Press Release
October 28, 2022

Signify reports third quarter sales of EUR 1.9 billion, comparable sales growth of 4.3% andan operational profitability of 10.4%
Third quarter 20221• Signify's installed base of connected light points increased from 103 million in Q2 22 to 109 million in Q3 22• Sales of EUR 1,912 million; nominal sales increase of 16.3% and CSG of 4.3%
• LED-based sales represented 83% of total sales (Q3 21: 83%)
• Adj. EBITA margin of 10.4% (Q3 21: 11.1%)• Net income of EUR 112 million (Q3 21: EUR 94 million)• Free cash flow of EUR 135 million (Q3 21: EUR 85 million)• Net debt/EBITDA ratio of 1.5x (Q3 21: 1.8x)
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced thecompany’s third quarter 2022 results.
“In the third quarter, we delivered solid topline growth in an increasingly volatile environment. The strong
performance of our professional business compensated lower consumer demand and the continued slowdown
in China. We managed to improve profitability compared to the second quarter despite the impact of energy
costs and currency movements. As expected, our free cash flow generation strengthened, driven by improved
profitability and the stabilization of our working capital. Given the uncertain near-term outlook, the continued
softness of the consumer segment and of the Chinese market, we now expect to achieve comparable sales
growth between 2% and 3% for the full year 2022. Regarding the adjusted EBITA margin and free cash flow, weare targeting the lower end of both guidance ranges,” said CEO Eric Rondolat.
“As we enter the final quarter of 2022, we have shifted gears to adapt the company to a structurally weaker
external environment in the coming quarters, when current headwinds and volatility are likely to persist. We will
therefore focus on measures to control costs and cash flow, in line with our track record of delivering margin
expansion and strong free cash flow generation in difficult environments. While some areas will be more
affected, connected energy efficient lighting solutions will continue to benefit from strong demand given theenergy prices surge.”

1

This 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 notrecognized 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, seeappendix B, Reconciliation of non-IFRS financial measures, of this press release.

Brighter Lives, Better World 2025
In the third quarter of the year, Signify continued to deliver on 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, mainly driven by energy-efficient andconnected LED lighting
Double Circular revenues to 32%:
Circular revenues were at 30% and on track. This positive trend is driven by serviceable and circularluminaires
Double Brighter lives revenues to 32%:Brighter lives revenues increased to 28%, mainly driven by the Safety & security and consumer wellbeing portfolios
Double the percentage of women in leadership positions to 34%:
The percentage of women in leadership positions was 27%, stable with Q2. Signify continued to create
action plans to address gaps and accelerate its progress. In addition, Signify published its first-everDiversity, Equity, and Inclusion report.

OutlookGiven the uncertain near-term outlook and the continued softness both of the consumer segment and of theChinese market, we now expect to achieve comparable sales growth between 2% and 3% for the full year 2022.
We are targeting the lower end of the range for both the 11.0-11.4% Adjusted EBITA margin guidance and the
5-7% free cash flow guidance.

2

Financial review
2021

Third quarter
2022

1,643
634
38.6%

1,912
713
37.3%

-415
-68
-483
29.4%

-471
-75
-546
28.6%

182
11.1%
-34
149

199
10.4%
-6
193

118
-4
-20
94

161
-17
-32
112

85
0.72
37,069135
0.86
34,273change
4.3%
8.1%
4.0%
16.3%
12.6%

-13.0%

9.1%

29.7%
36.3%

18.4%

in millions of EUR, except percentages

2021

Nine months
2022

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

4,852
1,909
39.3%

5,536
2,072
37.4%

Adj. SG&A expenses
Adj. R&D expenses
Adj. indirect costs
Adj. indirect costs (as % of sales)-1,262-210-1,47330.4%-1,392-219-1,611
29.1%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

530
10.9%
-130
399

560
10.1%
118
678

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

309
-20
-52
236

582
-12
-123
447

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

357
1.84
37,06981
3.52
34,273change
5.3%
6.6%
2.2%
14.1%
8.6%

-9.4%

5.8%

69.9%
88.5%

89.0%

Third quarter
Sales increased by 16.3% to EUR 1,912 million, with a comparable sales growth of 4.3%, as continued strength in
the professional channel more than offset weaker consumer channel sales. Nominal sales included a positive
currency effect of 8.1%, mainly from the appreciation of the USD, and a positive effect of 4.0% from the Q2
acquisitions of Fluence and Pierlite.
The Adjusted gross margin decreased by 130 bps to 37.3%. While continued price increases more than offset the
input cost increases and the surge in energy costs, the Adjusted gross margin was impacted by an adverse
currency effect. Adjusted indirect costs as a percentage of sales decreased by 80 bps to 28.6%, driven by
operating leverage and strengthened cost discipline.
Adjusted EBITA was EUR 199 million, up 9.1% vs. Q3 2021. The Adjusted EBITA margin decreased by 70 bps to10.4%, with price increases more than offsetting higher input costs. Yet, the Adjusted EBITA margin was
negatively affected by a 220bps currency effect, being the combination both from the weakening of the EUR
versus the USD and CNY, and from a temporary FX hedging headwind. Excluding this temporary adverse hedging
effect, the Adjusted EBITA margin was stable vs Q3 21.
Adjusted items were EUR -6 million. Restructuring costs decreased year on year to EUR -6 million, while
acquisition-related charges of EUR -10 million were fully compensated by incidental items of EUR 10 million. The
incidental items benefited from a release of tax indemnification liabilities. Net income increased by 18.4% fromEUR 94 million to EUR 112 million.
The number of employees (FTE) decreased from 37,069 at the end of Q3 21 to 34,273 at the end of Q3 22. The
employee base was exceptionally high in Q3 21, due to the strong volume recovery and additional staff

3

requirements in factories, following the peak of the COVID-19 pandemic. The number of FTEs is affected byfluctuations in volume and seasonality.

Digital Solutions
Third quarter
2021

2022

848
89
10.5%
68
40

1,103
124
11.2%
109
79

Nine months
change in millions of EUR, unless otherwise indicated12.0%

Comparable sales growth

30.0%
39.0%

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

59.5%
99.3%

2021

2022

2,479
250
10.1%
189
104

3,125
317
10.1%
276
186

change
13.4%
26.1%
26.9%
46.5%
78.4%

Includes Pierlite since April 29, 2022 and Fluence since May 2, 2022

Third quarter
Sales increased to EUR 1,103 million with a comparable sales growth of 12.0% (Q3 21: -7.3%), driven by strong
professional demand in most markets. Nominal sales grew by 30.0%, including a positive currency effect of 9.7%
and an impact of 8.4% from the acquisition of Fluence and Pierlite in the second quarter. Adjusted EBITA
increased by 39.0% to EUR 124 million. The Adjusted EBITA margin improved by 70 bps to 11.2%, as priceincreases and operating leverage more than compensated higher input costs and a negative impact fromcurrency movements.

Digital Products
2021

Third quarter2022

change in millions of EUR, unless otherwise indicated-2.5%

Comparable sales growth2021

Nine months
2022change
0.1%

588
76
13.0%

609
64
10.5%

3.7%
-16.5%

Sales
Adjusted EBITA
Adjusted EBITA margin

1,715
224
13.1%

1,808
204
11.3%

5.4%
-9.1%

73

64

-12.6%

EBITA

212

192

-9.3%

72

62

-13.2%

Income from operations (EBIT)

206

186

-9.7%

Third quarter
Nominal sales increased by 3.7% to EUR 609 million, as a comparable sales decline of 2.5% (Q3 21: 2.5%) was
compensated by a positive currency effect of 6.2%. During the quarter, the division saw a solid performance of
LED Electronics but lower consumer connected sales. Adjusted EBITA decreased by 16.5% to EUR 64 million. The
Adjusted EBITA margin decreased by 250 bps to 10.5%, mainly due to lower fixed cost absorption and a negative
impact from currency movements.

4

Conventional Products
Third quarter
2021
202
38
18.8%
32
32

Nine months

2022change in millions of EUR, unless otherwise indicated

195
28
14.2%
13
13

-9.5%

Comparable sales growth-3.2%-26.9%

Sales
Adjusted EBITA
Adjusted EBITA margin
EBITA
Income from operations (EBIT)-61.5%-61.5%

2021

2022

change-12.9%

642
124
19.4%
121
121

590
90
15.2%
56
56

-8.2%
-27.9%-53.7%-53.7%

Third quarter
Sales declined to EUR 195 million with a comparable sales decline of 9.5% (Q3 21: -13.2%), as price increases
partially compensated volume declines. The nominal sales decline of 3.2% includes a positive currency effect of
6.3%. The Adjusted EBITA margin decreased by 460 bps to 14.2%. With price increases and indirect cost savings
fully offsetting input cost increases, the division was disproportionately impacted by a temporary headwind
from FX hedging, and lower volume also resulted in lower fixed cost absorption. Excluding the temporary
headwind from FX hedging, the Adjusted EBITA margin was above 16%.

Other
Third quarter'Other' represents amounts not allocated to the operating segments and includes costs related both to central
R&D activities to drive innovation, and to Group enabling functions. Adjusted EBITA amounted to EUR -17
million (Q3 21: EUR -21 million). EBITA amounted to EUR 7 million (Q3 21: EUR -26 million). Adjusted items of
EUR 23 million include a release of tax indemnification liabilities.
On October 5, 2022, a jury in trial court in Connecticut awarded compensation of USD 90 million in a lawsuit
against Signify relating to a workplace accident that occurred in September 2017 in a warehouse leased andoperated by a Signify customer, where Signify products were pushed off a rack by a worker operating a forklift at
the warehouse onto one of the customer's employees. Signify categorically disagrees with the jury’s findings,
which it believes are not supported by either the facts or the law. Signify will therefore exercise all its rights tocontest this verdict. Signify has a comprehensive global liability insurance and has confirmation that the case isfully covered without reservation of rights, including interest and other costs. As a result, both the amountawarded and insurance cover are recognized as an adjusting event in the balance sheet of the company as per
30 September 2022 without any net P&L impact.

Sales by market
Third quarter
2021

2022

Change

465
637
401
140
1,643

546
772
445
149
1,912

17.4%
21.1%
10.9%
6.6%
16.3%

Nine months
CSG in millions of EUR, except percentages
16.0%
5.4%
-0.8%
-18.7%
4.3%

EuropeAmericasRest of the world
Global businesses
Total

2021

2022

change

CSG

1,464
1,848
1,148
391
4,852

1,605
2,222
1,272
438
5,536

9.6%
20.2%
10.7%
12.1%
14.1%

8.5%
7.8%
1.6%
-6.3%
5.3%

Rest of the world includes Pierlite since April 29, 2022. Global businesses include Fluence since May 2, 2022.

5

Third quarter
Most markets grew in the third quarter, benefiting from solid professional demand. In Europe, comparable sales
grew by 16.0%, driven by solid growth across all markets except Eastern Europe. Americas' comparable sales
grew by 5.4%, with solid growth rates across most markets. In the Rest of the World, comparable sales declined
by 0.8%, mainly due to a soft performance in China. Global businesses comparable sales declined by 18.7%, as
Klite and Fluence were impacted by difficult market environments.

Working capitalSep 30, 2021

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

LTM: Last Twelve Months
6,614
6,336

1,301
1,069
-2,0649316
4.7%

Jun 30, 2022 Sep 30, 2022
1,635
1,191
-2,030
-13
783
10.8%

1,696
1,265
-2,054
-87
820
10.9%

6,275

Third quarter
Working capital increased from EUR 783 million at the end of June 2022 to EUR 820 million at the end of
September 2022. When excluding currency effects, inventories have peaked and are starting to come down as
lead times are easing. The increases in receivables and payables, and the negative other working capital items
are related to seasonality and currency movements. As a percentage of last twelve-month sales, working capitalof 10.9% remained relatively stable compared with the end of June 2022. Including last twelve-month sales pro
forma for Fluence and Pierlite, working capital increased by 20 bps to 10.7%.

Cash flow analysis
Third quarter
2021
118
77
32
-58
-66
1
-14
-15
10
85

2022
161

Income from operations (EBIT)

78
25
-56
-9
-2
-17
-32
-13
135

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 flowin millions of EUR

Nine months
2021
309
235
121
-155
-39
-28
-45
-61
20
357

2022
582
233
78
-143
-495
-34
-62
105
-182
81

The gain related to the disposal of non-strategic real estate assets, included in EBIT, is eliminated in Other. Total cash proceeds from the disposal of these assets
are included in Net capex.

Third quarter
Free cash flow was EUR 135 million, mainly driven by strong income from operations and a stabilization ofworking capital. Free cash flow also included a restructuring payout of EUR 14 million (Q3 21: EUR 26 million).

6

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

Sep 30, 2021 Jun 30, 2022 Sep 30, 2022
422

213

176

1,916
2,338
927
1,411
2,295

1,944
2,157
407
1,749
2,927

1,978
2,154
469
1,685
3,302

Third quarter
Compared with the end of June 2022, the cash position increased by EUR 62 million to EUR 469 million, driven
by the positive free cash flow. Gross debt remained relatively stable at EUR 2,154 million, as higher long-term
debt was offset by a repayment of short-term debt. As a result, net debt decreased by EUR 64 million to EUR
1,685 million. Total equity increased to EUR 3,302 million (Q2 22: EUR 2,927 million), primarily due to net
income and currency translation.
Compared with the end of September 2021, the cash position declined by EUR 458 million, while gross debt
declined by EUR 184 million. As a result, net debt increased year on year. At the end of September 2022, the net
debt/EBITDA ratio was 1.5x (Q3 21: 1.8x).

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 Javier van Engelen (CFO) will host a conference call for analysts and institutional
investors at 9:00 a.m. CET to discuss the third quarter 2022 results. A live audio webcast of the conference callwill be available via the Investor Relations website.
Financial calendar 2023
January 27, 2023
February 28, 2023

Fourth quarter and full-year results 2022
Annual Report 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. In 2021, we had sales of EUR 6.9 billion,
approximately 37,000 employees and a presence in over 70 countries. We unlock the extraordinary potential oflight 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 forinvestors can be found on the Investor Relations 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 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 energy crisis in Europe, the impacts of COVID-19,
supply chain constraints, component shortages, cost inflation, rapid technological change, competition in thegeneral lighting 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 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 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 nor 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 and the Semi-Annual Report2022.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

9

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

January to September

2021

2022

2021

2022

Sales

1,643

1,912

4,852

5,536

Cost of sales(1,025)(1,214)(2,974)(3,510)Gross margin

618

698

1,878

2,026

Selling, general and administrative expenses

(434)

(477)

(1,372)(1,426)

Research and development expenses

(68)

(75)

(210)

(219)

Impairment of goodwill

—

—

—

—

Other business income

2

26

19

215

Other business expenses

(1)

(11)

(5)

(13)

Income from operations

118

161

309

582

Financial income

9

3

22

41

Financial expenses

(13)

(20)

(43)

(54)

Results relating to investments in associates

—

—

—

—

Income before taxes

114

144

288

569

Income tax expense

(20)

(32)

(52)

(123)

Net income

94

112

236

447

Net income (loss) attributable to shareholders of Signify N.V.

90

107

230

439

Net income (loss) attributable to non-controlling interests

4

4

6

7

Attribution of net income for the period:

Amounts may not add up due to rounding.

10B. Condensed consolidated statement of comprehensive income
In millions of EUR
Third quarter

January to September

2021

2022

2021

2022

94

112

236

447

Remeasurements

—

—

—

(5)

Income tax effect on remeasurements

—

—

—

—

Total of items that will not be reclassified to profit or loss

—

—

—

(5)

Net current period change, before tax

64

291

177

540

Income tax effect

—

—

—

—

Net current period change, before tax

(5)

—

(17)

(10)

Income tax effect

—

—

—

—

Net current period change, before tax

(9)

(35)

(22)

(66)

Income tax effect

2

9

5

16

Total of items that are or may be reclassified to profit or loss

51

265

143

481

Other comprehensive income (loss)

51

265

143

476

Total comprehensive income (loss)

146

377

380

923

Shareholders of Signify N.V.

139

365

366

900

Non-controlling interests

7

12

14

22

Net income (loss)
Pensions and other post-employment plans:

Currency translation differences:

Net investment hedge

Cash flow hedges:

Total comprehensive income (loss) attributable to:Amounts may not add up due to rounding.

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

September 30,
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

750
3,066
801
13
194
441
52
5,318

Current assets
Inventories
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

1,696
206
43
55
1,265
469
—
3,734
9,052

EquityShareholders’ equity
Non-controlling interests
Total equity

2,459
138
2,597

3,148
154
3,302

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

1,978
379
315
29
123
182
3,007

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

176
105
39
2,054
137
232
—
2,742
9,052

Amounts may not add up due to rounding.

12

D. Condensed consolidated statement of cash flows
In millions of EUR
Third quarter
2021
2022
Cash flows from operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided byoperating activities:• Depreciation, amortization and impairment of non-financial
assets• Impairment (reversal) of goodwill, other non-current financial
assets and investments 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
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
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
assetsPurchases of businesses, net of cash acquired
Proceeds from sale of businesses, net of cash disposed of
Net cash provided by (used for) investing activities
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 theperiod 2
1
2

January to
September
2021
2022

94

112

236

447

137

162

432

277

77

78

235

233

—
(2)
6
20
28
4
4
(66)
4
(167)
91
7
6
(48)
(10)
1
(14)
100

—
9
10
32
22
3
7
(9)
(29)
11
(57)
65
(23)
(43)
(12)
(2)
(17)
167

—
(13)
20
52
108
13
17
(39)
100
(379)
270
(30)
17
(130)
(25)
(28)
(45)
418

—
(180)
29
123
66
12
(6)
(495)
28
(98)
(466)
41
(13)
(116)
(27)
(34)
(62)
(24)

(15)
(6)
(17)
8

(32)
(15)
(19)
2

(61)
(22)
(61)
22

105
(41)
(51)
197

4
(24)
—
(36)

(16)
—
—
(48)

21
(24)
—
(64)

(22)
(297)
—
(214)

(57)
—
(19)
(19)
(96)
(31)

(5)
76
(131)
(13)
(72)
46

(351)
350
(410)
(92)
(503)
(149)

(188)
217
(172)
(48)
(191)
(429)

15

18

45

49

943

403

1,030

847

926

467

926

467

For Q3 2022 and Q3 2021, included bank overdrafts of EUR 4 million and EUR 2 million, respectively. For January to September of 2022 and 2021, included bank overdrafts of EUR 4
million and EUR 3 million, respectively.
Included bank overdrafts of EUR 2 million and EUR 1 million as at September 30, 2022 and 2021, respectively.

Amounts may not add up due to rounding.

13

Appendix B - Reconciliation of non-IFRS financial measures
Sales growth composition per business in %Third quarter
Comparable
growthCurrency effects

Consolidation andother changes

Nominal growth

Digital Solutions

12.0

9.7

8.4

30.0

Digital Products

(2.5)

6.2

—

3.7

Conventional Products

(9.5)

6.3

—

(3.2)

Total

4.3

8.1

4.0

16.3

2022 vs 2021

January to September
Comparable
growthCurrency effects

Consolidation andother changes

Nominal growth

13.4

8.0

4.7

26.1

2022 vs 2021
Digital Solutions
Digital Products
Conventional Products
Total

0.1

5.3

—

5.4

(12.9)

4.8

—

(8.2)

5.3

6.6

2.2

14.1

Sales growth composition per market in %Third quarter
Comparable
growthCurrency effects

Consolidation andother changes

Nominal growth

Europe

16.0

0.7

0.7

17.4

Americas

5.4

15.6

0.1

21.1

Rest of the world

(0.8)

5.8

5.9

10.9

Global businesses(18.7)

5.3

20.0

6.6

4.3

8.1

4.0

16.3

2022 vs 2021

Total

January to September
Comparable
growthCurrency effects

Consolidation andother changes

Nominal growth

Europe

8.5

0.6

0.5

9.6

Americas

7.8

12.4

—

20.2

Rest of the world

1.6

5.6

3.6

10.7

Global businesses

(6.3)

5.3

13.1

12.1

Total

5.3

6.6

2.2

14.1

2022 vs 2021

Amounts may not add up due to rounding.

14

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

1

1

Signify

DigitalSolutions

Digital Conventional
Products
Products

Third quarter 2022
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

199
(6)
(10)
10
193
(32)
161

124
(2)
(10)
(2)
109
(30)
79

64
—
—
1
64
(2)
62

28
(3)
—
(12)
13
—
13

(17)
(1)
—
24
7
—
7

Third quarter 2021
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

182
(19)
(10)
(5)
149
(31)
118

89
(9)
(9)
(3)
68
(29)
40

76
(1)
—
(2)
73
(2)
72

38
(5)
—
(1)
32
—
32

(21)
(5)
—
1
(26)
—
(26)

Signify

DigitalSolutions

Digital Conventional
Products
Products

Other

January to September 2022
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

560
(17)
(22)
158
678
(97)
582

317
(6)
(22)
(13)
276
(90)
186

204
(1)
—
(11)
192
(6)
186

90
(8)
—
(25)
56
—
56

(51)
(2)
—
207
154
(1)
154

January to September 2021
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

530
(76)
(37)
(17)
399
(91)
309

250
(16)
(36)
(9)
189
(84)
104

224
(4)
(1)
(8)
212
(5)
206

124
(4)
—
—
121
—
121

(69)
(52)
—
—
(122)
(1)
(123)

Other

Amortization and impairments of acquisition related intangible assets and goodwill.

Amortization and impairments of acquisition related intangible assets and goodwill.

Amounts may not add up due to rounding.

15Third quarter 2022 Income from operations to Adjusted EBITA in millions of EUR
Reported Restructuring
Third 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)
Third 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

Acquisitionrelated
charges

Incidental
items 1

Adjusted

1,912(1,214)
698
(477)
(75)
(552)
—
26
(11)
161
(32)

—
6
6
—
—
—
—
—
—
6
—

—
4
4
6
—
6
—
(1)
—
10
—

—
5
5
—
—
—
—
(24)
9
(10)
—

1,912
(1,198)
713
(471)
(75)
(546)
—
1
(1)
167
(32)

193

6

10

(10)

199

1,643
(1,025)
618
(434)
(68)
(501)
—
2
(1)
118
(31)

—
13
13
6
—
6
—
—
—
19
—

—
2
2
8
—
8
—
—
—
10
—

—
—
—
4
—
4
—
—
—
5
—

1,643
(1,010)
634
(415)
(68)
(483)
—
2
(1)
151
(31)

149

19

10

5

182

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 realestate gains, legal cases, environmental provision for inactive sites, and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

16

January to September 2022 Income from operations to Adjusted EBITA in millions of EUR

Reported Restructuring
January to September 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)
January to September 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

Acquisitionrelated
charges

Incidental
items 1

Adjusted

5,536(3,510)2,026(1,426)(219)(1,645)
—
215
(13)
582
(97)

—
14
14
4
(1)
3
—
—
—
17
—

—
8
8
14
—
14
—
(1)
—
22
—

—
24
24
16
—
16
—
(208)
10
(158)
—

5,536
(3,464)
2,072(1,392)(219)(1,611)
—
6
(3)
464
(97)

678

17

22

(158)

560

4,852
(2,974)
1,878(1,372)(210)(1,582)
—
19
(5)
309
(91)

—
17
17
58
—
59
—
—
—
76
—

—
6
6
33
—
33
—
(2)
—
37
—

—
8
8
18
—
18
—
(11)
2
17
—

4,852
(2,943)
1,909(1,262)(210)(1,473)
—
6
(4)
439
(91)

399

76

37

17

530

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 realestate gains, legal cases, environmental provision for inactive sites, and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

17

Appendix C – Financial glossary

EBIT

Acquisition-related charges

EBITA

Costs that are directly triggered by theacquisition of a company, such as transaction
costs, purchase accounting related costs andintegration-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,
and other incidental items attributable toresearch and development expenses.

Adjusted SG&A expenses

Selling, general and administrative expenses,
excluding restructuring costs, acquisition-related
charges, and other incidental items attributable
to selling, general and administrative expenses.

Brighter lives revenues

Percentage of total revenues coming from all
products, systems and services contributing toFood availability, Safety & security, or Health &well-being.

Changes in scope

Consolidation effects related to acquisitions.

Circular revenues

Percentage of total revenues coming fromproducts, systems and services designed for acircular economy, categorized as serviceable
luminaires (incl. 3D-printing), circularcomponents, intelligent systems, or circularservices.

Comparable sales growth (CSG)

The period-on-period growth in sales excluding
the effects of currency movements and changes
in consolidation and other changes.

Income from operations.

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 andother changes

In the event a business is acquired (or divested),
the impact of the consolidation (or deconsolidation) on the Group’s figures is included(or excluded) in the calculation of the comparable
sales growth figures. Other changes include
regulatory changes and changes originating fromnew 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 the end of the period,
expressed on a full-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 andnot part of normal business activity. Other
incidental items may extend over several quarters
within the same financial year.

Indirect costs

The sum of selling, general and administrative
expenses and R&D expenses.

Net capital expenditures

Additions of intangible assets, capital
expenditures on property, plant and equipment
and proceeds from disposal of property, plantand equipment.

Net debt

Short-term debt, long-term debt minus cash andcash equivalents.

18

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 partsof 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 that 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).

19