January 28, 2022

Takeaways from Signify's Full-Year Earnings Report

CEO doesn't expect to see logistics improvements in 2022

Signify reported its Fourth Quarter and Full Year 2021 results today, providing insights into the company’s financial performance and other initiatives relating to products and sustainability.

Signify CEO Eric Rondolat appeared on CNBC to discuss the company's full-year 2021 earnings and the impact of supply chain pressures on the company’s performance.

Component shortages:

"We saw the situation improving during Q4..." but the company expects the situation to be troubled during the first half of 2022.

Logistics issues:

"We don't see any improvement before the year end of 2022."

Financials:

(NOTE: Netherlands-based Signify reports financials in EU Euro. In this article, a 1.14 multiplier is used to convert to U.S. dollars.)

Fourth Quarter

Sales of $2.29 billion – comparable sales growth of 4.5%
Adjusted EBITA margin of 13.2% (Q4 20: 13.4%)
The 11.2% comparable sales growth in the Digital Solutions business unit was achieved with a “solid contribution from Cooper Lighting”

Full Year 2021

Sales of $7.82 billion – comparable sales growth of 3.8%
2021 marks the 8th consecutive year of adjusted EBITA margin progression.
Adjusted EBITA margin of 11.6% (FY 20: 10.7%)
Currency movements positively impacted Sales and negatively impacted earnings. The Sales impact of +2.2% was mainly from US dollar appreciation.

Headcount:

The company employs 36,824 workers worldwide. The number is down about 1,100 from a year earlier.

Product Categories:

LED-based sales represented 83% of total sales compared to 80% in 2020.

Digital Solutions and Digital Products business unites represent more than 80% of sales, profit and cash.

Conventional Products sales decline by 11.4% but deliver an impressive EBITA of 16.9%

Product mentions in the Investor Presentation:

Digital Solutions:

Philips UV-C disinfection upper air luminaires
Philips Maxos fusion luminaires
3D printed downlights
Philips Sunstay streetlights

Digital Products:

UV-C disinfection air cleaner
New type B Corepro TLEDs
HexaStyle Downlight
New reading/desk lights

Agriculture lighting was highlighted mainly in the context of the forthcoming acquisition of Fluence.

Future performance:

As Signify continues to proactively navigate through the "gradually improving component and logistics environment", it provides the following outlook for 2022:
Comparable sales growth in the range of 3-6%
Continued Adjusted EBITA margin improvement of up to 50 bps
Free cash flow in excess of 8% of sales

Carbon Reduction:

Signify reports that it is becoming greener at double the pace of the Paris agreement. Cumulative carbon reduction over the value chain was 60 million tons, and is ahead of track. All of Signify's divisions had CO2 emission reductions. The main driver remains the accelerated shift to energy efficient and connected LED lighting in 2021, which decreases the carbon emissions in the use phase.

Signify Earnings Report »