Press Release
July 28, 2023

Signify reports second quarter sales of EUR 1.6 billion, operational profitability of 8.3% anda free cash flow of EUR 88 million
Second quarter 20231• Signify's installed base of connected light points increased from 117 million in Q1 23 to 119 million in Q2 23• On track for all Brighter Lives, Better World 2025 sustainability program commitments• Sales of EUR 1,644 million; nominal sales decline of -10.5% and CSG of -8.6%• LED-based sales represented 84% of total sales (Q2 22: 84%)
• Adj. EBITA margin of 8.3% (Q2 22: 9.5%)• Net income of EUR 45 million (Q2 22: EUR 248 million)• Free cash flow of EUR 88 million (Q2 22: EUR 135 million)

Eindhoven, the Netherlands – Signify (Euronext: LIGHT), the world leader in lighting, today announced thecompany’s second quarter 2023 results.
“In the second quarter, we saw continued softness in the consumer, indoor professional and OEM channels anda slower than anticipated recovery of the Chinese market. Against this backdrop, our actions to improve grossmargin are paying off, although fixed costs reduction plans are not yet fully compensating for the volume
decline. While our Digital Solutions and Conventional Products divisions demonstrated resilience in their bottom
line, our Digital Products division was more exposed to these challenges,” said Eric Rondolat, CEO of Signify.
“The continued economic softness has led us to apply caution in our outlook for the full year and adjust our
Adjusted EBITA margin guidance to 9.5-10.5%. On the other hand, our free cash flow generation has and willcontinue to benefit from supply chain lead time improvements and effective working capital measures. We
therefore expect our free cash flow generation to be at the higher end of the 6-8% range. To optimize our global
operations, we have begun implementing structural measures to adapt our cost structure to the market
environment. These measures will enable enhanced performance and a stronger focus on growth
opportunities.”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 remained on track to deliver on its Brighter Lives, Better World 2025
sustainability program commitments:
Double the pace of the Paris Agreement
Signify is on track to reduce emissions across the entire value chain by 40% against the 2019 baseline - double
the pace required by the Paris Agreement. This is driven by Signify’s leadership in energy efficient and connected
LED lighting solutions, which significantly reduce emissions during the use phase.
Double Circular revenues
Circular revenues remained stable at 29%, on track to reach the 2025 target of 32%. The main contribution isfrom serviceable and upgradeable luminaires, including the first serviceable Horticulture product family.
Double Brighter lives revenues
Brighter lives revenues increased to 28%, on track to reach the 2025 target of 32%. This was driven by theperformance of Cooper’s tunable products supporting the consumer well-being portfolio and continued strengthof the safety & security portfolio.
Double the percentage of women in leadership
The percentage of women in leadership positions continued to improve to 30%, on track to reach the 2025
target of 34%. This was mainly due to the acceleration of hiring practices for diversity across all levels.

Outlook
The continued economic softness has led us to apply caution in our outlook for the full year and adjust our
Adjusted EBITA margin guidance to 9.5-10.5%. On the other hand, our free cash flow generation has and willcontinue to benefit from supply chain lead time improvements and effective working capital measures. We
therefore expect our free cash flow generation to be at the higher end of the 6-8% range.

2

Financial review
2022

Second quarter2023

change
-8.6%
-2.8%
0.9%
-10.5%
-5.3%

1,836
674
36.7%

1,644
639
38.9%

-465
-73
-537
29.3%

-454
-68
-523
31.8%

174
9.5%
166
340

136
8.3%
-28
108

-22.1%

306
11
-68
248

88
-31
-12
45

-71.2%

135
1.97
35,40788
0.32
33,181

2.7%-68.3%-81.9%

in millions of EUR, except percentages

2022

Six months
2023

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

3,624
1,359
37.5%

3,322
1,298
39.1%

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

-921
-144
-1,065
29.4%

-915
-143
-1,05831.8%

Adjusted EBITA
Adjusted EBITA margin
Adjusted items
EBITA

361
10.0%
125
486

285
8.6%
-95
190

-21.1%

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

421
5
-91
335

149
-61
-15
73

-64.6%

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

-54
2.66
35,407139
0.52
33,181change
-8.9%
-1.0%
1.5%
-8.3%
-4.4%

0.7%

-60.8%-78.3%

Second quarter
Nominal sales decreased by 10.5% to EUR 1,644 million, including a negative currency effect of 2.8%, mainly
from CNY depreciation, and a positive effect of 0.9% from the consolidation of Fluence, Pierlite and Intelligent
Lighting Controls (ILC). Comparable sales declined by 8.6%, as the indoor professional business, the consumer
segment and the OEM channel continued to be weak.
The Adjusted gross margin increased by 220 bps to 38.9% driven by effective COGS management and pricediscipline. Adjusted indirect costs as a percentage of sales increased by 250 bps to 31.8%, as indirect costs did
not keep pace with lower sales.
Adjusted EBITA was EUR 136 million. The Adjusted EBITA margin decreased by 120 bps to 8.3%, mainly due tounder-absorption of fixed costs. Digital Products was mainly impacted, while Digital Solutions and Conventional
Products both achieved Adjusted EBITA margin gains.
Restructuring costs were EUR 9 million, acquisition-related charges were EUR 3 million and incidental items had
a negative impact of EUR 16 million.
Net income decreased to EUR 45 million, mainly due to lower income from operations and higher financial
expenses, partly offset by lower income tax expense due to lower taxable income. In Q2 2022, income fromoperations included a EUR 184 million gain from the disposal of non-strategic real estate, while financial income
included a benefit from a non-cash fair value adjustment of the Virtual Power Purchase Agreements.
The number of employees (FTE) decreased from 35,407 at the end of Q2 22 to 33,181 at the end of Q2 23. The
year-on-year decrease is mostly related to a reduction of factory personnel due to lower production volumes. In
general, the number of FTEs is affected by fluctuations in volume and seasonality.
3

Digital Solutions
Second quarter
2022

2023

1,042
98
9.5%
92
60

974
97
10.0%
91
73

Six months
change in millions of EUR, unless otherwise indicated-5.7%

Comparable sales growth

-6.5%
-1.6%

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

-0.9%
21.1%

2022

2023

2,022
193
9.6%
167
107

1,924
179
9.3%
161
123

change
-7.2%
-4.8%
-7.2%
-3.4%
15.4%

Includes Intelligent Lighting Controls since March 1, 2023, Pierlite since April 29, 2022 and Fluence since May 2, 2022

Second quarter
Nominal sales decreased by 6.5% to EUR 974 million, including a negative currency effect of 2.4% and a positiveeffect of 1.7% from the consolidation of Fluence, Pierlite and Intelligent Lighting Controls. Comparable sales
declined by 5.7%, as continued strength in outdoor professional lighting was more than offset by softness inindoor professional and horticulture lighting. The Adjusted EBITA margin increased by 50 bps to 10.0%, mainly
driven by gross margin expansion from lower COGS and continued price discipline.

Digital Products
2022

Second quarter2023

change in millions of EUR, unless otherwise indicated2022

Six months
2023

change-12.1%

Comparable sales growth

598
63
10.6%

505
35
6.9%

-15.4%-45.1%

Sales
Adjusted EBITA
Adjusted EBITA margin

1,198
140
11.7%

1,043
79
7.6%

-11.1%-13.0%-43.4%

6333-47.4%

EBITA

128

72

-43.7%

6131-48.2%

Income from operations (EBIT)

124

69

-44.4%

Second quarter
Nominal sales decreased by 15.4% to EUR 505 million, including a negative currency effect of 3.4%. Comparable
sales declined by 12.1%, due to continued weakness in the consumer connected and OEM businesses, as well as
Klite. The Adjusted EBITA margin decreased by 370 bps to 6.9%, mainly reflecting the under-absorption of fixed
costs as a result of lower sales volumes.

Conventional Products
Second quarter
2022
193
30
15.5%
20
20

2023
160
33
20.5%
27
27

Six months
change in millions of EUR, unless otherwise indicated-15.0%

Comparable sales growth-17.3%
9.6%

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

32.9%
32.9%

2022

2023

change-11.6%

394
62
15.7%
43
43

346
75
21.6%
22
22

-12.4%
20.3%-49.6%-49.6%

Second quarter
Nominal sales decreased by 17.3% to EUR 160 million, including a negative currency effect of 2.3%. Comparable
sales declined by 15.0%, as lower volumes were partially compensated by price increases. The Adjusted EBITA
4

margin increased by 500 bps to 20.5%, reflecting a positive effect from price increases in combination with lower
COGS, while Adjusted EBITA in the previous year also included one-off obsolescence charges.

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 was EUR -29 million (Q2 22:
EUR -17 million) and EBITA was EUR -43 million (Q2 22: EUR 165 million). EBITA included a negative impact fromrestructuring costs of EUR 2 million and incidental items of EUR 13 million.

Sales by market
Second quarter
2022

2023

Change

502
747
433
154
1,836

444
665
396
138
1,644

-11.6%-11.0%-8.5%-10.3%-10.5%

Six months
CSG in millions of EUR, except percentages-10.6%-9.5%-2.6%-14.2%-8.6%

EuropeAmericasRest of the world
Global businesses
Total

2022

2023

change

CSG

1,059
1,450
826
289
3,624

968
1,318
765
271
3,322

-8.6%
-9.1%
-7.4%
-6.3%
-8.3%

-8.3%
-10.2%-4.7%-15.3%-8.9%

Americas includes Intelligent Lighting Controls since March 1, 2023. Global businesses include Fluence since May 2, 2022. Rest of the world includes Pierlite sinceApril 29, 2022.

Second quarter
The second quarter showed similar dynamics as the first quarter of the year. In addition, most markets had ahigh base of comparison. In Europe, comparable sales decreased by 10.6%, as most markets declined. In theAmericas, comparable sales decreased by 9.5%, mainly reflecting lower sales in the US and Canada. In the Restof the World, comparable sales decreased by 2.6%, mainly due to China, the Middle East and Indonesia. Global
businesses' comparable sales decreased by 14.2%, mainly due to Klite.

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, 2022 Mar 31, 2023
1,635
1,191
-2,030
-13
783
10.8%

1,337
1,032
-1,710
-42
617
8.3%

Jun 30, 2023
1,288
1,002
-1,608
-42
640
8.9%

6,275

Second quarter
Compared to March 2023, working capital slightly increased to EUR 640 million, as lower inventories and lower
receivables were offset by lower payables. As a percentage of last twelve-month sales, working capital increased
by 60 bps to 8.9%. Including last twelve-month sales pro forma for Fluence and Pierlite, working capital also
increased by 60 bps.
Compared to June 2022, working capital reduced by EUR 143 million, mainly driven by a strong reduction of
inventories and lower receivables, partly offset by lower payables. As a percentage of last twelve-month sales,
working capital decreased by 190 bps. Including last twelve-month sales pro forma for Fluence and Pierlite,
working capital decreased by 160 bps.
5

Cash flow analysis
Second quarter
2022
2023
306
88
79
34
-45
-171
-31
-22
163
-178
135

67
36
-41
-9
-32
-15
-21
13
88

Six months
2022
421

in millions of EUR

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

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

2023
149
139
113
-92
-62
-35
-38
-51
17
139

The gain related to the disposal of non-strategic real estate assets in Q2 2022, included in EBIT, is eliminated in Other. Total cash proceeds from the disposal ofthese assets are included in Net capex.

Second quarter
Free cash flow was EUR 88 million, as a lower income from operations was partly offset by a lower cash outflow
from working capital, which benefited from an improving supply chain and strict inventory discipline. Free cash
flow also included a restructuring payout of EUR 12 million (Q2 22: EUR 14 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, 2022 Mar 31, 2023 Jun 30, 2023
213

83

755

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

1,942
2,025
694
1,331
3,053

1,267
2,022
584
1,439
2,853

Second quarter
Compared with the end of March 2023, the cash position decreased by EUR 110 million to EUR 584 million,
mainly due to the dividend payment, partly offset by positive free cash flow. Gross debt remained relatively
stable at EUR 2,022 million. As a result of the lower cash position, net debt increased by EUR 108 million to EUR
1,439 million. Total equity decreased to EUR 2,853 million (Q1 23: EUR 3,053 million), primarily due to thedividend distribution.
Compared with the end of June 2022, the cash position increased by EUR 177 million, while gross debt declined
by EUR 135 million. As a result, net debt decreased by EUR 310 million year on year. At the end of June 2023, thenet debt/EBITDA ratio was 1.9x (Q2 22: 1.7x).

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 2023 results. A live audio webcast of the conference callwill be available via the Investor Relations website.
Financial calendar 2023
October 27, 2023
January 26, 2024

Third quarter results 2023
Fourth quarter and full-year results 2023

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
Tom Lodge
Tel: +31 6 5252 5416
E-mail: tom.lodge@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. In 2022, we had sales of EUR 7.5 billion,
approximately 35,000 employees and a presence in over 70 countries. We unlock the extraordinary potential oflight for brighter lives and a better world. We achieved carbon neutrality in our operations in 2020, have been in
the Dow Jones Sustainability World Index since our IPO for six 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 energy crisis in Europe, the expected recovery
trajectory of China post COVID, component shortages, cost inflation, 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.
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, free cash flow, and other related ratios, which are not recognizedmeasures of financial performance or liquidity under IFRS. The non-IFRS financial measures presented aremeasures used by management to monitor the underlying performance of the Group’s business and operations
and, accordingly, they have not been audited nor 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 tomeasures 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 2022.
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 2022.
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, 2023

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

20

10Semi-annual report
Introduction

Responsibility statement

The semi-annual report for the six-month period
ended June 30, 2023 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, 2023, whichhave been prepared in accordance with IAS 34,
Interim Financial Reporting, as adopted by theEuropean Union, give 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, 2023, 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 2023 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, 2022.

Eindhoven, July 28, 2023
Board of Management
Eric Rondolat
Javier van Engelen
Maria Letizia Mariani
Harshavardhan Chitale

11

Management report
1

Business performanceMarket environment

In the first half of 2023, the lighting market was
impacted by various dynamics in different
geographies and end markets.
The consumer lighting market, in particularconnected lighting, softened on the back of two
years of solid growth as consumers were
impacted by the inflationary environment. Higher
interest rates and a tighter credit environment
weighed on the indoor professional lighting
market. The OEM market was mainly impacted by adestocking effect, as a result of higher channel
inventory levels following the supply chain issues.
At the same time, outdoor professional lighting
continued to benefit from governmental stimulus
programs focused on sustainability.

Financial performance
Nominal sales decreased by 8.3% to EUR 3,322
million, including a negative currency effect of
1.0% and a positive effect of 1.5% from theconsolidation of Fluence, Pierlite and Intelligent
Lighting Controls. Comparable sales decreasedby 8.9%, mainly due to weakness in the indoor
professional lighting business, the consumer
segment and destocking in the OEM channel.
The gross margin increased by 70 basis points to37.3%. The adjusted gross margin increased by
160 basis points to 39.1%, mainly driven by pricediscipline and effective COGS management.
Indirect costs as a percentage of sales increased
by 230 basis points to 32.5%. Adjusted indirect
costs as a percentage of sales increased by 240
basis points to 31.8%, mainly due to an underabsorption of fixed costs.
EBITA decreased to EUR 190 million. In 2022,
EBITA benefited from a gain from the disposal of
non-strategic real estate. Restructuring costs
were EUR 57 million in the first half of 2023, mainly
related to Conventional Products. Acquisitionrelated charges were EUR 6 million, and incidental
items had a negative impact of EUR 32 million.
Correcting for these adjusted items, the Adjusted
EBITA was EUR 285 million, or 8.6% of sales.
Versus last year, the Adjusted EBITA margindecreased by 140 basis points, as the grossmargin improvement was more than offset by anunder-absorption of fixed costs.
Income from operations decreased to EUR 149
million. The previous year's income fromoperations benefited from a gain from thedisposal of non-strategic real estate. As a result,net income decreased to EUR 73 million in H1
2023.
Net cash from operating activities increased by
381 million to EUR 190 million. The increase wasmainly driven by a lower cash outflow frompayables and a reduction of inventories. Last
year's cash outflow from payables was impacted
by the settlement of payments related to theinventory buildup.

Digital Solutions
Nominal sales decreased by 4.8% to EUR 1,924
million, including a negative currency effect of
0.4% and a positive effect of 2.8% from theconsolidation of Fluence, Pierlite and Intelligent
Lighting Controls. Comparable sales decreasedby 7.2%, mainly due to weakness in indoor
professional and horticulture lighting, partly
offset by outdoor professional lighting.
Income from operations increased to EUR 123
million. EBITA of EUR 161 million included EUR 8
million of restructuring costs, EUR 6 million of
acquisition-related charges, and EUR 3 million ofother incidental costs. Adjusted EBITA was EUR
179 million, or 9.3% of sales. Versus last year, theAdjusted EBITA margin decreased by 30 basis
points, as gross margin improvements partly
offset the under-absorption of fixed costs.

Digital Products
Nominal sales decreased by 13.0% to EUR 1,043
million, including a negative currency effect of
1.9%. Comparable sales declined by 11.1%, as theconsumer connected and OEM businesses
continued to be weak.
Income from operations decreased to EUR 69
million. EBITA of EUR 72 million included EUR 6
million of restructuring costs and EUR 1 million ofother incidental costs. Correcting for theseadjusted items, Adjusted EBITA was EUR 79 million.
The Adjusted EBITA margin decreased by 410
basis points to 7.6%, mainly due to an underabsorption of fixed costs due to lower volumes.

Conventional Products
Nominal sales decreased by 12.4% to EUR 346
million, including a negative currency effect of
0.7%. Comparable sales decreased by 11.6%, as
lower volumes were partially compensated byprice increases.
Income from operations and EBITA were both EUR
22 million. EBITA included restructuring costs of
EUR 37 million and other incidental costs of EUR 16
million. Excluding these items, Adjusted EBITA was
75 million. The Adjusted EBITA margin increased by

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590 basis points to 21.6%, mainly due to thepositive effect from price increases and lower
COGS.

Other
'Other' represents amounts not allocated tooperating segments and includes costs related
both to central R&D activities to drive innovation,and to Group enabling functions. Reported EBITA
was EUR -65 million. Last year's reported EBITA of
EUR 147 million benefited from a gain from thedisposal of non-strategic real estate. Adjusted
EBITA was EUR -48 million, compared with EUR -34
million in the same period last year.

Outlook
The continued economic softness has led us toapply caution in our outlook for the full year andadjust our Adjusted EBITA margin guidance to
9.5-10.5%. On the other hand, our free cash flow
generation has and will continue to benefit fromsupply chain lead time improvements andeffective working capital measures. We therefore
expect our free cash flow generation to be at thehigher end of the 6-8% range.

13

1Condensed consolidated
financial statements

1.1

Condensed consolidated statement of income

In millions of EUR unless otherwise stated
Note

Second quarter

January to June

2022

2023

2022

2023

1,836

1,644

3,624

3,322

Cost of sales(1,173)(1,010)(2,296)(2,083)Gross margin

664

633

1,328

1,239

Selling, general and administrative expenses

(472)

(464)

(949)

(935)

Research and development expenses

(73)

(69)

(144)

(145)

Sales

1, 2

Other business income

4

188

4

189

10

Other business expenses

4

(1)

(16)

(3)

(19)

306

88

421

149

29

6

39

11

(18)

(37)

(34)

(72)

Income from operations
Financial income

9

Financial expenses
Results relating to investments in associates
Income before taxes
Income tax expense

—

(1)

—

57

426

88

(68)

(12)

(91)

(15)

248

45

335

73

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

246

41

332

66

Net income (loss) attributable to non-controlling interests

2

4

3

7

Net income

5

—
316

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):
Basic

124,822

125,913125,001

125,948

Diluted

127,082

127,367

127,778

127,806

Basic

1.97

0.32

2.66

0.52

Diluted

1.93

0.32

2.60

0.52

Net income attributable to shareholders per ordinary share in EUR:

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

2022

2023

2022

2023

248

45

335

73

Remeasurements

—

—

(5)

—

Income tax effect on remeasurements

—

—

—

—

—

—

(5)

—

178

(41)

249

(100)

—

—

—

—

Net current period change, before tax

(7)

—

(10)

—

Income tax effect

—

—

—

—

(25)

(6)

(31)

11

6

2

8

(3)

152

(45)

217

(91)

Other comprehensive income (loss)

153

(45)

211

(91)

Total comprehensive income (loss)

400

—

546

(19)

Shareholders of Signify N.V.

393

—

535

(19)

Non-controlling interests

7

—

11

1

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:
Net current period change, before tax
Income tax effectTotal of items that are or may be reclassified to profit or loss

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, 2022

June 30, 2023

Non-current assets
Property, plant and equipment

1

699

665

Goodwill

1

2,861

2,785

Intangible assets, other than goodwill

1

700

669

Investments in associates

12

12

165

95

Deferred tax assets

418

415

Other assets

40

32

4,895

4,673

Inventories

1,361

1,288

Other assets

161

182

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

34

37

56

57

1,102

1,002

677

584

1

1

Total current assets

3,391

3,150

Total assets

8,286

7,822

2,920

2,717

EquityShareholders’ equity

6

Non-controlling interests
Total equity

145

137

3,065

2,853

1,950

1,267

Non-current liabilities
Debt

7

Post-employment benefits

327

319

283

234

Deferred tax liabilities

25

23

Income tax payable

111

88

Other liabilities

160

168

2,855

2,100

Provisions

8

Total non-current liabilities
Current liabilities
Debt, including bank overdrafts

7

83

755

Derivative financial liabilities

9

42

54

Income tax payable
Trade and other payables
Provisions

31

1,859

1,608

168

189

194

232

Total current liabilities

2,367

2,869

Total liabilities and total equity

8,286

7,822

Other liabilities

821

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

2022

2023

2022

2023

Net income (loss)
Adjustments to reconcile net income (loss) to net cash provided byoperating activities:

248

45

335

73

(14)

159

115

335

• Depreciation, amortization and impairment of non-financial assets

79

67

155

139

(188)

13

(189)

8

12

11

18

21

Cash flows from operating activities• Result on sale of assets

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

5

68

12

91

15

• Additions to (releases of) provisions

8

29

31

45

103

• Additions to (releases of) post-employment benefits

4

6

9

11

• Other items

(19)

20

(14)

39

Changes in working capital:

(171)

(9)

(486)

(62)

• Changes in trade and other receivables

(8)

15

57

70

• Changes in inventories

(3)

40

(110)

49

• Changes in trade and other payables

(125)

(54)

(409)

(190)

• Changes in other current assets and liabilities

(35)

(10)

(25)

9

Changes in other non-current assets and liabilities

7

1

11

10
(75)

Utilizations of provisions

(39)

(33)

(73)

Utilizations of post-employment benefits

8

(6)

(8)

(15)

(17)

Net interest and financing costs received (paid)

(31)

(32)

(32)

(35)

Income taxes paid

(22)

(15)

(46)

(38)

Net cash provided by (used for) operating activities

(28)

109

(191)

190

Net capital expenditures:

163

(21)

137

(51)

• Additions of intangible assets

(13)

(17)

(26)

(31)

• Capital expenditures on property, plant and equipment

(18)

(9)

(31)

(26)

• Proceeds from disposal of property, plant and equipment

194

5

195

6

Net proceeds from (cash used for) derivatives and other financial assets

(19)

(3)

(5)

10

(297)

—

(297)

(14)

(153)

(25)

(166)

(56)

(168)

Cash flows from investing activities

Purchases of businesses, net of cash acquired3

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

6

(183)

(168)

(183)

Proceeds from issuance of debt

7

137

9

140

9

Repayment of debt

7

(19)

(24)

(41)

(47)

Purchase of treasury shares

—

—

(36)

—

Net cash provided by (used for) financing activities

(64)

(184)

(119)

(206)

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

(246)

(100)

(475)

(71)

24

(9)

31

(21)

625

693

847

676

403

583

403

583

8

16

21

33

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 2023 and Q2 2022, included bank overdrafts of EUR 1 million and EUR 0 million, respectively. For the first half of 2023 and 2022, included bank overdrafts of EUR 1 million and
EUR 4 million, respectively.
Included bank overdrafts of EUR 0 million and EUR 4 million as at June 30, 2023 and 2022, 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,
2022

1

2,174

491

Net Income

—

—

332

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,
2022

Total
shareNonholders' controlling
equity interests

EquityCash flow
hedgesTreasuryshares

(80)

(2)

(126)

2,459

138

2,597

—

—

—

332

3

335

(5)

232

(23)

—

203

8

211

—

327

232

(23)

—

535

11

546

—

(182)

—

—

—

(182)

(1)

(183)

—

—

—

—

—

(48)

(48)

—

(48)

—

(58)

16

—

—

42

—

—

—

—

15

—

—

—

—

15

—

15

1

2,131

652

152

(25)

(132)

2,779

148

2,927

Balance as at January 1,
2023

1

2,139

864

67

(20)

(131)

2,920

145

3,065

Net Income

—

—

66

—

—

—

66

7

73

Other comprehensive
income (loss)

—

—

—

(94)

9

—

(85)

(6)

(91)

Total comprehensive
income (loss)

—

—

66

(94)

9

—

(19)

1

(19)

Dividend distributed

—

—

(189)

—

—

—

(189)

(9)

(198)

Purchase of treasury
shares

—

—

—

—

—

(7)

(7)

—

(7)

Delivery of treasury
shares

—

(35)

(22)

—

—

56

—

—

—

Share-based
compensation plans

—

10

—

—

—

—

10

—

10

Hyperinflation adjustment

—

—

3

—

—

—

3

—

3

Balance as at June 30,
2023

1

2,114

722

(27)

(11)

(82)

2,717

137

2,853

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 2023, 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, 2022.

Climate-related matters
Signify continuously monitors risks andopportunities related to climate change. During
the six-month period ended June 30, 2023, there
was no significant change compared to ourassessment as disclosed in the Consolidated
financial statements for the year ended
December 31, 2022.

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,
2023. The impact was not material and therefore
no remeasurement was recognized.

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, 2022.

Macroeconomic and geopoliticalenvironment
Signify continuously monitors the development in
the macroeconomic and geopolitical environment.
Key challenges include: increase of interest rates,
increased inflation, business climate
uncertainties, the Russia-Ukraine conflict, andthe expected recovery trajectory of China post
COVID. During the six-month period ended June30, 2023, there was no significant change
compared to our assessment as disclosed in theConsolidated financial statements for the year
ended December 31, 2022.

19

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
Conventi
Digitalonal
Products Products

Digital5
SolutionsJanuary to June

Other

4

Intersegm
ent
elimination

Signify

Digital5
Solutions

DigitalProducts

Conventi
onal
Products

1,644

1,924

1,043

346

9

1,644

1,926

1,145

347

10

Other

4

Intersegm
ent
elimination

Signify

2023
Sales to externalcustomers
Sales includingintersegment

974

505

160

5

975

556

161

5

Depreciation and1amortization

(20)

(7)

(6)

(15)

(48)

(40)

(15)

(11)

(31)

91

33

27

(43)

108

161

72

22

(65)

9.3%

6.5%

16.8%

6.6%

8.4%

6.9%

6.3%

EBITA

2

EBITA as a % of sales
Amortization

(53)

3

3,322

(107)

(97)
190
5.7%

(20)

Income fromoperations

73

31

27

(43)

(41)

88

Financial income andexpenses

3,322

123

69

22

(65)

149

(31)

(61)

Results frominvestments inassociates——

Income before taxes

57

88

2022
Sales to externalcustomers
Sales includingintersegment
Depreciation and1amortization
EBITA

2

EBITA as a % of sales
Amortization

1,042

598

193

4

1,836

2,022

1,198

394

10

1,044

656

194

4

1,836

2,025

1,311

396

10

(19)

(7)

(4)

92

63

20

(14)

(45)

(38)

(15)

(9)

(28)

(91)

165

340

167

128

43

147

486

8.8%

10.5%

10.5%

18.5%

8.3%

10.7%

11.0%

(61)

3

60

61

20

165

Income before taxes

3
4
5

Sales
January toJune 2022

2

107

124

43

147

421
5

—

(1)

316

426

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 Intelligent Lighting Controls since March 1, 2023, 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:

1

13.4%

11

Results frominvestments inassociates

3,624

(64)

306

Financial income andexpenses

2

(118)

(34)

Income fromoperations

1

3,624

1

Tangible and intangible
1,2
assetsJanuary toJune 2023

December31, 2022

June 30,
2023

Netherlands

273

223

604

597

United States

1,231

1,124

2,639

2,550

China

256

217

299

274

Germany

205

189

9

9

Other countries

1,659

1,569

709

689

Total countries

3,624

3,322

4,261

4,119

Includes Intelligent Lighting Controls since March 1, 2023, Fluence since May 2,2022 and Pierlite since April 29, 2022
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, 2023,
sales consisted primarily (97%) of sales of goods
to customers (January to June 2022: 97%).
Sales by market are reported as follows:
Second quarter

January to June

2022

2023

2022

Europe

502

444

1,059

968

Americas

747

665

1,450

1,318

Rest of the world

433

396

826

765

Global businesses

154

138

289

271

1,836

1,644

3,624

3,322

Total

2023

Americas includes Intelligent Lighting Controls since March 1, 2023. Global businesses
include Fluence since May 2, 2022. Rest of the world includes Pierlite since April 29,
2022.

20

3

Acquisitions

4

Signify completed one acquisition in the six-month
period ended June 30, 2023.

Acquisition of ILC Intelligent Lighting
Controls

Other business income andexpenses

Other business income and expenses consist of
the following:
January to June
2022

2023

On March 1, 2023, Signify completed theacquisition of 100% of the equity of ILC Intelligent
Lighting Controls, Inc. (ILC), a market-leading U.S.
manufacturer of wired control systems,
expanding its connected portfolio. ILC is
consolidated as part of Cooper Lighting Solutions
within Digital Solutions. The acquisition isconsidered not material to the condensed
consolidated financial statements. The fair valueof assets and liabilities at the acquisition date isprovisional pending closing settlement
procedures expected to be finalized during 2023.

For the six-month period ended June 30, 2023,
the result on disposal of fixed assets mainly
relates to a provision recognized regarding aprior year real estate transaction in 'Other'.

Acquisition of Fluence

5

Fluence was acquired on May 2, 2022. In the sixmonth period ended June 30, 2023 and within the
one-year purchase price accounting period thefair value of assets and liabilities at acquisitiondate, the final purchase price adjustments andclosing settlement accounting were finalized.
Final settlement agreements are expected to besigned in 2023.
The opening balance adjustments were mainly
related to an indemnification asset booked aspart of the closing settlement accounting, thevaluation of certain liabilities and goodwill. Thechanges compared to December 31, 2022 areshown in the table below.
December31, 2022

June 30,
2023

Goodwill

258

242

Other intangible assets

20

20

Property, plant andequipment

3

3

Net deferred tax

15

11

Trade and other receivables

10

12Inventories

30

32

Other assets

3

11

Cash

3

3

(20)

(20)

Trade and other payables
Other liabilities

(64)

(59)

Net assets acquired

257

254

Result on disposal of businesses—

5

Result on disposal of fixed assets

189

(13)

Result on other remaining businesses

(2)

(1)

Other business income and expenses

187

(9)

Total other business income

189

10

Total other business expense

(3)

(19)

Income taxes

The income tax expense in the six-month period
ended June 30, 2023 decreased by EUR 76 million
compared to the corresponding period of theprevious year mainly due to lower income before
tax and releases of tax provisions.
The effective tax rate for the six-month period
ended June 30, 2023, was 17.2% compared to
21.4% in 2022.

6

EquityDividend distribution
In June 2023, the Company settled a dividend of
EUR 1.50 per ordinary share, representing a total
value of EUR 189 million including costs. An
amount of EUR 161 million was paid in cash in June
and the remaining dividend tax liability of EUR 26
million presented in Other liabilities as at June 30,
was paid in July.

Treasury shares
As at June 30, 2023, the total number of treasury
shares amounted to 2,040,468, which werepurchased at an average price of EUR 40.26 pershare.

21

7

Debt
December 31,
2022

June 30,
2023

280

280

Facility (EUR)
Facility (USD)

211

206

Eurobonds

1,268

1,269

254

249

Lease liabilities
Other debt
Subtotal
Bank overdrafts

19

18

2,032

2,022

1

—

2,033

2,022

Cash and cash equivalents

(677)

(584)

Net debt (cash)

1,356

1,439

Total equity

3,065

2,853

Net debt and total equity

4,421

4,292

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

31%

34%

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

69%

66%

Gross debt

8

Eurobonds
As of June 30, 2023, EUR 675 million of fixed rate
notes due in May 2024 with an annual coupon of
2.000% became short term. There were no othermaterial changes in Signify’s gross debt structure.

Provisions

Signify received a decision from the trial judge on
April 26, 2023, reducing the jury’s award from
USD 100 million to approximately USD 46.5 million
and Signify’s allocated share to approximately
USD 42 million. Signify has a comprehensive global
liability insurance and has confirmation that thecase is fully covered without reservation of rights,
including interest and other costs. Both the legal
provision and the insurance cover asset havebeen adjusted in the balance sheet of thecompany as per June 30, 2023, without any net
P&L impact. Signify will continue to exercise all its
rights to appeal the verdict issued in this case.

Additions of restructuring provisions during thesix-month period ended June 30, 2023, included
a restructuring program in Conventional Products
in Belgium. Signify expects the provision will beutilized mainly within the next year.
Releases from legal provision were mainly related
to the legal case as described below. On October
5, 2022, a jury in trial court in Connecticut
awarded compensation of USD 100 million in a
lawsuit against Signify and other defendants,
allocating USD 90 million of the award against
Signify. The accident that was the subject of thetrial occurred in a warehouse leased andoperated by a Signify customer, where Signify
products were pushed off a rack by a worker
operating a forklift at the warehouse onto one of
the customer's employees.

For more information, refer to note 24, Provisions
in the Consolidated financial statements for theyear ended December 31, 2022.
Provisions are summarized as follows:

Restructuring Environmental

Product
warranty

Legal

Other

Balance as at January 1, 2023

36

92

115

103

105

Total
451

Additions

55

23

18

5

24

125

Utilizations

(32)

(4)

(25)

(1)

(12)

(75)

Acquisitions

—

—

(5)

—

—

(5)

Releases

(4)

(5)

(1)

(55)

(3)

(68)

Translation differences and othermovements

3

(3)

(2)

(1)

(2)

(5)

Balance as at June 30, 2023

58

103

99

51

112

423

Short-term

53

19

71

5

41

189

Long-term

4

84

29

46

71

234

22

Financial assets and liabilities

9

Financial risk management

Fair value hierarchy

The company assessed global macroeconomic
developments and concluded that no materialchanges to the existing financial risk management
objectives were necessary. These objectives are
consistent with those disclosed in theConsolidated financial statements for the year
ended December 31, 2022.

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, 2022.
During the six-month period ended June 30,
2023, Signify recognized a loss of EUR 21 million in
Financial income and expenses related to Signify's
participation in Virtual Power Purchase
Agreements, which are included in Derivative
financial assets not designated as hedging
instruments. This non-cash loss results from a fairvalue remeasurement as calculated per balance
sheet date.

Effective January 1, 2023, the Company updated
its anticipated foreign exchange risk management
policy to allow more flexibility in responding to theglobal macroeconomic developments. The main
policy changes relate to the reduction of the time
horizon of the hedge period, fewer hedged
currencies taking into consideration a higher
threshold and the reduction of the hedge ratios.

Gross amountrecognizedon thebalancesheet

Amounts notoffset on thebalance sheet,but subject tomaster netting
arrangements

Net amountamortized cost

67

—

67

fair value (FVOCI)

4

—

4

1,002

—

1,002

37

(33)

4

2
3

Carried at

Fair value
hierarchy Estimated fair
level
value

Balance as at June 30, 2023
1, 2

Non-current financial assets
Unquoted equity shares
1

Trade and other receivables

amortized cost

Derivative financial assets
designated as hedging instruments

fair value (FVTPL)

Derivative financial assets notdesignated as hedging instruments

fair value (FVTPL)Cash and cash equivalents
Debt (Eurobonds)

24

—

24

584

—

584

67
3

4
1,002
37
29
584

amortized cost

(1,269)—(1,269)1(1,213)

Debt (excluding Eurobonds)

amortized cost

(753)

—

(753)

2

(753)

Derivative financial liabilities
designated as hedging instruments

2

1

fair value (FVTPL)

(54)

33

(21)

Trade and other payables

amortized cost

(1,605)—(1,605)

Contingent considerations

fair value (FVTPL)

(3)

—

(3)

amortized cost

117

—

117

fair value (FVOCI)

3

—

3

amortized cost

1,102

—

1,102

Derivative financial assets
designated as hedging instruments

fair value (FVTPL)

36

(21)

15

2

Derivative financial assets notdesignated as hedging instruments

fair value (FVTPL)

3

1

(54)
(1,605)

3(3)

Balance as at December 31, 2022
Non-current financial assets

1, 2Unquoted equity shares
Trade and other receivables

1

Cash and cash equivalents
Debt (Eurobonds)

44

—

677

36
50
677

amortized cost

(1,268)—(1,268)1(1,220)amortized cost

(765)

—

(765)

2

(765)

Derivative financial liabilities
designated as hedging instruments

2

fair value (FVTPL)

(43)

21

(22)

Trade and other payables

amortized cost

(1,856)—(1,856)

Contingent considerations

fair value (FVTPL)

(3)

—

(3)

1

2

—

3
1,102

Debt (excluding Eurobonds)

1

1

44
677

117
3

(43)
(1,856)3(3)

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.
Mainly includes the insurance cover asset related to the legal case as disclosed in note 8, Provisions.

10

Events after the balance sheet date

No subsequent events occurred that are material to Signify.

23

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

Nominal growth2023 vs 2022
Digital Solutions

(5.7)

(2.4)

1.7

(6.5)

Digital Products(12.1)(3.4)

0.0(15.4)

Conventional Products(15.0)(2.3)

0.0(17.3)

Total

(8.6)

(2.8)

0.9

(10.5)

January to June
Consolidation andCurrency effects
other changes

Nominal growth

Comparable
growth2023 vs 2022
Digital Solutions

(7.2)

(0.4)

2.8

(4.8)

Digital Products(11.1)(1.9)

0.0(13.0)

Conventional Products(11.6)(0.7)

0.0(12.4)

Total

(8.9)

(1.0)

1.5

(8.3)

Second quarter
Consolidation andCurrency effects
other changes

Nominal growth

Sales growth composition per market in %Comparable
growth2023 vs 2022
Europe(10.6)(0.9)

0.0(11.6)

Americas

(9.5)

(2.0)

0.5

(11.0)

Rest of the world

(2.6)

(7.2)

1.4

(8.5)

Global businesses(14.2)(0.6)

4.5(10.3)

Total

(8.6)

(2.8)

0.9

(10.5)

January to June
Consolidation andCurrency effects
other changes

Nominal growth

Comparable
growth2023 vs 2022
Europe

(8.3)

(0.4)

0.1

Americas(10.2)

0.7

0.4

(8.6)
(9.1)

Rest of the world

(4.7)

(5.4)

2.7

(7.4)

Global businesses(15.3)

0.5

8.5

(6.3)

Total

(8.9)

(1.0)

1.5

(8.3)

Amounts may not add up due to rounding.

24

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

DigitalSolutions

DigitalProducts

Conventional
Products

Other

Adjusted EBITA

136

97

35

33

(29)

Restructuring

(9)

(2)

(2)

(3)

(2)

Acquisition-related charges

(3)

(3)

—

—

—

Incidental items

(16)

—

1

(3)

(13)

EBITA

108

91

33

27

(43)

(20)

(18)

(1)

—

—

88

73

31

27

(43)

Adjusted EBITA

174

98

63

30

(17)

Restructuring

(7)

(2)

—

(4)

(1)

Acquisition-related charges

(5)

(5)

—

—

—

Second quarter 2023

Amortization

1

Income from operations (or EBIT)

2

Second quarter 2022

Incidental items

177

—

0

(6)

184

EBITA

340

92

63

20

165

(34)

(32)

(2)

—

—

306

60

61

20

165

Signify

DigitalSolutions

DigitalProducts

Conventional
Products

Other

Adjusted EBITA

285

179

79

75

(48)

Restructuring

(57)

(8)

(6)

(37)

(5)

Acquisition-related charges

(6)

(6)

—

—

—

Incidental items

(32)

(3)

(1)

(16)

(12)

EBITA

190

161

72

22

(65)

(41)

(38)

(3)

—

—

149

123

69

22

(65)

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

Amortization

1

Income from operations (or EBIT)
1
2

2

Amortization and impairments of acquisition-related intangible assets and goodwill.
For a reconciliation to income before taxes, refer to note 1, Information by segment and main country.

January to June 2023

Amortization

1

Income from operations (or EBIT)

2January to June 2022

Amortization

1

Income from operations (or EBIT)
1
2

2

Amortization and impairments of acquisition-related intangible assets and goodwill.
For a reconciliation to income before taxes, refer to note 1, Information by segment and main country.

Amounts may not add up due to rounding.

25

Second quarter 2023 Income from operations to Adjusted EBITA in millions of EUR

Reported

Restructuring

Acquisitionrelated
charges

Sales

1,644

—

—

—

1,644

Cost of sales(1,010)3

1

1(1,005)

Incidental
1
items

Adjusted

Second quarter 2023

Gross margin

633

3

1

1

639

Selling, general and administrative expenses

(464)

5

2

2

(454)

Research and development expenses

(69)

1

—

—

(68)

Indirect costs

(533)

6

3

2

(523)

Impairment of goodwill

—

—

—

—

—

Other business income

4

—

(2)

(1)

1

Other business expenses

(16)

—

1

13

(1)

Income from operations

88

9

3

16

116

Amortization

(20)

—

—

—

(20)

Income from operations excluding amortization(EBITA)

108

9

3

16

136

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

Second quarter 2022

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, results onreal estate transactions, environmental provision for inactive sites, and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

26

January to June 2023 Income from operations to Adjusted EBITA in millions of EUR

Reported

Restructuring

Acquisitionrelated
charges

Incidental
1
items

Adjusted

January to June 2023
Sales

3,322

—

—

—

3,322

Cost of sales(2,083)40

2

18(2,023)Gross margin

1,239

40

2

18

1,298

Selling, general and administrative expenses

(935)

14

5

1

(915)

Research and development expenses

(145)

3

—

—

(143)

(1,081)16

5

1(1,058)

Impairment of goodwill

—

—

—

—

—

Other business income

10

—

(2)

(1)

7

Other business expenses

(19)

—

1

14

(4)

Income from operations

149

57

6

32

244

Amortization

(41)

—

—

—

(41)

Income from operations excluding amortization(EBITA)

190

57

6

32

285

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

Indirect costs

January to June 2022

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, results onreal estate transactions, environmental provision for inactive sites, and discounting effect of long-term provisions.

Amounts may not add up due to rounding.

27Composition of cash flows in millions of
EUR
Second quarter

June 30, December June 30,
2022
31, 2022
2023

January to June

2022

2023

2022

2023

Cash flows fromoperating activities

(28)

109

(191)

190

Cash flows frominvesting activities

(153)

(25)

(166)

(56)

Cash flows before
financing activities

(182)

84

(356)

134

Cash flows fromoperating activities

(28)

109

(191)

190

Net capital
expenditures:

163

(21)

137

(51)

• Additions ofintangible assets

(13)

(17)

(26)

(31)

• Capital expenditureson property, plant andequipment

Working capital to total assets in millions
of EUR

Working capital

(9)

(31)

• Derivative financial
liabilities• Other current liabilities

194

5

195

6

Free cash flows

135

88

(54)

139

640

2,030

1,859

1,608

1

77

42

54

221

194

206

Include assets notcomprised in working
capital:• Non-current assets(26)• Proceeds from
disposal of property,
plant and equipment

564

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

(18)

783

4,963

4,895

4,673

• Income tax receivable

45

56

57

• Cash and cash
equivalents

407

677

584

• Assets classified as held
for sale
Total assets
1

—

1

1

8,526

8,286

7,822

Other current liabilities excluding EUR 26 million of dividend-related payable as atJune 30, 2023.

28

Appendix C – Financial glossary
Acquisition-related charges

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.

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.

EBIT

Income from operations.

EBITA

Income from operations excluding amortizationand impairment of acquisition-related intangible
assets and goodwill.

EBITDA

Income from operations excluding depreciation,amortization, and impairment of non-financial
assets.

Effects of changes in consolidation 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.

Net leverage ratio

The ratio of consolidated reported net debt toconsolidated reported EBITDA for the purpose of
calculating the financial covenant.

29

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 and inventories.

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).

30