Press Release
January 28, 2022

Signify reports full-year sales of EUR 6.9 billion, operational profitability of 11.6% and a free
cash flow of EUR 614 million
Fourth quarter 20211• Sales of EUR 2,008 million; comparable sales growth of 4.5%
• Order book increase of 67% in Q4 21 vs. Q4 20• Adj. EBITA margin of 13.2% (Q4 20: 13.4%)• Net income of EUR 170 million (Q4 20: EUR 137 million)• Free cash flow of EUR 257 million (Q4 20: EUR 332 million)• Repayment of EUR 350 million of debt, as committed
Full year 2021
• Signify's installed base of connected light points increased from 77 million at YE 20 to 96 million at YE 21• Sales of EUR 6,860 million; comparable sales growth of 3.8%
• LED-based sales represented 83% of total sales (FY 20: 80%)
• Adj. EBITA margin of 11.6% (FY 20: 10.7%)• Net income of EUR 407 million (FY 20: EUR 335 million)• Free cash flow of EUR 614 million, 8.9% of sales (FY 20: EUR 817 million)• Net debt/EBITDA ratio of 1.4x (YE 20: 1.7x)
Dividend• Proposal to pay a cash dividend of EUR 1.45 per share over 2021
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced thecompany’s fourth quarter and full-year 2021 results.
“The strong demand for connected lighting and our growth platforms, paired with the delivery of delayedorders, enabled us to achieve a comparable sales growth of 4.5% in the fourth quarter. Our teams’ relentless
focus on the execution of our strategy enabled us to deliver against our objectives for the year. This, in an
external environment that was possibly even more challenging than in 2020. Despite the significant cost
increases of raw materials, components, and logistics, we expanded our operational profit margin for the eighthconsecutive year, with an improvement of 90 basis points. This was driven by the strong performance of our two
digital divisions, which combined now account for more than 80% of our sales, profit and cash flow. Finally,
during the year we continuously made significant progress on our journey to double our positive impact on theenvironment and society,” said CEO Eric Rondolat.
“While we expect uncertainty to remain high in the first half of this year, we’re confident that we will manage
this volatility with the same agility as we demonstrated in the past two years. Our 2021 results provide us with asolid base on which to deliver another year of growth in 2022. This will be driven by continued investments in
our growth platforms, such as the intended acquisition of Fluence. The world's demand for energy-efficient anddigital lighting technologies continues to accelerate and Signify is well positioned to capture the potential thiscreates.”¹This 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.

Brighter Lives, Better World 2025
In the fourth quarter, Signify completed the first year of its Brighter Lives, Better World 2025 program, making
substantial progress towards doubling its positive impact on the environment and society:
•

•

•
•

Double the pace of the Paris agreement:
Cumulative carbon reduction over the value chain was 60 million tonnes, and is ahead of track. All of
Signify's divisions had CO2 emission reductions. The main driver remains the accelerated shift to energy
efficient and connected LED lighting in 2021, which decreases the carbon emissions in the use phase.
Double our Circular revenues to 32%:
Circular revenues increased to 25%, compared with the 2019 baseline of 16%. Signify is on track toachieve the 2025 target of 32%. This positive trend is driven by the further expansion of serviceable
professional luminaires, and the continuous, stable contribution of consumer luminaires and circularcomponents.
Double our Brighter lives revenues to 32%:Brighter lives revenues were 27%, with a strong contribution from the consumer well-being portfolio.
With this performance, Signify is making good progress towards the 2025 target of 32%.
Double the percentage of women in leadership to 34%:
The percentage of women in leadership positions was 25%, stable when compared with last quarter.
This performance is slightly behind the 2021 intermediary step aimed at reaching the 2025 target of
34%. In Q4, Signify launched the Powering Inclusion Series, which increases the awareness of its leadersand people managers on how to foster inclusion.

Signify is in the top 1% of its industry in the S&P Global Corporate Sustainability Assessment and is included in
the Dow Jones Sustainability World Index for the fifth consecutive year, illustrating its drive for leadership insustainability.

OutlookAs Signify continues to proactively navigate through the gradually improving component and logistics
environment, it provides the following outlook for 2022:•••

Comparable sales growth in the range of 3-6%
Continued Adjusted EBITA margin improvement of up to 50 bps
Free cash flow in excess of 8% of sales

Capital allocation
Signify proposes a cash dividend of EUR 1.45 per share for 2021, in line with its plan to pay an increasing annual
cash dividend per share year on year. The dividend proposal will be subject to approval at the Annual General
Meeting of Shareholders (AGM) to be held on May 17, 2022. Further details will be provided in the agenda for
the AGM.
The company expects to progress towards a leverage ratio of reported net debt/EBITDA of 1x by the end of2022. This now includes the cash outflow from the intended Fluence acquisition, and the 2022 cash inflow fromits operations and the continued rationalization of the company’s real estate portfolio.
Finally, Signify will continue to invest in organic and inorganic growth opportunities in line with its strategic
priorities.

2

Financial review
2020

Fourth quarter
2021

1,878
755
40.2%

2,008
794
39.5%

-458
-76
-534
28.4%

-485
-74
-559
27.8%

251
13.4%
-66
185

265
13.2%
-29
237

155
-12
-6
137

205
-4
-31
170

332
1.05
37,926257
1.34
36,824change
4.5%
2.2%
0.2%
6.9%
5.2%

-4.7%

5.8%

27.8%
32.5%

24.5%

Twelve months
2021

in millions of EUR, except percentages

2020*change
3.8%
-2.0%
3.6%
5.5%
5.7%

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

6,502
2,556
39.3%

6,860
2,702
39.4%

Adj. SG&A expenses
Adj. R&D expenses
Adj. indirect costs
Adj. indirect costs (as % of sales)-1,695-287-1,98230.5%-1,748-284-2,032
29.6%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

695
10.7%
-159
536

795
11.6%
-159
636

14.4%

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

416
-54
-27
335

514
-24
-83
407

23.6%

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

817
2.58
37,926614
3.18
36,824

-2.5%

18.7%

21.4%

* For comparability purposes, note that figures for the period only include results of Cooper Lighting since March 2020.

Fourth quarter
Total sales increased to EUR 2,008 million with a comparable sales growth of 4.5%, driven in particular by theprofessional segment, which benefited from strong demand and the partial fulfillment of delayed orders. The
two digital divisions increased their pace of recovery to the pre-pandemic sales levels of 2019. During thequarter, Signify continued to face logistics delays across its supply chain, caused by container shortages andcongested ports. At the same time, component shortages continued to ease, thereby allowing the company topartially fulfill delayed orders. By the end of the quarter, the order book had increased by 67% versus last year.
The adjusted gross margin decreased by 70 bps to 39.5%, on a high comparison base of 2020. In Q4, priceincreases and positive mix effect fully offset the effect of higher COGS. Adjusted indirect costs as a percentage ofsales decreased by 60 bps to 27.8%, driven by operating leverage, structural cost savings and one-off effects inthe previous year, which included provisions for the reimbursement of solidarity contributions to employees.
Adjusted EBITA increased to EUR 265 million. Adjusted EBITA margin decreased by 20 bps to 13.2%, mainly due
to higher COGS, partly offset by pricing, positive sales mix and operating leverage.
Total restructuring costs were EUR 11 million, acquisition-related charges were EUR 13 million and otherincidental costs were EUR 5 million. Net income increased from EUR 137 million to EUR 170 million, mainly as aresult of higher income from operations and lower net financial expenses.

Full year
Total sales increased by 5.5% to EUR 6,860 million. Comparable sales growth of 3.8% was driven by the twodigital divisions, which benefited from strong consumer and professional demand for connected products andfor our growth platforms. LED-based sales were 83% of total sales (2020: 80%).
The adjusted gross margin improved by 10 bps to 39.4%, as higher input and logistics costs were more thancompensated by price increases, positive sales mix and the carryover of bill of materials savings in the first halfof the year. Adjusted indirect costs as a percentage of sales decreased by 90 bps to 29.6%, as a result of
operating leverage and structural cost savings.
Adjusted EBITA increased by 14.4% to EUR 795 million. Digital Solutions and Digital Products contributed 82% of
Signify's Adjusted EBITA excluding 'Other' (2020: 79%). The Adjusted EBITA margin increased by 90 bps to 11.6%,
as operating leverage, pricing and mix more than compensated higher input costs for raw materials,
components and logistics, and a negative currency effect.
Total restructuring costs were EUR 86 million, acquisition-related charges were EUR 50 million and otherincidental costs were EUR 22 million. Net income increased by 21.4% to EUR 407 million, driven by a higher
income from operations and lower net financial expenses, partly offset by a higher income tax expense versus
2020 that benefited from a high one-time non-cash tax benefit.

Digital Solutions
Fourth quarter
2020

2021

917
105
11.5%
75
47

1,045
147
14.1%
130
100

Twelve months
change in millions of EUR, unless otherwise indicated11.2 %

Comparable sales growth

14.0 %
39.7 %

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

73.3 %
115.3 %

2020*

2021

3,252
330
10.2%
230
119

3,524
397
11.3%
318
205

change3.4 %8.3 %20.3 %
38.3 %
71.9 %* For comparability purposes, note that figures for the period only include results of Cooper Lighting since March 2020.

Fourth quarter
Sales increased to EUR 1,045 million with a comparable sales growth of 11.2%, driven by strong underlying
growth in many markets, including a solid contribution from Cooper Lighting. The Adjusted EBITA margin
improved by 260 bps to 14.1%, driven by operating leverage, price and sales mix, which more than offset higher
costs of raw materials, components and logistics.
Full year
Sales increased by 8.3% to EUR 3,524 million, a comparable sales growth of 3.4%, as the professional segment
improved across most markets. Connected-based sales represented 22% of total sales including Cooper Lighting(2020: 20%1). Adjusted EBITA grew by 20.3% to EUR 397 million. The Adjusted EBITA margin improved by 110
bps to 11.3%, mainly from operating leverage and adjusted indirect cost savings.

¹Includes Cooper Lighting connected-based sales.

Digital Products
2020

Fourth quarter2021

change in millions of EUR, unless otherwise indicated1.6%

Comparable sales growth2020

Twelve months
2021change
8.8 %

711
128
18.0%

737
114
15.5%

3.7%
-10.5%

Sales
Adjusted EBITA
Adjusted EBITA margin

2,288
295
12.9%

2,452
339
13.8%

7.2 %
14.9 %

122

112

-8.7%

EBITA

277

323

16.8 %

121

110

-8.9%

Income from operations (EBIT)

269

316

17.5 %

Fourth quarter
Sales increased by 3.7% to EUR 737 million. It continued to grow on the back of a strong 2021 with a comparable
sales growth of 1.6%. LED Electronics and Klite had a particularly strong performance, while connected homesales were stable despite the high 2020 comparison base and supply chain issues that impacted productavailability in 2021. The Adjusted EBITA margin decreased by 250 bps to 15.5%, mainly reflecting higher COGS
and increased growth investments in marketing and R&D.
Full year
Sales increased by 7.2% to EUR 2,452 million with a comparable sales growth of 8.8%. This performance wasdriven by strong demand for connected home lighting and improving professional sales, despite supply chain
constraints and component shortages. Connected-based sales represented 24% of total sales (2020: 21%). The
Adjusted EBITA margin improved by 90 bps to 13.8%, driven by operating leverage and the positive effect ofsales mix and price increases, only partially reduced by higher COGS and continued investments in future
growth.

Conventional Products
Fourth quarter
2020
242
46
18.9%
30
30

2021
219
37
16.9%
37
37

Twelve months
change in millions of EUR, unless otherwise indicated-11.4%

Comparable sales growth-9.5%-19.5%

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

23.8%
23.8%

2020

2021

change
-6.9%

943
170
18.0%
149
149

861
161
18.7%
158
158

-8.7%
-5.0%
5.9%
5.9%

Fourth quarter
Sales decreased by 9.5% to EUR 219 million with a comparable sales decline of 11.4%. The Adjusted EBITA
margin decreased by 200 bps to 16.9%, mainly due to a lower gross margin, partly offset by indirect cost savings.
Full year
Sales decreased to EUR 861 million, an 8.7% decline. Comparable sales decline was limited to 6.9%, mainly as aresult of the market recovery and continued traction across most of its segments. The Adjusted EBITA margin
improved by 70 bps to 18.7%, mostly driven by indirect cost savings.

4

OtherFourth 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 -33 million (Q4 20:
EUR -28 million) and EBITA was EUR -42 million (Q4 20: EUR -42 million). Restructuring costs and otherincidentals were EUR 9 million (Q4 20: EUR 14 million) during the quarter.
Full year
Adjusted EBITA was EUR -102 million (2020: EUR -100 million) and EBITA was EUR -164 million (2020: EUR -120
million). Restructuring costs and other incidentals were EUR 62 million (2020: EUR 20 million), largely related to
the restructuring of the central organization.

Sales by market
Fourth quarter
2020

2021

Change

633
665
453
127
1,878

666
733
457
152
2,008

5.1%
10.2%
1.0%
19.5%
6.9%

Twelve months
CSG in millions of EUR, except percentages

2020

2021

change

CSG

4.5%
7.6%
-1.7%
10.0%
4.5%

2,066
2,437
1,507
492
6,502

2,130
2,581
1,606
543
6,860

3.1%
5.9%
6.6%
10.3%
5.5%

3.4%
1.4%
7.9%
6.3%
3.8%

EuropeAmericasRest of the world
Global businesses
Total

Americas includes Cooper Lighting from March 1, 2020, and Global businesses includes Klite.
Effective Q1 2021, Wiz Connected is included in Market Groups Europe, Americas and Rest of the world (was previously part of Global businesses). Prior year
amounts were adjusted to conform to current year presentation.
Sales growth of Global businesses includes the impact of the acquisition of Telensa in July 2021.

Fourth quarterIn the fourth quarter, many markets benefited from improved professional demand and the fulfillment of
delayed orders. In Europe, comparable sales increased by 4.5%. In the Americas, comparable sales increased by
7.6% with a solid contribution from Cooper Lighting. In the Rest of the World, comparable sales declined by
1.7%, mostly due to a weaker performance in Middle East and Southeast Asia.
Full year
Many markets rebounded, as demand for connected home lighting remained strong and the professional
segment improved. Yet, supply chain constraints and component shortages impacted Signify's ability to meetdemand. In this context, Europe had a comparable sales growth of 3.4%. In the Americas, comparable sales
increased by 1.4%. In the Rest of the World comparable sales increased by 7.9%, driven by a strong performancein China, India and Australia.

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*

LTM: Last Twelve Months
6,614
6,336

31 Dec, 2020 30 Sep, 2021 31 Dec, 2021
885
1,140
-1,731
19
313
4.8%

1,301
1,069
-2,064
9
316
4.7%

1,410
1,183
-2,334
-8
250
3.6%

6,275

5

Fourth quarter
Working capital decreased from EUR 316 million at the end September 2021 to EUR 250 million at the end of the
December 2021, as higher payables more than offset higher receivables and inventories. The high level ofinventories is the result of longer order lead times and increased safety stock levels. As a percentage of lasttwelve-month sales, working capital improved by 110 bps to 3.6%.
Compared with December 2020, working capital decreased by EUR 63 million to EUR 250 million and improvedby 120 bps to 3.6% as a percentage of last twelve-month sales. When including last twelve-month sales pro
forma for Cooper Lighting, the improvement was 110 bps. The lower year-on-year working capital was mostly
driven by higher payables and lower other working capital items, which more than offset the higher inventories
and higher receivables.

Cash flow analysis
Fourth quarter
2020
2021
155
205
86
75
-59
119
-6
-23
-27
13
332

77
30
-65
37
1
-14
-29
16
257

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 received (paid)
Income taxes paid
Net capex
Other
Free cash flow

Twelve months
2020
2021
416
514
332
172
-197
239
-33
-73
-75
37
817

312
151
-221
-2
-27
-59
-91
36
614

Fourth quarter
Free cash flow of EUR 257 million was EUR 75 million lower than in Q4 2020, as 2020 benefited from a higher
release of working capital. Free cash flow included a restructuring payout of EUR 26 million (Q4 20: EUR 10
million).
Full year
Free cash flow of EUR 614 million was EUR 203 million lower than full year 2020, that benefited from the releaseof working capital as sales declined due to COVID-19. As such, in 2021 lower cash inflow from working capitaland higher capex more than offset higher profitability. Free cash flow included a restructuring payout of EUR 86
million (2020: EUR 52 million).
Twelve months
In millions of EUR

2020

2021

Digital Solutions

436

364

Digital Products

406

383

Conventional Products

188

136

Other*-213-270

Signify free cash flow

817

614

* Non-allocated free cash flow items (e.g. tax, interest).

In 2021, Digital Solutions and Digital Products combined accounted for 85% of Signify's free cash flow excluding'other' (2020: 82%), which underscores the fact that Signify continues to become less dependent on
Conventional Products. Versus the high base of 2020, free cash flow of Digital Solutions declined by EUR 72
million to EUR 364 million. Digital Products' free cash flow declined by EUR 23 million to EUR 383 million.
Conventional Products' free cash flow remained robust at EUR 136 million, a decline of EUR 52 million versus
2020.

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

31 Dec, 2020 30 Sep, 2021 31 Dec, 2021
86

422

77

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

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

1,931
2,007
851
1,156
2,597

Fourth quarter
Our cash position decreased by EUR 76 million to EUR 851 million compared with the end of September 2021.
Net debt amounted to EUR 1,156 million, a decrease of EUR 255 million compared with the end of September
2021. The decrease in gross debt was primarily driven by the repayment of EUR 350 million of debt, as
committed. Total equity increased to EUR 2,597 million at the end of December 2021 (Q3 21: EUR 2,295 million),reflecting the net income and currency translation results.
Compared with December 2020, our net debt position decreased by EUR 119 million to EUR 1,156 million. The
lower net debt is primarily driven by solid free cash flow generation, partly offset by dividend payments. Net
leverage improved from 1.7x at the end of December 2020, to 1.4x at the end of December 2021. Total equity
increased by EUR 276 million to EUR 2,597 million at the end of 2021 (2020: EUR 2,321 million), reflecting thenet income and currency translation results, offset by the dividend payment and share repurchases.

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 fourth quarter and full-year 2021 results. A live audio webcast of theconference call will be available via the Investor Relations website.
Financial calendar 2022
February 22, 2022
April 29, 2022
May 17, 2022
May 19, 2022
May 20, 2022
May 31, 2022
July 29, 2022
October 28, 2022

Annual Report 2021
First quarter results 2022
Annual General Meeting
Ex-dividend date
Dividend record date
Dividend payment date
Second quarter and half-year results 2022
Third quarter results 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
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 2021 sales of EUR 6.9 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 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 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, theimpacts of COVID-19, supply chain constraints, component shortages, rapid technological change, competition in
the general lighting market, development of lighting systems and services, successful implementation ofbusiness 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 andretain 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 ofmaterial risks, uncertainties and other important factors which may have a material adverse effect on thebusiness, results of operations, financial condition and prospects of the Group. Such risks, uncertainties andother important factors should be read in conjunction with the information included in the Company’s Annual
Report 2020 and Semi-Annual Report 2021.
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.
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 and Semi-Annual Report 2021.
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
Fourth quarter

January to December

2020

2021

2020

2021

Sales

1,878

2,008

6,502

6,860

Cost of sales(1,148)(1,215)(4,004)(4,189)Gross margin

730

793

2,499

2,671

Selling, general and administrative expenses

(485)

(510)

(1,781)(1,882)

Research and development expenses

(91)

(75)

(307)

(286)

Impairment of goodwill

—

—

—

—

Other business income

3

—

12

19

Other business expenses

(2)

(3)

(7)

(8)

Income from operations

155

205

416

514

Financial income

5

10

18

33

Financial expenses

(17)

(14)

(72)

(57)

Results relating to investments in associates

—

—

—

—

Income before taxes

143

202

362

490

Income tax expense

(6)

(31)

(27)

(83)

137

170

335

407

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

132

167

325

397

Net income (loss) attributable to non-controlling interests

5

3

9

9

Basic

125,577

124,896

126,223

124,967

Diluted129,247

128,554

129,692

128,646

Basic

1.05

1.34

2.58

3.18

Diluted

1.02

1.30

2.51

3.09

Net income
Attribution of net income for the period:

Earnings per ordinary share attributable to shareholders
Weighted average number of ordinary shares outstandingused for calculation (in thousands):

Net income attributable to shareholders per ordinary sharein EUR:

Amounts may not add up due to rounding.

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

January to December

2020

2021

2020

2021

137

170

335

407

Remeasurements

17

20

11

20

Income tax effect on remeasurements

(1)

(4)

(1)

(4)

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

16

16

11

16

(143)

114

(395)

291

—

—

—

—

Net current period change, before tax

20

(6)

42

(22)

Income tax effect

1

—

1

—

Net current period change, before tax

7

(4)

31

(26)

Income tax effect

(2)

1

(7)

6

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

(118)

106

(328)

249

Other comprehensive income (loss)

(102)

121

(318)

265

Total comprehensive income (loss)

35

292

17

671

Shareholders of Signify N.V.

34

284

16

650

Non-controlling interests

1

8

1

22

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

Currency translation differences:
Net current period change, before tax
Income tax effect
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,
2020

December 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

724
2,464
730
12
58
481
67
4,536

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

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

1,410
192
58
24
1,183
851
3
3,720
8,256

EquityShareholders’ equity
Non-controlling interests
Total equity

2,196
124
2,321

2,459
138
2,597

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

1,931
363
215
27
118
182
2,835

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

77
44
16
2,334
140
213
—
2,824
8,256

Amounts may not add up due to rounding.

12

D. Condensed consolidated statement of cash flows
In millions of EUR
Fourth quarter
2020
2021
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

January to
December
2020
2021

137

170

335

407

183

148

606

580

86

77

332

312

—
—
7
6
70
4
9
119
(4)
96
28
(1)
9
(48)
(11)
(6)
(23)
359

—
—
6
31
25
5
4
37
(99)
(79)
209
6
9
(57)
(9)
1
(14)
286

—
(1)
31
27
152
20
46
239
211
44
(50)
35
15
(162)
(35)
(33)
(73)
891

—
(13)
26
83
133
18
21
(2)
1
(458)
479
(24)
26
(187)
(34)
(27)
(59)
704

(27)
(9)
(23)
4

(29)
(12)
(22)
5

(75)
(32)
(67)
25

(91)
(34)
(84)
27

26
(17)
—
(19)

8
(6)
—
(28)

(4)
(1,303)2(1,379)

29
(30)
—
(91)

(17)
7
(34)
—
(44)
297

(2)
283
(654)
—
(372)
(114)

(17)
3,744
(2,932)
(38)
757
269

(354)
633
(1,064)
(92)
(876)
(263)

(23)

35

(80)

80

756

926

840

1,030

1,030

847

1,030

847

1

For Q4 2021 and Q4 2020, included bank overdrafts of EUR 1 million and EUR 6 million, respectively. For January to December of 2021 and 2020, included
bank overdrafts of EUR 3 million and EUR 7 million, respectively.

2

Included bank overdrafts of EUR 4 million and EUR 3 million as at December 31, 2021 and 2020, respectively.

Amounts may not add up due to rounding.

13

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

Consolidation andother changes

Nominal growth

Digital Solutions

11.2

2.3

0.5

14.0

Digital Products

1.6

2.1

—

3.7

(11.4)

1.9

—

(9.5)

4.5

2.2

0.2

6.9

2021 vs 2020

Conventional Products
Total

January to December
Comparable
growthCurrency effects

Consolidation andother changes

Nominal growth

3.4

(2.3)

7.3

8.3

Digital Products

8.8

(1.5)

(0.1)

7.2

Conventional Products

(6.9)

(1.7)

—

(8.7)

Total

3.8

(2.0)

3.6

5.5

2021 vs 2020
Digital Solutions

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

Consolidation andother changes

Nominal growth

Europe

4.5

1.0

(0.5)

5.1

Americas

7.6

2.8

(0.2)

10.2

Rest of the world

(1.7)

2.7

0.1

1.0

Global businesses

10.0

2.8

6.6

19.5

Total

4.5

2.2

0.2

6.9

2021 vs 2020

January to December
Comparable
growthCurrency effects

Consolidation andother changes

Nominal growth

Europe

3.4

—

(0.2)

3.1

Americas

1.4

(4.0)

8.5

5.9

Rest of the world

7.9

(1.5)

0.1

6.6

Global businesses

6.3

(0.6)

4.6

10.3

Total

3.8

(2.0)

3.6

5.5

2021 vs 2020

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

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

265
(11)
(13)
(5)
237
(32)
205

147
(3)
(13)
(2)
130
(29)
100

114
—
—
(2)
112
(2)
110

37
(2)
—
2
37
—
37

(33)
(5)
—
(4)
(42)
—
(43)

Fourth quarter 2020
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

251
(43)
(16)
(6)
185
(30)
155

105
(12)
(16)
(3)
75
(28)
47

128
(3)
—
(2)
122
(2)
121

46
(14)
—
(2)
30
—
30

(28)
(15)
—
1
(42)
—
(43)

Digital Conventional
Products
Products

Other

Other

Amortization and impairments of acquisition related intangible assets and goodwill.

Signify

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

795
(86)
(50)
(22)
636
(122)
514

397
(19)
(49)
(11)
318
(114)
205

339
(4)
(1)
(10)
323
(7)
316

161
(5)
—
2
158
—
158

(102)
(58)
—
(4)
(164)
(1)
(165)

January to December 2020
Adjusted EBITA
Restructuring
Acquisition-related charges
Incidental items
EBITA
Amortization 1
Income from operations (or EBIT)

695
(83)
(63)
(13)
536
(120)
416

330
(30)
(62)
(8)
230
(111)
119

295
(10)
(1)
(6)
277
(8)
269

170
(23)
—
3
149
—
149

(100)
(19)
—
(1)
(120)
(1)
(122)

Amortization and impairments of acquisition related intangible assets and goodwill.

Amounts may not add up due to rounding.

15

Fourth quarter 2021 Income from operations to Adjusted EBITA in millions of EUR
Reported Restructuring

1

Acquisition
relatedcharges

Incidental
items 1

Adjusted

Fourth 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)

2,008(1,215)
793
(510)
(75)
(585)
—
—
(3)
205
(32)

—
2
2
7
1
9
—
—
—
11
—

—
2
2
10
—
10
—
—
—
13
—

—
(3)
(3)
7
—
7
—
—
2
5
—

2,008
(1,214)
794
(485)
(74)
(559)
—
—
(1)
234
(32)

237

11

13

5

265

Fourth 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)

1,878(1,148)
730
(485)
(91)
(577)
—
3
(2)
155
(30)

—
18
18
9
15
25
—
—
—
43
—

—
4
4
13
—
13
—
(1)
—
16
—

—
2
2
5
—
5
—
(1)
—
6
—

1,878
(1,124)
755
(458)
(76)
(534)
—
1
(2)
220
(30)

185

43

16

6

251

Incidental items are non-recurring by nature and relate to separation, transformation, net real estate gains, environmental provision for inactive sites and theeffect of changes in discount rates on long-term provisions.

Amounts may not add up due to rounding.

16

January to December 2021 Income from operations to Adjusted EBITA in millions of EUR

Reported Restructuring

1

Acquisition
relatedcharges

Incidental
items 1

Adjusted

January to December 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)

6,860(4,189)2,671(1,882)(286)(2,168)
—
19
(8)
514
(122)

—
19
19
66
1
67
—
—
—
86
—

—
8
8
43
—
44
—
(2)
—
50
—

—
4
4
25
—
25
—
(11)
4
22
—

6,860
(4,157)
2,702(1,748)(284)(2,032)
—
7
(5)
673
(122)

636

86

50

22

795

January to December 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)

6,502(4,004)
2,499(1,781)(307)(2,088)
—
12
(7)
416
(120)

—
41
41
23
20
42
—
—
—
83
—

—
21
21
44
1
45
—
(2)
—
63
—

—
(4)
(4)
20
—
20
—
(2)
—
13
—

6,502
(3,946)
2,556(1,695)(287)(1,982)
—
8
(7)
575
(120)

536

83

63

13

695

Incidental items are non-recurring by nature and relate to separation, transformation, net real estate gains, environmental provision for inactive sites and theeffect of changes in discount rates on 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 & wellbeing.
Changes in scope
Consolidation effects related to acquisitions (mainly
Cooper Lighting).
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 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.
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
which 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