Signify (LIGHT) Q4 2025 earnings summary

Executive summary

• Delivered mixed performance in 2025 amid challenging market conditions, with resilience in cash generation and cost management despite reduced demand, tariff impacts, and price pressure.

• Growth in U.S. professional business offset by weakness in Europe and OEM; consumer business showed strong momentum except in China.

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

• Announced a €180 million cost reduction program impacting 900 roles, with most savings realized in 2026 and full benefit in 2027.

• Strategy and portfolio review underway, with updates expected at Capital Markets Day in June 2026.

Financial highlights

• Full-year 2025 sales reached EUR 5.8 billion, with adjusted EBITA margin at 8.9% and net income of EUR 259 million; free cash flow for FY25 was EUR 440 million, supported by working capital discipline.

• Q4 comparable sales declined 5.2% to EUR 1.49 billion, with adjusted EBITA margin at 10.0% and net income of EUR 60 million.

• Working capital as a percentage of sales improved to 5.7% due to reductions in inventories, receivables, and payables.

• Proposed 2026 dividend of EUR 1.57 per share, totaling EUR 188 million and 61% payout of continuing net income.

• Share repurchases paused during strategic review; 5.8 million shares cancelled in 2025.

Outlook and guidance

• No guidance on comparable sales growth due to market divergence and macro uncertainty; adjusted EBITA margin for 2026 expected between 7.5%-8.5% and free cash flow at 6.5%-7.5% of sales.

• Expect continued resilience in U.S., ongoing challenges in OEM and professional, and sustained momentum in consumer business.

• Anticipate a soft start to 2026 with margin headwinds in H1; cost actions to provide upside in H2.

• Portfolio review ongoing to determine areas for divestment or investment, with updates at Capital Markets Day in June 2026.