Press Release
April 30, 2021
Signify reports first quarter sales of EUR 1.6 billion, operational profitability of 10.8% and afree cash flow of EUR 168 million
First quarter 20211• Signify's installed base of connected light points increased from 77 million in Q4 20 to 83 million in Q1 21• Sales of EUR 1,599 million; 12.0% nominal sales growth and CSG of 3.2%
• LED-based sales represented 82% of total sales (Q1 2020: 79%2)• Adj. EBITA margin improved by 290 bps to 10.8%• Net income increased to EUR 60 million (Q1 20: EUR 27 million)• Free cash flow increased to EUR 168 million (Q1 20: EUR 112 million)• Net debt/EBITDA ratio of 1.4x (Q1 20: 2.7x)
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced thecompany’s first quarter 2021 results.
“Our first quarter performance demonstrates the execution of our strategy, as we report growth driven by ourconnected businesses and our growth platforms. The adaptive measures we took in 2020, combined with
continued pricing discipline, cost and working capital management, resulted in improvements in our operating
margin and free cash flow. Our teams have also begun to execute our new 'Brighter Lives, Better World 2025'
sustainability program, which aims to double our positive impact on the environment and society in 2025,” said
CEO Eric Rondolat.
“While we see signs of an economic recovery, supply chain performance is being challenged by component
shortages, which are impacting the first half, and will, to a lesser extent, impact the second half of the year. We
expect the continued vaccination rollouts and easing of lockdowns to drive an upswing in demand for our
professional portfolio in the second half of the year. We are therefore aiming for mid-single digit full-yearcomparable sales growth and further year-on-year operating margin improvements, driven by our digitalbusinesses.”¹ This press release contains certain non-IFRS financial measures and ratios, such as comparable sales growth, EBITA, adjusted EBITA and free cash flow, andrelated ratios, which are not recognized measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to themost directly comparable IFRS financial measures, see appendix B, Reconciliation of non-IFRS financial measures, of this press release.
22020 includes pro-forma Cooper Lighting for January and February.

2Brighter Lives, Better World 2025
In the first quarter of the year, Signify made its first steps to achieve the ambitious goals it set for the Brighter
Lives, Better World 2025 sustainability program, making progress on all four commitments that contribute to
doubling its positive impact on the environment and society. In addition, the CDP Awards 2021 recognized
Signify's leadership in Climate action, after the company had achieved carbon neutrality for all its operations in
the world in 2020.
In Q1 2021, the company has started to make progress against its ambition of doubling its positive impact on theenvironment and society in 2025:••••

Double the pace of the Paris agreement:
Carbon reduction over value chain was 18 million tonnes, for which we set a 2025 target of 340 million
tonnesDouble our Circular revenues to 32%:
Circular revenues were 19%, versus the 2019 baseline of 16% and the 2025 target of 32%
Double our Brighter lives revenues to 32%:Brighter lives revenues were 23%, versus the 2019 baseline of 16% and the 2025 target of 32%
Double the percentage of women in leadership positions to 34%:
The percentage of women in leadership positions was 24%, versus the 2019 baseline of 17% and the2025 target of 34%

Outlook
Following the operational performance in the first quarter and based on current visibility, Signify now
anticipates comparable sales growth of 3% to 6% for the full year 2021. In addition, Signify expects to achieve an
Adjusted EBITA margin of 11.5% to 12.5% and continues to expect free cash flow to exceed 8% of sales for thefull year 2021. The company reassesses its medium-term guidance for the period 2021-2023 after each financial
year.
Signify has refinanced EUR 350 million of its long-term debt with short-term loans with a maturity of December
2021 and is therefore fully committed to repaying EUR 350 million of debt in Q4 2021.

3

Financial review
in € million, except percentages

2020*

First quarter
2021

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

1,427
545
38.2%

1,599
637
39.8%

Adj. SG&A expenses
Adj. R&D expenses
Adj. indirect costs
Adj. indirect costs (as % of sales)

-393
-67
-460
32.2%

-424
-72
-496
31.0%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

112
7.9%
-42
70

172
10.8%
-57
115

53.3%

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

43
-10
-6
27

85
-10
-15
60

97.6%

112
0.24
38,446168
0.47
37,356

Free cash flow
Basic EPS (€)
Employees (FTE)change
3.2%
-6.4%
15.2%
12.0%
16.9%

-7.9%

63.9%

123.5%* For comparability purposes please note that first quarter 2020 includes only 1 month of Cooper Lighting performanceFirst quarter
Sales amounted to EUR 1,599 million, a nominal increase of 12.0%, including a 6.4% negative currency effect.
After adjusting for a 15.2% change in consolidation and other changes (mainly related to the consolidation of
Cooper Lighting in 2020), comparable sales increased by 3.2%. The return to growth was driven by strong sales
in the connected home category, the recovery in China as well as an improved performance in most of Europe,
India and the Middle East. LED-based sales accounted for 82% of total sales (Q1 2020: 79%1). The adjusted grossmargin increased by 160 bps to 39.8%, largely driven by a positive mix effect from strong connected home sales,
pricing discipline compensating the initial impact of material cost inflation, and the consolidation of Cooper
Lighting. Adjusted indirect costs as percentage of sales decreased by 120 bps to 31.0%, supported by continued
spending discipline and positive operating leverage. Adjusted EBITA amounted to EUR 172 million, representing
a EUR 60 million increase versus the same period last year. The Adjusted EBITA margin improved by 290 bps to10.8%, with gross margin and SG&A efficiency equally contributing to the improvement. Total restructuring costsof EUR 47 million mainly related to the restructuring of the central organization. Acquisition-related charges
were EUR 14 million and incidental items generated a EUR 4 million benefit. As a result of the higher income
from operations, net income improved from EUR 27 million to EUR 60 million compared to the first quarter oflast year.

12020 includes pro-forma Cooper Lighting for January and February.

4

Digital SolutionsFirst quarterin millions of EUR, unless otherwise indicated

2020*

2021

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

change
-1.8%

639
43
6.7%
18
-7

793
71
9.0%
48
20

24.1%
66.9%

* For comparability purposes please note that first quarter 2020 includes only 1 months of Cooper Lighting performanceFirst quarter
Sales amounted to EUR 793 million, a nominal increase of 24.1%, reflecting the consolidation impact of Cooper
Lighting. Comparable sales declined by 1.8%, on the back of continued lockdowns, component shortages,
continued macroeconomic softness in the Americas, yet a strong performance in China, the Middle East andIndia, and a partial recovery across Europe. LED-based sales accounted for 92% of total sales including Cooper
Lighting. Adjusted EBITA was EUR 71 million, resulting in an Adjusted EBITA margin expansion of 230 bps to
9.0%, mainly driven by continued cost management and the consolidation impact of Cooper Lighting.

Digital Products
2020

First quarter
2021

529
47
8.9%

575
82
14.2%

EBITA

38

76

Income from operations (EBIT)

36

74

in millions of EUR, unless otherwise indicatedComparable sales growth
Sales
Adjusted EBITA
Adjusted EBITA marginchange
15.7%
8.7%
73.1%

First quarter
Sales amounted to EUR 575 million, a nominal increase of 8.7%. On a comparable basis, sales improved by
15.7%, mainly driven by continued strong growth in the consumer segment for both the connected home andLED lamps and luminaires categories, partially offset by a lower recovery speed in the professional segment.
Adjusted EBITA was EUR 82 million, resulting in an Adjusted EBITA margin of 14.2%, up from 8.9% in the firstquarter of last year, mainly driven by the strong sales recovery, the resulting operating leverage, a solid grossmargin and a higher contribution and improvement from connected home products.

12020 includes pro-forma Cooper Lighting for January and February.

5

Conventional ProductsFirst quarterin millions of EUR, unless otherwise indicated

2020

2021

change

257
45
17.6%
39
39

227
47
20.6%
53
53

-11.7%
3.3%

Comparable sales growth

-6.1%

Sales
Adjusted EBITA
Adjusted EBITA margin
EBITA
Income from operations (EBIT)First quarter
Sales amounted to EUR 227 million, translating into a comparable decline of 6.1%, positively affected bycontinued strong traction in the consumer and horticulture segments. The Adjusted EBITA margin improved by
300 bps to 20.6%, driven by pricing discipline and operational efficiencies.

Other
First 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. 'Other' Adjusted EBITA amounted to EUR -28
million (Q1 20: EUR -23 million). 'Other' EBITA amounted to EUR -62 million (Q1 20: EUR -25 million), which
includes restructuring costs of EUR -34 million (Q1 20: EUR -2 million).

Sales by market
First quarterin millions of EUR, except percentages

2020

2021

ChangeCSG

EuropeAmericasRest of the World
Global businesses
Total

502
486
325
115
1,427

523
589
370
118
1,599

4.1%
21.2%
13.8%
3.0%
12.0%

6.0%
-7.7%
22.9%
1.7%
3.2%

Americas includes Cooper Lighting and Global businesses includes Klite
Wiz Connected is included in Market Groups Europe, Americas and Rest of the World (was previously part of Global businesses)

First quarter
Comparable sales in Europe grew by 6.0%, as most markets saw a partial recovery despite ongoing COVID-19
related measures. In the Americas, comparable sales declined by 7.7% as most countries continued to face achallenging macroeconomic environment at the start of the first quarter, yet with a stronger performance inMarch. In the Rest of the World, China showed a strong recovery. Together with India and the Middle East,
China benefited from a low comparison base.

6

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

31 Mar, 2020

31 Dec, 2020

31 Mar, 2021

1,019
1,173
-1,673
-49
470
7.6%

885
1,140
-1,731
19
313
4.8%

946
1,074
-1,784-1236
3.5%* LTM: Last Twelve Months

First quarter
Working capital improved by EUR 234 million year on year to EUR 236 million, driven by higher payables, lower
receivables and lower inventories. As a percentage of sales, working capital improved by 410 bps to 3.5% ofsales. When including last twelve-month sales pro-forma Cooper Lighting and Klite, working capital improved by
260 bps.

Cash flow analysis
First quarter2020
43

in millions of EUR

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

78
33
-52
52
-10
-28
-17
12
112

2021
85
77
60
-50
30
-1
-21
-16
3
168

First quarter
Free cash flow increased by EUR 56 million to EUR 168 million, as a result of higher income from operations,partly offset by a lower albeit continued inflow from working capital improvement. Free cash flow included a
restructuring payout of EUR 13 million (Q1 20: EUR 18 million).

Net debt and total equity
in millions of EUR

31 Mar,2020

31 Dec, 2020

31 Mar, 2021

Short-term debt

95

86

433

2,639
2,734
924
1,810
2,334

2,221
2,307
1,033
1,275
2,321

1,899
2,332
1,192
1,141
2,469

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

First quarter
Our cash position increased by EUR 159 million to EUR 1,192 million compared with the end of December 2020.
EUR 350 million of long-term debt was converted into short-term debt during Q1 2021. Net debt amounted to
EUR 1,141 million, a decrease of EUR 134 million compared with the end of December 2020. Net leverage

7

reduced from 2.7x at the end of March 2020, following the acquisition of Cooper Lighting, to 1.4x by the end of
March 2021, which is in line with our deleveraging strategy. Total equity increased to EUR 2,469 million at theend of the first quarter (Q4 20: EUR 2,321 million), primarily due to currency translation and net income offset
by share repurchases to cover obligations arising from long-term employee share plans.

8

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 2021 first quarter results. A live audio webcast of the conference callwill be available via the Investor Relations website.
Financial calendar 2021
May 18, 2021
May 20, 2021
May 21, 2021
June 1, 2021
July 23, 2021
October 29, 2021

Annual General Meeting
Ex-dividend date
Dividend record date
Dividend payment date
Second quarter results 2021
Third quarter results 2021

For further information, please contact:
Signify Investor Relations
Thelke Gerdes
Tel: +31 6 1801 7131
E-mail: thelke.gerdes@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 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. With 2020 sales of EUR 6.5 billion, we
have approximately 37,000 employees and are present in over 70 countries. We unlock the extraordinary
potential of light 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 four 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.

9

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, theimpacts of COVID-19, rapid technological change, competition in the general lighting market, development oflighting systems and services, successful implementation of business transformation programs, impact ofacquisitions and other transactions, reputational and adverse effects on business due to activities inEnvironment, Health & Safety, compliance risks, ability to attract and retain talented personnel, adverse
currency effects, pension liabilities, and exposure to international tax laws. Please see “Risk Factors and Risk
Management” in Chapter 12 of the Annual Report 2020 for discussion of material risks, uncertainties and otherimportant 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 2020.
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 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 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 2020.
Change in reporting segments
Effective Q2 2020, to further adapt to the industry transition and strengthen customer centricity, Signifychanged the organizational structure, which included changing the previously four business groups (BG’s) tothree divisions. Division Digital Solutions (formerly BG Professional, including Cooper Lighting Solutions) offers
luminaires, lighting systems and services for the Internet of Things to the customers in the professional segment;
Division Digital Products (combines BG LED and BG Home). This division offers LED lamps, LED luminaires andconnected products, including Hue and Wiz, and LED electronics to professional customers, OEM partners andconsumers. By bringing together its entire consumer LED portfolio, Signify can better manage this lighting
category for its channel partners; and Division Conventional Products (formerly BG Lamps) continues to focus on10

conventional lamps and electronics for professional customers, OEM partners and consumers. It is organizedseparately to bring a clear distinction between conventional and digital offerings.
In line with this change, effective Q2 2020, Signify's operating segments are Digital Solutions, Digital Products,
and Conventional Products. The segments are organized based on the nature of the products and services.
‘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.
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 2020.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

11

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

Sales
Cost of sales
Gross margin
Selling, general and administrative expenses
Research and development expenses
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.

First quarter
2020
1,427
(895)
533
(422)
(68)
2
(1)
43
5
(15)
—
33
(6)
27
30
(3)

2021
1,599
(970)
629
(484)
(71)
13
(2)
85
5
(15)
—
75
(15)
60
59
1

12

B. Condensed consolidated statement of comprehensive income
In millions of EUR

Net income (loss)
Pensions and other post-employment plans:Remeasurements
Income tax effect on remeasurements
Total of items that will not be reclassified to profit or loss

First quarter
2020
27

2021
60

—
—
—

—
—
—

(31)
—

147
—

Currency translation differences:
Net current period change, before tax
Income tax effect
Net investment hedge
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

—
—

(20)
—

14
(3)
(20)

(18)
4
113

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

(20)
6

113
173

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

9
(3)

166
7

Amounts may not add up due to rounding.

13

C. Condensed consolidated statement of financial position
In millions of EUR

December 31,
2020

March 31, 2021

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

708
2,251
775
12
55
473
60
4,334

720
2,357
776
12
49
471
70
4,455

Current assets
Inventories
Financial assets
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

885
—
171
104
39
1,140
1,033
3
3,376
7,710

946
—
209
63
50
1,074
1,192
—
3,534
7,989

EquityShareholders’ equity
Non-controlling interests
Total equity

2,196
124
2,321

2,338
131
2,469

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

2,221
390
224
22
108
159
3,123

1,899
390
229
24
111
175
2,828

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

86
44
20
1,731
172
213
—
2,266
7,710

433
37
13
1,784
189
236
—
2,692
7,989

Amounts may not add up due to rounding.

14

D. Condensed consolidated statement of cash flows
In millions of EUR
First quarter
2020
Cash flows from operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided by operating
activities:

27

60

133

156

78

77

—
—
7

—
(11)
7

6
28
5
8

15
56
4
8

52
220
(9)
(185)
26
7
(43)
(9)
(10)
(28)
129

30
84
(35)
(8)
(10)
9
(42)
(8)
(1)
(21)
184

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 assets
Purchases of businesses, net of cash acquired
Proceeds from sale of businesses, net of cash disposed of
Net cash provided by (used for) investing activities

(17)
(5)
(12)
—
10
(1,270)—(1,277)

(16)
(8)
(21)
13
(5)
—
—
(21)

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 period1
Cash and cash equivalents and bank overdrafts at the end of the period2—
2,455(1,218)
(6)
1,231
84
(5)
840
919

(3)
350
(371)
(24)
(48)
115
46
1,030
1,191

• Depreciation, amortization and impairment of non-financial assets• Impairment (reversal) of goodwill, other non-current financial assets andinvestments 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 paid
Income taxes paid
Net cash provided by (used for) operating activities

1
2

2021

For Q1 2021 and Q1 2020, included bank overdrafts of EUR 3 million and EUR 7 million, respectively.
Included bank overdrafts of EUR 1 million and EUR 5 million as at March 31, 2021 and 2020, respectively.

Amounts may not add up due to rounding.

15

Appendix B - Reconciliation of non-IFRS financial measures
Change in reporting segments
As indicated in the Important Information section, Signify changed its segment reporting in Q2 2020. The mainchange relates to combining BG LED and BG Home into division Digital Products. The comparatives 2020 inbelow tables have been updated to reflect the updated segment structure.
Sales growth composition per business in %Comparable
growth2021 vs 2020
Digital Solutions
Digital Products
Conventional Products
Total

-1.8
15.7
-6.1
3.2

First quarter
Currency effects
Consolidation andother changes
-6.6
-6.4
-5.5
-6.4

Nominal growth

32.6
-0.6
-0.1
15.2

24.1
8.7
-11.7
12.0

First quarter
Currency effects
Consolidation andother changes

Nominal growth

Sales growth composition per market in %Comparable
growth2021 vs 2020
EuropeAmericasRest of the World
Global businesses
Total

6.0
-7.7
22.9
1.7
3.2

-1.6
-9.0
-9.5
-2.7
-6.4

-0.3
37.8
0.4
4.0
15.2

4.1
21.2
13.8
3.0
12.0

16

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

1

Signify

DigitalSolutionsFirst quarter 2021
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization1
Income from operations (or EBIT)

172
(47)
(14)
4
115
(30)
85

71
(7)
(14)
(2)
48
(28)
20

82
(3)
—
(2)
76
(2)
74

47
(2)
—
9
53
—
53

(28)
(34)
—
—
(62)
0
(62)

First quarter 2020
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization1
Income from operations (or EBIT)

112
(13)
(18)
(11)
70
(27)
43

43
(4)
(16)
(4)
18
(25)
(7)

47
(4)
(2)
(4)
38
(2)
36

45
(3)
—
(3)
39
—
39

(23)
(2)
—
—
(25)
—
(25)

Amortization and impairments of acquisition related intangible assets and goodwill.

Amounts may not add up due to rounding.

Digital Conventional
Products
Products

Other

17

First quarter 2021 Income from operations to Adjusted EBITA in millions of EUR

Reported Restructuring
First 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)First quarter 2020
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

Acquisition
relatedcharges

Incidental
items1

Adjusted

1,599
(970)
629

—
5
5

—
2
2

—
—
—

1,599
(962)
637

(484)
(71)
(555)
—
13
(2)
85
(30)

43
(1)
42
—
—
—
47
—

12
—
12
—
—
14
—

5
—
5
—
(9)
—
(4)
—

(424)
(72)
(496)
—
4
(2)
142
(30)

115

47

14

(4)

172

1,427
(895)
533

—
4
4

—
7
7

—
2
2

1,427
(882)
545

(422)
(68)
(490)
—
2
(1)
43
(27)

8
1
9
—
—
—
13
—

12
—
12
—
—
—
18
—

10
—
10
—
—
—
11
—

(393)
(67)
(460)
—
2
(1)
85
(27)

70

13

18

11

112

Incidental items are non-recurring by nature and relate to separation, transformation, net real estate gains, environmental provision for inactive sites anddiscounting effect of long-term provisions.

Amounts may not add up due to rounding.

18

Appendix C – Financial glossary
Acquisition-related charges
Costs that are directly triggered by the acquisitionof a company, such as transaction costs, purchaseaccounting related costs and integration-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 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.
Changes in scope
Consolidation effects related to acquisitions (mainly
Cooper Lighting).
Comparable sales growth (CSG)
The period-on-period growth in sales excluding theeffects of currency movements and changes in
consolidation and other changes.
EBIT
Income from operations.
EBITA
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 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 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 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.

19

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,the most significant of which have been approvedby the group, and which generally involve therealignment of certain parts of the industrial andcommercial organization.

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.