Q3 2022 results
October 28, 2022

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 energy crisis in Europe, the impacts of COVID-19, supply chain constraints, component shortages, cost inflation, rapid technological change, competition in the general lighting market, development oflighting systems and services, successful implementation of business transformation programs, impact of acquisitions and other transactions, reputational and adverse effects on business due to activities in Environment, Health &Safety, compliance risks, ability to attract and retain talented personnel, adverse currency effects, pension liabilities, and exposure to international tax laws.
Additional risks currently not known to the Group or that the Group has not considered material as of the 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
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 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 measures” in the Annual Report 2021.
Presentation
All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up to totals provided. All reported data are unaudited. Unless otherwise indicated, financial information has been prepared inaccordance with the accounting policies as stated in the Annual Report 2021 and the Semi-Annual Report 2022.
Market Abuse Regulation
This presentation contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

2Content
Business and operational performance - Eric Rondolat
Financial performance and highlights - Javier van Engelen

Outlook & closing remarks - Eric Rondolat
Q&A

3

Need to update
photoThird quarter 2022 highlights%4•

Increasingly volatile environment•Margin improvements vs. Q2 22; pressures from energy costs and currency movements continuedto affect the P&L•

4.3% CSG driven by strong traction in professional segment; compensating lower
consumer demand and the slowdown in China•

Adjusted EBITA margin of 10.4% as an adverse FX impact was partly offset by operating
leverage and strengthened cost discipline•

Net income of EUR 112 million•Free cash flow of EUR 135 million, driven by improved profitability and the stabilizationof working capitalSignify reported Q3 22 sales of EUR 1.9 billion, CSG of 4.3% and anadj. EBITA margin of 10.4%
Sales (in EURm) & comparable sales growth (in %)
CSG

-4.8%

4.3%

4.5%

6.4%

5.1%

1,643

1,912

2,008

1,788

1,836

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

Key observations for Q3 22•

109 million connected light points (Q2 22: 103 million)•LED-based sales were 83% of total sales•

Nominal sales growth of 16.3% to EUR 1,912m•

Comparable sales growth of 4.3%

•Adjusted EBITA margin decline of 70 bps to 10.4%

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

511.1%

10.4%

13.2%

10.5%

9.5%

182199265187174

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

•

Adverse FX impact partly offset by operating
leverage and strengthened cost discipline•

Net income of EUR 112m (Q3 21: EUR 94m)•

Free Cash Flow of EUR 135m (Q3 21: EUR 85m)

Digital Solutions reported a CSG of 12.0% and an adj. EBITA margin of 11.2%
Sales (in EURm) & comparable sales growth (in %)
CSG

-7.3%

12.0%

11.2%

16.9%

11.6%

Key observations for Q3 22•

Comparable sales growth of 12.0%
•848

1,103

1,045981

1,042

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

Strong professional demand in most markets,particularly in the US and Europe

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

610.5%

11.2%

14.1%

9.7%

9.5%

89124

1479598

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

Adjusted EBITA margin increased by 70 bps to 11.2%•

Price increases and operating leverage more thancompensating higher input costs and an adverse
FX impact

Digital Solutions highlights
Upgrading lighting
solutions in every Everlast
gym across the UK

Installing LED horticulture
grow lights in a Korean
tomato greenhouseBecoming premium partner
for UV-C and LED lighting ofWerder Bremen

Lighting up the façade of
the Basilica di Santa Maria
Novella in Florence• Appointed to design andsupply the lighting for all 69
Everlast Gyms across the UK• Interact provides centralized
lighting control for all thegyms• 3D-printed luminaires aredesigned and developed tosuit the needs of eachlocation• Cuts energy consumption by
about 80%

• Installed Philips GreenPowerLED toplighting compact atthe 2.8 ha Parm Farmtomato greenhouse• Accelerates plant growth,
produces higher yields, andenables higher-quality cropproduction• Energy savings of up to 50%• Equipping team areas,
meeting rooms and several
offices of the Bundesliga
football club with Philips UVC air disinfection• Inactivates more than 95%
of bacteria and viruses inone hour
• The cooperation is to beextended to other coreareas of lighting in the longterm• Installed 12 Color Kinetics
ReachElite IntelliHue LED
projectors and Interact
Landmark• Enables further
enhancement of the exteriorof the famous building
thanks to dynamic
architectural lighting7

Digital Products reported a CSG of -2.5% and an adj. EBITA margin of 10.5%
Sales (in EURm) & comparable sales growth (in %)
CSG

2.5%

-2.5%

1.6%

0.2%

2.6%

588609737

601598

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

Key observations for Q3 22•

Comparable sales decline of 2.5%
•Solid demand for LED Electronics•

Softness in the consumer channel and China

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

8

13.0%

10.5%

15.5%

12.8%

10.6%

7664

114

7763

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

Adjusted EBITA margin declined by 250 bps to 10.5%•Adverse FX impact•

Lower fixed cost absorption

Digital Products highlights
Launching new Ultra
Efficient A-Class products

Offering a new way ofautomating WiZ lights

Teaming up with CORSAIR
to give you the ultimate
gaming setup

Introducing the Philips
CorePro LED HighBay• Launched the world’s first
Ultra Efficient A-classdownlight, and outdoor
luminaires with wall andpedestals in Europe• More than 50% of energy
savings compared withstandard LED alternatives• SpaceSense is a new way toautomate your WiZ lights
using Wi-Fi sensingtechnology• It uses Wi-Fi signals that arealready present in the room
to detect motion• No need for dedicatedsensors and batteries• The new feature iscompletely opt-in• To support an immersive
gaming experience, Philips
Hue and CORSAIR haveteamed up• CORSAIR iCUE can be used
to set scenes on Philips Huelights, synchronizing withCORSAIR RGB gaming
peripherals to create theperfect gaming atmosphere

•

9•

•

More than 60% of energy
savings compared withconventional HID
Suitable for a large variety ofapplications, such asindustrial buildings,warehouses and retail stores
Launching in Europe andGreater ChinaConventional Products reported a CSG of -9.5% and an adj. EBITA of 14.2%
Sales (in EURm) & comparable sales growth (in %)CSG-13.2%-9.5%-11.4%-15.1%-13.8%Key observations for Q3 22•

Comparable sales decline of 9.5%
•202

195

219

201

193

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

Price increases partially compensated volumedeclines

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

1018.8%

14.2%

16.9%

16.0%

15.5%

3828

37

32

30

Q3 21

Q3 22

Q4 21

Q1 22

Q2 22

Adjusted EBITA margin decreased by 460 bps to 14.2%•Price increases and indirect cost savings offsettingenergy cost increases•Lower fixed cost absorption•

Temporary headwind from FX hedging

Brighter Lives, Better World 2025 – Q3 2022 results

Brighter Lives

Better World

Doubling our positive impact on the environment and society

2019
Baseline

Q3 2022
Result2025
TargetClimate action

Carbon reduction over value chain
against Paris Agreement

0On track

324 MT

Circular economy

Circular revenues

16%

30%

32%

Food availability
Safety & security
Health & well-being

Brighter lives revenues16%

28%

32%

Great place to work

Women in leadership positions

17%27 %

34%

A list for climate andsupply chain

DJSI World Index and
top 1% in our industry

EcoVadis Platinum
Medal and top 1%On track

Off track

Content
Business and operational performance - Eric Rondolat
Financial performance and highlights - Javier van Engelen

Outlook & closing remarks - Eric Rondolat
Q&A

12

Need to update
photoAdjusted EBITA margin decreased to 10.4%, mainly due to a strong negative
currency effect, while price increases more than offset higher input costs
In EURm / as % of sales-70 bps

11.1%

10.4%-45910-23

182

Q3 21

13199-6-66

VolumeMix

EUR +54mPrice

COGS

Indirect Costs

Currency

Other

Q3 22

Year on year, working capital continues to be impacted by higher inventories
due to longer supplier lead times, and higher receivables
In EURm / as % of sales

10.7%1+600 bps

4.7%

10-96820

Trade & other payables

Other working
capital items

Q3 22196395316

Q3 21

14Inventories

Trade & other receivables

1Includes sales of Fluence and Pierlite on a 12-month pro-forma basis.

Leverage ratio decreased from 1.7x at the end of Q2 22 to 1.5x at the end ofQ3 22, mainly driven by positive free cash flow
In EURm
1,749
1,68571-239

91,411

Net debt
end of Q3 21
Net
1.8x
leverage 1

3132

19

13

Interest & Tax

Other
FCF items

FCF: EUR 135m

Net debt
end of Q2 22
1.7x

EBITDA

Change inworking capital

Net capex

Other includes new lease liabilities, derivatives, and FX effect on cash, cash equivalents and debt.

Change inprovisions

Other 1

Net debt
end of Q3 221.5x

Content
Business and operational performance - Eric Rondolat
Financial performance and highlights - Javier van Engelen

Outlook & closing remarks - Eric Rondolat
Q&A

16

Need to update
photoOutlook17•

Given the uncertain near-term outlook, the continued softness of the consumer segment
and of the Chinese market, we now expect to achieve comparable sales growth between
2% and 3% for the full year 2022•

We are targeting the lower end of the range for both the 11.0-11.4% Adjusted EBITA
margin guidance and the 5-7% free cash flow guidance•Adapting to a structurally weaker environment in the coming quarters•

Focus on measures to control costs and cash flow, in line with our track record

Q&A
Need to updatephoto

Currency movements had a positive impact on sales and a negative impact
on Adjusted EBITA
Q3 22 Sales FX Footprint (% of total)

Key observations

EUR, 25%

OtherCurrencies, 29%

CNY, 7%

USD, 39%
EUR
19USD

CNY

Other Currencies•

Currency movements positively impacted Sales andnegatively impacted Adjusted EBITA•Sales impact of +8.1%, mainly from US dollarappreciation.

•

Adjusted EBITA impact of EUR -23m, and -220 bps on
the Adjusted EBITA margin

Net income increased to EUR 112m, mainly driven by higher EBIT, partly
offset by higher income tax expense
Key observations

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

Q3 21
182

Q3 22
199

- Restructuring-19-6- Acquisition-related charges-10-10-5

10

EBITA

149

193

Amortization-31-32

EBIT

118

161

-4-17-20-32

Results from investments in associates

00Net income

94112

1 - Other incidental items

Net financial income / expenses
2 Income tax expense

20

12Non-recurring by nature and relate to among others:• Separation• Transformation• Environmental provision for inactive sites• The discounting effect of long-term provisions• Non-cash charges related to operations in Russia
and Ukraine
Last year’s income tax expense benefited from a onetime tax benefit from the release of tax liabilities

Free cash flow of EUR 135m, mainly driven by strong income fromoperations and a stabilization of working capitalKey observations

Free cash flow (in EURm)
Q3 21118

Q3 22161Depreciation and amortization

7778

Additions to (releases of) provisions

3225

Utilizations of provisions-58-56

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

-66

-91-2-14-17

Net capex-15-32Other10-13

Free cash flow

85

135

As % of sales

5.2%

7.1%

Income from operations

21

•

•

Free cash flow of EUR 135m•

Strong income from operations•Stabilization of working capital

Restructuring pay-out of EUR 14m (Q3 21: EUR 26m)