of the Board of 
Management require Supervisory Board 
approval, including important proposals for 
capital expenditures, acquisitions, 
divestments, decisions concerning financial 
and operational objectives and strategy to 
achieve such objectives, changes to 
corporate policies, as well as the annual 
operating plan.
The functioning and decision-making within 
the Board of Management are laid down in 
its Rules of Procedure which can be found 
on the company’s website.
Appointment and composition
Members of the Board of Management are 
appointed by the General Meeting of 
These Business Groups and Market Groups 
are supported by centralized shared 
services with respect to, among other 
functions, legal, finance, human resources, 
business transformation, strategy, 
marketing, innovation and operations.
In January 2020, the company announced 
that it intends to move from the current four 
Business Groups to three Divisions: Division 
Digital Solutions, Division Digital Products 
and Division Conventional Products. 
The changes are expected to take effect in 
the second quarter of 2020 and are subject 
to Works Council proceedings, depending 
on local legislation.
10.2	 Board of 
Management
The Board of Management is entrusted with 
the management of the company. The Board 
of Management focuses on long-term value 
creation for the company and its business, 
and takes the relevant stakeholders’ 
interests into account.
Among other responsibilities, the Board of 
Management drives the company’s 
management agenda, defines and deploys 
the strategic direction, identifies 
opportunities and risks connected with its 
business activities and strategy, pursues the 
operational and financial objectives of the 
company and monitors corporate social 
responsibility issues relevant to the 
company.
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The Supervisory Board meets at least six 
times a year. Meetings of the Supervisory 
Board are attended by the CEO and, 
if possible, by the other members of the 
Board of Management and the company’s 
general secretary, unless the Supervisory 
Board decides otherwise and save for 
certain meetings as described in the 
Supervisory Board Rules of Procedure.
Remuneration
The remuneration of the individual members 
of the Supervisory Board, as well as the 
additional remuneration for its Chairman and 
the members of its committees, 
is determined by the General Meeting. 
The composition of the remuneration of the 
members of the Supervisory Board and the 
remuneration policy are described in 
chapter 9, Remuneration report, included in 
this Annual Report. 
Independence of the 
Supervisory Board
The Supervisory Board is a separate 
corporate body that is independent of the 
Board of Management. Its independent 
character is also reflected in the 
requirement that members of the 
Supervisory Board can be neither a member 
of the Board of Management nor an 
employee of the company. Each member of 
the Supervisory Board meets the 
independence requirements as stated in the 
Dutch Corporate Governance Code.
The Articles of Association do not provide 
for a fixed or maximum term of appointment. 
In line with the Dutch Corporate Governance 
Code, the members of the Supervisory 
Board have been appointed for a period of 
four years, it being understood that the 
period of their appointment will end at the 
closing of the AGM to be held in the fourth 
year after appointment.
In 2019, the Supervisory Board consisted of 
five members, all being independent. 
The composition of the Supervisory Board 
follows the profile which aims for an 
appropriate combination of knowledge and 
experience among its members, 
encompassing marketing, manufacturing, 
technology, financial, economic, social & 
environmental, quality & regulatory and legal 
aspects of international business and 
society, in relation to the global character of 
its business. The size of the Supervisory 
Board may vary over time, as considered 
appropriate to support its profile. 
The Supervisory Board aims to have one or 
more members with an executive or similar 
position in business or society no longer 
than five years ago. The composition of the 
Supervisory Board shall be in accordance 
with the best practice provisions on 
independence of the Dutch Corporate 
Governance Code as well as Dutch law 
restrictions on the overall number of 
supervisory positions that a member of the 
Supervisory Board may hold. Each member 
shall be capable of assessing the broad 
outline of the overall management of the 
company.
one-tier board of another large Dutch 
company. Also, a person cannot be 
appointed as a supervisory director or 
non-executive director of a large Dutch 
company if he or she already holds a 
supervisory position at five or more other 
large Dutch companies, whereby the 
position of chairman of the supervisory 
board or one-tier board of another large 
Dutch company is counted twice.
10.3	 Supervisory 
Board
The Supervisory Board, in the two-tier board 
structure under Dutch law, is a separate 
body that is independent of the Board 
of Management. The Supervisory Board 
supervises the policies and management 
and the general affairs of the company. 
The Supervisory Board also provides advice 
to the Board of Management. In performing 
its duties, the members of the Supervisory 
Board are guided by the interests of the 
company and the business of the group, 
taking into consideration the interests of its 
stakeholders.
Appointment and composition
The members of the Supervisory Board are 
appointed by the General Meeting on the 
nomination of the Supervisory Board, which 
nomination may be binding. The Dutch large 
company regime (structuurregime) does not 
apply to Signify N.V. itself.
Conflicts of interest
Members of the Board of Management or 
Supervisory Board shall not participate in 
the discussions and decision-making 
process on a subject or transaction which 
they have a direct or indirect personal 
conflict of interest or have a conflict of 
interest within the meaning of the Dutch 
Corporate Governance Code. Relevant 
matters relating to conflicts of interests, 
if any, must be approved by the Supervisory 
Board and shall be mentioned in the Annual 
Report for the financial year in question. 
No legal acts as referred to above occurred 
during the financial year 2019.
Outside directorships
The acceptance by a member of the Board 
of Management of a position as a member of 
a supervisory board or a position of 
non-executive director in a one-tier board 
at another company requires the approval of 
the Supervisory Board. The Supervisory 
Board is required to be notified of other 
important positions (to be) held by a member 
of the Board of Management.
Dutch law provides for limitations on the 
overall number of supervisory positions that 
a member of the Board of Management or 
Supervisory Board (including a one-tier 
board) of large Dutch companies may hold. 
A person cannot be appointed as a managing 
or executive director of a large Dutch 
company if he or she already holds a 
supervisory position at more than two other 
large Dutch companies or if he or she is the 
chairman of the supervisory board or 
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The Remuneration Committee prepares an 
annual remuneration report, which is 
included in chapter 9, Remuneration report 
of this Annual Report. The Remuneration 
Committee meets at least twice per year.
10.4	 General 
Meeting of 
Shareholders
The main powers of the General Meeting are:
•	 to appoint, suspend and dismiss members 
of the Board of Management and of the 
Supervisory Board, adopt the 
remuneration policy and approve 
equity-based incentive plans for 
members of the Board of Management 
and adopt the remuneration of the 
members of the Supervisory Board;
•	 to adopt the annual accounts, declare 
dividends and to discharge the members 
of the Board of Management and the 
Supervisory Board from liability in 
respect of the performance of their 
respective duties in the previous financial 
year;
•	 to appoint the external auditor as 
required by Dutch law;
•	 to adopt amendments to the Articles of 
Association and proposals to dissolve or 
liquidate the company, to issue shares or 
rights to shares, to restrict or exclude 
pre-emptive rights of shareholders and 
to repurchase or cancel outstanding 
shares, as well as other important 
matters, such as major acquisitions or 
the sale of a substantial part of the 
company, as required by law.
and can make recommendations to the 
Supervisory Board relating to the corporate 
governance of the company.
The Corporate Governance and Nomination 
& Selection Committee meets at least twice 
every year.
Remuneration Committee
The Remuneration Committee is responsible 
for preparing proposals for the Supervisory 
Board on the remuneration policy for the 
Board of Management and on the 
remuneration of the individual members of 
the Board of Management and for 
overseeing the long-term incentive plans for 
the company’s executives involving the 
company’s shares.
The Remuneration Committee also reviews 
the proposed remuneration of certain 
senior executives designated by the 
Supervisory Board and the remuneration of 
the members of the Supervisory Board and 
prepares proposals for adjustments, 
if necessary.
Furthermore, the Remuneration Committee 
reviews and prepares proposals for the 
Supervisory Board concerning the 
corporate goals and objectives relevant to 
the annual incentive of members of the 
Board of Management, and reviews the 
performance of members of the Board of 
Management in light of those goals and 
objectives, and it prepares proposals for the 
Supervisory Board on the compensation 
levels of the members of the Board of 
Management, based on such review.
findings. It furthermore maintains contact 
with and supervises the external auditor and 
it prepares the nomination of an external 
auditor for appointment by the General 
Meeting.
The Audit Committee meets at least once 
before the publication of the quarterly and 
annual accounts of the company.
Corporate Governance and 
Nomination & Selection Committee
The Corporate Governance and Nomination 
& Selection Committee advises the 
Supervisory Board on its duties regarding 
the (procedures for the) selection and 
appointment of members of the Supervisory 
Board and the members of the Board of 
Management. The duties of the Corporate 
Governance and Nomination & Selection 
Committee include preparing the selection 
criteria and appointment procedures for 
members of the Supervisory Board and the 
members of the Board of Management and 
proposing the profile for the Supervisory 
Board. The Committee is also involved in the 
selection and appointment of the company’s 
leadership team, appointments of which are 
subject to the Supervisory Board’s approval. 
It also periodically assesses the size and 
composition of the Board of Management 
and the Supervisory Board, and the 
functioning of the individual members. 
The Corporate Governance and Nomination 
& Selection Committee also proposes on 
appointments and reappointments. 
It supervises the policy on selection criteria 
and appointment of senior executives within 
the company. At least once a year it reviews 
the corporate governance of the company 
Supervisory Board Committees
The Supervisory Board has established three 
committees: The Audit Committee, 
the Corporate Governance and Nomination & 
Selection Committee and the Remuneration 
Committee. Each of the committees has a 
preparatory and/or advisory role to the 
Supervisory Board. They report their 
findings to the full Supervisory Board, which 
is ultimately responsible for all decision-
making. Information on the work and 
composition of the committees during the 
year is set out in chapter 8, Supervisory 
Board report, of this Annual Report.
Each committee has a charter describing its 
role, responsibilities and functioning. These 
charters are published on the company’s 
website.
Audit Committee
The Audit Committee assists the 
Supervisory Board in fulfilling its oversight 
responsibilities for the integrity of the 
company’s financial statements, the financial 
reporting process, the system of internal 
business controls and risk management, 
the internal and external audit process, 
the internal and external auditor’s 
qualifications, its independence and its 
performance, as well as the company’s 
process for monitoring compliance with laws 
and regulations and its Integrity code. 
It reviews the company’s annual and interim 
financial statements, including non-financial 
information, prior to publication and advises 
the Supervisory Board on the adequacy and 
appropriateness of internal control policies 
and internal audit programs and their 
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The call option can be exercised by the 
foundation in order to, for example:
•	 prevent, slow down or otherwise 
complicate an unsolicited takeover bid 
for and an unsolicited acquisition of 
shares by means of an acquisition at the 
stock market or otherwise;
•	 prevent and countervail concentration of 
voting rights in the General Meeting; and/
or
•	 resist unwanted influence by and 
pressure from shareholders to amend 
the strategy of the company.
If the foundation exercises the call option, 
the company issues such number of 
preference shares as for which the 
foundation exercised its call option. 
No preference shares had been issued as of 
December 31, 2019. In addition, 
the foundation has the right to file a petition 
with the Enterprise Chamber of the 
Amsterdam Court of Appeal to commence 
an inquiry procedure within the meaning of 
section 2:344 Dutch Civil Code.
The foundation’s objects are to further the 
interests of Signify N.V., the enterprises 
maintained by the company and the 
companies affiliated with the company in a 
group. The foundation will act in such a way 
that the interests of the company and of 
those enterprises are optimally safeguarded 
and that influences which could affect the 
independence, continuity or identity of the 
company, the enterprise maintained by the 
company and the companies affiliated with 
the company in a group in conflict with those 
interests are deterred to the best of the 
foundation’s ability.
to restrict or exclude the pre-emptive rights 
accruing to shareholders, in each case up to 
a maximum of 10% of the issued share 
capital as at May 14, 2019 and subject to 
approval from the Supervisory Board. At the 
same time, the Board of Management was 
authorized to acquire shares in the company 
up to 10% of the issued share capital as at 
May 14, 2019 plus an additional 10% of the 
issued capital as of that same date in 
connection with the execution of share 
repurchase programs for capital reduction 
purposes.
Anti-takeover provisions and 
change of control
The possibility of issuing preference shares 
in the share capital of the company is a 
defensive measure. To this end, 
the foundation Stichting Continuïteit Signify 
has been granted a call option by the 
company to acquire preference shares. 
The foundation may resolve to exercise the 
call option at its sole discretion and does 
not require the consent of the company to 
exercise the call option. On the exercise of 
the call option, the foundation is entitled to 
acquire, and the company shall have the 
unconditional obligation to issue, 
preference shares up to a maximum 
corresponding with 100% of the issued and 
outstanding share capital of the company. 
This shall exclude the preference shares as 
issued and outstanding immediately prior to 
the exercise of the call option, less one 
preference share, from which maximum any 
preference shares already placed with the 
foundation at the time of the exercise of the 
call option must be deducted.
of the votes cast provided that majority 
represents more than half of the issued 
share capital. Pursuant to Dutch law, 
no votes may be cast at a General Meeting in 
respect of shares which are held by the 
company.
Share capital and repurchase 
and issue of (rights to) shares
The authorized share capital of the company 
amounts to EUR 6 million, divided into 300 
million ordinary shares with a nominal value 
of one eurocent each and 300 million 
preference shares also with a nominal value 
of one eurocent each. On December 31, 
2019, the issued share capital amounted to 
EUR 1.28 million, divided into 128,344,238 
ordinary shares and no preference shares. 
All shares are fully paid-up. The shares are in 
registered form. There are currently no 
limitations either under Dutch law or the 
company’s Articles of Association, as to the 
transfer of ordinary shares in the share 
capital of the company.
The Board of Management, to the extent 
authorized by the General Meeting for a 
specific period, may resolve to issue or 
repurchase shares, subject to the approval 
of the Supervisory Board. The Board of 
Management may limit or exclude pre-
emptive rights if designated to do so by the 
General Meeting.
At the AGM held on May 14, 2019, the General 
Meeting resolved to authorize the Board of 
Management for a period of 18 months, 
effective as of May 14, 2019, to issue shares 
or grant rights to acquire ordinary as well as 
The AGM is held within six months after the 
end of each financial year in order to discuss 
the annual report and decide on the 
adoption of the financial statements and 
dividend proposal as well as the discharge of 
the members of the Board of Management 
and the Supervisory Board.
The AGM is called by the Board of 
Management or the Supervisory Board. 
The Board of Management is entitled to 
determine the record date in accordance 
with Dutch law. The agenda, explanatory 
notes thereto and the procedure for 
attendance are published on the company’s 
website. Holders of ordinary shares in the 
aggregate representing at least 3% of the 
total issued share capital may submit 
proposals for the AGM agenda. 
Such proposals must be made in writing at 
least 60 days before the AGM to the Board 
of Management. Any written request must 
comply with the procedure stipulated by the 
Board of Management, which is published on 
the company’s website.
Each ordinary share confers the right to 
cast one vote in the General Meeting. There 
are no special statutory rights attached to 
the shares of the company and no 
restrictions on the voting rights of the 
company’s shares exist. Subject to certain 
exceptions provided by Dutch law or the 
Articles of Association, resolutions of the 
General Meeting are passed by an absolute 
majority of votes cast. A resolution to amend 
the Articles of Association requires a simple 
majority of the votes cast, if the resolution 
is adopted on a proposal of the Board of 
Management. Otherwise, such resolution 
requires a majority of at least three-fourths 
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10.6	 Dutch 
Corporate 
Governance 
Code
The company fully endorses the underlying 
principles of the Dutch Corporate 
Governance Code, and is committed to 
adhering to the best practices of the Code 
as much as possible.
The company fully complies with the Code 
and applies all its principles and best 
practice provisions that are addressed to 
the Board of Management or the 
Supervisory Board.
Auditor independence
The Audit Committee evaluates at least 
annually the external auditor’s 
independence. The lead auditor in charge of 
Signify account is changed every five years. 
Furthermore, Dutch law requires the 
rotation of the external audit firm after the 
firm has completed the statutory audits of 
the company for a period of 10 consecutive 
years.
Prohibition on non-audit 
services
The Audit Committee reviews the proposed 
audit scope, approach and fees as well as 
services that the external auditor provides 
to the company. Dutch law requires the 
separation of audit and non-audit services, 
meaning the company’s external auditor is 
not allowed to provide non-audit services.
10.5	 External 
auditor
Under Dutch law, the external auditor of the 
company is appointed by the General 
Meeting. In accordance with the Dutch 
Corporate Governance Code and Regulation 
(EU) 537/2014, the Supervisory Board 
selects and nominates an external auditor 
for appointment, upon advice by the Audit 
Committee. The Supervisory Board and the 
Audit Committee assess the functioning of 
the external auditor, taking the observations 
from the Board of Management into 
account. The General Meeting appointed 
Ernst & Young Accountants LLP as external 
auditor of the company for the financial 
years 2016 through 2019. The agenda for the 
upcoming Annual General Meeting of 
Shareholders will include a proposal to 
re-appoint Ernst & Young Accountants LLP 
as external auditor of the company for the 
years 2020 through 2022.
The external auditor attends, in principle, 
all meetings of the Audit Committee. 
The findings of the external auditor, 
the audit approach and the risk analysis are 
also discussed at these meetings. 
The external auditor attends the meeting of 
the Supervisory Board at which the report 
of the external auditor with respect to the 
audit of the annual accounts is discussed, 
and at which the annual accounts are 
approved.
As of December 31, 2019 the board of the 
foundation was composed as follows: Jos 
Streppel (chair), Sietze Hepkema and Jan 
Willem Baud.
Furthermore, it should be noted that also in 
the event of (an attempt at) a hostile 
takeover or other attempt to obtain (de 
facto) control of the company, the Board of 
Management and the Supervisory Board are 
authorized to exercise in the interests of 
Signify all powers vested in them.
The company is not a party to any material 
agreement that takes effect, alters or 
terminates upon a change of control of the 
company following a take-over bid as 
referred to in section 5:70 of the Dutch 
Financial Markets Supervision Act, other 
than the credit agreement entered into with 
a syndicate of financial institutions which 
established term loans and a revolving credit 
facility, the bridge facility agreement for the 
acquisition of Cooper Lighting Solutions 
entered into with a syndicate of financial 
institutions and the Trade Mark License 
Agreement entered into with Royal Philips. 
The credit agreement and the bridge facility 
agreement include a change of control 
provision which allows the lenders to cancel 
the commitment and declare any 
outstanding amounts under the agreement, 
immediately due and payable whereupon 
such amounts will become immediately due 
and payable.
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11	 Investor relations
11.1	
Shareholder 
engagement
Signify attaches great value to maintaining 
an open dialog with shareholders, investors 
and equity analysts to promote 
transparency and receive valuable 
feedback. The company conducts extensive 
investor outreach throughout the year 
involving investor relations and members of 
the Board of Management, to ensure that 
issues which matter most to shareholders 
can be addressed effectively.
In 2019, Signify hosted around 70 
conference calls and around 190 investor 
meetings through 21 roadshow days, 
12 investor conference days and in-house 
meetings, thereby reaching around 220 
unique investment institutions and covering 
more than 70% of its shareholder base, 
excluding passive funds. As part of this 
engagement, the company met at least 
twice with 9 of its largest 10 shareholders, 
excluding passive funds, through at least 28 
meetings and conference calls.
Signify has an active investor relations 
approach aimed at supporting the company’s 
long-term ambitions by keeping existing and 
potential shareholders well-informed about 
its strategy and latest operational and 
financial developments. Signify releases a full 
set of financial results on a quarterly basis. 
Each quarter, the company also organizes 
conference calls for research analysts and 
institutional investors to discuss these 
results, which can be accessed and replayed 
on Signify’s Investor Relations website. 
In addition, the company organizes an analyst 
dinner at least once a year hosted by the CEO 
and the CFO. Each quarter, the Supervisory 
Board receives a report that summarizes the 
feedback from institutional shareholders and 
investors as well as equity analysts, which 
gives the members of the Supervisory Board a 
clear understanding of shareholders’ views 
and concerns.
11.2	
Shareholder 
base
Signify has a broad base of international 
shareholders, as shown in the chart below. 
The information is based on an independent 
shareholder identification analysis using 
data available in December 2019.
Geographical distribution of shares 1
North America
32%
6%
9%
4%
3%
11%
6%
29%
United Kingdom
Netherlands
France
Germany
Norway
Rest of Europe
Rest of the World
1	
Excluding treasury shares, prime brokerage and 
retail investors.
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to pay a stable to increased dividend per 
share. While Signify will prioritize 
deleveraging, it will continue to invest in R&D 
and other organic growth opportunities. 
As Signify will focus on integrating Cooper 
Lighting Solutions, M&A will have a lower 
priority.
Dividend policy
Signify intends to pay a stable to increased 
dividend per share, to be paid out annually in 
cash. The payment of dividends, if any, 
and the amounts and timing thereof depend 
on several factors, including future sales, 
profits, financial conditions, general 
economic and business conditions and 
prospects. Other factors that the Board of 
Management may deem relevant, as well as 
other legal and regulatory requirements, 
may also impact the amount, timing and 
payment of future dividends. These may be 
beyond the control of the company.
Proposed dividend
The company proposes a dividend of 
EUR 1.35 per share, in cash, from the net 
income for full-year 2019, which represents 
an increase of 3.8% compared with 2018, 
and a pay-out ratio of 47% of continuing net 
income.
Continuing net income is defined as net 
income excluding discontinued operations 
and excluding material non-recurring items 
such as restructuring and acquisition-
related charges after tax.
11.3	
Annual 
General 
Meeting of 
Shareholders
The 2020 Annual General Meeting of 
Shareholders will be held on May 19, 2020. 
The agenda and the explanatory notes to 
the agenda will be published on the 
company’s website. The record date for the 
2020 Annual General Meeting of 
Shareholders is April 21, 2020, after 
processing all settlements of that date. 
People registered as shareholders in the 
designated register on that date, and who 
have applied to attend the meeting, will be 
entitled to attend and vote on the meeting.
11.4	
Capital 
allocation
Capital allocation policy
Signify intends to maintain a robust capital 
structure and continues to aim towards a 
financing structure that is compatible with 
an investment grade profile. Following the 
announced acquisition of Cooper Lighting 
Solutions in October 2019, the company will 
prioritize deleveraging with strong free cash 
flows expected to drive down Signify’s net 
leverage ratio from around 2x at closing to 
below 1x net debt/EBITDA within three years 
thereafter. The company plans to continue 
The Dutch Financial Markets Supervision Act 
requires institutions and individuals holding 
a (potential) capital and/or voting interest of 
3% or more in Signify to disclose such to the 
Netherlands Authority for the Financial 
Markets (AFM). The AFM processes these 
disclosures in its publicly available register, 
which can be found at www.afm.nl. 
The table below includes the total interests 
of 3% or more registered at the AFM on 
December 31, 2019, and the related actual 
interests.
Signify shareholders
%  
Actual interest 1
Total %  
registered 2
Baillie Gifford & Co
5.1%
5.1%
Blackrock, Inc.
3.0%
3.5%
Dimensional Fund Advisors LP
3.1%
3.1%
Goldman Sachs Group Inc.
2.7%
3.1%
LSV Asset Management
3.0%
3.0%
Amundi Asset Management
3.0%
3.0%
Norges Bank
0.8%
3.0%
1 	
The actual interest reflects the % registered interest, excluding potential interests, such as options, futures, 
forward-rate agreements and other derivatives contracts.
2	
The total % registered includes the actual and potential interests such as options, futures, swaps, forward-
rate agreements and other derivatives contracts.
Source: AFM
In September 2019, Royal Philips sold its 
remaining shares in Signify, by selling 13.8 
million shares via an accelerated book build 
offering to institutional investors, which 
represented approximately 10.7% of Signify’s 
issued share capital at the time.
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225 million with a maturity of five years 
(January 2025). The new committed EUR 500 
million multi-currency revolving credit 
facility (RCF) has a maturity of five years 
(January 2025), with the option to extend it 
twice by one year at the end of the first and 
second anniversary. These new facilities 
have similar terms to the previous facilities.
The new term loans and RCF agreement 
includes a financial covenant providing that 
Signify maintains a net leverage ratio of no 
greater than 3.5x. The net leverage ratio 
may temporarily increase to 4.0x within 12 
months of the closing of the Cooper 
Lighting Solutions acquisition or other 
material acquisitions. The covenant does not 
apply if the company has at least one 
investment grade rating.
In October 2019, Signify announced the 
acquisition of Cooper Lighting Solutions. 
This acquisition is fully financed with debt, 
with committed bridge financing arranged. 
Signify intends to replace the bridge loan 
with a new financing structure before or 
shortly after the closing of this transaction.
More information about our debt position 
can be found here.
For 2019, continuing net income was 
calculated based on net income attributable 
to shareholders of EUR 267 million. By adding 
back the impact of restructuring costs (EUR 
99 million), incidentals (EUR 32 million) and 
subtracting the related tax impact (EUR 35 
million) and non-controlling interests (EUR 5 
million), Signify’s total continuing net income 
for 2019 was EUR 359 million.
11.6	
Share 
performance
In 2019, the share price of Signify 
outperformed the S&P capital goods index 
and the AEX. The share price increased by 
33% in 2019, compared to a 31% increase of 
the S&P capital goods mid-cap index and a 
24% increase in the AEX. The market 
capitalization at year-end 2019 was EUR 3.5 
billion and the free-float was 100%.
Share price development
In EUR
27
24
21
18
15
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Signify
S&P 400 
DJ Europe 
11.7	
Financial 
calendar
Financial calendar 2020
Q1 2020 financial report
April 24
Annual General Meeting 
of Shareholders 2020
May 19
Capital Markets Day
June 18
First-half 2020  
financial report
July 24
Q3 2020 financial report
October 23
The dividend payment is subject to approval 
by the Annual General Meeting of 
Shareholders. Dividend in cash is, 
in principle, subject to 15% Dutch dividend 
withholding tax, which will be deducted from 
the dividend in cash paid to shareholders.
Dividend dates 
Ex-­dividend 
date
Dividend  
record date 
Dividend  
payment date
Signify shares
May 21, 2020
May 22, 2020
June 2, 2020
 
Share repurchases for  
LTI hedging
In June 2019, Signify repurchased 240,000 
shares for a total consideration of EUR 6.2 
million to cover obligations arising from its 
long-term incentive performance share plan 
and other employee share plans. These 
repurchases took place between June 4 and 
June 20, 2019. More details on Signify’s 
share repurchases can be found here.
11.5	
Debt info
In January 2020, Signify announced that it 
has signed new committed financing 
facilities to replace its term loans of EUR 740 
million and USD 500 million, and its revolving 
credit facility of EUR 500 million which were 
due to expire in May 2021.
The new committed term loan structure 
consists of EUR 400 million and USD 275 
million with a maturity of three years 
(January 2023) and EUR 340 million and USD 
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12	Risk factors and 
risk management
Introduction
At Signify we believe taking risks is an inherent part of entrepreneurial behavior. By 
deploying a structured risk management process, it allows management to take 
risks in a controlled manner. The company’s risk management and controls are 
designed to provide reasonable assurance that strategic and financial business 
objectives are met by integrating management control into the daily operations, by 
ensuring compliance with legal requirements and by safeguarding the integrity of 
the company’s financial reporting and its related disclosures. The components of 
our risk management process are listed below. 
12.1	
Establish 
strong risk 
management 
environment 
Signify’s risk management environment is 
embedded in the corporate governance, 
the business control framework and the 
Integrity code.
Corporate governance
Corporate governance is the system by 
which a company is directed and controlled. 
Good corporate governance derives from, 
among other things, solid internal controls 
and high ethical standards.
The Board of Management is responsible for 
the risk management associated with the 
company’s activities and defining the 
company’s risk appetite. It is assisted by the 
Business Groups, Market Groups and 
functions, which participate on a quarterly 
basis in audit risk and control meetings to 
identify critical risks and review progress on 
the implementation of risk responses. 
The Audit Committee of the Supervisory 
Board provides oversight for the system of 
internal business controls and risk 
management. Internal audits, external audits 
or management self-assessment are 
reported to and discussed quarterly by the 
Audit Committee. An in-depth description of 
the company’s corporate governance 
structure can be found in chapter 10, 
Corporate governance, of this Annual 
Report.
Business Control Framework
The company’s Business Control Framework 
(BCF) sets the standard for risk 
management and business controls in the 
company. The objectives of the BCF are to 
maintain integrated management control of 
the company’s operations, in order to 
ensure the integrity of the financial 
reporting and related disclosure, as well as 
compliance with applicable laws and 
regulations. The company has designed its 
BCF based on the frameworks established 
by the Committee of Sponsoring 
Organizations of the Treadway Commission 
(COSO). The company continuously 
evaluates and improves its BCF to align with 
business dynamics and good practice.
1
2
3
4
5
Establish strong
risk management
environment
Deﬁne
risk appetite
Report 
risk factors
Risk assessment
and control
Improvements
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Operational risks
Operational risks include adverse 
unexpected developments resulting from 
internal processes, people and systems, 
or from external events that are linked to 
the running of each business. The company 
has low risk appetite and aims to minimize 
downside risks to maintain the high quality 
of its products, systems and services, 
reliable IT systems and sustainability 
commitments.
Compliance risks
These risks cover unanticipated failures to 
implement, or comply with, appropriate 
laws, regulations, policies and procedures. 
The company has very low risk appetite and 
is committed to full compliance to relevant 
laws, regulations and its Integrity code.
Financial risk
We recognize financial risks outside our 
control related to treasury, accounting and 
reporting, pensions and tax. The risk 
appetite is low, the company aims to 
minimize the impact, we follow a 
conservative risk management approach in 
these areas. Furthermore, the company 
strives to ensure transparent and truthful 
accounting and reporting to enable financial 
statement users to make informed decisions 
which take the effect of these risks into 
consideration.
12.2	 Define Risk 
appetite
Risk management in Signify focuses on the 
following risk categories: Strategic, 
Operational, Compliance and Financial risks. 
The board of management has determined 
the risk appetite and seeks to manage risk 
within these boundaries. The risk appetite is 
different for each of the risk categories:
Strategic risks
Strategic risks include economic and 
political developments and the effects of 
actions taken to anticipate and respond to 
market circumstances. The company has 
medium risk appetite and is prepared to take 
some reasonable strategic risks, balancing 
the need to capture return from 
opportunities and manage risks. This may 
include investing in certain markets, in R&D 
and managing the portfolio of businesses, 
in acquisitions and divestments in a highly 
uncertain global political and economic 
environment.
Officers have also been appointed at 
Business Group and Functional level. 
The activities and responsibilities of this 
network are focused on providing expertise 
and support on Integrity code-related 
matters to managers and employees.
The Integrity code is supported by 
mechanisms that ensure standardized 
reporting, escalation and investigation of 
concerns. These mechanisms are based on 
the Integrity code Reporting Policy that 
urges employees and third parties to report 
any concerns they may have regarding 
business conduct in relation to the Integrity 
code, either through a Compliance Officer 
or through the Signify Ethics line. The Signify 
Ethics line enables employees and third 
parties to report a concern either by 
telephone or online via a web intake form. 
All concerns raised are registered 
consistently in a single database and are 
investigated in accordance with 
standardized investigation procedures. 
An overview of the reporting activities for 
2019 are given in chapter 16, Sustainability 
statements, of this Annual Report.
Integrity code
Acting with integrity is the cornerstone for 
the success of our business and key to 
achieving our purpose. It is integral to the 
values that define us as a company. Acting 
with integrity means making the right 
choices when faced with ethical dilemmas 
and holding ourselves and each other to 
high standards of behavior.
In 2019 Signify launched a revised code of 
conduct, the Integrity code (previously 
known as the General Business Principles).  
The Integrity code has been adopted by the 
Board of Management. It applies to all 
employees of Signify N.V. and its controlled 
subsidiaries. The Integrity code is not 
all-encompassing but formulate minimum 
standards of behavior. The company has 
underlying policies that form an integral part 
of the Integrity code.
In order to increase the level of awareness 
and to create global engagement, 
the company has established a network of 
Compliance Officers in each market and 
country where the company has a presence, 
and on each significant site. Compliance 
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dedicated resources to investigate and 
follow-up on, as appropriate, allegations of 
violation of the Integrity code and/or laws or 
regulations.
Financial risk
The company has implemented a global 
standard for internal controls over financial 
reporting (ICS). ICS, together with the 
established accounting procedures, 
are designed to provide reasonable 
assurance that assets are safeguarded, 
that the books and records properly reflect 
transactions necessary to permit 
preparation of financial statements, 
that policies and procedures are carried out 
by qualified personnel and that published 
financial statements are properly prepared 
and do not contain any material 
misstatements.
Internal controls are an inherent part of the 
processes in our company, where the 
responsibility for executing these internal 
controls is with the persons that carry out 
these processes. The design and 
maintenance of the global standard for 
internal controls is with the (global) business 
process owners and the dedicated ICS team.
An ICS monitoring process exists for all 
material reporting units, where business 
process owners engaged in the key financial 
processes perform self-assessment on 
several key controls, document the results, 
and take corrective action where necessary. 
ICS supports business and functional 
management in a periodic cycle of 
assessment and monitoring of the control 
environment.
compliance issues are highlighted and, 
if significant, they are reported to the Board 
of Management through the Certification 
Statement process.
Employees are requested to state their 
commitment to the Integrity code after 
having completed the e-learnings. In 2019, 
employees were required to complete one 
or more e-learnings on the Integrity code 
and related legal compliance domains. 
Specific target groups were required to 
participate in recurring face-to-face 
trainings. In addition, each year Finance and 
Procurement employees are asked to sign 
off on the Financial and the Procurement 
Codes of Ethics respectively. All executives 
are asked to sign off on the Integrity code 
each year to confirm their awareness of and 
compliance with the code. Violations of the 
Integrity code will result in disciplinary 
action, up to and including dismissal.
The company has implemented a compliance 
framework to mitigate compliance risks and 
to prevent, detect and remediate fraud and 
other misconduct. The company has rolled 
out relevant policies, procedures, controls 
and guidance for topics such as anti-bribery 
& anti-corruption, antitrust, privacy and 
export controls. A global network of 
Compliance Officers deploys the company’s 
compliance program, oversees compliance 
in the organizations and advises employees 
on business integrity matters. A recurring 
training program is in place that provides for 
online trainings and more in-depth face-to-
face-trainings. The company has established 
a reporting policy and reporting channels. 
The company also has a process and 
Operational risk
Risks are reported on a regular basis as part 
of the business performance reviews or, 
for specific topics, through dedicated risk 
committees. In addition, on an annual basis 
the top risks are identified by company 
leadership. Relevant risks including those 
associated with business opportunities are 
prioritized in terms of potential impact and 
likelihood, considering quantitative and/or 
qualitative aspects and reviewed with the 
board of management. On a quarterly basis 
risks and controls are reviewed in the audit 
risk committees with the Business Groups, 
Market Groups and specific Functions.
Compliance risk
The Integrity Committee is the ultimate body 
within Signify to administer the 
organization’s Integrity code Legal 
Compliance Program. It does so by 
maintaining oversight of the development 
and implementation of the Integrity code, 
including the monitoring of the 
effectiveness. The integrity Committee is 
chaired by the Chief Legal Officer. 
Its members include the Chief Executive 
Officer, Chief Financial Officer, Chief HR 
Officer, Head of Internal Audit and the Head 
of Legal Compliance.
With an annual Integrity code self-
assessment process forming part of ICS, 
compliance to the Integrity code forms part 
of management’s ICS monitoring process. 
Management of each business unit signs off 
on controls relating to compliance with the 
Integrity code, with this confirmation 
forming part of the annual certification 
statement on Business Controls. Non-
12.3	 Risk 
assessment 
and control
In order to provide a comprehensive view of 
the company’s business strategy and 
activities, risks and opportunities are 
identified in a structured way, combining 
elements of top-down and bottom-up 
approaches. Top-down, an annual risk 
workshop at enterprise level is held with the 
company leadership team. The bottom-up 
identification and prioritization process is 
supported by dedicated workshops, 
dedicated committees or as an integral part 
of the planning review cycle with the 
respective management at the Business 
Groups, Market Groups and Function levels.
Strategic risk
During the annual risk workshop, 
the company leadership team identifies risks 
and ranks them based on impact, likelihood, 
risk criticality and control effectiveness. 
Owners are assigned and accountable for 
ensuring adequate risk mitigation and 
monitoring measures are implemented and 
operating effectively. The outcome of the 
risk workshop is integrated in the strategic 
planning cycle. Each quarter the key risks 
are discussed during the audit and risk 
committee meetings. Reported risks and 
opportunities are analyzed for potential 
cumulative effects and are aggregated at 
Business Group, Market Group and at 
company level.
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12.4	 Improvements
In 2019 Signify launched a revised code of 
conduct, the Integrity code (previously 
known as the General Business Principles).  
Our Integrity code:
•	 emphasizes our commitment to always 
acting with integrity, starting from its 
name;
•	 is a living document: it will be updated on 
a yearly basis to ensure continuous 
improvement. It is a starting point for 
more awareness;
•	 is translated in 26 languages;
•	 incorporates commitment from the top 
leaders via the co-signed statement of 
our Leadership Team members;
•	 reflects our new company name and 
branding guidelines as well as our 
purpose and values;
•	 clarifies the relation between the 
Integrity code itself and its underlying 
policies belonging to different domains;
•	 gives more information on how to speak 
up and where to find additional 
resources;
•	 is user centric: designed around the 
employee and everyday work life 
situations he/she might encounter;
•	 helps us to make the right decisions, 
from how we behave in the market to how 
we treat each other.
The company has developed various actions 
to ensure that it remains in control on its tax 
risks and that its tax strategy and principles 
are being adhered to. The global tax 
strategy and policy are aligned with our 
business and sustainability strategies and 
published on the company’s website. In line 
with this, the Board of Management, 
enabling functions, Business Groups and 
Market Groups are advised on tax matters 
by Group tax. While implementing legal and 
organizational structures that are 
necessary to reach sustainable solutions, 
both needs of the business and tax needs 
are balanced. The company also participates 
in (inter)national groups of experts to 
represent its interests. The company has 
corporate requirements for the 
management of the company’s legal entities 
in line with tax legislation. All these actions 
and their periodic review ensure that the 
company’s tax strategy remains effective 
and that risks are managed accordingly.
On an annual basis, management’s 
accountability for business controls is 
recorded through the formal issuance of a 
Certification Statement on Business 
Controls and a Letter of Representation by 
Business Groups, Market Groups, reporting 
units and Functional management to the 
Board of Management. Any deficiencies 
noted in the design and operating 
effectiveness of controls over financial 
reporting, which were not completely 
remediated, are evaluated at year-end by 
the Board of Management. The Board of 
Management’s statement, including its 
conclusions regarding the effectiveness of 
internal controls over financial reporting 
can be found in chapter 13, Statement of the 
Board of Management, of this Annual 
Report.
12.5	 Risk Factors at 
a glance
Below the company describes the risk 
factors within each risk category, to give 
stakeholders an insight into which risks and 
opportunities it currently considers more 
prominent than others. The risk overview 
highlights the main risks known to the 
company – those risks which may hinder the 
company in achieving its strategic and 
business objectives and the actions taken to 
mitigate these risks. The risk overview may 
not, however, include all the risks that may 
ultimately affect the company. Describing 
risk factors in their order of expected 
significance within each risk category does 
not mean that a lower listed risk factor may 
not have a material and adverse impact on 
the company’s business, strategic 
objectives, revenues, income, assets, 
liquidity, capital resources or achievement 
of the company’s goals. Furthermore, a risk 
factor described as less significant than 
other risk factors may ultimately prove to 
have more significant adverse consequences 
than higher risk factors. Over time the 
company may change its view as to the 
relative significance of each risk factor.
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Risk category
Risk
Mitigating actions
Strategic
Fundamental shifts in the company’s industry such as the 
commoditization of LED lighting or the adoption of connected 
lighting systems and services based on LED technologies and the 
company’s inability to adapt swiftly to such changes, could have a 
material adverse effect on its financial condition and operating 
results
The company`s strategy is to create segmented and differentiated LED offers.  
The company’s innovation capabilities, global reach and client proximity allow for the 
delivery of a product portfolio that addresses local market needs with both high-
volume product and differentiated propositions addressing customer needs across all 
product segments. In addition, the company is actively participating in the industry 
migration to connected systems
As the company’s business is global, its operations are exposed 
to economic and political developments in countries across the 
world, such as changes in the monetary policy and trade and tax 
laws of the US, China and EU, that could adversely impact its 
financial condition and results
Due to its global footprint Signify is able to limit the impact of disruptions in certain 
geographies on its overall financial conditions and results. Specifically, in response to 
changes in trade and tax laws the company has been able to a large extent to offset the 
impact on its financial condition and operating results by adapting its sourcing base,  
re-negotiating its contracts with suppliers and adjusting its pricing strategy
The general lighting market in which the company operates is 
highly competitive as the transition to LED lighting has provided 
entry points for new competitors and opportunities for rapid 
market share shifts
In reference to the strategy the company continuously invests in innovation and 
strengthens the commercial excellence capabilities across all distribution channels. By 
investing in digitalization the company aims to further improve longstanding local 
customer relations and the global distribution network. Furthermore, the company 
runs cost reduction programs to keep our cost base competitive
Acquisitions, such as the announced acquisition of Cooper 
Lighting Solutions, could expose the company to integration 
risks, failure to realize planned synergies and may lead to a 
diversion of management resources
Signify runs a diligent process to select potential acquisition targets. For the 
integration of new acquisitions there is a dedicated support program office to monitor 
the integration and delivery of synergies per plan. Moreover, the company evaluates 
past acquisitions and applies lessons learned on existing and potential future 
integrations
The company’s inability to secure and maintain intellectual 
property rights for products and services, or the unauthorized 
use of the company’s intellectual property rights, could have a 
material adverse effect on its results
In Signify there is a dedicated team to handle intellectual property related risks.  
In response to these risks Signify can use its innovation capabilities to potentially 
redesign products & services and/or use its own IP assets to mitigate the risks
Operational
The company has previously implemented and is currently 
implementing certain business transformation programmes 
intended to ensure sustainable performance by transforming 
processes, operations, organisation and culture. These 
programmes may not be successfully implemented or continued 
and may not improve the overall performance of the company’s 
business
Signify set-up a transformation office and appointed Value Stream Leaders to lead the 
process from project initiation to implementation in the organization. The critical 
projects are reviewed directly by the Board of Management. Furthermore, to ensure 
the changes are sustainable the company has also introduced several organizational 
health actions
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Risk category
Risk
Mitigating actions
Operational
The company has experienced a declining sales trend and cost 
savings initiatives are needed to maintain competitiveness but 
these initiatives may not be successful
Cost reductions are run through a dedicated programme office where the timely 
realization of the initiatives and related savings are continuously monitored. 
Furthermore, to stimulate sales, the company has also defined a number of specific 
growth initiatives.
Failure to drive operational excellence, productivity and speed in 
the company’s process to create and bring product and solution 
innovations to market could hamper its profitable growth 
ambitions
The performance is structurally measured and processes have been continuously 
improved throughout the year. In addition the quality of end user insights has been 
improved and the value proposition creation process has been further detailed to 
address this risk
If the company is unable to ensure effective supply chain 
management, for example an interruption of its supply chain 
through a natural disaster, pandemic disease or the inability of 
third parties to deliver parts, components and services on time, 
or if it is subject to rising raw material prices, it may be unable to 
sustain its competitiveness in its markets
In response to this risk Signify has further enhanced its supplier risk program, 
assessing financial and non-financial risk areas, to be able to detect early and 
anticipate high risk, high impact situations. These situations are addressed by 
dedicated contingency plans and mitigation actions, that can include among others the 
release of alternative suppliers, the insourcing of activities, or the increase of strategic 
inventories. These measures were applied for instance to prepare for the risk of 
hard-Brexit related supply disruptions
A breach in the security of, or a significant disruption to, the 
company’s information technology systems could adversely 
affect its operating results, financial condition, reputation and 
brand
Signify has a dedicated corporate security department that provides guidance and 
assurance to the complete company. In addition, Signify has a dedicated security 
operation center reporting into the IT department which is responsible for detection, 
mitigation and resolving of cyber securi-related incidents in a timely manner. 
Furthermore, technical security measures are in place that support the defense in 
depth principle starting from the information to the infrastructure controls
Failure to comply with quality standards may reduce sales, result 
in costs associated with warranty or product liability claims or 
require recall of affected items
Signify has robust quality assurance processes and makes use of state-of-the-art 
Quality Planning Tools. Furthermore the company has a Safety Council in place to 
respond immediately to quality incidents and has installed regular workshops to learn 
from field performance for current and future designs
The company is dependent on its people for leadership and 
specialised skills and, as a result, the loss of its ability to attract 
and retain such personnel would have an adverse effect on its 
business
Employee engagement is a key focus area for teams and leaders through a quarterly 
cadence of team survey and dialogue. In addition, Signify invests in the professional and 
career development of personnel through professional and personal learning initiatives 
as well as through dedicated talent management programs which identify top talents 
early in their career and plan for development. Furthermore, the company performs 
exit interviews when it is faced with regrettable departures to learn and take 
appropriate actions where needed
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Risk category
Risk
Mitigating actions
Operational
The company is exposed to climate risks that could cause direct 
damage to assets and indirect damage from supply chain 
disruption, impacting its financial condition and operating results
As part of its Brighter Lives, Better World program, Signify is taking measures to 
manage climate risks. Signify is committed to 100% operational carbon neutrality, 100% 
renewable electricity and to increase energy efficiency of its products, services and 
systems to drive the transition to a low-carbon economy. Additionally, Signify is working 
at individual plant level to reduce and mitigate climate risks based on a 2°C or lower 
scenario. Regular risk assessments are performed, including the assessment of risks 
related to natural catastrophe perils and water scarcity. These assessments are also 
performed at locations of business-critical suppliers. For more on risks and 
opportunities related to climate change, please refer to Sustainability Supplements to 
this Annual Report
The company is exposed to developments of an environmental or 
social nature which could affect its reputation. These may be 
connected to the behavior of individual employees or suppliers 
or could relate to adherence to regulations related to labor, 
health and safety, environment or chemical management. 
Reputational damage could materially impact the company’s 
financial condition and operating results.
Signify has deployed strong Health & Safety, Environmental, Human Rights and 
Sustainability policies as well as due diligence processes to manage such risks. Incident 
reporting, assessments, third party and internal audits are done on an on-going basis. 
The Leadership Team is involved in mitigation actions through various governance 
meetings and regular updates for immediate action when needed
Compliance
The company’s global presence exposes it to regional and local 
regulatory rules, changes to which may affect the realization of 
business opportunities and investments in the countries in which 
the company operates
Signify has established a network of legal counsels covering each market and country 
where the company has a significant presence. These lawyers support the business in 
its commitment to act in compliance with applicable laws and regulations through 
activities such as training and advice. Moreover, in response to The Paris Agreement 
and carbon-pricing, Signify deploys voluntary GHG emissions reduction activities that 
go beyond strictly complying with cap and trade schemes
The company is exposed to risks of fraud and other misconduct 
in violation of the Integrity code and/or applicable laws and 
regulations and governmental investigation and legal 
proceedings in relation thereto
Signify has created the Signify Legal Compliance Program, including domains such as 
Antitrust, Anti-Bribery & Anti-Corruption, Export Controls & Sanctions and Privacy. 
Further reference is also made to paragraph 12.1 & 12.3 of this annual report
The company is exposed to non-compliance with privacy and data 
protection and product safety regulations and laws
The company strives to protect the personal data entrusted to the company via privacy 
rules. These implemented privacy rules address the worldwide processing of personal 
data by or on behalf of the company in its role as controller until the purpose it was 
collected for has been fulfilled. The privacy rules are supplemented through relevant 
sub-policies and privacy notices which are consistent with the privacy rules
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Risk category
Risk
Mitigating actions
Financial
The company is exposed to a variety of treasury risks and other 
financial risks including liquidity risk, currency risk, interest rate 
risk, commodity price risk, credit risk, country risk and other 
insurable risk
The company has various policies in place to manage treasury risks. For further 
analysis, please refer to note 29, Financial risk management
The company is exposed to various tax risks and uncertainties 
which could impact the local tax results
Tax risks are assessed in conjunction with the business where these arise. Signify has 
identified key tax controls that are part of the company’s business control framework. 
There is a tax risk framework in place which sets out the controls established to assess 
and monitor tax risks for direct and indirect taxes. Any key tax risks identified are 
monitored and the controls in place are tested. In addition, each year the Head of Tax 
discusses with the Audit Committee regarding tax developments, any uncertain tax 
positions, tax risk management and tax strategies. For further details, please refer to 
the tax risks paragraph in note 9, Income taxes
Changes to taxation or the interpretation or application of tax 
laws could have an adverse impact on the company’s results of 
operations and financial condition
The company monitors proposed changes in taxation legislation and takes these into 
account when considering future business plans
The company has defined-benefit and other post-employment 
benefit plans such as retirement plans in several countries. The 
funding level and the cost of maintaining these plans are 
influenced by movements in financial markets and demographic 
developments, creating volatility in the company’s financials
The company has a long-term employee benefits committee which monitors these 
plans. Where possible, the company actively hedges interest risks and annually reviews 
the optimal funding level, for example for the US qualified retirement plan which makes 
up more than 50% of the total post-retirement benefits obligations. The plans are 
managed according to a global policy, in line with local legislation and regulations and 
with the help of external actuaries and investment managers
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13	 Statement of the 
Board of Management
The Board of Management has prepared this 
Annual Report in accordance with 
International Financial Reporting Standards 
(IFRS) as endorsed by the European Union 
(EU), the statutory provisions of Part 9, 
Book 2 of the Dutch Civil Code and 
additional Dutch disclosure requirements 
for annual reports.
To the best of our knowledge:
•	 The Consolidated financial statements 
and Signify N.V. financial statements 
included in this Annual Report give a true 
and fair view of the assets, liabilities, 
financial position and profit or loss of 
Signify N.V. and its consolidated 
undertakings;
•	 Based on current state of affairs and the 
company’s strategic plan which forecasts 
among others the company’s future cash 
flows, it is justified that the financial 
reporting has been prepared on a going 
concern basis;
•	 The management report included in this 
Annual Report gives a true and fair view 
concerning the position on the balance 
sheet date and the development and 
performance of the business of 
Signify N.V. and the undertakings 
included in the consolidation taken as a 
whole during the financial year;
•	 The management report included in this 
Annual Report describes the principal 
risks and uncertainties that the company 
faces, and those that are relevant to the 
expectation of the company’s continuity 
for the period of twelve months after the 
date of publication of this Annual Report.
The Board of Management is responsible for 
the establishment and adequate functioning 
of a system of governance, risk management 
and internal controls in the company. 
It reports on and is accountable for internal 
risk management and control systems to the 
Supervisory Board and its Audit Committee. 
The company has implemented a risk 
management and internal control system 
designed to provide reasonable assurance 
that strategic objectives are met by creating 
focus, integrating management control over 
the company’s operations, ensuring 
compliance with applicable laws and 
regulations and by safeguarding its assets 
and the reliability of its financial reporting 
and its disclosures.
The company has designed its internal control 
system based on the Internal Control-
Integrated Framework (2013) established by 
the Committee of Sponsoring Organizations 
of the Treadway Commission (COSO).
The company’s risk management approach is 
embedded in its periodic business planning 
and review cycle and forms an integral part 
of business management. On the basis of 
risk assessments, management determines 
the risks and appropriate responses related 
to the achievement of business objectives 
and critical business processes. Risk factors 
and the risk management approach are 
described in more detail in chapter 12, 
Risk factors and risk management, of this 
Annual Report. Audit results, relevant 
investigative activities as well as significant 
changes and improvements in the company’s 
risk management and internal control 
system are discussed with the Audit 
Committee and the Supervisory Board.
With respect to financial reporting a 
structured self-assessment and monitoring 
process is used company-wide to assess, 
document, review and monitor compliance 
with internal control over financial 
reporting. Internal representations received 
from management, regular management 
reviews, reviews of the design and 
effectiveness of internal controls and 
reviews in company and Business Group, 
Market and Function Audit Committees are 
integral parts of the company’s risk 
management approach. On the basis 
thereof, we confirm that:
•	 The management report provides 
sufficient insights into failings, if any, 
in the effectiveness of the internal risk 
management and control systems; and
•	 The internal risk management and control 
systems provide a reasonable level of 
assurance that the financial reporting, 
including tax, included in this Annual 
Report does not contain any errors of 
material importance.
It should be noted that the above does not 
imply that these systems and procedures 
provide certainty as to the realization of 
operational and financial business 
objectives, nor can they prevent all 
misstatements, inaccuracies, errors, fraud 
and non-compliance with rules and 
regulations.
February 25, 2020
Board of Management
Eric Rondolat
Stéphane Rougeot
René van Schooten
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Corporate statements
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Governance
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Table of contents
Corporate statements
14	
Consolidated financial statements	
74
14.1	
Consolidated statement of income	
75
14.2	 Consolidated statement of comprehensive income	
76
14.3	 Consolidated statement of financial position	
77
14.4	 Consolidated statement of cash flows	
79
14.5	 Consolidated statement of changes in equity	
81
14.6	 Notes to the Consolidated financial  
statements	
82
1	
Basis of preparation	
82
2	
Significant accounting policies	
88
3	
Information by segment and main country	
96
4	
Income from operations	
98
5	
Employee benefit expenses	
98
6	
Depreciation, amortization and impairment	
99
7	
Other business income and expenses	
99
8	
Financial income and expenses	
99
9	
Income taxes	
100
10	
Earnings per share	
103
11	
Acquisitions and divestments	
103
12	
Interests in entities	
104
13	
Property, plant and equipment	
105
14 	 Leases	
106
15	
Intangible assets 	
107
16	
Objectives, policies and processes for managing capital	
109
17	
Inventories	
109
18	
Trade and other receivables	
109
19 	 Trade and other payables	
110
20	 Other assets	
110
21	
Other liabilities	
110
22	 Equity	
111
23	 Debt	
112
24	 Provisions	
114
25	 Post-employment benefits	
115
26	 Related party transactions	
117
27	
Share-based compensation	
117
28	 Information on remuneration	
119
29	 Financial risk management	
120
30	 Events after the balance sheet date	
124
15	
Signify N.V. financial statements	
125
15.1	
Statement of financial position before appropriation of results	
126
15.2	 Statement of income 	
127
15.3	 Statement of changes in equity	
128
15.4	 Notes to the Company financial statements	
129
A	
Statement of income	
129
B	
Audit fees	
129
C	
Financial assets	
129
D	
Shareholders’ equity	
130
E	
Debt	
131
F	
Employees	
131
G	
Contingent liabilities not appearing in the balance sheet	
131
H	
Events after the balance sheet date	
131
16	
Sustainability statements	
132
16.1	
Approach to sustainability reporting	
132
16.2	 Sustainable Innovation 	
137
16.3	 Brighter Lives 	
137
16.4	 Better World 	
151
17	
Combined independent auditor’s report	
157
18	
Reconciliation of non-IFRS financial measures	
169
19	
Definitions and abbreviations	
174
20	 Forward-looking statements and other information	
178
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Governance
Consolidated financial statements

14	Consolidated 
financial 
statements
Introduction
The audited Consolidated financial statements including the notes thereon have been 
prepared in accordance with International Financial Reporting Standards (IFRS) as endorsed 
by the European Union (EU) and with the statutory provisions of Part 9, Book 2 of the Dutch 
Civil Code.
All standards and interpretations issued by the International Accounting Standards Board 
(IASB) and the IFRS Interpretations Committee effective 2019 have been endorsed by the EU; 
consequently, the accounting policies applied by Signify also comply with IFRS as issued by the 
IASB.
The following chapters of this Annual Report:
•	 3, Creating value
•	 4, Corporate performance
•	 6, Board of Management
•	 7, Supervisory Board
•	 8, Supervisory Board report, sub-section 8.3.2 Corporate Governance and Nomination & 
Selection Committee
•	 10, Corporate governance
•	 11, Investor Relations, section 11.2, Shareholder base
•	 12, Risk factors and risk management
•	 13, Statement of the Board of Management
•	 16, Sustainability statements
•	 18, Reconciliation of non-IFRS financial measures
•	 19, Definitions and abbreviations
•	 20, Forward-looking statements and other information
form the management report within the meaning of section 2:391 of the Dutch Civil Code.
For ‘Additional information’ within the meaning of section 2:392 of the Dutch Civil Code, 
please refer to sections 4.3, Proposed distribution to shareholders, 10.1, Signify organization 
and chapter 17, Combined independent auditor’s report, of this Annual Report.
Ernst & Young Accountants LLP has issued a independent auditor’s report on the 
Consolidated financial statements and the Company financial statements, in accordance with 
Dutch law, including the Dutch standards on auditing, of Signify N.V., which is set out in 
chapter 17, Combined independent auditor’s report, of this Annual Report.
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Note
2018
2019
Sales
3
6,358 
6,247
Cost of sales
(3,976)
(3,940)
Gross margin
2,382 
2,307
Selling, general and administrative expenses
(1,675)
(1,637)
Research and development expenses
(312)
(283)
Impairment of goodwill
15
- 
-
Other business income
7
32 
22
Other business expenses
7
(17)
(8)
Income from operations
4
410 
401
Financial income
8
20 
17
Financial expenses
8
(61)
(60)
Results from investments in associates
(2)
1
Income before taxes
367 
360
Income tax expense
9
(106)
(93)
Net income
261 
267
Attribution of net income for the period:
Net income attributable to shareholders of Signify N.V.
263 
262
Net income attributable to non-controlling interests
(2)
5
 
Earnings per common share attributable to shareholders 
10
 
Weighted average number of ordinary shares outstanding used for calculation (in thousands):
 
•	 Basic
134,306 
126,028
•	 Diluted
134,672 
127,626
Net income attributable to shareholders per ordinary share in EUR: 
 
•	 Basic 
1.95 
2.08
•	 Diluted 
1.95 
2.06
The accompanying notes are an integral part of these consolidated financial statements.
14.1	
Consolidated 
statement of 
income
Consolidated statement of income  
in millions of EUR unless otherwise stated
For the years ended December 31
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2018
2019
Net income 
261 
267
Pensions and other post-employment plans:
•	 Remeasurements
(10)
6
•	 Income tax effect on remeasurements
1 
(3)
Total of items that will not be reclassified to the income statement
(9)
4
Currency translation differences:
•	 Net current period change, before tax
61 
38
•	 Income tax effect
- 
(1)
Cash flow hedges:
•	 Net current period change, before tax
(11)
1
•	 Income tax effect
1 
1
Total of items that are or may be reclassified to the income statement
51 
39
Other comprehensive income
42 
42
Total comprehensive income
303 
309
Total comprehensive income attributable to:
•	 Shareholders of Signify N.V.
301 
304
•	 Non-controlling interests
2 
6
The accompanying notes are an integral part of these consolidated financial statements.
14.2	 Consolidated 
statement of 
comprehensive 
income
Consolidated statement of  
comprehensive income in millions of EUR
For the years ended December 31
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Note
2018 1
2019
Non-current assets
 
Property, plant and equipment
3, 13
431
644
Goodwill
3, 15
1,771
1,943
Intangible assets, other than goodwill
3, 15
493
443
Investments in associates
12
11
14
Financial assets
29
49
49
Deferred tax assets
9
399
384
Other assets
20
58
64
Total non-current assets
 
3,211
3,541
 
Current assets
 
Inventories
17
878
874
Financial assets
29
4
-
Other assets
20
107
161
Derivative financial assets
29
28
16
Income tax receivable
9
35
48
Trade and other receivables
18
1,231
1,223
Cash and cash equivalents
29
676
847
Assets classified as held for sale
9
4
Total current assets
 
2,969
3,174
Total assets
 
6,181
6,715
14.3	 Consolidated 
statement of 
financial 
position
Consolidated statement of  
financial position in millions of EUR
As at December 31
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14.3	 Consolidated 
statement of 
financial 
position 
(continued)
 
Note
2018 1
2019
Equity
 
Shareholders’ equity
22
2,041 
2,181
Non-controlling interests
12
78 
142
Total equity
 
2,119 
2,324
 
Non-current liabilities
 
Debt
23
1,187
1,369
Post-employment benefits
25
475
437
Provisions
24
237
216
Deferred tax liabilities
9
19
28
Income tax payable
9
48
52
Other liabilities
21
125
135
Total non-current liabilities
 
2,091
2,236
 
Current liabilities
 
Debt, including bank overdrafts
23
78
96
Derivative financial liabilities
29
22
20
Income tax payable
9
15
22
Trade and other payables
19
1,507
1,684
Provisions
24
168
149
Other liabilities
21
179
183
Liabilities from assets classified as held for sale
0
2
Total current liabilities
 
1,970
2,155
Total liabilities and total equity
 
6,181
6,715
1	
This consolidated statement of financial position was updated for certain reclassification changes made.  
Refer to note 1, Basis of preparation. 
The accompanying notes are an integral part of these consolidated financial statements.
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14.4	 Consolidated 
statement of 
cash flows
Consolidated statement of  
cash flows in millions of EUR
For the years ended December 31
 
Note
2018 1
2019
Cash flows from operating activities
 
Net income 
261 
267
Adjustments to reconcile net income to net cash provided by operating activities:
547 
586
•	 Depreciation, amortization and impairment of non-financial assets
6
231 
288
•	 Impairment (reversal) of goodwill, other non-current financial assets and investments in 
associates
2 
(0)
•	 Net gain on sale of assets
(8)
(13)
•	 Net interest expense on debt, borrowings and other liabilities
15
15
•	 Income tax expense
9
106
93
•	 Additions to (releases of) provisions
24
151
154
•	 Additions to (releases of) post-employment benefits
25
19
24
•	 Other items
31
25
Decrease (increase) in working capital:
8
110
•	 Decrease (increase) in trade and other receivables
18
113
83
•	 Decrease (increase) in inventories
17
43
35
•	 Increase (decrease) in trade and other payables
19
(92)
21
•	 Increase (decrease) in other current assets and liabilities
(56)
(30)
Increase (decrease) in other non-current assets and liabilities
(3)
(11)
Utilizations of provisions
24
(223)
(189)
Utilizations of post-employment benefits
25
(63)
(57)
Interest paid, net
(23)
(17)
Income taxes paid
(123)
(90)
Net cash provided by (used for) operating activities
381
599
 
Cash flows from investing activities
 
Net capital expenditures:
(75)
(70)
•	 Additions of intangible assets
15
(26)
(29)
•	 Capital expenditures on property, plant and equipment
13
(57)
(58)
•	 Proceeds from disposal of property, plant and equipment
8
16
Net proceeds from (cash used for) derivatives and other financial assets
(13)
5
Purchases of businesses, net of cash acquired
11
(7)
(95)
Proceeds from sale of businesses, net of cash disposed of
5
15
Net cash provided by (used for) investing activities
(90)
(145)
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14.4	 Consolidated 
statement of 
cash flows 
(continued)
 
Note
2018 1
2019
Cash flows from financing activities
 
Dividend paid
(171)
(165)
Proceeds from issuance of debt
23
28
12
Repayment of debt
23
(87)
(127)
Purchase of treasury shares
(324)
(6)
Net cash provided by (used for) financing activities
(554)
(286)
Net cash flows
(263)
168
Effect of changes in exchange rates on cash and cash equivalents and bank overdrafts
2
7
Cash and cash equivalents and bank overdrafts at the beginning of the period
925
664
Cash and cash equivalents and bank overdrafts at the end of the period
29
664
840
Non-cash investing and financing activities:
Acquisition of fixed assets by means of new leases
42
1	
This consolidated statement of cash flows was updated for certain reclassification changes made.  
Refer to note 1, Basis of preparation 
The accompanying notes are an integral part of these consolidated financial statements.
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14.5	 Consolidated 
statement of 
changes in 
equity
Consolidated statement of changes in 
equity in millions of EUR
Share 
capital
Share 
premium
Retained 
earnings
Currency 
trans­lation 
differ­
ences
Cash flow 
hedges
Treasury 
shares
Total 
share-
holders’ 
equity
Non- 
con-
trolling 
interests
Equity
Balance as at January 1, 2018
1
2,163
276
(87)
1
(124)
2,231
76
2,307
Net income
-
-
263
-
-
-
263
(2)
261
Other comprehensive income (loss)
-
-
(9)
58
(10)
-
39
3
42
Total comprehensive income (loss)
-
-
253
58
(10)
-
301
2
303
Movement in non-controlling interests
-
-
-
-
-
-
-
1
1
Dividend distributed
-
-
(171)
-
-
-
(171)
(1)
(171)
Purchase of treasury shares
-
(0)
(15)
-
-
(324)
(339)
-
(339)
Cancellation of treasury shares
(0)
 -
(380)
-
-
380
-
-
-
Delivery of treasury shares
-
(2)
(0)
-
-
2
-
-
-
Share-based compensation plans
-
20
-
-
-
-
20
-
20
Funding by (distribution to) Royal Philips
-
(1)
-
-
-
-
(1)
-
(1)
Balance as at December 31, 2018
1
2,179
(37)
(29)
(9)
(65)
2,041
78
2,119
Balance as at January 1, 2019
1
2,179
(37)
(29)
(9)
(65)
2,041
78
2,119
Adoption of IFRS 16 (net of tax) 1
-
-
(12)
-
-
-
(12)
-
(12)
Restated balance as at January 1, 2019
1
2,179
(48)
(29)
(9)
(65)
2,030
78
2,108
Net income
-
-
262
-
-
-
262
5
267
Other comprehensive income (loss)
-
-
4
35
2
-
41
1
42
Total comprehensive income (loss)
-
-
266
35
2
-
304
6
309
Movement in non-controlling interests
-
-
-
-
-
-
-
60
60
Dividend distributed
-
-
(164)
-
-
-
(164)
(1)
(165)
Purchase of treasury shares
-
-
(0)
-
-
(6)
(6)
-
(6)
Delivery of treasury shares
-
(2)
(1)
-
-
3
-
-
-
Share-based compensation plans
-
18
-
-
-
-
18
-
18
Balance as at December 31, 2019
1
2,195
53
7
(7)
(68)
2,181
142
2,324
1	
Refer to note 1, Basis of preparation.
The accompanying notes are an integral part of these consolidated financial statements.
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1	
Basis of preparation
Signify N.V. is a public company with limited liability incorporated under the laws of the 
Netherlands and listed on Euronext Amsterdam under the symbol ‘LIGHT’.
As used herein, the term Signify is used for Signify N.V. (‘the Company’) and its subsidiaries 
within the meaning of Section 2:24b of the Dutch Civil Code.
The term Royal Philips is used for Koninklijke Philips N.V. and its subsidiaries within the meaning 
of Section 2:24b of the Dutch Civil Code.
The Company was incorporated as a private limited liability company on February 1, 2016 and 
converted into a public company with limited liability on May 31, 2016. On May 15, 2018, 
the name of the Company changed from Philips Lighting N.V. to Signify N.V.
Basis of preparation
The Consolidated financial statements have been prepared in accordance with the 
International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) 
and with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. The Consolidated 
financial statements are prepared by the Executive Board of the Company and authorized for 
issue on February 25, 2020 and will be submitted for adoption to the Annual General Meeting 
of Shareholders on May 19, 2020.
Basis of measurement
The financial statements have been prepared on a historical cost basis, except for derivatives 
(measured at fair value), assets held for sale (measured at fair value less costs to sell), 
and defined-benefit pension plans (plan assets are measured at fair value).
Functional and presentational currency
The Consolidated financial statements are presented in euros (EUR), which is the functional 
and presentation currency of Signify N.V. All amounts are presented in EUR million and have 
been rounded to the nearest EUR 100,000 unless otherwise stated. Due to rounding, amounts 
may not add up to totals provided.
Critical accounting judgments and key sources of estimation uncertainty
The preparation of the Consolidated financial statements requires management to make 
judgments, estimates and assumptions that affect the application of accounting policies, 
the reported amounts of assets, liabilities, income and expenses and assumptions that affect 
amounts reported in the Consolidated financial statements. These estimates inherently 
contain a degree of uncertainty. Actual results may differ from these estimates.
14.6	 Notes to the Consolidated financial  
statements
In millions of EUR unless otherwise stated
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Signify adopted IFRS 16 using the modified retrospective transition method (also referred to 
as cumulative effect method) with the date of initial application of January 1, 2019. This means 
that comparative figures were not restated and the cumulative effect of the initial application 
of the standard is accounted for as an adjustment to the opening balance of equity as at the 
date of initial application.
Lease contracts that have a meaningful impact on Signify’s Consolidated financial statements 
relate to real estate, car fleet and IT equipment. In selecting which practical expedients to 
apply, the Company focused on reducing the complexity of implementation and:
•	 applied the exemption not to recognize right-of-use assets and liabilities for leases of low 
value assets (mainly laptops)
•	 for real estate leases, applied the exemption not to recognize right-of-use assets and 
liabilities for leases with less than 12 months of lease terms. These include leases with a 
remaining lease term of 12 months or less at the transition date
•	 adjusted the right-of-use asset by the amount of any provisions for onerous lease 
contracts recognized under IAS 37 to approximate impairment. 
The effect of the adoption of IFRS 16 on the Consolidated statement of financial position as of 
January 1, 2019 was as follows:
Assets
Property, plant and equipment
222
Deferred tax assets
2
Non-current assets
9
Current assets
5
Total assets
238 
Equity
 
Retained earnings
(12)
Total equity
(12)
Liabilities
Long-term debt
214
Provisions
(9)
Short-term debt
45
Total liabilities
250
Property, plant and equipment increased due to the recognition of right-of-use-assets. 
Current and concurrent assets increased due to the inclusion of sublease receivables. 
Provisions decreased, relating to the derecognition of onerous lease provisions, which was 
recognized as an adjustment to right-of-use assets upon transition to IFRS 16.
These estimates and judgments are evaluated on an ongoing basis and are based on historical 
experience, current and expected future outcomes, third-party evaluations and various other 
assumptions that are considered reasonable under the circumstances. The results of these 
estimates form the basis for making judgments about the carrying values of assets and liabilities, 
as well as identifying and assessing the accounting treatment with respect to commitments and 
contingencies. Signify revises material estimates if changes occur in the circumstances or there 
is new information or experience on which an estimate was or can be based.
The areas where the most significant judgments and estimates are made are goodwill, 
deferred tax asset recoverability, revenue recognition, impairments, provisions, employee 
benefit obligations, inventory valuation and obsolescence provision, estimation of allowances 
for doubtful accounts as well as fair value of derivatives and other financial instruments. 
For further discussion on these significant judgments and estimates, reference is made to the 
respective accounting policies and notes within these Consolidated financial statements that 
relate to the above topics.
Changes in accounting policy
New and amended standards adopted by the group
Signify has applied the following standards and amendments for the first time for their annual 
reporting period commencing January 1, 2019:
•	 IFRS 16 Leases 
•	 Prepayment Features with Negative Compensation – Amendments to IFRS 9
•	 Long-term Interests in Associates and Joint Ventures – Amendments to IAS 28
•	 Annual Improvements to IFRS Standards 2015 - 2017 Cycle 
•	 Plan Amendment, Curtailment or Settlement – Amendments to IAS 19 
•	 Interpretation 23 Uncertainty over Income Tax Treatments.
Signify changed its accounting policies as a result of adopting IFRS 16. The other amendments 
listed above did not have any significant impact on the amounts recognized in the prior period 
and current period. 
IFRS 16 Leases
IFRS 16 replaced IAS 17 Leases and became effective on January 1, 2019. Under the new lease 
standard, assets leased by Signify are being recognized in the Consolidated statement of 
financial position with a corresponding lease liability.
Lessor accounting under IFRS 16 is substantially unchanged from IAS 17. In transactions where 
Signify is a lessor, it will continue to classify leases as either operating or finance leases using 
similar principles as in IAS 17. Therefore, IFRS 16 did not have an impact for such transactions.
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remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of 
lease liabilities recognized, initial direct costs incurred, and lease payments made at or before 
the commencement date less any lease incentives received. Unless the Company is 
reasonably certain to obtain ownership of the leased asset at the end of the lease term, 
the recognized right-of-use assets are depreciated on a straight-line basis over the shorter 
of its estimated useful life and the lease term. Right-of-use assets are subject to impairment. 
Lease liabilities 
At the commencement date of the lease, the Company recognizes lease liabilities measured at 
the present value of lease payments to be made over the lease term. The lease payments 
include (in-substance) fixed payments (less any lease incentives), variable lease payments 
that depend on an index or a rate, and amounts expected to be paid under residual value 
guarantees. The lease payments also include the exercise price of a purchase option 
reasonably certain to be exercised by the Company and payments of penalties for terminating 
a lease, if the lease term reflects the Company exercising the option to terminate. 
In calculating the present value of lease payments, the Company uses the incremental 
borrowing rate at the lease commencement date if the interest rate implicit in the lease is not 
readily determinable. After the commencement date, the amount of lease liabilities is 
increased to reflect the accretion of interest and reduced for the lease payments made. 
In addition, the carrying amount of lease liabilities is remeasured if there is a modification, 
a change in the lease term, a change in the in-substance fixed lease payments or a change in 
the assessment to purchase the underlying asset. 
Short-term leases and leases of low-value assets 
The Company applies the short-term lease recognition exemption to its short-term leases for 
real estate (i.e., those leases that have a lease term of 12 months or less from the 
commencement date and do not contain a purchase option). It also applies the lease of 
low-value assets recognition exemption to leases of office equipment that are considered of 
low value. Lease payments on short-term leases and leases of low-value assets are 
recognized as expense on a straight-line basis over the lease term.
Significant judgment in determining the lease term of contracts with renewal options and 
incremental borrowing rate
The Company determines the lease term as the non-cancellable term of the lease, together 
with any periods covered by an option to extend the lease if it is reasonably certain to be 
exercised, or any periods covered by an option to terminate the lease, if it is reasonably 
certain not to be exercised. When determining the lease term, Signify considers all relevant 
facts and circumstances that create an economic incentive to exercise an extension option, 
or not to exercise a termination option. These circumstances include the Company’s strategic 
plans, the industrial footprint of the Company and Business Groups and the importance of the 
site to the Company’s operations.
The effect of the adoption of IFRS 16 had no impact on the Company’s sales, while the Income 
from operations was positively impacted by approximately EUR 11 million for the year ended 
December 31, 2019. This was a result of operating lease expenses being replaced by 
depreciation, service costs and interest expenses, of which the latter was not recognized in 
Income from operations.
In addition, the cash flow from operating activities for the year ended December 31, 2019, 
was positively impacted by around EUR 71 million as, under the new standard, cash payments 
for the principal part of the lease liability are classified in the cash flow from financing 
activities instead of in the cash flow from operating activities.
Cash payments for the interest part of the lease liability continues to be included in cash flow 
from operating activities.
Signify had no impact of the adoption of IFRS 16 on compliance with debt covenants.
Leases previously accounted for as operating leases
The Company recognized right-of-use assets and lease liabilities for those leases previously 
classified as operating leases, except for short-term leases and leases of low-value assets. 
The right-of-use assets were recognized based on the carrying amount as if the standard had 
always been applied, apart from the use of the incremental borrowing rate at the date of 
initial application. Lease liabilities were recognized based on the present value of the 
remaining lease payments and discounted using the incremental borrowing rate at the date of 
initial application. The lease liabilities as of January 1, 2019 reconcile to the operating lease 
commitments as of December 31, 2018, as follows: 
Operating lease commitments as at December 31, 2018
285
Discounting impact
(23)
Short-term leases
(5)
Derecognition of lease liabilities for IT equipment
(9)
Other impacts
11
IFRS 16 opening balance impact on lease liabilities as at January 1, 2019
259
Other impacts include, among others, adjustments made as a result of a different treatment 
of extension and termination options. The Company applied a weighted average discount rate 
of 3.1% for real estate and a single discount rate of 1.5% for cars. 
Summary of new accounting policies 
Right-of-use assets 
The Company recognizes right-of-use assets at the commencement date of the lease (i.e., 
the date the underlying asset is available for use). Right-of-use assets are measured at cost, 
less any accumulated depreciation and impairment losses, and adjusted for any 
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To determine the incremental borrowing rate, Signify uses a build-up approach that starts with a 
risk-free interest rate adjusted for country, currency and risk premium and credit spread.
New standards and interpretations not yet adopted
The following new accounting standards and interpretations have been published that are 
mandatory for January 1, 2020 or later reporting periods and have not been early adopted by 
Signify:
•	 Amendments to References to the Conceptual Framework in IFRS Standards
•	 Definition of a Business - Amendments to IFRS 3 Business Combinations
•	 Definition of Material - Amendments to IAS 1 and IAS 8
•	 IFRS 17 Insurance Contracts
•	 Amendments to IFRS 9 Financial Instruments, IAS 39 Financial Instruments: Recognition and 
measurement and IFRS 7 Financial Instruments: Disclosures - Interest Rates Benchmark 
Reform
Consolidated statement of financial position
 
Before  
changes
Changes
After  
changes
Non-current assets
 
Property, plant and equipment
431
-
431
Goodwill
1,771
-
1,771
Intangible assets, excluding goodwill
493
-
493
Investments in associates
11
-
11
Non-current receivables
38
(38)
-
Other non-current financial assets
20
(20)
-
Financial assets 1
49
49
Deferred tax assets
399
-
399
Other assets 2
49
8
58
Total non-current assets
3,211
-
3,211
Total current assets
2,969
-
2,969
Total assets
6,181
-
6,181
Total equity
2,119 
-
2,119
Non-current liabilities
 
Debt
1,187
-
1,187
Post-employment benefits 3
475
475
Provisions
712
(475)
237
Deferred tax liabilities
19
-
19
Income tax payable 4
48
48
Other liabilities
173
(48)
125
Total non-current liabilities
2,091
-
2,091
These standards are not expected to have a material impact on Signify in the current or future 
reporting periods and on foreseeable future transactions.
Changes in presentation of consolidated statement of financial position and 
consolidated statement of cash flows
The presentation of the Consolidated statement of financial position has been amended to 
further improve transparency and readability of these statements in line with market practice. 
As a result of these changes total amounts of current and non-current assets and liabilities, 
equity as at December 31, 2018 were not impacted. The changes are only reclassifications 
within non-current assets, current liabilities and non-current liabilities. See modified 
Consolidated statement of financial position as at December 31, 2018 below.
 
Before  
changes
Changes
After  
changes
Current liabilities
 
Debt, including bank overdrafts
78
-
78
Derivative financial liabilities
22
-
22
Income tax payable
15
-
15
Accounts and notes payable 5
953
(953)
-
Accrued liabilities 5
444
(444)
-
Trade and other payables
1,507
1,507
Provisions
168
-
168
Other liabilities 6, 7
288
(109)
179
Liabilities directly associated with assets 
classified as held for sale
-
-
-
Total current liabilities
1,970
-
1,970
Total liabilities and total equity
6,181
-
6,181
1	
Non-current receivables and Other non-current financial assets were merged into Financial assets within 
non-current assets.
2	
Non-current income tax receivable was moved from Non-current receivables to Other assets within 
non-current assets.
3	
Post-employment benefits were separated from Provisions.
4	
Income tax payable was separated from Other liabilities.
5	
Accounts and notes payable and Accrued liabilities were merged into Trade and other payables.
6	
Rebates payable of EUR 163 million were moved from Other liabilities into Trade and other payables.
7	
Contract liabilities of EUR 54 million were moved from Accrued liabilities to Other liabilities.
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The presentation of the Consolidated statement of cash flows has been amended to better 
correspond to the balance sheet and to further improve transparency on cash flow 
movements. Impact on the Consolidated statement of cash flows for the year ended 
December 31, 2018 is stated in the table below. Net cash provided by operating activities, 
investing activities and financing activities did not change.
 
Before changes
Changes
After changes
Cash flows from operating activities
 
Net income (loss)
261
261
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
547
547
•	 Depreciation, amortization and impairment of non-financial assets
231
231
•	 Impairment (reversal) of goodwill, other non-current financial assets and investments in associates
2
2
•	 Net gain on sale of assets
(8)
(8)
•	 Interest income 1
(16)
16
-
•	 Net interest expense on debt, borrowings and other liabilities 1
31
(16)
15
•	 Income tax expense
106
106
•	 Additions to (releases of) provisions 2
170
(19)
151
•	 Additions to (releases of) post-employment benefits 2
19
19
•	 Other items
31
31
Decrease (increase) in working capital:
8
8
•	 Decrease (increase) in trade and other receivables
113
113
•	 Decrease (increase) in inventories
43
43
•	 Increase (decrease) in trade and other payables 3
(54)
(38)
(92)
•	 Increase (decrease) in other current assets and liabilities 3
(95)
38
(56)
Increase (decrease) in other non-current assets and liabilities
(3)
(3)
Utilizations of provisions 4
(286)
63
(223)
Utilizations of post-employment benefits 4
(63)
(63)
Interest paid, net
(23)
(23)
Income taxes paid
(123)
(123)
Net cash provided by (used for) operating activities
381
381
1	
Interest income and expense are presented at net. These items were presented at gross previously.
2	
Additions to (releases of) post-employment benefits are presented separately. They were presented in Additions to (releases of) 
provisions previously.
3	
Increase (decrease) in trade and other payables now includes movements for customer rebates and accrued liabilities, other than 
contract liabilities. They were presented in Increase (decrease) in other current asset and liabilities previously.
4	
Utilizations of post-employment benefits are presented separately. They were presented in Utilizations of provisions previously.
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Before changes
Changes
After changes
Cash flows from investing activities
 
Net capital expenditures:
(75)
(75)
•	 Additions of intangible assets
(26)
(26)
•	 Capital expenditures on property, plant and equipment
(57)
(57)
•	 Proceeds from disposal of property, plant and equipment
8
8
Net proceeds from (cash used for) derivatives and other financial assets 1
(4)
(9)
(13)
Proceeds from other non-current financial assets 1
2
(2)
-
Purchases of other non-current financial assets 1
(11)
11
-
Purchases of businesses, net of cash acquired
(7)
(7)
Proceeds from sale of businesses, net of cash disposed of
5
5
Net cash provided by (used for) investing activities
(90)
(90)
Cash flows from financing activities
 
Dividend paid
(171)
(171)
Proceeds from issuance of debt 2
(59)
87
28
Repayment of debt 2
(87)
(87)
Purchase of treasury shares
(324)
(324)
Net cash provided by (used for) financing activities
(554)
(554)
Net cash flows
(263)
(263)
Effect of changes in exchange rates on cash and cash equivalents and bank overdrafts
2
2
Cash and cash equivalents and bank overdrafts at the beginning of the period
925
925
Cash and cash equivalents and bank overdrafts at the end of the period
664
664
1	
Net proceeds from (cash used for) derivatives and other financial assets includes purchases and proceeds from non-current 
financial assets. They were presented in Proceeds from other non-current financial assets and Purchases of other non-current 
financial assets previously.
2	
Proceeds and repayment of debt are presented separately. These items were presented at net previously.
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2	
Significant accounting policies
General 
The accounting policies set out below have been applied consistently to all periods presented 
in these consolidated financial statements and have been applied consistently by Signify.
Basis of consolidation
The Consolidated financial statements comprise the financial statements of Signify N.V. and all 
subsidiaries that it controls (i.e. when it is exposed, or has rights, to variable returns from its 
involvement with the investee and has the ability to affect those returns through its power 
over the investee). The existence and effect of potential voting rights are considered when 
assessing whether the Company controls another entity. Subsidiaries are fully consolidated 
from the date that control commences until the date that control ceases. All intercompany 
balances and transactions have been eliminated in the Consolidated financial statements.
Business combinations
Business combinations are accounted for using the acquisition method. Under the acquisition 
method, the identifiable assets acquired, liabilities assumed and any non-controlling interest 
in the acquiree are recognized at the acquisition date, which is the date on which control is 
transferred to Signify. Signify measures goodwill at the acquisition date as:
•	 the fair value of the consideration transferred; plus
•	 the recognized amount of any non-controlling interest in the acquiree; plus
•	 if the business combination is achieved in stages, the fair value of the existing equity 
interest in the acquiree; less
•	 the net recognized amount (generally fair value) of the identifiable assets acquired and 
liabilities assumed.
Costs related to the acquisition, other than those associated with the issue of debt or equity 
securities, are expensed as incurred. Non-controlling interests are measured at their 
proportionate share of the acquiree’s identifiable net assets at the date of acquisition.
Loss of control
Upon the loss of control, Signify derecognizes the assets and liabilities of the subsidiary, 
any non-controlling interests and the other components of equity related to the subsidiary. 
Any surplus or deficit arising on the loss of control is recognized in the Consolidated 
statement of income. If Signify retains any interest in the previous subsidiary, then such 
interest is measured at fair value at the date the control is lost.
Investments in associates
Signify’s investments in associates are accounted for using the equity method. Investments in 
associates are recognized initially at cost. Investments in associates are those entities in 
which Signify has significant influence, but no control or joint control, over the financial and 
operating policies.
Foreign currency translation
Items included in the financial statements of each of the Signify entities are measured using 
the currency of the primary economic environment in which the entity operates (‘the 
functional currency’).
Foreign currency transactions are translated into the functional currency using the exchange 
rates prevailing at the dates of the transactions or valuation when items are re-measured. 
Foreign exchange gains and losses resulting from the settlement of such transactions and 
from the translation at year-end exchange rates of monetary assets and liabilities 
denominated in foreign currencies are recognized in the Consolidated statement of income, 
except when deferred in Other comprehensive income as qualifying cash flow hedges. 
The exchange differences are presented as part of Cost of sales, except for tax items and 
Financial income and expense, which are recognized in the same line item as they relate to.
Upon consolidation, the assets and liabilities of non-euro entities, including goodwill and fair 
value adjustments at the time of the acquisition, are translated into euros at the year-end 
rates of exchange. The items of the statement of income of foreign activities, excluding 
foreign operations in hyperinflationary economies, are translated at the rates which are 
approximating the rates at the dates of transactions. The resulting translation differences of 
the net investments in foreign operations are recognized as foreign currency translation 
reserve in other comprehensive income.
When a foreign operation is disposed of such that control, significant influence or joint 
control is lost, the cumulative amount in the currency translation differences related to the 
foreign operation is reclassified to the Consolidated statement of income as part of the gain 
or loss on disposal. 
Revenue recognition 
Sale of goods
Revenue from the sale of goods is recognized at the point in time when the customer obtains 
control over the goods. For standard sale of products, control generally passes to the 
customer at the time the product is delivered and accepted, depending on the delivery 
conditions and incoterms. Revenue is recognized at the amount to which Signify expects to be 
entitled. The transaction price excludes amounts collected on behalf of third parties, such as 
sales taxes. Payments made to customers for distinct goods or services are excluded from 
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either Other current assets or Other non-current assets. The contract assets are 
transferred to receivables when the rights become unconditional.
Contract liabilities consist of deferred income and payments received in advance and are 
recorded under other current and non-current liabilities. Deferred income includes balances 
related to royalties, extended warranty, life-cycle services as well as other services such as 
cloud-enabled services. Advances from customers mostly comprises payments received in 
advance for projects, for which Signify still needs to satisfy (part of) the performance 
obligations.
Other
Signify may incur costs for obtaining a contract, including payments made to agents that 
depend on winning the contract. Signify applies the practical expedient from IFRS 15, allowing 
the incremental costs of obtaining a contract to be expensed if the associated amortization 
period is 12 months or less. As a result, no amounts of contract costs were recognized in the 
balance sheet.
Income and expenses
Signify applies accrual accounting. This means that expenses are recognized when incurred 
and Income is recognized when earned, irrespective of the actual cash flows.
Shipping and handling expenses related to sales to third parties are generally recorded as 
Selling, general and administrative expenses. When shipping and handling is part of a project 
and billed to the customer, then the related expenses are recorded as Cost of sales. Shipping 
and handling billed to customers is recognized as Sales.
Advertising and promotion costs and costs related to the brand license fee are included in 
Selling, general and administrative expenses.
Inventories
Inventories are stated at the lower of cost and net realizable value. The cost of inventories 
comprises all costs of purchase, costs of conversion and other costs incurred in bringing the 
inventories to their present location and condition. The costs of conversion of inventories 
include direct labor and fixed and variable production overheads, considering the stage of 
completion and the normal capacity of production facilities. Costs of idle facility and abnormal 
waste are expensed. The cost of inventories is determined using the first-in, first-out (FIFO) 
method. Due to price erosion and technological developments, inventory valuation requires 
forward looking estimates on future sales levels, future price erosion and related expected 
gross margin percentages. On each reporting date, management performs an analysis of net 
realizable values and determines the lower of cost and net realizable value to measure its 
inventories. The write-down is included in Cost of sales.
the revenue recognized and recorded as part of Selling, general and administrative expenses. 
Signify does not adjust the transaction price for the effects of significant financing 
component if, at contract inception, it is expected that the period between customer 
payment and the transfer of goods or services is one year or less. This applies to most sales 
transactions. The transaction price may be variable due to discounts, rebates or similar 
arrangements. Revenue is only recognized for the part of the consideration for which it is 
highly probable that a significant reversal in the amount of cumulative revenue recognized will 
not occur. Judgment is required in determining the probability and level of discounts and 
rebates that will be granted. The estimate is updated throughout the term of the contract.
For products for which a right to return exists during a defined period, revenue is recognized 
by considering the historical pattern of actual returns. Return policies are typically based on 
customary return arrangements in local markets. 
Sale of services
Signify regards cloud-enabled services, extended warranty and lifecycle services as a 
separate performance obligation. The transaction price is allocated to the different 
performance obligation based on the relative stand-alone selling prices. Revenue for these 
services is recognized over time when the performance obligation is satisfied, which in most 
cases is proportionally over the duration of the service period.
Transactions with multiple performance obligations
When a single contract contains multiple deliverables, for example supply of goods and 
services, these multiple deliverables may be combined in one or more performance 
obligations. For these transactions, Signify accounts for individual goods and services, 
including any goods or services provided for free, separately in case they are distinct. 
Performance obligations may be satisfied over time, typically because Signify is creating or 
enhancing an asset that the customer controls. In limited cases, Signify may also be creating 
an asset with no alternative use while having an enforceable right to payment for performance 
to date. In both instances, revenue is recognized over time. The total consideration of the 
contract is allocated to all distinct performance obligations in the contract based on their 
stand-alone selling prices. Stand-alone selling prices are determined based on other 
stand-alone sales transactions that are directly observable, when possible. However, 
observable prices are not available for all performance obligations. If no direct observable 
prices are available, the stand-alone selling price is normally based on the expected cost plus 
a margin approach.
Contract assets and liabilities
Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, 
satisfied performance obligations but not yet billed the customer. These are recorded under 
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all counterparties in a normal course of business, as well as in the event of default, insolvency 
or bankruptcy.
Derecognition of financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar 
financial assets) is primarily derecognized when:
•	 The rights to receive cash flows from the asset have expired
or
•	 Signify has transferred its rights to receive cash flows from the asset or has assumed an 
obligation to pay the received cash flows in full without material delay to a third party 
under a ‘pass-through’ arrangement; and either (a) Signify has transferred substantially all 
the risks and rewards of the asset, or (b) Signify has neither transferred nor retained 
substantially all the risks and rewards of the asset, but has transferred control of the 
asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of 
the asset, nor transferred control of the asset, Signify continues to recognize the 
transferred asset to the extent of its continuing involvement. In that case, Signify also 
recognizes an associated liability. The transferred asset and the associated liability are 
measured on a basis that reflects the rights and obligations that Signify has retained. 
Impairment of trade receivables and contract assets
Signify estimates lifetime expected loss allowance for all Trade receivables and Contract 
assets via calculating the expected credit losses. Trade receivables and contract assets are 
grouped based on shared credit risk characteristics and the days past due whereby the 
lifetime expected credit loss on the Trade receivables is recognized based on a matrix model 
calculated per country, which utilizes historical recoverability data and default probability per 
country.
As soon as individual trade accounts receivable can no longer be collected in a normal course 
of business and are expected to result in a loss, they are designated as doubtful trade 
accounts receivable and valued at the expected collectible amounts. They are written off 
when they are deemed to be uncollectable because of bankruptcy or other form of 
receivership at the debtors. Any previously recognized expected loss is offset against the 
carrying amount of such trade receivable and the difference is taken as a loss accounted for 
within Selling, general and administrative expenses.
Impairment of other financial assets
Signify assesses on a forward-looking basis the expected credit loss associated with its debt 
instruments carried at amortized cost. Signify determines impairment amount based on the 
three stages of credit risk deterioration. The criteria to pass on to the next stage of the 
Financial instruments
Recognition
A financial asset or liability is recognized when Signify becomes party to a contract that is a 
financial instrument. Regular way purchases and sales of financial instruments are accounted 
for at the trade date. Initial measurement of financial assets and liabilities is at fair value. 
Dividend income is recognized when declared.
Classification and measurement
Classification and subsequent measurement of financial assets depends on the Signify’s 
business model for managing the financial assets and the contractual terms of the cash flows 
and solely payments of principal and interest (SPPI) test. Signify performs analysis instrument 
by instrument level, which utilizes contract details, business model and objective of the 
instrument in order to classify financial asset or liability into one of the following categories:
•	 Financial assets at amortized cost as the business model for these instruments is hold-to-
collect (or pay) contractual cash flows. These are Trade and Other Receivables, which are 
subsequently measured at amortized cost using the effective interest method, less loss 
allowance and net of discounts given or agreed if the offset requirements are met.
•	 Financial assets at fair value via profit and loss (FVPL), as the business model for these 
instruments is held for trading. Derivatives and other financial assets at fair value are 
Included in this category;
•	 Financial assets at fair value through other comprehensive income (FVOCI) with no 
subsequent reclassification of fair value gains and losses to profit or loss following the 
derecognition of the investment as the business model for these instruments is hold-to-
collect contractual cash flows and sell. Minor equity investments are included in this 
category. 
•	 Financial liabilities are all classified as subsequently measured at amortised cost, except 
for financial liabilities at fair value via profit and loss, for example derivatives, contingent 
consideration in a business acquisition, to which IFRS 3 applies. Such contingent 
consideration shall subsequently be measured at fair value with changes recognized in 
profit or loss. 
Netting of financial assets and liabilities
Signify presents financial assets and financial liabilities on a gross basis as separate line items 
in the Consolidated statement of financial position unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with 
financial liabilities and if Signify intends either to settle on a net basis or to realize the asset 
and settle the liability simultaneously. To meet the requirement, the right of set-off should be 
available today and not contingent on a future event and it should be legally enforceable for 
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sales in the Consolidated statement of income, except for derivatives that are effective and 
qualify for cash flow hedge accounting which are recorded in Other comprehensive income 
until the Consolidated statement of income is affected by the variability in cash flows of the 
designated hedged item. Changes in the fair value of hedges related to intercompany loans 
and deposits are recognized within Financial income and expenses in the Consolidated 
statement of income. There was no change to the allocation of these gains and losses 
between current and prior year.
The derivatives used by Signify can be subject to master netting and set-off agreements with 
financial counterparties. In case of certain termination events, under the terms of these 
Master Agreements, Signify can terminate the outstanding transactions and aggregate their 
positive and negative values to arrive at a single net termination sum (or close-out amount). 
This contractual right is, amongst others, subject to the following:
•	 the right may be limited by local law if the counterparty is subject to bankruptcy 
proceedings
•	 the right applies on a bilateral basis.
Income taxes
Income tax comprises current and deferred tax. Income tax is recognized in the Consolidated 
statement of income except to the extent that it relates to items recognized directly within 
equity or in Other comprehensive income. Current tax is the expected tax payable on the 
taxable income for the year, using tax rates enacted or substantially-enacted at the reporting 
date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities are recognized, using the balance sheet method, for the 
expected tax consequences of temporary differences between the carrying amounts of 
assets and liabilities and the amounts used for taxation purposes. Deferred tax is not 
recognized for the following temporary differences: the initial recognition of goodwill, 
the initial recognition of assets and liabilities in a transaction that is not a business 
combination and that affects neither accounting nor taxable profit, and differences relating 
to investments in subsidiaries to the extent that they probably will not reverse in the 
foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary 
differences when they reverse, based on the laws that have been enacted or substantially 
enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally-enforceable right to offset 
current tax liabilities and assets, and they relate to income taxes levied by the same tax 
authority on the same taxable entity or on different tax entities, but they intend to settle 
credit deterioration Is established for individual financial assets or group of financial assets 
with similar characteristics, considering credit risk profile of the counterparty, historical 
default data and macroeconomic factors.
Derivatives and hedge accounting
At inception of the hedge relationship, the Company documents the economic relationship 
between hedging instruments and hedged items including whether changes in the cash flows 
of the hedging instruments are expected to offset changes in the cash flows of hedged items. 
Signify documents its risk management objective and strategy for undertaking its hedge 
transactions. 
For foreign currency forwards, Signify designates the spot component of the change in fair 
value in cash flow hedge relationships. The spot component is determined with reference to 
the relevant spot market exchange rates. The differential between the contracted forward 
rate and the spot market exchange rate is defined as forward points. It is discounted, where 
material. Changes in the fair value related to forward points are continuously recognized in 
the statement of profit or loss.
Signify measures all derivative financial instruments at fair value derived from market prices of 
the instruments or calculated as the present value of the estimated future cash flows based 
on observable interest yield curves, basis spread and foreign exchange rates. These 
calculations are tested for reasonableness by comparing the outcome of the internal 
valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging 
instrument and hedge ratio is the same as the one Signify uses for the risk management 
purposes. A prospective effectiveness test is performed to prove that the hedge is effective. 
For the prospective effectiveness test Signify utilizes the dollar offset method.
If the hedge ratio for risk management purposes is no longer optimal due to the different 
timing or amount of the underlying transaction, but the risk management objective remains 
unchanged and the hedge continues to qualify for hedge accounting, Signify performs 
re-balancing of the hedge relationship by adjusting either the volume of the hedging 
instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio 
used for the risk management purposes. Gains and losses that were accumulated in equity 
related to an ineffective portion of hedge, Signify records immediately in the Consolidated 
statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges 
of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains 
or losses arising from changes in fair value of derivatives are recognized within the Cost of 
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Provisions
Provisions are recognized if, as a result of a past event, Signify has a present legal or 
constructive obligation, it is probable that an outflow of economic benefits will be required to 
settle the obligation and a reliable estimate can be made of the amount of the obligation. 
Provisions are measured at the present value of the expenditures expected to be required to 
settle the obligation using a pre-tax discount rate that reflects current market assessments 
of time value of money. The increase in the provision due to passage of time is recognized as 
interest expense. Significant judgment is required in determining the amount and probability 
of resources outflow and discount rates used to calculate the present value of this outflow. 
A liability is recognized if timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify’s provisions is as follows:
•	 Restructuring related provisions - The provision for restructuring relates to the estimated 
costs of programs that are planned and controlled by management that materially change 
the scope of our business or the manner in which it is conducted. A provision is recognized 
when Signify has a detailed formal plan for the restructuring and has raised a valid 
expectation that Signify will carry out the restructuring by starting to implement the plan, 
or by announcing the plan’s main features to those affected by it.
•	 Environmental provisions - Measurement of liabilities associated with environmental 
obligations is based on current legal and constructive requirements. Liabilities and 
expected insurance recoveries, if any, are recorded separately. The carrying amount of 
environmental provisions is regularly reviewed and adjusted for new facts and changes in 
law.
•	 Product warranty - A provision for product warranty is made at the time of revenue 
recognition and reflects the estimated costs of replacement and free-of-charge services 
that will be incurred by Signify with respect to the products. The provision is based on 
historical warranty data and a weighing of possible outcomes against their associated 
probabilities. 
•	 Litigation provisions – In relation to legal claim provisions and settlements, the relevant 
balances are transferred to Other liabilities at the point the amount and timing of cash 
flows are no longer uncertain. Settlements which are agreed for amounts in excess of 
existing provisions are reflected as payables.
•	 Onerous contract provisions - Provisions are recognized for a contract if it is onerous. 
The present obligation under the contract is measured and recognized as a provision. 
An onerous contract is a contract under which the unavoidable costs of meeting the 
obligations under the contract exceed the economic benefits expected to be received 
under it.
current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized 
simultaneously.
Deferred tax liabilities for withholding taxes are recognized for subsidiaries in situations 
where the income is to be paid out as dividend in the foreseeable future and for undistributed 
earnings of unconsolidated companies to the extent that these withholding taxes are not 
expected to be refundable or deductible.
Changes in tax rates are reflected in the period when the change has been enacted or 
substantially-enacted by the reporting date.
Deferred tax assets
A deferred tax asset is recognized for unused tax losses, tax credits and deductible 
temporary differences, to the extent that it is probable that future taxable profits will be 
available against which they can be utilized. The evaluation of the recoverability of deferred 
tax assets requires judgment about the future taxable profitability of the legal entity holding 
the tax loss carry forward. The ultimate realization of deferred tax assets is dependent upon 
the generation of future taxable income in the countries where the deferred tax assets 
originated and during the periods when the deferred tax assets become deductible. 
Management considers the scheduled reversal of deferred tax liabilities, projected future 
taxable income and tax planning strategies in making this assessment. A lack of future taxable 
profits or taxable profits below the level of current estimates, may cause deferred tax assets 
to be impaired.
The ultimate tax effects of transactions may be uncertain for a considerable period of time, 
requiring management to estimate the related current and deferred tax treatments. 
In assessing the uncertainty, Signify considers whether it is probable that a taxation authority 
will accept or revise the uncertain tax treatment. Income tax payable include liabilities for 
uncertain tax positions which are recognized when it is probable that tax will be due. Actual 
tax assessments in relation to these other tax liabilities may significantly deviate from 
estimates.
In determining the amount of current and deferred income tax, Signify takes into account the 
impact of uncertain tax positions and whether additional taxes and interest may be due. 
This assessment relies on estimates and assumptions and may involve a series of judgments 
about future events. New information may become available that causes Signify to change its 
judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will 
impact the income tax expense in the period that such a determination is made.
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Expected useful lives of intangible assets excluding goodwill in years
Product development
1-5
Software
1-10
Technology 
1-20
Customer relations
2-20
Brand names
2-20
Other
2-10
Impairment of goodwill and intangible assets not yet ready for use
Goodwill and intangible assets not yet ready for use are not amortized but tested for 
impairment annually and whenever impairment indicators require impairment testing. Signify 
performed and completed annual impairment tests in the last quarter of the financial year. 
Judgment is required when analyzing impairments triggers and tests of goodwill and intangible 
assets not yet ready for use. These analyses are based on the estimation of the recoverable 
amount. The review for impairment is carried out at the level where cash flows occur that are 
independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to 
the extent that the carrying amount of a cash-generating unit exceeds the unit’s recoverable 
amount, which is the greater of its value in use and fair value less costs of disposal. Value in 
use or fair value less costs to sell is measured as the present value of future cash flows 
expected to be generated by the asset via its use or sale with deduction of costs directly 
associated with its use or sale.
Impairment of non-financial assets other than goodwill, intangible assets 
not yet ready for use, inventories and deferred tax assets
Non-financial assets other than goodwill, intangible assets not yet ready for use, inventories 
and deferred tax assets are reviewed for impairment whenever events or changes in 
circumstances indicate that the carrying amount of an asset may not be recoverable. 
Recoverability of assets to be held and used is assessed by a comparison of the carrying 
amount of an asset with the greater of its value in use and fair value less cost of disposal. 
Value in use is measured as the present value of future cash flows expected to be generated 
by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment 
charge is recognized in the amount by which the carrying amount of the asset exceeds the 
recoverable amount. The review for impairment is carried out at the level where cash flows 
occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any 
indications that the loss has decreased or no longer exists. An impairment loss is reversed if 
and to the extent there has been a change in the estimates used to determine the 
Guarantees
When the potential cash outflow is possible or remote and the risk covered by a guarantee is 
not a financial risk, Signify applies off-balance sheet treatment to such guarantees. 
For example, environmental remediation and legal proceedings. When the expectation of the 
cash outflow becomes probable such guarantees become provisions, see guidance above.
When guarantees are covering credit risk or any other financial risk they are accounted for as 
financial assets and liabilities.
Goodwill
The measurement of goodwill at initial recognition is described under accounting policy, 
Business combinations, above. Goodwill is subsequently measured at cost, less accumulated 
impairment losses. In respect of investments in associates, the carrying amount of goodwill is 
included in the carrying amount of the investment, and an impairment loss on such investment 
is allocated to the investment as a whole.
Intangible assets other than goodwill
Acquired finite-lived intangible assets are amortized using the straight-line method over their 
estimated useful life. The useful lives are evaluated annually. Intangible assets are initially 
capitalized at cost, with the exception of intangible assets acquired as part of a business 
combination that are capitalized at their acquisition-date fair value.
Expenditure on development activities, whereby research findings are applied to a plan or 
design for the production of new or substantially improved products and processes, 
is capitalized as an intangible asset if the product or process is technically and commercially 
feasible, cost can be reliably measured, Signify has sufficient resources and the intention to 
complete development.
The development expenditure capitalized comprises all directly attributable costs (including 
the cost of materials and direct labor). Other development expenditures and expenditures on 
research activities are recognized in the Consolidated statement of income. Capitalized 
development expenditure is stated at cost less accumulated amortization and impairment 
losses. Amortization of capitalized development expenditure is charged to the Consolidated 
statement of income on a straight- line basis over the estimated useful lives of the intangible 
assets in Research and development expenses.
Amortization of other intangible assets is reported in Selling, general and administrative 
expenses for brand names and customer relationships and in Cost of sales for technology-
based and other intangible assets.
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Termination benefits
Termination benefits are payable when employment is terminated by Signify before the normal 
retirement date, or whenever an employee accepts voluntary redundancy in exchange for 
these benefits. Signify recognizes termination benefits when they are demonstrably 
committed to a termination and when they have a detailed formal plan to terminate the 
employment of current employees without possibility of withdrawal. In the case of an offer 
made to encourage voluntary redundancy, the termination benefits are measured based on 
the number of employees expected to accept the offer.
Other employee benefits
Signify’s net obligation in respect of long-term employee benefits is the amount of future 
benefit that employees have earned in return for their service in the current and prior 
periods, such as jubilee entitlements. That benefit is discounted to determine its present 
value. Remeasurements are recognized in the Consolidated statement of income in the period 
in which they arise.
Short-term employee benefit obligations are measured on an undiscounted basis. Signify 
recognizes a liability and an expense for bonuses and incentives based on a formula that takes 
into consideration the profit attributable to Signify’s shareholders after certain adjustments. 
Cash and cash equivalents
Cash and cash equivalents include all cash balances and short-term highly liquid investments 
with an original maturity of three months or less that are readily convertible into known 
amounts of cash. Bank overdrafts form an integral part of Signify’s cash management and 
often fluctuate from being positive to overdrawn and are included as a component of cash 
and cash equivalents for the purpose of the statement of cash flows.
Assets held for sale
Non-current assets (disposal groups comprising assets and liabilities) that are expected to be 
recovered primarily through sale rather than through continuing use are classified as held for 
sale. Non-current assets held for sale are carried at the lower of carrying amount or fair value 
less cost to sell. Comparatives in the balance sheet are not changed when a non-current 
asset is classified as held-for-sale.
Hyperinflationary economies
When the economy of a country in which Signify operates is deemed hyperinflationary and the 
functional currency of a Signify entity is the currency of that hyperinflationary economy, 
the financial statements of such entity are adjusted so that they are stated in terms of the 
measuring unit current at the end of the reporting period. This involves restatement of 
income and expenses to reflect changes in the general price index from the start of the 
reporting period and restatement of non-monetary items in the balance sheet, such as 
recoverable amount. The loss is reversed only to the extent that the asset’s carrying amount 
does not exceed the carrying amount that would have been determined, net of depreciation 
or amortization, if no impairment loss had been recognized. Reversals of impairment are 
recognized in the Consolidated income statement.
Pension and other employee benefits
Defined-benefit plans
Signify’s retirement benefit obligation is calculated by an independent actuary, using the 
projected unit credit method. This calculation is performed separately for each plan by 
estimating the amount of the benefit that employees have earned in relation to their past 
services. The measurement date for all defined-benefit plans is December 31. For plans with a 
relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit 
obligation with a lower frequency. The liability recognized in the Consolidated statement of 
financial position is the present value of these benefits at the end of the reporting period 
(defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation 
is determined by discounting the estimated future cash flows using full discount rates of 
high-quality corporate bonds with durations matching the terms of the benefits.
The increase in the defined-benefit obligation due to the passage of time and the expected 
return on plan assets, using the same interest rate as for the defined-benefit obligation, 
are included in the pension costs. Interest on the net defined-benefit obligation is recognized 
in Financing income and expenses in the Consolidated income statement.
Past-service costs are recognized immediately in the Personnel costs in the Consolidated 
income statement. Actuarial gains and losses arising from experience adjustments and 
changes in actuarial assumptions are charged or credited to equity via other comprehensive 
income in the period in which they arise.
When a plan is changed, settled or when a plan is curtailed, the resulting change in the 
defined-benefit obligation that relates to past-service or the gain or loss on curtailment is 
recognized immediately in the statement of income. Signify recognizes gains and losses on the 
settlement of a defined-benefit plan when the settlement occurs.
Signify presents all net defined-benefit post-employment obligations on one line within 
non-current liabilities on the Statement of financial position.
Defined-contribution plans
Contributions to defined-contribution plans are recognized in the Consolidated income 
statement in Personnel expenses as incurred.
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The expected useful lives of property, plant and equipment are as follows:
Useful lives property, plant and equipment in years
Building 
from 5 to 50
Machinery and installations
from 3 to 20
Other equipment
from 1 to 10
Right-of-use assets
from 2 to 20
Share-based compensation expenses
The cost of equity-settled transactions is determined by the fair value at the grant date using 
an appropriate valuation model.
The grant-date fair value of equity-settled share-based payment awards granted to 
employees is recognized as personnel expense, with a corresponding increase in equity, 
over the vesting period of the award. The cumulative expense recognized for equity-settled 
transactions at each reporting date until the vesting date reflects the extent to which the 
vesting period has expired and the company’s best estimate of the number of equity 
instruments that will ultimately vest. The expense or credit in the statement of profit or loss 
for a period represents the movement in cumulative expense recognized as at the beginning 
and end of that period.
Service and non-market performance conditions are not considered when determining the 
grant date fair value of awards, but the likelihood of the conditions being met is assessed as 
part of the company’s best estimate of the number of equity instruments that will ultimately 
vest. Market performance conditions are reflected within the grant date fair value.
No expense is recognized for awards that do not ultimately vest because non-market 
performance and/or service conditions have not been met. Where awards include a market or 
non-vesting condition, the transactions are treated as vested irrespective of whether the 
market or non-vesting condition is satisfied, provided that all other performance and/or 
service conditions are satisfied.
Consolidated statement of cash flows
The Consolidated statement of cash flows is prepared using the indirect method. Cash flows 
from derivative instruments that are accounted for as cash flow hedges are classified in the 
same category as the cash flows from the hedged items. Cash flows from other derivative 
instruments are classified consistent with the nature of the instrument. Cash flows in foreign 
currencies have been translated into euros using the exchange rate at the date of the cash 
flow.
property, plant and equipment and inventory to reflect current purchasing power as at the 
period end using a general price index from the date when they were first recognized. 
Comparative amounts are not adjusted. Any differences arising were recorded in equity on 
adoption.
In 2019 and 2018, hyperinflation accounting was applicable for Signify operations in Argentina, 
but the impact from hyperinflation accounting was not material.
Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the 
issuance of shares are recognized as a deduction from equity. Dividends are recognized as a 
liability in the period in which they are declared. The income tax consequences of dividends 
are recognized when a liability to pay the dividend is recognized.
Treasury shares that are reacquired are recognized at cost, representing the market price on 
the acquisition date, and deducted from equity until the shares are cancelled or reissued. 
When reissued, shares are removed from treasury shares on a first-in, first-out (FIFO) basis. 
When treasury shares are delivered under the Company’s share plans, the difference 
between the market price of the shares delivered and the cost is recorded in retained 
earnings, the market price is recorded in share premium. Upon cancellation, treasury shares 
are deducted from the share capital at their nominal value of EUR 0.01 per share and retained 
earnings for the difference.
Costs including dividend withholding tax in connection with the Company’s purchase of 
treasury shares for capital reduction purposes are recorded in retained earnings.
Property, plant and equipment
Property, plant and equipment are measured at cost less accumulated depreciation and 
accumulated impairment losses. The useful lives and residual values are evaluated annually. 
The costs of property, plant and equipment comprise of all directly attributable costs 
(including the cost of materials and direct labor). Government grants for assets are deducted 
from the cost of the related asset.
Depreciation of property, plant and equipment, other than freehold land, is calculated using 
the straight-line method over the residual values and estimated useful lives and is primarily 
included in Cost of sales. Freehold land is not depreciated. Gains and losses on the sale of 
property, plant and equipment are included in Other business income. Costs related to repair 
and maintenance activities are expensed in the period in which they are incurred unless 
leading to an extension of the original lifetime of capacity.
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Earnings per share
Signify presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic 
EPS is calculated by dividing the Net income (loss) attributable to shareholders of Signify N.V. 
by the weighted average number of ordinary shares outstanding during the period, adjusted 
for own shares held. Diluted EPS is determined by adjusting the Net income (loss) attributable 
to shareholders and the weighted average number of ordinary shares outstanding during the 
period, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, 
which comprises of restricted shares, conditional shares and performance shares granted to 
employees.
Government grants
Grants from the government are recognized at their fair value where there is a reasonable 
assurance that the grant will be received, and the company will comply with all attached 
conditions. Government grants relating to costs are deferred and recognized in the 
Consolidated statement of income over the period necessary to match them with the costs 
that they are intended to compensate.
3	
Information by segment and main country
Operating segments are components of the company’s business activities about which 
separate financial information is available that is evaluated regularly by the chief operating 
decision maker (the Board of Management of the Company). The operating segments are 
Lamps, LED, Professional and Home. The segments are organized based on the nature of the 
products and services. ‘Other’ represents amounts not allocated to the operating segments 
and includes certain costs related to central R&D activities to drive innovation as well as 
group enabling functions.
The following is an overview of Signify revenues and results by segment:
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Lamps
LED
Professional
Home
Other 4
Intersegment 
elimination
Signify
2019
 
 
 
 
 
 
 
Sales to external customers
1,159
1,891
2,649
521
27
6,247
Sales including intersegment
1,166
2,036
2,652
522
28
(157)
6,247
Depreciation and amortization 1
(32)
(15)
(52)
(19)
(71)
(189)
EBITA 2
168
217
222
5
(112)
500
EBITA as a % of sales
14.5%
11.5%
8.4%
1.0%
8.0%
Amortization 3
(99)
Income from operations 
168
212
133
3
(114)
401
Financial income and expenses
(43)
Results from investments in associates
1
Income before taxes
360
2018
 
 
 
 
 
 
 
Sales to external customers
1,428
1,812
2,635
467
16
 
6,358
Sales including intersegment
1,438
1,943
2,639
469
25
(157)
6,358
Depreciation and amortization 1
(37)
(12)
(44)
(10)
(34)
 
(137)
EBITA 2
270
204
208
(43)
(135)
 
504
EBITA as a % of sales
18.9%
11.3%
7.9%
(9.2)%
 
 
7.9%
Amortization 3
 
(94)
Income from operations 
269
200
121
(44)
(137)
 
410
Financial income and expenses
 
 
 
 
 
(41)
Results from investments in associates
 
 
 
 
(2)
Income before taxes
 
 
 
 
 
 
367
1	
Excluding amortization and impairments of acquisition related intangible assets and goodwill.
2	
Income from operations excluding amortization and impairments of acquisition related intangible assets and goodwill (“EBITA”).
3	
Amortization and impairments of acquisition related intangible assets and goodwill.
4	
Considering the nature of Other, EBITA as a % of sales for Other is not meaningful.
Sales between the segments mainly relate to the supply of goods. The pricing of such 
transactions is determined on an ‘arm’s length basis’.
Signify has no external customer that represents 10% or more of total sales.
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Sales, tangible and intangible assets by main countries:
 
Sales
Tangible and  
intangible assets 1
 
2018
2019
2018
2019
Netherlands
551
515
120
195
United States
1,361
1,317
1,803
1,799
China
441
548
86
308
Germany
464
418
6
16
India
416
372
15
22
France
310
296
10
17
Saudi Arabia
129
144
174
164
Other countries
2,687
2,636
479
510
Total countries
6,358
6,247
2,695
3,030
1	
Including goodwill.
Disaggregated revenue information
Total sales consist primarily of the sales of goods to customers (2019: 96%, 2018: 97%). 
Remaining sales include revenue from services, sales-and usage-based royalties and leases. 
The amount of revenue recognized in the period ended December 31, 2019 from performance 
obligations satisfied (or partially satisfied) in previous periods amounts to EUR 35 million 
(2018: EUR 34 million).
Sales by market:
2018
2019
Europe 1
2,337
2,238
Americas 1
1,830
1,747
Rest of the world 1
1,840
1,855
Global businesses 1
352
406
Total
6,358
6,247
1	
Horticulture is included in Market Groups Europe, Americas and Rest of the World (was previously part of 
Global businesses).
4	
Income from operations
Note
2018
2019
 Sales
3
6,358
6,247
 Cost of Materials used
(2,806)
(2,810)
 Employee benefit expenses
5
(1,734)
(1,651)
 Depreciation and amortization
6
(231)
(288)
 Shipping and handling
(214)
(235)
 Advertising and promotion
(156)
(133)
 Lease related expenses
(101)
(24)
 Other operational costs
(721)
(719)
 Other business income, net
7
15
15
 Income from operations
410
401
Other operational costs contain items which are dissimilar in nature and individually 
insignificant in amount to disclose separately. These costs contain, among others, expenses 
for outsourcing services, mainly in IT and HR, third-party workers, utilities and repair and 
maintenance for fixed assets. 
5	
Employee benefit expenses
Personnel expenses by nature as included in the Consolidated statement of income:
Note
2018
2019
Salaries and wages
(1,027)
(995)
Social securities
(192)
(180)
Defined-contribution plans
(80)
(71)
Cost of termination plans
(97)
(77)
Temporary personnel
(70)
(63)
Share-based compensation
27
(29)
(21)
Other
(239)
(243)
Total
 
(1,734)
(1,651)
Other personnel expenses mainly relate to travel expenses, incentives and other personnel 
related costs.
The average number of full-time equivalent (FTE) employees is summarized as follows:
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In 2019, the result on disposal of fixed assets includes a EUR 7 million income from the sale of 
real estate in Professional, in China. In 2019, the net result on other remaining businesses 
includes a EUR 5 million (2018: EUR 20 million) income from the movements in the provisions 
with Royal Philips originating from the separation.
In 2018, other remaining businesses also includes a EUR 8 million expense related to a legal 
provision for an adverse outcome of an appeal on a jury verdict in Professional, in the United 
States of America. The state Supreme Court has agreed to hear one of our three bases for 
appeal. 
8	
Financial income and expenses
Note
2018
2019
Interest income
16 
14
Change in fair value of financial assets at fair 
value through profit or loss
29
1 
1
Other financial income
 
4 
2
Financial income
20 
17
Interest expense
23
(30)
(22)
Interest on the net defined-benefit 
obligation
25
(13)
(14)
Interest expense on lease liability
23
(1)
(7)
Change in fair value of financial assets at fair 
value through profit or loss
29
-
(1)
Net foreign exchange losses
(9)
(4)
Other financial expenses
23 
(7)
(12)
Financial expenses
(61)
(60)
Financial income and expenses
 
(41)
(43)
In FTEs
 
2018
2019
Employees
27,161 
26,204
Third party workers
3,442 
3,054
Total 1
 
30,603 
29,258
1	
2,641 FTEs work in the Netherlands (2018: 3,059); the remaining FTEs work abroad.
6	
Depreciation, amortization and impairment
Note
2018
2019
Property, plant and equipment
13
(117)
(167)
Internal-use software
15
(5)
(7)
Other intangible assets
15
(94)
(99)
Development costs
15
(15)
(16)
Total 
(231)
(288)
7	
Other business income and expenses
2018
2019
Result on disposal of businesses:
 
•	 Income
3 
1
•	 Expense
(0)
-
Result on disposal of fixed assets:
 
•	 Income
5 
11
•	 Expense
(0)
(0)
Result on other remaining businesses:
 
•	 Income
24 
10
•	 Expense
(16)
(8)
Other business income and expenses
15 
15
Total other business income
32 
22
Total other business expense
(17)
(8)
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2018
 % 
2019
%
Income before taxes
367
360
Weighted average statutory income tax rate
(78)
(21)%
(79)
(22)%
Non-deductible expenses
(19)
(5)%
(16)
(4)%
Tax incentives and exempt income
31
8%
20
6%
Deferred tax expense related to  
derecognition of deferred tax assets - net
(3)
(1)%
(8)
(2)%
Changes in the liability for uncertain tax 
positions
(10)
(3)%
(6)
(2)%
Prior year tax expense
(1)
(0)%
0
0%
Changes in tax rates
(18)
(5)%
3
1%
Other
(7)
(2)%
(7)
(2)%
Income tax expense recognized in 
Consolidated statement of income
(106)
(29)%
(93)
(26)%
The weighted average statutory income tax rate increased by 1% in 2019 compared to 2018.
The effective income tax rate is higher than the weighted average statutory income tax rate 
in 2019 and 2018, mainly due to non-deductible expenses and a deferred tax expense related 
to derecognition of deferred tax assets, set off by tax incentives and exempt income. 
Changes in tax rates include EUR 6 million non-cash tax benefit (2018: EUR 17 million expense) 
related to the revaluation of the deferred tax assets following the statutory tax rate change 
in the Netherlands.
The effective tax rate was 26% in 2019 (2018: 29%), which is higher than the statutory income 
tax rate of 25% in the Netherlands. The difference is primarily due to non-deductible 
expenses, deferred tax expense related to derecognition of deferred tax assets, set off by 
tax incentives and exempt income.
9	
Income taxes
2018
2019
Netherlands
 123
175
Foreign
244
184
Income before taxes
367
360
Netherlands:
 
•	 Current tax benefit (expense)
-
(17)
•	 Deferred tax benefit (expense)
(48)
(15)
Total tax expense (Netherlands)
(48)
(32)
Foreign:
 
•	 Current tax benefit (expense)
(62)
(68)
•	 Deferred tax benefit (expense)
4
7
Total tax expense (foreign)
(58)
(61)
Income tax expense
(106)
(93)
2018
2019
Current tax expense
(82)
(86)
Prior year benefit (expense)
20 
1
Current tax expense
(62)
(85)
2018
2019
Origination and reversal of temporary differences
0
(6)
Change in tax losses, tax credits and temporary differences 
recognized
(5)
(4)
Tax rate changes
(18)
3
Prior year benefit (expense)
(21)
(0)
Deferred income tax expense
(44)
(8)
The 2018 prior year current income tax benefit and prior year deferred income tax expense 
are largely offsetting and mostly related to the same events. 
Signify’s operations are subject to income taxes in various jurisdictions. The statutory income 
tax rates vary from 9% to 35%, which results in a difference between the weighted average 
statutory income tax rate and the Netherlands’ statutory income tax rate of 25% (2018: 25%). 
A reconciliation of the weighted average statutory income tax rate to the effective income 
tax rate of continuing operations is as follows:
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The net deferred tax assets of EUR 356 million (2018: EUR 380 million) consists of deferred tax 
assets of EUR 384 million (2018: EUR 399 million) in countries with a net deferred tax asset 
position and deferred tax liabilities of EUR 28 million (2018: EUR 19 million) in countries with a 
net deferred tax liability position. An amount of EUR 89 million of deferred tax assets relates 
to several tax jurisdictions in which Signify has suffered a loss in the current or preceding 
period. Management’s projections support the assumption that it is probable that the results 
of future operations will generate enough taxable income to utilize these deferred tax assets.
Movement in deferred tax balances during 2019 and 2018 were as follows:
Balance  
as at  
January 1
Recog-
nized in  
income
Other
Balance  
as at  
December 
31
2019
Intangible assets
50
5
(10)
44
Property, plant and equipment
11
9
(49)
(29)
Inventories
42
1
(0)
42
Other receivables
47
(4)
(0)
43
Provisions:
•	 pensions and other post-retirement 
benefits
82
(8)
(1)
73
•	 termination benefits
15
(7)
(0)
8
•	 other provisions
35
(3)
(0)
32
Other liabilities
0
4
48
53
Tax loss carryforwards (including tax credit 
carryforwards)
98
(5)
(3)
90
Net deferred tax assets
380
(8)
(16)
356
Recognized deferred tax assets and liabilities
Assets
Liabilities
Net
2019
Intangible assets
134
(89)
44
Property, plant and equipment 1
25
(54)
(29)
Inventories
43
(1)
42
Other receivables and assets
52
(9)
43
Provisions for pensions and other post-
retirement
72
1
73
Provisions for termination benefits
8
—
8
Other provisions
32
(0)
32
Other liabilities 1
86
(33)
53
Deferred tax assets on tax attributes 2
90
—
90
Total allocations
541
(185)
356
Set-off of deferred tax
(157)
157
0
Net deferred tax assets
384
(28)
356
2018
 
 
 
Intangible assets
150 
(100)
50 
Property, plant and equipment
22 
(11)
11 
Inventories
42 
(0)
42 
Other receivables and assets
51 
(3)
47 
Provisions for pensions and other post-
retirement
82
-
82
Provisions for termination benefits
15
-
15
Other provisions
35
-
35
Other liabilities
40
(40)
-
Deferred tax assets on tax attributes 2
98
-
98
Total allocations
535
(155)
380
Set-off of deferred tax
(136)
136
0
Net deferred tax assets
399
(19)
380
1	
Includes an impact of IFRS 16 adoption.
2	
Tax loss carryforwards (including tax credit carryforwards).
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Out of EUR 487 million, an amount of EUR 475 million should not be limited in time, EUR 2 million 
will expire by 2024, and EUR 9 million expires after 2024, but carryforward is limited in time.
At December 31, 2019, the amount of deductible temporary differences for which no deferred 
tax asset has been recognized in the balance sheet is EUR 60 million (2018: EUR 86 million).
Classification of the income tax payable and receivable is as follows:
2018
2019
Income tax receivable under other current assets
35 
48
Income tax receivable under other non-current assets
8 
8
Income tax payable under current liabilities
(15)
(22)
Income tax payable under non-current liabilities
(48)
(52)
Tax risks
Signify is exposed to tax uncertainties. These uncertainties include, among others, 
the following:
Transfer pricing uncertainties
Signify has issued transfer pricing directives, which are in accordance with international 
guidelines, such as those of the Organization of Economic Co-operation and Development 
(OECD). As transfer pricing has a cross-border effect, potential adjustments by local tax 
authorities on implemented transfer pricing procedures in a country may have an impact on 
results in another country. In order to reduce the transfer pricing uncertainties, monitoring 
procedures are carried out by Group Tax and Internal Audit to safeguard the correct 
implementation of the transfer pricing directives.
Tax uncertainties on general and specific service agreements and licensing 
agreements
Due to the centralization of certain activities in a limited number of countries (such as 
research and development, IT, group functions and head office), costs are also centralized. 
Consequently, these costs and/or revenues must be allocated to the beneficiaries, i.e. 
the various Signify entities. This could lead to discussions with local tax authorities if they do 
not accept these charges. For that purpose, service contracts such as intra-group service 
agreements and licensing agreements are signed with Signify group entities. Tax authorities 
review these intra-group service and licensing agreements and may reject the implemented 
intra-group charges.
Balance  
as at  
January 1
Recog-
nized in  
income
Other
Balance  
as at  
December 
31
2018
 
 
 
 
Intangible assets
78
(26)
(2)
50
Property, plant and equipment
8
3
0
11
Inventories
34
7
1
42
Other receivables
55
(8)
0
47
Provisions:
•	 pensions and other post-retirement 
benefits
86
(7)
3
82
•	 guarantees
-
-
-
-
•	 termination benefits
24
(8)
(1)
15
•	 other provisions
35
0
0
35
Other liabilities
-
(0)
0
0
Tax loss carryforwards (including tax credit 
carryforwards)
93
(5)
10
98
Net deferred tax assets
413
(44)
11
380
The column “Other” includes foreign currency translation differences, acquisitions, 
the impact of the remeasurement of the deferred tax balances relating to Pensions and other 
post-retirement benefits and the impact of the adoption of IFRS 16.
At December 31, 2019, the temporary differences associated with investments, including 
potential income tax consequences on dividends for which no deferred tax liabilities are 
recognized, aggregate to EUR 272 million (2018: EUR 262 million).
At December 31, 2019, net operating loss carryforwards expire as follows:
Expiry year operating loss carryforwards
Total
2020
2021
2022
2023
2024
After 2024  
but not  
unlimited
Unlimited
786
4
-
1
4
4
93
679
At December 31, 2019, the amount of operating loss and tax credit carryforwards for which no 
deferred tax assets have been recognized in the balance sheet was EUR 487 million (2018: 
EUR 456 million).
102
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11	
Acquisitions and divestments
Signify completed several acquisitions in 2019, being Once and iLOX, WiZ Connected and 
Zhejiang Klite Lighting Holdings Co., Ltd. (Klite).
The summary of the major classes of consideration transferred and the recognized 
provisional amounts of assets acquired, and liabilities assumed at the acquisition date for all 
acquisitions Signify made in 2019 are presented below, the majority coming from the 
acquisition of Klite:
Klite
Other
Total
Tangible assets
58
1
                  59 
Intangible assets
25
11
                  36 
Total non-current assets
83
12
                  95 
Trade and other receivables
101
2
                103 
Other current assets
26
1
                  27 
Cash and cash equivalents
81
0
                  81 
Total current assets
208
3
                211 
Total assets
291
15
                306 
Non-current liabilities
15
1
                  16 
Current liabilities
159
4
163
Total net assets acquired
117
10
                127 
Consideration, including deferred
                209 
Non-controlling interest
                  60 
Goodwill on acquisition (provisional)
                142 
Opening balance positions are subject to final purchase price adjustments, expected to be 
processed in the course of 2020. The main pending final purchase price adjustments concern 
Goodwill, Other Intangible assets, Rights to use assets and Deferred tax liabilities. The 
non-controlling interest was determined as the sum of the non-controlling interest’s 
proportional interest in the identifiable net assets acquired.
Goodwill is recognized in the amount of EUR 142 million which at the date of this report is 
treated as non-deductible for tax purposes and mostly represents expected synergies from 
combining operations.
Tax uncertainties due to permanent establishments
Signify may encounter tax uncertainties, due to permanent establishments in countries where 
new operations are started or business models are altered. This is because when operations 
in a country involve a foreign Signify organization, there is a risk that tax claims will arise in the 
former country as well as in the latter country.
When Signify has cross-border operations, there is a risk that tax claims will arise in all 
relevant countries.
With regard to these uncertainties, income tax payable is recognized when it is probable that 
additional taxes will be due. In addition, related to similar uncertainties, an indemnification 
liability to Royal Philips of EUR 55 million (2018: EUR 61 million) and an indemnification 
receivable of EUR 18 million (2018: EUR 18 million) is recorded. The total net liability decreased 
in 2019 by EUR 6 million mainly due to settlements and expirations.
10	 Earnings per share
2018
2019
Net income attributable to shareholders of Signify N.V.
263
262
Weighted average number of ordinary shares outstanding 
(after deduction of treasury shares) during the year
134,305,672
126,028,474
Plus incremental shares assumed from conversions of:
 
•	 Performance shares
20,128
986,802
•	 Conditional shares
301,500
563,335
•	 Restricted shares
44,299
47,788
Diluted weighted average number of ordinary shares 
outstanding (after deduction of treasury shares) during the 
year
134,671,599
127,626,399
Net income attributable to shareholders per ordinary share 
in EUR 
 
•	 Basic
1.95
2.08
•	 Diluted
1.95
2.06
103
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12	
Interests in entities
Interests in subsidiaries
Wholly owned subsidiaries
The Consolidated financial statements comprise the assets and liabilities of approximately 150 
legal entities. Set out below is a list of material subsidiaries, in alphabetical order, representing 
more than 5% of either the consolidated company sales, income from operations or net income 
(before any intra-company eliminations). All the entities are 100% owned.
Legal entity name
Principal country of business
Signify (China) Investment Co., Ltd.
China
Signify GmbH
Germany
Signify Holding B.V.
Netherlands
Signify Hong Kong Limited
Hong Kong
Signify Netherlands B.V.
Netherlands
Signify North America Corporation
United States of America
Signify Poland Sp. z.o.o.
Poland
Signify does not have subsidiaries that have non-controlling interests that are material for its 
Consolidated financial statements.
Investments in associates
Signify has investments in several associates, none of them are regarded as individually 
material. In aggregate, the carrying amount and the company’s share of profit and other 
comprehensive income of the associates are shown in the Consolidated balance sheets, 
Consolidated statement of income and Consolidated statement of comprehensive income. 
Acquisition of Klite
On July 26, 2019, Signify announced that it had entered into an agreement with Zhejiang Klite 
Lighting Holdings Co., Limited to acquire 51% in Zhejiang Klite Lighting Holdings Co., Ltd. 
(Klite). Klite is China-based company and is one of the leading providers of high-quality, 
cost-efficient LED lamps and luminaires. The transaction is expected to bring additional scale 
and innovation power to Klite Lighting, allowing it to generate further cost efficiencies and 
enhance its product development, including connected lighting offerings. This will strengthen 
Klite’s position to serve branded and private label customers with innovative and cost-
efficient products. The transaction was completed on October 1, 2019 as from which date 
Klite was consolidated within Signify. 
As from the acquisition date, Klite’s contribution to Signify’s sales and net income was not 
material. Would the acquisition have taken place on January 1, 2019, sales and net income for 
Signify would have been EUR 223 million and EUR 25 million respectively.
Signify is party to a contractual arrangement that gives it a right, in certain circumstances, 
to purchase the remaining non-controlling interest in Klite. As at balance sheet date, the fair 
value of this right is considered to be not material. 
No divestments, material for Signify, took place in 2019.
104
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13	
Property, plant and equipment
Land and 
buildings
Machinery 
and instal-
lations
Other 
equipment
Prepay-
ments and 
construc-
tion in 
progress
Total
Balance as at January 1, 2018
Cost
576
1,375
346
35
2,333
Accumulated depreciation / 
impairment
(339)
(1,225)
(277)
-
(1,841)
Book value
237
150
69
35
492
Change in book value:
Capital expenditure
2
2
10
47
60
Assets available for use
17
22
23
(63)
0
Acquisitions
-
-
-
1
1
Sales and disposals
(0)
(0)
(0)
(0)
(1)
Divestments and transfers to 
assets classified as held for sale
(4)
(2)
0
-
(6)
Depreciation
(27)
(43)
(35)
-
(104)
Impairment
(4)
(6)
(3)
(1)
(13)
Translation differences and other 
movements
(2)
3
1
0
2
Total changes
(17)
(24)
(3)
(16)
(60)
 
 
 
 
 
 
Balance as at December 31, 2018
 
 
 
 
 
Cost
564 
1,293 
353 
19 
2,230 
Accumulated depreciation / 
impairment
(344)
(1,167)
(287)
-
(1,798)
Book value
220 
126 
66 
19 
431 
Adoption of IFRS 16
209 
- 
12 
 2
222 
Land and 
buildings
Machinery 
and instal-
lations
Other 
equipment
Prepay-
ments and 
construc-
tion in 
progress
Total
Restated book value as at  
January 1, 2019
428
126
78
21
654
Change in book value:
Capital expenditure
36
4
17
42
99
Assets available for use
8
21
13
(43)
-
Acquisitions
40
15
-
4
59
Additions
83
41
30
4
158
  Of which right-of-use assets
39
-
9
-
48
Sales and disposals
(2)
(0)
(2)
(0)
(5)
Divestments and transfers to 
assets classified as held for sale
(4)
(0)
(1)
-
(6)
  Of which right-of-use assets
(2)
-
-
-
(2)
Depreciation
(77)
(37)
(39)
-
(154)
  Of which right-of-use assets
(52)
-
(10)
-
(62)
Impairment
(4)
(8)
(1)
-
(13)
  Of which right-of-use assets
(1)
-
(1)
-
(2)
Translation differences and other 
movements
9
1
1
(1)
9
  Of which right-of-use assets
6
-
-
-
6
Total changes
4
(4)
(12)
2
(10)
Balance as at December 31, 2019
Cost
859
1,334
393
23
2,609
Accumulated depreciation / 
impairment
(426)
(1,212)
(327)
0
(1,965)
Book value
432
122
66
23
644
  Of which right-of-use assets
198
(0)
11
2
210
The impairment losses were mainly driven by manufacturing footprint rationalization.
Additions of right-of-use assets include remeasurement originating from lease renewals 
which were not considered probable per implementation date. 
105
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14 	 Leases
The carrying amounts, depreciation and additions to right-of-use assets recognized are 
disclosed in note 13, Property, plant and equipment. The movements of the related Lease 
liability are disclosed in note 23, Debt.
The following are the amounts recognized in profit or loss and cash flow:
Note
2019
Interest expense on lease liability
8
(7)
Total cash outflow for leases
4, 8, 23
(99)
106
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15	
Intangible assets 
Goodwill
Customer  
relationship
Technology 
based
Brand names
Product  
development
Software
Other
Total
Balance as at January 1, 2018
Cost
2,381
1,142
339
331
167
27
12
4,399
Accumulated depreciation / impairment
(687)
(807)
(252)
(234)
(141)
(15)
(6)
(2,143)
Book value
1,694
335
87
97
26
12
6
2,256
Change in book value:
Additions
-
-
5
-
15
7
-
26
Amortization
-
(63)
(18)
(13)
(13)
(5)
(1)
(113)
Acquisitions
12
1
2
-
-
0
-
15
Impairment
-
-
-
-
(1)
(0)
-
(1)
Translation differences and other movements
65
10
2
3
0
(0)
0
80
Total changes
77
(52)
(10)
(9)
1
1
-
7
 
Balance as at December 31, 2018
Cost
2,475
1,176
355
339
152
31
12
4,540
Accumulated depreciation / impairment
(704)
(894)
(278)
(251)
(125)
(18)
(7)
(2,277)
Book value
1,771
282
77
88
27
13
5
2,264
Change in book value:
Additions
-
-
9
-
16
4
0
29
Amortization
-
(66)
(19)
(13)
(13)
(6)
(1)
(118)
Acquisitions
142
20
15
1
-
0
0
178
Impairment
-
-
-
-
(3)
(1)
-
(3)
Translation differences and other movements
29
6
0
1
0
0
(0)
36
Total changes
172
(40)
5
(11)
-
(2)
(1)
122
 
Balance as at December 31, 2019
Cost
2,651
1,212
375
343
163
36
11
4,791
Accumulated depreciation / impairment
(708)
(970)
(293)
(267)
(136)
(25)
(7)
(2,405)
Book value
1,943
242
82
77
28
11
4
2,386
107
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Goodwill
During the year ended December 31, 2019, a translation difference of EUR 31 million was mainly 
due to the change in the USD/EUR rate which impacted the goodwill denominated in USD.
For impairment testing, goodwill is allocated to cash-generating units, which represent the 
lowest level at which the goodwill is monitored internally for management purposes. 
The cash-generating units correspond to the operating segments.
Goodwill allocated to the cash-generating unit Professional is considered to be significant in 
comparison to the total book value of goodwill of Signify at December 31, 2018 and December 
31, 2019. The goodwill allocated to each of the cash-generating units as of December 31, 2018, 
and December 31, 2019, is presented below.
2018
2019
Lamps 
60 
62
LED 
80 
211
Professional 
1,534 
1,573
Home 
96 
96
Book value 
1,771 
1,943
The basis of the recoverable amount used of the cash-generating units is the value in use. 
In the annual impairment test performed in the fourth quarter of 2019, the estimated 
recoverable amount of the cash-generating units tested exceeded the carrying value of the 
units. Therefore, no impairment loss was recognized.
Key assumptions used in the impairment tests for the units were sales growth rates, EBITA and 
the rates used for discounting the projected cash flows. These cash flow projections were 
determined using management’s internal forecasts that cover an initial period from 2020 to 
2022 that matches the period used for our strategic process. Projections were extrapolated 
with declining growth rates for a period of five years, after which a terminal value was 
calculated. The sales growth rates and EBITA used to estimate cash flows are based on past 
performance, external market growth assumptions and industry long-term growth averages.
For Professional, EBITA is expected to increase over the projection period as a result of 
volume growth and cost efficiencies. Cash flow projections for 2019 and 2018 were based on 
the key assumptions included in the table below:
In %
Compound sales growth rate 1
Initial forecast 
period
Extrapolation 
period
Used to  
calculate  
terminal value 2
Pre-tax  
discount rates
Professional 2019
3.5
2.4
0.3
10.6
Professional 2018
4.7
3.4
2.7
10.6
1 	
Compound sales growth rate is the annualized steady growth rate over the forecast period.
2 	
In 2018, the historical long-term growth rate was only applied to the first year after the five-year 
extrapolation period, after which no further growth was assumed for the terminal value calculation. 
From 2019 onwards the long-term growth rate is applied to all residual periods. This change had no 
significant impact on the headroom.
The results of the annual impairment test of Professional have indicated that a reasonably 
possible change in key assumptions would not cause the value in use to fall to the level of the 
carrying value.
Other intangible assets
The additions for 2019 contain internally generated assets of EUR 15 million for product 
development, and EUR 3 million for software.
The capitalized product development costs and software, for which amortization has not yet 
commenced, amounted to EUR 15 million as of December 31, 2019 (December 31, 2018: EUR  
16 million). 
As of December 31, 2019, the carrying amount of the customer relationships originating from 
the Genlyte acquisition in 2007 was EUR 108 million (USD 121 million) with a remaining 
amortization period of 3.1 years (2018: EUR 144 million, USD 165 million; 4.1 years).
108
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16	
Objectives, policies and processes for managing capital
There were no major changes in Signify’s approach to capital management during the year. 
The company manages capital based upon the following measures: working capital, net debt 
and free cash flow. These measures are used by the company to evaluate the capital 
efficiency of its businesses and are managed via comparison with the target ranges set by 
management.
For the net debt analysis refer to note 23, Debt.
Free cash flows for the year ended December 31, 2019 and comparative information are 
presented below:
2018
2019
Cash flows from operating activities 1
381
599
Cash flows from investing activities
(90)
(145)
Cash flows before financing activities
291 
454
Cash flows from operating activities
381
599
Net capital expenditures:
•	 Additions of intangible assets
(26)
(29)
•	 Capital expenditures on property, plant and equipment
(57)
(58)
•	 Proceeds from disposal of property, plant and equipment
8
16
Free cash flows
306
529
1	
2019 includes a positive impact of EUR 71 million from IFRS 16 adoption. Refer to note 1, Basis of preparation.
Working capital position as at December 31, 2019 and comparative information are presented 
below: 
2018
2019
Inventories
878
874
Trade and other receivables
1,231
1,223
Trade and other payables 1
(1,507)
(1,684)
Other working capital items 2
(66)
(25)
Working capital 3
536
388
1	
Includes accrued liabilities which previously was on a separate line.
2	
Includes contract liabilities which was previously in trade and other payables.
3	
2019 includes EUR (35) million of Klite.
17	
Inventories
2018
2019
Raw materials
315
297
Work in progress 1
3
2
Finished goods 1
561
575
Total
878
874
1	
Prior year has been revised to conform to the current year presentation.
The write-down of inventories to net realizable value amounted to EUR 23 million for the year 
ended December 31, 2019 (2018: EUR 30 million). 
18	
Trade and other receivables
2018
2019
Trade receivables
1,167 
1,159
Other receivables
64 
64
Total receivables, net of value allowance 1
1,231 
1,223
1	
2019 includes EUR 69 million of Klite.
The aging of Trade receivables, representing current and overdue, net of loss allowance, 
was as follows:
2018
2019
Current
1,059 
1,076
Overdue 1-30 days
38 
25
Overdue 31-180 days
53 
44
Overdue >180 days
16 
14
Trade receivables, net
1,167 
1,159
109
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20	 Other assets
2018
2019
Prepayments
33 
38
Contract assets
37 
48
Other assets
 
95 
140
Total
165 
225
From which current
107 
161
From which non-current
58 
64
Other assets mainly include indirect taxes receivable or recoverable and indemnification 
balances resulting from the separation from Royal Philips and past business combination 
transactions.
Indemnification receivable of EUR 18 million (2018: EUR 18 million) included in Other assets mainly 
relates to the indemnification for tax liabilities arising from the separation from Royal Philips.
21	
Other liabilities
2018
2019
Contract liabilities
119
137
Other tax liabilities
62
60
Other liabilities
 
122
120
Total
303
317
From which current
179
183
From which non-current
125
135
Out of the total amount of EUR 119 million recognized in contract liabilities at the end of 2018 
(beginning of 2018: EUR 108 million), EUR 48 million has been recognized as revenue for the 
period ended December 31, 2019 (2018: EUR 44 million). The non-current portion of contract 
liabilities is recognized over time over the duration of the contract, generally beyond 1 and up 
to 15 years.
Other liabilities mainly relate to separation from Royal Philips. In 2016, as part of the 
agreement in relation to the separation from Royal Philips, indemnities and guarantees were 
provided by major subsidiaries of Signify to Royal Philips. Conversely, certain major 
subsidiaries of Royal Philips have provided guarantees to Signify. Indemnification payable of 
EUR 55 million (2018: 61 million) mainly relates to uncertain tax positions indemnified in the 
separation from Royal Philips.
The changes in loss allowance for accounts receivable are as follows:
2018
2019
Balance as at December 31
(85)
Adoption of IFRS 9
(16)
Balance as at January 1
(100)
(101)
Additions charged to expense
(19)
(4)
Reclassifications
0 
0
Utilizations
9 
7
Releases 
11 
0
Translation differences and other movements
(1)
(5)
Balance as at December 31
(101)
(103)
As per December 31, 2019, the loss allowance for accounts receivable included allowances for 
individually impaired receivables of EUR 89 million (2018: EUR 84 million).
19 	 Trade and other payables
2018
2019
Payables to suppliers
953 
1,047
Amounts payable to employees
168 
184
Customer rebates
163 
217
Marketing and sales related
69 
60
Materials and fixed assets related
60 
41
Other payables
94 
134
Trade and other payables 1
1,507 
1,684
1	
2019 includes EUR 174 million of Klite.
Other payables include deferred considerations for acquisitions of business (EUR 38 million), 
communication and IT related accruals, consultancy costs payable and other payables.
110
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The following table shows the share transactions to cover obligations arising from share-
based compensation plans (for further details refer to note 27, Share-based compensation):
 
2018
2019
Shares acquired
1,300,000
240,000
Average market price
 EUR 25.52
 EUR 25.64
Amount paid
 EUR 33 million
 EUR 6 million
Shares delivered
76,756
83,558
Average price (FIFO)
 EUR 31.71
 EUR 32.84
Cost of delivered shares
 EUR 2 million
 EUR 3 million
Total shares in treasury at year-end
2,249,165
2,405,607
Total cost
 EUR 65 million
 EUR 68 million
To reduce the share capital, the following transactions took place in 2018. There were no 
transactions in 2019.
 
2018
2019
Shares acquired
11,855,762
Average market price
 EUR 24.51
Amount paid
 EUR 291 million
Reduction of capital stock (shares)
14,655,762
Reduction of capital stock
 EUR 380 million
Total shares in treasury at year-end
0
Total cost
 EUR 0 million
22	 Equity
Share capital
The Company has an authorized share capital of EUR 6 million, divided into 300,000,000 
ordinary shares with a nominal value of EUR 0.01 per share and 300,000,000 preference 
shares with a nominal value of EUR 0.01 per share.
On December 31, 2019, the issued and fully paid share capital consisted of 128,344,238 
ordinary shares with a nominal value of EUR 0.01 per share (2018: 128,344,238).
As a defense measure, Stichting Continuïteit Signify, a foundation organized under the laws of 
the Netherlands, has been granted the right to acquire preference shares in the Company. 
As of December 31, 2019, this right had not been exercised therefore no preference shares 
have been issued. 
Dividend distribution
A proposal will be submitted to the 2020 Annual General Meeting of Shareholders to pay a 
dividend of EUR 1.35 per ordinary share, in cash, from the 2019 net income.
In May 2019, the Company settled a dividend of EUR 1.30 per ordinary share, representing a 
total value of EUR 164 million including costs.
Treasury shares 
The following table shows the movements in the outstanding number of shares over the last 
two years:
Number of shares
2018
2019
Balance as at January 1
139,174,079 
126,095,073
Purchase of treasury shares
(13,155,762)
(240,000)
Delivery of treasury shares
76,756 
83,558
Balance as at December 31
126,095,073 
125,938,631
111
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Limitations in the distribution of shareholders’ equity
As at December 31, 2019, pursuant to Dutch law, certain limitations existed relating to the 
distribution of shareholders’ equity of EUR 189 million. Such limitations relate to ordinary 
shares of EUR 1 million, legal reserves required by Dutch law of EUR 178 million, other reserves 
of EUR 3 million and unrealized gains related to currency translation differences of EUR 7 
million. The unrealized losses related to cash flow hedges of EUR 7 million, although qualifying 
as legal reserves, reduce the distributable amount by their nature.
The total distributable reserves as at December 31, 2019, amounted to EUR 1,993 million (2018: 
EUR 1,853 million).
The legal reserve required by Dutch law of EUR 178 million relates to any legal or economic 
restrictions on the ability of affiliated companies to transfer funds to the parent company in 
the form of dividends.
As at December 31, 2018, the limitations in distributable reserves were EUR 188 million related 
to ordinary shares of EUR 1 million, legal reserves required by Dutch law of EUR 184 million and 
other reserves of EUR 3 million. The unrealized losses related to currency translation 
differences of EUR 29 million and cash flow hedges of EUR 9 million, although qualifying as 
legal reserves, reduce the distributable amount by their nature.
23	 Debt
 
2018
2019
Facility (EUR)
737
740
Facility (USD)
437
446
Lease liabilities 1
18
252
Other debt
62
20
Subtotal
1,253
1,458
Bank overdrafts
12
7
Gross debt
1,265
1,465
Cash and cash equivalents
(676)
(847)
Net debt (cash)
589
618
Total equity
2,119
2,324
Net debt and total equity
2,709
2,942
Net debt divided by net debt and total equity (in %)
22%
21%
Total equity divided by net debt and total equity (in %)
78%
79%
1	
2019 includes impact from IFRS 16 adoption. Refer to note 1, Basis of preparation.
112
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Movements of debt were as follows:
 
Facility (EUR)
Facility (USD)
Lease liabilities
Other debt
Bank  
overdrafts
Total
Balance as at January 1, 2018
736
417
19
120
17
1,309
Financing cash flows:
•	 New borrowings
-
-
-
28
-
28
•	 Repayment
-
-
(7)
(80)
-
(87)
Translation difference
19
-
(3)
(1)
15
Other movements
1
1
6
(3)
(4)
-
Balance as at December 31, 2018
737
437 
18 
62
12
1,265
Balance as at January 1, 2019
737
437
18
62
12
1,265
Adoption of IFRS 16
-
-
259
-
-
259
Restated balance as at January 1, 2019
737
437
277
62
12
1,524
Financing cash flows:
•	 New borrowings
-
-
-
12
-
12
•	 Repayment
-
-
(73)
(54)
-
(127)
Translation difference
-
9
2
1
-
11
Other movements
3
1
46
-
(4)
45
Balance as at December 31, 2019
740
446
252
20
7
1,465
In May 2016, Signify entered into a five-year term loan facility agreement. The amounts of the 
term facility were EUR 740 million and USD 500 million. The term loan facility was repayable at 
the end of the term and could also be repaid without penalty at the option of Signify during 
the term. The Term Loan Facility beared interest at a variable rate based on the relevant 
applicable EURIBOR and LIBOR respectively with zero floor plus a margin. The margin was 
0.65% as of December 31, 2019 (2018: 0.65%) and was subject to semi-annual adjustment 
based on the level of the Net Leverage Ratio (term loan facility agreement of 2016).
These borrowings contained customary undertakings. The undertakings included, among 
others, a negative pledge that provided, subject to certain exceptions, that no member of 
Signify may grant security over its assets without the consent of the lenders, and a restriction 
on subsidiaries of the Company (other than the obligors) incurring additional financial 
indebtedness. There were also restrictions (subject to certain exceptions and thresholds) on 
engaging in acquisitions, disposals and reorganizations.
The Term and Revolving Credit Facilities Agreement also included a financial covenant which 
had been suspended as of year-end 2017. The facilities were guaranteed by the Company and 
certain subsidiaries of the Company incorporated in the Netherlands, the United States, 
Germany, the People’s Republic of China, Poland and Belgium.
The Company replaced the existing financing facility with a Term and Revolving Credit 
Facilities Agreement in January 2020. For further details please refer to note 30, Events after 
the balance sheet date. 
In November 2019, Signify entered into a USD 1.4 billion bridge loan facility agreement to 
finance the acquisition of Cooper Lighting Solutions. The initial maturity date of this facility is 
15 October 2020, which may be extended at the option of the issuer for two additional 
periods of six months each, providing that Signify maintains a Net Leverage Ratio (bridge loan 
facility agreement) of no greater than 3.50x. The Net Leverage Ratio (bridge loan facility 
agreement) may temporarily increase to 4.0x within 12 months of the closing of the Cooper 
Lighting Solutions acquisition or other material acquisitions. The covenant does not apply if 
the issuer has at least one investment grade rating. As of December 31, 2019 Signify did not 
have any amounts drawn under this facility. 
113
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24	 Provisions
Restruc-
turing- 
provisions
Environ-
mental 
Provisions
Product 
warranty
Other 
provisions
Total
Balance as at January 1, 2018
145
129
46
164
485
Additions
103
9
25
46
183
Utilizations
(139)
(19)
(29)
(36)
(223)
Reclassifications
0
0
-
(7)
(7)
Releases
(11)
(6)
(0)
(20)
(37)
Changes in discount rate
-
1
-
0
1
Accretion
-
1
-
2
3
Translation differences and other 
movements
1
0
(0)
0
1
Balance as at December 31, 2018
99
115
42
149
406
Short-term
81
20
25
42
168
Long-term
18
95
17
107
237
Balance as at January 1, 2019
99
115
42
149
406
Adoption of IFRS 16
-
-
-
(9)
(9)
Restated balance as at  
January 1, 2019
99
115
42
140
396
Additions
82
6
44
34
166
Utilizations
(97)
(15)
(45)
(32)
(188)
Reclassifications
2
(0)
-
(0)
1
Releases
(9)
(2)
(0)
(8)
(19)
Changes in discount rate
-
3
-
1
4
Accretion
-
1
-
1
2
Translation differences and other 
movements
0
1
0
1
2
Balance as at December 31, 2019
78
110
41
136
365
Short-term
61
21
25
41
149
Long-term
17
89
16
94
216
Restructuring
The provision for restructuring relates primarily to restructuring programs in Lamps, mainly in 
Belgium and the Netherlands. Signify expects the provision will be utilized mainly within next 
year. 
Environmental provision
The environmental provisions include accrued costs recorded with respect to environmental 
remediation in various countries. Provisions for environmental remediation can change 
significantly due to the emergence of additional information regarding the extent or nature of 
the contamination, the need to utilize alternative technologies, actions by regulatory 
authorities as well as changes in judgments and discount rates. The environmental provision is 
expected to be utilized mainly within the next five years.
Product warranty
The provision for product warranty reflects the estimated costs of replacement and free-of-
charge services that will be incurred by Signify with respect to products sold. Signify expects 
the provision will be mainly utilized within the next year.
Other
Other provisions mainly comprise of provisions for legal claims, self-insurance, 
decommissioning and provision for employee jubilee funds. Other provisions are expected to 
be utilized mainly within the next five years.
114
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25	 Post-employment benefits
Post-employment benefits covered in this note relate to defined-benefit pension and other 
post-retirement benefit plans, including defined-benefit retiree medical plans. The benefits 
provided by these plans are based on employees’ years of service and compensation levels. 
Employee post-employment defined-benefit plans have been established in several countries 
in accordance with the legal requirements, customs and local practice.
Net defined-benefit liabilities per country
 
2018
2019
Country
Obligation
Plan  
assets
Net  
liability
Obligation
Plan  
assets
Net  
liability
Germany
229
(15)
214
236
(15)
221
Unites States
599
(427)
172
625
(505)
120
Other countries
137
(49)
88
166
(70)
96
Total countries
965
(491)
474
1,027
(590)
437
United States
The defined-benefit qualified pension plan in the US covers certain hourly workers and 
salaried workers hired before January 1, 2005. The plan is closed for new entrants and since 
2016 no further benefit accruals are taking place. Employees only accrue benefits in a 
defined-contribution plan. The company pays the administration cost and contributions to 
cover the funding deficit of the qualified pension plan. The plan assets are governed by an 
Investment Committee. The company also has an unfunded non-qualified pension plan in place 
for higher salaried employees and a post-retirement welfare plan.
The company made contributions to the qualified pension plan of USD 20 million in 2019 as part 
of a three-year funding plan (2017-2019) to improve the funding level and to lower future 
interest expenses. The contribution was lower than the originally anticipated amount of USD 
50 million due to better than anticipated asset returns and gain on anticipated longevity. 
In 2020, the company will review whether a further contribution is needed. Signify expects in 
2020 cash outflows in relation to unfunded defined-benefit plans of EUR 8 million.
For the funding of the deficit of the US qualified pension plan the company adheres to the 
minimum funding requirements of the US Pension Protection Act.
Germany
For employees with a salary above a certain salary threshold, there is a funded defined-
benefit pension plan which has a deficit of EUR 7 million. This plan has been closed for new 
entrants since January 1, 2018. Since 2016, the company no longer makes any contributions to 
this plan but funds the liabilities when these are paid out to retirees. New employees accrue 
pension benefits through a defined-contribution plan. For other closed defined-benefit 
plans, the company has an unfunded liability of EUR 214 million as at December 31, 2019. 
For the unfunded plans, Signify expects cash outflows of EUR 18 million in 2020.
Cash outflows for the defined-benefit plans in countries other than the USA and Germany are 
expected to be in total EUR 12 million in 2020.
Risks related to defined-benefit plans
The defined-benefit plans expose the company to various demographic and economic risks, 
such as longevity, investment, currency and interest rate risks and, in some cases, inflation 
risk. The latter plays a role in the assumed wage increase and in some smaller plans where 
indexation is mandatory.
The larger plans are either governed by independent boards, committees or trustees who 
have a legal obligation to evenly balance the interests of all stakeholders and operate under 
the local regulatory frameworks. These boards and trustees are responsible for and have full 
discretion over the investment strategy of the plan assets, in general they manage pension 
fund risks by diversifying the investments of plan assets and by (partially) matching interest 
rate risk of liabilities.
The company has an active de-risking strategy in which it constantly looks for opportunities 
to reduce the risks associated with its defined-benefit plans.
115
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Movements of net defined-benefit liability
 
2018
2019
 
Obligation
Plan assets
Net liability
Obligation
Plan assets
Net liability
Balance as at January 1
1,036
(540)
496
965
(491)
474
Service cost
10
-
10
9
-
9
(Negative) past service cost
(5)
-
(5)
0
-
0
Admin expenses paid
-
1
1
-
1
1
Settlements
(1)
0
(1)
0
-
0
Recognized in employee benefit expenses
4
1
5
9
1
10
Interest (cost) / income
30
(17)
13
34
(20)
14
Included in Statement of income
34
(16)
18
43
(19)
24
Actuarial gains / (losses)
•	 Demographic assumptions
(1)
-
(1)
(23)
-
(23)
•	 Financial assumptions
(47)
58
11
118
(105)
13
•	 Experience adjustment
0
-
0
4
-
4
Exchange rate differences
25
(20)
5
14
(9)
5
Included in Statement of comprehensive income
(23)
38
15
113
(114)
(1)
Employee contributions
1
(1)
-
2
(2)
-
Employer contributions
-
(31)
(31)
-
(26)
(26)
Benefits paid
•	 Benefits paid directly by employer
(32)
-
(32)
(32)
-
(32)
•	 Benefits paid from plan assets
(58)
58
-
(61)
61
-
Reclassifications
7
1
8
(3)
1
(2)
Other
(82)
27
(55)
(94)
34
(60)
Balance as at December 31
965
(491)
474
1,027
(590)
437
Plan assets allocation
The asset allocation in the company’s pension plans at December 31 was as follows:
2018
2019
Debt securities
351 
401
Equity securities
76 
97
Other
64 
92
Total assets
491 
590
The assets in 2019 contain 14% unquoted assets. Plan assets in 2019 do not include property 
occupied by or financial instruments issued by the company.
Some 86% of the total plan assets of the Signify pension plan are in the US and are invested in 
a well-diversified portfolio. The interest rate sensitivity of the fixed income portfolio of the 
US qualified pension plan is closely aligned to that of the plan’s pension liabilities. 
The remaining 14% of the total plan assets is mainly the market value of insured pension 
benefits.
Assumptions
The mortality tables used for the company’s major schemes are:
•	 US: Base table PRI-2012 White Collar mortality table, projected forward with future 
mortality improvements according to Scale MP-2019.
•	 Germany: Richttafeln 2018 G K. Heubeck.
116
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For the US, compared to the mortality table used for the 2018 valuation, the new table used 
for the 2019 valuation shows a lower degree of longevity improvement.
The weighted averages of the assumptions used to calculate the defined-benefit obligation 
as of December 31 were as follows:
In %
2018
2019
Discount rate
3.5 
2.6
Pension cost increases
0.3 
0.4
Healthcare cost increases
0.5 
0.5
Wage increases
1.0 
0.5
The average duration of the defined-benefit obligation of the defined-benefit plans is 10.5 
years. For the defined-benefit plans in the US and Germany, the average duration is 
respectively 10.3 years and 10.1 years. The average discount rates for the plans in these 
countries are respectively 3.0% and 0.7%. The pension cost increase rate assumption for the 
German defined-benefit plans is 1.75%.
Sensitivity analysis
The table below illustrates the approximate impact on the defined-benefit obligation if the 
company were to change key assumptions. The defined-benefit obligation was recalculated 
using a change of 1% in the respective assumptions which overall is considered a reasonably 
possible change. The impact on the defined-benefit obligation of changes in discount rate is 
for funded plans normally accompanied by offsetting movements in plan assets, especially 
when using matching strategies.
 
2018
2019
Increase
 
Discount rate (1% movement)
(88)
(95)
Wage change (1% movement)
6 
7
Pension indexation change (1% movement)
23 
24
Longevity (see explanation)
30 
36
Healthcare cost change (1% movement)
8 
9
Decrease
 
Discount rate (1% movement)
100 
110
Wage change (1% movement)
(6)
(7)
Pension indexation change (1% movement)
(21)
(22)
Longevity also impacts the post-employment defined-benefit obligation. In the above 
sensitivity table, the impact on the defined-benefit obligation of a further 10% decrease in 
the assumed rates of mortality for the company’s major schemes is illustrated. A 10% 
decrease in assumed mortality rates equals improvement of life expectancy by six months to a 
year.
26	 Related party transactions
As from December 31, 2018 Royal Philips is no longer consider a related party since at this 
date, Mr. Abhijit Bhattacharya stepped down from the Supervisory Board of Signify and Royal 
Philips lost significant influence on Signify.
Signify considers the Board of Management and the Supervisory Board to be key management 
personnel as defined in IAS 24 ‘Related parties’. For remuneration details of Key Management, 
see note 28, Information on remuneration.
27	 Share-based compensation
Total share-based compensation costs for Signify for the period ended December 31, 
2019 were EUR 21 million (period ended December 31, 2018: EUR 29 million), of which  EUR 18 
million was related to the Signify LTI Plan (2018: EUR 20 million), and the remaining was related 
to the Royal Philips LTI Plan.
Signify Long-term Incentive Plan
Under the Signify Long-term Incentive Plan (LTI Plan), which is equity settled, eligible 
employees are granted both conditional shares and performance shares. Conditional shares 
have a three-year cliff vesting period and will vest if a grantee is still employed with the 
company at the vesting date.
Vesting of performance shares is conditional on the achievement of performance conditions 
measured over a period of three years. The performance condition measurement is based on 
three measures, Relative Total Shareholder Return (TSR) (40% of the shares), Free Cash Flow 
(FCF) (40% of the shares) and Sustainability (20% of the shares). In addition, vesting is 
conditional to the grantee still being employed with Signify at the vesting date.
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For the Board of Management and certain members of senior management, the LTI Plan 
consists of performance shares only. Shares are conditionally granted annually.
In addition to shares awarded under the Signify LTI Plan, Signify may in individual cases, 
such as in the hiring process of members of (senior-) management, also grant restricted 
shares. Restricted shares have either three-year cliff vesting period or vest gradually over 
the vesting period of one, two or three years.
At the end of 2017, Signify introduced a one-time special performance share award to a 
limited group of key employees below the level of the Board of Management. The purpose of 
this award is to focus these key leaders on achieving the company’s 2019 operational 
profitability objective. This award is equity settled.
Under the terms of the employee stock purchase plan (ESPP), employees are eligible to 
purchase a limited number of Signify shares at discounted prices through payroll 
withholdings.
Signify performance shares
The fair value of shares granted with the market performance condition of relative TSR is 
measured based on Monte Carlo simulation. The closing share price at grant date is adjusted 
for the present value of expected dividends during the vesting period, as participants are not 
compensated for Signify dividend payouts. Monte Carlo simulation takes into account market 
conditions expected to impact relative Total Shareholders’ Return performance in relation to 
selected peers and the following weighted-average assumptions:
Assumptions used in Monte-Carlo simulation for valuation in %
2019
Risk-free interest rate
(0.7)%
Expected share price volatility
30%
The assumptions were used for these calculations only and do not necessarily represent an 
indication of Signify management’s expectation of future developments for other purposes. 
Historic volatility was measured over the same timeframe as the simulation period (weighted 
average 2.6 years).
The amount calculated as an expense for TSR shares is not adjusted for actual performance.
FCF, Sustainability, and Profitability related measurements are non-market performance 
conditions. Fair value of shares granted under FCF, Sustainability, and Profitability objective 
conditions equals the closing share price on the grant date, adjusted for the present value of 
expected dividends during the vesting period.
The amount calculated as an expense for shares granted with a non-market performance 
condition is adjusted for actual performance.
A summary of Signify performance shares movements and outstanding balance as of 
December 31, 2019 and 2018, is presented below.
Signify performance shares
2018
2019
 
Shares
Weighted  
average  
grant-date  
fair value
Shares
Weighted  
average  
grant-date  
fair value
EUR-denominated
 
 
Balance as at January 1
830,343
36.05
1,778,120
26.73
Granted
1,219,112
21.35
846,821
24.70
Vested
(42,416)
37.54
(18,819)
34.17
Forfeited
(228,919)
29.87
(221,069)
25.04
Performance adjustment
-
-
(485,062)
22.16
Balance as at December 31
1,778,120
26.73
1,899,991
27.12
The performance adjustment originates from updates in the number of shares which are 
expected to vest in relation to the mentioned non-market performance conditions. 
On December 31, 2019, estimated unrecognized costs related to non-vested performance 
shares amounted to EUR 15 million. These costs are expected to be recognized over a 
weighted-average period of 1.8 years.
Signify conditional shares
Fair value of conditional shares is determined by subtracting the present value of expected 
dividends from the closing share price on the grant date as participants are not compensated 
for Signify dividend payouts.
A summary of Signify conditional shares movements and outstanding balance as of December 
31, 2019 and 2018, is presented below.
118
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Signify conditional shares
2018
2019
 
Shares
Weighted  
average  
grant-date  
fair value
Shares
Weighted  
average  
grant-date  
fair value
EUR-denominated
 
 
Balance as at January 1
339,188
29.21
536,785
25.46
Granted
285,080
21.63
328,940
21.85
Vested
(11,584)
28.89
(12,011)
27.24
Forfeited
(75,899)
27.36
(53,071)
23.95
Performance adjustment
-
-
-
-
Balance as at December 31
536,785
25.46
800,643
24.05
On December 31, 2019, estimated unrecognized costs related to non-vested conditional 
shares amounted to EUR 6 million. These costs are expected to be recognized over a 
weighted-average period of 1.7 years.
Signify restricted shares
Fair value of restricted shares is determined by subtracting the present value of expected 
dividends from the closing share price on the grant date as participants are not compensated 
for Signify dividend payouts.
In 2019, Signify granted 41,167 restricted shares with weighted average grant date fair value of 
EUR 22.49.
On December 31, 2019, estimated unrecognized costs related to non-vested restricted 
shares amounted to EUR 0.3 million. These costs are expected to be recognized over a 
weighted-average period of 0.7 years.
Royal Philips Long-term Incentive Plan
Until the settlement of the IPO in 2016, eligible employees of Signify as well as members of the 
Board of Management participated in grants made under the Royal Philips Long-term 
Incentive Plan. Those employees remained to participate in the Royal Philips LTI Plan, which 
was equity settled, until the shares from the last grant in 2016 vested in 2019. The expense for 
Signify, calculated and accounted for in accordance with IFRS 2, equals the recharge from 
Royal Philips to Signify. Signify is not charged for any additional costs upon delivery of shares. 
At the end of 2019 all expenses related to Royal LTI Plan were fully recognized in Consolidated 
Income statement. After the settlement of the IPO no new grants have been made or will be 
made by Royal Philips to employees of Signify.
28	 Information on remuneration
In 2019, the total remuneration costs relating to the members of Key Management amounted 
to EUR 6,589,964 (2018: EUR 5,948,463). 
Remuneration of the Board of Management
In 2019, the total remuneration costs relating to the members of the Board of Management 
amounted to 6,007,275 (2018: EUR 5,341,023).
Remuneration costs of Key Management - the Board of Management in EUR
2018
2019
Salary / Base compensation
1,961,000
2,010,000
Annual incentive 1
813,346
1,035,150
Long-term equity-based incentive 2
1,642,753
2,074,252
Pension allowances
635,933
639,546
Pension scheme costs
77,124
79,140
Other compensation 3, 4
210,867
169,187
Total costs
5,341,023
6,007,275
1 	
The  annual incentives are related to the performance in the year reported which are paid out in the 
subsequent year.
2 	
Costs of performance shares (Signify and Royal Philips) and restricted shares (Royal Philips only) are based 
on accounting standards (IFRS) and do not reflect the value of the shares at the vesting/release date.  Royal 
Philips restricted shares all vested prior to January 1, 2016. However, members of the Board of Management 
are entitled to receive premium shares if shares from restricted share rights release are kept  for another 3 
years. In 2018 E.H.E. Rondolat and C.L. van Schooten sold the Royal Philips premium shares they received. 
As a result, they do not hold any Royal Philips premium shares since.
3 	
The stated amounts mainly concern (share of) allowances to members of the Board of Management that can 
be considered as remuneration. In a situation where such a share of an allowance can be considered as 
(indirect) remuneration (for example, private use of the company car), then the share is both valued and 
accounted for here. The method employed by the fiscal authorities in the Netherlands is the starting point 
for the value stated.
4 	
Comparatives were revised to also include the housing allowance of EUR 94.288 for S.L.A. Rougeot that was 
accidentally not included in the table in Note 30 to the Consolidated financial statements for 2018.
For further information on remuneration costs, see chapter 9, Remuneration report, of this 
Annual Report.
Remuneration of the Supervisory Board
The remuneration of the members of the Supervisory Board amounted to EUR 582,689 (2018: 
EUR 607,440).
119
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Remuneration of Key Management - the Supervisory Board in EUR
2018 1
2019 1
Membership
429,375
420,000
Committees
115,565
113,500
Other compensation 2
62,500
49,189
Total costs
607,440
582,689
1 	
The amounts mentioned in this table are excluding VAT.
2 	
The amounts mentioned under other compensation relate to the fee for (inter-)continental travel.
29	 Financial risk management
Signify has exposure to the following risks from its use of financial instruments, as they arise 
in the normal course of business: interest rate risk, credit risk, liquidity risk, commodity price 
risk, currency and country risk. This note comprises the disclosures on Signify’s financial risk 
management objectives, policies and procedures to monitor and manage these risks.
The summary of all financial assets and liabilities, including their classification and 
measurement and fair value hierarchy is presented below:
Carried at
Gross amount 
recognized on 
the balance 
sheet
Amounts  
not offset on 
the balance 
sheet, but are 
subject to  
master netting  
arrangements
Net amount
Fair value  
hierarchy level
Estimated  
fair value 1
Balance as at December 31, 2018
 
 
 
 
 
 
Non-current financial assets
amortised cost
45
-
45
45
Unquoted equity shares
fair value (FVOCI)
2
-
2
3
2
Trade and other receivables
amortised cost
1,231
-
1,231
1,231
Derivative financial assets designated as hedging instruments
fair value (FVTPL)
28
(16)
12
2
28
Derivative financial assets not designated as hedging instruments
fair value (FVTPL)
2
-
2
3
2
Cash and cash equivalents
676
-
676
676
Debt
amortised cost
(1,265)
-
(1,265)
2
(1,265)
Derivative financial liabilities designated as hedging instruments
fair value (FVTPL)
(22)
16
(6)
2
(22)
Trade and other payables
amortised cost
(1,507)
-
(1,507)
(1,507)
Balance as at December 31, 2019
Non-current financial assets
amortised cost
44
-
44
44
Unquoted equity shares
fair value (FVOCI)
3
-
3
3
3
Trade and other receivables
amortised cost
1,223
-
1,223
1,223
Derivative financial assets designated as hedging instruments
fair value (FVTPL)
16
(14)
2
2
16
Derivative financial assets not designated as hedging instruments
fair value (FVTPL)
2
-
2
3
10
Cash and cash equivalents
847
- 
847
847
Debt
amortised cost
(1,465)
-
(1,465)
2
(1,465)
Derivative financial liabilities designated as hedging instruments
fair value (FVTPL)
(20)
14
(6)
2
(20)
Trade and other payables
amortised cost
(1,663)
-
(1,663)
(1,663)
Contingent consideration
fair value (FVTPL)
(21)
 -
(21)
3
(21)
1	
In view of the nature, maturity or the magnitude of the amounts, Signify considers that the fair value of non-current financial assets, trade and other receivables, debt, including bank overdrafts, trade and other payables are not 
materially different from their carrying value.
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The estimated fair value of financial instruments has been determined by Signify using 
available market information and appropriate valuation methods. The estimates presented are 
not necessarily indicative of the amounts that will ultimately be realized by Signify upon 
maturity or disposal. The use of market assumptions and/or estimation methods may have a 
material effect on the estimated fair value amounts.
The following hierarchy is applied to classify the financial assets and liabilities:
Level 1
Instruments included in Level 1 are comprised primarily of listed equity investments classified 
as financial assets at fair value via Other comprehensive income investees and financial assets 
designated at fair value through profit and loss. The fair value of financial instruments traded 
in active markets is based on quoted market prices at the balance sheet date. A market is 
regarded as active if quoted prices are readily and regularly available from an exchange, 
dealer, broker, industry group, pricing service, or regulatory agency, and those prices 
represent actual and regularly occurring market transactions on an arm’s length basis.
LeveI 2
The fair value of financial instruments that are not traded in an active market (for example, 
over-the-counter derivatives) are determined by using valuation techniques. These valuation 
techniques maximize the use of observable market data where it is available and rely as little 
as possible on entity specific estimates. If all significant inputs required to fair value an 
instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash 
flows based on observable interest yield curves, basis spread and foreign exchange rates. 
Please refer to note 2, Significant accounting policies, for further details.
LeveI 3
If one or more of the significant inputs are not based on observable market data, 
the instrument is included in Level 3.
During 2019 and 2018 under Level 3, no material fair value changes were recorded in 
Consolidated statement of comprehensive income.
Interest rate risk
Interest rate risk is the risk of the fair value or future cash flows of a financial instrument 
fluctuating because of changes in the market interest rates. Financial instruments included in 
the debt position create an inherent interest rate risk. Failure to effectively hedge this risk 
could negatively impact financial results.
Signify monitors interest rate coverage, short-term and long-term interest rate 
developments and has the flexibility to opt for different short-term interest periods for the 
debt instruments at roll-over dates and/or could enter into derivative financial instruments to 
fix interest rates for a certain period of time. As of December 31, 2019, Signify had a ratio of 
fixed-rate debt to total outstanding debt of approximately 17% (2018: 1%). Higher ratio in 2019 
was mainly attributable to IFRS 16 adoption impact.
A sensitivity analysis conducted in January 2020 shows that if interest rates were to increase 
instantaneously by 1% from their level of December 31, 2019, with all other variables held 
constant, the annualized net interest expense would remain unchanged. This impact was 
based on the outstanding net floating debt position as of December 31, 2019.
Liquidity risk
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations 
associated with financial liabilities.
Liquidity risk for the company is monitored through the Treasury Risk Committee which tracks 
the development of the actual cash flow position for the company and uses input from a 
number of sources in order to forecast the overall liquidity position.
The table below analyzes Signify’s financial liabilities into relevant maturity groupings based on 
their contractual maturities. The amounts disclosed in the table are the contractual 
undiscounted cash flows. Balances due within 12 months equal their carrying balances as the 
impact of discounting is not significant. Interest on Long-term debt is based on floating rate 
adjustments according to market expectations. 
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Payments due by period 1
Total
Less than 
1 year
Between  
1 and 5 
years
Over 5 
years
Debt, including bank overdrafts
1,213
27
1,186
0
Interest on debt 2
29
22
7
0
Trade and other payables
1,644
1,644
0
0
Lease liability
252
70
139
43
Derivative liabilities
20
19
1
0
Deferred considerations
40
38
2
0
Off-balance sheet commitments
195
32
130
33
Purchase obligations
62
27
35
0
Contractual cash obligations
3,454
1,879
1,500
76
Revolving credit facility (RCF)
500
Bridge facility
1,249
1	
Obligations in this table are undiscounted.
2	
Interest on Long-term debt is based on floating rate adjustments according to market expectations.
Signify invests surplus cash primarily in money market deposits with investment graded 
financial institutions, and with maturities up to three months, to ensure sufficient liquidity is 
available to meet liabilities when due.
Signify has various sources to mitigate the liquidity risk for the company. Signify pools cash 
from subsidiaries to the extent legally and economically feasible; cash not pooled remains 
available for operational or investment needs by the company. The table below shows details 
of cash and cash equivalents and bank overdrafts as of the reporting date:
2018
2019
Cash at banks and in hand
302
423
Short-term deposits
336
394
Other cash equivalents
38
30
Cash and cash equivalents
676
847
Bank overdrafts
(12)
(7)
Cash and cash equivalents and bank overdrafts
664
840
As announced in October 2019, Signify intends to acquire Cooper Lighting Solutions from 
Eaton Corporation PLC for a cash consideration of USD 1.4 billion (approx. EUR 1,270 million) on 
a cash and debt-free basis. The closing of the transaction is still subject to regulatory 
approvals and other customary conditions and is expected to take place in the first quarter of 
2020. The acquisition is expected to be fully financed with debt, with committed bridge 
financing arranged. In case the transaction will not go through, the seller is entitled to receive 
a termination fee under certain conditions. 
Signify has a EUR 500 million revolving credit facility that can be used for general purposes 
and USD 1.4 billion bridge facility dedicated solely for the mentioned acquisition of Cooper 
Lighting Solutions. As of December 31, 2019, Signify did not have any amounts drawn under 
either facility. 
Currency risk
Currency risk is the risk that reported financial performance, or the fair value or future cash 
flows of a financial instrument, will fluctuate because of changes in foreign exchange rates. 
Signify operates in many countries and currencies and therefore currency fluctuations may 
inevitably impact its financial results. The company is exposed to currency risk in the following 
areas:
•	 Transaction exposures related to anticipated sales and purchases and on-balance-sheet 
receivables/payables resulting from such transactions.
•	 Financing exposure arising from foreign currency intercompany and external debt and 
deposits.
•	 Translation exposure of net income in foreign entities.
•	 Translation exposure of foreign currency denominated equity invested in consolidated 
companies.
•	 Translation exposure to equity interests in non-functional-currency investments in 
associates and financial assets at fair value.
It is Signify’s policy to reduce the volatility caused by foreign currency movements on its net 
earnings by hedging the anticipated net exposure of foreign currencies resulting from foreign 
currency sales and purchases. In general, net anticipated exposures are hedged during a 
period of 15 months in layers of 20% up to a hedge ratio of 80%, using derivatives.
Signify’s policy requires significant committed foreign currency exposures to be fully hedged, 
generally using forwards. However, not every foreign currency can or shall be hedged as 
there may be regulatory barriers or prohibitive hedging cost preventing Signify from 
effectively and/or efficiently hedging its currency exposures. As a result, hedging activities 
cannot and will not eliminate all currency risks for anticipated and committed transaction 
exposures.
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Foreign exchange exposure also arises from intercompany loans and deposits. Where Signify 
enters into such arrangements the financing is generally provided in the functional currency 
of the subsidiary. The currency of Signify’s external funding and liquid assets is matched with 
the required financing of subsidiaries either directly through external foreign currency loans 
and deposits or synthetically by using foreign exchange derivatives. In certain cases, where 
Signify subsidiaries may also have external foreign currency debt or liquid assets, these 
exposures are also hedged using foreign exchange derivatives.
Signify does not currently hedge the foreign exchange exposure arising from equity interests 
measured at fair value through Other comprehensive income and in non-functional currency 
investments in associates.
Commodity price risk
Commodity price risk is the risk that the fair value or future cash flows of a financial 
instrument will fluctuate because of changes in commodity prices.
Signify is a purchaser of certain base metals, precious metals and energy. Signify could hedge 
certain commodity price risks using derivative instruments to minimize significant, 
unanticipated earnings fluctuations caused by commodity price volatility. As of December 31, 
2019, Signify had EUR 2 million of commodity derivatives recognized in the Statement of 
financial position (2018: EUR 2 million).
Change of the commodity price for 10% will lead to the commodity derivatives value change of 
EUR 5 million.
Credit risk
Credit risk represents the loss that would be recognized at the reporting date, 
if counterparties failed completely to perform their payment obligations as contracted. 
Credit risk is present within Signify trade and other receivables and contract assets. To have 
better insights into the credit exposures, Signify performs ongoing evaluations of the 
financial and non-financial condition of its customers and adjusts credit limits when 
appropriate. In instances where the creditworthiness of a customer is determined not to be 
sufficient to grant the credit limit required, there are a number of mitigation tools that can be 
utilized to close the gap, including reducing payment terms, cash on delivery, prepayments 
and pledges on assets.
Signify invests available cash and cash equivalents and enters into financial derivative 
instruments with various financial institutions and is exposed to credit risk with these 
counterparties. Signify does not enter into any financial derivative instruments to protect 
against default by financial institutions.
The following table outlines the estimated nominal value in millions of EUR for transaction 
exposure and related hedges for Signify’s most significant currency exposures:
Receivables / Sales 
Payables / Purchases
 
 Exposure 
 Hedges 
 Exposure 
 Hedges 
Balance as at December 31 
Exposure currency 
CNY
46
(40)
(1,324)
838
USD
319
(238)
(480)
336
GBP
163
(97)
(14)
8
SEK
65
(37)
(1)
—
EUR 1
90
(90)
(25)
25
CHF
57
(33)
(2)
2
AUD
52
(30)
(6)
5
NOK
41
(22)
—
—
SGD
39
(22)
(2)
1
NZD
34
(20)
(7)
5
RON
30
(16)
—
—
CZK
27
(16)
(3)
2
Others
24
(24)
(37)
37
Total 2019
986
(685)
(1,901)
1,258
Total 2018
801
(526)
(1,976)
1,151
1	
EUR exposures in non EUR denominated functional currencies.
As of December 31, 2019, a loss of EUR 8 million was deferred in equity as a result of these 
hedges (2018: loss of EUR 10 million). The result deferred in equity will be released to earnings 
mostly during 2020 at the time when the related hedged transaction affects the Consolidated 
statement of income. During 2019, EUR nil million (2018: EUR nil million) was recorded within 
cost of goods sold in the Consolidated statement of income as a result of ineffectiveness on 
certain anticipated cash flow hedges.
The total net fair value of hedges related to transaction exposure as of December 31, 
2019 was an unrealized liability of EUR 5 million (2018: asset EUR 3 million). An instantaneous 
10% increase in the value of the euro against all currencies, with all other variables held 
constant, would lead to a decrease of EUR 53 million in the value of the derivatives. 
This decrease includes a loss of EUR 17 million that would impact the income statement, which 
would largely offset the opposite revaluation effect on the underlying accounts receivable 
and payable, and the remaining loss of EUR 36 million would be recognized in equity to the 
extent that the cash flow hedges were effective.
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Where possible, Signify requires all financial institutions to complete legally enforceable 
netting agreements under an International Swap Dealers Association master agreement or 
otherwise prior to trading, and whenever possible, to have a solid credit rating from generally 
accepted rating agencies. Signify also regularly monitors the development of the credit risk 
of its financial counterparties.
As of December 31, 2019, the company held 63% of cash at banks and at hand and short-term 
deposits in ‘A-’ or stronger rated banks based on Standard and Poor’s rating (2018: 72%).
Maximum credit risk exposure for Signify equals carrying amounts of all financial assets 
recognized in the Statement of financial position plus off-balance sheet guarantees provided. 
Country risk
Country risk is the risk that political, legal, or economic developments in a single country 
could adversely impact our performance. The country risk per country is defined as the sum 
of the equity of all subsidiaries and associated companies in country cross-border 
transactions, such as intercompany loans, accounts receivable from third parties and 
intercompany accounts receivable.
As of December 31, 2019, Signify had country risk exposure of EUR 1.5 billion in the United 
States, EUR 1.1 billion in the Netherlands and EUR 543 million in China (including Hong Kong). 
Countries where the risk exceeds EUR 200 million but was less than EUR 500 million are 
Belgium (EUR 481 million), Poland (EUR 411 million), and Saudi Arabia (EUR 236 million). Countries 
where the risk exceeded EUR 50 million but was less than EUR 200 million are Spain, Mexico, 
Canada, France and India. The degree of risk of a country is taken into account when new 
investments are considered. Signify does not, however, use financial derivative instruments to 
hedge country risk.
The impending withdrawal of the United Kingdom from the European Union (Brexit) generates 
uncertainty. For Signify the most considerable impact of Brexit and country risk in general 
comes in the form of foreign exchange volatility risk embedded in operational results and 
consequently landing in hedging strategies through changes in the forecasts.
30	 Events after the balance sheet date
In January 2020, Signify replaced its existing term loan debt of EUR 740 million and USD 500 
million with a new term loan structure consisting of EUR 400 million and USD 275 million with a 
maturity of three years (January 2023) and EUR 340 million and USD 225 million with a maturity 
of five years (January 2025). The existing EUR 500 million revolving credit facility (RCF) was 
refinanced for the same amount with a five-year maturity plus two one-year extension 
options. The new term loans and RCF agreement includes a financial covenant providing that 
Signify maintains a net leverage ratio of no greater than 3.5x. The net leverage ratio may 
temporarily increase to 4.0x within 12 months of the closing of the Cooper Lighting Solutions 
acquisition or other material acquisitions. The covenant does not apply if the company has at 
least one investment grade rating.
No other subsequent events occurred that are material to Signify.
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15	 Signify N.V. 
financial 
statements
Introduction
Statutory financial statements
The sections Consolidated financial statements and Signify N.V. financial statements contain 
the statutory financial statements of Signify N.V. (the ‘Company’).
A description of the activities of the Company, its subsidiaries and Company structure are 
included in the Consolidated financial statements. The corporate seat of the Company is in 
Eindhoven, the Netherlands, and its registered office is at High Tech Campus 48, 5656 AE 
Eindhoven. Signify N.V. is registered in the Commercial Register of the Chamber of Commerce 
under number 65220692.
A list of all Signify N.V. subsidiaries and affiliated companies, prepared in accordance with the 
relevant legal requirements (Dutch Civil Code, Book 2, Sections 379 and 414), forms part of 
the notes to the statutory financial statements and is deposited at the Chamber of 
Commerce in Eindhoven, the Netherlands.
The Company, incorporated as a private limited liability company on February 1, 2016, 
was converted into a public company with limited liability on May 31, 2016. On May 15, 2018, 
the Company changed its name from Philips Lighting N.V. to Signify N.V.
Accounting policies applied
The financial statements of the Company included in this section are prepared in accordance 
with Part 9 of Book 2 of the Dutch Civil Code. Section 362 (8), Book 2, Dutch Civil Code, allows 
companies that apply the International Financial Reporting Standards (IFRS) as endorsed by 
the European Union, in their consolidated financial statements to use the same measurement 
principles in their company financial statements. The Company has prepared these Company 
financial statements using this provision.
The accounting policies are described in note 2, Significant accounting policies, of the 
Consolidated financial statements and are deemed incorporated and repeated herein by 
reference. The implementation of IFRS 16 had no impact on the Company financial statements. 
Investments in subsidiaries in the Company financial statements are accounted for using the 
equity method.
The Statement of financial position included in these Company financial statements has been 
prepared before the appropriation of result.
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Note
2018
2019
Non-current assets
Financial assets
C
3,737
2,375
Total non-current assets
3,737
2,375
Current assets
 
Other assets
-
1
Trade and other receivables
1
-
Total current assets
1
1
Total assets
3,738
2,376
Shareholders’ equity
D
Share capital
1
1
Share premium
2,179
2,195
Legal reserve: currency translation differences
(29)
7
Legal reserve: cash flow hedges
(9)
(7)
Legal reserve: other
187
181
Other reserve: treasury shares 
(65)
(68)
Other reserve: retained earnings
(486)
(390)
Net income
263
262
Total shareholders’ equity
2,041 
2,181
Non-current liabilities
Debt
E
740 
- 
Total non-current liabilities
740 
- 
Current liabilities
Debt
E
939
178
Other liabilities
17
17
Total current liabilities
956
195
Total liabilities and shareholders’ equity
3,738
2,376
15.1	
Statement of 
financial 
position 
before 
appropriation 
of results
Statement of financial position before 
appropriation of results in millions of EUR
As at December 31
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Note
2018
2019
Other expenses
(1)
(3)
Financial expenses
(5)
(1)
Share in results of subsidiaries
268
266
Net income
A
263
262
15.2	 Statement of 
income 
Statement of income in millions of EUR
For the years ended December 31
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Legal reserves
Other reserves
Share 
capital
Share  
premium
Currency 
translation 
differ­
ences
Cash flow 
hedges
Other
Treasury 
shares
Retained 
earnings
Net  
income
Total 
share-
holders’ 
equity
Balance as at January 1, 2018
1 
1,975
(87)
1
187
(124)
(17)
294
2,231
Appropriation of prior year result
- 
-
-
-
-
-
294
(294)
-
Net income
- 
-
-
-
-
-
-
263
263
Net current period change
- 
-
58
(10)
-
-
(9)
-
39
Legal reserves reclassifications
- 
187
-
-
(1)
-
(187)
-
-
Dividend distributed
- 
-
-
-
-
-
(171)
-
(171)
Purchase of treasury shares
-
-
-
-
-
(324)
(15)
-
(339)
Cancellation of treasury shares
(0)
-
-
-
-
380
(380)
-
-
Delivery of treasury shares
- 
(2)
-
-
-
2
(0)
-
-
Share-based compensation plans
- 
20
-
-
-
-
-
-
20
Funding by (distribution to) Royal Philips
- 
(1)
-
-
-
-
-
-
(1)
Balance as at December 31, 2018
1 
2,179
(29)
(9)
187
(65)
(486)
263
2,041
Balance as at January 1, 2019
1 
2,179
(29)
(9)
187
(65)
(486)
263
2,041
Adoption of IFRS 16 (net of tax) 1
-
-
-
-
-
-
(12)
-
(12)
Restated balance as at January 1, 2019
1 
2,179
(29)
(9)
187
(65)
(497)
263
2,030
Appropriation of prior year result
- 
-
-
-
-
-
263
(263)
-
Net income
- 
-
-
-
-
-
-
262
262
Net current period change
- 
-
35
2
-
-
4
-
41
Legal reserves reclassifications
- 
-
-
-
(6)
-
6
-
-
Dividend distributed
- 
-
-
-
-
-
(164)
-
(164)
Purchase of treasury shares
- 
-
-
-
-
(6)
(0)
-
(6)
Delivery of treasury shares
-
(2)
-
-
-
3
(1)
-
-
Share-based compensation plans
- 
18
-
-
-
-
-
-
18
Balance as at December 31, 2019
1 
2,195
7
(7)
181
(68)
(390)
262
2,181
1	
Refer to note 1, Basis of preparation.
15.3	 Statement 
of changes 
in equity
Statements of changes in equity  
in millions of EUR
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C	
Financial assets
The Company has one directly owned subsidiary, Signify Holding B.V. This investment is 
presented as a financial asset in the Statement of financial position using the equity method. 
Goodwill paid upon acquisition of investments in subsidiaries is included in the net equity value 
of the investment and is not shown separately on the face of the Statement of financial 
position.
2018
2019
Balance as at January 1
3,458
3,737
Dividend received
(38)
(1,677)
Share in results of subsidiaries
268
266
Translation differences
58
35
Other movements
(11)
14
Balance as at December 31
3,737
2,375
15.4	 Notes to the Company financial 
statements
In millions of EUR unless otherwise stated
A	
Statement of income
Share in results of subsidiaries represents the share of the Company in the results of its 
affiliated companies. Other expenses mainly relate to the remuneration of the directors of 
the Company and the supervisory board. These costs are partly recharged to the subsidiaries 
of the Company. Financial expenses mostly relate to the interest paid on the intercompany 
loan with Signify Holding B.V. until its settlement in February 2019.
B	
Audit fees
A summary of Audit fees from Ernst & Young Accountants LLP is shown below.
2018
2019
Audit fees 1
5.2 
5.4 
•	 consolidated financial statements
3.3 
3.2 
•	 statutory financial statements
1.8 
2.2 
Audit-related fees
0.4 
0.4
•	 sustainability assurance
0.3 
0.3 
•	 other
0.1
0.1
Total 2
5.6 
5.8
1	
The audit fees included in 2019 represent the fees in relation to the audit of the 2019 financial statements.
2	
Fees charged by the Dutch organization of EY were EUR 2.6 million (2018: 2.4 million).
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The following table shows the share transactions to cover obligations arising from share-
based compensation plans (for further details refer to note 27, Share-based compensation):
2018
2019
Shares acquired
1,300,000
240,000
Average market price
 EUR 25.52
 EUR 25.64
Amount paid
 EUR 33 million
 EUR 6 million
Shares delivered
76,756
83,558
Average price (FIFO)
 EUR  31.71
 EUR  32.84
Cost of delivered shares
 EUR 2 million
 EUR 3 million
Total shares in treasury at year-end
2,249,165
2,405,607
Total cost
 EUR 65 million
 EUR 68 million
To reduce the share capital, the following transactions took place in 2018. There were no 
transactions in 2019.
2018 
2019 
Shares acquired
11,855,762
Average market price
 EUR 24.51
Amount paid
 EUR  291 million
Reduction of capital stock (shares)
14,655,762
Reduction of capital stock
 EUR 380 million
Total shares in treasury at year-end
0
Total cost
 EUR 0 million
Legal reserves
As of December 31, 2019, legal reserves related to unrealized gains in currency translation of 
EUR 7 million, unrealized losses related to cash flow hedges of EUR 7 million and included in 
other, the ‘affiliated companies’ reserve of EUR 178 million and other reserves of EUR 3 million.
The item ‘affiliated companies’ reserve relates to the ‘wettelijke reserve deelnemingen’, which 
is required by Dutch law. This reserve relates to any legal or economic restrictions on the 
ability of affiliated companies to transfer funds to the parent company in the form of 
dividends.
As of December 31, 2018, legal reserves related to unrealized losses in currency translation of 
EUR 29 million, unrealized losses related to cash flow hedges of EUR 9 million and included in 
other, the ‘affiliated companies’ reserve of EUR 184 million and other reserves of EUR 3 million.
D	
Shareholders’ equity
Share capital
The Company has an authorized share capital of EUR 6 million, divided into 300,000,000 
ordinary shares with a nominal value of EUR 0.01 per share and 300,000,000 preference 
shares with a nominal value of EUR 0.01 per share.
On December 31, 2019, the issued and fully paid share capital consisted of 128,344,238 
ordinary shares with a nominal value of EUR 0.01 per share (2018: 128,344,238). 
As a defense measure, Stichting Continuïteit Signify, a foundation organized under the laws of 
the Netherlands, has been granted the right to acquire preference shares in the Company. 
As of December 31, 2019, this right had not been exercised therefore no preference shares 
have been issued. 
Dividend distribution
A proposal will be submitted to the 2020 Annual General Meeting of Shareholders to pay a 
dividend of EUR 1.35 per ordinary share, in cash, from the 2019 net income.
In May 2019, the Company settled a dividend of EUR 1.30 per ordinary share, representing a 
total value of EUR 164 million including costs.
Treasury shares
The following table shows the movements in the outstanding number of shares over the last 
two years:
Number of shares
2018
2019
Balance as at January 1
139,174,079
126,095,073
Purchase of treasury shares
(13,155,762)
(240,000)
Delivery of treasury shares
76,756
83,558
Balance as at December 31
126,095,073
125,938,631
130
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Corporate statements

G	
Contingent liabilities not appearing in the balance sheet
General guarantees as referred to in Section 403, Book 2, of the Dutch Civil Code, have been 
given by the Company on behalf of other group companies in the Netherlands. The liabilities of 
these companies to third parties amounted to EUR 1,211 million as of December 31, 2019, (2018: 
EUR 1,085 million).
There have been no other general guarantees or credit guarantees given on behalf of 
unconsolidated companies and third-parties.
For corporate income tax purposes, the Company is the parent of a fiscal unity that contains 
the most significant Dutch wholly-owned group companies. The Company is therefore jointly 
and severally liable for the corporate income tax liabilities of the tax unity.
H	
Events after the balance sheet date
For the disclosure of events after the balance sheet date, reference is made to note 30, 
Events after the balance sheet date which is deemed incorporated and repeated herein by 
reference.
On February 25, 2020, the Board of Management authorized the statutory financial 
statements for issue. The statutory financial statements as presented in this report are 
subject to the adoption by the Annual General Meeting of Shareholders, to be held on  
May 19, 2020.
February 25, 2020
Board of Management
Eric Rondolat
Stéphane Rougeot
René van Schooten
Supervisory Board
Arthur van der Poel
Gerard van de Aast
Eelco Blok
Rita Lane
Jill Lee
Limitations in the distribution of shareholders’ equity
As at December 31, 2019, pursuant to Dutch law, certain limitations existed relating to the 
distribution of shareholders’ equity of EUR 189 million. Such limitations relate to ordinary 
shares of EUR 1 million, legal reserves required by Dutch law of EUR 178 million, other reserves 
of EUR 3 million and unrealized gains related to currency translation differences of  
EUR 7 million.  The unrealized losses related to cash flow hedges of EUR 7 million, although 
qualifying as legal reserves, reduce the distributable amount by their nature.
The total distributable reserves as at December 31, 2019, amounted to EUR 1,993 million (2018: 
EUR 1,853 million).
As at December 31, 2018, the limitations in distributable reserves were EUR 188 million related 
to ordinary shares of EUR 1 million, legal reserves required by Dutch law of EUR 184 million and 
other reserves of EUR 3 million. The unrealized losses related to currency translation 
differences of EUR 29 million and cash flow hedges of EUR 9 million, although qualifying as 
legal reserves, reduce the distributable amount by their nature.
E	
Debt
In February 2019, upon receiving a dividend from its subsidiary, the Company immediately 
settled its intercompany loan of EUR 740 million and an amount of EUR 937 million included in 
current debt.
As per December 31, 2019 current debt related to other debt to subsidiaries was EUR 178 
million (2018: EUR 939 million).
F	
Employees
The number of persons employed by the Company at year-end 2019 was three (2018: three); 
all were employed in the Netherlands. For the remuneration of past and present members of 
both the Board of Management and the Supervisory Board, please refer to note 28, 
Information on remuneration, which is deemed incorporated and repeated herein by 
reference.
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16	 Sustainability 
statements
16.1	
Approach to 
sustainability 
reporting
Sustainability is central to our company 
strategy and purpose. We strive to balance 
financial, environmental and social 
considerations and maximize long-term 
value creation along these three 
dimensions.
We have made our approach towards 
long-term value creation transparent by 
preparing this Annual Report with key 
elements of the International Integrated 
Reporting Council’s (IIRC) Integrated 
Reporting framework and reporting in 
accordance with the GRI Sustainability 
Reporting Standards.
At the core of our reporting approach is the 
value creation model. This model shows how 
our business activities depend on various 
financial, environmental, and social 
resources that are converted to outputs. 
Our activities and their outputs lead to 
outcomes in terms of the impact made on 
our stakeholders and society at large. Since 
2017, Signify communicates its impacts in 
monetary terms, enabling more effective 
and efficient decision making and giving a 
holistic view on our most prominent risks 
and opportunities. It also provides further 
transparency to our stakeholders on 
company performance. By publishing the 
results of our analysis and being transparent 
on the methodology, we strive to contribute 
to developing a global standard for impact 
analysis.
As part of our continuing commitment to the 
United Nations Sustainable Development 
Goals (SDGs), we report on our contribution 
to six SDGs: 3 - Good health and wellbeing;  
7 - Affordable and clean energy; 8 - Decent 
work and economic growth; 11 - Sustainable 
cities and communities; 12 - Responsible 
consumption and production; and 13 - 
Climate action. These SDGs link directly to 
our purpose to create brighter lives and a 
better world.
Our external auditor Ernst & Young 
Accountants LLP (EY) has provided 
reasonable (highest level) assurance on our 
sustainability performance and sustainability 
statements in this Integrated Annual Report. 
Signify is a frontrunner in this field. To read 
the combined assurance statement, please 
refer to chapter 17, Combined independent 
auditor’s report, of this Annual Report.
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stakeholders about our activities, 
the measures taken and the results.
Stakeholders considered most relevant to 
our success include customers, employees, 
investors, suppliers, governments, and civil 
society organizations. These stakeholders 
16.1.1	
Definition of Signify’s 
strategic focus: our 
materiality assessment 
Our materiality assessment is the first step 
towards defining our strategy. By identifying 
future trends and understanding 
stakeholders’ perspectives at a global and 
local level, we are better able to manage the 
risks and opportunities that could impact 
our ability to create value over the long term.
We evaluate materiality along two axes. 
The vertical axis captures the importance of 
each topic for external and internal 
stakeholders. The horizontal axis captures 
our company’s significant economic, 
environmental, and social impacts, 
both positive and negative. Assessing both 
aspects enables us to prioritize and focus 
on the most relevant issues in terms of our 
efforts as well as reporting progress in this 
Annual Report. Our materiality assessment 
was conducted using the GRI Standards’ 
principles for defining report content. 
Continuous stakeholder 
engagement 
Through dialogue with key stakeholders, 
we have gained significant insights into how 
to create value and anticipate risks. 
Accordingly, we are better equipped to 
understand society’s needs and translate 
them into our company strategy and goals. 
Working closely with key stakeholders 
strengthens our ability to address their 
needs and concerns. Through different 
engagement channels, we inform our 
Ongoing stakeholder engagement activities (non-exhaustive)
Stakeholder group
Stakeholder engagement processes
Exemplary topics discussed
Customers
Joint (research) projects, business development, lean value 
chain projects, consumer panels, Net Promoter Scores, 
training centers, social media, customer surveys, key account 
management (several times per week), sustainability 
exchanges with customers
(Sustainable) revenues and 
innovation
Satisfaction rates
ESG-performance
Employees
Regular meetings, quarterly Team surveys, bi-annual 
employee development process, quarterly update webinars
Strategic alignment sessions
Training & Development
Engagement
Investors and analysts
Investor roadshows, (ESG) investor conferences, investor and 
analysts calls, in-house (ESG) meetings, investor meetings, 
analyst dinners, IR mailbox, investor surveys
Strategic alignment sessions
ESG-performance
Suppliers
Supplier development and quality activities including topical 
training sessions (4 times per year), supplier forums, industry 
working groups such as EPRM and RBA, and the commodity 
management, supplier quality and procurement engineering 
functions
Sustainability performance 
Peer-learning
Governments, municipalities
Issues meetings, annual innovation experience, research 
projects, policy and legislative developments, business 
development
Sustainable cities
Energy efficiency
Sustainable innovation
Civil society organizations
Partnerships with NGOs (several times per week), cross-sector 
(multi-stakeholder) projects, supplier sustainability stakeholder 
day, our social investment program, the Signify Foundation
Social impact of light
Sustainable operations
Sustainable revenues
are most likely to be impacted by our 
activities and have the most influence on 
achieving our commitments. In addition to 
our strategic conversations with these 
stakeholders, we hold memberships and are 
active in many organizations including the 
Carbon Disclosure Project (CDP), the World 
Economic Forum (WEF), the Responsible 
Business Alliance (RBA), and The Climate 
Group. For more information on the work we 
perform with stakeholders, please refer to 
sub-section 16.3.6 Working with 
stakeholders of this Annual Report.
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Our 2019 materiality assessment 
We use different sources of information to 
identify possible material topics. These 
include media and trend analyses as well as 
continuous conversations with strategic 
stakeholders. To prioritize these topics, 
Signify organizes dedicated stakeholder 
engagement activities every year. In 2019, 
this consisted of an online survey reaching 
out to 352 internal and external 
stakeholders, a series of qualitative 
interviews, and internal strategic 
workshops.
As an outcome of the assessment, Signify’s 
materiality matrix has been simplified for 
better clarity by grouping detailed sub-
topics under over-arching material topics. 
The detailed mapping can be found in the 
table below. Energy efficiency, Human rights 
and Carbon footprint are considered our 
most material topics. Safety at work remains 
very important and is given a high priority 
with strong processes in place. Biodiversity 
has been added and the topics of Circular 
Economy, Packaging and Social impact of 
light have increased in importance. 
The result of the materiality assessment has 
been reviewed by the Leadership Team and 
the Supervisory Board. The details of our 
2019 materiality assessment, as well as the 
definition of each material topic can be 
found in the Sustainability Supplements to 
the Annual Report, available on our 
Sustainability downloads webpage:  
https://www.signify.com/global/
sustainability/downloads.
High
Medium
High
Medium
Water usage
Biodiversity
Human capital development
Circular economy
Responsible packaging
Business ethics
Social impact of light
Carbon footprint
Human rights
Energy efficiency
Safety at work
Hazardous substances
Importance to stakeholders
Business impact
Materiality matrix
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Signify material topics – The table showcases the link between our strategy, our contribution to the SDGs and our material topics and their boundaries.
Priority SDG 
Material topic
Sub-topic included
Our contribution
Boundary
Brighter Lives
Human capital development
•	
Employee engagement
•	
Diversity & Inclusion
•	
Talent management
16.3.1 Human capital development
•	
Own operations
•	
Own operations
•	
Own operations
Human rights
•	
Human rights in our operations
•	
Living wages
•	
Social responsibility in our supply chain
•	
Responsible mineral sourcing
16.3.2 Human rights
•	
Own operations
•	
Own operations / Supply chain
•	
Supply chain
•	
Supply chain
Safety at work
•	
Occupational Health & Safety
16.3.3 Safety at work
•	
Own operations
Business Ethics
•	
Acting with integrity
•	
Product quality
•	
Share-performance & pay-out policy
•	
Responsible procurement practices
•	
Responsible tax policy
•	
Big data and customer privacy
16.3.4 Acting with integrity
16.3.4 Acting with integrity
11.6 Share performance, 
11.4 Capital allocation
16.3.2 Human rights
14.6 - Note 9 Income taxes
12.5 Report risks factors
•	
Own operations
•	
Use phase
•	
Own operations 
•	
Own operations
•	
Own operations
•	
Use phase
Social impact of light
•	
Human centric lighting
•	
Food availability and quality
•	
Access to light
16.3.5 Social impact of light
•	
Use phase
•	
Use phase
•	
Use phase
Better World
Energy efficiency
•	
Energy efficiency of our products, systems and 
services
16.4.1 Energy efficiency of our products, 
systems and services
•	
Use phase
Circular economy
•	
Circular lighting
•	
Weight & materials
•	
Waste management 
16.4.3 Circular economy 
•	
Use phase
•	
Own operations / Use phase
•	
Own operations
Responsible packaging
•	
Responsible packaging
16.4.4 Responsible packaging
•	
Use phase
Hazardous substances
•	
Products substances
•	
Regulated substances in production processes
16.4.5 Hazardous substances
•	
Use phase
•	
Own operations
Water usage
•	
Water usage
16.4.6 Water usage
•	
Own operations
Carbon footprint
•	
Operational carbon footprint
•	
Carbon footprint of our supply chain
16.4.2 Carbon footprint and energy
•	
Own operations
•	
Supply chain
Biodiversity
•	
Biodiversity
16.4.7 Biodiversity
•	
Own operations
In the sections that follow we explain how we manage social and environmental material topics in our operations, supply chain and products.
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16.1.4	
Reporting standards
This report has been prepared in 
accordance with the GRI Standards: 
Comprehensive option. We also used 
additional company disclosures.
An overview of the information on data 
definitions, measurements and any 
uncertainties inherent to measurements can 
be found in the Sustainability Supplements 
to the Annual Report, available on our 
Sustainability downloads webpage: https://
www.signify.com/global/sustainability/
downloads. These supplements also include 
more information on our 2019 materiality 
assessment, a GRI Content Index presenting 
the overview of the GRI disclosures, 
a mapping to the recommendations of the 
Task Force on Climate-related Financial 
Disclosures (TCFD) and to the E.U. Directive 
on non-financial information.
New Signify ventures and acquisitions are 
included in environmental and social 
disclosures to the extent that the 
integration process of these ventures has 
been sufficiently finalized. The normative 
integration period is two years. Divestures 
completed before December 31 of the 
book-year are excluded from environmental 
and social reporting.
In 2019, Signify re-committed to the United 
Nations Global Compact to advance 10 
universal principles in the areas of human 
rights, labor, the environment, and anti-
corruption efforts. This report also serves 
as our annual Communication on Progress 
(COP) towards abiding by these principles.
please refer to the sub-section 16.4.2 
Carbon footprint and energy of this Annual 
Report. As part of our operational carbon 
footprint program, we committed to 100% 
carbon neutrality by the end of 2020 and to 
using only electricity from renewable 
sources by 2020.
Signify has a target of reaching 5 million lives 
with renewably powered lighting and 
supporting 10,000 people with technical and 
business skills development in 2020 
(baseline 2017). For more details, please 
refer to the sub-section 16.3.5 Social impact 
of light, of this Annual Report.
16.1.3	
Program targets
Our sustainability commitments are grouped 
under our sustainability program Brighter 
Lives, Better World, launched in September 
2016. Targets of this program have been set 
for a five-year period, until the end of 2020. 
Changes in targets, policies, definitions or 
scope are specified annually. There are no 
changes in targets, policies, definitions or 
scope to be reported in 2019.
Additionally, to ensure our efforts are in line 
with the targets of the Paris Agreement, 
we have set science-based targets in 
relation to our emissions. For more details, 
16.1.2	
Sustainability 
governance
The Sustainability function, including 
Environment, Health & Safety, headed by 
Nicola Kimm, consists of global, regional and 
local sustainability professionals and falls 
under the responsibility of the Chief 
Strategy & Marketing Officer, Maria Letizia 
Mariani. Progress is reviewed on a quarterly 
basis by the Board of Management and the 
Leadership Team. During these meetings 
progress on strategic programs is reviewed 
and corrective actions taken when 
necessary.
Progress is also reviewed with the 
Supervisory Board on an annual basis. 
In addition, the results of our sustainability 
programs are communicated on a quarterly 
basis to Signify employees and on our 
website for external stakeholders.
Sustainability programs are embedded in the 
Signify organization and ways of working. 
Examples of departments that implement 
sustainability programs include innovation, 
manufacturing, sourcing, and logistics. 
Targets on sustainability are set both at a 
corporate level and at a Business Group 
level.
Program targets
Program
Target 2020
Sustainable revenues
80% of revenues
LED lamps & luminaires
>2 billion LED lamps & luminaires delivered 
cumulatively (baseline 2015)
Operational carbon footprint
Net 0 kt CO2 emissions
Electricity
100% of electricity from renewable sources
Waste to landfill
Zero waste to landfill
Health & Safety
Total recordable case rate of <0.35
Sustainable Supply Chain
Minimum performance rate of 90%
Science-Based Targets
Baseline
Target 2030
Carbon emissions from scope 1 
and scope 2
2015
70% reduction
Carbon emissions from scope 3 
(use of product)
2015
30% reduction
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At Signify, we are creating a workplace 
where people belong, have impact and take 
pride in the lighting company we are 
transforming together. It’s a vibrant 
workplace where people are passionate 
about taking light beyond illumination to 
create brighter lives and a better world. 
With our company purpose and values, 
we provide our people with a common 
direction about why we exist, what we value, 
and how we work.
We determined our values by engaging 
people globally from across our 
organization. At Signify, we put the 
Customer First. We will always be Greater 
Together by collaborating across teams to 
build on our strengths and diversity, 
and work towards our shared goal. We are a 
Game Changer, innovating to set ourselves 
apart and continue to lead in the industry. 
We have Passion for Results by working 
smarter and faster to deliver with 
excellence.
16.3	 Brighter Lives 
16.3.1	
Human capital 
development 
Mark van Bijsterveld,  
Chief HR Officer Signify
“To continue our transformation 
into the new age of connected 
lighting, we need the industry’s 
very best people. That’s why at 
Signify we focus on developing all 
our employees and selectively 
attracting new talent. Creating a 
workplace where people belong, 
have impact and take pride in the 
company is at the heart of our 
people strategy. We celebrate our 
successes, learn from our 
failures, and work in a style of 
radical collaboration to 
continuously improve. Our 
diversity policy and inclusive 
environment facilitates 
continuous performance and 
learning. I’m proud to be part of 
this remarkable team realizing the 
industry transformation and 
excited to give my best each day 
to work side-by-side with the 
people here to unlock the 
extraordinary potential of light for 
brighter lives and a better world.”
We’re committed to using innovations to 
lead the way in revolutionizing the lighting 
industry. In 2019, we invested EUR 225 million 
in sustainable innovation which represents 
83.5% of Signify R&D expenses (82.2% in 
2018). Increasing investments in digital 
lighting solutions, cloud computing and 
circular economy designs have led to 
further improvements in the areas of energy 
and circularity. At the same time, sustainable 
innovation also addresses social needs such 
as Access to light, Basic needs and Human 
Centric Lighting. We believe that sustainable 
innovation will help create a more future-
proof and purposeful portfolio of products, 
systems and services.
16.2	 Sustainable 
Innovation 
Signify integrates sustainable principles in 
its innovation programs. In recent years, 
Signify extended these principles to include 
design rules for a circular economy as well 
as additional benefits beyond illumination, 
such as social benefits. Our sustainable 
products and systems must demonstrate 
proven measurable benefits in one or more 
of the eight sustainable focal areas (SFAs) 
compared to the relevant annually updated 
benchmark. Our eight SFAs are:
•	 Energy - increasing energy efficiency of 
products, systems and services
•	 Packaging - reducing packaging weight / 
volume, increasing recycled content and 
eliminating the use of plastics
•	 Substances - eliminating harmful 
substances
•	 Weight & materials - reducing product 
weight and selecting sustainable 
materials
•	 Circularity - recycling products, 
components and materials at the highest 
utility and value
•	 Access to light - providing light in 
off-grid and underserved areas
•	 Basic needs - lighting that increases 
productivity of food by ≥10% vs 
benchmark
•	 Human centric lighting - providing light 
which increases well-being and 
performance
Sustainable innovation in millions of EUR
300
As a % 
of R&D spent
240
180
120
60
2017
2018
2019
225
83,5%
82.7%
236
277
82.2%
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•	 Signify careers website – Our career 
website attracts talent by emphasizing 
our Employer Value Proposition through 
targeted information sharing and 
storytelling from our employees and 
leadership teams.
The Signify global career website can be 
found at www.careers.signify.com.
Employee engagement 
Employee engagement is key to our 
competitive performance and is integral to 
our vision, creating a workplace where 
people belong, have impact and take pride in 
the company we build together. Engaged 
employees are emotionally committed to our 
company. They help us meet our business 
goals and sustainability commitments, 
and contribute to a dynamic, high-
performance workplace. In 2019, to foster 
employee engagement on sustainability, 
we launched quarterly campaigns around 
the themes of sustainable commuting and 
carbon neutrality. We can only offer an 
environment in which all our people thrive by 
maintaining regular dialogue with our 
employees in order to understand their 
needs. Our employees and managers take 
the time for this dialogue, directly shaping 
the work environment and our inclusive 
culture. As a result, high engagement levels 
not only help Signify to grow but help us to 
understand our employees’ needs in depth 
and respond to these in turn.
A strong global employer brand with 
local relevance in the digital age
Since the launch of our new name Signify, 
we are strengthening our global employer 
brand through our Employee Value 
Proposition. We continue to focus our 
strategic recruitment marketing 
investments on the most critical talent 
segments, to drive our transformation and 
growth. For example, a special focus is given 
to the target groups marketing, sales, 
technology, supply chain, students and 
alumni with relevant messaging. Additionally, 
Signify’s career website, launched in 2018, 
is attracting a growing number of candidates 
(increase of 50% compared to 2018).
As part of our global talent acquisition 
strategy, we continue to attract talent from 
proven high-quality sources. In 2019, 
the main sources of hire were:
•	 Internal - Over the last few years we have 
filled approximately 30% of our vacancies 
internally (2019: 35%).
•	 Employee referral – Historical data has 
shown that our top-performing hires are 
those referred by our own employees. 
Therefore, we encourage them to share 
their network through a formal employee 
referral program, which generated 15% 
of our total hires in 2019.
•	 Proactively sourced by recruiter – Our 
dedicated in-house sourcing function 
focuses on proactively building talent 
pipelines and identifying passive talent.
Talent Management
With more than 32,005 talented and 
engaged employees all over the world, it is 
our people who execute our strategy to 
delight our customers. We believe that we 
will maintain our position as the market 
leader in Lighting by being a talent-builder, 
developing and growing people from within. 
We do this by offering employee attractive 
and relevant learning and career 
development opportunities and by 
strengthening the leadership pipeline 
across the organization.
Our approach to talent is to build and 
develop employees’ functional and 
leadership skills continuously, while 
attracting new talent where critical 
capabilities are needed to strengthen our 
diverse talent pool to achieve our strategic 
objectives. In 2019, we welcomed 1,246 
external talents to help bring our business 
vision to life.
In line with our talent philosophy to promote 
talent from within the organization, 81% of 
our senior leadership roles were filled with 
talent from within. Overall, 35% of all our 
vacancies were filled with internal 
candidates, which is in line with the ambition 
we set.
Employment 
The total number of Signify employees was 
32,005 at the end of 2019, compared to 
29,237 at year-end 2018. Approximatively 
60% of our employees were employed by 
one of our four Business Groups, focusing 
on manufacturing and research & 
development. 27% were employed in one of 
our markets, focusing on sales & marketing. 
The remaining 13% worked in corporate 
functions. Compared to 2018, the number of 
employees increased by 9% due to new 
acquisitions during the year. In line with the 
industry transformation from conventional 
technologies to LED technologies, 
connected Lighting systems and services, 
we expect that the nature of the current 
workforce will continue to change.
Employees in FTEs
2017
2018
2019
Signify total
32,130
29,237
32,005
In 2019, the total employee turnover 
amounted to 41%, of which the vast majority 
was factory staff.
Employee turnover breakdown in 2019 in %
Staff (majority 
in factory)
Professional 
Management 
Executives
84%
14.4%
1.5%
0.1%
of which voluntary
50%
55%
52%
42%
of which involuntary
50%
45%
48%
58%
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representing the different markets, 
businesses and functions. In 2019, 
this network continued to promote our 
inclusive culture, by creating more 
awareness on local initiatives and sharing 
best practices around the world. In addition 
to the champions’ network, in 2019 we 
created a Diversity and Inclusion Board to 
discuss current policies and initiatives and 
implement new initiatives and review the 
progress.
We continue to foster an inclusive culture 
and feeling of belonging, where people take 
pride in the company we are building 
together. Globally, we recognize the need 
for better balance in diversity in two specific 
areas: generational diversity and gender 
diversity. We continually monitor our gender 
and generational diversity numbers and 
strive to have a healthy balance in our 
organization. For the past three years, 
we have maintained a healthy generational 
Diversity and Inclusion 
At Signify, we believe in building a diverse 
and inclusive workplace. This means we 
celebrate and foster an environment in 
which all people’s ideas, perspectives, 
experiences and styles are highly valued. 
It also means that all individuals are treated 
fairly and respectfully, have equal access to 
opportunities and resources, and can 
contribute fully to Signify’s success. Signify 
is a global company, embracing a global 
mindset and actively promoting and building 
capability in this area. Diversity and Inclusion 
reinforces our Greater Together value by 
nurturing an inclusive culture centered 
around valuing diversity, listening to learn, 
and acting with care.
In 2017, we created a network of 20 Diversity 
and Inclusion champions in our organization 
consisting of a variety of employees across 
grades, gender, nationalities, and age 
a score of 0 to 6 are labeled Detractors, 
and they are believed to be less likely to 
exhibit the value-creating behaviors. 
Responses of 7 and 8 are labeled Passives, 
and their behavior falls in the middle of 
Promoters and Detractors. The NPS is 
calculated by subtracting the percentage of 
employees who are Detractors from the 
percentage of employees who are 
Promoters. The NPS can be as low as −100 
(everybody is a detractor) or as high as +100 
(everybody is a promoter). A positive NPS 
(i.e. higher than zero) is felt to be good. 
In 2019, Team survey had an average 
employee response rate of 80% which is the 
highest since we began running the survey 
(2018: 78%). At the end of Q4 2019, 
we recorded an unprecedented NPS score 
of 20 across the Signify population, leading 
to a yearly average score of 18 (2018: 13), 
following the announcement of the 
acquisition of Cooper Lighting Solutions.
Given that employee feedback and 
engagement is so critical, seven years ago 
we introduced a quarterly survey currently 
known as the Team survey, with the 
accompanying promotion of Team dialogues 
for people managers and their teams. 
This Team survey has questions in line with 
our company purpose and values. 
This proved to be a positive driver of 
employee engagement to increase team 
effectiveness, and, as a result, we will 
continue to run the Team survey on a 
quarterly basis to monitor engagement.
In 2019, we saw the following company 
results: 86% of our employees underlined 
that we truly put our Customer First; 87.3% 
of our employees acknowledged that we are 
Greater Together; 88% of our employees 
felt that we are considered a Game Changer 
and 79.3% of our employees agreed that we 
have Passion for Results.
We have noted that we need to continue to 
improve in effectiveness and recognition. 
Initiatives to address our improvement areas 
are driven at a team level via our Team 
dialogues, and in addition we continue to 
drive progress on these questions during 
our Quarterly Performance Reviews.
To measure employee satisfaction, the Net 
Promoter Score (NPS) methodology is used 
as part of our Team survey. Employees are 
asked to rank how likely it is that they would 
recommend our company as a great place to 
work. The scoring for this answer is based 
on a 0 to 10 scale. Those who respond with a 
score of 9 to 10 are called Promoters and 
are considered likely to exhibit value-
creating behaviors. Those who respond with 
Gender diversity in %
100
80
60
40
20
’17 ’18
Staff
Professional Management
Executive
’19
’17 ’18 ’19
’17 ’18 ’19
’17 ’18 ’19
44
56 53
47
54
46
27
70
73
30
69
31
80
20
80
20
80
20
83
17
83
17
83
17
Male
Female
New hire diversity in %
100
80
60
40
20
54
46
50
50
50
50
74
26
67
33
67
33
78
22
83
17
68
32
83
17
87
13 100
’17 ’18
Staff
Professional Management
Executive
’19
’17 ’18 ’19
’17 ’18 ’19
’17 ’18 ’19
Male
Female
Employee per age category in %
100
80
60
40
20
2017
2018
2019
13
25
35
23
4
12
24
34
25
5
13
34
24
24
5
Over 55
45 – 55
35 – 45
25 – 35
Under 25
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Corporate performance
We are Signify
Governance
Consolidated financial statements
Corporate statements

Let’s Get Systemized!  
In 2019, as part of our strategic growth 
initiative to upskill the commercial functions 
in our markets, we launched a new learning 
program: Let’s Get Systemized. The aim of 
this program is to equip our sales talents to 
increase the opportunity win-rates in a 
highly competitive business context. 
Over 50 subject matter experts joined the 
movement by creating agile learning content 
in their respective fields of expertise, 
such as Interact, Dynalite and Color Kinetics, 
making use of the full potential of the 
Learning@Signify platform.
The design is based on three pillars to 
reflect our blended learning vision - allowing 
people to not only discover the latest 
content on the value propositions via 
reading or watching videos, but also 
stimulating people to take part in the 
dialogue and virtually meet each other on a 
regular basis to discuss challenges and learn 
from peers. Markets embraced this 
opportunity to learn and connect with 
experts and peers and were encouraged to 
get the needed “license to sell” within their 
sub-segment.
With close to 5,000 active learners and over 
1,000 people actively engaging with each 
other in our “System Talks”, Signify 
employees are taking ownership of their 
learning. This also enables them to bring our 
value propositions to customers more 
seamlessly and effectively. The program 
proves we have a wealth of knowledge inside 
our company and strengthens our muscle to 
increase our market share in the System and 
Services Business.
aimed at developing our existing leaders 
who already hold responsible positions, 
as well as building a pipeline of future-ready 
leaders who can further take the company 
to paths of excellence and sustainable 
profitable growth.
As per our development methodology, 
leadership development is also viewed 
through the lens of embodying the blended 
learning philosophy, rather than by one-off 
programs. The latest partnerships we have 
built with Harvard Business School and 
Ashridge HULT disseminate world-class 
leadership development journeys and are a 
great example of ensuring continuous 
learning discipline in the minds of our top 
leaders across all levels.
The unique and ground-breaking 
experiences of our leadership development 
provides our leaders with a learning journey 
which includes 1 on 1 coaching, self-directed 
virtual learning, group activities focused on 
agile working and design thinking, all linked 
with pre and post calls and a face to face 
program in the middle. In 2019, we  
completed 8 Edge leadership programs: 5 
EDGE I classes, 2 EDGE II classes and 1 EDGE 
IIII class. Each class has around 30 
participants.
As we move into 2020, we will continue to 
improve the leadership development 
experiences with our leaders using co-
creation and will continue to ensure that our 
leaders are able to drive our continued 
transformation and digitalization, and are 
equipped to give our people the best 
employee experience possible.
Leadership and Development 
At Signify, we consider continuous learning 
and development to be a key differentiator 
in enriching the lives and careers of our 
employees, enabling growth, engagement 
and fulfilment. We offer new approaches to 
learning and apply them daily. A clear 
demonstration of our learning culture was 
the introduction of our new social learning 
platform Learning@Signify. This global 
learning platform enables employees to 
learn in their own way, co-create and share 
their expertise.
Our learning mindset is also connected to 
the development process, linking 
development area’s during performance 
cycles to ongoing learning opportunities. 
The Signify Learning Centre of Expertise 
(LCoE) offers all forms of learning 
opportunities, enabling learning on the job 
through challenging assignments on the job 
(experience), providing coaching and 
mentoring through developmental 
relationships (exchange), and offering 
formally structured learning methods such 
as classroom teaching and online courses 
(education).
Leadership development
As continuous learning is our key 
differentiator, we ensure our leadership 
development experiences are aligned to this 
ethos and to our Talent Management 
Strategy. Our EDGE leadership development 
programs ensure our first time (EDGE I), 
mid-level (EDGE II) and enterprise leaders 
(EDGE III) are given the capabilities and 
mind-set to lead in the Signify way. They are 
diversity. In 2019, 38.2% of Signify 
employees were women and 17% of 
executive roles across the company were 
held by women. In 2019, we set the ambition 
to have 25% women in leadership roles by 
2022 and 30% by 2025 (scope of leadership 
roles comprises executive and part of 
management roles).
Our internal and external hiring process, 
as well as our succession planning process, 
foster a rigorous focus on the broader 
sense of diversity (background, ethnicity, 
race, gender, age, education, religion). 
We aim to build a diverse workforce and an 
inclusive work environment to continuously 
improve our capabilities for the future 
success of Signify. We foster this culture by 
actively promoting our open internal job 
market, where all vacancies are posted, 
and all our employees can apply. In 2019, 
48% of our new hires were women, 
an increase of 2% compared to 2018.
Equal remuneration
Signify has a pay policy with market-
conforming compensation levels in all 
countries in which Signify operates. 
Our Integrity code explicitly condemn all 
forms of discrimination based on race, color, 
age, gender, gender identity or expression, 
sexual orientation, language, religion, 
political or other opinions, disability, national 
or social origin or birth. The principle of 
equal pay for work of equal value is applied 
in all countries in which Signify operates.
140
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Sustainability statements
Creating value
Corporate performance
We are Signify
Governance
Consolidated financial statements
Corporate statements

work. Our commitment to respecting and 
promoting human rights extends beyond our 
own operations, across our wider sphere of 
influence, including our supply chain. To that 
end, we integrate human rights 
considerations into our policies, processes, 
and practices.
Our Human Rights policy is based on the 
International Bill of Human Rights, the United 
Nations Global Compact Ten Principles, 
and the International Labour Organization’s 
declaration on Fundamental Principles and 
Rights at work. Signify carries out 
continuous research and stakeholder 
regulations in line with our Integrity code. 
Based on our value creation methodology, 
Signify has created EUR 4.89 million in value 
for our society through its employees’ 
learning and development programs.
16.3.2	
Human rights 
Our approach 
Acting with integrity is at the heart of 
Signify’s culture and is an integral part of 
our company’s purpose. Respecting human 
rights is a central foundation of the way we 
Trainings and courses
To ensure our workforce is well equipped to 
perform and meet business requirements, 
each functional area has identified “fit for 
future” competency on which the respective 
area will focus. Through the award-winning 
Harvard Manage Mentor leadership suite, 
employees also have access to 40 individual 
online modules on personal development, 
business and management skills.
More than 17,500 learning modules and 
periodicals were offered through the LCoE 
in 2019, collaborating with the best content 
providers like Harvard Manage Mentor, 
Pluralsight, Coursera, Ashridge Executive 
Education and MindGym. Our learning 
offering is structured in learning journeys 
and paths to help our employees build 
excellence in any chosen topic. These world 
class e-learning offerings complement the 
curriculum of critical programs in our 
blended learning methodology. In 2019, 
more than 384,000 e-learnings were 
booked centrally compared to 210,000 in 
2018 and 156,000 in 2017. The amount of 
time registered as spent on learning 
modules was over 135,610 hours in 2019. 
Thanks to our new learning approach with 
Learning@Signify, we are improving on our 
vision to build a culture of learning in the 
company. At the end of 2019, 94% of the 
targeted employee population were on the 
Learning@Signify platform and 49% have 
begun to consume, share and promote 
learning actively.
We support our learning by always acting 
with integrity, whereby all employees are 
required to complete mandatory learnings 
related to privacy law, security and 
Salient human rights issues
Salient human rights issues
Rights holders covered in our programs
Reference to our disclosures
(3rd party)  
employees
Direct  
suppliers
Indirect  
suppliers
1
Freedom of association and  
collective bargaining
•
•
16.3.4: Acting with integrity 
16.3.2: Social responsibility in our supply 
chain
2
Safe & healthy workplace
•
•
16.3.3: Safety at work
16.3.2: Social responsibility in our supply 
chain
3
Working hours
•
•
16.3.4: Acting with integrity 
16.3.2: Social responsibility in our supply 
chain
4
Equal employment opportunities  
and respect
•
•
16.3.1: Diversity and Inclusion
16.3.4: Acting with integrity 
5
Recognition and reward
•
•
16.3.2: Human Rights
16.3.4: Acting with integrity 
16.3.2: Social responsibility in our supply 
chain
6
Forced and child labor
•
•
16.3.2: Social responsibility in our supply 
chain
7
Employee development
•
16.3.1: Leadership and Development
16.3.4: Acting with integrity 
engagement activities to identify the most 
salient ethical and social principles that 
govern our relationship with stakeholders 
worldwide.
The table below shows, in random order, 
the salient issues identified and the 
stakeholders they affect, as well as 
references to the sub-sections that contain 
the progress that Signify made in addressing 
these issues.
141
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Sustainability statements
Creating value
Corporate performance
We are Signify
Governance
Consolidated financial statements
Corporate statements

suppliers. It covers labor, health & safety, 
environment, ethics and management 
systems. We monitor supplier compliance 
with the SSD through a system of regular 
audits. In the RBA Code of Conduct and in 
our SSD, special attention is given to the 
prevention of human slavery as referred to 
in the United Kingdom (UK) Modern Slavery 
Act Disclosures and the California 
Transparency in Supply Chains Act. 
The formal statement on these legislations 
can be found on our website (see link above).
For selected suppliers in risk countries, 
full audits are performed in a three-year 
cycle by an independent audit firm. If 
non-conformances are identified, 
we require the supplier to develop and 
execute a corrective action plan. 
We support our suppliers to correct the 
non-conformances, for instance by 
providing training or sharing best practices. 
We monitor the execution of the corrective 
action plans until the supplier is compliant 
with our requirements. In case of delays, 
the supplier is classified as non-compliant in 
our Tritium program and we apply a stratified 
approach for consequence management. 
We work with each supplier to resolve 
non-conformities within ninety days, where 
possible.
Social responsibility in our supply 
chain
Signify has developed programs over the 
years to prevent Human Rights violations in 
its supply chain. We have a direct business 
relationship with approximately 3,300 
product and component suppliers. 
Responsible procurement practices and 
management of our supply chain require a 
structured and innovative approach due to 
the wide variety of stakeholders. 
Our programs cover the assessment and 
development of supplier sustainability 
performance (audits and training) and 
responsible minerals sourcing.
Supplier sustainability performance
The core of our supplier sustainability 
performance program is the Supplier 
Sustainability Declaration (SSD). 
This declaration forms an integral part of 
our supplier contracts and can be found on 
our website: https://www.signify.com/
global/contact/suppliers/sustainability/
our-programs/supplier-sustainability-
management.
The SSD is derived from the Responsible 
Business Alliance (RBA) Code of Conduct 
and sets out the standards and behaviors 
we require from our suppliers and their 
Living wages
At Signify, our people make the difference in 
our performance and they are our face to 
customers, suppliers and partners. 
By ensuring good working conditions, Signify 
not only aims to provide a fair, safe, 
and respectful environment, but also an 
inspiring place to work and grow. 
Fair remuneration is considered a pre-
condition for our employees to flourish. It is 
our company policy to offer remuneration 
that meets or exceeds the provisions of all 
applicable wage laws, including those 
relating to minimum wages, overtime hours 
and legally mandated benefits.
Every two years, Signify performs an analysis 
of salaries and benefits for employees 
globally with respect to living wage, covering 
the costs of food, housing and 
transportation, with a 10% margin for other 
expenses, based on WageIndicator. In 2019, 
Signify performed an analysis that showed 
that company standards exceed the living 
wage standards in all countries examined 
(such as the Netherlands, China or India).
We ensure employees of our suppliers in risk 
countries receive fair compensation in 
terms of wages, overtime and benefits. 
Through our intervention, 98% of our risk 
suppliers met our requirements. In 2019, 
we continued to advocate for increased 
attention and collaboration on social 
responsibility in global supply chains and we 
will continue our efforts regarding Living 
Wages in our supply chain in 2020.
Human rights risk assessment
Compliance to the Human Rights policy is 
governed through our Integrity code 
processes, combined with dedicated steps 
that help ensure adherence.
In 2019, employees were requested to 
complete e-learnings or to participate in 
face-to-face trainings that helped interpret 
our Integrity code. Dedicated 
communication campaigns urged everyone 
to speak-up and report concerns of 
possible violations. In those campaigns, 
the availability of our Ethics hotline was also 
highlighted. This initiative is an integrated 
and ongoing activity we have embed in our 
business and business principles, which we 
redeploy on a regular basis and share with 
our new employees as part of their on-
boarding program.
Based on a country risk assessment, 
multiple manufacturing locations were 
considered to have an increased likelihood 
of policy violations. Since 2017, these 
locations are requested to periodically fill in 
a dedicated self-assessment on human 
rights. No systemic violations were identified 
at any of the sites.
Summary of 2019 audit program (three-year cycle, third-party audit)
Greater 
China
Rest of 
the World
Americas
Europe
Total
Total no. of risk suppliers
176
31
16
4
227
Total no. of audits
49
18
6
0
73
Initial audits
3
4
0
0
7
Continued conformance audits
46
14
6
0
66
Workers employed at sites audited
30,866
19,779
1,987
0
52,632
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the average audit score of our risk suppliers 
was 66 (2018: 63). Risk suppliers new to the 
audit program scored 58 (2018: 57). 
Dedicated follow-up actions to close the 
non-conformances were carried out for the 
lower scoring suppliers. After implementing 
the corrective action plans, the average 
overall audit score in 2019 was 87 out of 100.
In 2019, we audited 73 of our current risk 
suppliers, including 66 continued 
conformance audits with suppliers that were 
previously in the three-year cycle. In 2019, 
the majority of the audits were done in 
China. Through these audits, we have 
reached 52,632 workers employed at 
supplier production sites. In 2019, 
The supplier sustainability performance rate 
represents the percentage of risk suppliers 
that have an audit score of at least 90 out of 
100 points. Our 2019 target on supplier 
sustainability performance is 90%. In 2019, 
we achieved a supplier sustainability 
performance rate of 99% (2018: 93%).
The table below shows the supplier 
sustainability performance and indicates the 
conformance level in the audits before 
suppliers have taken corrective actions. 
Three suppliers showed outstanding 
performance during the third-party audit, 
without any non-conformities found. 
The performance in the categories Wages 
and benefits, Industrial hygiene, 
and Hazardous substances have increased 
from 40-60% to 60-80% compared to 2018.
Summary of 2019 audit findings before suppliers have taken corrective actions, supplier compliance rate per category of SSD including top-10 non-conformities coverage of the Supplier 
Sustainability Declaration
Labor
Health & Safety
Environment
Ethics
General
Freely chosen employment 
60-80%
Occupational safety
40-60%
Environmental permits and 
reporting
60-80%
Business integrity
80-100%
RBA code
80-100%
Child labor prohibition/
Young worker management
80-100%
Emergency preparedness
20-40%
Pollution prevention and 
resource reduction
80-100%
No improper advantage
80-100%
Working hours
40-60%
Occupational injury and illness
60-80%
Hazardous substances
60-80%
Disclosure of information
80-100%
Wages and benefits
60-80%
Industrial hygiene
60-80%
Solid waste
80-100%
Protection of intellectual 
property
80-100%
Human treatment
80-100%
Physically demanding work
80-100%
Air emissions
80-100%
Fair business, advertising and 
competition
80-100%
Non-discrimination
80-100%
Machine safeguarding
80-100%
Product content restrictions
80-100%
Protection of identity
80-100%
Freedom of association
80-100%
Food sanitation and housing
60-80%
Water management
80-100%
Responsible sourcing of 
minerals
80-100%
Health and Safety information 
communication
80-100%
Energy consumption and 
Greenhouse gas emission
60-80%
Privacy
80-100%
Non-retaliation
80-100%
143
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Creating value
Corporate performance
We are Signify
Governance
Consolidated financial statements
Corporate statements

position on Conflict Minerals are available on 
our website: https://www.signify.com/
global/contact/suppliers/sustainability/
our-programs/conflict-minerals.
We are an active member of the Responsible 
Mineral Initiative (RMI) which runs the audit 
program to verify the smelters’ conflict-free 
status. We use the tools and programs 
developed by the RMI, especially the Conflict 
Minerals Reporting Template (CMRT) and the 
Conflict-Free Smelter Program (CFSP). 
Each year, we invite our main suppliers, 
based on purchasing spend and metal usage, 
to fill in the latest version of CMRT. 
We carefully review the information received 
via the CMRT from each supplier against our 
requirements. After having identified the 
smelters in our supply chain, we publish our 
Signify Conflict Minerals Declaration, 
including our smelter list on the company 
website (see link above). Each year, 
we update the Signify smelter list with new 
information received from our suppliers.
In 2019 we invited 164 priority suppliers to fill 
in the CMRT, among which 35% were new 
suppliers. This number of suppliers 
represents 82% of our total spend. 
We approved 92% of the CMRTs against the 
Signify requirements. We had a total of 263 
smelters in our supply chain.
The results of the Reasonable Country of 
Origin Inquiry (RCOI) can be found in the 
table below. The information for the RCOI is 
provided by RMI.
We also provide training sessions on the RBA 
Code of Conduct and SSD. To address 
critical and emerging issues, we also provide 
in-depth capability building programs for 
our suppliers on specific topics. In 2019, 
we focused these extra trainings on carbon 
emissions and reduction, related to the CDP 
Supply Chain program and health and safety 
in worker-led programs.
In 2019, we organized 9 training sessions 
which were attended by 91 suppliers, with a 
total of 503 attendees.
Responsible mineral sourcing 
Our commitment to sustainable 
development extends to issues further 
down in supply chain, to prevent human 
rights abuses and financing of conflicts in 
the extractives sector. Global supply chains 
in the lighting industry are long and complex, 
typically with more than seven tiers between 
the finished product and the source of raw 
materials used for manufacturing. However, 
we believe that through strong multi-
stakeholder partnerships we can make a 
difference.
As part of the Signify Conflict Minerals 
program, we implement measures in our 
supply chain to ensure that our products are 
not directly or indirectly funding atrocities in 
the Democratic Republic of Congo (DRC). 
We support and follow the OECD Due 
Diligence Guidance for Responsible Supply 
Chains of Minerals from Conflict-Affected 
and High-Risk Areas. The full description of 
our due diligence process and Signify’s 
In addition to the audits with current risk 
suppliers, we audited 21 potential suppliers 
as part of the supplier qualification process. 
For potential suppliers to continue the 
qualification process, they should not have 
any zero-tolerance issues and score a 
minimum of 70 points. Additionally, non-
conformities need to be closed before 
completing the qualification process.
Since 2016, we have performed an annual 
verification for the highest risk suppliers. 
Depending on the risk category this can 
either be an on-site audit or a self-
assessment questionnaire. In 2019, 
we performed 5 onsite annual verifications 
audits and validated 42 self-assessment 
questionnaires remotely (2018: 7 onsite 
annual verification and 42 self-assessment 
questionnaires). The average initial score in 
these annual verification audits was 58 and 
average score of self-assessment was 94.
Supplier training and developments
Since 2017, we have included hours of 
on-site trainings at suppliers. These 
trainings are tailored towards the non-
conformances that were found during the 
audit. By doing so, we train supplier staff on 
the topics that are most important for them 
to improve on. In 2019, we performed 
on-site trainings at 56 supplier sites, which 
were attended in total by 400 supplier 
employees.
Reducing water and air 
pollution levels in China 
To reduce the environmental pollution 
in China, Signify worked with the 
Chinese Institute of Public & 
Environmental Affairs (IPE), leveraging 
their work to engage with our suppliers. 
For instance, to help suppliers have 
better understanding of environmental 
issues, we organized two IPE training 
sessions in July and December 2019 as a 
part of our overall RBA training 
program.
Periodically, IPE publishes a list of 
Chinese factories associated with 
concerning environmental pollution 
levels. Signify engages with any 
suppliers on the IPE list to resolve 
environmental non-conformances. 
From 2015 to the end of 2019, there 
were 44 direct suppliers flagged on 
IPE’s list, which was reduced to 5 by this 
year-end and 39 suppliers have taken 
actions to remediate and their violation 
records were removed from IPE 
website. Signify also requested direct 
suppliers to engage their own direct 
suppliers that appear on IPE’s list for 
them to resolve non-conformances.
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Corporate performance
We are Signify
Governance
Consolidated financial statements
Corporate statements

Activities in 2019 included office safety 
standard deployment with the objective to 
increase and standardize safety maturity at 
our office sites.
We regret to report one employee fatality in 
2019, which involved a stand-up clamp truck 
occurred at one of our sites.
We recorded 82 TRC cases in 2019 (81 TRC 
cases in 2018). The TRC rate increased to 
0.32 per 100 FTEs, compared to 0.29 in 2018. 
This is a 56% improvement from our 2015 
baseline and meets our 2020 target on 
safety.
Eighteen of our industrial units went through 
2019 without any recordable injuries. There 
are 5 industrial sites that have had no 
recordable injuries over the last 4 years - 
Varginha, Xiamen, Pila Home, Pabianice 
Lamps branch, Assembly Workshop 
Copenhagen, while 63 sites had achieved 
more than 500 days injury-free at year-end.
Recordable cases
2017
2018
2019
Total recordable 
case rate
0.41
0.29
0.32
Lost workday 
cases rate
0.27
0.18
0.19
Fatalities
1
1
1
16.3.3	
Safety at work 
Health & Safety performance
Since our founding, we have prioritized the 
health and wellbeing of people involved with 
our activities, committing ourselves to 
provide a safe and healthy workplace for all. 
The Total Recordable Case (TRC) rate is the 
central lagging indicator through which we 
measure our overall safety performance. 
Targets for this indicator are set and 
managed at an overall company level, for the 
individual Business Groups and 
manufacturing sites. A target of 0.35 for 
2020 for the overall company has been set in 
our Brighter Lives, Better World 
sustainability program. We drive continuous 
improvement cycles, followed up with daily 
management reviews and regular 
operational reviews.
We are further strengthening our safety 
mindset through our injury prevention 
program. We focused on equipment safety, 
warehousing safety, on-site contractors’ 
safety and managing progress for leading 
indicators related to near-misses, unsafe 
conditions and at-risk behaviors.
Cobalt is present in our battery supply chain 
for emergency lighting and remote controls, 
making up less than 0.2% of our bill of 
material spend. Despite this, we have 
prioritized this topic and engaged on 
responsible sourcing standards. Since 2018, 
we have been part of the Partnership 
agreement for Responsible Cobalt Mining 
together with Fairphone, Huayou and Impact 
Facility. This partnership aims to improve 
health and safety, fairer income and 
community impacts in artisanal small-scale 
mines (ASM) and contribute to the 
development of a transparent battery 
supply chain. In 2019, we developed a 
strategic plan with our partners, which will 
be executed in 2020.
We are also a member of the European 
Partnership for Responsible Minerals 
(EPRM), a public-private partnership 
initiative. The EPRM provides a platform for 
cooperation between European 
governments, companies and civil society to 
address the issues occurring in the mining of 
minerals and to enable responsible sourcing 
from high risk and conflict regions.
To ensure Signify does not indirectly 
contribute to human rights abuses in cobalt, 
lithium and mica mining, we have carried out 
an investigation to understand which of our 
suppliers were using these minerals. 
It resulted in the identification of 8 direct 
suppliers that provide components or parts 
which contain mica, 3 suppliers for cobalt 
and 4 for lithium.
Results of the RCOI (Reasonable Country of Origin Inquiry)
Gold
Tantalum
Tin
Tungsten
Total
Smelters known to source from the DRC and/or adjoining countries
2
24
7
10
43
Smelters known to process only recycled or scrap materials
16
2
5
3
26
Smelters known to source from outside the DRC or adjoining countries
17
13
66
31
127
Smelters that disclosed mineral country of origin to auditors only
64
0
0
0
64
Smelters with unknown minerals origin
6
0
0
0
6
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Sustainability statements
Creating value
Corporate performance
We are Signify
Governance
Consolidated financial statements
Corporate statements

•	 Reflects our new company name and 
branding guidelines as well as our 
purpose and values;
•	 clarifies the relation between the 
Integrity code itself and its underlying 
policies belonging to different domains;
•	 gives more information on how to speak 
up and where to find additional 
resources;
•	 is user centric: designed around the 
employee and everyday work/life 
situations they might encounter;
•	 helps us make the right decisions, 
from how we behave in the market to how 
we treat each other.
For a description of Integrity code 
processes and policies, please refer to 
section 12.1 Establishing strong risk 
management environment, of this Annual 
Report.
In 2019, 197 Integrity code concerns were 
captured via the Signify Ethics line. 
In addition to the Ethics line, employees are 
encouraged to address integrity related 
concerns with their managers or other 
assigned staff. Compared to 2018 (186 
Integrety concerns), this is an increase of 
approximately 6%. This increase can be 
mainly attributed to more concerns having 
been filed related to treatment of 
employees, which represented 58% of the 
•	 periodic health-checks
•	 discounts to health and sports centers
•	 free fresh fruit
•	 on-site availability of massage therapy 
and physiotherapy.
In addition, several of our office spaces are 
using lighting technologies which enable 
lumen outputs to follow the human circadian 
rhythm, enabling our employees to see, 
feel and function better. Several of our 
locations also provide the ability for each 
employee to adjust the individual light 
settings in the workspace with their 
smartphones, ensuring the brightness and 
tone of our office lighting aligns with their 
energy patterns and needs.
16.3.4	
Acting with integrity 
In 2019, Signify launched a revised code of 
conduct, the Integrity code (previously 
known as the General Business Principles).  
Our Integrity code:
•	 emphasizes our commitment to always 
acting with integrity, starting from its 
name;
•	 is a living document: it will be updated on 
a yearly basis to ensure continuous 
improvement. It is a starting point for 
greater awareness;
•	 is translated in 26 languages;
•	 incorporates commitment from the top 
leaders via the co-signed statement of 
our Leadership Team members;
Our injury prevention framework was 
launched in 2015 and has continued its 
integration into the operational Lean 
framework. All our industrial sites have now 
adopted the key elements of this framework. 
Efforts continued to further reduce injury 
and illness rates by focusing on daily 
standards to prevent injuries. We increased 
our injury prevention requirements in the 
new release of Signify’s Lean program.
Management system
We have implemented a Health & Safety 
management system in accordance with the 
OHSAS-18001 standard at all manufacturing 
sites. In 2019, 64% of our reporting 
manufacturing sites were certified to 
OHSAS-18001. The remaining manufacturing 
sites have procedures in place which assure 
compliance with local regulations and Signify 
policies.
Health and wellbeing initiatives
Apart from our commitment to provide an 
injury-free workplace, we support our 
employees with their health and wellbeing. 
Through diverse initiatives managed by our 
country offices, our staff are enabled to 
proactively work on their vitality and 
personal health. Examples of initiatives 
which support active health management 
include:
total number of registered complaints in 
2019 compared to 48% in 2018.
Most commonly reported concerns
Treatment of employees
The subcategory equal, fair & respectful 
treatment makes up 78% of the concerns 
related to ‘Treatment of employees’ in 2019 
(73% in 2018). This category, for instance, 
relates to concerns about verbal abuse, 
(sexual) harassment, favoritism and matters 
of discrimination in the workplace. 
The increase can be attributed in part to an 
increased reporting rate in the Growth 
Markets region and the fact that for a 
number of matters multiple reporters have 
filed a concern.
In 2019, we combined the category of Right 
to organize & Collective bargaining as well 
as Other & HR commitments towards 
employees.
Business integrity
The second most reported type of concern 
relates to Business integrity. The number of 
complaints reported in this segment 
represents 34% of the total cases reported, 
compared to 37% in 2018.
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Human-Centric Lighting
Scientific evidence shows that light has a 
powerful impact on our emotions and 
important physiological and biological 
processes in our body. The powerful effects 
of light on our physiology, mood and 
behavior are not only mediated by rods and 
cones, but also by a novel, melanopsin-
containing photoreceptor within the eye. 
These insights help us develop commercial 
lighting solutions that are targeted at 
enhancing vision, well-being, 
and performance. By applying an in-depth 
knowledge of science, customers and user 
needs, we bring light beyond illumination.
In 2019, we continued to establish a new 
global standard for the essential building 
blocks of Human Centric Lighting and to 
innovate in Human-Centric Lighting 
solutions - helping people to see, feel, 
and function better.
approach towards the selection and 
qualification of suppliers, manufacturing, 
installation and service of our products and 
services. In those rare cases where defects 
are found in our products that have been 
brought to market, Signify takes a proactive 
approach and appropriate actions, which 
may include a product recall, especially if 
health and safety are of concern. Signify has 
a robust process in place to ensure 
impacted constituents are informed. In 2019, 
no product safety issues were found that 
resulted in a fine or penalty.
16.3.5	
Social impact of light 
We are driving change to create brighter 
futures. Through our technology, social and 
business life no longer stops when the sun 
goes down. Light enables recreation, 
productivity and economic growth.
Breakdown of alleged violations Integrity code
2017
2018
2019
Health & Safety
2
4
-
Treatment of employees
106
90
114
•	 Equal, fair and respectful treatment
77
66
89
•	 Employee development
-
1
1
•	 Employee privacy
1
-
-
•	 Employee relations
10
8
1
•	 Remuneration
5
1
2
•	 Right to organize/Collective bargaining
-
-
1
•	 Working hours
4
3
1
•	 HR other
9
11
19
Legal
6
3
4
Business integrity
73
69
66
Supply management
1
n.a.
n.a.
Security, including IT
-
11
9
Other
10
9
4
Total
198
186
197
Substantiated/unsubstantiated 
concerns
Of the 197 cases reported in 2019, 51 were 
open as of December 31, 2019. Of the 146 
reports investigated, 66 were ultimately 
closed having been found to be 
substantiated, which represents 45% of the 
closed cases.
Product quality 
Signify has a strong commitment to 
responsible product stewardship. 
The Signify quality management system is 
ISO 9001:2015 certified, covering all 
business activities. When it comes to quality, 
we believe prevention of defects is better 
than cure. This is reflected in our structured 
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Aquaculture LED lighting
Mowi ASA is committed to excellence, 
ensuring the demand for farm-raised 
Atlantic salmon is met while achieving 
the highest standards of sustainability.
Mowi chose Signify’s new 680W 
AquaLED luminaire to achieve its goals 
for being the most robust solution and 
providing the best results.
With our lighting system, a 15% energy 
saving was realized, as well as an 
approximately 50% reduction in sea lice 
treatments and 5-7% waste reduction. 
Food availability and quality 
The challenges we face will require more 
efficient food production to support an 
additional two billion people by 2050. 
New and smarter agricultural methods other 
than rural farming will be required to deliver 
food - at scale - to meet this demand.
Signify continues the development of 
agricultural lighting to help growers and 
farmers globally to produce sustainable and 
healthy food, increasing yields and quality 
and improving animal well-being. 
Our technology applies to horticulture, 
aquaculture, animal centric lighting and 
water and air purification.
Access to light
Deep disparities in energy access continue 
to deprive 850 million people living off-grid 
in the global south of development 
opportunities. At the same time, urgent 
action is needed to limit the hazardous 
levels of carbon emissions of mature 
economies. With these two spectrums, 
ending this energy access imbalance will 
have to be driven by renewable sources of 
energy.
Signify has a target of reaching 5 million lives 
with renewably powered lighting and 
supporting 10,000 people with technical and 
business skills development in 2020 
(baseline 2017).
Signify channels its community investment 
activities via a dedicated Corporate Social 
Responsibility program and the Signify 
Foundation with the mission to enable 
sustainable access to light to communities 
underserved by the grid. As a result, a large 
percentage of Signify Foundation partners 
and projects are in Sub Saharan Africa, 
where more than half of the population do 
not have access to electricity.
When pursuing this mission, the Foundation 
works with actors who are addressing 
barriers across all the aspects of the energy 
and light access value chain. 
From technology manufacturers, logistics 
and distribution agencies, financing 
partners and training institutions, they are 
all key to enabling a robust self-sustaining 
energy ecosystem. This approach deviates 
from traditional philanthropy to 
interventions that stimulate systemic 
change through the development of clean 
technology market ecosystems. Signify 
Foundation dedicates the use of its 
resources to addressing barriers to growth 
and sustainability of a robust market where 
local lighting needs are met by local 
suppliers. Thus, contributing to sustainable 
and affordable lighting, underpinned by the 
creation of gender-inclusive livelihood 
opportunities.
Leveraging on the 125-year history of 
Signify, Signify Foundation’s projects 
promote the use of clean technology-based 
lighting systems that address the entire 
spectrum of lighting needs of a community. 
These include home lighting, institutional 
lighting, public lighting and lighting for 
emergency relief. Lighting homes and public 
spaces by promoting the use of solar lighting 
systems which are safer, cleaner and have 
no recurring fuel costs compared to 
traditional kerosene lamps. Partner and 
project selection follows the process of 
project application, due diligence and risk 
assessment and the projects considered for 
funding support are aligned with the 
Foundation’s key focus areas:
•	 Lighting Lives
•	 Lighting Entrepreneurs
•	 Humanitarian Light
Through all the projects that were 
implemented within the scope of the CSR 
department and Signify Foundation in 2019, 
1,373,219 lives were lit and 3,276 lighting 
entrepreneurs were supported.
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Humanitarian Lighting
During man-made or natural disasters, 
grid infrastructure is often impacted, leaving 
vulnerable communities without access to 
energy and lighting. The high impact 
earthquake (7.5 Richter scale) that hit 
Lombok in 2019 was followed by a tsunami 
and liquefaction impacting Palu and its 
surrounding area in Central Sulawesi, 
Indonesia. This led to 1,763 casualties and a 
total of 62,359 people being forced to 
evacuate to 147 evacuation shelters. People 
impacted by the destruction have an 
immediate need for light. Signify Foundation 
provided indoor and outdoor lighting to 
communities impacted by the earthquakes 
and flooding in Palu. The donation of lighting 
products including bulbs, streetlights and 
luminaires as well as solar lighting supported 
the rehabilitation and reconstruction. 
Lea Kartika Indra, who leads the CSR efforts 
at Signify Indonesia said “Lighting is one of 
the key enablers for various activities that 
enable the survivors to continue their life as 
normal after this tragedy.”
Lighting Entrepreneurs
Better lighting stimulates productivity and 
entrepreneurship. However, Lighting Lives 
can only have a long-term impact if 
communities have the skills to operate and 
maintain the lighting installation provided. 
In addition to this technical training, Signify 
Foundation helps entrepreneurs develop or 
improve enterprise management skills to 
stimulate the creation of a robust 
distribution channel for green lighting 
technology. In 2019, Signify Foundation 
partnered with BRAC Nepal to train young 
women, many of whom were unable to 
complete their formal education, 
with electrician skills. Several of these 
young women went on to work on the 
rebuilding of homes that had been 
destroyed by an earthquake and are now 
earning livelihoods as assistant electricians 
in their communities. These young female 
electricians are not just challenging social 
and gender norms but have also become 
role models and a source of inspiration to 
other girls in their communities. ”I am 
confident to troubleshoot any electrical 
problems in my community”, says Ramita, 
one of the 70 girls trained to become 
lighting technicians in Nepal.
Lighting Lives
We are enabling access to relevant, 
affordable and sustainable lighting 
technology for off-grid and partial grid 
communities to help extend the productive 
day. In 2019, Signify Foundation extended its 
East Africa footprint to Uganda, supporting 
Village Energy to accelerate its business 
sustainability by addressing barriers in their 
business structure, financial planning, 
procurement and personnel needs. 
This would enable Village Energy to bring 
their solar lighting technology to SMEs, 
schools and households in rural Uganda. 
Signify Foundation was granted support for 
this program by the Austrian Development 
Agency to help extend the scope of the 
program. The objectives of this partnership 
are to install 150,000 light points and place 
60 women in clean technology jobs.
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stay as close as possible to the 1.5°C global 
warming threshold. As part of this launch 
our CEO called on all countries to commit to 
carbon neutrality by 2050 at the latest, 
and on companies to commit to this by 2030 
at the latest.
Another important achievement in 2019 was 
the commitment of the European Investment 
Bank to end their investments in Fossil Fuel 
projects, and to act for climate change by 
making the “energy efficiency 1st” principle 
an investment priority.
In our program at COP25 in Madrid we 
reiterated the above calls. All in all, 
this progress creates a good foundation to 
work on the Green Deal that the incoming 
European Council will create early in 2020.
Another important event was the 4th UN 
Environmental Assembly that gathered 
mid-March 2019 in Nairobi. As members of 
the UN Science-Policy-Business Steering 
Committee, we were asked to share 
sustainable development recommendations 
- with a focus on tackling climate change 
- with the Environmental Ministerial 
delegations. At UNEA-4, we co-launched the 
“Global Alliance for Smart Cities in Africa” 
(GASCA) during the March 14 One Planet 
Summit for Africa hosted by French 
President Macron. In 2019, we continued our 
cooperation with the UN Environment’s 
program to establish robust a policy 
framework in developing and emerging 
countries to support their transition 
towards energy efficient lighting.
And 2019 was a year of intense advocacy 
activities - mainly through the European 
Alliance to Save Energy and the Corporate 
Leadership Group Europe - to motivate the 
European Commission and Council to adopt 
a commintment to being climate neutral by 
2050 the latest. This was combined with our 
program during Climate Week NYC, where at 
the UN Climate Action Summit our CEO 
launched the “Three percent Club” on 
energy efficiency, a crucial initiative aimed 
at doubling the annual energy efficiency 
improvement rate to 3% per year, in order to 
16.3.6	
Working with 
stakeholders 
In the further development of our Brighter 
Lives, Better World program and 
commitments to the relevant UN SDGs, 
Signify has again stepped up its work with 
strategic partners and stakeholders.
During 2019, and in the run up to COP26 in 
2020 - where countries need to submit their 
final national climate plans to the UNFCCC 
- we were part of a number of initiatives 
aimed at increasing the focus on climate 
action. At the start of the year we shared 
our views at the World Economic Forum 
(WEF) in Davos, emphasizing that climate 
advocacy must be followed by action. 
At Signify, we continue to drive 
implementation of our carbon neutral by the 
end of 2020 commitment and implemented 
our Science-Based Targets; our RE100, 
EV100 and Net Zero Carbon Buildings 
program. In Davos, we urged the 
International Gathering of World Economic 
Leaders (IGWEL) community to pursue 
similar approaches. Also, at the WEF we 
published the blog “How building renovation 
can drive the accelerated adoption of 
electric vehicles”, based on the RMI report 
published in the second half of the 
preceding year.
Light for better learning
In 2019, Signify country offices came 
together as part of a global campaign “Light 
for better learning”, to enhance the quality 
of lighting for schools that already have 
lighting and are served by the grid, or solar 
lighting systems for schools that are not on 
the grid. In its innovative program, solar 
lighting libraries, schools were equipped 
with solar lanterns that would be charged at 
the school by solar panels but would be 
accessible for the students to take home 
for the night. Evaluation reports captured 
that the lanterns were not just being used 
by the students for studying at home, 
but for a wider range of uses by their 
families, such as for household chores and 
looking after their livestock at night. 
The students would bring the lantern back 
to school to be recharged, thus increasing 
the drivers for attendance rates at the 
school.
In other countries like Ukraine and Russia, 
Light for better learning program activities 
comprised retrofitting of lighting for 
schools where Signify employees also 
delivered classes on energy efficiency and 
its potential as a climate change mitigator as 
part of their volunteering efforts. Signify 
promotes employee volunteering and 
employee giving through locally relevant 
initiatives across the geographies where we 
operate.
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Two billion LED lamps & luminaires
Through our digital LED technology, Signify 
offers light that is up to 80% more energy 
efficient, compared with conventional 
technologies, which are still commonly used. 
For this reason, we have pledged to deliver 
two billion LED lamps & luminaires in 2020 
(baseline 2015). When combined with 
digitally connected systems, we can save 
energy equivalent to that generated by  
58 medium-sized coal-fired power stations 
(equivalent to emissions from 21 million cars) 
in 2020.
In September 2019, Signify celebrated 
surpassing its five-year commitment to 
deliver two billion LED lamps and luminaires 
in support of the “Global Lighting Challenge” 
at the Climate Week NYC. At the end of 2019, 
Signify delivered 2,344 million LED lamps and 
luminaires. Considering the environmental 
impact of avoided carbon emissions, our LED 
lamps & luminaires delivered thus far have 
already saved 56,943 kilotonnes in CO2, 
equal to EUR 5,784 million in societal costs 
saved.
16.4.1	
Energy efficiency of our 
products, systems and 
services
Lighting makes up 13% of global electricity 
consumption and 5% of global greenhouse 
gas emissions. Phasing out energy 
inefficient conventional lighting and 
switching to energy-efficient LEDs and solar 
lighting can have significant environmental 
benefits. That is why energy efficiency is a 
vital aspect of our innovation process. 
We have set the ambitious target to have 
80% of our revenues coming from 
sustainable products, systems and services 
in 2020.
Sustainable revenues are defined as 
products with an energy efficiency of 66 
lm/W and higher as well as all systems and 
services, as these provide additional energy 
savings. Energy is selected as the key 
criterion, as this sustainable focal area 
consistently has the highest environmental 
impact, as shown through life-cycle 
assessments. In 2019, sustainable revenues 
grew to an all-time high of 82.5%.
16.4	 Better World 
For decades, we focused on minimizing the 
environmental impact of our operations. 
At Signify, we manage our environmental 
responsibility by setting ambitious targets, 
developing and implementing detailed plans 
and reporting on our progress. 
We continuously strive for excellence in 
environmental management. In 2019, 
we continued our efforts to align with the 
recommendations set out by the Financial 
Stability Board (FSB) and the industry-led 
Task Force on Climate-related Financial 
Disclosures (TCFD). We continued to lead 
the way towards the achievement of the 
Paris Agreement and made significant 
progress towards our science-based 
targets, as reported below under carbon 
footprint and energy.
All our environmental policies and 
management framework are based on the 
international ISO-14001 standard. In 2019, 
77% of our manufacturing sites were 
certified to ISO-14001.
The city of Seville is using 
solar lighting to enhance 
safety and energy efficiency 
Seville is a city committed to fully switch 
to renewable electricity by 2030 to 
reduce energy costs and reduce its 
carbon footprint. Seville needed a 
lighting solution for more safety in their 
park.
By offering Philips SunStay streetlights 
to the city, Seville saved cabling costs, 
reduced its carbon footprint and 
lowered overall capital and operational 
expenditure. With an output of 3,000 
lumens of warm light and an efficacy of 
175 lm/W, Philips SunStay are more 
efficient than existing LED streetlights. 
The lighting of the park allows the 
practice of outdoor sports outside the 
existing facilities during the night, as 
well as maximizing the use of this green 
space of the city by neighbors and 
visitors.
1	
Our sustainable revenues definition is reviewed regularly and was made more ambitious in 2018. In 2017, all LED 
were considered sustainable and in 2018, the energy efficiency criterion was also applied to the LED part of 
our portfolio. 2017 results are consistent with those reported in previous annual reports.
Sustainable revenues in millions of EUR
6,000
As a % 
of sales
4,800
3,600
2,400
1,200
2017 1
2018
2019
5,102
82.5%
5,363
77.3%
5,005
79.0%
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To fulfil our carbon neutral commitment, 
we continue to partner with South Pole for 
strategic carbon offsetting projects. Among 
others, we initiated off-grid renewable 
energy generation with solar panels in India. 
We continued to support forest 
conservation in Colombia and Zimbabwe and 
kept our engagement in increasing the 
availability of renewable electricity through 
wind farms in India. Our partnership with 
South Pole enabled us to offset 82% of our 
emissions, resulting in a net carbon footprint 
Carbon Buildings commitment facilitates 
improvement in energy efficiency as well as 
reduction in electricity consumption in our 
non-industrial buildings.
Operational carbon footprint 
Through substantial efforts in various 
departments, we continue our carbon 
reduction efforts to make our operational 
footprint carbon neutral. This consists of 
manufacturing, non-industrial operations, 
logistics, and business travel.
In 2019, our total CO2 emissions were 363 
kilotonnes, a 9.5% decrease year-on-year. 
This was mainly due to a reduction in emissions 
from logistics and manufacturing activities. 
Our operational CO2 efficiency in tonnes of 
CO2-equivalent per million-euro sales was 
58 in 2019, a 9% decline compared to 2018.
based targets for GHG emissions reduction 
in 2018. Signify commits to reduce 70% of 
absolute Scopes 1 and 2 GHG emissions and 
30% of absolute Scope 3 GHG emissions by 
2030 (baseline 2015).
At the end of 2019, we achieved:
•	 50% reduction of absolute Scopes 1 and 
2 GHG emissions (baseline 2015)
•	 42% reduction of absolute Scope 3 GHG 
emissions from use of sold products 
(baseline 2015).
In 2019, we stepped up our support of a 
1.5°C future as one of the first 28 companies 
committing to verified 1.5°C-aligned 
reduction targets covering greenhouse gas 
emissions from our operations.
We continue to partner with the Climate 
Group’s EV100 Initiative to operate a lease 
fleet of hybrid and fully electric vehicles 
(EVs) by 2030. Through our partnership with 
the RE100 Initiative, we keep making 
progress towards our commitment of 100% 
renewable electricity use by the end of 
2020. As an active member of Clean Cargo 
and the WBCSD Transforming Heavy 
Transport project, we engage cross-
industry collaboration and strive to lower 
the carbon footprint of our freight 
transport. Our continuous pledge to the 
World Green Building Council’s Net Zero 
LED lamps & luminaires delivered  
in millions of units
2017
2018
2019
Cumulative 
from 2015
LED lamps delivered
568
552
596
2,344
Carbon neutral operations in 
15 markets
Signify has been actively working on 
solutions that reduce our carbon 
footprint in all our markets. We 
implemented a combination of measures 
including a wide range of energy-
efficiency activities, sourcing 
renewable electricity, and offsetting 
the remaining carbon emissions. In 
2019, 6 more markets, namely Latam, 
Asean, Far East, Indian Subcontinent, 
Indonesia and Pacific became carbon 
neutral. 
16.4.2	
Carbon footprint and 
energy 
At Signify, we have a long-term commitment 
to increase the energy efficiency of our 
products and reduce energy use in our 
production processes. We acknowledge the 
findings of the Intergovernmental Panel on 
Climate Change (IPCC) and believe we have 
an important role to play in the 
transformation towards a low-carbon 
economy. In our Brighter Lives, Better World 
sustainability program, reduction of CO2 
emissions and energy use are central to our 
2020 sustainability commitments. We are 
committed to becoming 100% carbon 
neutral in our operations and sourcing only 
renewable electricity by the end of 2020. 
Through substantial efforts in various 
departments, we intend to continue our 
carbon reduction efforts to make our 
operational footprint carbon neutral. 
In addition, we contribute to reducing global 
electricity use and the carbon footprint 
through our energy-efficient products and 
we continue fostering carbon reduction 
activities in our supply chain. 
Climate Leadership 
In line with the Paris Agreement, 
we announced our 2°C scenario science-
Operational carbon footprint in kilotonnes
600
480
360
240
120
2017
2018
2019
401
174
30
13
184
363
172
25
6
160
519
245
33
23
218
Logistics
Business travel
Non-industrial operations
Manufacturing
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Enabling carbon reduction in our 
supply chain 
We engage our supply chain to reduce its 
carbon footprint. We proactively initiate, 
develop and support carbon emission 
reduction activities in the supply chain 
through our partnership with the CDP 
Supply Chain program.
Our target for 2020 is to have at least 250 
strategic suppliers annually reporting on 
scope 1 and scope 2 emissions (direct and 
indirect greenhouse gas emissions) and 200 
strategic suppliers annually reporting on 
emission reduction activities.
In 2019, we invited 404 (281 in 2018) of our 
strategic suppliers to the program, of which 
73% submitted the 2019 CDP questionnaire, 
which is an increase of more than 80% 
compared to 2018. This represents 87% of 
project related spend, which is significantly 
higher than 2018 (60% of the spend). 
In 2019, 160 suppliers reported emission-
reduction activities.
In total, our suppliers undertook more than 
400 carbon emission projects in 2019, 
with almost 55 million metric tons of CO2 
emissions saved, which represents over 5 
times more CO2 emissions saved than 2018 
(9 million metric tons). This large increase 
demonstrates the shift our suppliers are 
making in implementing carbon emission-
reduction measures.
 
Electricity
In 2019, we procured 94% of our electricity 
from renewable sources. All electricity 
consumed by our operations in the United 
States, Canada, Europe, Middle East, China, 
India and Indonesia was sourced from 
renewable sources or matched with Energy 
Attribute Certificates (EACs). Approximately 
38% of our renewable electricity was 
contracted via our energy providers. 
The remaining 62% was sourced through the 
procurement of renewable energy 
certificates, of which 34% came from our 
participation in power purchase 
agreements.
In 2019, we signed a 10-year virtual power 
purchase agreement (vPPA) with Kisielice 
wind farm in Poland. This is the first vPPA 
project established in Poland. It accelerates 
the transition to a renewable electricity 
market in Poland and reinforces our 
long-term commitment to renewable 
electricity. The renewable electricity 
generated by the wind farm will power our 
operations in the country, which accounted 
for nearly 30% of Signify’s global electricity 
consumption.
Business travel
Our CO2 emissions related to business travel 
account for 7% of our operational carbon 
footprint. We achieved a 17% reduction 
compared to 2018. We continued to 
implement our sustainable travel policy in 
2019. As a result, we lowered emissions from 
air travel by 23% and emissions from 20 
kilotonnes to 16 kilotonnes.
Operational carbon footprint in kilotonnes 
CO2-equivalent 
2017
2018
2019
Scope 1
185
172
168
Scope 2  
(market based)
56
25
10
Scope 3  
business travel
33
30
25
Scope 3 logistics
245
174
160
Of which
•	 Air transport
143
71
73
•	 Road 
transport
49
51
40
•	 Ocean 
transport 
53
52
47
Total Signify
519
401
363
Scope 2  
(location based)
242
202
181
Energy use in operations
Our total energy usage in 2019 amounted to 
3,885 terajoules, 4% lower than the previous 
year. This decrease was due to operational 
changes, reduced heating requirements and 
energy efficiency improvements in our 
factories. Our operational energy efficiency 
in terajoules per million-euro sales 
increased by 3% from 2018 to 2019.
of 64 kilotonnes which is 56% lower than our 
net CO2 footprint in 2018.
Manufacturing
Manufacturing accounted for 48% of our 
operational carbon footprint, which has 
been reduced by 6% compared to 2018. 
This was achieved mainly due to continuous 
operational changes and efficiency 
improvements, for instance optimization of 
heating systems.
Non-industrial operations
CO2 emissions from non-industrial 
operations (offices, warehouses) represent 
2% of our total carbon footprint. In 2019, 
our emissions from non-industrial 
operations decreased by 57% year-on-year, 
primarily through increased renewable 
electricity usage and energy efficiency 
improvements.
Logistics
Overall, 44% of our total CO2 emissions was 
attributed to logistics, which decreased by 
8% in 2019. We focused on implementing 
strict approval procedures and actively 
promoting sustainable alternatives. Driven 
by our commitment to sustainable logistics, 
we remained engaged in the Clean Cargo 
buyer-supplier forum. This enabled us to 
successfully reduce emissions from road 
freight and ocean freight by 22% and 9%, 
respectively. Our air transport emissions 
went up by 2% due to an adjustment of 
reporting methodology to improve our 
reporting accuracy and transparency. 
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Corporate statements

Our efforts also address supply chain 
improvements, such as remote serviceability 
(connected lighting) and end-of-life 
services. Prolonging lifetimes via 
serviceability further limits the material use 
and higher recyclability rates that optimize 
the reuse of materials, applying the 
principles of a circular economy.
16.4.3	
Circular economy
The rising demand for raw materials and 
energy is fueled by an increasing global 
population, while the availability of natural 
resources and fossil fuels is diminishing. 
At Signify, we consider the transition to a 
circular economy as a key enabler in 
society’s pursuit of a more sustainable 
world. A circular economy aims to decouple 
economic growth from the use of natural 
resources and ecosystems by using material 
resources more effectively. Our actions 
cover the whole life cycle of a product: from 
production, use and re-use to waste 
management.
Circular lighting 
In our efforts to transition to a circular 
economy, we developed Signify Circular 
lighting. This approach applies the “make, 
use, return” circular economy principles to 
the lighting industry. Lighting is designed to 
use resources in a smarter and more 
efficient way, building in traceability, 
serviceability, refurbishment and upgrade 
options, parts harvesting and recycling of 
used materials.
We offer a sustainable service option 
allowing our customers to pay for the light 
used, rather than an upfront investment in 
the materials. By minimizing materials waste 
and reducing the environmental impact, 
we create an ecosystem that extends the 
life of our lighting products and provides a 
better future for the next generation. In this 
seventh year of our circular economy 
program, five more families of “Circular 
Economy ready” luminaires were brought to 
market.
Reducing the weight of materials of 
our products
Via well-established sustainable design rule 
Signify continuously lowers the weight of 
new product designs resulting in less 
material use and cost for our product 
portfolio. The sustainable design rules are 
also optimized for circularity resulting in 
better serviceability while increasing 
recyclability.
CDP reporters per region and topics reported
Greater China
Rest of the World
Europe
Americas
Total
2018
2019
2018
2019
2018
2019
2018
2019
2018
2019
Scope 1
78%
70%
80%
62%
85%
61%
76%
61%
80%
65%
Scope 2
52%
43%
68%
62%
63%
44%
76%
56%
62%
48%
Scope 1 & 2
67%
43%
72%
59%
69%
46%
72%
55%
71%
48%
Have a reduction target
57%
58%
68%
54%
62%
42%
60%
39%
61%
48%
Have on-going reduction 
activities
69%
65%
64%
54%
68%
51%
72%
44%
68%
55%
Climate change 
opportunities
68%
70%
72%
65%
67%
63%
60%
53%
67%
64%
Climate change risks
57%
61%
64%
54%
60%
44%
52%
45%
58%
52%
Integrated climate 
change in business 
strategy
72%
76%
88%
76%
81%
79%
76%
68%
79%
75%
Integrated climate 
change in risk 
management
81%
71%
88%
70%
85%
75%
68%
60%
81%
70%
Total amount of 
reporters
58
105
25
37
52
89
25
62
160
293
3D printed professional 
luminaires
Retail customers like Albert Heijn and 
M&S aimed for an easy and sustainable 
refresh of their stores and had a need 
to upgrade their luminaires without 
adjustments or cutting into their 
ceilings. Signify provided them with 
mass customized 3D printed luminaires, 
using a 100% recyclable polycarbonate 
material and shapes tailored to their 
needs. Additional benefits were the 
lower weight (less material), no use of 
paint nor screws and the ease of 
recycling at the end of their lives, 
supporting a circular economy.
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16.4.5	
Hazardous substances 
Product substances 
Through sustainable design rules, all new 
product developments meet stringent 
sustainability criteria before their market 
launch. All our products and systems 
delivered to countries requiring the CE 
marking are compliant with the RoHS 
Directive (2011/65/ EU) and REACH (EC 
1907/2006) regulations. We require all our 
suppliers to communicate all substances in 
their components and to comply with the 
stipulations that we have listed in our 
Regulated Substance List (RSL), which in 
many cases goes beyond legislation. In 2019, 
we continued to engage with our suppliers, 
further rolling out the publicly available 
BOMcheck tool, in which components and 
substances can be registered.
Chemical substances in production 
processes
We prioritize the safe management of 
chemicals to ensure that we minimize the 
risks of the use of these substances related 
to the environment, society and our 
employees in their daily work. If there are 
threats of harm to human safety or the 
environment, we proactively search for 
effective alternatives. We have a robust 
approach to identify and manage regulated 
and hazardous substances in our production 
processes.
packaging materials with a high recycled 
content, and/or selecting virgin packaging 
materials with a minimal environmental 
impact from responsible sources.
Our packaging policy requires for the use of 
80% recycled paper. In 2019, Signify 
continued to work on phasing out plastic 
materials in packaging. The Signify Packaging 
policy can be found on our website: https://
www.signify.com/global/sustainability.
Total manufacturing waste consists of waste 
that is delivered for recycling, incineration 
or landfill.
Zero Waste to landfill
Sending zero manufacturing waste to landfill 
is one of our Brighter Lives, Better World 
2020 commitments. In 2019, we were able to 
effectively reduce the amount of waste sent 
to landfill, as defined by our commitment, 
by 70% compared to 2018. A number of 
waste categories are excluded from this 
commitment, such as chemical or hazardous 
waste, which are mandatory to landfill under 
legislative regulation or when waste 
collection and/or treatment is regulated. 
For more details on our commitment scope, 
please refer to our Sustainability 
Supplements to the Annual Report, available 
on our Sustainability downloads webpage:  
https://www.signify.com/global/
sustainability/downloads.
Our recycling programs address waste 
arising from manufacturing activities, 
such as glass or canteen waste, as well as 
from suppliers, such as packaging materials.
In 2019, total waste to landfill amounted to 
0.7 kilotonnes. This is a decrease of waste to 
landfill of 70% compared to 2018. 
This decrease was mainly due to the 
optimization of waste management in our 
operations, more accurate weighting 
methods in Growth Markets and a shift to 
more sustainable waste contractors in the 
USA and Mexico.
The focus given to increase the waste 
recycling rate has also enabled our sites to 
identify new opportunities for reducing their 
overall amount of waste.
Manufacturing waste in kilotonnes
 
2017
2018
2019
Recycled
37.4 (84%)
33.3 (82%)
32.7 (90%)
Incinerated
2.7 (6%)
3.0 (7%)
2.2 (6%)
Landfilled 
4.3 (10%)
4.5 (11%)
1.5 (4%)
In scope of commitment
2.9 (6%)
2.4 (6%)
0.7 (2%)
Total waste
44.4
40.8
36.4
90% of total waste was recycled in 2019 and we continue to recycle 100% of our metal and 
glass waste.
Recycling rate per waste category
2017
2018
2019
Canteen waste
15%
32%
58%
Chemical Waste
46%
22%
29%
Electrical and Electronic Waste
91%
97%
90%
Glass (line rejects)
100%
100%
100%
Metal scrap
100%
100%
100%
Paper/cardboard
99%
99%
99%
Plastic waste
89%
86%
84%
16.4.4	
Responsible packaging
Signify pursues a reduction of the 
environmental impact of its packaging by 
shifting to responsible materials. 
Our packaging policy encourages packaging 
designers, the purchasing community and 
suppliers to minimize the environmental 
impact of packaging materials in all phases 
of the life cycle. This means reducing the 
amount of packaging used, selecting 
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16.4.8	
Environmental incidents 
In 2019, Signify experienced no significant 
environmental incidents. However, 
one instance of non-compliance related to 
oil leakage was reported. This incident was 
resolved in a satisfactory manner and did 
not result in a fine.
business models which have a lower 
dependency on water.
Total water intake in 2019 was 944,000 m3, 
25% lowered compared to 1,266,000 m3 in 
2018. This decrease was mainly a result of 
lower production volumes in those sites 
where water is used for cooling purposes. 
In addition, a decrease in usage was realized 
through operational changes and an 
optimization of our industrial footprint. 38% 
of our sites state that water is primarily used 
for domestic purposes.
Water intake in thousands of m3
2017
2018
2019
Total water
1,321
1,266
944
16.4.7	
Biodiversity 
Protecting biodiversity is important for 
Signify and its stakeholders. Through our 
carbon offsetting projects and partnership 
with South Pole, we contribute to 
conserving and restoring forests, 
safeguarding biodiversity in different 
regions of the world. For example, 
our project in Zimbabwe ensures that 
785,000 hectares of forest and wildlife on 
the southern shores of Zimbabwe’s Lake 
Kariba are now being protected. 
Our reforestation project in Colombia 
restored 1,116 hectares of forest in Càceres 
and 9,640 hectares of land have been 
surveyed and mapped in Cravo Norte. Based 
on our methodology for calculating societal 
impact, we created EUR 70 million for society 
through conserving and restoring forest in 
2019. 
Additionally, by changing our processes from 
lacquering to powder coating, Signify 
reduced the emissions of Toluene.
Emissions of VOCs in lacquering processes
 
2017
2018
2019
Lead and lead 
compounds
 2
1
1
Styrene
909
653
233
Toluene
101
65
4
Xylene
670
744
728
Emissions from 
category 2 
substances
1,682
1,463
967
16.4.6	
Water
Signify recognizes the growing importance 
of water usage in our everyday activities. 
As we continue to expand our portfolio of 
LED products, systems, and services, 
the water intensity of our operations 
continues to decrease. Despite this, some of 
our manufacturing facilities are located in 
areas with water stress, such as Saudi 
Arabia, Mexico and parts of the United 
States, and may face water scarcity risks. 
To analyze and quantify our exposure to 
water risk, we utilized the open source 
Water Risk Monetizer tool by Ecolab, 
Trucost, and Microsoft. The results show 
that 38% of our global water consumption is 
located in regions classified as having 
extremely high- or high-water scarcity. 
While some of our facilities have reuse and 
recycling measures in place, we continued 
to implement and identify new and more 
efficient water saving measures as well as 
continuing our transition to technology and 
We ensure compliance through continuous 
monitoring of chemicals usage in 
manufacturing sites. In 2010 we developed a 
program to start the phase-out of several 
hazardous substances.
Emissions from mercury and mercury 
compounds totaled 1 kilogram in 2019. 
The target to achieve emissions As Low As 
Reasonably Achievable (ALARA) was met in 
2015. Signify continues to closely monitor 
usage, emissions and exposure, 
to determine if further improvement 
opportunities are possible. 
Emissions from mercury
Since 2012, we have been able to drastically 
decrease the emissions from mercury by 
changing our production processes and 
replacing liquid mercury with solid-state 
mercury. 
Emissions from mercury in kilograms
 
2017
2018
2019
Mercury and 
mercury 
compounds
5
4
1
Emissions from volatile organic 
compounds (VOCs) in lacquering 
processes
Due to improvements in operations relating 
to the coating of products, the application 
of targeted VOCs was reduced, and in 2019, 
chemical painting was shifted to water-
based paint. In 2019, Signify continues to 
phase out styrene in resins used for 
impregnation by replacing coil ballasts with 
electronic ballasts.
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17	 Combined 
independent 
auditor’s report
On the 2019 financial statements and sustainability information
To: the annual general meeting of shareholders and Supervisory Board of Signify N.V.
Our Opinions
We have audited the financial statements 
2019 of Signify N.V. (hereafter: the 
Company) based in Eindhoven, 
the Netherlands. The financial statements 
include the consolidated financial 
statements and the company financial 
statements.
In our opinion:
•	 the accompanying consolidated financial 
statements give a true and fair view of 
the financial position of Signify N.V. as at 
December 31, 2019 and of its result and 
its cash flows for 2019 in accordance with 
International Financial Reporting 
Standards as adopted by the European 
Union (EU-IFRS) and with Part 9 of Book 2 
of the Dutch Civil Code
•	 the accompanying company financial 
statements give a true and fair view of 
the financial position of Signify N.V. as at 
December 31, 2019 and of its result for 
2019 in accordance with Part 9 of Book 2 
of the Dutch Civil Code
We have audited the sustainability 
information in the annual report for the year 
2019 of Signify N.V. based in Eindhoven, 
the Netherlands (hereafter: the annual 
report). The scope is described in the 
section Our Scope. An audit is aimed at 
obtaining a reasonable level of assurance.
In our opinion, the sustainability information 
presents, in all material respects, a reliable 
and adequate view of:
•	 the policy and business operations with 
regard to sustainability
•	 the thereto related events and 
achievements for the year 2019
in accordance with the Sustainability 
Reporting Standards (option 
Comprehensive) of the Global Reporting 
Initiative (GRI) and the applied supplemental 
reporting criteria as disclosed in section 16.1 
Approach to sustainability reporting of the 
annual report 2019 of Signify N.V. 
Basis for our 
Opinions
We performed our audit on the financial 
statements and the sustainability 
information in accordance with Dutch law, 
including the Dutch Standards on Auditing 
and the Dutch Standard 3810N “Assurance 
engagements relating to sustainability 
reports”, which is a specified Dutch 
Standard that is based on the International 
Standard on Assurance Engagements (ISAE) 
3000, “Assurance Engagements Other Than 
Audits or Reviews of Historical Financial 
Information”. Our responsibilities under 
those standards are further described in 
the section Our responsibilities in this 
report.
We believe that the audit evidence we have 
obtained is sufficient and appropriate to 
provide a basis for our opinions.
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Materiality
Financial statements
For the audit of the financial statements our 
considerations regarding the materiality are 
as follows:
Materiality
€ 25 million  
(2018: € 26 million) 
Benchmark 
used
5% of adjusted profit  
before taxes
Additional 
explanation
Based on our professional 
judgment we consider 
earnings-based measures as 
the most appropriate basis to 
determine materiality. 
Adjustments are made to 
profit before taxes for 
elements which are not 
directly related to the 
operational performance of 
the Company as disclosed in 
note 18 of the annual report.
We have also taken into account 
misstatements and/or possible 
misstatements that in our opinion are 
material for the users of the financial 
statements for qualitative reasons.
We have agreed with the Supervisory Board 
that misstatements in excess of € 1,250 
thousand, which are identified during the 
audit, would be reported to them, as well as 
smaller misstatements that in our view must 
be reported on qualitative grounds.
Unaudited references to external 
sources
The references to external sources or 
websites in the sustainability information, 
with the exception of the Methodology for 
calculating societal impact and the 
Supplement to the 2019 sustainability 
statements (supplement 1 and 2), are not 
part of the sustainability information as 
audited by us. We therefore do not provide 
assurance on this information.
Our audit approach
Our understanding of the 
business 
Signify N.V. is a global provider of lighting 
solutions. The group is structured in 
components and we tailored our group audit 
approach accordingly. We paid specific 
attention in our audit to a number of areas 
driven by the operations of the group and 
our risk assessment. We start by 
determining materiality and identifying and 
assessing the risks of material misstatement 
of the financial statements, whether due to 
fraud, non-compliance with laws and 
regulations or error in order to design audit 
procedures responsive to those risks, 
and to obtain audit evidence that is 
sufficient and appropriate to provide a basis 
for our opinion. The risk of not detecting a 
material misstatement resulting from fraud 
is higher than for one resulting from error, 
as fraud may involve collusion, forgery, 
intentional omissions, misrepresentations, 
or the override of internal control. 
The company financial statements comprise: 
•	 the balance sheet as at December 31, 
2019
•	 the statements of income and changes in 
equity for 2019
•	 the notes comprising a summary of the 
accounting policies and other 
explanatory information
The sustainability information is included in 
chapter 3 Brighter Lives, Better World 
program and Value Creation Model, section 
4.2 Sustainability performance and chapter 
16 Sustainability statements of the annual 
report. 
Limitations to the scope of our 
audit engagement comprising 
the sustainability information
Unexamined prospective 
information
The sustainability information includes 
prospective information, such as goals, 
strategy, plans, forecasts, expectations and 
estimates. Inherent to prospective 
information, the actual future results are 
uncertain. We do not provide any assurance 
on the assumptions and achievability of 
prospective information in the sustainability 
information.
Our independence
We are independent of Signify N.V. 
in accordance with the EU Regulation on 
specific requirements regarding statutory 
audit of public-interest entities, the “Wet 
toezicht accountantsorganisaties” (Wta, 
Audit firms supervision act), the 
“Verordening inzake de onafhankelijkheid 
van accountants bij assurance-opdrachten” 
(ViO, Code of Ethics for Professional 
Accountants, a regulation with respect to 
independence) and other relevant 
independence regulations in the 
Netherlands. This includes that we do not 
perform any activities that could result in a 
conflict of interest with our independent 
audit engagements. Furthermore, we have 
complied with the “Verordening gedrags- en 
beroepsregels accountants (VGBA, Dutch 
Code of Ethics)”. 
Our scope
The consolidated financial statements 
comprise:
•	 the consolidated balance sheet as at 
December 31, 2019
•	 the following statements for 2019: the 
consolidated statements of income, 
comprehensive income, cash flows and 
changes in equity 
•	 the notes comprising a summary of the 
significant accounting policies and other 
explanatory information
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we consider, based on the audit evidence 
obtained, whether a material uncertainty 
exists related to events or conditions that 
may cast significant doubt on the Company’s 
ability to continue as a going concern. If we 
conclude that a material uncertainty exists, 
we are required to draw attention in our 
auditor’s report to the related disclosures in 
the financial statements or, if such 
disclosures are inadequate, to modify our 
opinion. 
Our conclusions are based on the audit 
evidence obtained up to the date of our 
auditor’s report. However, future events or 
conditions may cause a company to cease to 
continue as a going concern.
Our scope for the group audit of 
the financial statements
Signify N.V. is at the head of a group of 
entities. The financial information of this 
group is included in the consolidated 
financial statements of Signify N.V. 
Because we are ultimately responsible for 
the opinion, we are also responsible for 
directing, supervising and performing the 
group audit. In this respect we have 
determined the nature and extent of the 
audit procedures to be carried out for 
group entities. Decisive were the size and/or 
the risk profile of the group entities or 
operations. On this basis, we selected group 
entities for which an audit or review had to 
be carried out on the complete set of 
financial information or specific items.
We incorporated elements of 
unpredictability in our audit. We considered 
the outcome of our other audit procedures 
and evaluated whether any findings were 
indicative of fraud or non-compliance. If so, 
we reevaluate our assessment of fraud risk 
and its resulting impact on our audit 
procedures.
Our audit response related to risks 
of non-compliance with laws and 
regulations
We assessed factors related to the risks of 
non-compliance with laws and regulations 
that could reasonably be expected to have a 
material effect on the financial statements 
from our general industry experience, 
through discussions with the Board of 
Management, reading minutes, inspection of 
internal audit and compliance reports, 
and performing substantive tests of details 
of classes of transactions, account balances 
and disclosures.
We also inspected lawyers’ letters and 
correspondence with regulatory authorities 
and remained alert to any indication of 
(suspected) non-compliance throughout 
the audit. Finally, we obtained written 
representations that all known instances of 
non-compliance with laws and regulations 
have been disclosed to us. 
Going concern
In order to identify and assess the risks of 
going concern and to conclude on the 
appropriateness of management’s use of 
the going concern basis of accounting, 
understanding of the entity and its 
environment, including the entity’s internal 
control relevant to the audit and in order to 
design audit procedures that are 
appropriate in the circumstances. As in all of 
our audits, we addressed the risk of 
management override of internal control. 
We do not audit internal control per se for 
the purpose of expressing an opinion on the 
effectiveness of the Company’s internal 
control.
We considered available information and 
made enquiries of relevant executives, 
directors (including internal audit, legal, 
compliance and heads of Market Groups and 
Business Groups) and the Supervisory 
Board. As part of our process of identifying 
fraud risks, we evaluated fraud risk factors 
with respect to financial reporting fraud, 
misappropriation of assets and bribery and 
corruption in close co-operation with our 
forensic specialists. As Signify N.V. is a 
global company, operating in multiple 
jurisdictions, we considered the risk of 
bribery and corruption. 
We evaluated the design and the 
implementation and, where considered 
appropriate, tested the operating 
effectiveness of internal controls that 
mitigate fraud risks. In addition, 
we performed procedures to evaluate key 
accounting estimates for management bias 
in particular relating to important judgment 
areas and significant accounting estimates 
as disclosed in the Notes to the financial 
statements. We have also used data analysis 
to identify and address high-risk journal 
entries.
Sustainability information
Based on our professional judgment we 
determined specific materiality levels for 
each relevant part of the sustainability 
information and for the sustainability 
information as a whole. When evaluating our 
materiality levels, we have taken into 
account quantitative and qualitative 
considerations as well as the relevance of 
information for both stakeholders and the 
organization. 
Our focus on fraud and non-
compliance with laws and 
regulations
Our responsibility
Although we are not responsible for 
preventing fraud or non-compliance and 
cannot be expected to detect non-
compliance with all laws and regulations, it is 
our responsibility to obtain reasonable 
assurance that the financial statements, 
taken as a whole, are free from material 
misstatement, whether caused by fraud or 
error. Non-compliance with laws and 
regulations may result in fines, litigation or 
other consequences for the Company that 
may have a material effect on the financial 
statements.
Our audit response related to fraud 
risks
In order to identify and assess the risks of 
material misstatements of the financial 
statements due to fraud, we obtained an 
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Our key audit 
matters
Key audit matters are those matters that, 
in our professional judgment, were of most 
significance in our audit procedures for the 
financial statements and the sustainability 
information. We have communicated the key 
audit matters to the Supervisory Board. 
The key audit matters are not a 
comprehensive reflection of all matters 
discussed.
The key audit matter “Valuation of deferred 
tax assets and liabilities for uncertain tax 
positions” which was included in our 2018 
audit, has been changed to “Valuation of 
deferred tax assets” in our 2019 audit as our 
audit procedures confirmed a decrease in 
estimation uncertainty regarding the liability 
for uncertain tax positions.
The key audit matters were addressed in the 
context of our audit procedures for the 
financial statements and the sustainability 
information as a whole and to conclude 
thereon, and we do not provide a separate 
conclusion on these matters. 
By performing the procedures mentioned 
above at components, together with 
additional procedures at group level, 
we have been able to obtain sufficient and 
appropriate audit evidence about the 
group’s financial information to provide an 
opinion on the consolidated financial 
statements.
Teaming, use of specialists and internal audit
We ensured that the audit teams both at 
group and at component levels included the 
appropriate skills and competences which 
are needed for the audit of a listed client in 
Signify’s industry. We included specialists in 
the areas of IT audit, forensics, treasury, 
pensions and income tax and have made use 
of our own experts in the areas of valuations 
and actuaries.
Accordingly, our coverage of the group’s 
Revenues, Goodwill and Deferred tax assets 
can be summarized as follows: 
Revenues
Full scope
Specific 
scope
Other
procedures
21%
55%
24%
Goodwill
Full scope
100%
Deferred tax assets
Full scope
Specific 
scope
72%
9%
19%
Other
procedures
Following our assessment of the risk of 
material misstatement to Signify N.V.’s 
consolidated financial statements, we have 
selected 1 component which required an 
audit of the complete financial information 
(Full Scope Component). We have selected 
37 components requiring audit procedures 
on specific account balances that we 
considered to have the potential for the 
greatest impact on the significant accounts 
in the financial statements either because 
of the size of these accounts or their risk 
profile (Specific Scope Components). 
We centrally performed audit procedures on 
accounting areas which are managed 
centrally such as goodwill, legal claims and 
treasury.
As a result of our scoping, our actual 
coverage varies per account balance. 
In addition, the level of detail of our audit 
procedures per account balance varies 
depending on our risk assessment. 
Of the remaining components, 
we performed risk-based analytical 
procedures to respond to any potential risks 
of material misstatements to the financial 
statements. 
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For the audit of the financial statements we 
identified the following key audit matters. 
Key audit matter
How our audit addressed the matter
Key observations
Improper revenue recognition and risk of management override
Revenue from the sale of goods is 
recognized at the point in time that the 
customer obtains control of the goods. For 
standard sale of products, control generally 
passes to the customer at the time the 
product is delivered and accepted, 
depending on the delivery conditions. 
Management focuses on sales as a key 
performance measure which could create an 
incentive for sales to be recognized before 
the customer obtains control of the goods 
due to the pressure management may feel 
to achieve planned results. Further 
reference is made to note 2 to the 
Consolidated financial statements.
We assessed that improper revenue 
recognition and risk of management 
override relating to material projects and 
sale of goods, represents a key audit matter.
 
Our audit procedures included the 
assessment of the appropriateness of the 
Company’s revenue recognition accounting 
policies and the compliance with IFRS as 
endorsed by the EU. We obtained an 
understanding of the design of key controls 
in the revenue recognition process. We used 
data-analytics to focus on key risk areas and 
exceptional or unusual revenue streams and 
patterns. We audited significant sales 
contracts and performed cut-off 
procedures to ensure revenue is recognized 
in the correct period. 
Based on the procedures performed, we did 
not identify any evidence of material 
misstatement in the revenue recognized 
relating to the sales in 2019.
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Key audit matter
How our audit addressed the matter
Key observations
Valuation of goodwill
At December 31, 2019, the total carrying 
value of goodwill amounted to  
€ 1,943 million, representing 29% of total 
assets. 
Goodwill is allocated to Cash Generating 
Units (CGUs). Goodwill is not amortized but 
tested for impairment annually and 
whenever impairment indicators require 
impairment testing. Signify performed and 
completed annual impairment tests in the 
last quarter of the financial year. Judgment 
is required when analyzing impairment 
triggers and tests. These analyses are based 
on estimates of future cash flows. 
An impairment loss is recognized in the 
Consolidated statements of income 
whenever and to the extent that the 
carrying amount of a cash-generating unit 
exceeds the recoverable amount. 
As the determination of the value in use of 
goodwill is based on significant judgment 
and a complex valuation method, including 
the determination of the CGUs used to 
assess goodwill for impairment, the 
allocation of goodwill to CGUs, and the 
assumptions used in the impairment test to 
support the recoverable amount of goodwill 
(as disclosed in note 15), we consider this a 
key audit matter. 
As part of our audit, we assessed and tested 
the assumptions, methodologies, and data 
used by the Company in their impairment 
test, by comparing them to external data 
such as expected inflation rates, discount 
rates and implied growth. Additionally, we 
validated that the cash flow projections 
used in the valuation are consistent with the 
approved strategic plans and have evaluated 
the historical accuracy of management’s 
estimates that drive the assessment, such 
as expected growth rates. We performed 
sensitivity analyses by stress testing key 
assumptions in the model to determine the 
degree to which these assumptions would 
need to change before an impairment 
charge is triggered. We included in our team 
a valuation expert to assist us in these audit 
activities.
We specifically focused on the sensitivity of 
the headroom in the CGU Professional and 
whether a reasonably possible change in 
assumptions could cause the carrying 
amount to exceed its recoverable amount.    
We assessed the adequacy of the Company’s 
disclosure around goodwill as included in 
note 15 to the Consolidated financial 
statements as well as the Company’s 
policies that are more critical in nature as 
included in note 2 to the Consolidated 
financial statements.
We consider management’s assumptions to 
be within a reasonable range. 
We concur with management’s conclusion 
that no impairment of goodwill is required as 
at December 31, 2019 and with the 
disclosures in the financial statements.
162
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Corporate statements
Creating value
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Sustainability statements
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Consolidated financial statements

Key audit matter
How our audit addressed the matter
Key observations
Valuation of deferred tax assets
At December 31, 2019, the deferred tax 
assets amounted to € 384 million. Further 
reference is made to note 9 of the 
Consolidated financial statements.
A deferred tax asset is recognized for 
unused tax losses, tax credits and 
deductible temporary differences, to the 
extent that it is probable that future taxable 
profits will be available against which they 
can be utilized. The evaluation of the 
recoverability of deferred tax assets 
requires judgment about the future taxable 
profitability of the legal entity holding the 
tax loss carry forward. The ultimate 
realization of deferred tax assets is 
dependent upon the generation of future 
taxable income in the countries where the 
deferred tax assets originated and during 
the periods when the deferred tax assets 
become deductible. Management considers 
the scheduled reversal of deferred tax 
liabilities, projected future taxable income 
and tax planning strategies in making this 
assessment. A lack of future taxable profits 
or taxable profits below the level of current 
estimates, may cause deferred tax assets to 
be impaired.
The accounting for deferred tax assets was 
significant to our audit since the Company 
has extensive international operations and 
makes judgments and estimates in relation 
to the realization of deferred tax assets. 
With the involvement of our tax experts we 
evaluated the tax accounting in various 
jurisdictions in which the Company operates, 
taking into account the impact of the local 
tax jurisdiction.
With regard to deferred tax assets, we 
tested management’s assumptions used to 
determine the probability that deferred tax 
assets recognized in the balance sheet will 
be recovered. This is based upon forecasted 
taxable income in the countries where the 
deferred tax assets originated and the 
periods when the deferred tax assets can 
be utilized. These forecasts were evaluated 
by us and we assessed the historical 
accuracy of management’s assumptions. 
Where possible, we compared information 
provided by management to corroborative 
or contradictory information. 
The gradual reduction of the income tax rate 
in the Netherlands, initially anticipated to be 
20.5%, has been amended to 21.7% in 2021 in 
the 2020 Tax Plan. This resulted in an 
increase of the deferred tax asset relating 
to temporary differences on intangible 
assets of € 6 million, which was recognized 
as income.
 
We did not identify any evidence of material 
misstatement of deferred tax assets as 
recorded in the year-end balance sheet.
163
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Corporate statements
Creating value
Corporate performance
Sustainability statements
We are Signify
Governance
Consolidated financial statements

For the audit of the sustainability 
information, we identified the following key 
audit matters:
Key audit matter
How our procedures addressed the matter
Key observations
Reporting criteria for sustainable revenues
Sustainable revenues (as disclosed in 
chapter 16.4.1) is an important key 
performance indicator (KPI) in the 
sustainability strategy. This KPI is based on 
reference products which are continuously 
improving in time.
Our procedures focused on evaluating 
whether the self-developed reporting 
criteria for this indicator are suitable and 
consistently applied and assessing whether 
the disclosure of the reporting criteria in 
the annual report is sufficient for a proper 
understanding by the reader. Further 
reference is made to the Sustainability 
supplement as referred to in chapter 16.1.4.
We concur with the criteria, its application 
by management and the disclosures made by 
management.
Estimates and assumptions concerning the calculated impact of avoided CO₂ as presented in the value creation model
Inherent to the nature of calculating avoided 
CO₂ and expressing this in monetary terms is 
that this is to a large extent based on the 
use of estimates and underlying assumptions 
which require additional attention in our 
procedures. 
Further reference is made to the Value 
creation model as disclosed in chapter 3.3.
Our procedures focused on evaluating 
whether the methodology is suitable, 
consistently applied and assessing the 
reasonableness of estimates and 
assumptions. Furthermore, we evaluated 
whether the related disclosures in the 
annual report and in the document 
“methodology for calculating our societal 
impact” document are adequate.
We concur with the methodologies applied, 
the estimates and assumptions made by 
management and the sufficiency of the 
related disclosures in the annual report and 
methodology document.
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Corporate statements
Creating value
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Consolidated financial statements

Responsibilities
Responsibilities of management 
and the Supervisory Board
Management is responsible for the 
preparation and fair presentation of the 
financial statements in accordance with 
EU-IFRS and Part 9 of Book 2 of the Dutch 
Civil Code. 
Management is also responsible for the 
preparation of the sustainability information 
in accordance with the Sustainability 
Reporting Standards of the GRI and the 
applied supplemental reporting criteria as 
disclosed in note 16 of the annual report, 
including the identification of the 
stakeholders and the determination of 
material issues. The choices made by 
management with respect to the scope of 
the sustainability information are included in 
section 16.1 Approach to sustainability 
reporting of the annual report. 
Furthermore, management is responsible 
for such internal control as management 
determines is necessary to enable the 
preparation of the financial statements and 
the sustainability information that are free 
from material misstatement, whether due to 
fraud or errors. 
Report on other 
legal and regulatory 
requirements
Engagement
We were engaged by the Supervisory Board 
as the auditor of Philips Lighting N.V. 
(Signify N.V.) on July 15, 2016 for the audit of 
2016 and have operated as statutory auditor 
since that date.
No prohibited non-audit services
We have not provided prohibited non-audit 
services as referred to in Article 5(1) of the 
EU Regulation on specific requirements 
regarding statutory audit of public-interest 
entities.
Other non-prohibited services 
provided
Our services are only related to the audit of 
the financial statements.
We have read the other information. Based 
on our knowledge and understanding 
obtained through our audit of the financial 
statements or otherwise, we have 
considered whether the other information 
contains material misstatements. 
By performing these procedures, we comply 
with the requirements of Part 9 of Book 2 
and Section 2:135b sub-Section 7 of the 
Dutch Civil Code and the Dutch Standard 
720. The scope of the procedures 
performed is substantially less than the 
scope of those performed in our audit of the 
financial statements or in our audit of the 
sustainability information.
Management is responsible for the 
preparation of the other information, 
including the report of the Board of 
Management in accordance with Part 9 of 
Book 2 of the Dutch Civil Code, other 
information required by Part 9 of Book 2 of 
the Dutch Civil Code and the remuneration 
report in accordance with Section 2:135b of 
the Dutch Civil Code.
Other information 
included in the 
annual report
In addition to the financial statements and 
our auditor’s report thereon, the annual 
report contains other information that 
consists of:
•	 The report of the Board of Management
•	 The remuneration report
•	 Other information required by Part 9 of 
Book 2 of the Dutch Civil Code
•	 Sustainability statements
•	 Corporate Governance report
Based on the following procedures 
performed, we conclude that the other 
information:
•	 Is consistent with the financial 
statements and does not contain material 
misstatements
•	 Contains the information as required by 
Part 9 of Book 2 and Section 2:135b of 
the Dutch Civil Code
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Signify Annual Report 2019
Corporate statements
Creating value
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Sustainability statements
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Consolidated financial statements

Misstatements can arise from fraud or error 
and are considered material if, individually or 
in the aggregate, they could reasonably be 
expected to influence the decisions of users 
taken on the basis of the financial 
statements and the sustainability 
information. The materiality affects the 
nature, timing and extent of our audit 
procedures and the evaluation of the effect 
of identified misstatements on our opinions.
We apply the ‘Nadere voorschriften 
kwaliteitssystemen’ (NVKS, Regulations for 
Quality management systems) and 
accordingly maintain a comprehensive 
system of quality control including 
documented policies and procedures 
regarding compliance with ethical 
requirements, professional standards and 
other relevant legal and regulatory 
requirements.
A further description of our responsibilities 
is included in the Annex to the combined 
independent auditor’s report.
Amsterdam, the Netherlands
February 25, 2020
Ernst & Young Accountants LLP
O.E.D. Jonker
As part of the preparation of the financial 
statements, management is responsible for 
assessing the company’s ability to continue 
as a going concern. Based on the financial 
reporting frameworks mentioned, 
management should prepare the financial 
statements using the going concern basis of 
accounting unless management either 
intends to liquidate the company or to cease 
operations or has no realistic alternative but 
to do so. Management should disclose 
events and circumstances that may cast 
significant doubt on the company’s ability to 
continue as a going concern in the financial 
statements. 
The Supervisory Board is responsible for 
overseeing the (financial) reporting process 
of Signify N.V.
Our responsibilities
Our responsibility is to plan and perform the 
audit engagements in a manner that allows 
us to obtain sufficient and appropriate audit 
evidence for our conclusions. 
Our audit of the financial statements and 
the sustainability information have been 
performed with a high, but not absolute, 
level of assurance, which means we may not 
detect all material errors and fraud during 
our audit. 
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Corporate statements
Creating value
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Sustainability statements
We are Signify
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Consolidated financial statements

reconciles with underlying records of 
the company
•	 Evaluating relevant internal and 
external documentation, on a test 
basis, to determine the reliability of 
the information in the sustainability 
information
•	 Performing an analytical review of the 
data and trends
•	  Reconciling the relevant financial 
information with the financial statements.
•	 Evaluating the consistency of the 
sustainability information with the 
information in the annual report which is 
not included in the scope of our audit.
•	 Evaluating the overall presentation, 
structure and content of the 
sustainability information.
•	 Considering whether the sustainability 
information as a whole, including the 
disclosures, reflects the purpose of the 
reporting criteria used.
Communication
We communicate with the Supervisory Board 
regarding, among other matters, 
the planned scope and timing of the audit 
and significant audit findings, including any 
significant findings in internal control that 
we identify during our audit. In this respect 
we also submit an additional report to the 
audit committee in accordance with Article 
11 of the EU Regulation on specific 
requirements regarding statutory audit of 
public-interest entities. The information 
included in this additional report is 
consistent with our audit opinion in this 
auditor’s report.
control relevant to our audit, but not for 
the purpose of expressing an opinion on 
the effectiveness of the company’s 
internal control
•	 Identifying and assessing the risks that 
the sustainability information is 
misleading or unbalanced, or contains 
material misstatements, whether due to 
fraud or errors. Designing and performing 
further audit procedures responsive to 
those risks, and obtaining audit evidence 
that is sufficient and appropriate to 
provide a basis for our opinion. The risk 
that the sustainability information is 
misleading or unbalanced, or the risk of 
not detecting a material misstatement 
resulting from fraud is higher than for 
one resulting from errors. Fraud may 
involve collusion, forgery, intentional 
omissions, misrepresentations, or the 
override of internal control. These 
further audit procedures consisted 
amongst others of:
•	 Interviewing management and relevant 
staff at corporate and business level 
responsible for the sustainability 
strategy, policy and results
•	 Interviewing relevant staff responsible 
for providing the information for, 
carrying out internal control 
procedures on, and consolidating the 
data in the sustainability information
•	 Visits to production sites in Poland and 
India aimed at, on a local level, 
validating source data and to evaluate 
the design, implementation and 
operation of control validation 
procedures.
•	 Obtaining assurance information that 
the sustainability information 
on the effectiveness of the company’s 
internal control. 
•	 Evaluating the appropriateness of 
accounting policies used and the 
reasonableness of accounting estimates 
and related disclosures made by 
management. 
•	 Evaluating the overall presentation, 
structure and content of the financial 
statements, including the disclosures.
•	 Evaluating whether the financial 
statements represent the underlying 
transactions and events in a manner that 
achieves fair presentation. 
Our audit to obtain reasonable assurance 
about the sustainability information included 
amongst others:
•	 Performing an analysis of the external 
environment and obtaining an 
understanding of relevant social themes 
and issues and the characteristics of the 
company.
•	 Evaluating the appropriateness of the 
reporting criteria used, their consistent 
application and related disclosures in the 
sustainability information. This includes 
the evaluation of the results of the 
stakeholders’ dialogue and the 
reasonableness of estimates by 
management.
•	 Obtaining an understanding of the 
reporting processes for the sustainability 
information, including obtaining a general 
understanding of internal control 
relevant to our audit.
•	 Obtaining an understanding of the 
systems and processes for collecting, 
reporting and consolidating the 
sustainability information, including 
obtaining an understanding of internal 
Annex to the 
combined 
independent 
auditor’s report
Work performed
We have exercised professional judgment 
and have maintained professional skepticism 
throughout the assurance engagements, 
in accordance with the Dutch Standards on 
Auditing and the Dutch assurance 
standards, ethical requirements and 
independence requirements.
Our audit to obtain reasonable assurance 
about the financial statements 
(consolidated and corporate) included 
amongst others: 
•	 Identifying and assessing the risks of 
material misstatement of the financial 
statements, whether due to fraud or 
errors, designing and performing audit 
procedures responsive to those risks, 
and obtaining audit evidence that is 
sufficient and appropriate to provide a 
basis for our opinion. The risk of not 
detecting a material misstatement 
resulting from fraud is higher than for 
one resulting from error, as fraud may 
involve collusion, forgery, intentional 
omissions, misrepresentations, or the 
override of internal control. 
•	 Obtaining an understanding of internal 
control relevant to the audit in order to 
design audit procedures that are 
appropriate in the circumstances, but not 
for the purpose of expressing an opinion 
167
Signify Annual Report 2019
Corporate statements
Creating value
Corporate performance
Sustainability statements
We are Signify
Governance
Consolidated financial statements

We provide the Supervisory Board with a 
statement that we have complied with 
relevant ethical requirements regarding 
independence, and to communicate with 
them all relationships and other matters 
that may reasonably be thought to bear on 
our independence, and where applicable, 
related safeguards.
From the matters communicated with the 
Supervisory Board, we determine the key 
audit matters: those matters that were of 
most significance in the audit of the financial 
statements. We describe these matters in 
our auditor’s report unless law or regulation 
precludes public disclosure about the 
matter or when, in extremely rare 
circumstances, not communicating the 
matter is in the public interest.
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Corporate statements
Creating value
Corporate performance
Sustainability statements
We are Signify
Governance
Consolidated financial statements

18	Reconciliation of 
non-IFRS financial 
measures
Explanation of non-IFRS financial measures
Certain parts of this Annual Report contain financial measures that are not measures of 
financial performance or liquidity under IFRS. These are commonly referred to as non-IFRS 
financial measures and include items such as comparable sales growth, adjusted gross margin, 
EBITA, Adjusted EBITA, free cash flow and other related ratios.
Although the non-IFRS financial measures presented are not measures of financial 
performance or liquidity under IFRS, the company uses these measures to monitor the 
underlying performance of its business and operations. These measures have not been 
audited or reviewed by the company’s external auditor. Furthermore, these measures may not 
be indicative of the company’s historical operating results, nor are such measures meant to 
be predictive of the company’s future results. These measures are presented in this Annual 
Report because the company considers them an important supplemental measure of its 
performance and believes that these and similar measures are widely used in the industry in 
which it operates, as a means of evaluating a company’s operating performance and liquidity.
Comparable sales growth
The company discloses comparable sales growth as a supplemental non-IFRS financial 
measure, as the company believes that the presentation of comparable sales growth is a 
meaningful measure for investors to evaluate the performance of the company’s business 
activities over time. The company determines comparable sales growth by deducting the 
percentage figures for changes from the nominal change of sales. Interaction effects 
between currency movements, changes in consolidation, regulatory changes and changes in 
accounting standards (second order effects) are not taken into account. The company 
presents comparable sales growth on both a Business Group and Market Group basis. 
Comparable sales growth is also used by the company as a key financial measure to assess the 
operating performance of the Business Groups and Market Groups.
Sales growth composition per business in % 
 Comparable 
growth 
 Currency  
effects 
 Consolidation 
and other 
changes 
 Nominal 
growth 
Lamps
(20.5)
1.7
(0.0)
(18.8)
LED
(1.1)
1.9
3.5
4.4
Professional
(1.7)
1.3
1.0
0.5
Home
11.3
1.1
(0.8)
11.6
Signify
(4.6)
1.6
1.3
(1.8)
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Sustainability statements
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Consolidated financial statements

Adjusted EBITA to Income from operations (EBIT) in millions of EUR
Signify
Lamps
LED
Profes-
sional
Home
Other
2019
Adjusted EBITA
648
222
240
265
20
(100)
Restructuring
(99)
(44)
(8)
(22)
(11)
(14)
Acquisition-related 
charges
(13)
-
(3)
(9)
-
(0)
Incidental items
(36)
(10)
(12)
(11)
(4)
1
EBITA
500
168
217
222
5
(112)
Amortization 1
(99)
(0)
(5)
(90)
(2)
(2)
Income from 
operations (EBIT) 2
401
168
212
133
3
(114)
2018
Adjusted EBITA
640
302
212
251
(38)
(87)
Restructuring
(118)
(32)
(8)
(34)
(5)
(39)
Acquisition-related 
charges
(1)
(0)
-
(1)
-
(0)
Incidental items
(17)
(0)
(0)
(8)
(0)
(9)
EBITA
504
270
204
208
(43)
(135)
Amortization 1
(94)
(1)
(4)
(86)
(1)
(2)
Income from 
operations (EBIT) 2
410
269
200
121
(44)
(137)
1	
Amortization and impairments of acquisition-related intangible assets and goodwill.
2.	
For a reconciliation to income before taxes, refer to note 3, Information by segment and main country,  
of this Annual Report.
Sales growth composition per market in %
Comparable 
growth
Currency  
effects
Consolidation 
and other 
changes
Nominal growth
Europe
(4.4)
(0.1)
0.2
(4.3)
Americas
(7.5)
3.0
0.0
(4.5)
Rest of the World
(2.0)
2.2
0.6
0.8
Global businesses
(4.4)
1.0
18.9
15.5
Total
(4.6)
1.6
1.3
(1.8)
EBITA and Adjusted EBITA
The company discloses EBITA, Adjusted EBITA and Adjusted EBITA ratio as supplemental 
non-IFRS financial measures, as the company believes these are meaningful measures to 
evaluate the performance of the company’s business activities over time. The company 
understands that these measures are used by analysts, rating agencies and investors in 
assessing the company’s performance. The company presents EBITA, Adjusted EBITA and 
Adjusted EBITA ratio on a Business Group basis. The company also believes that the 
presentation of EBITA, Adjusted EBITA and Adjusted EBITA ratio provide useful information to 
investors on the development of the company’s business and enhance the ability of investors 
to compare profitability across the Business Groups. In the case of EBITA, the company 
believes that it makes the underlying performance of its businesses more transparent by 
factoring out the amortization and impairment of acquisition-related intangible assets and 
goodwill, which arises when acquisitions are consolidated by the company. In the case of 
Adjusted EBITA and Adjusted EBITA ratio, the company believes that these measures make the 
underlying performance of its businesses more transparent by factoring out restructuring 
costs, acquisition-related charges and other incidental charges which are not directly related 
to the operational performance of a Business Group. EBITA, Adjusted EBITA and Adjusted 
EBITA ratio are also used by the company as key financial measures to assess the operating 
performance of the Business Groups.
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Sustainability statements
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Governance
Consolidated financial statements

Adjusted gross margin
The company discloses adjusted gross margin as a supplemental non-IFRS financial measure. 
The company believes it is a meaningful measure to evaluate the company’s gross margin on a 
comparable basis over time. The measure factors out restructuring costs, acquisition-related 
charges and other incidental charges attributable to cost of sales which are not directly 
related to the operational performance of the company. Adjusted gross margin is also used by 
the company as a key financial measure to assess the operating performance of the company.
Adjusted indirect costs: adjusted SG&A costs and adjusted R&D costs
The company discloses adjusted gross SG&A costs and adjusted R&D costs as a supplemental 
non-IFRS financial measure. The company believes it is a meaningful measure to evaluate the 
company’s SG&A costs and R&D costs on a comparable basis over time. The measure factors 
out restructuring costs, acquisition-related charges and other incidental charges 
attributable to SG&A and R&D costs which are not directly related to the operational 
performance of the company. Adjusted SG&A costs and adjusted R&D costs are also used by 
the company as key financial measures to assess the operating performance of the company.
Income from operations to Adjusted EBITA in millions of EUR
Reported
Restruc-
turing
Acquisition-  
related  
charges
Incidental  
items 2
Adjusted
2019
 
 
 
Sales
6,247
-
-
-
6,247
Cost of sales
(3,940)
50
2
1
(3,887)
Gross margin
2,307
50
2
1
2,360
Selling, general and 
administrative expenses
(1,637)
36
11
47
(1,544)
Research and development 
expenses
(283)
13
-
-
(270)
Indirect costs
(1,920)
50
11
47
(1,813)
Impairment of goodwill
-
-
-
-
-
Other business income
22
-
-
(13)
9
Other business expenses
(8)
-
-
1
(7)
Income from operations
401
99
13
36
549
Amortization 1
(99)
-
-
-
(99)
Income from operations 
excluding amortization (EBITA)
500
99
13
36
648
2018
Sales
6,358
-
-
-
6,358
Cost of sales
(3,976)
50
0
0
(3,926)
Gross margin
2,382
50
0
0
2,433
Selling, general and 
administrative expenses
(1,675)
43
1
23
(1,609)
Research and development 
expenses
(312)
25
-
-
(288)
Indirect costs
(1,988)
68
1
23
(1,896)
Impairment of goodwill
-
-
-
-
-
Other business income
32
-
-
(17)
14
Other business expenses
(17)
-
-
11
(5)
Income from operations
410
118
1
17
545
Amortization 1
(94)
-
-
-
(94)
Income from operations 
excluding amortization (EBITA)
504
118
1
17
640
1	
Amortization and impairment of acquisition-related intangible assets and goodwill.
2	
Incidental items are non-recurring by nature and relate to the separation from Royal Philips, company name 
change, transformation and real estate gains.
171
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Corporate statements
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Corporate performance
Sustainability statements
We are Signify
Governance
Consolidated financial statements

Net debt
The net debt position as a percentage of the sum of the company’s equity (shareholders’ 
equity and non-controlling interests) and net debt are presented to express the financial 
strength of the company. The company understands that this measure is used by analysts, 
rating agencies and investors in assessing the company’s performance.
Composition of net debt to total equity in millions of EUR unless otherwise stated
2018
2019 1
Short-term debt
78
96
Long-term debt
1,187
1,369
Gross debt
1,265
1,465
Cash and cash equivalents
(676)
(847)
Net debt
589
618
Shareholders’ equity
2,041
2,181
Non-controlling interests
78
142
Total equity
2,119
2,324
Net debt and total equity
2,709
2,942
Net debt divided by net debt and total equity (in %)
22%
21%
Total equity divided by net debt and total equity (in %)
78%
79%
1	
2019 includes impact from IFRS 16 adoption. Refer to note 1, Basis of preparation.
Free cash flow
The company discloses free cash flow as a supplemental non-IFRS financial measure, as the 
company believes it is a meaningful measure to evaluate the performance of the company’s 
business activities over time. The company understands that free cash flow is broadly used by 
analysts, rating agencies and investors in assessing the company’s performance. The company 
also believes that the presentation of free cash flow provides useful information to investors 
regarding the cash generated by the company’s operating activities after deducting cash 
outflows for additions of intangible assets, capital expenditures on property, plant and 
equipment and proceeds from disposal of property, plant and equipment. Therefore, 
the measure gives an indication of the long-term cash generating ability of the company’s 
business. In addition, because free cash flow is not impacted by purchases of businesses, it is 
less volatile than the total of cash flows from operating and investing activities. Free cash 
flow is also used by the company as a key financial measure to assess the operating 
performance of the company.
Composition of cash flows in millions of EUR
2018
2019
Cash flows from operating activities 1
381
599
Cash flows from investing activities
(90)
(145)
Cash flows before financing activities
291
454
Cash flows from operating activities
381
599
Net capital expenditures:
•	 Additions of intangible assets
(26)
(29)
•	 Capital expenditures on property, plant and equipment
(57)
(58)
•	 Proceeds from disposal of property, plant and equipment
8
16
Free cash flows
306
529
1	
2019 includes a positive impact of EUR 71 million from IFRS 16 adoption. Refer to note 1, Basis of preparation.
Free cash flow in millions of EUR
2018
2019
LED, Professional and Home 1
370
559
Lamps 1
308
222
Other
(372)
(252)
Signify total
306
529
1	
Excluding non-allocated free cash flow items (e.g. tax, interest).
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Working capital
The company discloses working capital as a supplemental non-IFRS financial measure, as the 
company believes it is a meaningful measure to evaluate the company’s ability to maintain a 
solid balance between growth, profitability and liquidity. Working capital is broadly analyzed 
and reviewed by analysts and investors in assessing the company’s performance. This measure 
serves as a metric for how efficiently a company is operating and how financially stable it is in 
the short term. It is an important measure of a company’s ability to pay off short-term 
expenses or debts.
Working capital to total assets in millions of EUR
2018
2019
Working capital 
536
388
Eliminate liabilities comprised in WoCa:
•	 Trade and other payables 1
1,507
1,684
•	 Derivative financial liabilities
22
20
•	 Other current liabilities 1
179
183
Include assets not comprised in WoCa:
•	 Non-current assets
3,211
3,541
•	 Income tax receivable
35
48
•	 Current financial assets
4
0
•	 Cash and cash equivalents
676
847
•	 Assets classified as held for sale
9
4
Total assets
6,181
6,715
1	
Prior year has been revised to align with the new presentation of the Consolidated statement of financial 
position. Refer to note 1, Basis of preparation.
Working capital bridge for 2018 in millions of EUR
Before 
changes
Accrued 
liabilities
Customer  
rebates
Contract  
liabilities
After 
changes
Inventories
878
878
Inventories
Trade and other receivables
1,231
1,231
Trade and other receivables
Accounts and notes payable
(953)
(444)
(163)
54
(1,507)
Trade and other payables
Accrued liabilities
(444)
444
Other working capital items
(176)
163
(54)
(66)
Other working capital items
Working capital
536
0
0
0
536
Working capital
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19	Definitions and 
abbreviations
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, 
acquisition related charges and other 
incidental charges.
Adjusted EBITA margin
Adjusted EBITA divided by sales to third 
parties (excluding intersegment).
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 research and development (R&D) 
expenses
Research and development expenses, 
excluding restructuring costs, acquisition-
related charges and other incidental items 
attributable to research and development 
expenses.
Adjusted selling, general and administrative 
(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.
Ballasts
Lamp control gear inserted between the 
supply and one or more discharge lamps, 
which, by means of inductance, capacitance 
or a combination of inductance and 
capacitance, serves mainly to limit the 
current of the lamp(s) to the required value.
Carbon footprint
Carbon footprint is expressed in CO2- 
equivalent or carbon dioxide equivalent, 
which is a quantity that describes, for a 
given mixture and amount of greenhouse 
gas, the amount of CO2 that would have the 
same global warming potential (GWP), 
when measured over a specific timescale 
(generally 100 years). Signify measures its 
operational gross carbon footprint, as well 
as its net carbon footprint. Signify net 
carbon footprint = Signify gross carbon 
footprint - Amount of carbon offset through 
our carbon offsetting programs.
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Global Reporting Initiative (GRI)
The Global Reporting Initiative is a network-
based organization that pioneered the 
world’s most widely used sustainability 
reporting framework. GRI is committed to 
the framework’s continuous improvement 
and application worldwide. GRI’s core goals 
include the mainstreaming of disclosure on 
environmental, social and governance 
performance.
Gross debt
The sum of short-term debt and long-term 
debt.
Gross margin
Sales minus cost of sales.
Halogen lamp
A type of incandescent lamp with a capsule 
that holds a special halogen gas composition 
around the heated filament to increase the 
efficacy of the incandescence.
High intensity discharge lamp (HID)
A type of conventional lamp that uses 
electricity arcs between two electrodes to 
create an intensely bright light where 
mercury, sodium, or metal halide gas act as 
the conductor.
Incidental charges
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.
Employees
Employees of Signify at period end 
expressed on a full-time equivalent (FTE) 
basis.
Employee Net Promoter Score (NPS)
The Net Promoter Score methodology is 
used to measure employee engagement. 
Employees are asked to rank how likely it is 
that they would recommend our company as 
a great place to work. The scoring for this 
answer is based on a 0 to 10 scale. Those 
who respond with a score of 9 to 10 are 
called Promoters. Those who respond with a 
score of 0 to 6 are labeled Detractors. 
Responses of 7 and 8 are labeled Passives. 
The NPS is calculated by subtracting the 
percentage of employees who are 
Detractors from the percentage of 
employees who are Promoters.
Fluorescent lamp
A lamp which produces light with an electric 
current conducted through an inert gas 
producing ultraviolet light that is invisible to 
the human eye.
Free cash flow
Net cash provided by operating activities 
minus net capital expenditures. For LED, 
Professional, Home and Lamps, free cash 
flow excludes items not allocated to the 
operating segments, such as interest paid 
(or received) and income taxes paid.
Conventional luminaires
Light fixtures with a conventional socket 
(e.g., a screw socket for a conventional lamp 
or LED lamp).
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.
Effects of changes in consolidation and 
other changes
In the event a business is acquired (or 
divested), the impact of the consolidation 
(or de-consolidation) on the company’s 
figures are included (or excluded) in the 
comparable figures. Other changes include 
regulatory changes and changes originating 
from new accounting standards.
Effects of currency movements
Calculated by translating the foreign 
currency financials of the previous period 
and the current period into euros at the 
same average exchange rates.
Electronics
Units that regulate the current going 
through a light source.
Circular economy
A circular economy aims to decouple 
economic growth from the use of natural 
resources and ecosystems by using those 
resources more effectively. By definition it is 
a driver for innovation in the areas of 
material-, component- and product reuse, 
as well as new business models such as 
solutions and services. In a circular 
economy, the more effective use of 
materials creates more value, both by cost 
savings and by developing new markets or 
growing existing ones.
Compact fluorescent light (CFL)
CFLs usually combine a fluorescent light 
with an incandescent fixture.
CFLni
Non-integrated CFLs.
Comparable sales growth
The period-on-period growth in sales 
excluding the effects of currency 
movements and changes in consolidation 
and other changes.
Continuing net income
Recurring net income from continuing 
operations, or net income excluding 
discontinued operations and excluding 
material nonrecurring items.
Conventional lamps
Non-LED based light emitting light sources, 
including incandescent lamps, halogen 
lamps, fluorescent lamps and high intensity 
discharge lamps.
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Productivity
Signify uses Productivity internally and as 
mentioned in this Annual Report as a 
non-financial indicator of efficiency that 
relates the added value, being income from 
operations adjusted for certain items such 
as restructuring and acquisition-related 
charges plus salaries and wages (including 
pension costs and other social security and 
similar charges), depreciation of property, 
plant and equipment, and amortization of 
intangibles, to the average number of 
employees over the past 12 months.
R&D expenses
Research and development expenses.
Renewable electricity
Percentage of total electricity usage from 
renewable sources.
Responsible Business Alliance (RBA)
The Responsible Business Alliance (RBA, 
formerly known as Electronic Industry 
Citizenship Coalition) was established in 
2004 to promote a common code of conduct 
for the electronics and information and 
communications technology (ICT) industry. 
The RBA now includes more than 100 global 
companies and their suppliers. 
Restructuring costs
The estimated costs of initiated 
reorganizations, the most significant of 
which have been approved by the company, 
and which generally involve the realignment 
of certain parts of the organization.
Net capital expenditures
Additions of intangible assets, capital 
expenditures on property, plant and 
equipment and proceeds from disposal of 
property, plant and equipment, 
and intangible assets.
Net debt
Short-term debt, long-term debt minus cash 
and cash equivalents.
Net leverage ratio (term loan facility 
agreement of 2016)
The ratio of consolidated total net debt to 
consolidated adjusted EBITDA for the 
purpose of calculating the facility covenant 
for the term loan and revolving credit 
facility.
Net leverage ratio (bridge loan facility 
agreement)
The ratio of consolidated reported net debt 
to consolidated reported EBITDA for the
purpose of calculating the bridge loan 
covenant.
Non-governmental organization (NGO)
A non-governmental organization is any 
non-profit, voluntary citizens’ group which is 
organized at a local, national or international 
level.
OEM
Original equipment manufacturer.
LED luminaires
Light fixtures where LED modules are 
integrated into the luminaire as light source 
and cannot be separated from the luminaire 
by the user.
LED modules
Light generating units around which 
luminaires are built for the purpose of 
emitting distributed patterns of light.
Light-as-a-service contract
Contracts enabling an integrated solution 
for customers where customers pay for the 
provision of light to their premises, while the 
company plans and builds the lighting 
infrastructure and ensures its performance 
until the end of the contract.
Lighting services
Services offered to customers building on a 
lighting system and enabled by data.
Lighting systems
The combination of luminaires, controls and 
software. The automation and related 
controls of lighting within a room, building or 
outdoor facilities for end-users.
Luminaire
Electrical devices that produce, control and 
distribute light. Also called light fixtures. 
They consist of one or more light sources, 
lamps or sockets that connect the lamps to 
the electrical power (as well as drivers in 
some luminaires), and the mechanical 
components required to support or attach 
the housing. 
Incandescent lamp
A conventional lamp that produces visible 
light by heating a tungsten filament inside a 
glass bulb usually filled with an inert gas.
Indirect costs
The sum of Selling, general and 
administrative and Research and 
development expenses.
International Standardization Organization 
(ISO)
The International Standardization 
Organization is the world’s largest developer 
and publisher of International Standards. 
ISO is a network of the national standards 
institutes of more than 160 countries, 
one member per country, with a Central 
Secretariat in Geneva, Switzerland, 
that coordinates the system. ISO is a non- 
governmental organization that forms a 
bridge between the public and private 
sectors.
LED
Light-emitting diode.
LED-based sales
Sales provided by products, systems and 
services based on LED lighting technologies.
LED drivers
Lighting electronics that convert input 
power into a current which remains constant 
despite fluctuations in voltage.
LED lamp
A solid-state semiconductor device that 
converts electrical energy directly into light.
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Switch
Wall mounted devices designed to (i) change 
the electric connections among its terminals 
or (ii) engage with the pins of a plug and 
having terminals for the connection of 
cables or cords (i.e., socket contacts).
Total Recordable Case rate
Number of injuries and illnesses sustained at 
work that result in medical treatment, 
restricted work, lost work-days, or fatality, 
divided by 100 FTEs.
Weighted average statutory income tax rate
The reconciliation of the effective tax rate is 
based on the applicable statutory tax rate, 
which is a weighted average of all applicable 
jurisdictions. This weighted average 
statutory tax rate is the aggregation of the 
result before tax multiplied by the applicable 
statutory tax rate without adjustment for 
losses, divided by the company result before 
tax.
Sustainable revenues
Sustainable revenues are measured as a 
percentage of total revenues per product 
category and tracked for each Business 
Group. Sustainable products, systems or 
services must demonstrate a measurable 
positive impact in energy efficiency (10% or 
greater), the most impactful of our 
sustainable focal areas. Sustainable 
revenues are defined as products with an 
energy efficiency of 66 lm/W and higher as 
well as all systems and services, as these 
provide additional energy savings. 
Sustainable products outperform reference 
products (predecessor product in the 
particular product family), or product-
specific eco-requirements, or by being 
awarded with a recognized eco-
performance label. The lifecycle approach is 
used to determine the environmental 
impacts and improvements of our products 
over their total life cycle (from raw 
materials, manufacturing, packaging, 
transportation, product use to disposal). 
Studies have shown the product use phase 
being the most important for lighting 
products.
Royal Philips
Koninklijke Philips N.V. (‘KPNV’) and its 
subsidiaries within the meaning of Section 
2:24b of the Dutch Civil Code.
SG&A expenses
Selling, general and administrative 
expenses.
Signify
Signify N.V. (the “Company”, formerly known 
as Philips Lighting N.V) and its subsidiaries, 
within the meaning of Section 2:24b of the 
Dutch Civil Code.
Supplier sustainability performance
The supplier sustainability performance rate 
represents the percentage of risk suppliers 
with an audit score of at least 90 out of 100 
points.
Sustainable innovation
Sustainable innovation comprises all 
research & development activities 
contributing to lighting technologies 
considered for sustainable products, 
systems or services. This means all 
products, systems, or services that 
demonstrate a measurable positive impact in 
energy efficiency (10% or greater), 
and preferably in one or more sustainable 
focal areas: Circularity, Weight & Materials, 
Packaging, Substances, Human Centric 
Lighting, Basic Needs or Access to Light. 
Sustainable innovation spend is the 
cumulative spending of all R&D projects 
contributing to sustainable innovation.
Working capital
The sum of Inventories, Trade and other 
receivables, Other current assets, 
Derivative financial assets minus the sum of 
Trade and other payables, Derivative 
financial liabilities and Other current 
liabilities.
Zero waste to landfill
Zero waste to landfill refers to 
manufacturing sites diverting their 
manufacturing waste to recycling or 
incineration, opposed to landfill. 
To determine waste to landfill in scope of 
our commitment we exclude the following 
categories: chemical waste, hazardous 
waste, one-time waste and regulated waste. 
When more than 99% of the total 
operational waste generated from a site is 
diverted from landfill, a site is considered to 
qualify as sending ‘zero waste to landfill’.
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20	 Forward-looking 
statements and 
other information
Forward-looking statements and 
risks & uncertainties 
This document contains forward-looking 
statements that reflect the intentions, 
beliefs or current expectations and 
projections of Signify N.V. together with its 
subsidiaries, including statements regarding 
strategy, estimates of sales growth and 
future operational results.
By their nature, these statements involve 
risks and uncertainties facing Signify 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: fundamental 
shifts in the industry, the adoption of 
lighting systems and services, adverse 
economic and political developments, 
competition in the general lighting market, 
integration risks relating to acquisitions, 
successful implementation of business 
transformation programs, failure to drive 
operation excellence and ensure effective 
supply change management, pension 
liabilities and costs, exposure to 
international tax laws. Please see chapter 
12, Risk factors and risk management, of this 
Annual Report for discussion of material 
risks, uncertainties and other important 
factors which may have a material adverse 
effect on the business, results of 
operations, financial condition and 
prospects of Signify. Such risks, 
uncertainties and other important factors 
should be read in conjunction with the 
information included in the Annual Report.
Additional risks currently not known to 
Signify or that Signify 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 Signify or could 
cause the forward-looking events discussed 
in this document. Signify 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 Signify 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, 
and 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 
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inherently uncertain and may therefore 
deviate from actual developments. Critical 
assumptions used are disclosed in the 
financial statements. In certain cases, 
independent valuations are obtained to 
support management’s determination of fair
values.
IFRS basis of presentation
The financial information included in this 
document is based on the International 
Financial Reporting Standards (IFRS) as 
endorsed by the European Union (EU), 
as explained in the significant accounting 
policies, unless otherwise indicated. 
Statutory financial statements 
Chapter 14, Consolidated financial 
statements and chapter 15, Signify N.V. 
financial statements, of this Annual Report, 
contain the statutory financial statements 
of Signify N.V.
Regulated information
This document contains regulated 
information within the meaning of the Dutch 
Financial Markets Supervision Act.
performance of the Signify business and 
operations and, accordingly, they have not 
been audited or 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 
18, Reconciliation of non-IFRS financial 
measures, of this Annual Report.
Fair value information
In presenting Signify’s financial position, 
fair values are used for the measurement of 
various items in accordance with the 
applicable accounting standards. These fair 
values are based on market prices, where 
available, and are obtained from sources 
that are deemed to be reliable. Readers are 
cautioned that these values are subject to 
changes over time and are only valid on the 
balance sheet date. When quoted prices or 
observable market values do not exist, 
fair values are estimated using valuation 
models, which we believe are appropriate 
for their purpose. They require management 
to make significant assumptions with 
respect to future developments which are 
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Signify N.V.
High Tech Campus 48
5656 AE Eindhoven
The Netherlands
E-mail: IR@signify.com
www.signify.com
Dutch Chamber of Commerce  
registration no. 65220692
VAT NL8560.25.823.B.01