January 24, 2025
Signify Reports Mixed Results as Workforce Shrinks by 2,500
CEO discusses his departure, U.S. growth, company restructuring, and potential tariffs
On the same day Signify announced the upcoming departure of its longtime CEO Eric Rondolat, the company reported its fourth-quarter and full-year 2024 financial results.
Signify reported sales of €6.1 billion ($6.4 billion) for 2024, reflecting a decline of 6.6% in comparable sales growth, primarily due to challenges in the European professional lighting and Chinese markets, as well as an accelerated decline in its Conventional business. Despite these headwinds, the company achieved an adjusted EBITA margin of 9.9%, supported by effective cost management that delivered €131 million in savings. Net income rose to €334 million, a 55% increase from the prior year, aided by reduced restructuring costs and financial expenses.
In Q4 2024, sales decreased by 2.8% in comparable sales growth, totaling €1.7 billion, while the adjusted EBITA margin rose to 12.4%, up from 12.1% in Q4 2023. The company highlighted robust performance in the Consumer segment, driven by strong sales of connected products, while the Agriculture lighting business showed recovery. Signify also reduced gross debt by €440 million in 2024, strengthening its balance sheet and lowering future interest costs.
Looking ahead, Signify announced a €150 million share repurchase program for 2025, part of a broader €350-450 million buyback plan through 2027. The company also proposed increasing its 2024 dividend to €1.56 per share.
Signify's Workforce Drops by 2,500, Exceeding Planned Cuts of 1,000
In early 2024, Signify embarked on a significant restructuring program aimed at optimizing its organizational structure and achieving a leaner cost base. Initially announced to include approximately 1,000 job cuts, the program concluded with a headcount decline of nearly 2,500 employees by year-end. These adjustments contributed to operational efficiencies and €131 million in cost savings, exceeding the company’s initial savings target.
The restructuring supported Signify’s adjusted EBITA margin, which was reported at 9.9% for the full year, just 10 basis points lower than 2023, despite challenging market conditions. Additionally, the company achieved a free cash flow of €438 million, representing 7.1% of sales. CEO Eric Rondolat emphasized the importance of these measures, noting, "We exit 2024 with a stronger company and a structure aligned with market opportunities."
Navigating Potential U.S. Tariff Impacts
During today’s earning call, Signify expressed confidence in its ability to manage potential U.S. tariff changes, citing its strategically positioned global manufacturing footprint. CEO Rondolat noted that less than 20% of the company’s U.S. imports come from China, putting Signify in a favorable position compared to some competitors. “We believe our footprint is better positioned than others, which should help us navigate any tariff-related challenges,” Rondolat said.
The company emphasized its preparedness, with contingency plans in place to mitigate potential impacts through a combination of manufacturing shifts and pricing strategies. Rondolat added that Signify has successfully handled similar tariff situations in the past, leveraging its flexibility and cost-efficient operations to minimize disruptions.
“We have Plan A, Plan B and Plan C ready to be implemented,” Rondolat stated.
Strength in U.S. Professional Lighting Business
Signify highlighted a strong performance in its U.S. professional lighting business during its 2024 earnings call, noting market share gains in the region. CEO Rondolat emphasized the company’s competitive position, stating, “We believe we’ve been taking market share, particularly in the professional segment.”
The U.S. market also demonstrated resilience in the consumer lighting segment, bolstered by robust demand for connected lighting solutions. The company attributed its success in the Americas to effective cost management, innovation, and a focus on high-value solutions, which have positioned Signify as a leader in the region’s lighting industry.
Rondolat Discusses his Departure
During the earnings call, Rondolat discussed his departure after 13 years at the helm, nine of which occurred “in a listed environment” after the Philips spinoff. Rondolat emphasized the decision was driven by "time and timing," noting it was a joint decision with the board. “At the end of April, I would have been in the role for 13 years, which is a long time,” he said, adding that it was important to ensure the company had leadership in place for its next phase of growth.
Rondolat highlighted that 2024 was a pivotal year for Signify, with a major restructuring program successfully implemented. “We exit 2024 with a stronger company than when we entered it,” he stated. Under his leadership, Signify became a market leader in connected and LED lighting, growing its specialty and connected lighting business to €2 billion. Rondolat expressed confidence in the company’s direction, citing its strong leadership team and promising future. "The team, with a new leader, will be capable of revealing the potential ahead," he said.
