Press Release
April 29, 2022
Signify reports first quarter sales of EUR 1.8 billion, CSG of 6.4% and an operational
profitability of 10.5%
First quarter 20221• Signify's installed base of connected light points increased from 96 million in Q4 21 to 100 million in Q1 22• Sales of EUR 1,788 million; nominal sales increase of 11.8% and CSG of 6.4%
• LED-based sales represented 84% of total sales (Q1 21: 82%)
• Adj. EBITA margin of 10.5% (Q1 21: 10.8%)• Net income of EUR 87 million (Q1 21: EUR 60 million)• Free cash flow of EUR -189 million (Q1 21: EUR 168 million)• Net debt/EBITDA ratio of 1.6x (Q1 21: 1.4x)
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced thecompany’s first quarter 2022 results.
“Our main priority in the first quarter was to safeguard and support our Ukrainian employees and their families
to the best extent possible. We are happy to report that all of our people are safe, and we were proud to see thevery strong engagement from our colleagues and the Signify Foundation in supporting the people andcommunities so desperately affected by the war. Investments in Russia were stopped and all new business waspaused since February 25th. We were also impacted by the return of lockdowns in China towards the end of thequarter. Throughout these challenging conditions, Signify continued to see strong momentum in theprofessional channel in the US and in most of the other geographies. We grew by 6.4% in the first quarter andmaintained a strong double-digit adjusted EBITA margin. Global supply chain disruptions, which brought longer
supplier lead times and higher levels of inventory, have negatively affected our cash flow. We expect this topositively readjust as the year progresses,” said CEO, Eric Rondolat.
“Given the world’s growing need for sustainable, connected and energy efficient lighting, we remain more
focused than ever on our strategic priorities. For the remainder of the year, we anticipate a lower performancefrom our consumer-focused business due to inflationary headwinds. At the same time, we still expect strong
demand for our professional business, driven by ongoing investments in the energy transition. Moving forward,
our guidance for the year remains within reach, assuming the Chinese market and global supply chain dynamics
do not deteriorate further.”¹ This press release contains certain non-IFRS financial measures and ratios, such as comparable sales growth, EBITA, adjusted EBITA and free cash flow, andrelated ratios, which are not recognized measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to themost directly comparable IFRS financial measures, see appendix B, Reconciliation of non-IFRS financial measures, of this press release.

Brighter Lives, Better World 2025
In the first quarter of the year, Signify was on track for most of its Brighter Lives, Better World 2025
sustainability program commitments that contribute to doubling its positive impact on the environment andsociety.
••••

Double the pace of the Paris Agreement:
Cumulative carbon reduction over the value chain is on track. This is mainly due to the accelerated shift
to energy efficient and connected LED lighting, which decreases carbon emissions in the use phase, andSignify's ongoing efforts to decarbonize its supply chain.
Double our Circular revenues to 32%:
Circular revenues increased to 30%, well on track to reach the target. This positive trend is attributable
to the recent upgrade of a family of luminaires, which are now serviceable, and to the further
expansion of the serviceable portfolio in outdoor luminaires.
Double our Brighter lives revenues to 32%:Brighter lives revenues were 27%, on track to reach the target. The main contributions come from theconsumer well-being portfolio, as well as UV-C disinfection and emergency lighting.
Double the percentage of women in leadership positions to 34%:
The percentage of women in leadership positions was 26%, slightly off track, yet Signify expects to see
further progress during the year. In Q1, Signify conducted the first all-employee session of the Powering
Inclusion Series with more than 5,000 participants across the company, and celebrated International
Women's Day with its global #BreakTheBias campaign. Signify participated in the UN Global Compact’s
Target Gender Equality event to share its mentoring practices for improving diverse representation in
its organization.

Outlook
Following the solid performance in the first quarter, the strong order intake and the continued momentum inthe professional segment, Signify maintains its guidance for 2022. This assumes that the Chinese market andglobal supply chain dynamics do not deteriorate further.
•••

Comparable sales growth in the range of 3-6%
Continued Adjusted EBITA margin improvement of up to 50 bps
Free cash flow in excess of 8% of sales

2Financial review
in millions of EUR, except percentages

2021

First quarter
2022

Comparable sales growth
Effects of currency movements
Consolidation and other changes
Sales
Adjusted gross margin
Adj. gross margin (as % of sales)

1,599
637
39.8%

1,788
684
38.3%

Adj. SG&A expenses
Adj. R&D expenses
Adj. indirect costs
Adj. indirect costs (as % of sales)

-424
-72
-496
31.0%

-456
-72
-528
29.5%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

172
10.8%
-57
115

187
10.5%
-41
146

85
-10
-15
60

115
-6
-22
87

168
0.47
37,356-189
0.69
36,884

Income from operations (EBIT)Net financial income/expense
Income tax expense
Net income
Free cash flow
Basic EPS (€)
Employees (FTE)change
6.4%
5.2%
0.2%
11.8%
7.5%

-6.3 %

8.6%

27.1%
35.5%

44.7%

First quarter
Sales increased by 11.8% to EUR 1,788 million, with a comparable sales growth of 6.4%. Nominal sales growth
included a positive currency effect of 5.2%, mainly attributable to the appreciation of the USD, and a positive
impact from consolidation and other changes of 0.2%. LED-based sales increased from 82% in Q1 21 to 84% in
Q1 2022.
During the quarter, energy prices increased significantly. Together with higher transportation costs, the increasein energy costs impacted the adjusted gross margin, mainly in Conventional Products due to its energy intensive
production processes. As a result of these cost increases, the Adjusted gross margin decreased by 150 bps to38.3%, yet on the back of a high comparison base in Q1 2021. The company is implementing further priceincreases to compensate for these effects.
Adjusted indirect costs as a percentage of sales decreased by 150 bps to 29.5%, driven by operating leverageand structural cost savings.
Adjusted EBITA increased by 8.6% to EUR 187 million. The Adjusted EBITA margin was 10.5%, remaining above
10% for the second consecutive year. The Adjusted EBITA margin decline of 30 bps reflects the high comparisonbase of the previous year, a negative currency effect of 130 bps and higher COGS, which were partly
compensated by price increases, positive sales mix and operating leverage.
Restructuring costs were EUR 4 million, acquisition-related charges were EUR 7 million and incidental items were
EUR 29 million, largely attributable to impairments related to Signify's operations in Russia and Ukraine.

3

Net income increased by EUR 27 million to EUR 87 million, mainly reflecting higher income from operations andlower net financial expenses, partly reduced by impairments related to our operations in Russia and Ukraine.

Digital Solutions
in millions of EUR, unless otherwise indicated2021

First quarter
2022

Comparable sales growth
Sales
Adjusted EBITA
Adjusted EBITA margin
EBITA
Income from operations (EBIT)

793
71
9.0%
48
20

981
95
9.7%
75
47

change
16.9%
23.6%
32.6%
57.4%
130.9%First quarter
Sales increased to EUR 981 million with a comparable sales growth of 16.9%, driven by continued traction of theprofessional segment across many markets, particularly the United States, and with a strong performance ofhorticulture lighting. Nominal sales growth of 23.6% includes a positive impact of 6.2% from currency
movements and 0.5% from consolidation and other changes. The Adjusted EBITA margin improved by 70 bps to
9.7%, driven by operating leverage, price increases and positive sales mix, more than offsetting higher COGS.

Digital Products
in millions of EUR, unless otherwise indicated2021

First quarter
2022

Comparable sales growth
Sales
Adjusted EBITA
Adjusted EBITA margin
EBITA
Income from operations (EBIT)

575
82
14.2%
76
74

601
77
12.8%
65
63

change
0.2%
4.5%
-6.0%
-13.7%-14.1%First quarter
Sales were EUR 601 million with a comparable sales growth of 0.2%. This is on the back of a strong Q1 2021,
which benefited from the acceleration of connected home sales. Nominal sales growth of 4.5% includes a 4.3%
benefit from currency movements. The Adjusted EBITA margin of 12.8% was 140 bps lower than last year
reflecting a strong comparison base, higher COGS and continued investments in marketing to support future
growth, partly offset by price increases.

Conventional Products
in millions of EUR, unless otherwise indicated2021

First quarter
2022

Comparable sales growth
Sales
Adjusted EBITA
Adjusted EBITA margin
EBITA
Income from operations (EBIT)

227
47
20.6%
53
53

201
32
16.0%
23
23

change-15.1%-11.5%-31.2%-56.6%-56.6%

4

First quarter
Sales declined to EUR 201 million with a comparable sales decline of 15.1%. The Adjusted EBITA margin declined
to 16.0%, driven by gross margin contraction mainly due to the sudden rise in both energy and transportation
costs. The division was able to compensate part of this impact by fixed cost savings and is implementing further
price increases.

OtherFirst quarter'Other' represents amounts not allocated to operating segments and includes costs related both to central R&D
activities to drive innovation, and to group enabling functions. Adjusted EBITA was EUR -17 million (Q1 21: EUR-28 million) and EBITA was EUR -18 million (Q1 21: EUR -62 million). Restructuring costs decreased to EUR 1
million (Q1 21: EUR 34 million).

Sales by market
in millions of EUR, except percentages

EuropeAmericasRest of the world
Global businesses
Total

2021
523
589
370
118
1,599

First quarter2022
Change
557
6.5%
703
19.4%
394
6.6%
135
13.9%
1,788
11.8%

CSG
5.5%
10.3%
1.1%
7.9%
6.4%

First quarterIn the first quarter, most markets continued to see strong demand in the professional segment. In Europe,comparable sales grew by 5.5%, as most markets continued to recover. Americas' comparable sales grew by
10.3%, with a strong contribution from the professional segment. Americas' nominal sales growth of 19.4%
benefited from a 9.2% currency movement. In the Rest of the World most markets grew, while the top line
performance in China was negatively impacted by the reinstated COVID-19 lockdowns in March.

Working capitalin millions of EUR, unless otherwise indicatedInventories
Trade and other receivables
Trade and other payables
Other working capital items
Working capital
As % of LTM* sales

31 Mar, 2021
946
1,074
-1,784-1
236
3.5%

31 Dec, 2021
1,410
1,183
-2,334-8250
3.6%31 Mar, 2022
1,535
1,128
-2,073
-30
559
7.9%

* LTM: Last Twelve Months

First quarter
Working capital increased from EUR 250 million at the end of December 2021 to EUR 559 million at the end of
March 2022. Following a buildup of inventory during Q4 2021, which continued into Q1 2022, the payables
position subsequently reduced during the quarter, as payments related to a part of this inventory buildup weresettled. This led to a higher overall working capital position. As a percentage of last twelve-month sales, working
capital increased by 430 bps to 7.9%.
Compared with March 2021, working capital increased by EUR 323 million. This increase is mostly related tohigher inventories, due to longer supplier lead times, partly offset by higher payables. As a percentage of lasttwelve-month sales, working capital increased by 440 bps.
5

Cash flow analysis
First quarter
2021
85
77
60
-50
30
-1
-21
-16
3
168

in millions of EUR

Income from operations (EBIT)
Depreciation and amortization
Additions to (releases of) provisions
Utilizations of provisions
Change in working capital
Net interest and financing costs received (paid)
Income taxes paid
Net capex
Other
Free cash flow

2022
115
76
19
-43
-315
—
-24
-27
9
-189

First quarter
Free cash flow was EUR -189 million, mostly due to a strong cash outflow from working capital, as payables
reduced following the settlement of payments related to the inventory buildup. At the same time, inventories
remained at high levels, as longer supplier lead times led to higher safety stocks and higher goods in transit. Free
cash flow included a restructuring payout of EUR 14 million (Q1 21: EUR 13 million).

Net debt and total equity
in millions of EUR

Short-term debt
Long-term debt
Gross debt
Cash and cash equivalents
Net debt
Total equity

31 Mar, 2021
433
1,899
2,332
1,192
1,141
2,469

31 Dec, 2021
77
1,931
2,007
851
1,156
2,597

31 Mar, 2022
72
1,932
2,004
626
1,378
2,716

First quarter
Compared with the end of December 2021, the cash position decreased by EUR 225 million to EUR 626 million,
mostly due to the negative cash flow. As gross debt remained relatively stable at EUR 2,004 million, net debt
increased by EUR 222 million to EUR 1,378 million. Total equity increased to EUR 2,716 million at the end of
March 2022 (Q4 21: EUR 2,597 million), primarily due to net income and currency translation, partly offset byshare repurchases to cover obligations arising from long-term employee share plans.
Compared with the end of March 2021, the cash position decreased by EUR 566 million, while gross debt
declined by EUR 328 million. As a result, the net debt increased by EUR 237 million to EUR 1,378 million. The net
debt/EBITDA ratio increased from 1.4x at the end of March 2021, to 1.6x at the end of March 2022.

6

Other information
Appendix A – Selection of financial statements
Appendix B – Reconciliation of non-IFRS financial measures
Appendix C – Financial Glossary
Conference call and audio webcast
Eric Rondolat (CEO) and Javier van Engelen (CFO) will host a conference call for analysts and institutional
investors at 9:00 a.m. CET to discuss the first quarter 2022 results. A live audio webcast of the conference callwill be available via the Investor Relations website.
Financial calendar 2022
May 17, 2022
May 19, 2022
May 20, 2022
May 31, 2022
July 29, 2022
October 28, 2022

Annual General Meeting
Ex-dividend date
Dividend record date
Dividend payment date
Second quarter and half-year results 2022
Third quarter results 2022

For further information, please contact:
Signify Investor Relations
Thelke Gerdes
Tel: +31 6 1801 7131
E-mail: thelke.gerdes@signify.com
Signify Corporate Communications
Leanne Carmody
Tel: +31 6 3928 0201
E-mail: leanne.carmody@signify.com
Abigail Levene
Tel: +31 6 2939 3895
E-mail: abigail.levene@signify.com
About Signify
Signify (Euronext: LIGHT) is the world leader in lighting for professionals and consumers and lighting for theInternet of Things. Our Philips products, Interact connected lighting systems and data-enabled services, deliver
business value and transform life in homes, buildings and public spaces. With 2021 sales of EUR 6.9 billion, we
have approximately 37,000 employees and are present in over 70 countries. We unlock the extraordinary
potential of light for brighter lives and a better world. We achieved carbon neutrality in 2020, have been in the
Dow Jones Sustainability World Index since our IPO for five consecutive years and were named Industry Leader
in 2017, 2018 and 2019. News from Signify is located at the Newsroom, Twitter, LinkedIn and Instagram.
Information for investors can be found on the Investor Relations page.

7

Important Information
Forward-Looking Statements and Risks & Uncertainties
This document and the related oral presentation contain, and responses to questions following the presentation
may contain, forward-looking statements that reflect the intentions, beliefs or current expectations andprojections of Signify N.V. (the “Company”, and together with its subsidiaries, the “Group”), including
statements regarding strategy, estimates of sales growth and future operational results.
By their nature, these statements involve risks and uncertainties facing the Company and its Group companies,
and a number of important factors could cause actual results or outcomes to differ materially from thoseexpressed in any forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties andother important factors include but are not limited to: adverse economic and political developments, inparticular the impacts of the Russia-Ukraine conflict, the impacts of COVID-19, supply chain constraints,
component shortages, rapid technological change, competition in the general lighting market, development oflighting systems and services, successful implementation of business transformation programs, impact ofacquisitions and other transactions, reputational and adverse effects on business due to activities inEnvironment, Health & Safety, compliance risks, ability to attract and retain talented personnel, adverse
currency effects, pension liabilities, and exposure to international tax laws. Please see “Risk Factors and Risk
Management” in Chapter 12 of the Annual Report 2021 for discussion of material risks, uncertainties and otherimportant factors which may have a material adverse effect on the business, results of operations, financial
condition and prospects of the Group. Such risks, uncertainties and other important factors should be read in
conjunction with the information included in the Company’s Annual Report 2021.
Additional risks currently not known to the Group or that the Group has not considered material as of the dateof this document could also prove to be important and may have a material adverse effect on the business,
results of operations, financial condition and prospects of the Group or could cause the forward-looking events
discussed in this document not to occur. The Group undertakes no duty to and will not necessarily update any of
the forward-looking statements in light of new information or future events, except to the extent required byapplicable law.
Market and Industry Information
All references to market share, market data, industry statistics and industry forecasts in this document consist of
estimates compiled by industry professionals, competitors, organizations or analysts, of publicly available
information or of the Group’s own assessment of its sales and markets. Rankings are based on sales unlessotherwise 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 notrecognized measures of financial performance or liquidity under IFRS. The non-IFRS financial measurespresented are measures used by management to monitor the underlying performance of the Group’s businessand 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 becomparable 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 thisdocument. For further information on non-IFRS financial measures, see “Chapter 18 Reconciliation of non-IFRS
measures” in the Annual Report 2021.
Presentation
All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up to totals
provided. All reported data are unaudited. Unless otherwise indicated, financial information has been preparedin accordance with the accounting policies as stated in the Annual Report 2021.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

8

Appendix A – Financial statement information
A. Condensed consolidated statement of income
In millions of EUR unless otherwise stated

Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Research and development expenses
Other business income
Other business expenses
Income from operations
Financial income
Financial expenses
Results relating to investments in associates
Income before taxes
Income tax expense
Net income
Attribution of net income for the period:
Net income (loss) attributable to shareholders of Signify N.V.
Net income (loss) attributable to non-controlling interests

First quarter
2021
1,599
(970)
629
(484)
(71)
13
(2)
85
5
(15)
—
75
(15)
60
59
1

2022
1,788
(1,124)
664
(477)
(71)
1
(1)
115
10
(15)
—
109
(22)
87
86
1

Amounts may not add up due to rounding.

9B. Condensed consolidated statement of comprehensive income
In millions of EUR

Net income (loss)
Pensions and other post-employment plans:Remeasurements
Income tax effect on remeasurements
Total of items that will not be reclassified to profit or loss

First quarter
2021
60

2022
87

—
—
—

(6)
—
(6)

147
—

71
—

(20)
—

(3)
—

(18)
4
113

(6)
1
64

Other comprehensive income (loss)
Total comprehensive income (loss)

113
173

59
146

Total comprehensive income (loss) attributable to:Shareholders of Signify N.V.
Non-controlling interests

166
7

142
3

Currency translation differences:
Net current period change, before tax
Income tax effect
Net investment hedge
Net current period change, before tax
Income tax effectCash flow hedges:
Net current period change, before tax
Income tax effectTotal of items that are or may be reclassified to profit or loss

Amounts may not add up due to rounding.

10C. Condensed consolidated statement of financial position
In millions of EUR
December 31, 2021

March 31, 2022

Non-current assets
Property, plant and equipment
Goodwill
Intangible assets, other than goodwill
Investments in associates
Financial assets
Deferred tax assets
Other assets
Total non-current assets

724
2,464
730
12
58
481
67
4,536

709
2,506
713
13
70
483
73
4,566

Current assets
Inventories
Financial assets
Other assets
Derivative financial assets
Income tax receivable
Trade and other receivables
Cash and cash equivalents
Assets classified as held for sale
Total current assets
Total assets

1,410
—
192
58
24
1,183
851
3
3,720
8,256

1,535
—
204
46
33
1,128
626
6
3,577
8,143

EquityShareholders’ equity
Non-controlling interests
Total equity

2,459
138
2,597

2,574
142
2,716

Non-current liabilities
Debt
Post-employment benefits
Provisions
Deferred tax liabilities
Income tax payable
Other liabilities
Total non-current liabilities

1,931
363
215
27
118
182
2,835

1,932
372
211
28
121
191
2,854

Current liabilities
Debt, including bank overdrafts
Derivative financial liabilities
Income tax payable
Trade and other payables
Provisions
Other liabilities
Liabilities from assets classified as held for sale
Total current liabilities
Total liabilities and total equity

77
44
16
2,334
140
213
—
2,824
8,256

72
47
19
2,073
129
233
—
2,574
8,143

Amounts may not add up due to rounding.

11

D. Condensed consolidated statement of cash flows
In millions of EUR
First quarter
2021
Cash flows from operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:

60

87

156

129

77

76

—
(11)
7

—
—
7

15
56
4
8

22
15
4
5

Decrease (increase) in working capital:• Decrease (increase) in trade and other receivables• Decrease (increase) in inventories• Increase (decrease) in trade and other payables• Increase (decrease) in other current assets and liabilities
Increase (decrease) in other non-current assets and liabilities
Utilizations of provisions
Utilizations of post-employment benefits
Net interest and financing costs received (paid)
Income taxes paid
Net cash provided by (used for) operating activities

30
84
(35)
(8)
(10)
9
(42)
(8)
(1)
(21)
184

(315)
65
(107)
(284)
10
4
(34)
(8)
—
(24)
(162)

Cash flows from investing activities
Net capital expenditures:• Additions of intangible assets• Capital expenditures on property, plant and equipment• Proceeds from disposal of property, plant and equipment
Net proceeds from (cash used for) derivatives and other financial assets
Purchases of businesses, net of cash acquired
Proceeds from sale of businesses, net of cash disposed of
Net cash provided by (used for) investing activities

(16)
(8)
(21)
13
(5)
—
—
(21)

(27)
(14)
(14)
1
14
—
—
(12)

(3)
350
(371)
(24)
(48)
115
46
1,030
1,191

—
3
(23)
(36)
(55)
(230)
8
847
625

• Depreciation, amortization and impairment of non-financial assets• Impairment (reversal) of goodwill, other non-current financial assets andinvestments in associates• Net gain on sale of assets• Net interest expense on debt, borrowings and other liabilities• Income tax expense• Additions to (releases of) provisions• Additions to (releases of) post-employment benefits• Other items

Cash flows from financing activities
Dividend paid
Proceeds from issuance of debt
Repayment of debt
Purchase of treasury shares
Net cash provided by (used for) financing activities
Net cash flows
Effect of changes in exchange rates on cash and cash equivalents and bank overdrafts
Cash and cash equivalents and bank overdrafts at the beginning of the period 1
Cash and cash equivalents and bank overdrafts at the end of the period 2
1
2

2022

For Q1 2022 and Q1 2021, included bank overdrafts of EUR 4 million and EUR 3 million, respectively.
Included bank overdrafts of EUR 0 million and EUR 1 million as at March 31, 2022 and 2021, respectively.

Amounts may not add up due to rounding.

12Appendix B - Reconciliation of non-IFRS financial measures
Sales growth composition per business in %Comparable
growth2022 vs 2021
Digital Solutions
Digital Products
Conventional Products
Total

16.9
0.2
(15.1)
6.4

First quarter
Currency effects
Consolidation andother changes
6.2
4.3
3.6
5.2

Nominal growth

0.5
—
—
0.2

23.6
4.5
(11.5)
11.8

First quarter
Currency effects
Consolidation andother changes

Nominal growth

Sales growth composition per market in %Comparable
growth2022 vs 2021
EuropeAmericasRest of the world
Global businesses
Total

5.5
10.3
1.1
7.9
6.4

0.6
9.2
5.4
4.9
5.2

0.4
(0.1)
0.1
1.2
0.2

6.5
19.4
6.6
13.9
11.8

13

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

1

Signify

DigitalSolutions

Digital Conventional
Products
Products

First quarter 2022
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization1
Income from operations (or EBIT)

187
(4)
(7)
(29)
146
(31)
115

95
(1)
(7)
(11)
75
(29)
47

77
—
—
(11)
65
(2)
63

32
(2)
—
(7)
23
—
23

(17)
(1)
—
—
(18)
—
(18)

First quarter 2021
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization1
Income from operations (or EBIT)

172
(47)
(14)
4
115
(30)
85

71
(7)
(14)
(2)
48
(28)
20

82
(3)
—
(2)
76
(2)
74

47
(2)
—
9
53
—
53

(28)
(34)
—
—
(62)
—
(62)

Other

Amortization and impairments of acquisition related intangible assets and goodwill.

Amounts may not add up due to rounding.

14

First quarter 2021 Income from operations to Adjusted EBITA in millions of EUR

Reported Restructuring
First quarter 2022
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Research and development expenses
Indirect costs
Impairment of goodwill
Other business income
Other business expenses
Income from operations
Amortization
Income from operations excluding
amortization (EBITA)First quarter 2021
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Research and development expenses
Indirect costs
Impairment of goodwill
Other business income
Other business expenses
Income from operations
Amortization
Income from operations excluding
amortization (EBITA)
1

Acquisition
relatedcharges

Incidental
items1

Adjusted

1,788(1,124)
664

—
2
2

—
3
3

—
15
15

1,788
(1,104)
684

(477)
(71)
(548)
—
1
(1)
115
(31)

2
—
2
—
—
—
4
—

5
—
5
—
—
—
7
—

14
—
14
—
—
—
29
—

(456)
(72)
(528)
—
1
(1)
156
(31)

146

4

7

29

187

1,599
(970)
629

—
5
5

—
2
2

—
—
—

1,599
(962)
637

(484)
(71)
(555)
—
13
(2)
85
(30)

43
(1)
42
—
—
—
47
—

12
—
12
—
—
—
14
—

5
—
5
—
(9)
—
(4)
—

(424)
(72)
(496)
—
4
(2)
142
(30)

115

47

14

(4)

172

Incidental items are non-recurring by nature and relate to impairment and other non-cash charges related to operations in Russia and Ukraine, separation,transformation, net real estate gains, environmental provision for inactive sites and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

15Appendix C – Financial glossary
Acquisition-related charges
Costs that are directly triggered by the acquisitionof a company, such as transaction costs, purchaseaccounting related costs and integration-related
expenses.
Adjusted EBITAEBITA excluding restructuring costs, acquisitionrelated 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 R&D expenses
Research and development expenses, excluding
restructuring costs, acquisition-related charges andother incidental items attributable to research anddevelopment expenses.
Adjusted SG&A expenses
Selling, general and administrative expenses,
excluding restructuring costs, acquisition-related
charges and other incidental items attributable toselling, general and administrative expenses.
Brighter lives revenues
Percentage of total revenues coming from all
products, systems and services contributing toFood availability, Safety & security or Health & wellbeing.
Changes in scope
Consolidation effects related to acquisitions (mainly
Cooper Lighting).
Circular revenues
Percentage of total revenues coming fromproducts, systems and services designed for acircular economy, categorized as serviceable
luminaires (incl. 3D-printing), circular components,
intelligent systems or circular services.
Comparable sales growth (CSG)
The period-on-period growth in sales excluding theeffects of currency movements and changes in
consolidation and other changes.

EBIT
Income from operations.
EBITA
Income from operations excluding amortizationand 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 otherchangesIn the event a business is acquired (or divested),
the impact of the consolidation (or deconsolidation) on the Group’s figures is included (orexcluded) in the calculation of the comparable sales
growth figures. Other changes include regulatorychanges 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.
Employees
Employees of Signify at period end expressed on afull-time equivalent (FTE) basis.
Free cash flow
Net cash provided by operating activities minus net
capital expenditures. Free cash flow includes
interest paid and income taxes paid.
Gross margin
Sales minus cost of sales.
Incidental charges
Any item with an income statement impact (loss orgain) that is deemed to be both significant and notpart of normal business activity. Other incidental
items may extend over several quarters within thesame financial year.
Indirect costs
The sum of selling, general and administrative
expenses and R&D expenses.
Net capital expenditures
Additions of intangible assets, capital expenditureson property, plant and equipment and proceedsfrom disposal of property, plant and equipment.

16

Net debt
Short-term debt, long-term debt minus cash andcash equivalents.
Net leverage ratio
The ratio of consolidated reported net debt toconsolidated reported EBITDA for the purpose of
calculating the financial covenant.
R&D expenses
Research and development expenses.
Restructuring costs
The estimated costs of initiated reorganizations
which have been approved by the company, andgenerally involve the realignment of certain parts of
the organization. Restructuring costs include costs
for employee termination benefits for affected
employees and other costs directly attributable to
the restructuring, such as impairment of assets
which will no longer be in use.
SG&A expenses
Selling, general and administrative expenses.
Working capital
The sum of inventories, trade and otherreceivables, other current assets, derivative
financial assets minus the sum of trade and otherpayables, derivative financial liabilities and othercurrent liabilities (excluding dividend related
payables).

17