Press Release
October 27, 2023

Signify reports third quarter sales of EUR 1.6 billion, operational profitability of 10.7% and afree cash flow of EUR 152 million
Third quarter 20231• Signify's installed base of connected light points increased from 119 million in Q2 23 to 121 million in Q3 23• Reached the 2025 target for circular revenues in Brighter Lives, Better World 2025 sustainability program• Sales of EUR 1,649 million; nominal sales decline of -13.8% and CSG of -7.8%• LED-based sales represented 85% of total sales (Q3 22: 83%)
• Adj. EBITA margin of 10.7% (Q3 22: 10.4%)• Net income of EUR 83 million (Q3 22: EUR 112 million)• Free cash flow of EUR 152 million (Q3 22: EUR 135 million)
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced thecompany’s third quarter 2023 results.
“In the third quarter, we continued to recover our gross margin, which is a 2023 priority. Operating margin andfree cash flow growth were in line with our expectations. While we see persistent weakness in China, in theconnected consumer and LED electronics businesses, we gained market share in the professional segment,
driven by strong demand for connected systems and services. We are also pleased to report that we have beenable to bring our Conventional Products division back to its historical performance levels,” said Eric Rondolat,
CEO of Signify.
“With the visibility we have into the final quarter, we confirm our guidance for the full year. However, we expect
macroeconomic external factors to continue to put pressure on our topline in the quarters ahead. We are well
positioned by the cost reduction actions that began earlier this year. Further structural measures will be
implemented through Q1 2024 to improve our efficiency, speed of execution, and enhance our focus on thegrowth opportunities presented by the accelerating transition to ultra-efficient LED and connected lighting
technologies.”

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 was on track to deliver on three of its Brighter Lives, Better World 2025
sustainability program commitments:
Double the pace of the Paris Agreement
Signify is on track to reduce emissions across the entire value chain by 40% against the 2019 baseline - double
the pace required by the Paris Agreement. This is driven by Signify's leadership in energy efficient and connected
LED lighting solutions, which significantly reduce emissions during the use phase.
Double Circular revenues
Circular revenues increased to 32%, hitting the 2025 target of 32%. The main contribution was from serviceable
and upgradeable luminaires, with a strong performance from Cooper this quarter.
Double Brighter lives revenues
Brighter lives revenues increased to 31%, on track to reach the 2025 target of 32%. This was driven by a strong
performance from tunable products that support well-being.
Double the percentage of women in leadership
The percentage of women in leadership positions decreased to 29%, slightly off track to reach the 2025 target of
34%. Actions to increase women in leadership positions continue, including focused hiring practices for diversity
across all levels, and through retention and engagement actions to reduce attrition.

OutlookSignify confirms its guidance for the full year 2023. The company expects an Adjusted EBITA margin of 9.5-10.5%
and free cash flow generation at the higher end of the 6-8% range.

2

Financial review
2022

Third quarter2023

change
-7.8%
-6.2%
0.2%
-13.8%
-8.3%

1,912
713
37.3%

1,649
654
39.7%

-471
-75
-546
28.6%

-431
-66
-498
30.2%

199
10.4%
-6
193

177
10.7%
-26
151

-11.3%

161
-17
-32
112

131
-22
-26
83

-18.2%

135
0.86
34,273152
0.64
32,214-8.9%-21.9%-25.5%

in millions of EUR, except percentages

2022

Nine months
2023

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

5,536
2,072
37.4%

4,970
1,953
39.3%

Adj. SG&A expenses
Adj. R&D expenses
Adj. indirect costs
Adj. indirect costs (as % of sales)-1,392-219-1,61129.1%-1,346-209-1,555
31.3%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

560
10.1%
118
678

461
9.3%
-121
341

-17.6%

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

582
-12
-123
447

280
-84
-41
156

-51.8%

Free cash flow
Basic EPS (€)
Employees (FTE)81
3.52
34,273291
1.17
32,214change
-8.5%
-2.7%
1.1%
-10.2%
-5.8%

-3.5%

-49.7%-65.1%

Third quarter
Nominal sales decreased by 13.8% to EUR 1,649 million, including a negative currency effect of 6.2%, mainly
from the depreciation of the US dollar, and a positive effect of 0.2% from the consolidation of Intelligent Lighting
Controls. Comparable sales declined by 7.8%, driven by persistent weakness in Signify's end markets.
The Adjusted gross margin increased by 240 bps to 39.7%, reflecting effective COGS management and a positive
contribution from mix and price. Adjusted indirect costs as a percentage of sales increased by 160 bps to 30.2%,
as indirect costs did not keep pace with lower sales.
Adjusted EBITA was EUR 177 million. The Adjusted EBITA margin increased by 30 bps to 10.7%, driven by grossmargin improvements. Both Digital Solutions and Conventional Products improved their Adjusted EBITA margins
year on year.
Restructuring costs were EUR 27 million, acquisition-related charges were EUR 3 million and incidental items had
a net positive impact of EUR 4 million. The incidental items benefited from a release of tax indemnification
liabilities.
Net income decreased to EUR 83 million, mainly due to lower income from operations and higher financial
expenses, partly offset by lower income tax expense.
The number of employees (FTE) decreased from 34,273 at the end of Q3 22 to 32,214 at the end of Q3 23. The
year-on-year decrease is mostly related to a reduction of factory personnel due to lower production volumes. In
general, the number of FTEs is affected by fluctuations in volume and seasonality.

3

Digital Solutions
Third quarter

Nine months

2022

2023

change in millions of EUR, unless otherwise indicated-4.3%

Comparable sales growth

1,103
124
11.2%
109
79

990
116
11.7%
100
82

-10.2%-6.3%

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

-8.9%
3.6%

2022

2023

3,125
317
10.1%
276
186

2,915
295
10.1%
261
205

change
-6.2%
-6.7%
-6.9%
-5.5%
10.4%

Includes Intelligent Lighting Controls since March 1, 2023, Pierlite since April 29, 2022 and Fluence since May 2, 2022

Third quarter
Nominal sales decreased by 10.2% to EUR 990 million, including a negative currency effect of 6.3% and a positiveeffect of 0.4% from the consolidation of Intelligent Lighting Controls. Comparable sales declined by 4.3% against
a high base of comparison of 12.0% growth in the previous year, as continued strength in professional systems
and services was more than offset by softness in indoor professional and horticulture lighting. The Adjusted
EBITA margin increased by 50 bps to 11.7%, mainly driven by gross margin recovery.

Digital Products
2022

Third quarter
2023

2022

Nine months
2023-10.3%

Comparable sales growth

609
64
10.5%

508
51
9.9%

-16.6%-20.8%

Sales
Adjusted EBITA
Adjusted EBITA margin

1,808
204
11.3%

1,551
130
8.4%

-14.2%-36.3%

64

46

62

45

-28.2%

EBITA

192

118

-38.5%-28.3%

Income from operations (EBIT)

186

114

-39.1%

change in millions of EUR, unless otherwise indicatedchange-10.8%

Third quarter
Nominal sales decreased by 16.6% to EUR 508 million, including a negative currency effect of 6.3%. Comparable
sales declined by 10.3% (Q3 22: -2.5%), as weakness in consumer connected, the OEM business and Klite
persisted. The Adjusted EBITA margin decreased by 60 bps to 9.9%, as an improvement of gross margin was
more than offset by an under-absorption of fixed costs.

4

Conventional Products
Third quarter
2022
195
28
14.2%
13
13

2023

Nine months
change in millions of EUR, unless otherwise indicated

145
31
21.2%
20
20

-21.0%

Comparable sales growth-25.7%
10.9%

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

55.8%
55.8%

2022

2023

change-14.7%

590
90
15.2%
56
56

491
105
21.5%
41
41

-16.8%
17.4%-26.0%-26.0%

Third quarter
Nominal sales decreased by 25.7% to EUR 145 million, including a negative currency effect of 4.7%. Comparable
sales declined by 21.0% (Q3 22: -9.5%), as volumes declined in line with expectation. The Adjusted EBITA marginincreased by 700 bps to 21.2%, mainly driven by gross margin recovery and cost discipline.

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 was EUR -21 million (Q3 22:
EUR -17 million) and EBITA was EUR -15 million (Q3 22: EUR 7 million). EBITA included a negative impact fromrestructuring costs of EUR 3 million and a positive impact from incidental items of EUR 9 million, which was
mainly related to a release of tax indemnification liabilities.

Sales by market
Third quarter
2022

2023

change

546
772
445
149
1,912

486
660
375
128
1,649

-11.0%-14.4%-15.8%-14.3%-13.8%

Nine months
CSG in millions of EUR, except percentages-10.0%-7.6%-4.9%-10.3%-7.8%

EuropeAmericasRest of the world
Global businesses
Total

2022

2023

change

CSG

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

1,454
1,978
1,140
398
4,970

-9.4%
-11.0%-10.3%-9.0%-10.2%

-8.9%
-9.4%
-4.7%
-13.8%-8.5%

Americas includes Intelligent Lighting Controls since March 1, 2023. Global businesses include Fluence since May 2, 2022. Rest of the world includes Pierlite sinceApril 29, 2022.

Third quarter
In Europe, comparable sales declined by 10.0%, as most markets declined except Nordics and Italy. In theAmericas, comparable sales declined by 7.6%, as solid growth in Latin America did not manage to offset
weakness in the US. In the Rest of the World, comparable sales declined by 4.9%, mainly due to continued
weakness across most markets except the Middle East, and as China has yet to recover. Global businesses'
comparable sales declined by 10.3%, mainly due to Klite and Fluence.

5

Working capitalSep 30, 2022

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

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

Jun 30, 2023 Sep 30, 2023
1,288
1,002
-1,608
-42
640
8.9%

1,247
1,093
-1,672
-35
632
9.1%

6,275

Third quarter
Compared to June 2023, working capital slightly reduced to EUR 632 million, as lower inventories and higher
payables were partly offset by higher receivables and other working capital items. As a percentage of lasttwelve-month sales, working capital increased by 20 bps to 9.1%.
Compared to September 2022, working capital reduced by EUR 188 million, mainly due a strong reduction ininventories and receivables, partly offset by lower payables. As a percentage of last twelve-month sales, working
capital decreased by 180 bps. Including last twelve-month sales pro forma for Fluence and Pierlite, working
capital decreased by 160 bps.

Cash flow analysis
Third quarter
2022
161
78
25
-56
-9
-2
-17
-32
-13
135

2023
131

Income from operations (EBIT)

66
46
-53
28
-5
-21
-31
-9
152

Depreciation and amortization
Additions to (releases of) provisions
Utilizations of provisions
Changes in working capital
Net interest and financing costs received (paid)
Income taxes paid
Net capex
Other
Free cash flowin millions of EUR

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

2023
280
205
159
-145
-34
-40
-59
-82
8
291

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 increased to EUR 152 million, as a lower income from operations was compensated by a cash
inflow from working capital. Free cash flow also included a restructuring payout of EUR 21 million (Q3 22: EUR
14 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, 2022 Jun 30, 2023 Sep 30, 2023
176

755

759

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

1,267
2,022
584
1,439
2,853

1,270
2,029
689
1,340
3,084

Third quarter
Compared with the end of June 2023, the cash position increased by EUR 105 million to EUR 689 million, mainly
driven by free cash flow generation. Gross debt remained relatively stable at EUR 2,029 million. As a result of thehigher cash position, net debt reduced to EUR 1,340 million. Total equity increased to EUR 3,084 million (Q2 23:
EUR 2,853 million), primarily due to currency translation results and net income.
Compared with the end of September 2022, the cash position increased by EUR 220 million, while gross debt
reduced by EUR 125 million. As a result, net debt reduced by EUR 345 million year on year. At the end of
September 2023, the net debt/EBITDA ratio was 1.9x (Q3 22: 1.5x).

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 2023 results. A live audio webcast of the conference callwill be available via the Investor Relations website.
Financial calendar 2024
January 26, 2024
February 27, 2024

Fourth quarter and full-year results 2023
Annual Report 2023

For further information, please contact:
Signify Investor Relations
Thelke Gerdes
Tel: +31 6 1801 7131
E-mail: thelke.gerdes@signify.com
Signify Corporate Communications
Tom Lodge
Tel: +31 6 5252 5416
E-mail: tom.lodge@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 2022, we had sales of EUR 7.5 billion,
approximately 35,000 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 our operations in 2020, have been in
the Dow Jones Sustainability World Index since our IPO for six consecutive years and were named Industry
Leader in 2017, 2018 and 2019. News from Signify is located at the Newsroom, Twitter, LinkedIn and Instagram.
Information for investors can be found on the Investor Relations page.

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 conflict in the Middle East, the energy crisis in Europe,
the expected recovery trajectory of China post COVID, component shortages, cost inflation, rapid technologicalchange, competition in the general 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 tointernational 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, free cash flow, and other related ratios, which are not recognizedmeasures of financial performance or liquidity under IFRS. The non-IFRS financial measures presented aremeasures used by management to monitor the underlying performance of the Group’s business and 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 be comparable tomeasures 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 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 preparedin accordance with the accounting policies as stated in the Annual Report 2022 and the Semi-Annual Report2023.
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

2022

2023

2022

2023

Sales

1,912

1,649

5,536

4,970

Cost of sales(1,214)(1,014)(3,510)(3,097)Gross margin

698

634

2,026

1,873

Selling, general and administrative expenses

(477)

(443)

(1,426)(1,379)Research and development expenses

(75)

(70)

(219)

(216)

Other business income

26

10

215

20

Other business expenses

(11)

—

(13)

(19)

Income from operations

161

131

582

280

Financial income

3

7

41

18

Financial expenses

(20)

(29)

(54)

(102)

Results relating to investments in associates

—

—

—

—

Income before taxes

144

109

569

197

Income tax expense

(32)

(26)

(123)

(41)

Net income

112

83

447

156

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

107

81

439

147

Net income (loss) attributable to non-controlling interests

4

2

7

9

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
Net income (loss)

January to September

2022

2023

2022

2023

112

83

447

156

Pensions and other post-employment plans:Remeasurements

—

(1)

(5)

(1)

Income tax effect on remeasurements

—

—

—

—

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

—

(1)

(5)

(1)

Net current period change, before tax

291

138

540

38

Income tax effect

—

—

—

—

Net current period change, before tax

—

(4)

(10)

(4)

Income tax effect

—

—

—

—

(35)

10

(66)

21

9

(3)

16

(5)

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

265

141

481

50

Other comprehensive income (loss)

265

140

476

49

Total comprehensive income (loss)

377

223

923

205

Shareholders of Signify N.V.

365

216

900

197

Non-controlling interests

12

7

22

8

Currency translation differences:

Net investment hedge

Cash flow hedges:
Net current period change, before tax
Income tax effectTotal 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,
2022

September 30,
2023

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

699
2,861
700
12
165
418
40
4,895

662
2,885
676
13
94
414
41
4,785

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

1,361
161
34
56
1,102
677
1
3,391
8,286

1,247
158
29
64
1,093
689
1
3,281
8,066

EquityShareholders’ equity
Non-controlling interests
Total equity

2,920
145
3,065

2,940
144
3,084

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

1,950
327
283
25
111
160
2,855

1,270
319
274
25
91
159
2,138

Current liabilities
Debt, including bank overdrafts
Derivative financial liabilities
Income tax payable
Trade and other payables
Provisions
Other liabilities
Total current liabilities
Total liabilities and total equity

83
42
21
1,859
168
194
2,367
8,286

759
30
37
1,672
153
193
2,845
8,066

Amounts may not add up due to rounding.

12

D. Condensed consolidated statement of cash flows
In millions of EUR
Third quarter
2022
2023
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• Result 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
Changes in working capital:• Changes in trade and other receivables• Changes in inventories• Changes in trade and other payables• Changes in other current assets and liabilities
Changes 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
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
2022
2023

112

83

447

156

162

161

277

496

78
9
10
32
22
3
7
(9)
(29)
11
(57)
65
(23)
(43)
(12)
(2)
(17)
167

66
—
12
26
39
6
11
28
(73)
61
29
11
(10)
(41)
(13)
(5)
(21)
183

233
(180)
29
123
66
12
(6)
(495)
28
(98)
(466)
41
(13)
(116)
(27)
(34)
(62)
(24)

205
8
33
41
142
17
51
(34)
(2)
110
(161)
20
—
(116)
(30)
(40)
(59)
374

(32)
(15)
(19)
2

(31)
(17)
(14)
—

105
(41)
(51)
197

(82)
(48)
(40)
6

(16)
—
(48)

(1)
(2)
(33)

(22)
(297)
(214)

9
(16)
(89)

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

(30)
2
(18)
(7)
(53)
97

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

(198)
11
(64)
(7)
(259)
26

18

8

49

(13)

403

583

847

676

467

688

467

688

For Q3 2023 and Q3 2022, included bank overdrafts of EUR 0 million and EUR 4 million, respectively. For January to September of 2023 and 2022, included bank overdrafts of EUR 1
million and EUR 4 million, respectively.
Included bank overdrafts of EUR 1 million and EUR 2 million as at September 30, 2023 and 2022, 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

NominalgrowthDigital Solutions

(4.3)

(6.3)

0.4

(10.2)

Digital Products(10.3)(6.3)—(16.6)

Conventional Products(21.0)(4.7)—(25.7)

Total

(7.8)

(6.2)

0.2

(13.8)

2023 vs 2022

January to September
Comparable
growthCurrency
effects

Consolidation andother changes

NominalgrowthDigital Solutions

(6.2)

(2.4)

1.9

(6.7)

Digital Products(10.8)(3.4)—(14.2)

Conventional Products(14.7)(2.1)—(16.8)

Total

(8.5)

(2.7)

1.1

(10.2)

2023 vs 2022

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

Consolidation andother changes

NominalgrowthEurope(10.0)(1.0)—(11.0)

Americas

(7.6)

(7.3)

0.5

(14.4)

Rest of the world(4.9)(11.1)

0.2(15.8)

Global businesses(10.3)(4.0)—(14.3)

Total

(7.8)

(6.2)

0.2

(13.8)

2023 vs 2022

January to September
Comparable
growthCurrency
effects

Consolidation andother changes

NominalgrowthEurope

(8.9)

(0.6)

0.1

(9.4)

Americas

(9.4)

(2.0)

0.4

(11.0)

Rest of the world

(4.7)

(7.4)

1.8

(10.3)

Global businesses(13.8)

(0.9)

5.6

(9.0)

Total

(8.5)

(2.7)

1.1

(10.2)

2023 vs 2022

14

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

1

1

Signify

DigitalSolutions

Digital Conventional
Products
Products

Third quarter 2023
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

177
(27)
(3)
4
151
(19)
131

116
(9)
(3)
(5)
100
(18)
82

51
(5)
—
—
46
(1)
45

31
(11)
—
—
20
—
20

(21)
(3)
—
9
(15)
—
(15)

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

Signify

DigitalSolutions

Digital Conventional
Products
Products

Other

January to September 2023
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

461
(84)
(9)
(27)
341
(61)
280

295
(16)
(9)
(9)
261
(56)
205

130
(11)
—
—
118
(4)
114

105
(48)
—
(16)
41
—
41

(69)
(8)
—
(2)
(79)
(1)
(80)

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

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 2023 Income from operations to Adjusted EBITA in millions of EUR
Reported Restructuring
Third quarter 2023
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Research and development expenses
Indirect costs
Other business income
Other business expenses
Income from operations
Amortization
Income from operations excluding
amortization (EBITA)
Third quarter 2022
Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Research and development expenses
Indirect costs
Other business income
Other business expenses
Income from operations
Amortization
Income from operations excluding
amortization (EBITA)
1

Acquisitionrelated
charges

Incidental
items 1

Adjusted

1,649(1,014)
634
(443)
(70)
(514)
10
—
131
(19)

—
13
13
10
4
14
—
—
27
—

—
1
1
2
—
2
—
—
3
—

—
6
6
(1)
—
(1)
(10)
—
(4)
—

1,649
(994)
654
(431)
(66)
(498)
—
—
157
(19)

151

27

3

(4)

177

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

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, results onreal estate transactions, legal cases, incidental warranty costs, environmental provision for inactive sites, and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

16

January to September 2023 Income from operations to Adjusted EBITA in millions of EUR

Reported Restructuring
January to September 2023
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 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)
1

Acquisitionrelated
charges

Incidental
items 1

Adjusted

4,970(3,097)
1,873(1,379)(216)(1,595)
—
20
(19)
280
(61)

—
53
53
24
7
31
—
—
—
84
—

—
3
3
8
—
8
—
(2)
1
9
—

—
24
24
1
—
1
—
(11)
14
27
—

4,970
(3,018)
1,953(1,346)(209)(1,555)
—
7
(3)
401
(61)

341

84

9

27

461

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

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, results onreal estate transactions, legal cases, incidental warranty costs, 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
Income from operations.

Acquisition-related charges
Costs that are directly triggered by the acquisitionof a company, such as transaction costs, purchaseaccounting related costs and integration-related
expenses.

EBITA
Income from operations excluding amortizationand impairment of acquisition-related intangible
assets and goodwill.

Adjusted EBITAEBITA excluding restructuring costs, acquisitionrelated charges, and other incidental charges.

EBITDA
Income from operations excluding depreciation,amortization, and impairment of non-financial
assets.

Adjusted EBITA margin
Adjusted EBITA divided by sales to third parties(excluding intersegment).
Adjusted gross margin
Gross margin, excluding restructuring costs,
acquisition-related charges, and other incidental
items attributable to cost of sales.
Adjusted indirect costs
Indirect costs, excluding restructuring costs,
acquisition-related charges, and other incidental
items attributable to indirect costs.
Adjusted R&D expenses
Research and development expenses, excluding
restructuring costs, acquisition-related charges, andother incidental items attributable to research anddevelopment expenses.
Adjusted SG&A expenses
Selling, general and administrative expenses,
excluding restructuring costs, acquisition-related
charges, and other incidental items attributable toselling, general and administrative expenses.
Brighter lives revenues
Percentage of total revenues coming from all
products, systems and services contributing toFood availability, Safety & security, or Health &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), circular components,
intelligent systems, or circular services.
Comparable sales growth (CSG)
The period-on-period growth in sales excluding theeffects of currency movements and changes in
consolidation and other changes.

Effects of changes in consolidation and otherchangesIn the event a business is acquired (or divested),
the impact of the consolidation (or deconsolidation) on the Group’s figures is included (orexcluded) in the calculation of the comparable sales
growth figures. Other changes include regulatorychanges and changes originating from new
accounting standards.
Effects of currency movements
Calculated by translating the foreign currency
financials of the previous period and the current
period into euros at the same average exchange
rates.
Employees
Employees of Signify at 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 and notpart of normal business activity. Other incidental
items may extend over several quarters within thesame financial year.
Indirect costs
The sum of selling, general and administrative
expenses and R&D expenses.
Net capital expenditures
Additions of intangible assets, capital expenditureson property, plant and equipment and proceedsfrom disposal of property, plant and equipment.
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 parts of
the organization. Restructuring costs include costs
for employee termination benefits for affected
employees and other costs directly attributable to
the restructuring, such as impairment of assets andinventories.
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