Q2 2024 results
July 26, 2024

Important information
Forward-looking statements
This release contains forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Signify, including statements regarding strategy, estimates of sales growth and future operational results.
By their nature, these statements involve risks and uncertainties facing the Company and its Group companies, and a number of important factors could cause actual results or outcomes to differ materially from those expressed inany forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties and other important factors include but are not limited to: adverse economic and political developments, in particular the impacts of theRussia-Ukraine conflict, the conflict in the Middle East, the recovery trajectory of the Chinese economy, cost inflation, rapid technological change, competition in the general lighting market, development of lighting systems andservices, 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, compliancerisks, ability to attract and retain talented personnel, adverse currency effects, pension liabilities, and exposure to international tax laws. Above-mentioned risks are also applicable to the second half of 2024. The Group will continue
to monitor how these topics develop.
Additional risks currently not known to the Group or that the Group has not considered material as of the date of this document could also prove to be important and may have a material adverse effect on the business, results ofoperations, financial condition and prospects of the Group or could cause the forward-looking events discussed in this document not to occur. The Group undertakes no duty to and will not necessarily update any of the forwardlooking statements in light of new information or future events, except to the extent required by applicable law.
Market and Industry Information
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or of the Group’s own assessment of its sales and markets. Rankings are based on sales unless otherwise stated.
Non-IFRS Financial Statements
Certain parts of this document contain non-IFRS financial measures and ratios, such as comparable sales growth, adjusted gross margin, EBITA, adjusted EBITA, EBITDA, adjusted EBITDA and free cash flow, and other related ratios,
which are not recognized measures of financial performance or liquidity under IFRS. The non-IFRS financial measures presented are measures used by management to monitor the underlying performance of the Group’s businessand operations and, accordingly, they have not been audited or reviewed. Not all companies calculate non-IFRS financial measures in the same manner or on a consistent basis and these measures and ratios may not be comparable
to measures used by other companies under the same or similar names. A reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures is contained in this document. For further
information on non-IFRS financial measures, see “Chapter 18 Reconciliation of non-IFRS financial measures” in the Annual Report 2023.
PresentationAll amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up to totals provided. All reported data are unaudited. Unless otherwise indicated, financial information has been prepared inaccordance with the accounting policies as stated in the Annual Report 2023.
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2

Content
Business and operational performance - Eric Rondolat

Financial performance and highlights - Željko Kosanović
Outlook and closing remarks - Eric Rondolat
Q&A

3

Need to updatephotoSignify reported Q2 24 sales of EUR 1.5 billion, CSG of -8.4% and an
adj. EBITA margin of 7.9%
Sales (in EURm) & comparable sales growth (in %)
CSG

-8.6%

-8.4%

-7.8%

-7.7%

-10.1%

1,644

1,483

1,649

1,734

1,468

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Key observations for Q2 24•

136 million connected light points•

LED-based sales were 86% of total sales•

Nominal sales decline of 9.8% (including FX impact of -1.4%)
to EUR 1,483m•

Comparable sales decline of 8.4%•

Adjusted EBITA margin decrease of 40 bps to 7.9%Adjusted EBITA (in EURm & as % of sales)
%

48.3%

7.9%

10.7%

12.1%

8.3%

136118

177

209

122

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

•

Gross margin expansion•

Under-absorption of fixed costs•

Net income of EUR 63m (Q2 23: EUR 45m)•

Free Cash Flow of EUR 51m (Q2 23: EUR 88m)

The Professional Business reported a CSG of -8.3% and an adj. EBITA marginof 8.1%
Sales (in EURm) & comparable sales growth (in %)
CSG

-4.2%

-8.3%

-4.2%

-3.0%

-7.6%

1,059

959

1,055

1,095943

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Key observations for Q2 24•

Comparable sales decline of 8.3%
•Continued softness in Europe and China•

Sequential improvements in Agriculture lighting

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

58.4%

8.1%

10.6%

11.7%

7.4%

8978

111

128

70

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Adjusted EBITA margin decrease of 30 bps to 8.1%
•Negative pricing compensated by BOM savings•

Positive sales mix•

Under-absorption of fixed costs

The Consumer Business reported a CSG of -2.4% and an adj. EBITA margin of
7.1%
Sales (in EURm) & comparable sales growth (in %)CSG-11.1%

-2.4%

-6.0%

-5.3%

-5.7%

312297316

387299

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Key observations for Q2 24•

Comparable sales decline of 2.4%
•Lower sales in China•

Connected offers back to growth

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

65.5%

7.1%

8.8%

14.2%

10.4%

17212855

31

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Adjusted EBITA margin increase of 160 bps to 7.1%
•COGS savings•

Positive sales mix•

Positive currency effectThe OEM Business reported a CSG of 0.1% and an adj. EBITA margin of 10.9%
Sales (in EURm) & comparable sales growth (in %)CSG-28.2%

0.1%-22.8%-23.7%-7.4%

Key observations for Q2 24•

Comparable sales growth of 0.1%
•

108

106

128

107

103

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Inventory levels of OEM distributors normalized

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

77.2%

10.9%

12.2%

8.1%

8.8%8121699Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Adjusted EBITA margin increase of 370 bps to 10.9%•COGS savings

The Conventional Business reported a CSG of -27.6% and an adj. EBITA
margin of 15.7%
Sales (in EURm) & comparable sales growth (in %)CSG-15.0%-27.6%-21.0%-29.6%-34.1%Key observations for Q2 24•

Comparable sales decline of 27.6%
•160

114

145

136

119

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Impact of the fluorescent bans in Europe, whichbecame effective in February and August 2023

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

8

19.9%

15.7%

20.9%

17.1%

17.6%

321830

2321

Q2 23

Q2 24

Q3 23

Q4 23

Q1 24

Adjusted EBITA margin decrease of 420 bps to 15.7%•

Under-absorption of fixed costs following theaccelerated sales decline•

One-off charges

Business highlights
Signify

Professional

Consumer

Announcing partnershipwith Mercedes-AMG
PETRONAS Formula 1 Team

Introducing new
UltraEfficient and 3D
printed innovations

Launching new Philips Huelights and app features

Launching Music Sync andexpanding the WiZ LED
strip portfolio• Signify and Mercedes-AMG
PETRONAS F1 are driven bya shared passion forresponsible innovation.
• Our innovations in lighting
support the team’s ambition
to become one of theworld’s most sustainable insport, serve well-being andperformance, and deliver
powerful experiences forfans, trackside and at home.

• Continued to expand theUltraEfficient range withnew panels, recessedluminaires, and downlights.
• These UltraEfficientluminaires generate energy
savings of up to 21.7%
compared to other LEDluminaires.
• Expanded the Philips
MyCreation range of 3Dprinted products.

• The Philips Hue Twilightsleep and wake up light was
designed to support yourcircadian rhythm.
• It mimics the wide palette ofcolors in both morning andevening sky light.
• The new Sunset Go to sleep
automation simulates asunset with a rich blend of
red tones.

• The new Music Sync featureenables users to have theirlights change brightness andcolor with the rhythm ofmusic.
• Users can add as many lights
to the Music Sync area as
they wish as long as they are
all connected to the same
Wi-Fi network.

9Brighter Lives, Better World 2025 – Q2 2024 results

Brighter Lives

Better World

Doubling our positive impact on the environment and society

Q2 2024
Result2025
TargetClimate action

Carbon reduction over value chain
against Paris Agreement

0

Ahead ofschedule

324 MT

Circular economy

Circular revenues

16%

35%

32%

Food availability
Safety & security
Health & well-being

Brighter lives revenues

16%

31%

32%

Great place to work

Women in leadership positions

17%

29%

34%

A list for climate andsupply chain leader
102019Baseline

DJSI World Index

EcoVadis Platinum
Medal and top 1%

On track
Off trackContent
Business and operational performance - Eric Rondolat

Financial performance and highlights - Željko Kosanović
Outlook and closing remarks - Eric Rondolat
Q&A11

Adjusted EBITA margin decreased to 7.9%, as gross margin expansion wasoffset by under-absorption of fixed costs
As % of sales-40 bps

8.3%

7.9%

+40 bps
0.6%

-2.2%

Q2 23

12

Volume-0.1%
0.8%

-1.5%

1.9%

Price/Mix

COGS

Indirect Costs

Currency

OtherQ2 24

Working capital decreased to 7.9%, driven by lower inventories and lower
receivables, partly offset by lower payables and other working capital items
In EURm / as % of sales-100 bps

8.9%

7.9%

640-214
-43

Q2 23

13

Inventories

Trade & other receivables

12502

Other workingcapital items

Q2 24108

Trade & other payables

Resilient H1 24 Adjusted EBITA margin and free cash flow despite topline
declineSales & comparable sales
growthFree Cash Flow

Adjusted EBITA(in EURm)(in EURm and % of sales)(in EURm and %)
5.8%
-8.9%

-9.2%

10.0%

8.6%

8.1%

3,624

3,322

2,951361285

240

H1 22

H1 23

H1 24

H1 22

H1 23

H1 24139131

H1 23

H1 24-54

H1 24 performance

14

Comparable sales declined by 9.2%
• Lower professional lighting salesin Europe• Continued softness in China• Accelerated decline
Conventional• Consumer and OEM improving
sequentially

The Adjusted EBITA margin wasmainly impacted by underabsorption of fixed costs• Gross margin improvement,
driven by effective COGS
management and a positive sales
mix effect• Under-absorption of fixed costs

H1 22

Continued strong cash flow
generation• Working capital improvement• Higher restructuring payoutContent
Business and operational performance - Eric Rondolat

Financial performance and highlights - Željko Kosanović
Outlook and closing remarks - Eric Rondolat
Q&A15

Outlook%16

We remain cautious on Professional Europe and on China for the second semester, but
expect to see positive traction for Professional in the Americas, as well as the OEM andConsumer businesses. As a result, we maintain our guidance, with an Adjusted EBITA margin
at the lower end of the 10.0-10.5% range and free cash flow generation of 6-7% of sales.

Q&A
Need to updatephoto

Currency movements had a negative impact on sales and a positive impact
on the Adjusted EBITA margin
Q2 24 Sales FX Footprint (% of total)

18

Key observations•Overall currency impact of -1.4% on sales, mainly from
CNY depreciation.

•Impact of +0.6% on the Adjusted EBITA margin.

Net income increased to EUR 63m, mainly driven by lower adjusted items,
lower non-cash losses on VPPAs and higher financial income
Key observations

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

Q2 23136

Q2 24118- Restructuring-9-9- Acquisition-related charges-3-2-168EBITA

108115

Amortization-20-18

EBIT

88

97

Net financial income / expenses-31-21

Income tax expense-12-13Results from investments in associates

00Net income

4563

1 - Other incidental items

191Non-recurring items by nature and are related to:• Gains from the movements in the indemnification
positions with Koninklijke Philips N.V. originating fromthe separation (EUR 8m)• Other items with a combined effect of EUR 1m loss

Free cash flow decreased to EUR 51m, mainly due to a higher restructuring
payout and a higher cash outflow from working capitalKey observations

Free cash flow (in EURm)
Q2 23
88

Q2 24
97

Depreciation and amortization

67

64

Additions to (releases of) provisions

3630

Utilizations of provisions-41-64

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

-9-15-32-28-15-16

Net capex-21-20

Other

132

Free cash flow

88

51

As % of sales

5.3%

3.4%

Income from operations20••

Free cash flow of EUR 51m•

Higher restructuring payout•Higher cash outflow from working capital•

Partly offset by a higher income from operations

Restructuring payout of EUR 39m (Q2 23: EUR 12m)