Signify (LIGHT) Q4 2024 earnings summary

Executive summary

• 2024 marked a transition to a new structure with four verticalized businesses, achieving €131 million in cost savings and managing the accelerated decline of the Conventional business, while launching a climate transition plan to reduce greenhouse gas emissions by 90% by 2040.

• €440 million of debt was repaid, strengthening the balance sheet and reducing future interest charges.

• Achieved Platinum EcoVadis sustainability rating for the fifth consecutive year and included in the Dow Jones Sustainability World Index.

• CEO Eric Rondolat announced his decision to step down after 13 years, citing timing and completion of major restructuring.

• Formed a partnership with Mercedes-AMG PETRONAS F1 Team.

Financial highlights

• Net income for 2024 rose to €334 million, driven by lower restructuring costs and financial expenses, with free cash flow at €438 million (7.1% of sales).

• Adjusted EBITA margin was 9.9% for the year, with a 40 bps drag from the Conventional business.

• Comparable sales growth was -6.6% for the year, mainly due to headwinds in China and Europe, and a 240 bps drag from Conventional.

• LED sales accounted for 93% of total sales, up from 85% last year.

• Adjusted gross margin improved by 100 bps to 40.7% year-over-year.

Outlook and guidance

• For 2025, low single-digit comparable sales growth is expected, excluding Conventional, with sales momentum building through the year.

• Adjusted EBITA margin is expected to remain stable, with margin expansion in Professional, Consumer, and OEM offsetting the Conventional drag.

• Free cash flow generation is projected at 7%-8% of sales for 2025.

• Share repurchase program of up to €150 million planned for 2025, with a total plan of €350-450 million through 2027.

• Proposed a cash dividend of €1.56 per share for 2024, subject to AGM approval.