Signify (LIGHT) Q4 2025 earnings summary

Executive summary

• Mixed performance in 2025 amid challenging market conditions, with full-year sales at EUR 5.8 billion and operational profitability (adjusted EBITA margin) at 8.9%, reflecting resilience in cash generation and gross margin above 40%.

• Professional business grew in the US but declined in Europe; Consumer business expanded except in China, while OEM and Conventional segments faced significant declines due to weak demand and price pressure.

• Connected and specialty lighting now represent 36% of sales, driving growth in both consumer and professional segments; installed base of connected light points reached 167 million.

• Sustainability targets for climate action and circular revenues were exceeded, but diversity in leadership remains below target.

• A EUR 180 million cost reduction program was initiated, impacting 900 roles, with most savings realized in 2026 and full benefit in 2027.

Financial highlights

• Full-year adjusted EBITA margin at 8.9%; Q4 margin at 10.0%, down from 12.4% in Q4 2024.

• Free cash flow for FY25 was EUR 440 million (7.6% of sales); Q4 free cash flow was EUR 291 million (19.5% of sales), driven by working capital discipline.

• Q4 nominal sales declined 9.9% to EUR 1.49 billion, mainly due to a 4.7% negative currency impact; comparable sales down 5.2%.

• Net income for 2025 was EUR 259 million, down from EUR 334 million in 2024; Q4 net income was EUR 60 million.

• Working capital as a percentage of sales improved to 5.7% at year-end.

Outlook and guidance

• No guidance on comparable sales growth due to market divergence and macro uncertainty; challenging conditions expected to persist through 2026.

• 2026 adjusted EBITA margin expected between 7.5–8.5%; free cash flow guidance at 6.5–7.5% of sales.

• Majority of EUR 180 million cost savings to be realized in 2026, with full benefit in 2027.

• Portfolio and strategy review ongoing, with conclusions to be shared at Capital Markets Day in June 2026.