Press Release
July 29, 2022

Signify reports second quarter sales of EUR 1.8 billion, comparable sales growth of 5.1% andan operational profitability of 9.5%
Second quarter 20221• Signify's installed base of connected light points increased from 100 million in Q1 22 to 103 million in Q2 22• Sales of EUR 1,836 million; nominal sales increase of 14.1% and CSG of 5.1%
• LED-based sales represented 84% of total sales (Q2 21: 82%)
• Adj. EBITA margin of 9.5% (Q2 21: 10.9%)• Net income of EUR 248 million (Q2 21: EUR 82 million)• Free cash flow of EUR 135 million (Q2 21: EUR 104 million)• Net debt/EBITDA ratio of 1.7x (Q2 21: 1.7x)• Completed the acquisitions of Fluence and Pierlite, divested non-strategic real estate assets
Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced thecompany’s second quarter 2022 results.
“In the second quarter, we continued to deliver top-line growth. This was driven by strong traction of theprofessional segment, which more than compensated headwinds from the lockdowns in China, the effect of thewar in Ukraine on our Eastern European market, and a weaker consumer environment. This top-line increase –achieved despite a challenging comparison base – illustrates our improved profile for growth, fueled by thecontinuing shift towards connected lighting. At the same time, currency movements and inflationary pressures
affected our gross margin and adjusted EBITA, although the impact on the latter was partially compensated bycost management. We maintain our CSG guidance for the full year, given continued momentum in theprofessional segment and our solid order book. The challenging external environment has led us to revise ouroutlook for the adjusted EBITA margin. In addition, persistent supply chain disruption and long supplier leadtimes will impact our free cash flow performance,” said CEO Eric Rondolat.
“We are taking adaptive measures and expect margin headwinds to ease in the second half of the year. Cashflow generation will normalize once supplier lead times shorten. We remain firmly committed to investing in ourbusiness and driving our long-term growth objectives. Our extensive portfolio of sustainable and connected
lighting solutions uniquely positions Signify to capture the heightened demand for energy efficient lighting.”¹ This press release contains certain non-IFRS financial measures and ratios, such as comparable sales growth, EBITA, adjusted EBITA and free cash flow, and related ratios, which are notrecognized measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures, seeappendix B, Reconciliation of non-IFRS financial measures, of this press release.

Brighter Lives, Better World 2025
In the second quarter of the year, Signify was on track for three of its Brighter Lives, Better World 2025
sustainability program commitments that contribute to doubling its positive impact on the environment andsociety.
••••

Double the pace of the Paris Agreement:
Cumulative carbon reduction over the value chain is ahead of track. This is mainly driven by the sales ofenergy-efficient and connected LED lighting, which drive emissions reduction in the use phase.
Double Circular revenues to 32%:
Circular revenues increased to 31%, well on track for the 2025 target of 32%. This positive trend
continues to be driven by the upgrade of luminaires to serviceable luminaires.
Double Brighter lives revenues to 32%:Brighter lives revenues of 26% were off track, yet Signify remains confident that it will achieve the 2025
target of 32%.
Double the percentage of women in leadership positions to 34%:
The percentage of women in leadership positions was 27%, on track. This quarter, Signify continued todrive actions to achieve its 2025 commitment, including inclusive job posting and diverse hiring panels.
In addition, Signify conducted training sessions together with Hult International Business School. These
training sessions equip teams with the right tools to realize the company's diversity ambitions.

OutlookSignify maintains its CSG guidance of 3-6% for the year, driven by continued momentum in the professional
segment and its solid order book.
The company revises its Adjusted EBITA margin guidance for the full year to 11.0-11.4%, reflecting the lower
margin performance in Q2 2022.
Signify also revises its 2022 free cash flow guidance to 5-7% of sales, including the proceeds from real estatedivestments. Signify expects to return to the target of over 8% as soon as supplier lead times ease and no longer
require the company to carry higher inventory.

2

Financial review
2021

Second quarter
2022

1,609
638
39.7%

1,836
674
36.7%

-423
-70
-493
30.6%

-465
-73
-537
29.3%

175
10.9%
-39
136

174
9.5%
166
340

106
-7
-17
82

306
11
-68
248

104
0.65
39,143135
1.97
35,407change
5.1%
6.6%
2.4%
14.1%
5.6%

-9.0%

-0.5%

149.9%
189.0%

202.8%

in millions of EUR, except percentages

2021

Six months
2022

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

3,209
1,275
39.7%

3,624
1,359
37.5%

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

-847
-142
-989
30.8%

-921
-144
-1,065
29.4%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

347
10.8%
-97
251

361
10.0%
125
486

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

191
-16
-32
142

421
5
-91
335

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

272
1.12
39,143-54
2.66
35,407change
5.8%
5.9%
1.3%
13.0%
6.5%

-7.6%

4.0%

93.7%
120.6%

135.9%

Second quarter
Sales increased by 14.1% to EUR 1,836 million, with a comparable sales growth of 5.1%, largely driven bycontinued strong professional demand across most markets except China, which was impacted by lockdowns
during the quarter. Nominal sales included a positive currency effect of 6.6%, mainly from the appreciation of
the USD, and a positive contribution from the recently acquired Fluence and Pierlite businesses.
The Adjusted gross margin decreased from 39.7% to 36.7%. While continued price increases more than offset
the input cost increases, Signify was not able to offset within the quarter the surge of energy costs, nor thenegative impact from currency movements.
Adjusted indirect costs as a percentage of sales decreased by 130 bps to 29.3%, driven by operating leverageand strengthened cost discipline in view of the pressure on gross margin.
Adjusted EBITA decreased slightly to EUR 174 million. The Adjusted EBITA margin decreased by 140 bps to 9.5%,
reflecting the lower gross margin, which was partly offset by operating leverage and indirect cost savings.
Currency movements also had a negative effect of 110 bps on the Adjusted EBITA margin.
Adjusted items of EUR 166 million include a EUR 184 million gain from the disposal of non-strategic real estate,while year-on-year restructuring and acquisition-related costs decreased from EUR 22 million to EUR 12 million.
As a result, net income increased from EUR 82 million to EUR 248 million.
The number of employees (FTE) decreased from 39,143 to 35,407, reflecting the exceptionally high base in theprevious year related to the strong volume recovery and additional staff requirements in factories, following the
COVID-19 pandemic. The number of FTE can be affected by fluctuations in volume and seasonality.
3

Digital Solutions
Second quarter
2021

2022

837
89
10.7%
72
44

1,042
98
9.5%
92
60

Six months
change in millions of EUR, unless otherwise indicated
11.6%

Comparable sales growth

24.4%
10.3%

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

27.0%
35.9%

2021

2022

1,631
161
9.9%
120
65

2,022
193
9.6%
167
107

change
14.1%
24.0%
20.2%
39.1%
65.6%

Includes Pierlite since April 29, 2022 and Fluence since May 2, 2022

Second quarter
Sales increased to EUR 1,042 million with a comparable sales growth of 11.6% (Q2 21: 12.6%), driven bycontinued strong professional demand in most markets. Nominal sales growth of 24.4% included a positive
currency effect of 7.8% and an impact of 5.0% mainly from the consolidation of Fluence and Pierlite. Adjusted
EBITA increased to EUR 98 million, yet as a percentage of sales it declined by 120 bps to 9.5%, as price increases
compensated higher input costs, but with positive sales mix and operating leverage only partly offsetting anegative currency effect.

Digital Products
2021

Second quarter
2022

553
66
12.0%

598
63
10.6%

63

63

61

61

change in millions of EUR, unless otherwise indicated2021

Six months
2022change2.6%

Comparable sales growth

8.0%
-4.5%

Sales
Adjusted EBITA
Adjusted EBITA margin

1,128
148
13.1%

1,198
140
11.7%

1.4%
6.2%
-5.3%

—%

EBITA

138

128

-7.5%

-0.2%

Income from operations (EBIT)

135

124

-7.8%

Second quarter
Sales increased to EUR 598 million with a comparable sales growth of 2.6% (Q2 21: 20.4%), driven by strong
demand for LED Electronics, however consumer connected sales were impacted by lower consumer confidence.
Nominal sales growth of 8.0% included a positive currency effect of 5.5%. Adjusted EBITA decreased to EUR 63
million, representing a decrease of 140 bps to 10.6%, mainly due to a negative currency effect and a negative
mix impact.

Conventional Products
Second quarter
2021
213
40
18.6%
35
35

2022
193
30
15.5%
20
20

Six months
change in millions of EUR, unless otherwise indicated-13.8%

Comparable sales growth-9.3%-24.8%

Sales
Adjusted EBITA
Adjusted EBITA margin
EBITA
Income from operations (EBIT)-42.1%-42.1%

2021

2022

change-14.5%

440
86
19.6%
88
88

394
62
15.7%
43
43

-10.5%-28.3%-50.9%-50.9%

4

Second quarter
Sales declined to EUR 193 million with a comparable sales decline of 13.8%. The nominal sales decline of 9.3%
benefited from a positive currency effect of 4.5%. The Adjusted EBITA margin decreased by 310 bps to 15.5%, assignificant Q2 price increases were not sufficient to compensate the impact of the sudden rise in energy prices
on the division's costs and demand, and the negative currency effect.

Other
Second 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 amounted to EUR -17 million(Q2 21: EUR -20 million). EBITA amounted to EUR 165 million (Q2 21: EUR -34 million). Adjusted items of EUR
183 million include a EUR 184 million gain from the disposal of non-strategic real estate, while year-on-year
restructuring costs decreased from EUR 13 million to EUR 1 million.

Sales by market
Second quarter
2021

2022

Change

477
623
377
133
1,609

502
747
433
154
1,836

5.4%
20.0%
14.6%
16.1%
14.1%

Six months
CSG in millions of EUR, except percentages

2021

2022

change

CSG

4.5%
8.0%
4.5%
-3.6%
5.1%

999
1,211
747
251
3,209

1,059
1,450
826
289
3,624

6.0%
19.7%
10.6%
15.1%
13.0%

5.0%
9.1%
2.9%
1.5%
5.8%

EuropeAmericasRest of the world
Global businesses
Total

Rest of the world includes Pierlite since April 29, 2022. Global businesses include Fluence since May 2, 2022.

Second quarterIn the second quarter, most markets continued to see strong demand in the professional segment. In Europe,comparable sales grew by 4.5%, driven by growth across most markets. Americas' comparable sales growth was
8.0%, with a solid contribution from Cooper Lighting. In the Rest of the world, comparable sales growth was
4.5%, with a solid contribution from India, Southeast Asia and Australia, while sales in China were impacted by
the reinstated lockdowns.

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

Jun 30, 2021 Mar 31, 2022
1,120
1,056
-1,935
29
269
4.0%

1,535
1,128
-2,073
-30
559
7.9%

Jun 30, 2022
1,635
1,191
-2,030
-13
783
10.8%

6,275

Second quarter
Working capital increased from EUR 559 million at the end of March 2022 to EUR 783 million at the end of June
2022. Excluding currency effects and acquisitions, inventories were stable versus the end of Q1, yet remained at
a high level due to the continuing longer supply chain lead times. Changes in receivables, payables and otherworking capital reflect currency movements and seasonality. In total, working capital as a percentage of lasttwelve-month sales increased by 290 bps to 10.8%. When including last twelve-month sales pro forma for
Fluence and Pierlite, working capital increased by 260 bps to 10.5%.
5Cash flow analysis
Second quarter
2021
2022
106
306
81
29
-48
-3
-28
-10
-30
7
104

79
34
-45
-171
-31
-22
163
-178
135

Six months
2021
191

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

158
89
-98
27
-29
-31
-46
10
272

2022
421
155
53
-88
-486
-32
-46
137
-169
-54

The gain related to the disposal of non-strategic real estate assets, included in EBIT, is eliminated in Other. Total cash proceeds from the disposal of these assets
are included in Net capex.

Second quarter
Free cash flow was EUR 135 million as the cash proceeds from the disposal of non-strategic real estate assets
were partly offset by higher working capital. Free cash flow also included a restructuring payout of EUR 14
million (Q2 21: EUR 20 million).

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

Jun 30, 2021 Mar 31, 2022 Jun 30, 2022
427

72

213

1,893
2,320
945
1,375
2,149

1,932
2,004
626
1,378
2,716

1,944
2,157
407
1,749
2,927

Second quarter
Compared with the end of March 2022, the cash position decreased by EUR 219 million to EUR 407 million, withthe cash outflow for the Fluence acquisition, the Pierlite acquisition, and the dividend payment, only partly
offset by the Q2 operating profit and the proceeds from the disposal of non-strategic real estate assets. Gross
debt increased to EUR 2,157 million, mainly due to an increase in short-term debt. As a result, net debt
increased by EUR 371 million to EUR 1,749 million. Total equity increased to EUR 2,927 million (Q1 22: EUR 2,716
million), primarily due to net income and currency translation, offset by dividend distribution.
Compared with the end of June 2021, the cash position decreased by EUR 538 million, while gross debt declined
by EUR 163 million. As a result, net debt increased to EUR 1,749 million. At the end of June 2022, the net debt/
EBITDA ratio was 1.7x, in line with June 2021.

6

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 second quarter 2022 results. A live audio webcast of the conference callwill be available via the Investor Relations website.
Financial calendar 2022
October 28, 2022
January 27, 2023

Third quarter results 2022
Fourth quarter and full-year 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
Leanne Carmody
Tel: +31 6 3928 0201
E-mail: leanne.carmody@signify.com
Abigail Levene
Tel: +31 6 2939 3895
E-mail: abigail.levene@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.

7

Important Information
Forward-Looking Statements and Risks & Uncertainties
This document and the related oral presentation contain, and responses to questions following the presentation
may contain, forward-looking statements that reflect the intentions, beliefs or current expectations andprojections of Signify N.V. (the “Company”, and together with its subsidiaries, the “Group”), including
statements regarding strategy, estimates of sales growth and future operational results.
By their nature, these statements involve risks and uncertainties facing the Company and its Group companies,
and a number of important factors could cause actual results or outcomes to differ materially from thoseexpressed in any forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties andother important factors include but are not limited to: adverse economic and political developments, inparticular the impacts of the Russia-Ukraine conflict, the impacts of COVID-19, supply chain constraints,
component shortages, cost inflation, rapid technological change, competition in the general lighting market,
development of lighting systems and services, successful implementation of business transformation programs,
impact of acquisitions and other transactions, reputational and adverse effects on business due to activities inEnvironment, Health & Safety, compliance risks, ability to attract and retain talented personnel, adverse
currency effects, pension liabilities, and exposure to international tax laws.
Looking ahead to the second half of 2022, the Group's key concerns are about the further impact of the RussiaUkraine conflict, the high level of inflation, the worsening global macro-economic conditions, the continued
supply chain constraints, and the uncertainties related to the resurgence of the COVID-19 pandemic in the global
and domestic markets in which it operates. The main challenge remains the visibility on how these topics willdevelop. Additional risks currently not known to the Group or that the Group has not considered material as ofthe date of this document could also prove to be important and may have a material adverse effect on thebusiness, results of operations, financial condition and prospects of the Group or could cause the forwardlooking events discussed in this document not to occur. The Group undertakes no duty to and will notnecessarily update any of the forward-looking statements in light of new information or future events, except tothe 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 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 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 preparedin accordance with the accounting policies as stated in the Annual Report 2021.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.

8

Unaudited condensed
consolidated interim
financial statements

For the six-month period ended June 30, 2022

9

Index to the unaudited condensed consolidated interim
financial statements
Introduction

11

Management report12

1. Condensed consolidated interim financial statements
1.1 Condensed consolidated statement of income

14

1.2 Condensed consolidated statement of comprehensive income

15

1.3 Condensed consolidated statement of financial position

16

1.4 Condensed consolidated statement of cash flows

17

1.5 Condensed consolidated statement of changes in equity

18

2. Notes to the condensed consolidated interim financial statements
2.1 Reporting entity

19

2.2 Basis of preparation

19

2.3 Notes

21

10

Semi-annual report
Introduction

Responsibility statement

The semi-annual report for the six-month period
ended June 30, 2022 of Signify N.V. (the‘Company’) consists of the semi-annual
condensed consolidated interim financial
statements, the semi-annual management report
and the responsibility statement by theCompany’s Board of Management.

The Board of Management of the Company
hereby declares that, to the best of its
knowledge, the semi-annual condensed
consolidated interim financial statements for thesix-month period ended June 30, 2022, whichhave been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by theEuropean Union, gives a true and fair view of theassets, liabilities, financial position and profit orloss of the Company and the undertakings
included in the consolidation taken as a whole,and the semi-annual management report for thesix-month period ended June 30, 2022, gives afair view of the information required pursuant to
Section 5:25d(8)-(9) of the Dutch Financial
Markets Supervision Act (Wet op het Financieeltoezicht).

The main risks and uncertainties for the second
half of 2022 are addressed in the first part of thepress release - please refer to the section‘Important Information’.
The information in this semi-annual report isunaudited. The semi-annual condensed
consolidated interim financial statements do notinclude all the information and disclosuresrequired in the annual financial statements andshould be read in conjunction with the Company’s
Consolidated financial statements for the year
ended December 31, 2021.

Eindhoven, July 29, 2022
Board of Management
Eric Rondolat
Javier van Engelen
Maria Letizia Mariani

11

Management report
1

Business performanceMarket environment

In the first half of 2022, the market environment
was affected by a multitude of factors.
Following the outbreak of war in Ukraine in thefirst quarter, Signify’s main priority was tosafeguard and support its Ukrainian employees
and their families to the best extent possible.
Signify stopped all investments in Russia and all
new business was paused. As a result of the war,
Signify incurred impairments for part of its
Ukrainian and Russian operations.
Throughout the first half of the year, inflation
continued to have a strong impact on the overall
economy. To compensate the effect of higher
input, logistics and energy costs, Signify
increased its prices across most markets andsegments.
The surge in inflation also affected consumer
demand for Signify's connected home products.
By contrast, professional sales benefited fromstrong demand for energy efficient lighting
solutions.
Signify's sales in China were also affected by
COVID-19 related lockdowns.

Financial performance
Sales increased to 3,624 million, a nominal sales
growth of 13.0%. Adjusted for a 5.9% currency
effect and a 1.3% impact from consolidation andother changes (mainly related to the acquisitionsof Fluence and Pierlite), comparable sales grew
by 5.8%, driven by strong professional demand.
The gross margin decreased by 270 basis points
to 36.6%. The adjusted gross margin of 37.5%
was 220 basis points below last year's level,affected by cost inflation and an adverse
currency effect, partly compensated by priceincreases, higher volumes, and positive sales mix.
Indirect costs as a percentage of sales decreased
by 350 basis points to 30.2%, driven by operating
leverage. Adjusted indirect costs as a percentage
of sales decreased by 140 basis points to 29.4%.
EBITA was EUR 486 million, an increase of 93.7%
over last year. Restructuring costs were EUR 11
million, acquisition-related charges were EUR 12
million, and incidental items were EUR 148 million.
The incidental items included a gain from thedisposal of non-strategic real estate andimpairments to Signify's operations in Russia andUkraine. Correcting for these adjusted items, theAdjusted EBITA was EUR 361 million, or 10.0% ofsales. The Adjusted EBITA margin decline of 80
basis points versus last year was mostly related toa negative currency effect, while cost inflation
was more than offset by price increases.
Income from operations more than doubled to
EUR 421 million, mainly due to a gain from thedisposal of non-strategic real estate, only partly
offset by impairments related to Signify's
operations in Russia and Ukraine. As a result, net
income was EUR 335 million compared with EUR
142 million last year.
Net cash from operating activities was EUR -191
million. This was mainly impacted by a cash outflow
from payables, as payments related to last year's
inventory buildup were settled, and by anincrease of inventories, which was the result of
longer supplier lead times.

Digital Solutions
Sales grew by 24.0% to EUR 2,022 million. Nominal
sales growth included a positive currency effectand a positive impact from the consolidation of
Fluence and Pierlite. Comparable sales grew by
14.1%, mainly driven by strong traction in theprofessional market.
Income from operations increased by EUR 42
million to EUR 107 million. EBITA of EUR 167 million
included EUR 25 million of restructuring costs,
acquisition-related charges, and other incidental
costs. Adjusted EBITA increased to 193 million.
The decrease of the Adjusted EBITA margin by 30
basis points to 9.6% was mainly due to input cost
inflation, higher logistics costs and a negative
currency effect, which were partly offset by priceincreases, higher sales volumes and positive sales
mix.

Digital Products
Sales were EUR 1,198 million, representing anominal sales growth of 6.2%. Adjusting for apositive currency effect, comparable sales
growth was 1.4%, driven by strong demand for
LED Electronics, partly offset by lower connected
home sales.
Income from operations decreased by EUR 11
million to EUR 124 million. EBITA of EUR 128 million
included EUR 12 million of incidental costs.
Correcting for these adjusted items, Adjusted
EBITA was EUR 140 million. The Adjusted EBITA
margin decreased by 140 basis points to 11.7%,
due to a negative currency effect, input cost
inflation and negative sales mix, partly
compensated by price increases and indirect costsavings.

1

This section contains certain non-IFRS financial measures and ratios, such as comparable sales growth, EBITA, Adjusted EBITA, free cash flow, and related ratios,
which are not recognized measures of financial performance or liquidity under IFRS. For a reconciliation of these non-IFRS financial measures to the most directlycomparable IFRS measures, see “Reconciliation of non-IFRS financial measures”.

12Conventional Products
Sales decreased by 10.5% to EUR 394 million.
Correcting for a positive currency effect of 4.0%,
comparable sales decreased by 14.5%.
Income from operations and EBITA bothdecreased by EUR 45 million to EUR 43 million.
Excluding restructuring costs of EUR 6 million andincidental costs of EUR 13 million, Adjusted EBITA
was 62 million. The Adjusted EBITA margindecreased by 390 basis points to 15.7%, mainly asa result of the sudden energy price increases anda negative currency effect.

Other'Other' represents amounts not allocated to theoperating segments and includes costs related
both to central R&D activities to drive innovation,and to group enabling functions. Reported EBITA
was EUR 147 million, and included a gain from thedisposal of non-strategic real estate and anegative impact from restructuring costs.
Adjusted EBITA was EUR -34 million, comparedwith EUR -48 million in the same period last year.

OutlookSignify maintains its CSG guidance of 3-6% for theyear, driven by continued momentum in theprofessional segment and its solid order book.
The company revises its Adjusted EBITA margin
guidance for the full year to 11.0-11.4%, reflecting
the lower margin performance in Q2 2022.
Signify also revises its 2022 free cash flow
guidance to 5-7% of sales, including the proceedsfrom real estate divestments. Signify expects toreturn to the target of over 8% as soon as
supplier lead times ease and no longer require thecompany to carry higher inventory.

13

1

Condensed consolidated
financial statements

1.1

Condensed consolidated statement of income

In millions of EUR unless otherwise stated
Note

Second quarter

January to June

2021

2022

2021

2022

1,609

1,836

3,209

3,624

Cost of sales(979)(1,173)(1,949)(2,296)Gross margin

631

664

1,260

1,328

Selling, general and administrative expenses

(455)

(472)

(938)

(949)

(71)

(73)

(143)

(144)
189

Sales

1, 2

Research and development expenses
Other business income

4

3

188

16

Other business expenses

4

(2)

(1)

(4)

(3)

106

306

191

421

Income from operations
Financial income

9

Financial expenses

8

29

13

39

(14)

(18)

(29)

(34)

Results relating to investments in associates

—

—

(1)

(1)

Income before taxes

99

316

174

426

Income tax expense

(17)

(68)

(32)

(91)

82

248

142

335

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

81

246

140

332

Net income (loss) attributable to non-controlling interests

1

2

2

3

Basic

124,668

124,822

124,945

125,001

Diluted128,200

127,082

128,814

127,778

Net income

5

Attribution of net income for the period:

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

Net income attributable to shareholders per ordinary share in EUR:
Basic

0.65

1.97

1.12

2.66

Diluted

0.63

1.93

1.08

2.60

The accompanying notes are an integral part of these condensed consolidated financial statements.

14

1.2

Condensed consolidated statement of comprehensive income

In millions of EUR
Second quarter

January to June

2021

2022

2021

2022

82

248

142

335

Remeasurements

—

—

—

(5)

Income tax effect on remeasurements

—

—

—

—

—

—

—

(5)

(34)

178

113

249

—

—

—

—

Net current period change, before tax

8

(7)

(11)

(10)

Income tax effect

—

—

—

—

Net current period change, before tax

6

(25)

(12)

(31)

Income tax effect

(2)

6

3

8

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

(21)

152

92

217

Other comprehensive income (loss)

(21)

153

92

211

Total comprehensive income (loss)

61

400

234

546

Shareholders of Signify N.V.

61

393

227

535

Non-controlling interests

—

7

7

11

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

Total of items that will not be reclassified to profit or loss
Currency translation differences:
Net current period change, before tax
Income tax effect
Net investment hedge

Cash flow hedges:

Total comprehensive income (loss) attributable to:

The accompanying notes are an integral part of these condensed consolidated financial statements.

15

1.3

Condensed consolidated statement of financial position

In millions of EUR
Note

December 31, 2021

June 30, 2022

Non-current assets
Property, plant and equipment

1

724

719

Goodwill

1

2,464

2,834

Intangible assets, other than goodwill

1

730

812

Investments in associates

12

12

58

96

Deferred tax assets

481

437

Other assets

67

52

4,536

4,963

Inventories

1,410

1,635

Other assets

192

243

Financial assets

9

Total non-current assets
Current assets

Derivative financial assets

9

Income tax receivable
Trade and other receivables
Cash and cash equivalents

9

Assets classified as held for sale

58

42

24

45

1,183

1,191

851

407

3

—

Total current assets

3,720

3,563

Total assets

8,256

8,526

2,459

2,779

EquityShareholders’ equity

6

Non-controlling interests
Total equity

138

148

2,597

2,927

1,931

1,944

Non-current liabilities
Debt

7

Post-employment benefits
Provisions

8

363

375

215

205

Deferred tax liabilities

27

30

Income tax payable

118

121

Other liabilities
Total non-current liabilities

182

200

2,835

2,875

213

Current liabilities
Debt, including bank overdrafts

7

77

Derivative financial liabilities

9

44

77

16

36

2,334

2,030

Income tax payable
Trade and other payables
Provisions
Other liabilities

8

140

148

213

221

Total current liabilities

2,824

2,724

Total liabilities and total equity

8,256

8,526

The accompanying notes are an integral part of these condensed consolidated financial statements.

16

1.4

Condensed consolidated statement of cash flows

In millions of EUR
Note

Second quarter

January to June

2021

2022

2021

2022
335

Cash flows from operating activities
Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided byoperating activities:

82

248

142

139

(14)

295

115

• Depreciation, amortization and impairment of non-financial assets

81

79

158

155

—

(188)

(11)

(189)

7

12

14

18

• Net gain on sale of assets

4• Net interest expense on debt, borrowings and other liabilities• Income tax expense

5

17

68

32

91

• Additions to (releases of) provisions

8

45

24

29

80

• Additions to (releases of) post-employment benefits

5

4

9

9

• Other items

5

(19)

13

(14)

Decrease (increase) in working capital:

(3)

(171)

27

(486)

• Decrease (increase) in trade and other receivables

13

(8)

96

57

(176)

(3)

(211)

(110)

• Increase (decrease) in trade and other payables

187

(125)

179

(409)

• Increase (decrease) in other current assets and liabilities

(26)

(35)

(37)

(25)

Increase (decrease) in other non-current assets and liabilities

2

7

11

11

(41)

(39)

(82)

(73)

• Decrease (increase) in inventories

Utilizations of provisions

8

Utilizations of post-employment benefits

(7)

(6)

(15)

(15)

Net interest and financing costs received (paid)

(28)

(31)

(29)

(32)

Income taxes paid

(10)

(22)

(31)

(46)

Net cash provided by (used for) operating activities

134

(28)

318

(191)

Net capital expenditures:

(30)

163

(46)

137

• Additions of intangible assets

(8)

(13)

(16)

(26)

• Capital expenditures on property, plant and equipment

(23)

(18)

(44)

(31)

• Proceeds from disposal of property, plant and equipment

1

194

14

195

23

(19)

18

(5)

—

(297)

—

(297)

(7)

(153)

(28)

(166)

Cash flows from investing activities

Net proceeds from (cash used for) derivatives and other financial assets
Purchases of businesses, net of cash acquired3

Net cash provided by (used for) investing activities
Cash flows from financing activities
Dividend paid

6

(292)

(183)

(294)

(183)

Proceeds from issuance of debt

7

—

137

350

140

Repayment of debt

7

(19)

(19)

(391)

(41)

Purchase of treasury shares

6

(48)

—

(72)

(36)

Net cash provided by (used for) financing activities

(360)

(64)

(407)

(119)

Net cash flows
Effect of changes in exchange rates on cash and cash equivalents andbank overdrafts
Cash and cash equivalents and bank overdrafts at the beginning of the1
period

(233)

(246)

(117)

(475)

(16)

24

30

31

1,191

625

1,030

847

943

403

943

403

12

8

34

21

Cash and cash equivalents and bank overdrafts at the end of the period2Non-cash investing and financing activities:
Acquisition of fixed asset by means of leases
1
2

For Q2 2022 and Q2 2021, included bank overdrafts of EUR 0 million and EUR 1 million, respectively. For the first half of 2022 and 2021, included bank overdrafts of EUR 4 million and
EUR 3 million, respectively.
Included bank overdrafts of EUR 4 million and EUR 2 million as at June 30, 2022 and 2021, respectively.

The accompanying notes are an integral part of these condensed consolidated financial statements.

17

1.5

Condensed consolidated statements of changes in equity

In millions of EUR
Currency
Retained translation
earnings differences

SharecapitalSharepremium

Balance as at January 1,
2021

1

2,201

387

Net Income

—

—

140

Other comprehensive
income (loss)——

Total comprehensive
income (loss)—

Dividend distributed—

Purchase of treasury
shares
Delivery of treasury
sharesShare-based
compensation plans
Balance as at June 30,
2021

Total
shareNonholders' controlling
equity interests

Cash flow
hedgesTreasuryshares

(337)

17

(74)

2,196

124

2,321

—

—

—

140

2

142

—

97

(10)

—

88

5

92

—

140

97

(10)

—

227

7

234

—

(343)

—

—

—

(343)

—

(343)

—

—

7

—

—

(83)

(77)

—

(77)

—

(57)

26

—

—

30

—

—

—

—

15

—

—

—

—

15

—

15

217

(239)

8

(127)

2,018

131

2,149

Equity12,159

Balance as at January 1,
2022

1

2,174

491

(80)

(2)

(126)

2,459

138

2,597

Net Income

—

—

332

—

—

—

332

3

335

Other comprehensive
income (loss)

—

—

(5)

232

(23)

—

203

8

211

Total comprehensive
income (loss)

—

—

327

232

(23)

—

535

11

546

Dividend distributed

—

—

(182)

—

—

—

(182)

(1)

(183)

Purchase of treasury
shares

—

—

—

—

—

(48)

(48)

—

(48)

Delivery of treasury
shares

—

(58)

16

—

—

42

—

—

—

Share-based
compensation plans

—

15

—

—

—

—

15

—

15

Balance as at June 30,
2022

1

2,131

652

152

(25)

(132)

2,779

148

2,927

The accompanying notes are an integral part of these condensed consolidated financial statements.

18

2 Notes to the consolidated
interim financial statements
All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up to
totals provided.

2.1

Reporting entity

Signify N.V. is a public company with limited liability
incorporated under the laws of the Netherlands
and listed on Euronext Amsterdam under thesymbol ‘LIGHT’.
As used herein, the term Signify is used for Signify
N.V. (the 'Company’) and its subsidiaries within themeaning of Section 2:24b of the Dutch Civil Code.
The corporate seat of the Company is in
Eindhoven, the Netherlands, and its registeredoffice is at High Tech Campus 48, 5656 AE
Eindhoven. The Company is registered in theCommercial Register of the Chamber ofCommerce under number 65220692.

2.2

Basis of preparation

The condensed consolidated interim financial
statements have been prepared in accordancewith IAS 34 ‘Interim Financial Reporting’ as
adopted by the European Union. Several
amendments apply to the accounting standards
for the first time in 2022, but do not have amaterial impact on the condensed consolidated
interim financial statements of Signify.
The income tax expense is recognized based on
management’s estimate of the weighted average
effective annual income tax rate expected for thefull year.
The accounting policies applied in the condensed
consolidated interim financial statements are
consistent with those applied in the Consolidated
financial statements for the year ended
December 31, 2021.

Russia-Ukraine conflict
As a result of the war in Ukraine, several countries
have imposed sanctions against Russia andcertain Russian individuals.
Our main priority has been to safeguard andsupport our Ukrainian employees and theirfamilies to the best extent possible. Investments
in Russia were stopped and all new business has
been paused since February 25, 2022. During thesix-month period ended June 30, 2022, wereported EUR 23 million of charges in ourcondensed consolidated statement of income

resulting from the war in Ukraine. The mostsignificant items are further described as follows:

Inventories

Signify has reviewed the impact from the war in
Ukraine, such as its ability to control and sellinventories in the region. The analysis has
resulted in a write down of inventories of EUR 10
million during the six-month period ended June30, 2022.

Trade receivables

Signify has reviewed the collectability of its tradeaccounts receivables. During the six-month
period ended June 30, 2022, Signify recorded
EUR 9 million of impairment of trade receivables,
mainly attributed to increased risk of
uncollectible receivables.

Impact of supply chain disruptions
In response to the global supply chain disruptions,
Signify has been implementing several mitigating
actions. As a result of these actions, availability ofcomponents has improved. However, logistics
were still affected by longer supplier lead times,
which in turn impacted our inventory levels.

Climate-related matters
Signify continuously monitors risks andopportunities related to climate change. During
the six-month period ended June 30, 2022, there
was no significant change compared to ourassessment as disclosed in the Consolidated
financial statements for the year ended
December 31, 2021.

Assumptions for post-employment
benefits
For the provision for post-employment benefits,
Signify reviewed the changes in market conditions
during the six-month period ended June 30,
2022. The impact was not material and therefore
no remeasurement was recognized.

19

Critical accounting judgments and key
sources of estimation uncertainty
The preparation of the condensed consolidated
interim financial statements requires management
to make judgments, estimates and assumptions
that affect the application of accounting policies
and the reported amounts of assets, liabilities,
income and expenses. Actual results may differ
from the estimates.
Except as disclosed in previous paragraphs, theareas where the most significant judgments andestimates are made, were the same as those
disclosed in the Consolidated financial statements
for the year ended December 31, 2021.

20

2.3

Notes

1

Information by segment and main country

The following is an overview of Signify's sales and results by segment:
Second quarter
ConvenDigitaltional
Products Products

Digital5
SolutionsJanuary to June

Other

4

Intersegment
elimination

Signify

Digital5
Solutions

DigitalProducts

Conventional
Products

1,836

2,022

1,198

394

10

1,836

2,025

1,311

396

10

Other

4

Intersegment
elimination

Signify

2022
Sales to externalcustomers
Sales includingintersegment
Depreciation and1amortization
EBITA

2

EBITA as a % of sales
Amortization

1,042

598

193

4

1,044

656

194

4

(19)

(7)

(4)

(14)

(45)

(38)

(15)

(9)

(28)

(91)

92

63

20

165

340

167

128

43

147

486

8.8%

10.5%

10.5%

18.5%

8.3%

10.7%

11.0%

(61)

3

3,624

(118)

13.4%

(34)

Income fromoperations

60

61

20

165

(64)

306

Financial income andexpenses

3,624

107

124

43

147

421

11

Results frominvestments inassociates
Income before taxes

5

—

(1)

316

426

2021
Sales to externalcustomers
Sales includingintersegment

837

553

213

6

838

605

215

6

Depreciation and1amortization

(20)

(7)

(4)

72

63

35

8.6%

11.3%

16.4%

EBITA

2

EBITA as a % of sales
Amortization

1,609

1,631

1,128

440

10

1,609

1,632

1,231

444

11

(20)

(51)

(41)

(14)

(8)

(35)

(34)

136

120

138

88

(96)

8.4%

7.4%

12.3%

20.0%

(55)

3

44

61

35

(34)

3
4
5

(98)
251
7.8%

65

135

88

(97)

191

(7)

(16)

Results frominvestments inassociates—(1)

Income before taxes

99

174

Excluding amortization and impairments of acquisition-related intangible assets and goodwill
Income from operations excluding amortization and impairments of acquisition-related intangible assets and goodwill ('EBITA')
Amortization and impairments of acquisition-related intangible assets and goodwill
Considering the nature of Other, EBITA as a % of sales for Other is not meaningful
Includes Fluence since May 2, 2022 and Pierlite since April 29, 2022

Sales between the segments mainly relate to the
supply of goods. The pricing of such transactions
is determined on an ‘arm’s length basis’. Sales andtangible and intangible assets are reported basedon the country of origin as follows:
Tangible and intangible1
assetsSales
January toJune 2021

1

3,209

(60)

106

Financial income andexpenses

2

(110)

(30)

Income fromoperations

1

3,209

January toJune 2022

December31, 2021

June 30,
2022

Netherlands

249

273

555

608

United States

1,010

1,231

2,311

2,680

China

256

256

329

325

Germany

184

205

12

12

Other countries

1,510

1,659

710

740

Total countries

3,209

3,624

3,917

4,365

Includes goodwill

2

Disaggregated revenue
information

Information on sales per segment is disclosed innote 1, Information by segment and main country.
For the six-month period ended June 30, 2022,
sales consisted primarily (97%) of sales of goods
to customers (January to June 2021: 96%).
Sales by market are reported as follows:
Second quarter

January to June

2021

2022

2021

2022

Europe

477

502

999

1,059

Americas

623

747

1,211

1,450

Rest of the world

377

433

747

826

Global businesses

133

154

251

289

1,609

1,836

3,209

3,624

Total

Rest of the world includes Pierlite since April 29, 2022. Global businesses include
Fluence since May 2, 2022.

21

3

Acquisitions

Signify completed two acquisitions in the sixmonth period ended June 30, 2022.

Acquisition of Fluence
On May 2, 2022, Signify completed the acquisitionof 100% interest in Fluence Bioengineering, Inc(Fluence) and the purchase of certain related
assets for a total consideration of EUR 257 million.
The initial consideration was paid in cash andclosing settlement procedures are expected tobe finalized during 2022. The transaction pricedoes not include any contingent and/or deferredconsiderations. The overall cash position of
Fluence on the transaction date was EUR 3
million.
Fluence is based in Austin, TX, United States andis a provider of agricultural lighting. The
acquisition adds Fluence’s complementary
technology and market segments to Signify’s
existing horticultural lighting operations andprovides Signify with access to Fluence’s strong
multi-channel go-to-market approach in theattractive North American horticultural lighting
market. As of May 2, 2022, Fluence was fully
consolidated as part of Digital Solutions.

The fair value of assets and liabilities at theacquisition date is provisional due to the timing of
the acquisition in relation to Signify's interim
reporting. Receivables and other current assets
are assumed to be valued against their fair value.
Goodwill recognized for the amount of EUR 181
million is primarily related to the synergies
expected to be achieved from integrating Fluence
within Digital Solutions. The goodwill recognized is
expected to be deductible for tax purposes.
From the acquisition date, the contribution of
Fluence to the sales and net income of theCompany was not material. If the acquisition hadtaken place on January 1, 2022, sales and net
income for the Company are considered notmaterial for the condensed consolidated financial
statements.

Acquisition of Pierlite
On April 29, 2022, Signify completed theacquisition of Pierlite, strengthening its position in
the Australian and New Zealand lighting markets.

Acquisition-related costs that were recognized in
General and administrative expenses amounted to
EUR 3 million.
The condensed balance sheet of Fluence at theacquisition date was as follows:

The acquisition involved a total consideration of
EUR 44 million, resulting in EUR 23 million goodwill
and EUR 17 million intangible assets. Pierlite isconsolidated within Digital Solutions. The
acquisition is considered not material to thecondensed consolidated financial statements.
The fair value of assets and liabilities at theacquisition date is provisional and closing
settlement procedures are expected to be
finalized during 2022.

4

At acquisition date
Goodwill

181

Other intangible assets

81

Other business income andexpenses

Property, plant and equipment

3

Other business income and expenses consist of
the following:

Trade and other receivables

10

January to June

Inventories

40

Other assets

3

Result on disposal of fixed assets:

Cash

2021

2022

3

• Income

11

189

Trade and other payables(19)• Expense——

Other liabilities(34)

Result on other remaining businesses:

Net deferred tax assets(11)• Income

5—

Net assets acquired257• Expense

(4)

(2)

The other intangible assets were reported asfollows:
At acquisition date

Amortization
periodBrand names

31

15 years

Customer
relationships

47

10-15 years

Order backlog

3

3-6 months

Total otherintangible assets

81

Other business income and expenses

12

187

Total other business income

16

189

Total other business expense

(4)

(3)

For the six-month period ended June 30, 2022,
the result on disposal of fixed assets includes a
EUR 184 million income related to a sale of realestate in 'Other', in France, which was recognized
as Assets classified as held for sale as ofDecember 31, 2021.
For the six-month period ended June 30, 2021,
the result on disposal of fixed assets includes a
EUR 10 million income related to a sale of realestate in Conventional Products, in India.

22

7
5

Income taxes

The income tax expense in the six-month period
ended June 30, 2022 increased by EUR 59 million
compared to the corresponding period of theprevious year.

December 31,
2021

June 30,
2022

Facility (EUR)

280

280

Facility (USD)

199

214

Eurobonds

1,265

1,266

Lease liabilities

249

246

Other debt

The effective tax rate for the six-month period
ended June 30, 2022, was 21.4% compared to18.5% in 2021.

6

Debt

Subtotal
Bank overdrafts

EquityDividend distribution
In May 2022, the Company settled a dividend of
EUR 1.45 per ordinary share, representing a total
value of EUR 182 million including costs.

Share repurchases

11

146

2,003

2,152

4

4

Gross debt

2,007

2,157

Cash and cash equivalents

(851)

(407)

Net debt (cash)

1,156

1,749

Total equity

2,597

2,927

Net debt and total equity

3,753

4,676

Net debt divided by net debt
and total equity (in %)

31%

37%

Total equity divided by net
debt and total equity (in %)

69%

63%

As of June 30, 2022, there was an increase of
EUR 135 million in short-term borrowings includedin Other debt. Signify's long-term facilities
remained unchanged.

During the six-month period ended June 30,
2022, the Company purchased shares to coverobligations arising from its long-term incentive
performance share plans and other employee
share plans. The total number of shares
repurchased was 1,174,595 for a total
consideration of EUR 48 million.

Treasury shares
As at June 30, 2022, the total number of treasury
shares amounted to 3,122,359, which werepurchased at an average price of EUR 42.20 per
share.

8

Provisions

Utilizations of restructuring provisions during thesix-month period ended June 30, 2022 weremainly related to the restructuring of the central
organization and programs in Digital Solutions.
Translation differences and other movements
primarily relates to a reclassification of refund
liabilities from Other provisions to Trade andother payables.
Provisions are summarized as follows:
Restructuringprovisions

Environmental
provisions

Product
warranty

Other
provisions

Total

62

97

66

129

355

Additions

7

13

21

16

57

Utilizations

(27)

(12)

(22)

(10)

(71)

Acquisitions

—

—

28

2

30

Releases

(5)

—

—

(4)

(9)

Translation differences and other movements

1

1

3

(14)

(9)

Balance as at June 30, 2022

38

100

96

119

353

Short-term

28

25

62

34

148

Long-term

11

75

34

85

205

Balance as at January 1, 2022

23

9Financial assets and liabilities

Fair value hierarchy
The valuation techniques and inputs used todevelop measurements for financial assets andliabilities are consistent with those disclosed in
the Consolidated financial statements for theyear ended December 31, 2021.

Financial risk management
The Company assessed global macroeconomic
developments and concluded that no materialchanges to the existing financial risk management
objectives and policies were necessary. The
Company’s financial risk management objectives
and policies are consistent with those disclosed in
the Consolidated financial statements for theyear ended December 31, 2021.

Carried at

Gross amountrecognizedon thebalancesheet

Amounts notoffset on thebalance sheet,but subject tomaster netting
arrangements

Net amount

Fair value
hierarchy Estimated fair
level
value

Balance as at June 30, 2022
1

Non-current financial assets

amortized cost

43

—

43

Unquoted equity sharesfair value (FVOCI)

3

—

3

1

43
3

Trade and other receivables

amortized cost

1,191

—

1,191

Derivative financial assets
designated as hedging instruments

fair value (FVTPL)

43

(32)

10

2

Derivative financial assets notdesignated as hedging instruments

fair value (FVTPL)

3

Cash and cash equivalents
Debt (Eurobonds)

50

—

50

407

—

407

3
1,191
43
56
407

amortized cost

(1,266)—(1,266)

1(1,232)

Debt (excluding Eurobonds)

amortized cost

(891)

—

(891)

2

(891)

Derivative financial liabilities
designated as hedging instruments

fair value (FVTPL)

2

1

(78)

32

(46)

(2,028)—(2,028)fair value (FVTPL)

(2)

—

(2)

amortized cost

37

—

37

fair value (FVOCI)

3

—

3

amortized cost

1,183

—

1,183

Derivative financial assets
designated as hedging instruments

fair value (FVTPL)

59

(30)

28

2

Derivative financial assets notdesignated as hedging instruments

fair value (FVTPL)

3

1

Trade and other payables

amortized cost

Contingent considerations(78)(2,028)3(2)

Balance as at December 31, 2021
Non-current financial assets

1

Unquoted equity shares
Trade and other receivables

1

Cash and cash equivalents
Debt (Eurobonds)

—

18

—

851

3
1,183
59
25
851

amortized cost

(1,265)—(1,265)1(1,355)

Debt (excluding Eurobonds)

amortized cost

(743)

—

(743)

2

(743)

Derivative financial liabilities
designated as hedging instruments

fair value (FVTPL)

2

1

1

1

18
851

37
3

Trade and other payables

amortized cost

Contingent considerations

fair value (FVTPL)

(45)

30

(14)

(2,332)—(2,332)

(2)

—

(2)

(45)
(2,332)

3(2)

In view of the nature, maturity or the magnitude of the amounts, Signify considers that the fair value of non-current financial assets, trade and other receivables, debt (excluding
Eurobonds), trade and other payables are not materially different from their carrying value.

During the six-month period ended June 30,
2022, Signify recognized a gain of EUR 33 million in
Financial income related to our participation in
Virtual Power Purchase Agreements, which areincluded in Derivative financial assets notdesignated as hedging instruments. This non-cash
gain results from a fair value remeasurement ascalculated per balance sheet date.

10

Events after the balance sheet
date

No subsequent events occurred that are material
to Signify.

24

Appendix B - Reconciliation of non-IFRS financial measures
Sales growth composition per business in %Comparable
growthSecond quarter
Consolidation andCurrency effects
other changes

Nominal growth2022 vs 2021
Digital Solutions

11.6

7.8

5.0

Digital Products

2.6

5.5

0.0

8.0

(13.8)

4.5

0.0

(9.3)

5.1

6.6

2.4

14.1

January to June
Consolidation andCurrency effects
other changes

Nominal growth

Conventional Products
Total

Comparable
growth24.42022 vs 2021
Digital Solutions

14.1

7.0

2.8

Digital Products

1.4

4.9

0.0

6.2

(14.5)

4.0

0.0(10.5)

5.8

5.9

1.3

13.0

Second quarter
Consolidation andCurrency effects
other changes

Nominal growth

Conventional Products
Total

24.0

Sales growth composition per market in %Comparable
growth2022 vs 2021
Europe

4.5

0.5

0.4

5.4

Americas

8.0

12.0

0.0

20.0

Rest of the world

4.5

5.6

4.5

14.6

Global businesses

(3.6)

5.8

13.9

16.1

5.1

6.6

2.4

14.1

January to June
Consolidation andCurrency effects
other changes

Nominal growth

Total

Comparable
growth2022 vs 2021
Europe

5.0

0.5

0.4

6.0

Americas

9.1

10.7

0.0

19.7

Rest of the world

2.9

5.5

2.3

10.6

Global businesses

1.5

5.4

8.2

15.1

Total

5.8

5.9

1.3

13.0

Amounts may not add up due to rounding.

25

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

DigitalSolutions

DigitalProducts

Conventional
Products

Other

Adjusted EBITA

174

98

63

30

(17)

Restructuring

(7)

(2)

—

(4)

(1)

Acquisition-related charges

(5)

(5)

—

—

—

Second quarter 2022

Incidental items

177

—

—

(6)

184

EBITA

340

92

63

20

165

Amortization

1

(34)

(32)

(2)

—

—

306

60

61

20

165

Adjusted EBITA

175

89

66

40

(20)

Restructuring

(9)

—

—

4

(13)

Acquisition-related charges

(13)

(13)

—

—

—

Incidental items

(16)

(4)

(4)

(8)

—

EBITA

136

72

63

35

(34)

Income from operations (or EBIT)
Second quarter 2021

Amortization

1

(30)

(28)

(2)

—

—

106

44

61

35

(34)

Signify

DigitalSolutions

DigitalProducts

Conventional
Products

Other

Adjusted EBITA

361

193

140

62

(34)

Restructuring

(11)

(3)

—

(6)

(2)

Acquisition-related charges

(12)

(12)

—

—

—

Incidental items

148

(10)

(12)

(13)

183

EBITA

486

167

128

43

147

(64)

(60)

(4)

—

—

421

107

124

43

147

Adjusted EBITA

347

161

148

86

(48)

Restructuring

(56)

(7)

(3)

1

(47)

Acquisition-related charges

(28)

(27)

—

—

—

Incidental items

(12)

(6)

(6)

—

(1)

EBITA

251

120

138

88

(96)

(60)

(56)

(3)

—

(1)

191

65

135

88

(97)

Income from operations (or EBIT)
1

Amortization and impairments of acquisition-related intangible assets and goodwill.

January to June 2022

Amortization

1

Income from operations (or EBIT)
January to June 2021

Amortization

1

Income from operations (or EBIT)
1

Amortization and impairments of acquisition-related intangible assets and goodwill.

Amounts may not add up due to rounding.

26

Second quarter 2022 Income from operations to Adjusted EBITA in millions of EUR

Reported

Restructuring

Acquisitionrelated
charges

Sales

1,836

—

—

—

1,836

Cost of sales(1,173)5

2

4(1,162)Gross margin

664

5

2

4

674

Selling, general and administrative expenses

(472)

2

3

3

(465)

Research and development expenses

(73)

—

—

—

(73)

Indirect costs

(545)

2

3

3

(537)

Impairment of goodwill

—

—

—

—

—

Other business income

188

—

—

(184)

4

Other business expenses

(1)

—

—

—

(1)

Income from operations

306

7

5

(177)

141

Amortization

(34)

—

—

—

(34)

Income from operations excluding amortization(EBITA)

340

7

5

(177)

174

Sales

1,609

—

—

—

1,609

Cost of sales

(979)

(1)

2

7

(971)

Gross margin

631

(1)

2

7

638

Selling, general and administrative expenses

(455)

10

13

8

(423)

Incidental
1
items

Adjusted

Second quarter 2022

Second quarter 2021

Research and development expenses

(71)

1

—

—

(70)

(526)

11

13

8

(493)

Impairment of goodwill

—

—

—

—

—

Other business income

3

—

(2)

(1)

1

Other business expenses

(2)

—

—

1

(1)

Income from operations

106

9

13

16

145

Amortization

(30)

—

—

—

(30)

Income from operations excluding amortization(EBITA)

136

9

13

16

175

Indirect costs

1

Incidental items are non-recurring by nature and relate to impairment and other non-cash charges related to operations in Russia and Ukraine, separation, transformation, net realestate gains, environmental provision for inactive sites, and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

27

January to June 2022 Income from operations to Adjusted EBITA in millions of EUR

Reported

Restructuring

Acquisitionrelated
charges

Sales

3,624

—

—

—

3,624

Cost of sales(2,296)8

4

19(2,266)Gross margin

1,328

8

4

19

1,359

Selling, general and administrative expenses

(949)

4

8

16

(921)

Research and development expenses

(144)

—

—

—

(144)

(1,093)3

8

16(1,065)

Impairment of goodwill

—

—

—

—

—

Other business income

189

—

—

(184)

5

Other business expenses

(3)

—

—

1

(2)

Income from operations

421

11

12

(148)

297

Amortization

(64)

—

—

—

(64)

Income from operations excluding amortization(EBITA)

486

11

12

(148)

361

Sales

3,209

—

—

—

3,209

Cost of sales(1,949)4

4

7(1,933)Gross margin

1,260

4

4

7

1,275

Selling, general and administrative expenses

(938)

53

25

14

(847)

Research and development expenses

(143)

—

—

—

(142)

(1,081)

52

25

14

(989)

Impairment of goodwill

—

—

—

—

—

Other business income

16

—

(2)

(11)

4

Other business expenses

(4)

—

—

2

(2)

Income from operations

191

56

28

12

288

Amortization

(60)

—

—

—

(60)

Income from operations excluding amortization(EBITA)

251

56

28

12

347

Incidental
1
items

Adjusted

January to June 2022

Indirect costs

January to June 2021

Indirect costs

1

Incidental items are non-recurring by nature and relate to impairment and other non-cash charges related to operations in Russia and Ukraine, separation, transformation, net realestate gains, environmental provision for inactive sites, and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

28Composition of cash flows in millions of
EUR
Second quarter
2022

2021

2022

Cash flows fromoperating activities

134

(28)

318

(191)

Cash flows frominvesting activities

(7)

(153)

(28)

(166)

Cash flows before
financing activities

127

(182)

290

(356)

Cash flows fromoperating activities

134

(28)

318

(191)

Net capital
expenditures:

(30)

163

(46)

137

• Additions ofintangible assets

(8)

(13)

(16)

(26)

• Proceeds from
disposal of property,
plant and equipment
Free cash flows

June 30, December June 30,
2021
31, 2021
2022

January to June

2021

• Capital expenditureson property, plant andequipment

Working capital to total assets in millions
of EUR

Working capital

(18)

(44)

• Derivative financial
liabilities• Other current liabilities

194

14

195

104

135

272

(54)

783

1,935

2,334

2,030

1

21

44

77

242

213

221

Include assets notcomprised in working
capital:• Non-current assets

(31)

1

250

Eliminate liabilities
comprised in working
capital:• Trade and other payables

(23)

269

4,363

4,536

4,963

• Income tax receivable

35

24

45

• Cash and cash
equivalents

945

851

407

• Assets classified as held
for sale
Total assets
1

3

3

—

7,814

8,256

8,526

Other current liabilities excluding EUR 49 million of dividend-related payable as atJune 30, 2021.

29

Appendix C – Financial glossary

EBIT

Acquisition-related charges

EBITA

Costs that are directly triggered by theacquisition of a company, such as transaction
costs, purchase accounting related costs andintegration-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,
and other incidental items attributable toresearch and development expenses.

Adjusted SG&A expenses

Selling, general and administrative expenses,
excluding restructuring costs, acquisition-related
charges, and other incidental items attributable
to selling, general and administrative expenses.

Brighter lives revenues

Percentage of total revenues coming from all
products, systems and services contributing toFood availability, Safety & security, or Health &well-being.

Changes in scope

Consolidation effects related to acquisitions(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), circularcomponents, intelligent systems, or circularservices.

Comparable sales growth (CSG)

The period-on-period growth in sales excluding
the effects of currency movements and changes
in consolidation and other changes.

Income from operations.

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 andother changes

In the event a business is acquired (or divested),
the impact of the consolidation (or deconsolidation) on the Group’s figures is included(or excluded) in the calculation of the comparable
sales growth figures. Other changes include
regulatory changes and changes originating fromnew accounting standards.

Effects of currency movements

Calculated by translating the foreign currency
financials of the previous period and the current
period into euros at the same average exchange
rates.

Employees

Employees of Signify at the end of the period,
expressed on a full-time equivalent (FTE) basis.

Free cash flow

Net cash provided by operating activities minus
net capital expenditures. Free cash flow includes
interest paid and income taxes paid.

Gross margin

Sales minus cost of sales.

Incidental charges

Any item with an income statement impact (loss orgain) that is deemed to be both significant andnot part of normal business activity. Other
incidental items may extend over several quarters
within the same financial year.

Indirect costs

The sum of selling, general and administrative
expenses and R&D expenses.

Net capital expenditures

Additions of intangible assets, capital
expenditures on property, plant and equipment
and proceeds from disposal of property, plantand equipment.

Net debt

Short-term debt, long-term debt minus cash andcash equivalents.

30

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 partsof 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 that 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).

31