Q1 2023 results
May 3, 2023

Important information
Forward-looking statements
This release contains forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Signify, 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 those expressed inany forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties and other important factors include but are not limited to: adverse economic and political developments, in particular the impacts of theRussia-Ukraine conflict, the energy crisis in Europe, the impacts of COVID-19, supply chain constraints, component shortages, cost inflation, rapid technological change, competition in the general lighting market, development oflighting systems and services, successful implementation of business transformation programs, impact of acquisitions and other transactions, reputational and adverse effects on business due to activities in Environment, Health &Safety, compliance risks, ability to attract and retain talented personnel, adverse currency effects, pension liabilities, and exposure to international tax laws.
Additional risks currently not known to the Group or that the Group 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 ofoperations, 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 forwardlooking 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 the Group’s own assessment of its sales and markets. Rankings are based on sales unless otherwise stated.
Non-IFRS Financial Statements
Certain parts of this document contain non-IFRS financial measures and ratios, such as comparable sales growth, adjusted gross margin, EBITA, adjusted EBITA, EBITDA, adjusted EBITDA 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 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 be comparableto 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” in the Annual Report 2022.
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 prepared inaccordance with the accounting policies as stated in the Annual Report 2022.
Market Abuse Regulation
This presentation contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

2

ContentBusiness and operational performance - Eric Rondolat

Financial performance - Javier van Engelen
Outlook and closing remarks - Eric Rondolat
Q&A

3

Need to update
photoFirst quarter 2023 highlights

%

4

•

Persistent weakness in the consumer segment and the indoor professional business;slowdown in OEM sales•

Recovery of gross margin thanks to price discipline and effective COGS management•Comparable sales growth of -9.1%•Adjusted EBITA margin of 8.9%, impacted by fixed cost under-absorption, while
benefiting from structural gross margin recovery•

Net income of EUR 28 million•Free cash flow of EUR 51 million, mainly due to a lower cash outflow from working
capitalSignify reported Q1 23 sales of EUR 1.7 billion, CSG of -9.1% and an
adj. EBITA margin of 8.9%
Sales (in EURm) & comparable sales growth (in %)
CSG

6.4%

-9.1%

5.1%

4.3%

-8.8%

1,788

1,678

1,8361,912

1,978

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

Key observations for Q1 23•

117 million connected light points (Q4 22: 114 million)•LED-based sales were 82% of total sales•

Nominal sales decline of 6.1% to EUR 1,678m•

Comparable sales decline of 9.1%•

Adjusted EBITA margin decline of 160 bps to 8.9%

Adjusted EBITA (in EURm & as % of sales)
%

5

10.5%

8.9%

9.5%

10.4%

10.2%

•Structural gross margin recovery•

Under-absorption of fixed costs•

Temporary impact from the unwinding ofprevious FX hedging policy

187149174

199202•

Net income of EUR 28m (Q1 22: EUR 87m)

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

•

Free Cash Flow of EUR 51m (Q1 22: EUR -189m)

Digital Solutions reported a CSG of -8.7% and an adj. EBITA margin of 8.7%
Sales (in EURm) & comparable sales growth (in %)
CSG

16.9%

-8.7%

11.6%

12.0%

-5.8%

981

951

1,042

1,103

1,105

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

Key observations for Q1 23•

Comparable sales decline of 8.7%
•High base of comparison of 16.9%•

Weak indoor professional business•

Softness in horticulture lighting

Adjusted EBITA (in EURm & as % of sales)
•%

69.7%

8.7%

9.5%

11.2%

9.7%

95

82

98

124

107

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

Adjusted EBITA margin decreased by 100 bps to 8.7%•

Gross margin improvements•

Under-absorption of fixed costs•

Negative currency/hedging impact

Digital Solutions highlights
Bringing energy-efficient
outdoor lighting to West
Cambridge site

Completing a large-scale
smart city project inHuanggang City

Helping retailers become
more sustainable throughnew lighting solutions

Bringing wirelessbroadband connectivity toEichenzell• Partnered with University ofCambridge’s Estates Division• Replaced over 300
streetlights with energyefficient Philips TownTuneluminaires• The new LEDs require lessmaintenance time and will
provide an improved nighttime experience• Supplied BrightSites smart
poles, Philips LED streetlights
and the Interact connected
lighting system• The BrightSites smart poles
integrate security cameras,
environmental sensors, Wi-Fi
and other devices• Reduces energy consumption
by about 60% and operationalcosts by about 50%• Launched new Philips
StoreFlow retail lighting,Interact Retail hybrid lighting
controls, and a range ofluminaires made from wastematerials• Philips StoreFlow is made ofat least 68% biobased plastic,
reducing the CO2 footprint of
the plastics by ~80%
• Efficacy ranges from120lm/W up to 142lm/W• The German municipality ofEichenzell installs Brightsites
by Signify to support its smart
city vision• Through our LED lighting andInteract City system,
Eichenzell can continuously
monitor and manage all lights• Cost-effective and sustainable
solution creates super-fastcommunication throughconnected streetlights

7

Digital Products reported a CSG of -10.1% and an adj. EBITA margin of 8.3%
Sales (in EURm) & comparable sales growth (in %)
CSG

0.2%

-10.1%

2.6%

-2.5%

-12.9%

601

537

598

609

661

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

Key observations for Q1 23•

Comparable sales decline of 10.1%•

Continued weakness in consumer connected and OEMbusinesses•

Partly compensated by higher sales of LED lamps &luminaires

Adjusted EBITA (in EURm & as % of sales)•%

812.8%

8.3%

10.6%

10.5%

14.1%

7744636493

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

Adjusted EBITA margin declined by 450 bps to 8.3%•

Positive impact from price and mix•

Under-absorption of fixed costs

Digital Products highlights
Introducing the Philips HueSync TV app for Samsung
TVs

Helping customers switchfrom fluorescent to LED as
EU ban comes into effectLaunching a new low
voltage outdoor range

Expanding the WiZ outdoor
portfolio with newproducts• The new Philips Hue Sync TVapp synchronizes Philips Hue
smart lights with yourSamsung TV• Experience immersive andseamless light syncing in yourhome when watching TV or
playing games• Compatible with all TV
content and video formats,including native apps

• From 24 February, the RoHS
Directive bans the placing on
the EU market of CFL-ni lamps• Linear fluorescent lamps (T5,T8) will be phased out as per
24 August• Signify extended the range ofenergy-efficient alternatives• These LED alternatives
provide energy savings
between 45% and 70%• The new outdoor range isavailable with wall, path light,and sensor accessories• Safe and easy installation with
Twist & Lock connector• Designed to perform in allweather conditions• Launched in Europe andplanning to extend
internationally• Introduced a spotlight, a wall

9light and a bollard• The outdoor range isavailable in tunable white &full colors• The range is waterproof &weatherproof• Matter certification allows
for seamless integration andcollaboration with other
Matter-certified devices

Conventional Products reported a CSG of -8.5% and an adj. EBITA of 22.5%
Sales (in EURm) & comparable sales growth (in %)CSG-15.1%-8.5%-13.8%-9.5%-11.4%

201

186

193

195

203

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

Key observations for Q1 23•

Comparable sales decline of 8.5%
•Continued strong price discipline•

Volume decline in line with expectation and helpedby last time buys

Adjusted EBITA (in EURm & as % of sales)•%

1016.0%

22.5%

15.5%

14.2%

12.9%

324230

2826

Q1 22

Q1 23

Q2 22

Q3 22

Q4 22

Adjusted EBITA margin increased by 650 bps to 22.5%•Strong price discipline•

Reversal of 2022 headwinds: energy, logistics, FX•

One-off benefitsBrighter Lives, Better World 2025 – Q1 2023 results

Brighter Lives

Better World

Doubling our positive impact on the environment and society

2019
Baseline

Q1 2023Result2025
TargetClimate action

Carbon reduction over value chain
against Paris Agreement

0On track

324 MT

Circular economy

Circular revenues

16%

29%

32%

Food availability
Safety & security
Health & well-being

Brighter lives revenues

16%

27%

32%

Great place to work

Women in leadership positions

17%

29%

34%

A list for climate andsupply chain leader

DJSI World Index

EcoVadis PlatinumMedal and top 1%

On track
Off track

Content
Business and operational performance - Eric Rondolat

Financial performance - Javier van Engelen
Outlook and closing remarks - Eric Rondolat
Q&A

12

Need to update
photoAdjusted EBITA margin decreased to 8.9%, mainly due to under-absorption of
fixed costs more than offsetting gross margin recovery
In EURm / as % of sales-160 bps

10.5%+260 bps
-3.0%
0.1%

Q1 22

13

VolumeMix

8.9%

0.3%

0.3%

COGS

Indirect Costs

-0.9%

-0.5%

Currency

Other

2.2%

Price

Q1 23

Working capital increased year on year, due to lower payables, partly offset
by lower inventories and receivables
In EURm / as % of sales

8.3%1+40 bps

7.9%

617-12559-198

363-96

Q1 2214Inventories

Trade & other receivables

1Includes sales of Fluence and Pierlite on a 12-month pro-forma basis.

Trade & other payables

Other working
capital items

Q1 23

Leverage ratio at 1.4x, with improved cash flow offsetting lower profitability

In EURm
FCF: EUR 51m

1,378
1,356

1,331
2630-132-25

27-453Net
leverage15

1.6x

1.3xNet debt
end of Q1 22

Net debt
end of Q4 22

1.4x
EBITDA

Change inworking
capital

Net capex

Change inprovisions

1Other includes purchase of businesses, new lease liabilities, derivatives, and FX effect on cash, cash equivalents and debt.

Interest & Tax

OtherFCF items

Other 1

Net debt
end of Q1 23

Content
Business and operational performance - Eric Rondolat

Financial performance - Javier van Engelen
Outlook and closing remarks - Eric Rondolat
Q&A

16

Need to update
photoOutlook•17

Signify confirms its guidance for 2023. The company continues to focus its efforts on
improving the Adjusted EBITA margin and free cash flow. Signify expects for 2023:•An Adjusted EBITA margin in the range of 10.5-11.5%•Free cash flow between 6-8% of sales

Q&A
Need to update
photoCurrency movements had a positive impact on sales and a negative impact
on the Adjusted EBITA margin
Q1 23 Sales FX Footprint (% of total)

19

Key observations•

Overall currency impact on the Adjusted EBITA marginof -90 bps•

Benefit on main currencies largely offset by hedging•Significant negative FX impact due to devaluation ofEGP, TRY and ARS, yet largely offset through pricing tomaintain gross margin•

Unwinding of FX hedging policy still having temporary
negative effect on P&L, to be fully offset in remainderof 2023

Net income decreased to EUR 28m, mainly due to lower EBIT and higher
financial expenses, partly offset by lower income tax expense
Key observations

From Adjusted EBITA to net income (in EURm)
Adjusted EBITA

Q1 22187

Q1 23149- Restructuring-4-47- Acquisition-related charges-7-3-29-16

EBITA

146

83

Amortization-31-22

EBIT

115

61

2 Net financial income / expenses-6-30

3 Income tax expense-22-3Results from investments in associates

00Net income

8728

1 - Other incidental items

20123Non-recurring by nature and relate to among others:• Impairment and other non-cash charges related tooperations in Russia and Ukraine• Separation• Transformation• Environmental provision for inactive sites• The discounting effect of long-term provisions
Higher financial expenses were mainly impacted by:• Non-cash fair value adjustment of the Virtual Power
Purchase Agreements• Higher interest costs
Lower income tax expenses were mainly driven by:• Lower taxable income• A release of tax liabilities

Free cash flow of EUR 51m, mainly due to a lower cash outflow from workingcapitalKey observations

Free cash flow (in EURm)
Q1 22
115

Q1 2361

Depreciation and amortization

7671

Additions to (releases of) provisions

1977

Utilizations of provisions-43-52

Change in working capital
Net interest and financing costs
received (paid)
Income taxes paid

-315-530-4-24-23

Net capex-27-3094Free cash flow

-189

51

As % of sales-10.6%

3.0%

Income from operations

Other21••

Free cash flow of EUR 51m•

Lower cash outflow from working capital, which
benefited from improved demand planning
reliability and stricter inventory discipline•

Increase in additions to provisions was mostly
related to restructuring provisions inConventional Products

Restructuring pay-out of EUR 21m (Q1 22: EUR 14m)