Press Release
April 26, 2019

Signify reports first quarter sales of EUR 1.5 billion, operational profitability of 7.8% and free
cash flow of EUR 55 million
First quarter 20191• Signify’s installed base of connected light points increased from 34 million in Q1 18 to 47 million in Q1 19• CSG growing profit engines 1.1%; CSG total Signify -3.3%• LED-based comparable sales grew by 3.6% to 73% of sales (Q1 18: 68%)
• Adj. indirect costs down EUR 39 million on a currency comparable basis, a reduction of 8%, or 170 bps of sales• Adj. EBITA margin improved by 80 bps to 7.8%, despite a negative currency impact of -130 bps• Net income more than doubled to EUR 44 million (Q1 18: EUR 20 million)• Total free cash flow of EUR 55 million (Q1 18: EUR -6 million)• Signify 2019 outlook confirmed
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced the company’s
2019 first quarter results. “We are satisfied with the 1.1% sales growth of our growing profit engines in the firstquarter, against the backdrop of headwinds in China and Europe,” said CEO Eric Rondolat. “Continued progress in oursimplification actions resulted in a further improvement in our profitability, and our free cash flow remained solid.
While market conditions remain challenging, we continue to invest in our growth platforms and rigorously improve
our operational efficiency.”

Outlook
We confirm our outlook that in 2019 our growing profit engines (LED, Professional and Home combined) are expected
to deliver a comparable sales growth in the range of 2 to 5%. Our cash engine, Lamps, is expected to decline at a
slower pace than the market, in the range of -21 to -24% on a comparable basis. For total Signify, we aim to reach an
Adjusted EBITA margin in 2019 within the range of 11 to 13% set at the time of the IPO in May 2016. In 2019, we
expect free cash flow, excluding the positive impact from IFRS 16, to be above 5% of sales.

¹This press release contains certain non-IFRS financial measures and ratios, such as comparable sales growth, EBITA, adjusted EBITA and free
cash flow, and related ratios, which are not recognized measures of financial performance or liquidity under IFRS. For a reconciliation of these
non-IFRS financial measures to the most directly comparable IFRS financial measures, see appendix B, Reconciliation of non-IFRS financial
measures, of this press release.

Page 2Financial review
Implementation of IFRS 16 Leases
Signify has adopted IFRS 16 as of January 1, 2019. All lease contracts are recognized on the balance sheet except whencertain capitalization exemptions are applied, such as lease contracts with a duration of less than 12 months and lease
contracts for low value items. Leases that have a meaningful impact on the company’s consolidated financials relate
to real estate, car fleet and IT equipment.
• IFRS 16 has no impact on the company’s sales, while the Adjusted EBITA is expected to be positively impacted byaround EUR 10 million in 2019. When exemptions do not apply, the former operating lease expenses are replaced
by depreciation, service costs and interest expenses, of which the latter is recognized outside Adj. EBITA.
• Free cash flow of 2019 is estimated to be positively impacted by around EUR 60 million (Q1 19: EUR 17 million) as,
under the new standard, cash payments for the principal part of the lease liability are classified in the cash flowfrom financing activities instead of in the cash flow from operating activities.
• The estimates referenced above are based on the current lease portfolio and are subject to change if, for example,
lease contracts are amended, or new contracts are entered into.
• On January 1, 2019, total assets increased by EUR 238 million due to the increase in Property, Plant and Equipmentwith capitalized lease assets, and total long-term/short-term debt increased by EUR 259 million due to additional
lease liabilities.

in € million, except percentages

2018First quarter
2019

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

1,501
580
38.6%

1,478
557
37.7%

Adj. SG&A expenses
Adj. R&D expenses

-417
-81

-395
-69

Adj. indirect costs
Adj. indirect costs (as % of sales)

-498
33.2%

-464
31.4%

6.7%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

106
7.0%
-43
62

115
7.8%
-22
93

8.8%

Income from operations (EBIT)Net financial income/expense
Income tax expense
Net income

39
-9
-10
20

69
-9
-16
44

-6
0.15
31,61555
0.35
28,689

Free cash flow
Basic EPS (€)
Employees (FTE)

-3.3%
1.1%
0.7%
-1.5%
-4.0%

49.3%
74.9%

119.1%

Page 3First quarter
Sales amounted to EUR 1,478 million. Adjusted for 1.1% positive currency effects, comparable sales decreased by
3.3%, with LED-based sales increasing by 3.6% and now accounting for 73% of sales. The adjusted gross margin
declined by 90 bps to 37.7%, due to a currency effect of -140 bps, partly offset by ongoing procurement savings.
Adjusted indirect costs decreased by EUR 34 million, or 180 bps as a percentage of sales, as a result of our ongoingcost reduction initiatives. Adjusted EBITA amounted to EUR 115 million, compared with EUR 106 million in the same
period last year, and was negatively impacted by EUR 18 million of currency effects. The Adjusted EBITA margin
improved by 80 bps to 7.8%, despite a currency effect of -130 bps. Total restructuring costs were EUR 20 million andother incidentals were EUR 2 million. Net income more than doubled from EUR 20 million last year to EUR 44 million
in Q1 19, mainly as a result of better operational profitability and lower restructuring costs. Free cash flow amounted
to EUR 55 million, including a positive impact of EUR 17 million related to IFRS 16.

Growing profit engines
CSG

Adj. EBITA margin

LED
Professional
Home

Q1 18
3.6%
3.2%
-6.4%

Q1 19
-0.2%
-1.5%
24.4%

Q1 18
9.6%
5.2%
-23.1%

Q1 19
11.9%
5.3%
-6.1%

LED, Professional and Home combined

2.5%

1.1%

4.6%

6.7%

First quarter
Our growing profit engines, LED, Professional and Home, represent the foundations we are building and investing in,in line with our strategy to move to LED and connectivity, unleashing new growth platforms. These include connected
systems, IoT platform services, horticulture, solar, and LiFi. Comparable sales growth of the three businesses
combined was 1.1%, while the Adjusted EBITA margin improved by 210 bps to 6.7%.

LED
2018

First quarter
2019

Sales

444

449

1.1%

Adjusted EBITA
Adjusted EBITA margin (%)
EBITA
Income from operations (EBIT)

43
9.6%
42
41

54
11.9%
52
51

25.6%

in € million, unless otherwise indicatedComparable sales growth (%)

change-0.2%

First quarter
Sales amounted to EUR 449 million, a slight decrease of 0.2% on a comparable basis. LED lamps showed a solid
performance while growth in LED electronics slowed down in Europe. Adjusted EBITA increased by 25.6% to EUR 54
million, mainly driven by ongoing procurement savings and lower indirect costs. This resulted in an Adjusted EBITA
margin improvement of 230 bps to 11.9%.

Page 4

Professionalin € million, unless otherwise indicated2018

First quarter
2019

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

593
31
5.2%
28
7

599
32
5.3%
23
1

change
-1.5%
1.0%
2.8%

First quarter
Comparable sales decreased by 1.5% to EUR 599 million, due to a lower level of market activity in Europe and China,
which was partly offset by a solid performance in the Americas. Adjusted EBITA amounted to EUR 32 million, which
resulted in an Adjusted EBITA margin of 5.3%, as continued indirect cost savings more than offset the negative impactof currencies and mix.

Homein € million, unless otherwise indicated2018

First quarter
2019

Comparable sales growth (%)
Sales
Adjusted EBITA

92
-21

115
-7

-23.1%

-6.1%

EBITA

-22

-7

Income from operations (EBIT)

-22

-8

Adjusted EBITA margin (%)

change
24.4%
25.3%
67.0%

First quarter
Sales amounted to EUR 115 million, an increase of 24.4% on a comparable basis, on the back of a low comparisonbase in the US while we experienced strong demand for connected offers. Adjusted EBITA amounted to EUR -7 million,
including a significant negative impact of currencies. The Adjusted EBITA margin improved from -23.1% to -6.1%.

Cash engine - Lampsin € million, unless otherwise indicated2018

First quarter
2019

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

370
78
21.2%
62
62

309
63
20.5%
61
60

change-17.9%-16.7%-19.5%

Sales amounted to EUR 309 million, a comparable decrease of 17.9%. The decline in comparable sales is estimated to
be lower than the market decline, resulting in continued market share gains. The Adjusted EBITA margin remainedsolid at 20.5%.

Page 5

Other
First quarter
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. Adjusted EBITA amounted to EUR -27 million (Q1
18: EUR -25 million). EBITA amounted to EUR -35 million (Q1 18: EUR -47 million), including restructuring costs of EUR
7 million (Q1 18: EUR 18 million). Other incidental items not part of the Adjusted EBITA amounted to EUR 2 million(Q1 18: EUR 4 million).

Sales by marketin € million, except percentages

2018First quarter
2019
changeCSG

EuropeAmericasRest of the World
Global businesses
Total

560
422
434
85
1,501

533
430
432
84
1,478

-4.5%
-2.1%
-3.3%
-1.0%
-3.3%

-4.9%
1.8%
-0.5%
-0.2%
-1.5%

Horticulture is included in Market Groups Europe, Americas and Rest of the World (was previously part of Global businesses)

First quarter
Comparable sales in Europe decreased by 4.5%, mainly reflecting challenging market conditions in Germany, France
and Spain. Comparable sales for the Rest of the World decreased by 3.3%, with a solid performance in Southeast Asia
and Indonesia, offset by more challenging market conditions in China.

Working capitalin € million, unless otherwise indicatedInventories
Receivables
Accounts and notes payable
Accrued liabilities
Other
Working capital
As % of LTM* sales

31 Mar '18

31 Dec '18

31 Mar '19

957
1,235
-949
-413
-218
612
9.0%

878
1,231
-953
-444
-176
536
8.4%

943
1,231
-971
-431
-185
587
9.3%

* LTM: Last Twelve Months

First quarter
Working capital improved year-on-year by EUR 25 million to EUR 587 million, mainly driven by lower inventories
and increased payables. Working capital represents 9.3% of sales, compared with 9.0% at the end of March 2018.
Excluding the impact of currencies, working capital improved by 20 basis points year-on-year.

Page 6

Cash flow analysis
First quarter2018

in € million

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

39
58
54
-59
-41
-5
-35
-21
3
-6

2019
69
70
41
-57
-29
-4
-19
-10
-5
55

First quarter
Free cash flow amounted to EUR 55 million compared with EUR -6 million in the same period last year. Free cash flowin Q1 19 included a positive impact of EUR 17 million related to IFRS 16 and a restructuring pay-out of EUR 25 million(Q1 18: EUR 31 million).

Net debt
in € million

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

31 Mar '18

31 Dec '18

31 Mar '19

111
1,157
1,267
833
435
2,202

78
1,187
1,265
676
589
2,119

151
1,370
1,521
733
789
2,208

First quarter
Net debt amounted to EUR 789 million, an increase of EUR 200 million compared with the end of 2018 which can be
explained by the impact of IFRS 16 of EUR 259 million, partly offset by solid free cash flow generation. Total equity
increased to EUR 2,208 million at the end of Q1 19 (year-end 2018: EUR 2,119 million), primarily due to currencytranslation results and net income.

Page 7

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 Stéphane Rougeot (CFO) will host a conference call for analysts and institutional investors at
9:00 a.m. CET to discuss first quarter results. A live audio webcast of the conference call will be available via the Signify
Investor Relations website.
Financial calendar
14 May 201926 July 201925 October 2019

Annual General Meeting of Shareholders
Second quarter and half year results 2019
Third quarter results 2019

For further information, please contact:
Signify Investor Relations
Robin Jansen
Tel: +31 6 1594 4569
E-mail: robin.j.jansen@signify.com
Signify Corporate Communications
Elco van GroningenTel: +31 6 1086 5519
E-mail: elco.van.groningen@signify.com

About Signify
Signify (Euronext: LIGHT) is the world leader in lighting for professionals and consumers and lighting for the Internetof 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 2018 sales of EUR 6.4 billion, we have approximately
29,000 employees and are present in over 70 countries. We unlock the extraordinary potential of light for brighter
lives and a better world. We have been named Industry Leader in the Dow Jones Sustainability Index for two years ina row. News from Signify is located at the Newsroom, Twitter, LinkedIn and Instagram. Information for investors canbe found on the Investor Relations page.

Page 8

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 and projections of Signify N.V. (the“Company”, and together with its subsidiaries, the “Group”), including statements regarding strategy, estimates of sales growthand future operational results.
By their nature, these statements involve risks and uncertainties facing the Company and its Group Companies and a number ofimportant 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: adverse economic and political developments, the impacts of rapid technological change, competition in the general lighting
market, development of lighting systems and services, successful implementation of business transformation programs, impact ofacquisitions and other transactions, impact of the Group’s operation as a separate publicly listed company, pension liabilities andcosts, establishment of corporate and brand identity, adverse tax consequences from the separation from Royal Philips andexposure to international tax laws. Please see “Risk Factors and Risk Management” in Chapter 12 of the Annual Report 2018 fordiscussion 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 the Group. Such risks, uncertainties and other important factors should
be read in conjunction with the information included in the Company’s Annual Report 2018.
Looking ahead, the Group is primarily concerned about the challenging economic conditions, currency headwinds and politicaluncertainties in the global and domestic markets in which it operates. 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 of operations, financial condition and prospects of the Group or could cause the forwardlooking 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 by applicable law.

Market and Industry Information
All references to market share, market data, industry statistics and industry forecasts in this document consist of estimatescompiled 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 Measures
Certain parts of this document contain non-IFRS financial measures and ratios, such as comparable sales growth, adjusted grossmargin, 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 performance of the Group’s 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 andratios 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 measures” in the Annual Report 2018.

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 in accordance with theaccounting policies as stated in the Annual Report 2018.

Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

Page 9Appendix A – Financial statement information
A. CONDENSED CONSOLIDATED STATEMENTS OF INCOME

In millions of EUR unless otherwise statedFirst quarter

Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Research and development expenses
Impairment of goodwill
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
Amounts may not add up due to rounding

2018

2019

1,501
(936)
565
(430)
(95)
2
(2)
39
4
(13)
0
30
(10)
20

1,478
(927)
552
(409)
(72)
2
(4)
69
5
(14)
1
61
(16)
44

21
(1)

44
(0)

Page 10

B. CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

in millions of EUR
First quarter
Net income for the period

2018
20

2019
44

(3)
(3)

(2)
(2)

Pensions and other post-employment plans:Remeasurements
Income tax effect on remeasurements
Total of items that will not be reclassified to profit or loss
Currency translation differences:
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

(64)
-

45
(2)

10
(2)
(56)

17
(3)
57

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

(59)
(39)

55
99

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

(36)
(3)

97
1

Amounts may not add up due to rounding

Page 11

C. CONDENSED CONSOLIDATED BALANCE SHEETIn millions of EUR
December 31, 2018

March 31, 2019Non-current assets
Property, plant and equipment
Goodwill
Intangible assets, excluding goodwill
Non-current receivables
Investments in associates
Other non-current financial assets
Deferred tax assets
Other non-current assets
Total non-current assets

431
1,771
493
38
11
20
399
49
3,211

630
1,799
473
43
14
18
403
49
3,429

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

878
4
107
28
35
1,231
9
676
2,969
6,181

943
3
133
27
34
1,231
8
733
3,113
6,542

EquityShareholders’ equity
Non-controlling interests
Total equity

2,041
78
2,119

2,129
79
2,208

Non-current liabilities
Long-term debt
Long-term provisions
Deferred tax liabilities
Other non-current liabilities
Total non-current liabilities

1,187
712
19
173
2,091

1,370
703
18
167
2,258

Current liabilities
Short-term debt
Derivative financial liabilities
Income tax payable
Accounts and notes payable
Accrued liabilities
Short-term provisions
Liabilities directly associated with assets classified held for sale
Other current liabilities
Total current liabilities
Total liabilities and total equity

78
22
15
953
444
168
0
288
1,970
6,181

151
13
18
971
431
159
0
332
2,075
6,542

Amounts may not add up due to rounding

Page 12

D. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWSIn millions of EUR
First quarter
2018
2019
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net cash provided by operating activities:• Depreciation, amortization and impairment of non-financial assets• Impairment (reversal) of goodwill, other non-current fin. assets and inv. in associates• Net gain on sale of assets• Interest income• Interest expense on debt, borrowings and other liabilities• Income tax expense• Additions to (releases of) provisions• Other items
Decrease (increase) in working capital:• Decrease (increase) in receivables• Decrease (increase) in inventories• Increase (decrease) in accounts payable• Increase (decrease) in other current assets, accrued and other current liabilities
Increase (decrease) in non-current receivables, other assets and other liabilities
Utilization of provisions
Interest paid
Income taxes paid
Net cash provided by (used for) operating activities

20
132
58
0
(1)
(3)
8
10
54
5
(41)
98
(54)
(37)
(48)
3
(59)
(5)
(35)
16

44
131
70
(0)
(0)
(4)
8
16
41
1
(29)
21
(52)
3
(1)
(1)
(57)
(4)
(19)
65

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 current financial assets
Proceeds from other non-current financial assets
Purchases of other non-current financial assets
Purchases of businesses, net of cash acquired
Proceeds from sale of interests in businesses, net of cash disposed of
Net cash used for investing activities

(21)
(7)
(15)
0
15
1
(3)
(0)
(0)
(9)

(10)
(4)
(7)
1
4
0
0
(0)
(5)

Cash flows from financing activities
Dividends paid
Proceeds from issuance (payments) of debt
Purchases of treasury shares
Net cash provided by (used for) financing activities
Net cash provided by (used for) operations

(17)
(71)
(88)
(81)

(26)
(27)
33

(20)
925
825

15
664
712

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) For Q1 2019 and 2018, included bank overdrafts of EUR 12 million and EUR 17 million, respectively.
2) Included bank overdrafts of EUR 20 million and EUR 8 million as at March 31, 2019 and 2018,
respectively.
Amounts may not add up due to rounding

Page 13

Appendix B – Reconciliation of non-IFRS financial measures
Sales growth composition (in %)comparable
growth2019 vs 2018
Lamps
LED
Professional
Home
Other
Total

-17.9
-0.2
-1.5
24.4
371.3
-3.3

comparable
growth2019 vs 2018
EuropeAmericasRest of the World
Global businesses
Total

-4.5
-2.1
-3.3
-1.0
-3.3

Amounts may not add up due to rounding

First quarter
currency
consolidation andeffectsother changes
1.2
1.3
0.9
0.9
29.6
1.1

nominalgrowth

0.0
0.0
1.7
0.0
0.0
0.7

-16.7
1.1
1.0
25.3
400.9
-1.5

First quarter
currency
consolidation andeffectsother changes

nominalgrowth

-0.5
3.9
0.5
1.1
1.1

0.0
0.0
2.3
-0.2
0.7

-4.9
1.8
-0.5
-0.2
-1.5

Page 14

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

Signify

Lamps

LED

Professional

Home

Other

First quarter 2019
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1)
Income from operations (or EBIT)

115
(20)
(0)
(2)
93
(24)
69

63
(3)
61
(0)
60

54
(2)
52
(1)
51

32
(8)
(0)
23
(22)
1

(7)
(0)
(7)
(0)
(8)

(27)
(7)
(2)
(35)
(1)
(36)

First quarter 2018
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1)
Income from operations (or EBIT)

106
(39)
(0)
(4)
62
(23)
39

78
(17)
(0)
62
(0)
62

43
(1)
42
(1)
41

31
(3)
28
(21)
7

(21)
(1)
(22)
(0)
(22)

(25)
(18)
(4)
(47)
(0)
(47)

1) Amortization and impairments of acquisition related intangibles and goodwill

Amounts may not add up due to rounding

Page 15

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

Reported

Restructuring

Acquisition
relatedcharges

Sales
Cost of sales
Gross margin

1,478
(927)
552

-

-

-

5
5

-

-

1,478
(922)
557

Selling, general and administrative expenses
Research and development expenses
Indirect costs

(409)
(72)
(481)

12
3
15

0
0

2
2

(395)
(69)
(464)

Impairment of goodwill
Other business income
Other business expenses
Income from operations
Amortization
Income from operations excl. amortization(EBITA)

2
(4)
69
(24)

20
-

0
-

2
-

2
(4)
91
(24)

93

20

0

2

115

First quarter 2018
Sales
Cost of sales
Gross margin

1,501
(936)
565

15
15

0
0

0
0

1,501
(921)
580

Selling, general and administrative expenses
Research and development expenses
Indirect costs

(430)
(95)
(526)

10
15
24

-

4
4

(417)
(81)
(498)

Impairment of goodwill
Other business income
Other business expenses
Income from operations
Amortization
Income from operations excl. amortization(EBITA)

2
(2)
39
(23)

39
-

0
-

(0)
4
-

2
(2)
82
(23)

62

39

0

4

106

First quarter 2019

Amounts may not add up due to rounding

Incidental
items

Adjusted

Page 16

Appendix C – Financial glossary
Acquisition-related charges

Adjusted EBITA
Adjusted EBITA margin
Adjusted gross margin

Adjusted indirect costs

Adjusted R&D expenses

Adjusted SG&A expenses

Comparable sales growth (CSG)

EBIT

Costs that are directly triggered by theacquisition of a company, such as transaction costs,
purchase accounting related costs and integrationrelated expenses
EBITA excluding restructuring costs, acquisitionrelated charges and other incidental charges
Adjusted EBITA divided by sales to third parties(excluding intersegment)
Gross margin, excluding restructuring costs,
acquisition-related charges and other incidental
items attributable to cost of sales
Indirect costs, excluding restructuring costs,
acquisition-related charges and other incidental
items attributable to indirect costs
Research and development expenses, excluding
restructuring costs, acquisition-related charges andother incidental items attributable to research anddevelopment expenses
Selling, general and administrative expenses,
excluding restructuring costs, acquisition-related
charges and other incidental items attributable toselling, general and administrative expenses
The period-on-period growth in sales excluding theeffects of currency movements and changes in
consolidation and other changes
Income from operations

EBITA

Income from operations excluding amortization andimpairment of acquisition related intangible assets
and goodwill
Effects of changes in consolidation and other In the event a business is acquired (or divested), thechanges
impact of the consolidation (or de-consolidation) on
the Group’s figures is included (or excluded) in thecalculation of the comparable sales growth figures.
Other changes include regulatory changes andchanges 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 notPage 17

Indirect costs
Net capital expenditures

Net debt
R&D expenses
Restructuring costs

SG&A expenses
Working capitalpart of normal business activity. Other incidental
items may extend over several quarters within thesame financial year
The sum of selling, general and administrative
expenses and R&D expenses
Additions of intangible assets, capital expenditureson property, plant and equipment and proceedsfrom disposal of property, plant and equipment
Short-term debt, long-term debt minus cash andcash equivalents
Research and development expenses
The estimated costs of initiated reorganizations, themost significant of which have been approved by theGroup, and which generally involve the realignmentof certain parts of the industrial and commercialorganization
Selling, general and administrative expenses
The sum of Inventories, Receivables, Other current
assets, Derivative financial assets, minus the sum of
Accounts and notes payable, Accrued liabilities,
Derivative financial liabilities, and Other current
liabilities.