Q4 2023 results
January 26, 2024

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 conflict in the Middle East, the energy crisis in Europe, the expected recovery trajectory of China post COVID, component shortages, cost inflation, rapid technological change, competition in the generallighting market, development of lighting systems and services, successful implementation of business transformation programs, impact of acquisitions and other transactions, reputational and adverse effects on business due toactivities 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 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” 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 and the Semi-Annual Report 2023.
Market Abuse Regulation
This presentation contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

2

ContentQ4 23 Performance - Javier van Engelen
Full Year 23 Performance - Eric Rondolat

Outlook & closing remarks - Eric Rondolat
Q&A

3

Need to update
photoSignify reported Q4 23 sales of EUR 1.7 billion, CSG of -7.7% and anadj. EBITA margin of 12.1%
Sales (in EURm) & comparable sales growth (in %)
CSG

-8.8%

-7.7%

-9.1%

-8.6%

-7.8%

1,978

1,734

1,678

1,644

1,649

Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

Key observations for Q4 23•

124 million connected light points (Q3 23: 121 million)•

LED-based sales were 87% of total sales•

Nominal sales decline of 12.3% (including FX impact of -4.9%)
to EUR 1,734m•

Comparable sales decline of 7.7%•

Adjusted EBITA margin increase of 190 bps to 12.1%

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

410.2%

12.1%

8.9%

8.3%

10.7%

202

209149

136

177

Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

•

Continued gross margin recovery•

Net income of EUR 59m (Q4 22: EUR 86m)

•Free Cash Flow of EUR 295m (Q4 22: EUR 364m)

Digital Solutions reported a CSG of -2.9% and an adj. EBITA margin of 12.4%
Sales (in EURm) & comparable sales growth (in %)
CSG

-5.8%

-2.9%

-8.7%

-5.7%

-4.3%

1,105

1,022951

974990

Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

Key observations for Q4 23•

Comparable sales decline of 2.9%
•Continued strength in professional systems andservices•

Softness in indoor professional and horticulture
lighting

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

59.7%

12.4%

8.7%

10.0%

Adjusted EBITA margin improved by 270 bps to 12.4%

11.7%

•107

127

82

97116

Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

Gross margin recovery

Digital Solutions highlights
Winning the Prototype
Phase of U.S. DoE’s L-Prize
competition

Upgrading the Nicola
Ceravolo Stadium inCatanzaro to LED

Reducing carbon footprint
by rethinking the classic
Copenhagen street lamp

Modernizing the lighting in
more than 200 Netto storesin Poland• Two winning prototypes• The Generation Flex
modular luminaire prototype
delivers energy efficiency
and light quality throughflexible, circular design andsustainable materials• Interact Next Gen connected
lighting prototype increases
energy savings and occupant
experience, while reducing
operational expenses• Together with City Green
Light adapting the lighting toSerie B standards andmaking it more sustainable• Installed 110 Philips
ArenaVision LED gen3.5
floodlights and 6 Philips
UniFlood M G2 outdoor LEDfloodlights• The floodlights can beconnected to Interact Sports• Energy savings of over 35%• The fittings will be produced
in Bio-PE (polyethylene), a
plant-based material with alower carbon footprint• The material does notcompromise on either
durability, appearance orfunctionality• Carbon footprint reductionof over 50% compared withthe old aluminum fitting• Replacing the old generationof LED fixtures with themodern and energy-saving
Philips Maxos Fusion LED
products resulted in 43%
energy savings• Integration of the lightingwith the Interact system will
increase energy savings byan additional 35%

6Digital Products reported a CSG of -9.4% and an adj. EBITA margin of 13.3%
Sales (in EURm) & comparable sales growth (in %)CSG-12.9%-9.4%-10.1%-12.1%-10.3%

661

566

537

505

508

Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

Key observations for Q4 23•

Comparable sales decline of 9.4%•

Continued weakness in consumer and OEM•

Sequential improvement in consumer connected

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

714.1%

13.3%

8.3%

6.9%

9.9%

9375

443551Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

Adjusted EBITA margin decreased by 80 bps to 13.3%•

Positive sales mix effect•

Under-absorption of fixed costs

Digital Products highlights
Introducing the WiZ A60
filament ultra-efficient
smart bulb

Launching the new Philips
Radii auto-linkable Ultra
Efficient solar lights

Introducing the batterypowered Secure camera

Launching a new collectionof 3D-printed pendants• The WiZ A60 filament ultraefficient smart bulb is themost energy-efficient smartbulb• This A-class rated smart lightbulb consumes 40% lessenergy than standard LED
and connected LED lightbulbs• With SpaceSense, two or
more bulbs can act as
motion sensors• The new Philips Radii solar
lights are automaticallylinked together and light up
simultaneously when
triggered by motion• Powered by Ultra Efficienttechnology, the new solar
lights can brighten youroutdoor space for up to sixnights on one charge• The battery-powered Securecamera works with thewhole Philips Hue collection• Turn on lights when thecamera detects motion andtrigger alarms to deter
intruders• All recorded video and audio
can only be seen byauthorized users and isencrypted end to end• The new Spring Oasis
collection from Philips
MyCreation features two
unique pendant lamps,
made with materials
recovered from used waterjugs• 50% of the pendant’s outershade is made from recycledwater jugs

8Conventional Products reported a CSG of -29.6% and an adj. EBITA margin of
17.3%
Sales (in EURm) & comparable sales growth (in %)CSG-11.4%-29.6%-8.5%-15.0%-21.0%Key observations for Q4 23•

Comparable sales decline of 29.6%•203136186160145

Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

Structural decline exacerbated by the fluorescentbans in Europe

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

912.9%

17.3%

22.5%

20.5%

21.2%

2623

4233

31

Q4 22

Q4 23

Q1 23

Q2 23

Q3 23

Adjusted EBITA margin increased by 440 bps to 17.3%•Gross margin recovery

Adjusted EBITA margin increased to 12.1%, mainly driven by the recovery ofgross margin
As % of sales+190 bps

10.2%+340 bps

12.1%
0.0%

0.3%

0.2%

Currency

Other

2.9%
-2.0%

Q4 22

10Volume1.3%

Mix-0.8%

Price

COGS

Indirect Costs

Q4 23

Working capital decreased to 6.9%, mainly due to lower inventories, lower
receivables and other working capital items, partly offset by lower payables
In EURm / as % of sales-50 bps

7.4%1

6.9%

564-21

461-311320-90

Q4 22

11Inventories

Trade & other receivables

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

Trade & other payables

Other working
capital items

Q4 23

Content
Q4 23 Performance - Javier van Engelen
Full Year 23 Performance - Eric Rondolat

Outlook & closing remarks - Eric Rondolat
Q&A

12

Need to update
photoSignify reported 2023 sales of EUR 6.7 billion, CSG of -8.3% and anadj. EBITA margin of 10.0%
Sales (in EURm) & comparable sales growth (in %)
CSG

1.2%

-8.3%

7,514

6,704

2022

2023

Key observations for 2023•

Connected lighting and growth platforms were 30% of total sales•Nominal sales decline of 10.8% (including FX impact of -3.3%) toEUR 6,704m•Comparable sales decline of 8.3%

•Adjusted EBITA margin of 10.0%, broadly in line with 2022

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

1310.1%

10.0%7626702022

2023

•

Gross margin improvement•

Under-absorption of fixed costs•

Net income of EUR 215m (2022: EUR 532m incl. one-timeeffects of EUR 184m)•Free Cash Flow of EUR 586m, 8.7% of sales (2022: EUR 445m)

Digital Solutions and Digital Products contributing 91% to sales, 83% to Adj.
EBITA and 88% to Free Cash FlowSales contribution (in EURm)

Free Cash Flow contribution (in EURm)

Adj. EBITA contribution (in EURm)

2,469
2,117

2,452

89%1

87%1
3,524

4,231

339

82%1

91%1
3,937

297

397

86%1
424

85%1

83%1
422

291

383

205

364
321

1488%1

170

90%1

458

861

793

627

161

116

129

136

56

99

2021

2022

2023

2021

2022

2023

2021

2022

2023

1 Excludes ‘Other’.

Adjusted EBITA margin benefited from gross margin recovery in all divisions,
offset by under-absorption of fixed costs – mainly in Digital Products
Digital Solutions

Digital Products

Conventional Products

CSG%

7.8%

-5.4%

-3.8%
-10.5%-12.6%-18.4%

Adj. EBITA%FY 22FY 23+70bps

FY 23

FY 22

10.0%10.7%12.0%

2022

2023

2022

FY 23+600bps-230bps• High CSG comparison base
• Market share gains forprofessional connected systems• Adj. EBITA margin expansion
driven by gross margin recovery
15

FY 22

9.7%

2023

• CSG decline driven by weakness
in consumer and OEM businesses• Adj. EBITA margin decline mainly
due to lower volumes

20.6%

14.6%

2022

2023

• Adj. EBITA margin expansion driven
by gross margin recovery

Brighter Lives, Better World 2025 – Q4 2023 results

Brighter Lives

Better WorldDoubling our positive impact on the environment and society

Q4 2023
Result2025
TargetClimate action

Carbon reduction over value chain
against Paris Agreement

0On track

324 MT

Circular economy

Circular revenues

16%

33%

32%

Food availability
Safety & security
Health & well-being

Brighter lives revenues

16%

31%

32%

Great place to work

Women in leadership positions

17%

29%

34%

A list for climate andsupply chain leader
16

2019
Baseline

DJSI World Index

EcoVadis Platinum
Medal and top 1%On track

Off trackSignify proposes a cash dividend of EUR 1.55 per share for 2023
Key observations••

Dividend per share since IPO (in EUR)

Proposed dividend1 of EUR 1.55 per share, a year-on-yearincrease of 5 cents per share

1.55
1.50

Dividend yield of 5.1% over the year-end share price of
EUR 30.32•

Total cash dividend of EUR 196m•

Signify expects to further deleverage its gross debt and reduce
its US pension liabilities in 2024

1.45
1.40
1.35
1.30
1.25
1.10

Capital allocation policy•

Pay an increasing annual cash dividend per share year onyear•

Signify remains committed to maintaining a robust capital
structure and an investment grade credit rating•Continue to invest in organic and inorganic growth
opportunities in line with strategic priorities

17FY16

1 Dividend proposals are subject to approval at the AGM to be held on May 14, 2024.
2The extraordinary dividend of EUR 1.35 per share was related to the 2019 dividend proposal, which was withdrawn.

FY17

FY18Ext Div.

2FY20

FY21

FY22

FY23

Content
Q4 23 Performance - Javier van Engelen
Full Year 23 Performance - Eric Rondolat

Outlook & closing remarks - Eric Rondolat
Q&A

18

Need to update
photoOutlook%

For 2024, Signify expects:• An Adjusted EBITA margin improvement of up to 50 bps, including first benefits from theannounced restructuring program• Free cash flow generation of 6-7% of sales, including an incremental and non-recurring
negative impact around EUR 150m related to the restructuring program and a reductionof US pension liabilities

19Introducing the new operating model
Signify – current structure

Signify – new structure

Digital Products

Conventional

Prof. luminaires

LED lamps &luminairesconsumer

Conventionallamps

LED lamps &luminaires
professional

Specialty lighting

Systems &services
Agriculture
lighting

Consumerconnected

Digital projection
Lamp electronics

Offer development

Digital Solutions

Professional

ConsumerOEM

Conventional

Prof. luminaires

LED lamps &luminaires
consumer

LED electronics

Conventionallamps

LED lamps &luminaires
professional

Specialty lighting

Consumerconnected

Digital projection

Systems &services
Agriculture
lighting

Lamp electronics

MarketsOperations
20

Supply Chain & Sales &Manufacturing Marketing

LED electronics• Offerdevelopment• Offerdevelopment• Offerdevelopment• Offerdevelopment• Manufacturing• Manufacturing• Manufacturing• Manufacturing• Sales &Marketing• Sales &Marketing• Sales &Marketing• Sales &Marketing

End-to-End responsibility

Central functions

Central functions

Q&A
Need to updatephoto

Currency movements had a negative impact on sales and a positive impact
on Adjusted EBITA margin
Q4 23 Sales FX Footprint (% of total)

22

Key observations•

Overall currency impact of -4.9% on sales, mainly from
USD depreciation.

•Positive impact of 0.3% on the Adjusted EBITA margin.

Net income decreased to EUR 59m, as higher Adjusted EBITA, lower financialexpenses and lower income tax expense were offset by restructuring costs
Key observations

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

Q4 22202

Q4 23
209

- Restructuring

-47

-83

- Acquisition-related charges

-4-5

15-13

EBITA

166

108

Amortization

-29

-20

EBIT

137

89

Net financial income / expenses-29-18

Income tax expense

-22

-12

Results from investments in associates

00Net income

8659

1 - Other incidental items

231Non-recurring by nature and relate to:• Impairment and other non-cash charges/gains
related to operations in Russia and Ukraine• A one-day FX loss from the devaluation of theArgentine peso by the Argentinian government• Separation costs• Transformation costs• Real estate gains/loss• Legal cases• Incidental warranty costs• Environmental provisions for inactive sites• The discounting effect of long-term provisions

Free cash flow decreased to EUR 295m, mainly due to a lower inflow fromworking capitalKey observations

Free cash flow (in EURm)
Q4 22137

Q4 2389

Depreciation and amortization

8669

Additions to (releases of) provisions

41107

Utilizations of provisions-56-46

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

247

121-5-1-36-23

Net capex-36-28Other-14

8

Free cash flow

364

295

As % of sales

18.4%

17.0%

Income from operations

24

•

•

Free cash flow of EUR 295m•

Lower inflow from working capital•Q4 last year benefited from a stronger reductionof inventories

Restructuring payout of EUR 16m (Q4 22: EUR 11m)