Our purpose is to unlock the extraordinary potential of light for brighter lives and a better world Signify is the world leader in lighting. We provide our customers with high-quality, energy-efficient lighting products, systems and services. We leverage over 130 years of leadership in lighting to create dynamic, innovative and human-centric projects. By turning light sources into data collection points, we can connect more devices, places and people through light, contributing to a safer, more productive and smarter world. In homes, offices, shops, supermarkets, sports stadiums, cities, greenhouses and factories – as well as through the Signify Foundation – our purpose is to unlock the extraordinary potential of light for brighter lives and a better world. | Signify Annual Report 2022 | ||||
Our values Our values provide our people with a common understanding of what matters to us and how we work | |||||
Always act with integrity “Integrity means understanding, accepting, and choosing to always act in accordance with moral and ethical principles and values.” Sandra Mendiburu, Content Production Specialist, Global Brand & Marketing, Signify | |||||
Forward-looking statements and risks & uncertainties Please refer to chapter 20, Forward-looking statements and other information, for more information about forward looking statements, market and industry information, fair value information, IFRS basis of presentation, use of non-IFRS financial measures and statutory financial statements. |
We are Signify |
2021 | 2022 | |
Comparable sales growth | 3.8% | 1.2% |
Nominal sales growth | 5.5% | 9.5% |
Adjusted EBITA margin | 11.6% | 10.1% |
Net income * | 407 | 532 |
Free cash flow * | 614 | 445 |
Net cash provided by operating activities * | 704 | 376 |
Divisions | Digital Solutions | Digital Products | Conventional Products |
Sales * | 4,231 | 2,469 | 793 |
Comparable sales growth | 7.8% | (3.8)% | (12.6)% |
Nominal sales growth | 20.1% | 0.7% | (7.9)% |
EBITA margin | 8.8% | 11.0% | 7.6% |
Adjusted EBITA margin | 10.0% | 12.0% | 14.6% |
Brighter Lives highlights | 2021 | 2022 |
Brighter lives revenues | 25% - 27%* | 27% |
Women in leadership | 25% | 28% |
Safety at work (TRC rate) | 0.17 | 0.16 |
Supplier Sustainability Performance | 98% | 94% |
Lives lit since 2017 (in million) | 7.2 | 8.3 |
Better World highlights | 2021 | 2022 |
Carbon reduction over value chain against Paris Agreement | On track* | On track* |
Circular revenues | 21% - 25%* | 29% |
Climate action revenues | 61% - 64%* | 65% |
Carbon neutral operations | 100% | 100% |
Total waste to landfill | <1% | <1% |
3Creating long-term value |
Sustainability focus and UN SDGs | Doubling objectives | ||||||
Climate action | Double the pace we achieve the 1.5°C scenario of the Paris Agreement | Better World | |||||
Circular economy | Double our Circular revenues to 32% | ||||||
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - | |||||||
Food availability Safety & security Health & well-being | Double our Brighter lives revenues to 32% | Brighter Lives | |||||
Great place to work | Double our percentage of women in leadership to 34% | ||||||
Beautiful examples of Signify’s lighting design can be discovered throughout our offices, from subtle luminous surfaces to eye-catching 3D printed luminaires, which are recyclable and support a circular economy. And the lighting is doing far more than illuminating the space. UV- C disinfection upper air luminaires purify the air throughout the day, neutralizing bacteria, viruses, and other airborne pathogens. Employees can connect to fast, secure internet through Trulifi, which offers exceptional speed, stability and security through light, or book a workstation through Interact Workspace, an extension of the Interact connected lighting system that works behind the scenes to manage lighting and other smart building features in Signify’s offices and throughout the entire building. The Interact system supports the building’s impressive sustainability credentials, bringing together energy performance and usage data to optimize, automate and remotely manage lighting throughout the building. This combination of the aesthetic and the practical creates a beautiful, functional workplace where employees can thrive. EDGE Amsterdam West is just one of the Signify offices around the world that benefits from our own technology. At the end of 2022, 86 Signify offices, from Guangzhou to Burlington, had been upgraded with UV-C disinfection lighting, Interact, NatureConnect or Trulifi. |
Dubai is home to one of the world’s busiest airports. National airline Emirates flies from the city to more than 100 destinations in 60 countries every day – serving up as many as 200,000 meals in the process. That’s a challenge when it comes to fresh vegetables: the harsh desert climate is not conducive to cultivating leafy greens. But flying in fragile crops from other countries is inefficient and unsustainable. The solution? Bustanica, the largest vertical farm in the world. Located near Al Maktoum International Airport, the three-hectare indoor farm consists of 27 grow rooms, each with its own climate system, controls, and special LED lighting from Signify. Different LED lights are used at different stages of plant development, with lights tailored specifically for the indoor crops. The state-of-the-art hydroponic facility can produce more than one million kilograms of high-quality leafy greens each year using up to 95% less water than conventional agriculture, saving 250 million liters of water every year compared to traditional outdoor farming. | The farm’s focus on water security supports the UAE’s Water Security Strategy 2036 agenda. Accelerating self-sufficiency in fresh food produce, supporting sustainability, and long-term food security are top priorities for the UAE. Vertical farming techniques and innovative technologies used at the facility eliminate the use of pesticides, chemicals, herbicides, and fungicides. This way, Emirates can ensure a clean, hygienic and tasty product for its passengers in a sustainable and repeatable way. “The superior performance of the lights we use is specifically tailored to the plants we’re cultivating, allowing them to grow to their optimum nutritious best. Lighting is such an important part of the entire functioning of the farm. These lights perform strongly in terms of power use, growing efficacy, and the number of lights required to achieve that.” Kieran Dowd, Vice-president of Sourcing Solutions, Emirates Flight Catering |
When Frasers Group planned a redesign of its Everlast gyms, it was clear that high performance would be a priority. Members of the 69 gyms across the UK needed a training environment that was welcoming, easy to navigate, and could inspire a great workout. And Frasers Group needed a solution that was energy-efficient, consistent across locations, and easy to manage. The result is both visually striking and immensely practical. Bold chevrons, lines and squares in the ceiling entice members to distinct innovative zones within the space. Contemporary luminaires from Modular Lighting Instruments create soft, functional light with a clean, minimalist design. And tailor-made 3D printed pendant and projector lights offer one- of-a-kind designs to suit the needs of each location, also contributing to a circular economy. | Everlast’s lighting creates a high-energy atmosphere, but not a high energy cost. By designing with LED, the clubs can use just a fraction of the electricity previously needed to power the traditional lighting that was there before. Behind the scenes, the Interact connected lighting system with multisite management capability centralizes lighting controls for a consistent look and feel across clubs and efficient maintenance planning. "Our first elevated sites reflect our ambitions for Everlast Gyms and perfectly demonstrate the gym experience we aim to bring to all of our members throughout the UK. We needed to make sure that the lighting added to the look and feel of the club, while also keeping the facility environmentally friendly. It’s been great to switch on these solutions and I’m looking forward to working with Signify on the rollout across the UK." Daniel Summerson, Managing Director of Everlast Gyms, Frasers Group |
Our 5 strategic frontiers | Description | Our targets | Our achievements | ||||||||
1.Build a customer-centric organization. | We are building a more customer-focused, more localized operating model and driving improved process excellence. | •Steadily increase customer Net Promoter Score (NPS). | •Customer NPS: 44. | ||||||||
2.Deliver differentiated lighting offers. | We are developing and delivering differentiated lighting products through multiple distinctive brands. | •Grow tiered offering sales and develop new ultra energy-efficient offers on the market in Q3 and Q4. | •3.9% of sales invested in R&D and 20,300 patent rights. •Comparable sales growth of 1.2%. | ||||||||
3.Drive growth for sustainability. | We are addressing global challenges by focusing on growth areas for sustainability: Climate action, Circular economy, Food availability, Safety & security, Health & well- being. | By the end of 2025: •Double the pace we achieve the 1.5°C scenario of the Paris Agreement. •Double our Circular revenues to 32%. •Double our Brighter lives revenues to 32% | •On track to deliver against our ambitious goal of doubling the pace of the Paris Agreement’s 1.5ᵒC scenario. •29% Circular revenues. •27% Brighter lives revenues. | ||||||||
4.Digitalize and transform for the future. | We are improving our digital front and back- ends and increasing our data analytics capabilities to better serve our customers. | • Increase our (B2B/B2C) online sales. | •Direct online sales at 12.5% of revenues. | ||||||||
5.Be a great place to work. | We are investing in our people, creating a diverse and inclusive workplace, deepening our digital and commercial competencies. | •Double the % of women in leadership to 34% by the end of 2025. •Increase digital and commercial excellence capabilities. | •28% women in leadership positions. •Employee NPS: 36. •97% active learners. |
The state-of-the-art technology improves luminosity on the pitch and so increases comfort for players and the public. Excellent uniformity of horizontal and vertical light without flicker effects mean higher quality for HD television broadcasts, and there’s a memorable light show to impress both those present in the stadium and people watching on TV. It’s the first time a Brazilian stadium has installed the Interact Sports management system, which enables flexible, multi- purpose venues with optimal lighting across all areas of the stadium. This IoT platform provides real-time intelligent lighting control via software and dashboard insights generation and so enables immersive experiences through lighting, with different scenes and effects. | ||||||
Inaugurated in 2014, Brazil’s Allianz Parque is a world-class stadium with ambitions that stretch well beyond soccer. The public experience was the starting point of the design for a project completed in 2022 that transforms the venue into a multi-purpose arena combining sport with entertainment such as shows, events, gastronomy, art and culture. | Signify partnered with construction company WTorre Entertainment and stadium owner Palmeiras to deliver intelligent dynamic lighting technology for the stadium in São Paulo. The new system consists of 180 Philips ArenaVision LED luminaires for field lighting, replacing 274 conventional ones. The result is a vibrant experience for arena-goers, and is expected to generate more than 70% savings on electricity and maintenance costs. | |||||
With half a million visitors each year, the Basilica of Santa Maria Novella is one of Florence’s most important attractions. It is home to some of the world’s great artistic, religious and cultural treasures and is an artistic work in its own right, with its fifteenth-century white marble façade presiding gracefully over the Piazza Santa Maria Novella. Firenze Smart, the public company responsible for the Italian city’s smart services, aimed to combine sensitivity to this historic landmark with the benefits of modern, energy-saving LED technology and the vitality and artistic possibilities of dynamic lighting. To achieve this, they selected and installed 12 Color Kinetics ReachElite IntelliHue LED projectors, paired with Signify’s Interact connected lighting control system. | The IntelliHue lights offered the ability to finely tune shades of white to create exactly the right perception of the quality and uniformity of the façade. A cooler white was selected for the façade than for the surrounding square and historic center, with a warm white picking out the iconic sun decoration. The underlying control and flexibility of Interact and Color Kinetics makes it possible to bring the façade to life with colorful and dynamic scenes for holidays and special occasions. As well as highlighting the artistic and cultural value of the building, this solution transforms Florence into a smart, dynamic city with even greater energy efficiency. |
The COVID-19 pandemic put infection protection squarely in the global spotlight. Yet even with the gradual return to everyday life in many countries, high hygiene standards are set to remain a cornerstone of social coexistence. With that in mind, the Bad Dürkheim district in Germany was keen to equip busy public spaces with cost-effective, future-proof disinfection solutions that could be seamlessly integrated into the existing environment. Four primary schools, seven daycare centers, two after-school care centers, and parts of the Bad Dürkheim town hall were equipped with Philips UV-C disinfection devices from Signify. The municipality used a total of 15 Philips UVCA200 mobile disinfection units and a further 85 Philips SM345C Upper Air UV-C ceiling mounted devices. Local electricians completed special UV-C training courses before installing the devices with careful attention to aspects such as the size, specificities and aesthetics of the individual rooms. They used photos, sketches and cross-sections to ensure seamless integration of the disinfection units. | The ultraviolet light used in UV-C technology inactivates viruses, bacteria and germs by breaking down the DNA and/or RNA of microorganisms. By investing on a municipal scale in this comprehensive infection protection against germs and viruses, Bad Dürkheim is investing in long-term hygiene, health and well-being for its citizens. “We thought long and hard about exactly how we could make our schools, daycare centers, after-school care centers and the town hall safer and more hygienic places. With Signify's UV-C technology, we found a long-term and future- oriented solution." Christoph Glogger, Mayor of Bad Dürkheim |
Input | Impact | ||||||||||
Financial | • EUR 294 million R&D investments with 90% sustainable innovation. • EUR 3,065 million total equity. • EUR 8,286 million total assets. | • EUR 7,514 million sales. • Comparable Sales Growth of 1.2%. • EUR 445 million free cash flow. • EUR 287 million paid in taxes and dividends. • 20,300 patents rights. • 44 customer NPS. | Brighter Lives We created EUR 346 million in value for society through total shareholder returns, tax, and interest payments. We created EUR 1,218 million in value for society through employees’ salaries & wages and learning & development combined with the costs to society of injuries & illnesses at work. Better World Our environmental footprint caused EUR 3.1 million in costs to society. At the same time, we created EUR 2,645 million through CO2-equivalent (CO2e) avoided by shifting to LED*, removing plastic from our consumer packaging, and conserving biodiversity through our offsetting projects. | ||||||||
Environmental | • 3,811 terajoules energy and 100% renewable electricity. • EUR 3,410 million materials. • 1,164 thousands of m3 water. | ||||||||||
Social | • 34,619 FTE in 74 countries and over 95 nationalities. • 50% of female new hires. • EUR 3.11 million spent on training. • 79 supplier audits. • EUR 2.5 million to the Signify Foundation and CSR activities. | • 27% Brighter lives revenues. • 28% Women in leadership and 17% of employees under 30. • 0.16 total recordable case rate. • 36 employee NPS. • 97% active learners. • 94% supplier sustainability performance. • 1.1 million lives lit. • 259 entrepreneurs trained. | |||||||||
Connecting communities with a bridge of light Dynamic, programmable LED lighting brings light and life to a Louisiana landmark. | ||||||
residency program and get hands-on experience operating the bridge's lighting controls. People can 'adopt a light', picking colors for special celebrations, announcements, or causes. And during the Art Break festival, SRAC invited the public to use coloring sheets to show how they’d like to see the bridge lit during the event. Hundreds of submissions were scanned into the system and played during a special 20- minute light show. The unique interactive public art installation has transformed the bridge into a stunning canvas of light that illuminates the river, drives economic development, and breathes new life into the connecting cities. | “Signify and Color Kinetics offered the best products for the project, providing the flexibility to challenge our talented lighting designers to produce a diversity of light shows and excite our community.” Pam Atchison, Executive Director, SRAC “We haven’t just lighted a bridge, we’ve lighted lives.” Jason Lyons, Resident Lighting Designer, SRAC | |||||
The O.K. Allen or Long-Allen Bridge, commonly known as the Texas Street Bridge, connects Shreveport and Bossier City in Louisiana, USA. Over time, the bridge’s neon lighting system had begun to fail, taking with it an important sense of vibrancy and community pride. So, the Shreveport Regional Arts Council (SRAC) recruited a team of local artists, designers, and IT professionals to create a new lighting solution that would rejuvenate the region. | Completed in February 2022, Color Kinetics Blast Powercore, IntelliHue luminaires illuminate the bridge’s steel structure. The Interact Landmark platform controls the interactive system, with its constantly morphing colors, shapes and forms. Color Kinetics Data Enabler Pro supplies power and data. Once the installation was in place, it became a flexible artistic canvas to enrich the community. Young people can join a certified | |||||
Like most long-term care facilities, Missouri Slope Lutheran Care Center in Bismarck, North Dakota, faced steep challenges. An ageing population and increased demand for care created a need to scale services while dealing with increasing staff shortages and rising healthcare costs – all while raising the quality of care and the overall experience for residents. With its existing premises at full capacity, Missouri Slope built a state-of-the-art new facility including 192 resident rooms, chapel, entertainment center, beauty salon, on-site pharmacy, memory care unit – and lighting to support all these activities. The facility needed a lighting system that provided return on investment at once, and scalability in the future. Cooper Lighting’s WaveLinx is the heart of the Missouri Slope system, which combines high- quality ambient lighting with advanced integrated sensing capabilities such as daylight, power, and occupancy. The Smart Spaces platform, with its Locate app, provides real- time location system (RTLS) functionalities. It includes wearables, badges, and tags accessories and is replacing traditional disparate RTLS systems of the past with greater value at a lower acquisition and ongoing operational cost. | Residents have more control over their environment, while staff have more information at their fingertips than ever before to help them keep residents safe, active and healthy. And by combining LED light fixtures with a digital control system, the facility can expect energy savings of 70%. Missouri Slope’s lighting system has received national acclaim. It was recognized by the U.S. Department of Energy’s 2022 Integrated Lighting Campaign for exemplary performance in building efficiency through advanced sensors and controls in lighting, and the integration of lighting with other building and business systems. “Our advanced lighting system is the next step in the evolution of modern healthcare delivery. It significantly increases our ability to analyze operations and to improve quality and safety for all who live and work at Missouri Slope.” Reier Thompson, President/CEO, Missouri Slope |
Installing extra hardware at home to enable motion detection can feel complex, expensive and cumbersome. WiZ removes those hurdles, opening up automations and other advanced benefits of smart lighting to everyone. SpaceSense is a new innovation in consumer lighting developed by WiZ. For the first time, consumers can enjoy the benefits of motion- based lighting automation, straight out of the box. SpaceSense uses Wi-Fi signals already present in the room to detect motion, so there's no need for dedicated sensors and batteries. Wi- Fi signals are slightly disturbed when people move around in a room, like a ripple in a swimming pool. | By measuring the small deviations in signal strength caused by those disturbances, the WiZ lights can determine if there is an object moving in the room. With this feature in place, SpaceSense can turn lighting on when people enter, and off when motion is no longer detected. Privacy and security are top of mind in the WiZ smart lighting system. SpaceSense does not detect people’s exact location, nor does it recognize faces. All the detection data is processed locally without going to the Internet or cloud service. And by eliminating extra hardware, WiZ can offer improved functionality without the need for batteries or additional material waste. SpaceSense is available in all new Connected by WiZ products, including WiZ brand, Philips Smart LED and other OEM and private label brands. |
Better World | SDG 7: Affordable and clean energy | SDG 12: Responsible production and consumption | SDG 13: Climate action | ||||||||||||
We deliver energy-efficient solutions through our Climate action lighting portfolio. Our operations run entirely on renewable electricity, and we contribute to the transition to more sustainable electricity supply. 2022 contribution: •100% renewable electricity in our operations. •65% Climate action revenues. | We aim to preserve value and minimize waste by developing Circular lighting, sustainable packaging, and good waste management practices. We are plastic-free in our consumer packaging in most of our markets. 2022 contribution: •29% Circular revenues. •Sending 0 waste to landfill, and 89% recycling rate. •EUR 0.2 million societal costs decreased through eliminating plastic in our consumer packaging.* | We drive climate action by being carbon neutral in our operations and reducing greenhouse gas (GHG) emissions over our value chain. We have set approved science-based targets (1.5°C scenario) and we will achieve the goals laid out in the Paris Agreement 1.5°C pathway for 2031 by the end of 2025. 2022 contribution: •EUR 3.1 million costs to society from our own environmental footprint.* •On track to deliver against our goal of doubling the pace of the Paris Agreement’s 1.5ᵒC scenario. •EUR 2,645 million value created to society through CO2 avoided by shifting to LED, our offsetting projects and the conservation of biodiversity.* | |||||||||||||
Brighter Lives | SDG3: Health and well-being | SDG 8: Decent work and economic growth | |||||||||||||
We contribute to improving health and well-being by creating light that increases food availability and -enables people to see, feel and function better. 2022 contribution: •27% Brighter lives revenues. •Employee NPS of 36. •More than 6,000 Solar & LED lamps and 900 UV-C disinfection products donated to health centers. | We foster decent work and economic growth by creating a fair and inclusive workplace and development opportunities for our employees and suppliers. We provide training and access to finance to lighting entrepreneurs in developing countries. 2022 contribution: •0.16 TRC rate and EUR 1.16 million costs to society from injuries & illnesses at work.* •94% supplier sustainability performance. •EUR 346 million value to society through total shareholder returns, tax and interest payments, and EUR 1,218 million through employees' salaries & wages and learning & development.* | We enable smart and secure roads and urban areas and enable safe and sustainable workplaces, while accelerating the renovation rate of buildings. Through the Signify Foundation, we provide access to light to off-grid communities. 2022 contribution: •1.1 million lives lit, adding up to 8.3 million lives lit since 2017. •27% Brighter lives revenues. •9 humanitarian projects completed. | |||||||||||||
A bright future for students in Tanzania An employee-nominated project empowers girls and boys with high quality vocational training. | ||||||
The Don Bosco KIITEC vocational training center in Arusha, Tanzania, empowers the region’s young people with vocational training in fields including electrical engineering. With the help of indoor and outdoor lighting from Signify, the center can provide a high-quality learning environment that matches its reputation for excellence. | The institute aims to create a community of youth that is equipped with technical skills to generate income and improve local livelihoods. It contributes directly to the UN’s SDGs by providing quality education, and further aims to promote gender equality by providing opportunities for both boys and girls to study in a high-quality facility. With a rising student intake, the center needed an expansion that would help more students achieve their potential. | Inside, the center is lit with Signify’s energy- efficient LED battens. And outside, solar streetlights keep the surrounding area safe and well-lit, while generating no electricity costs. | Signify first engaged with the project via Project In/Visible, an internal crowdsourcing campaign which enabled employees to direct the company’s social good resources to projects close to their hearts. With funding from the Signify Foundation and lighting design created in collaboration with Signify India and Signify Kenya, the center can provide a safe learning environment for 250 students each year. | |||
The Philippines regularly experiences typhoons, floods, earthquakes, landslides and other natural disasters. These risks are likely to intensify as the impact of climate change becomes more widely felt. In this precarious environment, evacuation centers can be a lifeline for communities displaced when disaster strikes. Evacuation centers are often created from repurposed schools, community spaces and sports facilities, where a lack of reliable lighting can be an issue. The Signify Foundation and Signify Philippines worked with the Asia Society for Social Improvement and Sustainable Transformation (ASSIST) to meet this need in 63 of these essential spaces. The centers were equipped with over 6,000 solar and electric floodlights, light tubes, and rechargeable light bulbs that can be used in emergencies and crises. | Solar lights were chosen for this project as they are resilient, easy to use, and long lasting. These lights can also operate with zero energy costs and in areas where electrical connections are damaged or impossible, bringing light and hope to people at vulnerable times of need. “By spreading light, we will be able to create brighter lives for people, communities, and our planet. We believe that sustainable light can bring access to new opportunities, improve quality of life and health, unlock education and empowerment, and boost economic development.” Yvonne Pan, Country Leader Signify Philippines |
Replacing conventional street lighting with energy-efficient LED is an effective way to reduce energy consumption and associated emissions. Modernizing public lighting in Huanggang Industrial Park and Jinmei Avenue in Huanggang City has helped Hubei Province reduce its carbon footprint and play its part in implementing China’s greenhouse gas emissions reduction program. And beyond its environmental benefits, the upgraded lighting uses the street lighting infrastructure spanning the city to improve citizens’ quality of life in multiple ways. The city opted for Signify’s BrightSites smart poles, complemented with Philips BRP and BVP- series LED streetlights and Interact connected lighting system. This combination provides high quality and energy-efficient LED lighting, plus two-way communication on a cloud-based platform. The operations team can optimize street lighting performance and accurately measure energy usage in real time, all from a remote dashboard. This helps the team detect and act on any maintenance needs, and optimize usage to bring down costs and energy-related emissions. All this power is wrapped in sleek, compact smart poles that blend seamlessly into the surroundings, maintaining the overall integrity and aesthetic of the urban environment. The scalable, modular design allows easy configuration for changing needs. |
Key figures in millions of EUR unless otherwise stated | ||
2021 | 2022 | |
Sales | 6,860 | 7,514 |
Comparable sales growth 1 | 3.8% | 1.2% |
Gross margin | 2,671 | 2,732 |
as a % of sales | 38.9% | 36.4% |
Income from operations | 514 | 718 |
Financial income and expenses | (24) | (41) |
Income tax expense | (83) | (145) |
Net income | 407 | 532 |
Adjusted gross margin 1 | 2,702 | 2,806 |
Adjusted indirect costs 1 | (2,032) | (2,171) |
Adjusted EBITA 1 | 795 | 762 |
as a % of sales | 11.6% | 10.1% |
Restructuring, acquisition and incidental items 1 | (159) | 82 |
EBITA 1 | 636 | 844 |
Basic earnings per share in EUR | 3.18 | 4.18 |
Dividend per share in EUR 2 | 1.45 | 1.50 |
Shareholders’ equity | 2,459 | 2,920 |
Net debt 1 | 1,156 | 1,356 |
Working capital 1 | 250 | 564 |
Net cash provided by operating activities | 704 | 376 |
Free cash flow 1 | 614 | 445 |
as a % of sales | 8.9% | 5.9% |
1For a reconciliation to the most directly comparable IFRS financial measure, see chapter 18, Reconciliation of non-IFRS financial measures. 22022 Dividend subject to approval by the 2023 Annual General Meeting of Shareholders. | ||
Key figures Digital Solutions in millions of EUR unless otherwise stated | ||
2021 | 2022 | |
Sales | 3,524 | 4,231 |
Nominal sales growth | 8.3% | 20.1% |
Comparable sales growth 1 | 3.4% | 7.8% |
Income from operations (or EBIT) | 205 | 256 |
EBITA 1 | 318 | 374 |
Adjusted EBITA 1 | 397 | 424 |
as a % of sales | 11.3% | 10.0% |
Free cash flow 1, 2 | 364 | 321 |
Number of employees (in FTEs) | 15,006 | 13,930 |
Key figures Digital Products in millions of EUR unless otherwise stated | ||
2021 | 2022 | |
Sales | 2,452 | 2,469 |
Nominal sales growth | 7.2% | 0.7% |
Comparable sales growth 1 | 8.8% | (3.8)% |
Income from operations (or EBIT) | 316 | 265 |
EBITA 1 | 323 | 272 |
Adjusted EBITA 1 | 339 | 297 |
as a % of sales | 13.8% | 12.0% |
Free cash flow 1, 2 | 383 | 170 |
Number of employees (in FTEs) | 14,643 | 14,264 |
Key figures Conventional Products in millions of EUR unless otherwise stated | ||
2021 | 2022 | |
Sales | 861 | 793 |
Nominal sales growth | (8.7)% | (7.9)% |
Comparable sales growth 1 | (6.9)% | (12.6)% |
Income from operations (or EBIT) | 158 | 60 |
EBITA 1 | 158 | 60 |
Adjusted EBITA 1 | 161 | 116 |
as a % of sales | 18.7% | 14.6% |
Free cash flow 1, 2 | 136 | 56 |
Number of employees (in FTEs) | 6,837 | 6,093 |
Sales by geography in millions of EUR unless otherwise stated | ||||
2021 | 2022 | Change | CSG | |
Europe | 2,130 | 2,230 | 4.7% | 3.9% |
Americas | 2,581 | 2,978 | 15.4% | 3.2% |
Rest of the world 1 | 1,606 | 1,709 | 6.5% | (1.5)% |
Global businesses 2 | 543 | 597 | 9.9% | (9.2)% |
Total | 6,860 | 7,514 | 9.5% | 1.2% |
1Rest of the World includes Pierlite since April 29, 2022. 2Global businesses includes Fluence since May 2, 2022. | ||||
4.2Sustainability performance Brighter Lives performance In 2022, our workforce decreased compared to 2021 to 34,619 FTEs (2021: 36,824 FTEs), with 28% of leadership roles held by women (2021: 25%). Our employee Net Promoter Score (NPS) was 36 (2021: 30). Meanwhile, 27% of our revenues came from products, systems and services contributing to Food availability, Safety & security or Health & well- being (2021: 25%-27%). Our safety performance indicator (TRC rate) was 0.16 per 100 FTEs (0.17 in 2021). We achieved a supplier performance rate of 94% (2021: 98%), and since 2017 we have lit the lives of 8.3 million people through the Signify Foundation. Better World performance We are on track to deliver against our ambitious goal of doubling the pace of the Paris Agreement’s 1.5ᵒC scenario. At the end of 2022, 65% of our revenues contributed to climate action (2021: 61%-64%). In line with our ambition to contribute to a more circular economy, 29% of our revenues came from our circular portfolio (2021: 21%-25%). At the same time, we remained carbon neutral in our operations, sourced 100% renewable electricity and sent zero waste to landfill. Through our global presence, we drive sustainability across 18 markets. | Sustainable performance per market | |||||||||||||||
FTEs | Manufacturing sites | % Women in leadership 1 | Operational CO2e (kt) | Safety TRC rate | ||||||||||||
2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | |||||||
Europe | 11,139 | 10,024 | 15 | 15 | 23% | 29% | 112 | 111 | 0.15 | 0.07 | ||||||
Benelux | 2,810 | 2,678 | 4 | 3 | 23% | 28% | 12 | 12 | 0.25 | 0.11 | ||||||
Eastern Europe | 6,232 | 5,214 | 7 | 8 | –% | –% | 79 | 77 | 0.09 | 0.08 | ||||||
DACH (Germany, Austria, and Switzerland) | 355 | 383 | – | – | 100% | 100% | 3 | 5 | — | — | ||||||
France | 353 | 353 | – | – | –% | 50% | 6 | 6 | — | — | ||||||
Iberia | 641 | 629 | 2 | 2 | –% | –% | 6 | 5 | 0.47 | — | ||||||
Italy, Israel, and Greece | 150 | 154 | – | – | –% | –% | 2 | 1 | — | — | ||||||
Nordics | 245 | 285 | 1 | 1 | –% | –% | 2 | 3 | — | — | ||||||
UK and Ireland | 352 | 328 | 1 | 1 | n.a. | n.a. | 2 | 2 | — | — | ||||||
Americas | 10,456 | 9,468 | 18 | 18 | 24% | 25% | 74 | 55 | 0.27 | 0.34 | ||||||
Canada | 695 | 643 | 2 | 2 | –% | –% | 6 | 11 | — | 0.24 | ||||||
Latin America | 6,911 | 5,868 | 9 | 8 | –% | –% | 16 | 11 | 0.15 | 0.13 | ||||||
United States of America | 2,849 | 2,957 | 7 | 8 | 27% | 28% | 52 | 33 | 0.60 | 0.83 | ||||||
Rest of the world | 15,229 | 15,128 | 15 | 13 | 32% | 32% | 104 | 86 | 0.11 | 0.07 | ||||||
ASEAN | 326 | 353 | – | – | 20% | 20% | 3 | 2 | — | — | ||||||
Indonesia | 164 | 174 | – | – | –% | –% | 2 | 1 | — | — | ||||||
Greater China | 10,823 | 10,172 | 10 | 9 | 50% | 50% | 37 | 37 | 0.11 | 0.07 | ||||||
India | 2,929 | 3,262 | 1 | 1 | –% | 25% | 48 | 36 | 0.04 | — | ||||||
Far East | 80 | 75 | – | – | n.a. | n.a. | 2 | 1 | — | — | ||||||
Middle East, Turkey, Africa and Pakistan | 753 | 742 | 3 | 2 | –% | –% | 8 | 6 | 0.30 | 0.85 | ||||||
Pacific | 154 | 350 | 1 | 1 | n.a. | –% | 4 | 3 | — | — | ||||||
1Excludes Klite. | ||||||||||||||||
Three-year financial summary in millions of EUR unless otherwise stated | |||
2020 | 2021 | 2022 | |
Income statement | |||
Sales | 6,502 | 6,860 | 7,514 |
Comparable sales growth 1 | (12.7)% | 3.8% | 1.2% |
Nominal sales growth | 4.1% | 5.5% | 9.5% |
Sales of LED-based products (as % of sales) | 80% | 83% | 83% |
Gross margin | 2,499 | 2,671 | 2,732 |
as a % of sales | 38.4% | 38.9% | 36.4% |
Income from operations (or EBIT) | 416 | 514 | 718 |
Net income (loss) | 335 | 407 | 532 |
Adjusted EBITA 1 | 695 | 795 | 762 |
as a % of sales | 10.7% | 11.6% | 10.1% |
EBITA 1 | 536 | 636 | 844 |
Net income (loss) attributable to shareholders | 325 | 397 | 523 |
Earnings per share in EUR | 2.58 | 3.18 | 4.18 |
Dividend per share in EUR 2 | 1.40 | 1.45 | 1.50 |
Balance sheet | |||
Total assets | 7,710 | 8,256 | 8,286 |
Shareholders' equity | 2,196 | 2,459 | 2,920 |
Net debt 1 | 1,275 | 1,156 | 1,356 |
Working capital 1 | 313 | 250 | 564 |
Investments and cash flow | |||
Cash flow from operating activities | 891 | 704 | 376 |
Net capital expenditure | (75) | (91) | 69 |
Free cash flow 1 | 817 | 614 | 445 |
Three-year sustainability summary | |||
2020 | 2021 | 2022 | |
85% | 93% | 90% | |
Brighter lives revenues, as a % of total sales 1 | — | 25% - 27% | 27% |
Women in leadership, as a % of total leadership roles | 23% | 25% | 28% |
Employee Net Promoter Score | 25 | 30 | 36 |
Total recordable cases, per 100 FTEs | 0.22 | 0.17 | 0.16 |
Lost workday injuries, per 100 FTEs | 0.17 | 0.12 | 0.09 |
Fatalities | – | – | – |
73 | 92 | 79 | |
Suppliers audits, performance rate, in % | 99% | 98% | 94% |
Lives lit, cumulative since 2017 (in million) | 6 | 7.2 | 8.3 |
Cumulative carbon reduction over value chain, in million tonnes CO2e 1 | — | On track 2 | On track 2 |
Climate action revenues, as a % of total sales 1 | — | 61% - 64% | 65% |
Operational gross carbon footprint, in kilotonnes CO2e | 260 | 290 | 252 |
Carbon neutral, as % of total operations | 100% | 100% | 100% |
40 | 42 | 34 | |
Operational energy consumption, in terajoules | 3,728 | 3,630 | 3,811 |
Operational energy intensity, in terajoules per million euro sales | 0.72 | 0.53 | 0.51 |
Renewable electricity, as a % of total electricity usage | 100% | 100% | 100% |
Circular revenues, as a % of total sales 1 | — | 21% - 25% | 29% |
Total waste to landfill, in scope of commitment | <1% | <1% | <1% |
82% | 83% | 70% | |
ISO 45001 certification, as a % of all reporting organizations | 72% | 60% | 61% |
Governance |
The Supervisory Board supervises the policies, management and general affairs of Signify. It also provides advice to the Board of Management. The Supervisory Board, in the two-tier corporate structure under Dutch law, is a separate body that is independent of the Board of Management. The Rules of Procedure of the Supervisory Board are published on the company’s website. For details on the activities of the Supervisory Board in 2022 see chapter 8, Supervisory Board report, and chapter 9, Remuneration report. | ||||||
Arthur van der Poel Born 1948, Dutch | Gerard van de Aast Born 1957, Dutch | Pamela Knapp Born 1958, German | ||||
Chair | Vice-Chair | |||||
Committee(s) B,C Chair of the Corporate Governance and Nomination & Selection Committee Member of the Supervisory Board since 2016; second term expires in 2024 | Committee(s) A,B Chair of the Remuneration Committee Member of the Supervisory Board since 2017; second term expires in 2025 | Committee(s) A,B Chair of the Audit Committee Member of the Supervisory Board since 2020; first term expires 2024 | ||||
Former member of the Board of Management of Koninklijke Philips N.V. | Former CEO of Imtech and VolkerWessels, and former member of the Executive Board of Reed Elsevier (later: RELX). Currently Chair of the Supervisory Board of Nederlandse Spoorwegen (Dutch Railways) and KPN. | Former CFO of the Power Transmission and Distribution Group of Siemens, former CFO of GfK SE. Currently member of the Supervisory Board of LANXESS and Compagnie de Saint-Gobain, and member of the German Monopolies Commission. | ||||
A Member of the Audit Committee. B Member of the Remuneration Committee. C Member of the Corporate Governance and Nomination & Selection Committee. D Member of the Digital Committee. | ||||||
Rita Lane Born 1962, American | Frank Lubnau Born 1969, German | Bram Schot Born 1961, Dutch | ||||
Committee(s) C,D Member of the Supervisory Board since 2016; second term expires in 2024 | Committee(s) C,D Chair of the Digital Committee Member of the Supervisory Board since 2020; first term expires 2024 | Committee(s) A,D Member of the Supervisory Board since 2022; first term expires 2026 | ||||
Former Vice President of Operations at Apple Inc. Currently member of the Board of Directors of Sanmina Corporation, L3Harris Technologies and Amphenol Corporation. | Former Chief Digital Officer of the industry division of Robert Bosch and Chief Technology Officer of the Customer Services Division of Siemens. Currently Head of Intelligent Industry Northern and Central Europe at Capgemini. | Former CEO of Audi Group, member of the Management Board of Volkswagen Group and Vice-Chair of Porsche Holding Salzburg. Currently non-executive member of the Board of Directors at Shell, senior advisor to different companies, including Carlyle Group, and Professor Leadership & Transformation at Bocconi University, Italy. | ||||
A Member of the Audit Committee. B Member of the Remuneration Committee. C Member of the Corporate Governance and Nomination & Selection Committee. D Member of the Digital Committee. | ||||||
Supervisory Board in person meetings | Supervisory Board calls | Audit Committee | Nomination Committee | Remuneration Committee | Digital Committee | |
TOTAL MEETINGS | 6 | 2 | 6 | 6 | 4 | 4 |
Arthur van der Poel | 6 / 6 | 2 / 2 | 6 / 6 | 4 / 4 | ||
Gerard Van de Aast ¹ | 6 / 6 | 2 / 2 | 6 / 6 | 4 / 4 | ||
Eelco Blok ² | 1 / 2 | 2 / 2 | 3 / 3 | 1 / 1 | ||
Pamela Knapp | 6 / 6 | 2 / 2 | 6 / 6 | 2 / 4 | ||
Rita Lane | 6 / 6 | 2 / 2 | 6 / 6 | 4 / 4 | ||
Frank Lubnau | 6 / 6 | 2 / 2 | 6 / 6 | 4 / 4 | ||
Bram Schot ³ | 6 / 6 | 2 / 2 | 2 / 3 | 1 / 3 | ||
Total attendance ⁴ | 97% | 100% | 94% | 100% | 83% | 83% |
1Mr. Van de Aast attended one of the in person meetings via video conference. 2Mr. Blok stepped down from the Supervisory Board on May 17, 2022. 3Mr. Schot was appointed as member of the Supervisory Board on May 17, 2022. As of January, he joined the Supervisory Board meetings as an observer, which is also included in the table. Mr. Schot became a member of committees after his appointment. 4On average, the attendance rate of the Supervisory Board in person meetings and calls combined was 98%. | ||||||
Supervisory Board skills and expertise matrix Fields in which the members of the Supervisory Board have a particular skill or expertise | ||||||
Skill/experience item | Arthur van der Poel | Gerard van de Aast | Pamela Knapp | Rita Lane | Frank Lubnau | Bram Schot |
CEO role | ü | ü | ü | |||
Industrial experience | ü | ü | ü | ü | ü | ü |
Finance, expert level | ü | ü | ||||
Sustainability | ü | ü | ü | |||
Projects/infrastructure | ü | ü | ||||
Business transformation | ü | ü | ü | ü | ü | |
Digital business processes | ü | ü | ü | |||
IT, cybersecurity | ü | ü | ü | |||
Technology/innovation | ü | ü | ü | ü | ||
Operations/Supply chain | ü | |||||
Diversity elements: Gender identity, age, nationality | Male 74 Dutch | Male 65 Dutch | Female 64 German | Female 60 American | Male 53 German | Male 61 Dutch |
Better World | Climate action | |||||
Circular economy | ||||||
Brighter Lives | Food availability Safety & security Health & well-being | |||||
Great place to work | ||||||
Signify’s value creation model: The value created by Signify goes beyond financial performance alone. Our approach is to optimize long-term value through financial, environmental and social resources. Our focus on environment and the societal implications of doing business is evidenced in our Brighter Lives, Better World 2025 program. This program links to our long-term incentive plan and ensures that the interests of the organization, society at large and our impact on the environment in which we live are key elements in how Signify delivers long-term value creation to stakeholders. Our activities and our way of doing business impact customers, employees, investors and society at large. Signify expresses these impacts in monetary terms in chapter 3, Creating long-term value, section 3.3, Our value created. | |||
Labor Market Peer Group | ||
Aalberts | DSM | Prysmian Group |
AkzoNobel | KPN | Rexel |
ASML | Legrand | Rheinmetall Group |
BAM | Nexans | Siemens Gamesa |
Boskalis | OSRAM | |
Compensation Element | Policy Summary | Application in 2022 Summary | |||||||||
Total direct compensation | Base salary | •The Supervisory Board determines the base salary and may, at its discretion, apply an increase. •The base salary may not be adjusted with a higher percentage than a collective labor agreement (CLA) increase agreed for the CLA population in the Netherlands. | Base salary as follows: E.H.E. Rondolat F.J. van Engelen Sousa M.L. Mariani | € 947,330 € 619,855 € 619,855 | |||||||
Annual cash incentive | CEO: On-target: 80% Maximum: 160% of base salary | Other BoM members: On-target: 60% Maximum: 120% of base salary | Measures: • Comparable sales growth (30%) • Adjusted EBITA (30%) • Free cash flow (20%) • Team/individual (20%) | ||||||||
80% is related to financial performance measures and focuses on the realization of strategic business objectives. 20% is related to team and individual performance measures. | Actual payout: E.H.E. Rondolat F.J. van Engelen Sousa M.L. Mariani | In % of target: 12% 12% 12% | |||||||||
Long-term equity based incentive | CEO: Annual on-target grant value: 100% of base salary | Other BoM members: Annual on-target grant value: 80% of base salary | 2022 grant: E.H.E. Rondolat F.J. van Engelen Sousa M.L. Mariani | 23,256 PSUs 12,172 PSUs 12,172 PSUs | |||||||
Key features: •Granted in performance share units (PSUs) only. •Conditionally granted annually. •Vesting of performance shares conditional upon achievement of performance conditions measured over a period of three financial years and continued employment. •Performance measured using four performance measures equally weighted: i) relative total shareholder return (25%), ii) free cash flow (25%), iii) return on capital employed (25%) and iv) sustainability (25%). •Payout per performance measure can vary between 0% and 200%. •In case of external hires, a restricted share units (RSUs) based sign-on award can be offered. | • Holding requirement (part 9.2.7 of this remuneration report): CEO: 300% of base salary Other BoM members: 200% of base salary • Additional requirement to comply with holding requirements under the Dutch corporate governance code (total five years from grant date) | ||||||||||
Compensation Element | Policy Summary | Application in 2022 Summary | |||||||||
Other compensation | Pension benefit | •Collective defined contribution plan up to the maximum pensionable salary (2022: EUR 114,866). •Gross pension allowance of 25% of the base salary exceeding the maximum pensionable salary. •Members of the Board of Management can, on a voluntary basis, choose to participate in a net pension arrangement by investing the net (after tax) amount. •Temporary gross transition allowance for a maximum period of eight years, offsetting historical plan changes. | E.H.E. Rondolat F.J. van Engelen Sousa M.L. Mariani | Accumulated annual pension as of Dec 31, 2022: € 44,672 € 4,379 € 4,528 | |||||||
Additional benefits | Additional benefits, such as expense and relocation allowances, medical insurance, accident insurance and company car arrangements. Car allowance gross per annum (or lease car): Entertainment expense allowance net per annum: Representation allowance net per annum: Relocation allowances: | CEO: € 36,960 € 23,920 € 6,800 F.J. van Engelen Sousa (per contractual agreement related to family relocation): Allowance international school (net): | Other BoM members: € 31,560 € 6,000 € 12,500 | ||||||||
Remuneration and remuneration costs of individual members of the Board of Management in EUR | ||||||||
Base compensation/ salary | Annual incentive 1 | Performance shares costs 2 | Restricted share rights costs 3 | Pension allowances | Pension scheme costs 4 | Other compensation 5 | Total remuneration costs | |
2022 | ||||||||
E.H.E. Rondolat | 947,330 | 90,944 | 705,530 | – | 240,492 | 28,133 | 31,725 | 2,044,154 |
F.J. van Engelen Sousa | 619,855 | 44,630 | 179,199 | 96,799 | 126,247 | 28,133 | 29,404 | 1,124,267 |
M.L. Mariani | 619,855 | 44,630 | 349,509 | – | 126,247 | 28,133 | 42,262 | 1,210,636 |
2,187,040 | 180,204 | 1,234,238 | 96,799 | 492,986 | 84,399 | 103,391 | 4,379,057 | |
2021 | ||||||||
E.H.E. Rondolat | 919,737 | 819,670 | 1,156,993 | – | 266,639 | 27,462 | 37,590 | 3,228,091 |
F.J. van Engelen Sousa | 601,800 | 402,243 | 115,445 | 162,072 | 122,403 | 27,462 | 41,434 | 1,472,859 |
M.L. Mariani | 601,800 | 402,243 | 528,117 | – | 122,403 | 27,462 | 45,261 | 1,727,286 |
2,123,337 | 1,624,156 | 1,800,555 | 162,072 | 511,445 | 82,386 | 124,285 | 6,428,236 | |
Fixed 1 | Variable 2 | Proportion fixed/ variable | |
E.H.E. Rondolat | 1,247,680 | 2,545,375 | 33%/67% |
F.J. van Engelen Sousa 3 | 803,639 | 44,630 | 95%/5% |
M.L. Mariani 3 | 816,497 | 44,630 | 95%/5% |
New base salaries Board of Management in 2022 in EUR | |
January 1, 2022 (+ 3%) | |
E.H.E. Rondolat | 947,330 |
F.J. van Engelen Sousa | 619,855 |
M.L. Mariani | 619,855 |
Performance measures | Weighting | Threshold 50% | Actual | Payout % | Weighted payout % |
Comparable sales growth | 30% | 3.0% | 1.2% | –% | –% |
Adjusted EBITA | 30% | 11.6% | 10.1% | –% | –% |
Free cash flow | 20% | 8.0% | 5.9% | –% | –% |
Team and individual performance measures | 20% | 60.0% | 60.0% | 12.0% | |
Multiple achieved | 12.0% |
Annual incentive realization 2022 in EUR | |||||||
Annual base | On-target % of annual base | Multiple achieved | Realized annual incentive (in EUR) | ||||
E.H.E. Rondolat | 947,330 | x | 80% | x | 12.0% | = | 90,944 |
F.J. van Engelen Sousa | 619,855 | x | 60% | x | 12.0% | = | 44,630 |
M.L. Mariani | 619,855 | x | 60% | x | 12.0% | = | 44,630 |
TSR Peer Group | ||
ABB | Honeywell Int. | Panasonic |
Acuity Brands | Hubbell | Signify |
Eaton Corporation | Johnson Controls | Schneider Electric |
Fagerhult | Legrand | Toshiba |
Hitachi | MLS Co Ltd | Zumtobel Group |
Performance-incentive zone for TSR in % of grant value | |||||||||||||||
Ranking | 15 | 14 | 13 | 12 | 11 | 10 | 9 | 8 | 7 | 6 | 5 | 4 | 3 | 2 | 1 |
Payout | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 75 | 100 | 125 | 150 | 175 | 200 | 200 | 200 |
Performance shares 2019-2022 | ||||||
Grant date | Number of performance shares originally granted | Value at grant date (in EUR) | End of vesting period | Number of performance shares vested in 2022 | Value at vesting date in 2022 (in EUR) | |
E.H.E. Rondolat | 2019 | 35,148 | 871,000 | 2022 | 63,478 | 2,454,431 |
2020 | 45,932 | 901,703 | 2023 | n.a. | n.a. | |
2021 | 21,312 | 919,737 | 2024 | n.a. | n.a. | |
2022 | 23,256 | 947,330 | 2025 | n.a. | n.a. | |
F.J. van Engelen Sousa | 2020 | - | - | 2023 | n.a. | n.a. |
2021 | 11,156 | 481,440 | 2024 | n.a. | n.a. | |
2022 | 12,172 | 495,884 | 2025 | n.a. | n.a. | |
M.L. Mariani | 2020 | 23,228 | 456,000 | 2023 | n.a. | n.a. |
2021 | 11,156 | 481,440 | 2024 | n.a. | n.a. | |
2022 | 12,172 | 495,884 | 2025 | n.a. | n.a. | |
Number of Signify unvested performance shares (holdings) in number of shares | |||||
January 1, 2022 | Awarded 2022 | Realized 2022 | December 31, 2022 | Vesting date 1 | |
E.H.E. Rondolat | 35,148 | – | 63,478 | – | 02.05.2022 |
45,932 | – | – | 45,932 | 04.05.2023 | |
21,312 | – | – | 21,312 | 01.05.2024 | |
– | 23,256 | – | 23,256 | 01.05.2025 | |
F.J. van Engelen Sousa 2 | – | – | – | – | 04.05.2023 |
11,156 | – | – | 11,156 | 01.05.2024 | |
– | 12,172 | – | 12,172 | 01.05.2025 | |
M.L. Mariani | 23,228 | – | – | 23,228 | 04.05.2023 |
11,156 | – | – | 11,156 | 01.05.2024 | |
– | 12,172 | – | 12,172 | 01.05.2025 | |
Performance shares (holdings) | 147,932 | 47,600 | 63,478 | 160,384 | |
January 1, 2020 – December 31, 2022 | ||
Rank | Company | TSR performance |
1 | Eaton Corporation | 86.1% |
2 | Hubbell | 80.4% |
3 | Hitachi | 74.6% |
4 | Schneider Electric | 65.8% |
5 | Johnson Controls | 55.5% |
6 | ABB | 52.4% |
7 | Toshiba | 49.1% |
8 | Acuity Brands | 39.7% |
9 | MLS | 38.0% |
10 | Panasonic | 28.0% |
11 | Honeywell | 24.2% |
12 | Signify | 23.3% |
13 | Legrand | 13.9% |
14 | Zumtobel Group | (4.8)% |
15 | Fagerhult | (25.9)% |
Payout | As % of sales | |
Below threshold | –% | < 8.2% |
Threshold | 40% | 8.2% |
Target | 100% | 8.9% |
Maximum | 200% | 9.6% |
Payout | ROCE % | |
Below threshold | –% | < 10.6% |
Threshold | 40% | 10.6% |
Target | 100% | 11.1% |
Maximum | 200% | 11.6% |
Status 1 | Result 2022 2 | ||||
Better World | Climate action | Carbon footprint reduction | On Track | ||
Circular economy | Circular revenues | On Track | 29% | ||
Brighter Lives | Food availability Safety & security Health & well-being | Brighter lives revenues | On Track | 27% | |
Great place to work | Women in leadership positions | Off Track | 28% |
Achievement | Weighting | Vesting level | |
TSR | –% | 25% | –% |
Free Cash Flow | 110% | 25% | 27.5% |
Return on Capital Employed | 200% | 25% | 50.0% |
Sustainability | 150% | 25% | 37.5% |
Total | 115.0% |
Signify Shares held by Board members in number of shares | ||||
December 31, 2021 | Holdings as % of base 1 | December 31, 2022 | Holdings as % of base 1 | |
E.H.E. Rondolat | 195,038 | 877.9% | 231,570 | 766.9% |
F.J. van Engelen Sousa | 10,000 | 68.8% | 26,951 | 136.4% |
M.L. Mariani | 18,591 | 127.9% | 33,484 | 169.5% |
Accumulated annual pension entitlements and pension-related costs in EUR | |||||
Age at December 31, 2022 | Accumulated annual pension as of December 31, 2021 1 | Total pension- related costs 2021 2,3 | Accumulated annual pension as of December 31, 20221 | Total pension- related costs 2022 2 | |
E.H.E. Rondolat | 56 | 42,188 | 294,101 | 44,672 | 268,625 |
54 | 2,677 | 149,865 | 4,379 | 154,380 | |
M.L. Mariani | 62 | 2,824 | 149,865 | 4,528 | 154,380 |
Pension costs | 593,831 | 577,385 | |||
Remuneration and company performance development in EUR unless otherwise stated | |||||
2018 | 2019 | 2020 | 2021 3 | 2022 | |
E.H.E. Rondolat 1 | 2,564,306 | 2,822,104 | 3,245,335 | 3,228,091 | 2,044,154 |
Change in % | (16)% | 10% | 15% | (0.5)% | (37)% |
F.J. van Engelen Sousa 1 | - | - | 599,753 | 1,472,859 | 1,124,267 |
Change in % | - | - | - | 146% | (24)% |
M.L. Mariani 1 | - | - | 1,225,491 | 1,727,286 | 1,210,636 |
Change in % | - | - | - | 41% | (30)% |
Employees 2 | 61,264 | 60,601 | 51,780 | 51,337 | 53,766 |
Change in % | (5)% | (1)% | (15)% | (1)% | 5% |
Free cash flow (in millions of EUR) | 306 | 529 | 817 | 614 | 445 |
Change in % | (24)% | 73% | 54% | (25)% | (28)% |
Closing share price on last business day December | 20.47 | 27.86 | 34.53 | 40.78 | 31.38 |
Change in % | (33)% | 36% | 24% | 18% | (23)% |
Fiscal year | CEO total remuneration 1 | Average total compensation employees 2 | Resulting pay ratio |
2022 | 2,044,154 | 53,766 | 38 |
2021 3 | 3,228,091 | 51,337 | 63 |
2020 | 3,245,335 | 51,780 | 63 |
2019 | 2,822,104 | 60,601 | 47 |
2018 | 2,564,306 | 61,264 | 42 |
Supervisory Board fixed annual fee | |
Chair | 110,000 |
Vice-Chair | 85,000 |
Member | 75,000 |
Committee fees | |
Audit Committee | |
Chair | 22,500 |
Member | 13,000 |
Digital Committee | |
Chair | 22,500 |
Member | 13,000 |
Remuneration Committee | |
Chair | 15,000 |
Member | 10,000 |
Nomination Committee | |
Chair | 15,000 |
Member | 7,500 |
Allowance for travel | |
Intercontinental | 5,000 |
Continental | 2,500 |
Membership | Committees | Other compensation 1 | Total | |
2022 | ||||
A.P.M. van der Poel | 110,000 | 25,000 | 5,000 | 140,000 |
G. van der Aast | 85,000 | 28,000 | 5,000 | 118,000 |
E. Blok 2 | 28,225 | 9,800 | – | 38,025 |
P. Knapp | 75,000 | 32,500 | 17,500 | 125,000 |
R.S. Lane | 75,000 | 20,500 | 27,500 | 123,000 |
F. Lubnau | 75,000 | 30,000 | 17,500 | 122,500 |
B. Schot 3 | 75,000 | 16,250 | 5,000 | 96,250 |
523,225 | 162,050 | 77,500 | 762,775 | |
2021 | ||||
A.P.M. van der Poel | 110,000 | 25,000 | – | 135,000 |
G. van der Aast | 85,000 | 28,000 | – | 113,000 |
E. Blok | 75,000 | 26,000 | – | 101,000 |
P. Knapp | 75,000 | 32,500 | 7,500 | 115,000 |
R.S. Lane | 75,000 | 20,500 | 12,500 | 108,000 |
F. Lubnau | 75,000 | 30,000 | 7,500 | 112,500 |
495,000 | 162,000 | 27,500 | 684,500 | |
Supervisory Board remuneration 2018 - 2022 in EUR (excluding VAT) | |||||
2018 | 2019 | 2020 3 | 2021 | 2022 | |
A.P.M. van der Poel | 140,000 | 137,500 | 128,250 | 135,000 | 140,000 |
G. van der Aast | 118,000 | 113,000 | 107,350 | 113,000 | 118,000 |
E. Blok 1 | 74,065 | 95,500 | 90,725 | 101,000 | 38,025 |
P. Knapp | - | - | 66,698 | 115,000 | 125,000 |
R.S. Lane | 121,125 | 121,689 | 87,875 | 108,000 | 123,000 |
F. Lubnau | - | - | 95,720 | 112,500 | 122,500 |
B. Schot 2 | - | - | - | - | 96,250 |
in EUR | January 1, 2023 (+4%) |
E.H.E. Rondolat | 985,223 |
F.J. van Engelen Sousa | 644,649 |
M.L. Mariani | 644,649 |
Introduction |
Signify N.V., a public company with limited liability organized under Dutch law, is the parent company of the Signify group. |
Signify shareholders | ||
% Actual interest 1 | Total % registered 2 | |
Amundi Asset Management | 5.0% | 5.0% |
BlackRock Inc. | 1.9% | 4.0% |
DWS Investment GmbH | 3.5% | 3.6% |
Impax Asset Management Group Plc. | 3.0% | 3.0% |
Pictet Asset Management S.A. | 3.0% | 3.0% |
1The actual interest reflects the % registered interest, excluding potential interests, such as options, futures, forward-rate agreements and other derivatives contracts. 2The total % registered includes the actual and potential interests such as options, futures, swaps, forward-rate agreements and other derivatives contracts. | ||
Ex-dividend date | May 18, 2023 |
Dividend record date | May 19, 2023 |
Dividend payment date | June 5, 2023 |
Report/Activity | Date |
Q1 2023 financial report | May 3, 2023 |
Annual General Meeting of Shareholders 2023 | May 16, 2023 |
Q2 and first-half 2023 financial report | July 28, 2023 |
Q3 2023 financial report | October 27, 2023 |
Introduction |
At Signify, we believe taking risks is an inherent part of entrepreneurial behavior. By deploying a structured risk management process, management is able to take risks in a controlled manner. The company’s risk management and controls are designed to provide reasonable assurance that strategic and financial business objectives are met. This is done by integrating management control into the daily operations, by ensuring compliance with legal requirements and by safeguarding the integrity of the company’s financial reporting and its related disclosures. The components of our risk management process are listed below. |
Risk | Risk description | Mitigation actions | ||||||
Technological change | The transition to LED lighting is characterized by the increasing importance of digital capabilities and technology, such as the adoption of connected lighting systems may drastically change the business environment. At present, a relatively small part of the worldwide installed base of light points is connected. A cornerstone of Signify’s strategy is to focus on and invest in its connected lighting offerings, such as its Interact offerings for the professional market and Hue, WiZ smart lighting offerings for the consumer market. Signify also aims to develop new business models, in particular through value-added service offerings. The risk is that the extent and speed of adoption of connected lighting systems and services does not develop as anticipated, or that Signify is unable to successfully implement its strategy in connected lighting. | Signify is actively developing and investing in technology platforms and software applications to bring (more advanced) connected lighting systems to the market. Part of this strategy is to strongly focus on the interoperability of its applications and to incorporate different connectivity technologies in its connected lighting portfolio, thereby addressing different needs in the market. Additionally, Signify plays a leading role in developing the market for connected lighting systems, in building awareness of the benefits of connected lighting, and in forging partnerships and alliances. Finally, in order to capture this new value opportunity, Signify’s systems and product teams are developing innovative services and flexible offers meeting differentiated customer needs from basic to advanced and responding to different regional requirements around connected lighting. The market adoption of connected technologies is captured through quarterly market analysis and forecasting. | ||||||
Competition | The LED lighting market has attracted many new competitors (particularly from Asia) with low-priced offerings and is at present highly competitive. This has led to increasing commoditization of offerings as well as price pressure on LED products. This might impact revenues and profitability, in particular, if Signify fails to manage costs. In the area of connected lighting, the risk is that non-lighting players with broad technology platforms might enter and disrupt the lighting market. | To counter aggressive commoditization by Asian players, Signify's strategy includes the creation of tiered offerings (e.g. B-brand and private label), but also bringing renewed innovation into the commoditized LED segment (A-class LED range) Further, the company is strengthening its digital (sales) capabilities and is running saving initiatives to keep its cost base competitive. Also, Signify can make use of the Philips brand, which has a strong global reputation and brand preference to drive sales. Finally, in the connected lighting segment, the company manages to maintain a leadership position by providing a continues stream of innovations to the market, both in hardware and software. In general, Signify has a global sales and distribution network which is difficult for a competitor to replicate. This network allows the company to quickly roll- out innovative products and services on a global scale. |
Risk | Risk description | Mitigation actions | ||||||
Global political and economic instability | There continues to be significant instability in the global economy and in the global political landscape. Polarization and trade protectionism as well as political changes might disrupt our operations and, ultimately, our sales, profit and cash flow, as Signify has commercial activities and operations in almost every country. Adverse economic conditions might result in lower customer demand. In particular, both the Russia-Ukraine war with the resulting high level of inflation and the Chinese zero-COVID policy have had an adverse effect on consumer and customer spending, and hence on the company’s sales in 2022. Persistent supply chain disruptions from China impaired the company’s ability to meet existing customer demand and have affected customer satisfaction levels. Separately, the company's result was negatively impacted by the rising cost of energy, disproportionately impacting the Conventional Products Division as it uses glass furnaces in the production of Conventional Lighting, and as lower transport density leads to a significant worsening of transportation cost. And as the passing-through of disproportionate cost increases to consumer price increases promotes an accelerated switch to LED Lighting, there is potential for further disruption to the company’s conventional lamps business. | At the macro level, Signify actively engages in global forums focused on the benefits of globalization. Signify is also committed to highly credible industry organizations globally to support the stabilization of global trade. In order to minimize the impact of instability on its business, Signify closely follows and reviews (geo)political and economic developments and takes these into account in both its short- and medium-term operational planning. To mitigate potential supply chain inefficiencies, tariff impacts arising from geopolitical tensions and trade protectionism, and to address continued uncertainty from COVID interventions, Signify leverages its global (manufacturing) footprint and makes adjustments to its sourcing base when needed. The company has also launched actions throughout the organization to secure the supply of components and to maximize the delivery of existing customer orders. Inflation in Commodity and Energy prices is offset through a combination of cost savings and price increases. | ||||||
Supply disruption | Signify depends on external suppliers and, to a large extent, on the production of components and LED products from Asian countries. The risk of this high dependency is that suppliers are not able to deliver (raw) materials, components or services in a timely manner for Signify to meet customer demand. Next to this, the production and shipping of products and components could be interrupted by conflicts, natural disasters, such as earthquakes, typhoons and floods caused by climate change, or pandemic diseases. Finally, increasing geopolitical tensions and trade protectionism, such as local manufacturing requirements, might disrupt the company’s operations. This might limit the company’s ability to leverage and draw efficiencies from its global (manufacturing) footprint. | Signify has built a supplier risk plan in which at risk suppliers are identified using criteria that take into account the geographical location of the supplier, and the technologies and processes used. In addition, Signify has enhanced regional supply capabilities to increase the share of components needed for manufacturing products for a particular region, as opposed to them being sourced from remote locations. Regular risk assessments are carried out at individual plant level, including the risks related to natural catastrophes and water scarcity. These assessments are also performed at locations of business-critical suppliers and of strategic inventories. Signify requires its sites to have robust business continuity plans for any large-scale events that can severely impact the business. These plans include sourcing from alternative suppliers, nearshoring, and increasing strategic inventories. |
Risk | Risk description | Mitigation actions | ||||||
Supply disruption (cont.) | Due to the zero-COVID policy in China in 2022, the company continued to be impacted by shortages of electronic components and logistics disruptions, mostly in the 1st half of 2022. Moreover, early 2022, the company continued to see a volatile market with significant increases in the costs of (raw) materials and key components, putting further pressure on pricing to the final customers. | Cost inflation due to the shortage of components, containers or labor is offset through a combination of cost savings and market price increases. The level of pricing moves is benchmarked versus key competitors. | ||||||
Innovation | The high speed of innovation and the increasing importance of digital technology in the general lighting industry requires Signify to spend considerable resources on developing new products and solutions. It also requires developing different capabilities and competences to commercialize its innovations successfully. In particular, in the fast-changing market in which the company operates, it must continuously address the needs of local customers and introduce locally relevant new products and solutions ahead of competition. Failure to bring new products and solutions to the markets in a timely fashion and to commercialize its innovations successfully would lead to the expected benefits of these investments not being delivered and, hence, this would be detrimental to both the top and bottom line of the company. | Signify invests significantly in its R&D activities. It has dedicated R&D activities to support its divisions in developing and realizing near-term innovation roadmaps, and to develop longer-term innovations with a focus on areas such as connected lighting systems, software and digital applications. Signify adapted its business structure to enable a stronger customer focus and enhanced specialization to further increase execution speed. Finally, dedicated go-to-market channels and tailored marketing approaches are in place with the aim to successfully introduce new offerings commercially. The return on innovation investments is reviewed on a quarterly basis, including speed to market, efficiency of investment and sales development versus plan. | ||||||
Cyber-attacks and security breaches | As Signify becomes more digitalized, more devices and systems are connected online. This increases cyber security risk across enterprise IT, Operational Technology (OT) and our products and solutions that are delivered with Internet of Things (IoT) capabilities and accompanying (cloud-based) software applications. Should a successful cyber-attack materialize, the processes, services and systems that allow the organization to continue to operate could be impacted resulting in operational disruption, with or without ransom demands. Further, a cyber-attack could cause a data breach where sensitive, protected, personal or confidential data held by Signify is leaked or stolen. | Signify develops its products and software applications and secures the ecosystem in conformity to security standards and best practices (ISA/ IEC62443, ISO2700x, NIST). Cyber risk is reviewed by the Board of Management and the Supervisory Board on a periodic basis. A dedicated cyber security team scans external developments, identifies inherent risks, and proposes plans to limit residual risk as much as possible. The Security Board aligns on the level of acceptable residual risk. Each year mandatory security and data protection & privacy awareness trainings are conducted. A security improvement roadmap has been created and the progress is monitored by the Security Board, Supervisory Board and Audit Risk Committee. Security measures are in place to detect attackers and to minimize the risk of them causing damage to systems and gaining access to critical data, systems and services. Business continuity plans are in place in the event of non- availability of IT systems and manufacturing sites. These business continuity plans are tested periodically. |
Risk | Risk description | Mitigation actions | ||||||
Digitalization | It is a strategic priority for Signify to digitalize its customer interfaces, its processes, and its offers. As such, digitalization is a key opportunity to provide higher customer service levels, more attractive customer offers, and to continue optimizing productivity through more efficient workflows. Failure to keep up with ongoing digitalization and to adapt to new technologies will lead to a gradual loss of both market share and earnings. | Over the past years, the company has stepped up its investment in digitalization. Signify has established a Digitalization roadmap for customer interfaces, processes and offers. IT architecture, employee re-skilling and data governance have been identified as key enablers. Several key programs have been initiated under the leadership of Chief Digital and Information Officer in the areas of technology foundation, skills up-grading, enhancement in go-to-market and E-commerce capabilities. Progress against the established roadmap and the key programs is closely followed-up by the Digital Committee, a sub-committee of the Supervisory Board. | ||||||
New organizational capabilities | Signify needs to build the capabilities and culture required to transform its business and deliver on its strategy, including the ambition to grow its connected lighting business and grow in new areas such as agricultural, solar, UV-C lighting and 3D printing. New capabilities are particularly relevant in the areas of digital, software development, marketing and consultative selling. Next to this, bringing advanced connected lighting offerings to the market requires highly specialized (technical) personnel. Failure to successfully develop these new and different capabilities may have a significant impact on the company achieving its long-term strategic goals. | Signify invests in the professional development of its employees through learning initiatives as well as through dedicated talent management programs that identify top talents early in their career. In addition, actions were launched to upscale commercial skills and capabilities in cooperation with Learning@Signify Academy. Next, talent acquisition programs are in place to attract new employees with a specific focus on those (technical) areas where the company sees capability needs that cannot be developed internally. Finally, through M&A projects of various size, new capabilities are brought to the company, with retention programs being part of the due diligence and acquisition approval process. | ||||||
Acquisitions and integrations | Selected acquisitions have been, and are, an important part of Signify’s strategy. These acquisitions are focused on growing the business, strengthening its supply chain or acquiring complementary technologies or new capabilities. Acquisitions always entail integration risk, which in turn could result in (cost) synergies, strategic advantages and/or economies of scale being delayed or not fully realized. | For any acquisition, Signify follows a rigid process of confirming strategic relevance, value creation, due-diligence, and post-merger integration plan. Throughout the entire process, Signify makes sure to involve the right people from the organization, considering all vital aspects of the business. Immediately after any acquisition, a multidisciplinary team with members from both organizations is put together to ensure a smooth integration of the new business, both from a top-line synergy, a cost synergy, and a cultural integration point of view. |
Risk | Risk description | Mitigation actions | ||||||
Climate change | The impact of climate change generates both opportunities and challenges for Signify’s existing and future lighting products and solutions portfolio. And, with a global footprint, Signify’s manufacturing sites and supply chain are exposed to risks related to climate change. In line with that, Signify is seeing continued and increased attention to climate change from all sectors of society. This attention has led to additional regulations designed to reduce greenhouse gas (GHG) emissions and the adoption of more energy-efficient products and low carbon solutions. On top of climate crisis, 2022 saw the emergence of an energy crisis, making energy reductions more urgent than ever. As lighting represents more than 10% of global electricity consumption, the lighting industry will need to adapt to changing environmental regulations. The inability to meet customer expectations related to the energy efficiency potential of the company’s LED lighting products and solutions could adversely affect the company’s reputation and brand. Additionally, understanding the risks posed by climate change, and how to improve business resilience through climate change mitigation and adaptation accordingly, is imperative to secure the company’s longer-term success. | As part of its Brighter Lives, Better World 2025 sustainability program, Signify is taking measures to manage climate risks and adapt its businesses. Since 2020, Signify is carbon neutral in its operations and sources 100% renewable electricity. Investments in purchase power agreements not only contribute to emission reduction but also hedge the fluctuation of energy prices. Sustainability is an integral part of Signify's 5 Frontiers strategy. Its pillar, Growth for Sustainability, aims to address global challenges by focusing on sustainable growth areas, based on low-carbon technological innovation: Climate action, Circular economy, Food availability, Safety & security, and Health & well-being. Through its global leadership in energy-efficient lighting, Signify's portfolio is uniquely positioned to mitigate risks and capture opportunities related to climate change. For example, Signify continues to expand its Philips Ultra Efficient portfolio, the world's most efficient energy saving LED Lighting, thereby helping to reduce energy expenditure. Following the recommendations and guidance of the Task Force on Climate- Related Financial Disclosures, Signify conducts ongoing climate risk assessments in line with the four core elements of governance, strategy, risk management, and metrics and targets (for details, please refer to the Sustainability Supplements to the Annual Report, available on our Sustainability At the end of 2022, Signify was on track to achieve its ambitious Brighter Lives, Better World 2025 commitments (for details, please refer to chapter 16, Sustainability statements). | ||||||
Concentration risk | With the acquisition of US-based Cooper Lighting (2020) and Fluence (2022), Signify's overall risk profile changed. As a result, Signify is more exposed to developments in the professional lighting market, and in particular, in the North American market. Therefore, going forward, any developments in those markets are expected to have a bigger impact on the company’s results, operations and prospects. More importantly, in case of negative developments in North America, it might have a reduced ability for offsets through its other business activities and markets in which it is active. | The increased importance of the US is recognized and taken into consideration in the annual strategic planning process and risk assessment. Resources are allocated in line with both the size of the business and the future growth potential. Not only is the company focused on getting the right talent to drive the success of the US business, but also the Divisions and Functions are expected to spend a significant amount of time and energy on ensuring a successful US business. Finally, in order to address both the importance of the US business and the higher risk of global disruption, dedicated support plans have been and are being worked out for the US. |
Corporate statements |
14.1Consolidated statement of income | Note | 2021 | 2022 | ||
Sales | 3 | ||||
Cost of sales | ( | ( | |||
Gross margin | |||||
Selling, general and administrative expenses | ( | ( | |||
Research and development expenses | ( | ( | |||
Impairment of goodwill | 15 | ||||
Other business income | 7 | ||||
Consolidated statement of income | Other business expenses | 7 | ( | ( | |
in millions of EUR unless otherwise stated | Income from operations | 4 | |||
For the years ended December 31 | Financial income | 8 | |||
Financial expenses | 8 | ( | ( | ||
Results from investments in associates | |||||
Income before taxes | |||||
Income tax expense | 9 | ( | ( | ||
Net income | |||||
Attribution of net income for the period: | |||||
Net income (loss) attributable to shareholders of Signify N.V. | |||||
Net income (loss) attributable to non-controlling interests | |||||
Earnings per common share attributable to shareholders | 10 | ||||
Weighted average number of ordinary shares outstanding used for calculation (in thousands): | |||||
• Basic | |||||
• Diluted | |||||
Net income attributable to shareholders per ordinary share in EUR: | |||||
• Basic | |||||
• Diluted |
14.2Consolidated statement of comprehensive income | 2021 | 2022 | ||
Net income | ||||
Pensions and other post-employment plans: | ||||
• Remeasurements | ||||
• Income tax effect on remeasurements | ( | ( | ||
Total of items that will not be reclassified to the Income statement | ||||
Consolidated statement of | Currency translation differences: | |||
comprehensive income in millions of EUR | • Net current period change, before tax | |||
For the years ended December 31 | • Income tax effect | |||
Net investment hedge: | ||||
• Net current period change, before tax | ( | ( | ||
• Income tax effect | ||||
Cash flow hedges: | ||||
• Net current period change, before tax | ( | ( | ||
• Income tax effect | ||||
Total of items that are or may be reclassified to the Income statement | ||||
Other comprehensive income | ||||
Total comprehensive income | ||||
Total comprehensive income attributable to: | ||||
• Shareholders of Signify N.V. | ||||
• Non-controlling interests |
14.3Consolidated statement of financial position | Note | 2021 | 2022 | ||
Non-current assets | |||||
Property, plant and equipment | 3, 13 | ||||
Goodwill | 3, 15 | ||||
Intangible assets, other than goodwill | 3, 15 | ||||
Investments in associates | 12 | ||||
Financial assets | 29 | ||||
Deferred tax assets | 9 | ||||
Consolidated statement of | Other assets | 20 | |||
financial position in millions of EUR | Total non-current assets | ||||
Current assets | |||||
Inventories | 17 | ||||
Other assets | 20 | ||||
Derivative financial assets | 29 | ||||
Income tax receivable | 9 | ||||
Trade and other receivables | 18 | ||||
Cash and cash equivalents | 29 | ||||
Assets classified as held for sale | |||||
Total current assets | |||||
Total assets |
14.3Consolidated statement of financial position (continued) | 2021 | 2022 | |||
Equity | |||||
Shareholders’ equity | 22 | ||||
Non-controlling interests | 12 | ||||
Total equity | |||||
Non-current liabilities | |||||
Debt | 23 | ||||
Post-employment benefits | 25 | ||||
Provisions | 24 | ||||
Deferred tax liabilities | 9 | ||||
Income tax payable | 9 | ||||
Other liabilities | 21 | ||||
Total non-current liabilities | |||||
Current liabilities | |||||
Debt, including bank overdrafts | 23 | ||||
Derivative financial liabilities | 29 | ||||
Income tax payable | 9 | ||||
Trade and other payables | 19 | ||||
Provisions | 24 | ||||
Other liabilities | 21 | ||||
Liabilities from assets classified as held for sale | |||||
Total current liabilities | |||||
Total liabilities and total equity |
14.4Consolidated statement of cash flows | Note | 2021 | 2022 | ||
Cash flows from operating activities | |||||
Net income | |||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||
• Depreciation, amortization and impairment of non-financial assets | 6 | ||||
• Impairment (reversal) of goodwill, other non-current financial assets and investments in associates | |||||
• Net gain on sale of assets | 7 | ( | ( | ||
Consolidated statement of | • Net interest expense on debt, borrowings and other liabilities | 8 | |||
cash flows in millions of EUR | • Income tax expense | 9 | |||
For the years ended December 31 | • Additions to (releases of) provisions | 24 | |||
• Additions to (releases of) post-employment benefits | 25 | ||||
• Other items | |||||
Decrease (increase) in working capital: | ( | ( | |||
• Decrease (increase) in trade and other receivables | 18 | ||||
• Decrease (increase) in inventories | 17 | ( | |||
• Increase (decrease) in trade and other payables | 19 | ( | |||
• Increase (decrease) in other current assets and liabilities | ( | ||||
Increase (decrease) in other non-current assets and liabilities | ( | ||||
Utilizations of provisions | 24 | ( | ( | ||
Utilizations of post-employment benefits | 25 | ( | ( | ||
Net interest and financing costs paid | ( | ( | |||
Income taxes paid | ( | ( | |||
Net cash provided by (used for) operating activities | |||||
Cash flows from investing activities | |||||
Net capital expenditures: | ( | ||||
• Additions of intangible assets | 15 | ( | ( | ||
• Capital expenditures on property, plant and equipment | 13 | ( | ( | ||
• Proceeds from disposal of property, plant and equipment | |||||
Net proceeds from (cash used for) derivatives and other financial assets | ( | ||||
Purchases of businesses, net of cash acquired | 11 | ( | ( | ||
Proceeds from sale of businesses, net of cash disposed of | |||||
Net cash provided by (used for) investing activities | ( | ( |
14.4Consolidated statement of cash flows (continued) | |||||
Note | 2021 | 2022 | |||
Cash flows from financing activities | |||||
Dividend paid | ( | ( | |||
Proceeds from issuance of debt | 23 | ||||
Repayment of debt | 23 | ( | ( | ||
Purchase of treasury shares | ( | ( | |||
Net cash provided by (used for) financing activities | ( | ( | |||
Net cash flows | ( | ( | |||
Effect of changes in exchange rates on cash and cash equivalents and bank overdrafts | |||||
Cash and cash equivalents and bank overdrafts at the beginning of the period | |||||
Cash and cash equivalents and bank overdrafts at the end of the period | 29 |
14.5Consolidated statement of changes in equity | |||||||||||
Share capital | Share premium | Retained earnings | Currency translation differences | Cash flow hedges | Treasury shares | Total share- holders' equity | Non- controlling interests | Equity | |||
Balance as at January 1, 2021 | ( | ( | |||||||||
Net Income | |||||||||||
Other comprehensive income (loss) | ( | ||||||||||
Total comprehensive income (loss) | ( | ||||||||||
Consolidated statement of changes in equity | Dividend distributed | ( | ( | ( | ( | ||||||
in millions of EUR | Purchase of treasury shares | ( | ( | ( | |||||||
Delivery of treasury shares | ( | ||||||||||
Share-based compensation plans | |||||||||||
Balance as at December 31, 2021 | ( | ( | ( | ||||||||
Balance as at January 1, 2022 | ( | ( | ( | ||||||||
Net Income | |||||||||||
Other comprehensive income (loss) | ( | ||||||||||
Total comprehensive income (loss) | ( | ||||||||||
Dividend distributed | ( | ( | ( | ( | |||||||
Purchase of treasury shares | ( | ( | ( | ||||||||
Delivery of treasury shares | ( | ||||||||||
Share-based compensation plans | |||||||||||
Hyperinflation adjustment | |||||||||||
Balance as at December 31, 2022 | ( | ( |
Product development | from 2 to 5 |
Software | from 1 to 10 |
Technology | from 1 to 20 |
Customer relations | from 5 to 20 |
Brand names | from 5 to 20 |
Other | from 2 to 10 |
Building | from 5 to 50 |
Machinery and installations | from 3 to 20 |
Other equipment | from 1 to 10 |
Right-of-use assets | from 2 to 20 |
Digital Solutions 5 | Digital Products | Conventional Products | Other 4 | Signify | ||
2022 | ||||||
Sales to external customers | 4,231 | 2,469 | 793 | 22 | 7,514 | |
Sales including intersegment | 4,236 | 2,691 | 796 | 23 | (232) | 7,514 |
Depreciation and amortization 1 | (80) | (31) | (22) | (59) | (192) | |
EBITA 2 | 374 | 272 | 60 | 138 | 844 | |
EBITA as a % of sales | 8.8% | 11.0% | 7.6% | 11.2% | ||
Amortization 3 | (126) | |||||
Income from operations | 256 | 265 | 60 | 137 | 718 | |
Financial income and expenses | (41) | |||||
Results from investments in associates | – | |||||
Income before taxes | 678 | |||||
2021 | ||||||
Sales to external customers | 3,524 | 2,452 | 861 | 23 | 6,860 | |
Sales including intersegment | 3,527 | 2,673 | 868 | 22 | (230) | 6,860 |
Depreciation and amortization 1 | (79) | (28) | (18) | (65) | (190) | |
EBITA 2 | 318 | 323 | 158 | (164) | 636 | |
EBITA as a % of sales | 9.0% | 13.2% | 18.4% | 9.3% | ||
Amortization 3 | (122) | |||||
Income from operations | 205 | 316 | 158 | (165) | 514 | |
Financial income and expenses | (24) | |||||
Results from investments in associates | – | |||||
Income before taxes | 490 |
Sales, tangible and intangible assets by main countries: | ||||
Sales 1 | Tangible and intangible assets 1, 2 | |||
2021 | 2022 | 2021 | 2022 | |
Netherlands | 547 | 655 | 555 | 604 |
United States | 2,136 | 2,522 | 2,311 | 2,639 |
China | 567 | 517 | 329 | 299 |
Germany | 382 | 421 | 12 | 9 |
Other countries | 3,229 | 3,398 | 710 | 709 |
Total countries | 6,860 | 7,514 | 3,917 | 4,261 |
Sales by market: | ||
2021 | 2022 | |
Europe | 2,130 | 2,230 |
Americas | 2,581 | 2,978 |
Rest of the world 1 | 1,606 | 1,709 |
Global businesses 2 | 543 | 597 |
Total | 6,860 | 7,514 |
Note | 2021 | 2022 | |
Sales | 3 | 6,860 | 7,514 |
Cost of materials used | (2,916) | (3,410) | |
Employee benefit expenses | 5 | (1,798) | (1,790) |
Depreciation and amortization | 6 | (312) | (318) |
Shipping and handling | (371) | (460) | |
Advertising and promotion | (136) | (135) | |
Lease related expenses | (36) | (29) | |
Other operational costs | (788) | (861) | |
Other business income, net | 7 | 11 | 208 |
Income from operations | 514 | 718 |
Note | 2021 | 2022 | |
Salaries and wages | (1,111) | (1,216) | |
Social securities | (194) | (202) | |
Defined contribution plans | (74) | (75) | |
Cost of termination plans | (68) | (30) | |
Temporary personnel | (101) | (86) | |
Share-based compensation | 27 | (31) | (24) |
Other | (218) | (156) | |
Total | (1,798) | (1,790) |
In FTEs | ||
2021 | 2022 | |
Employees | 33,056 | 31,693 |
Third party workers | 4,698 | 3,619 |
Total 1 | 37,754 | 35,312 |
Note | 2021 | 2022 | |
Property, plant and equipment | 13 | (165) | (167) |
Internal-use software | 15 | (10) | (9) |
Other intangible assets | 15 | (122) | (126) |
Development costs | 15 | (14) | (17) |
Total | (312) | (318) |
2021 | 2022 | |
Result on disposal of businesses: | ||
• Income | – | – |
• Expense | – | (11) |
Result on disposal of fixed assets: | ||
• Income | 13 | 194 |
• Expense | – | (1) |
Result on other remaining businesses: | ||
• Income | 6 | 32 |
• Expense | (8) | (6) |
Other business income and expenses | 11 | 208 |
Total other business income | 19 | 227 |
Total other business expense | (8) | (19) |
Note | 2021 | 2022 | |
Interest income | 14 | 10 | |
Change in fair value of financial assets at fair value through profit or loss | 29 | 18 | 36 |
Other financial income | 1 | 1 | |
Financial income | 33 | 47 | |
Interest expense | 23 | (33) | (44) |
Interest on the net defined-benefit obligation | 25 | (6) | (8) |
Interest expense on lease liability | 23 | (7) | (7) |
Change in fair value of financial assets at fair value through profit or loss | 29 | (2) | (9) |
Net foreign exchange gains (losses) | (2) | (5) | |
Monetary gains (losses) 1 | – | (5) | |
Other financial expenses | 23 | (7) | (9) |
Financial expenses | (57) | (88) | |
Financial income and expenses | (24) | (41) |
2021 | 2022 | |
Current tax expense | (78) | (76) |
Prior year benefit (expense) | 2 | 3 |
Current tax expense | (76) | (73) |
2021 | 2022 | |
Origination and reversal of tax losses, tax credits and temporary differences | (28) | (76) |
Change in tax losses, tax credits and temporary differences recognized | 19 | 3 |
Tax rate changes | 6 | – |
Prior year benefit (expense) | (3) | – |
Deferred tax benefit (expense) | (7) | (72) |
2021 | % | 2022 | % | |
Income before taxes | 490 | 678 | ||
Weighted average statutory income tax rate | (110) | (22)% | (158) | (23)% |
Non-deductible expenses | (14) | (3)% | (14) | (2)% |
Tax incentives and exempt income | 28 | 6% | 22 | 3% |
Deferred tax expense related to (de)recognition of deferred tax assets - net | 19 | 4% | 3 | –% |
Changes in the liability for uncertain tax positions | (4) | (1)% | 7 | 1% |
Prior year tax benefit (expense) | (1) | –% | 3 | –% |
Changes in tax rates | 6 | 1% | – | –% |
Other | (7) | (1)% | (9) | (1)% |
Income tax expense recognized in Consolidated statements of income | (83) | (17)% | (145) | (21)% |
Intangible assets | 205 | (75) | 131 |
Property, plant and equipment | 8 | (46) | (38) |
Inventories | 52 | (1) | 51 |
Other receivables and assets | 26 | (14) | 12 |
Provisions for pensions and other post-retirement | 51 | – | 51 |
Provisions for termination benefits | 3 | (1) | 3 |
Other provisions | 48 | – | 48 |
Other liabilities | 94 | (24) | 70 |
Deferred tax assets on tax attributes 1 | 66 | – | 66 |
Total allocations | 554 | (161) | 393 |
Set-off of deferred tax | (136) | 136 | – |
Net deferred tax assets | 418 | (25) | 393 |
2021 | |||
Intangible assets | 252 | (83) | 169 |
Property, plant and equipment | 12 | (44) | (32) |
Inventories | 49 | (1) | 48 |
Other receivables and assets | 23 | (9) | 15 |
Provisions for pensions and other post-retirement | 58 | – | 58 |
Provisions for termination benefits | 6 | – | 6 |
Other provisions | 41 | – | 41 |
Other liabilities | 94 | (19) | 75 |
Deferred tax assets on tax attributes 1 | 73 | – | 73 |
Total allocations | 609 | (155) | 454 |
Set-off of deferred tax | (128) | 128 | – |
Net deferred tax assets | 481 | (27) | 454 |
In millions of EUR | Balance as at January 1 | Recognized in income | Other | Balance as at December 31 |
2022 | ||||
Intangible assets | 169 | (31) | (7) | 131 |
Property, plant and equipment | (32) | (11) | 5 | (38) |
Inventories | 48 | (1) | 4 | 51 |
Other receivables and assets | 15 | (3) | 1 | 12 |
Provisions: | ||||
• pensions and other post-retirement benefits | 58 | (6) | (2) | 51 |
• termination benefits | 6 | (3) | – | 3 |
• other provisions | 41 | 3 | 3 | 48 |
Other liabilities | 75 | (13) | 8 | 70 |
Tax loss carryforwards (including tax credit carryforwards) | 73 | (7) | – | 66 |
Net deferred tax assets | 454 | (72) | 12 | 393 |
2021 | ||||
Intangible assets | 188 | (12) | (7) | 169 |
Property, plant and equipment | (23) | (14) | 5 | (32) |
Inventories | 39 | 4 | 5 | 48 |
Other receivables and assets | 32 | (16) | (1) | 15 |
Provisions: | ||||
• pensions and other post-retirement benefits | 66 | (7) | (1) | 58 |
• termination benefits | 9 | (2) | (1) | 6 |
• other provisions | 29 | 11 | 1 | 41 |
Other liabilities | 56 | 11 | 8 | 75 |
Tax loss carryforwards (including tax credit carryforwards) | 55 | 18 | 1 | 73 |
Net deferred tax assets | 452 | (7) | 9 | 454 |
Expiry year operating loss carryforwards | |||||||
Total | 2023 | 2024 | 2025 | 2026 | 2027 | After 2027 but not unlimited | Unlimited |
632 | 1 | 1 | 1 | 16 | 2 | 25 | 586 |
Income tax receivable under other current assets | 24 | 56 |
Income tax receivable under other non-current assets | 8 | 1 |
Income tax payable under current liabilities | (16) | (21) |
Income tax payable under non-current liabilities | (118) | (111) |
2021 | 2022 | |
Net income attributable to shareholders of Signify N.V. | 397 | 523 |
Weighted average number of ordinary shares outstanding (after deduction of treasury shares) during the year | 124,966,505 | 125,004,312 |
Plus incremental shares assumed from conversions of: | ||
• Performance shares | 2,828,996 | 1,904,807 |
• Conditional shares | 710,721 | 599,885 |
• Restricted shares | 139,716 | 87,966 |
Diluted weighted average number of ordinary shares outstanding (after deduction of treasury shares) during the year | 128,645,938 | 127,596,971 |
in EUR | ||
• Basic | 3.18 | 4.18 |
• Diluted | 3.09 | 4.10 |
At acquisition date | |
Goodwill | 258 |
Other intangible assets | 20 |
Property, plant and equipment | 3 |
Net deferred tax | 15 |
Trade and other receivables | 10 |
Inventories | 30 |
Other assets | 3 |
Cash | 3 |
Trade and other payables | (20) |
Other liabilities | (64) |
Net assets acquired | 257 |
Legal entity name | Principal country of business |
Cooper Lighting Netherlands B.V. | Netherlands |
Cooper Lighting, LLC | United States of America |
Signify (China) Investment Co., Ltd. | China |
Signify France | France |
Signify GmbH | Germany |
Signify Holding B.V. | Netherlands |
Signify Netherlands B.V. | Netherlands |
Signify North America Corporation | United States of America |
Signify Poland Sp. z.o.o. | Poland |
Land and buildings | Machinery and installations | Other equipment | Prepayments and construction in progress | Total | |
Book value as at January 1, 2021 | 447 | 147 | 63 | 51 | 708 |
Of which right-of-use assets | 192 | – | 15 | – | 207 |
Change in book value: | |||||
Capital expenditure | 69 | 7 | 14 | 69 | 160 |
Of which right-of-use assets | 69 | – | 10 | – | 79 |
Assets available for use | 7 | 47 | 18 | (72) | – |
Acquisitions | 2 | – | – | – | 2 |
Of which right-of-use assets | 1 | – | – | – | 1 |
Additions | 78 | 54 | 32 | (2) | 162 |
Sales and disposals | (12) | (1) | – | – | (14) |
Of which right-of-use assets | (4) | – | – | – | (4) |
Divestments and transfers to assets classified as held for sale | (6) | – | – | – | (6) |
Of which right-of-use assets | – | – | – | – | – |
Depreciation | (81) | (40) | (37) | – | (158) |
Of which right-of-use assets | (54) | – | (8) | – | (63) |
Impairment | (6) | (3) | (1) | (2) | (12) |
Of which right-of-use assets | (4) | – | – | – | (4) |
Reversal of impairment | 3 | 1 | – | 1 | 5 |
Of which right-of-use assets | 1 | – | – | – | 1 |
Translation differences and other movements | 26 | 9 | 1 | 1 | 38 |
Of which right-of-use assets | 11 | – | – | – | 11 |
Total changes | 2 | 20 | (5) | (2) | 16 |
Balance as at December 31, 2021 | |||||
Cost | 985 | 1,195 | 458 | 49 | 2,686 |
Accumulated depreciation / impairment | (535) | (1,027) | (399) | – | (1,962) |
Book value | 450 | 167 | 59 | 49 | 724 |
Of which right-of-use assets | 212 | – | 18 | – | 229 |
Land and buildings | Machinery and installations | Other equipment | Prepayments and construction in progress | Total | |
Book value as at January 1, 2022 | 450 | 167 | 59 | 49 | 724 |
Of which right-of-use assets | 212 | – | 18 | – | 229 |
Change in book value: | |||||
Capital expenditure | 61 | 2 | 15 | 58 | 136 |
Of which right-of-use assets | 55 | – | 10 | – | 65 |
Assets available for use | 19 | 24 | 14 | (57) | – |
Acquisitions | 6 | 1 | 1 | 1 | 9 |
Of which right-of-use assets | 5 | – | – | – | 5 |
Additions | 86 | 27 | 30 | 1 | 145 |
Sales and disposals | (12) | (2) | (1) | – | (15) |
Of which right-of-use assets | (10) | – | – | – | (10) |
Divestments and transfers to assets classified as held for sale | (4) | – | – | – | (4) |
Of which right-of-use assets | – | – | – | – | – |
Depreciation | (83) | (38) | (33) | – | (155) |
Of which right-of-use assets | (58) | – | (9) | – | (67) |
Impairment | (5) | (8) | (1) | – | (14) |
Of which right-of-use assets | (2) | – | – | – | (2) |
Reversal of impairment | 1 | 1 | – | – | 2 |
Of which right-of-use assets | 1 | – | – | – | 1 |
Translation differences and other movements | 13 | (7) | 10 | 1 | 16 |
Of which right-of-use assets | 8 | – | – | – | 8 |
Total changes | (3) | (28) | 5 | 2 | (25) |
Balance as at December 31, 2022 | |||||
Cost | 1,019 | 1,100 | 472 | 50 | 2,641 |
Accumulated depreciation / impairment | (573) | (961) | (408) | – | (1,942) |
Book value | 446 | 139 | 64 | 50 | 699 |
Of which right-of-use assets | 211 | – | 19 | – | 230 |
Note | 2021 | 2022 | |
Interest expense on lease liability | 8 | (7) | (7) |
Total cash outflow for leases | 4, 8, 23 | (119) | (107) |
Goodwill | Customer relationships | Technology based | Brand names | Product development | Software | Other | Total | |
Balance as at January 1, 2021 | ||||||||
Cost | 2,921 | 1,419 | 388 | 410 | 145 | 58 | 8 | 5,350 |
Accumulated amortization / impairment | (670) | (967) | (264) | (264) | (119) | (35) | (5) | (2,324) |
Book value | 2,251 | 452 | 124 | 146 | 26 | 23 | 3 | 3,026 |
Change in book value: | ||||||||
Additions | – | – | 1 | – | 21 | 17 | – | 38 |
Amortization | – | (77) | (27) | (18) | (14) | (10) | (1) | (146) |
Acquisitions | 28 | 5 | 4 | 2 | – | – | 1 | 41 |
Impairment | – | – | – | – | (1) | – | – | (1) |
Translation differences and other movements | 185 | 35 | 2 | 12 | 1 | – | – | 235 |
Total changes | 213 | (37) | (20) | (4) | 8 | 7 | 1 | 167 |
Balance as at December 31, 2021 | ||||||||
Cost | 3,167 | 1,522 | 413 | 440 | 163 | 75 | 10 | 5,790 |
Accumulated depreciation / impairment | (703) | (1,107) | (308) | (298) | (129) | (45) | (6) | (2,597) |
Book value | 2,464 | 415 | 105 | 142 | 34 | 30 | 4 | 3,193 |
Change in book value: | ||||||||
Additions | – | – | – | – | 37 | 17 | 3 | 57 |
Amortization | – | (88) | (23) | (12) | (17) | (9) | (3) | (152) |
Acquisitions | 280 | 15 | – | 22 | – | – | – | 317 |
Impairment | – | – | – | – | – | – | – | – |
Translation differences and other movements | 117 | 21 | (15) | 8 | – | – | 15 | 146 |
Total changes | 398 | (53) | (38) | 18 | 20 | 8 | 15 | 368 |
Balance as at December 31, 2022 | ||||||||
Cost | 3,589 | 1,604 | 387 | 481 | 160 | 89 | 38 | 6,348 |
Accumulated amortization / impairment | (728) | (1,242) | (320) | (322) | (106) | (51) | (19) | (2,787) |
Book value | 2,861 | 362 | 67 | 160 | 54 | 38 | 19 | 3,562 |
2021 | 2022 | |
Digital Solutions | 2,089 | 2,482 |
Digital Products | 315 | 317 |
Conventional Products | 59 | 63 |
Book value | 2,464 | 2,861 |
Key assumptions in % | |||
Compound sales growth rate 1 | |||
Extra polation period | Used to calculate terminal value | Pre-tax discount rates | |
Digital Solutions 2022 | 2.8 | 0.3 | 11.6 |
Digital Solutions 2021 | 2.6 | 0.3 | 11.0 |
2021 | 2022 | |
Cash flows from operating activities | 704 | 376 |
Cash flows from investing activities | (91) | (256) |
Cash flows before financing activities | 613 | 119 |
Cash flows from operating activities | 704 | 376 |
Net capital expenditures: | ||
• Additions of intangible assets | (34) | (62) |
• Capital expenditures on property, plant and equipment | (84) | (70) |
• Proceeds from disposal of property, plant and equipment | 27 | 201 |
Free cash flows | 614 | 445 |
2021 | 2022 | |
Inventories | 1,410 | 1,361 |
Trade and other receivables | 1,183 | 1,102 |
Trade and other payables | (2,334) | (1,859) |
Other working capital items | (8) | (41) |
Working capital | 250 | 564 |
2021 | 2022 | |
Raw materials and components | 508 | 552 |
Finished goods | 901 | 809 |
Total | 1,410 | 1,361 |
2021 | 2022 | |
Trade receivables | 1,137 | 1,037 |
Other receivables | 46 | 66 |
Total receivables, net of value allowance | 1,183 | 1,102 |
2021 | 2022 | |
Current | 1,064 | 982 |
Overdue 1-30 days | 36 | 23 |
Overdue 31-180 days | 38 | 31 |
Overdue >180 days | – | – |
Trade receivables, net | 1,137 | 1,037 |
2021 | 2022 | |
Balance as at January 1 | (94) | (76) |
Additions charged to expense | – | (11) |
Utilizations | 23 | – |
Translation differences and other movements | (5) | (7) |
Balance as at December 31 | (76) | (94) |
2021 | 2022 | |
Payables to suppliers | 1,611 | 1,242 |
Amounts payable to employees | 233 | 151 |
Customer rebates and refunds related | 209 | 220 |
Marketing and sales related | 97 | 90 |
Materials and fixed assets related | 59 | 47 |
Other payables | 124 | 108 |
Trade and other payables | 2,334 | 1,859 |
In millions of EUR | 2021 | 2022 |
Contract assets | 53 | 45 |
Indirect taxes | 74 | 73 |
Prepayments | 51 | 42 |
Other assets | 81 | 42 |
Total | 259 | 201 |
From which current | 192 | 161 |
From which non-current | 67 | 40 |
2021 | 2022 | |
Contract liability | 200 | 215 |
Other tax liabilities | 85 | 78 |
Other liabilities | 110 | 61 |
Total | 395 | 353 |
From which current | 213 | 194 |
From which non-current | 182 | 160 |
Number of shares | ||
2021 | 2022 | |
Balance as at January 1 | 125,581,371 | 124,902,004 |
Purchase of treasury shares | (1,937,489) | (1,174,595) |
Delivery of treasury shares | 1,258,122 | 1,513,751 |
Balance as at December 31 | 124,902,004 | 125,241,160 |
2021 | 2022 | |
Shares acquired | 1,937,489 | 1,174,595 |
Average market price | EUR 43.08 | EUR 40.89 |
Amount paid | EUR 83 million | EUR 48 million |
Shares delivered | 1,258,122 | 1,513,751 |
Average price (FIFO) | EUR 25.38 | EUR 28.02 |
Cost of delivered shares | EUR 32 million | EUR 42 million |
Total shares in treasury at year-end | 3,442,234 | 3,103,078 |
Total cost | EUR 126 million | EUR 131 million |
2021 | 2022 | |
Term loan (EUR) | 280 | 280 |
Term loan (USD) | 199 | 211 |
Eurobonds | 1,265 | 1,268 |
Lease liabilities | 249 | 254 |
Other debt | 11 | 19 |
Subtotal | 2,003 | 2,032 |
Bank overdrafts | 4 | 1 |
Gross debt | 2,007 | 2,033 |
Cash and cash equivalents | (851) | (677) |
Net debt (cash) | 1,156 | 1,356 |
Total equity | 2,597 | 3,065 |
Net debt and total equity | 3,753 | 4,421 |
Net debt divided by net debt and total equity (in %) | 31% | 31% |
Total equity divided by net debt and total equity (in %) | 69% | 69% |
Term loans | Eurobonds | Lease liabilities | Other debt | Bank overdrafts | Total | |
Balance as at January 1, 2021 | 795 | 1,262 | 233 | 15 | 3 | 2,307 |
Acquisitions | – | – | 1 | – | – | 1 |
Financing cash flows: | ||||||
• New borrowings | 630 | – | – | 3 | – | 633 |
• Repayment | (984) | – | (72) | (8) | – | (1,064) |
Translation difference | 36 | – | 11 | – | – | 47 |
Other movements 1 | 2 | 3 | 76 | – | 1 | 82 |
Balance as at December 31, 2021 | 479 | 1,265 | 249 | 11 | 4 | 2,007 |
Balance as at January 1, 2022 | 479 | 1,265 | 249 | 11 | 4 | 2,007 |
Acquisitions | – | – | 5 | – | – | 5 |
Financing cash flows: | ||||||
• New borrowings | – | – | – | 217 | – | 217 |
• Repayment | – | – | (68) | (208) | – | (276) |
Translation difference | 12 | – | 2 | – | – | 14 |
Other movements 1 | – | 3 | 66 | – | (3) | 66 |
Balance as at December 31, 2022 | 491 | 1,268 | 254 | 19 | 1 | 2,033 |
Restruc- turing | Environ- mental | Product warranty | Legal | Other | Total | |
Balance as at January 1, 2021 | 84 | 109 | 70 | 10 | 122 | 396 |
Additions | 81 | 9 | 32 | 2 | 45 | 169 |
Utilizations | (88) | (22) | (40) | (3) | (36) | (189) |
Reclassifications | 1 | – | – | – | – | 1 |
Releases | (17) | (2) | (1) | (1) | (12) | (33) |
Changes in discount rate | – | 1 | – | – | (4) | (3) |
Accretion | – | – | – | – | – | 1 |
Translation differences and other movements | 2 | 2 | 4 | – | 5 | 13 |
Balance as at December 31, 2021 | 62 | 97 | 66 | 9 | 120 | 355 |
Short-term | 46 | 18 | 33 | 3 | 40 | 140 |
Long-term | 16 | 79 | 33 | 7 | 80 | 215 |
Balance as at January 1, 2022 | 62 | 97 | 66 | 9 | 120 | 355 |
Acquisitions | – | – | 53 | – | 7 | 60 |
Additions | 38 | 17 | 48 | 108 | 31 | 242 |
Utilizations | (52) | (24) | (51) | (6) | (22) | (155) |
Reclassifications | – | 3 | – | – | (17) | (14) |
Releases | (13) | (6) | (1) | (2) | (7) | (28) |
Changes in discount rate | – | 4 | – | – | (7) | (4) |
Accretion | – | – | – | 1 | – | 1 |
Translation differences and other movements | – | 1 | (1) | (6) | – | (6) |
Balance as at December 31, 2022 | 36 | 92 | 115 | 103 | 105 | 451 |
Short-term | 30 | 22 | 81 | 3 | 32 | 168 |
Long-term | 6 | 70 | 34 | 101 | 73 | 283 |
2021 | 2022 | |||||
Obligation | Plan assets | Net Liability | Obligation | Plan assets | Net Liability | |
Unites States | 563 | (475) | 88 | 459 | (351) | 108 |
Germany | 208 | (15) | 193 | 170 | (15) | 155 |
Other countries | 133 | (51) | 82 | 112 | (48) | 64 |
Total countries | 904 | (541) | 363 | 741 | (414) | 327 |
2021 | 2022 | |||||
Obligation | Plan assets | Net Liability | Obligation | Plan assets | Net Liability | |
Balance as at January 1 | 959 | (569) | 390 | 905 | (541) | 363 |
Service cost | 9 | – | 9 | 9 | – | 9 |
(Negative) past service cost | 3 | – | 3 | – | – | – |
Admin expenses paid | – | 1 | 1 | – | 1 | 1 |
Settlements | (20) | 19 | (1) | (8) | 1 | (8) |
Plan amendments | – | – | – | (1) | – | (1) |
Recognized in employee benefit expenses | (8) | 20 | 12 | 1 | 2 | 2 |
Interest (cost) / income | 18 | (12) | 6 | 23 | (15) | 8 |
Included in Statements of Income | 10 | 8 | 18 | 24 | (13) | 11 |
Actuarial gains / (losses) | ||||||
• Demographic assumptions | 5 | – | 5 | (1) | – | (1) |
• Financial assumptions | (35) | – | (35) | (165) | 129 | (36) |
• Experience adjustment | (4) | 15 | 11 | 22 | – | 22 |
Exchange rate differences | 51 | (41) | 10 | 44 | (33) | 11 |
Included in Statements of comprehensive income | 18 | (26) | (9) | (101) | 96 | (5) |
Employee contributions | 1 | (1) | – | 1 | (1) | – |
Employer contributions | – | (6) | (6) | – | (7) | (7) |
Benefits paid | ||||||
• Benefits paid directly by employer | (28) | – | (28) | (34) | – | (34) |
• Benefits paid from plan assets | (53) | 53 | – | (52) | 52 | – |
Reclassifications | (2) | – | (2) | – | – | – |
Other | (82) | 46 | (36) | (86) | 44 | (42) |
Balance as at December 31 | 905 | (541) | 363 | 741 | (414) | 327 |
In millions of EUR | 2021 | 2022 |
Debt securities | 419 | 310 |
Equity securities | 51 | 38 |
Other | 71 | 67 |
Total assets | 541 | 415 |
In % | ||
2021 | 2022 | |
Discount rate | 2.3 | 4.8 |
Pension cost increases | 0.4 | 0.5 |
Healthcare cost increases | 0.5 | 0.5 |
Wage increases | 0.4 | 1.1 |
2021 | 2022 | |
Increase | ||
Discount rate (1% movement) | (80) | (52) |
Wage change (1% movement) | 11 | 5 |
Pension indexation change (1% movement) | 19 | 10 |
Longevity (see explanation) | 40 | 20 |
Healthcare cost change (1% movement) | 6 | 5 |
Decrease | ||
Discount rate (1% movement) | 91 | 65 |
Wage change (1% movement) | (9) | (3) |
Pension indexation change (1% movement) | (21) | (8) |
Longevity (see explanation) | (33) | (28) |
Healthcare cost change (1% movement) | (6) | (4) |
Assumptions used in Monte-Carlo simulation for valuation in % | |
2022 | |
Signify performance shares | ||||
EUR-denominated | Shares | Weighted average grant-date fair value | Shares | Weighted average grant-date fair value |
3,380,119 | 20.14 | 3,085,771 | 24.51 | |
579,559 | 50.20 | 657,031 | 35.24 | |
Signify conditional shares | ||||
EUR-denominated | Shares | Weighted average grant-date fair value | Shares | Weighted average grant-date fair value |
900,831 | 19.21 | 811,664 | 25.96 | |
224,345 | 46.65 | 260,205 | 32.97 | |
Remuneration costs of Key Management - the Board of Management | ||
2021 | 2022 | |
Salary/Base compensation | 2,123,337 | 2,187,040 |
Annual Incentive 1 | 1,624,156 | 180,204 |
Long Term Equity-based Incentive 2 | 1,962,627 | 1,331,037 |
Pension allowances | 511,445 | 492,986 |
Pension scheme costs 3 | 82,386 | 84,399 |
Other compensation 4 | 124,285 | 103,391 |
Total costs | 6,428,236 | 4,379,057 |
Remuneration of Key Management - the Supervisory Board in EUR | ||
2021 | 2022 | |
Membership | 495,000 | 523,225 |
Committees | 162,000 | 162,050 |
Other compensation 1 | 27,500 | 77,500 |
Total costs | 684,500 | 762,775 |
Carried at | Gross amount recognized on the balance sheet | Amounts not offset on the balance sheet, but are subject to master netting arrangements | Net amount | Fair value hierarchy level | Estimated fair value 1 | |
Balance as at December 31, 2021 | ||||||
Non-current financial assets 1 | amortized cost | 37 | – | 37 | – | 37 |
Unquoted equity shares | fair value (FVOCI) | 3 | – | 3 | 3 | 3 |
Trade and other receivables 1 | amortized cost | 1,183 | – | 1,183 | – | 1,183 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 59 | (30) | 28 | 2 | 59 |
Derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 18 | – | 18 | 3 | 25 |
Cash and cash equivalents | 851 | – | 851 | – | 851 | |
Debt (Eurobonds) | amortized cost | (1,265) | – | (1,265) | 1 | (1,355) |
Debt (excluding Eurobonds) 1 | amortized cost | (743) | – | (743) | 2 | (743) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (45) | 30 | (14) | 2 | (45) |
Trade and other payables 1 | amortized cost | (2,332) | – | (2,332) | – | (2,332) |
Contingent considerations | fair value (FVTPL) | (2) | – | (2) | 3 | (2) |
Balance as at December 31, 2022 | ||||||
Non-current financial assets 1, 2 | amortized cost | 117 | – | 117 | – | 117 |
Unquoted equity shares | fair value (FVOCI) | 3 | – | 3 | 3 | 3 |
Trade and other receivables 1 | amortized cost | 1,102 | – | 1,102 | – | 1,102 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 36 | (21) | 15 | 2 | 36 |
Derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 44 | – | 44 | 3 | 50 |
Cash and cash equivalents | 677 | – | 677 | – | 677 | |
Debt (Eurobonds) | amortized cost | (1,268) | – | (1,268) | 1 | (1,220) |
Debt (excluding Eurobonds) 1 | amortized cost | (765) | – | (765) | 2 | (765) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (43) | 21 | (22) | 2 | (43) |
Trade and other payables 1 | amortized cost | (1,856) | – | (1,856) | – | (1,856) |
Contingent considerations | fair value (FVTPL) | (3) | – | (3) | 3 | (3) |
Total | Less than 1 year | Between 1 and 5 years | Over 5 years | |
Debt, including bank overdrafts | 1,779 | 20 | 1,759 | – |
Interest on debt | 115 | 47 | 68 | – |
Trade and other payables | 1,859 | 1,859 | – | – |
Lease liability | 279 | 69 | 173 | 36 |
Derivative liabilities | 43 | 42 | 1 | – |
Off-balance sheet commitments | 95 | 31 | 64 | – |
Purchase obligations | 228 | 123 | 105 | |
Contractual cash obligations | 4,399 | 2,191 | 2,172 | 36 |
Revolving credit facility (RCF) | 500 | – | – | – |
2021 | 2022 | |
Cash at banks and in hand | 403 | 425 |
Short-term deposits | 432 | 216 |
Other cash equivalents | 17 | 35 |
Cash and cash equivalents | 851 | 677 |
Bank overdrafts | (4) | (1) |
Cash and cash equivalents and bank overdrafts | 847 | 676 |
Receivables / Sales | Payables / Purchases | ||||
Exposure currency | |||||
CNY | 4 | (4) | (1,142) | 750 | |
USD | 836 | (619) | (193) | 177 | |
GBP | 82 | (54) | – | – | |
EUR 1 | 73 | (73) | (11) | 11 | |
CAD | 143 | (89) | – | – | |
SEK | 58 | (34) | – | – | |
CHF | 88 | (53) | – | – | |
AUD | 62 | (38) | – | – | |
NOK | 37 | (23) | – | – | |
SGD | 40 | (24) | – | – | |
NZD | 34 | (22) | – | – | |
HUF | 1 | (1) | (44) | 28 | |
JPY | 33 | (20) | – | – | |
PLN | 61 | (61) | (144) | 106 | |
Others | 69 | (51) | (26) | 26 | |
Total 2022 | 1,621 | (1,164) | (1,560) | 1,098 | |
Total 2021 | 2,024 | (1,394) | (1,458) | 1,085 | |
Note | 2021 | 2022 | |||
Other income | – | 3 | |||
Financial income | 5 | 14 | |||
Financial expenses | (38) | (44) | |||
Statement of income in millions of EUR For the years ended December 31 | Share in results of subsidiaries | 430 | 551 | ||
Net income | A | 397 | 523 | ||
15.2Statement of financial position before appropriation of results | Note | 2021 | 2022 | ||
Non-current assets | |||||
Financial assets | C | 4,221 | 4,823 | ||
Total non-current assets | 4,221 | 4,823 | |||
Current assets | |||||
Derivative financial assets | – | 16 | |||
Amounts due from subsidiaries | 4 | 5 | |||
Total current assets | 4 | 21 | |||
Total assets | 4,225 | 4,844 | |||
Shareholders’ equity | D | ||||
Statement of financial position before appropriation of results in millions of EUR As at December 31 | Share Capital | 1 | 1 | ||
Share premium | 2,174 | 2,139 | |||
Legal reserve: currency translation differences | (80) | 67 | |||
Legal reserve: cash flow hedges | (2) | (20) | |||
Legal reserve: other | 213 | 263 | |||
Other reserve: treasury shares | (126) | (131) | |||
Other reserve: retained earnings | (119) | 79 | |||
Net income | 397 | 523 | |||
Total shareholders' equity | 2,459 | 2,920 | |||
Non-current liabilities | |||||
Debt | E | 1,743 | 1,759 | ||
Provisions | 1 | – | |||
Total non-current liabilities | 1,745 | 1,759 | |||
Current liabilities | |||||
Provisions | 1 | 1 | |||
Other liabilities | – | 1 | |||
Amounts owed to subsidiaries | – | 142 | |||
Trade and other payables | 20 | 22 | |||
Total current liabilities | 21 | 165 | |||
Total liabilities and shareholders' equity | 4,225 | 4,844 |
15.3Statement of changes in equity | ||||||||||||
Legal reserves | Other reserves | |||||||||||
Share capital | Share premium | Currency translation differences | Cash flow hedges | Other | Treasury shares | Retained earnings | Net income | Total share- holders' equity | ||||
Balance as at January 1, 2021 | 1 | 2,201 | (337) | 17 | 157 | (74) | (95) | 325 | 2,196 | |||
Appropriation of prior year result | – | – | – | – | – | – | 325 | (325) | – | |||
Statement of changes in equity in millions of EUR | Net income | – | – | – | – | – | – | – | 397 | 397 | ||
Net current period change | – | – | 257 | (20) | – | – | 16 | – | 253 | |||
Legal reserves reclassifications | – | – | – | – | 56 | – | (56) | – | – | |||
Dividend distributed | – | – | – | – | – | – | (343) | – | (343) | |||
Purchase of Treasury shares | – | – | – | – | – | (83) | 7 | – | (77) | |||
Delivery of Treasury shares | – | (60) | – | – | – | 32 | 28 | – | – | |||
Share-based compensation plans | – | 31 | – | – | – | – | – | – | 31 | |||
Income tax share-based compensation plans | – | 2 | – | – | – | – | – | – | 2 | |||
Balance as at December 31, 2021 | 1 | 2,174 | (80) | (2) | 213 | (126) | (119) | 397 | 2,459 | |||
Balance as at January 1, 2022 | 1 | 2,174 | (80) | (2) | 213 | (126) | (119) | 397 | 2,459 | |||
Appropriation of prior year result | – | – | – | – | – | – | 397 | (397) | – | |||
Net income | – | – | – | – | – | – | – | 523 | 523 | |||
Net current period change | – | – | 147 | (18) | – | – | 11 | – | 140 | |||
Legal reserves reclassifications | – | – | – | – | 50 | – | (50) | – | – | |||
Dividend distributed | – | – | – | – | – | – | (182) | – | (182) | |||
Purchase of Treasury shares | – | – | – | – | – | (48) | – | – | (48) | |||
Delivery of Treasury shares | – | (59) | – | – | – | 42 | 16 | – | – | |||
Share-based compensation plans | – | 23 | – | – | – | – | – | – | 23 | |||
Hyperinflation adjustment | – | – | – | – | – | – | 5 | – | 5 | |||
Balance as at December 31, 2022 | 1 | 2,139 | 67 | (20) | 263 | (131) | 79 | 523 | 2,920 | |||
2021 | 2022 | |
Audit fees 1 | 6.4 | 6.5 |
•consolidated financial statements | 4.0 | 3.7 |
•statutory financial statements | 2.4 | 2.8 |
Audit-related fees | 0.4 | 0.4 |
•sustainability assurance | 0.3 | 0.3 |
•other | 0.1 | 0.1 |
Total 2 | 6.8 | 6.9 |
Investments | Loans | Total | |
Balance as at January 1, 2021 | 3,745 | 407 | 4,151 |
Dividends received | (632) | – | (632) |
Share in results of subsidiaries | 430 | – | 430 |
Translation differences | 257 | 35 | 293 |
Other movements | (21) | – | (21) |
Balance as at December 31, 2021 | 3,779 | 442 | 4,221 |
Dividends received | (96) | – | (96) |
Share in results of subsidiaries | 551 | – | 551 |
Translation differences | 147 | 27 | 174 |
Other movements | (26) | – | (26) |
Balance as at December 31, 2022 | 4,353 | 470 | 4,823 |
Number of shares | ||
2021 | 2022 | |
Balance as at January 1 | 125,581,371 | 124,902,004 |
Purchase of treasury shares | (1,937,489) | (1,174,595) |
Delivery of treasury shares | 1,258,122 | 1,513,751 |
Balance as at December 31 | 124,902,004 | 125,241,160 |
2021 | 2022 | |
Shares acquired | 1,937,489 | 1,174,595 |
Average market price | EUR 43.08 | EUR 40.89 |
Amount paid | EUR 83 million | EUR 48 million |
Shares delivered | 1,258,122 | 1,513,751 |
Average price (FIFO) | EUR 25.38 | EUR 28.02 |
Cost of delivered shares | EUR 32 million | EUR 42 million |
Total shares in treasury at year-end | 3,442,234 | 3,103,078 |
Total cost | EUR 126 million | EUR 131 million |
2021 | 2022 | |
Shareholders' equity per December 31 | 2,459 | 2,920 |
Issued share capital | 1 | 1 |
Currency translation reserve | – | 67 |
Restrictions on subsidiaries to transfer funds to parent company | 143 | 142 |
Capitalized development costs reserve | 53 | 84 |
Revaluation reserve | 14 | 34 |
Reserves required by Articles of Association | 3 | 3 |
Limitations in the distribution of shareholders' equity | 214 | 331 |
Distributable reserves of December 31 | 2,245 | 2,589 |
Term loans | Eurobonds | Other debt | Total | |
Balance as at January 1, 2021 | 794 | 1,262 | – | 2,056 |
New borrowings | 630 | – | – | 630 |
Repayments | (984) | – | – | (984) |
Translation differences | 36 | – | – | 36 |
Other movements | 2 | 3 | – | 5 |
Balance as at December 31, 2021 | 479 | 1,265 | – | 1,743 |
New borrowings | – | – | 189 | 189 |
Repayments | – | – | (189) | (189) |
Translation differences | 12 | – | – | 12 |
Other movements | – | 3 | – | 3 |
Balance as at December 31, 2022 | 491 | 1,268 | – | 1,759 |
16Sustainability statements |
Overview stakeholder engagement activities (non-exhaustive) | ||||||||
Stakeholder group | Stakeholder engagement processes | Examples of topics discussed | ||||||
Customers | Business development, lean value chain projects, consumer panels, Net Promoter Scores, social media, customer surveys, key account management, sustainability exchanges with customers | Energy crisis and efficiency Satisfaction rates ESG-performance | ||||||
Employees | Regular meetings, quarterly team surveys and employee development process, sustainability quarterly webcasts and engagement campaigns | Strategic alignment sessions Training & Development Diversity, equity & inclusion | ||||||
Investors and analysts | Virtual roadshows, (ESG) investor conferences, investor webcasts, investor relations website, investors' perception study | Strategic alignment sessions ESG-performance | ||||||
Suppliers | Supplier development, quality improvement projects, cooperation in industry working groups and strategic commodity management | ESG-performance Peer-learning Strategic alignment sessions | ||||||
Governments, municipalities | Annual innovation experience, research projects, advocating activities, business development, GreenSwitch and Brighten America programs' implementation | Sustainable cities Energy crisis and efficiency Sustainable innovation | ||||||
Civil society organizations | Partnerships with NGOs, cross-sector (multi-stakeholder), projects, supplier sustainability stakeholder day, our social investment program, the Signify Foundation | Social impact of light Sustainable operations Growth for sustainability | ||||||
Priority SDG | Material topic | Location | Boundary | |||||||||||
Social | Talent & Development | 16.3.1 Talent & Development | Own operations | |||||||||||
Diversity & Inclusion | 16.3.2 Diversity, equity & inclusion | Own operations; Supply chain | ||||||||||||
Human rights | 16.3.3 Human rights | Own operations; Supply chain | ||||||||||||
Safety at work | 16.3.4 Safety at work | Own operations; Supply chain | ||||||||||||
Social impact of light | 16.3.5 Social impact of light | Use phase | ||||||||||||
Environment | Climate action | 16.4.1 Climate action | Own operations; Supply chain; Use phase | |||||||||||
Biodiversity | 16.4.6 Biodiversity | Own operations; Use phase | ||||||||||||
Circular economy | 16.4.2 Circular economy | Own operations; Supply chain; Use phase | ||||||||||||
Responsible packaging | 16.4.3 Responsible packaging | Use phase | ||||||||||||
Water usage | 16.4.5 Water usage | Own operations | ||||||||||||
Hazardous substances | 16.4.4 Hazardous substances | Own operations; Use phase | ||||||||||||
Economic & Governance | Innovation | 2 CEO message 16.2 Sustainable innovation | Own operations; Supply chain; Use phase | |||||||||||
Cybersecurity | 16.3.6 Cybersecurity | Own operations; Use phase | ||||||||||||
Business Ethics | 16.3.2 Human rights 16.3.5 Business ethics 11.4 Capital allocation 11.6 Share performance | Own operations; Use phase | ||||||||||||
Digitalization | 2 CEO message 12.5 Key risks | Own operations | ||||||||||||
Operational excellence | 4 Corporate Performance 12.5 Key risks | Own operations | ||||||||||||
Geopolitical instability | 12.5 Key risks | Own operations | ||||||||||||
Program 2025 targets | ||
Doubling objectives | Continue and strengthen | |
Better World | Double the pace we achieve the 1.5°C scenario of the Paris Agreement | Carbon neutral operations and 100% renewable electricity |
Increase Climate action revenues to 72% | ||
Double our Circular revenues to 32% | Zero waste to landfill and sustainable packaging | |
Brighter Lives | Double our Brighter lives revenues to 32% | 10 million lives lit through our Signify Foundation |
Double our % of women in leadership to 34% | Safe & healthy workplace with a TRC rate less than 0.30 | |
Supplier sustainability performance of 95% | ||
Approved Science-Based Targets - 1.5 degrees scenario | ||
Baseline | Target 2030 | |
Carbon emissions from scope 1 and scope 2 | 2015 | 70% reduction |
Carbon emissions from scope 3 (use of product) | 2015 | 30% reduction |
Employee turnover breakdown in 2022 in % | ||||||
Staff (majority in factory) | Professional | Mid-Level Professional | Senior-Level Professional | Leadership | Grand Total | |
Total adjusted 1 | 6% | 8% | 2% | 1% | –% | 17% |
Total | 39% | 7% | 2% | –% | –% | 48% |
of which voluntary | 25% | 4% | 1% | –% | –% | 30% |
of which involuntary | 14% | 3% | 1% | –% | –% | 18% |
Employees in FTEs | |||
2020 | 2021 | 2022 | |
Signify total | 37,926 | 36,824 | 34,619 |
Staff | Professional | Mid-level professional | Senior-level professional | Leadership | ||||||
Men | Women | |||||||||
Staff | Professional | Mid-level professional | Senior-level professional | Leadership | ||||||
Men | Women | |||||||||
Under 30 | 30 - 50 | Over 50 | |||||||
Salient human rights issues | |||||||||
Salient human rights issues | Rights holders covered in our programs | Reference to our disclosures | |||||||
(3rd party) employees | Direct suppliers | Indirect suppliers | |||||||
1 | Freedom of association and collective bargaining | • | • | 16.3.5: Business ethics 16.3.3: Human Rights | |||||
2 | Safe & healthy workplace | • | • | 16.3.4: Safety at work 16.3.3: Human rights | |||||
3 | Working hours | • | • | 16.3.5: Business ethics 16.3.3: Human Rights | |||||
4 | Equal employment opportunities and respect | • | • | 16.3.2: Diversity, equity & inclusion 16.3.3: Human rights 16.3.5: Business ethics | |||||
5 | Recognition and reward | • | • | 16.3.2: Diversity, equity & inclusion 16.3.3: Human rights 16.3.5: Business ethics | |||||
6 | Modern Slavery & Human Trafficking | 16.3.3: Human rights | |||||||
7 | Forced and child labor | 16.3.3: Human rights | |||||||
8 | Employee development | • | 16.3.1: Talent & Development 16.3.5: Business ethics | ||||||
Labor | Health & Safety | Environment | Ethics | General | ||||||
Freely chosen employment 80-100% | Occupational safety 60-80% | Environmental permits and reporting 80-100% | Business integrity 80-100% | RBA code 80-100% | ||||||
Child labor prohibition/ Young worker management 80-100% | Emergency preparedness 60-80% | Pollution prevention and resource reduction 80-100% | No improper advantage 80-100% | |||||||
Working hours 60-80% | Occupational injury and illness 80-100% | Hazardous substances 60-80% | Disclosure of information 80-100% | |||||||
Wages and benefits 80-100% | Industrial hygiene 80-100% | Solid waste 80-100% | Protection of intellectual property 80-100% | |||||||
Human treatment 80-100% | Physically demanding work 80-100% | Air emissions 80-100% | Fair business, advertising and competition 80-100% | |||||||
Non-discrimination 80-100% | Machine safeguarding 80-100% | Product content restrictions 80-100% | Protection of identity 80-100% | |||||||
Freedom of association 80-100% | Food sanitation and housing 60-80% | Water management 80-100% | Responsible sourcing of minerals 80-100% | |||||||
Health & Safety information communication 80-100% | Energy consumption and greenhouse gas emission 60-80% | Privacy 80-100% | ||||||||
Non-retaliation 80-100% |
Recordable cases | |||
2020 | 2021 | 2022 | |
Total recordable case rate | 0.22 | 0.17 | 0.16 |
Severe injuries | 21 | 18 | 7 |
Severity rate | 0.06 | 0.05 | 0.02 |
Lost workday cases rate | 0.17 | 0.12 | 0.09 |
Fatalities | 0 | 0 | 0 |
Breakdown of alleged violations Integrity code | |||
2020 | 2021 | 2022 | |
Health & Safety | 2 | 3 | 3 |
Treatment of employees | 86 | 90 | 130 |
• Equal, fair and respectful treatment | 60 | 59 | 103 |
• Employee development | 4 | 3 | — |
• Employee privacy | — | — | — |
• Employee relations | 2 | 5 | 3 |
• Remuneration | 5 | 11 | 2 |
• Right to organize/Collective bargaining | — | — | — |
• Working hours | 2 | 2 | — |
• HR other | 13 | 10 | 22 |
Legal | 7 | 11 | 3 |
Business integrity | 59 | 56 | 75 |
Security, including IT | 24 | 30 | 30 |
Other | — | 5 | 3 |
Total | 178 | 195 | 244 |
2022 Signify corporate income tax paid per main countries | |
Countries | EUR million |
France | 20 |
China | 15 |
The Netherlands | 13 |
India | 12 |
Mexico | 2 |
Poland | 9 |
Belgium | 4 |
Canada | 3 |
The United States | 1 |
Other | 20 |
Total | 99 |
Signify operational carbon footprint in kilotonnes | |||
2020 | 2021 | 2022 | |
Scope 1 | 161 | 149 | 142 |
Scope 2 (market based) | 1 | 10 | 13 |
Scope 3 logistics | 91 | 124 | 87 |
Of which | |||
• Air transport | 40 | 59 | 21 |
• Road transport | 24 | 31 | 30 |
• Ocean transport | 27 | 34 | 36 |
7 | 7 | 10 | |
Total footprint | 260 | 290 | 252 |
Scope 2 (location based) | 160 | 186 | 140 |
Logistics | |||
Non-industrial operations | |||
Manufacturing |
Philips A-class LED tube | ||
In 2021, Signify broke new ground with the launch of the Philips LED A-class bulb, which consumes 60% less energy than a standard Philips LED. In 2022, the MASTER LEDtube UltraEfficient continues this technological innovation to expand the portfolio of energy-efficient products, which meet the A-class criteria of the new EU energy labeling and eco- design framework. Under these updated rules, lighting products need energy efficiency of at least 210 lm/W to be rated A-class, the highest rating. | ||
Setting Science-Based Targets in China |
Signify was one of the first CDP Supply Chain members to start engaging Chinese suppliers on the importance to set Science-Based Targets (SBTs) to reduce GHG emissions. We nominated four of our high-impact China-based suppliers, of which two have now formally signed the Science-Based Targets Initiative (SBTi) commitment letter. In a dedicated webinar to our suppliers, we explained how science-based target setting plays an important role in suppliers' evaluation. Once suppliers have formally committed to the SBTi, an emission calculation tool was provided to them to help the establishment of accurate emission rates. Our collaboration with CDP was key to support our suppliers and monitor their progress and progress reports were shared at management level, to initiate actions where needed. |
CDP reporters per region and topics reported | ||||||||||||||
Greater China | Rest of the World | Europe | Americas | Total | ||||||||||
2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | 2022 | |||||
Scope 1 | 65% | 62% | 68% | 67% | 67% | 66% | 60% | 65% | 65% | 64% | ||||
Scope 2 | 35% | 33% | 46% | 53% | 48% | 44% | 45% | 57% | 42% | 43% | ||||
Scope 1 & 2 | 37% | 36% | 48% | 58% | 49% | 50% | 44% | 57% | 43% | 47% | ||||
Have a reduction target | 55% | 55% | 52% | 58% | 43% | 46% | 34% | 48% | 47% | 51% | ||||
Have on-going reduction activities | 63% | 54% | 61% | 62% | 51% | 63% | 39% | 52% | 54% | 57% | ||||
Climate change opportunities | 65% | 70% | 68% | 67% | 67% | 73% | 53% | 73% | 63% | 71% | ||||
Climate change risks | 57% | 60% | 45% | 44% | 46% | 52% | 42% | 56% | 49% | 55% | ||||
Integrated climate change in risk management | 21% | 31% | 38% | 44% | 38% | 38% | 34% | 51% | 30% | 38% | ||||
Total amount of reporters | 190 | 141 | 56 | 45 | 136 | 103 | 116 | 63 | 498 | 352 | ||||
Recycling rate per waste category | |||
2020 | 2021 | 2022 | |
Canteen waste | 43% | 66% | 72% |
Chemical Waste | 29% | 36% | 45% |
Electrical and Electronic Waste | 99% | 100% | 99% |
Glass (line rejects) | 100% | 100% | 100% |
Metal scrap | 100% | 100% | 100% |
Paper/cardboard | 99% | 99% | 97% |
Plastic waste | 79% | 81% | 84% |
Manufacturing waste in kilotonnes | |||
2020 | 2021 | 2022 | |
Recycled | 30 (91%) | 38.7 (89%) | 37.7 (89%) |
Incinerated | 1.9 (6%) | 3.8 (9%) | 3.8 (9%) |
Landfilled | 0.9 (3%) | 0.9 (2%) | 0.6 (1.5%) |
In scope of commitment | 0 (0%) | 0.4 (0.88%) | 0.2 (0.49%) |
Total waste | 32.8 | 43.8 | 42.2 |
Water intake in thousands of m3 | |||
2020 | 2021 | 2022 | |
Total water | 971 | 1,432 | 1,164 |
Emissions of VOCs in lacquering processes | |||
2020 | 2021 | 2022 | |
Lead and lead compounds | — | 0 | 0 |
Styrene | 0 | 0 | 0 |
Toluene | 37 | 1.2 | 1.2 |
Xylene | 767 | 822.3 | 717.2 |
Emissions from mercury in kilograms | |||
2020 | 2021 | 2022 | |
Mercury and mercury compounds | 0.01 | 0 | 0 |
Eligibility and alignment disclosures for turnover, CapEx and Opex contributing to the objectives of climate change mitigation and adaptation | |||||||||
2021 (original) | 2021 (restated)1 | 2022 | |||||||
Turnover | CapEx | OpEx | Turnover | CapEx | OpEx | Turnover | CapEx | OpEx | |
Taxonomy-eligible and aligned (A.1) | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 11% | 12% | 11% |
Taxonomy-eligible but not aligned (A.2) | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 72% | 71% | 63% |
Total Taxonomy-eligible activities (A=A1+A2) | 45% | 51% | 44% | 83% | 85% | 76% | 83% | 83% | 74% |
Total Taxonomy-non-eligible activities (B) | 55% | 49% | 56% | 17% | 15% | 24% | 17% | 17% | 26% |
Total (EUR million) | 6,860 | 213 | 456 | 6,860 | 213 | 456 | 7,514 | 238 | 492 |
1Definition of taxonomy-eligible turnover has been updated. Climate action revenues are no longer used for the calculation of Taxonomy-eligible activities. Reporting of our third-party manufacturing activities has been adjusted to follow the IFRS rules for revenue recognition. Sales of products manufactured by subcontractors are included in the Taxonomy-eligible proportion as Signify controls the circumstances under which the subcontractor works. | |||||||||
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2022 | ||||||||||||||||||
Substantial contribution criteria | DNSH criteria ('Does Not Significantly Harm') | |||||||||||||||||
EU NACE CODE | Absolute Turnover | Proportion of total Turnover | Climate change mitigation | Climate change adaptation | Water and marine resources | Circular economy | Pollution | Biodiversity and ecosystems | Climate change adaptation | Water and marine resources | Circular economy | Pollution | Biodiversity and ecosystems | Taxonomy- aligned proportion of Turnover year 2022 | Category (Enabling or Transitional) | |||
Economic activities | EUR million | % | % | % | % | % | % | % | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E/T | |
A. TAXONOMY-ELIGIBLE ACTIVITIES | ||||||||||||||||||
A.1 Taxonomy-eligible and aligned activities (Taxonomy-Aligned) | ||||||||||||||||||
Manufacture of energy efficiency equipment for buildings (3.5) | C27.40 | 229 | 3.0% | 3.0% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | Y | Y | Y | Y | Y | 3.0% | E |
Manufacture other low carbon technologies that result in substantial GHG emission reductions in other sectors of the economy (3.6) | C27.40 | 584 | 7.8% | 7.8% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | Y | Y | Y | Y | Y | 7.8% | E |
Installation, maintenance and repair of energy efficiency equipment (7.3) | F43.21 | 5 | 0.1% | 0.1% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | n.a. | n.a. | Y | n.a. | Y | 0.1% | E |
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings (7.5) | F43.21 | 9 | 0.1% | 0.1% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | n.a. | n.a. | n.a. | n.a. | Y | 0.1% | E |
Total Turnover from taxonomy-eligible and aligned activities (A.1) | 826 | 11.0% | 11.0% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 11.0% | E | |
A.2 Taxonomy-eligible but not aligned activities (Taxonomy-Eligible) | ||||||||||||||||||
Manufacture of energy efficiency equipment for buildings (3.5) | C27.40 | 4,292 | 57.1% | 57.1% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Manufacture other low carbon technologies that result in substantial GHG emission reductions in other sectors of the economy (3.6) | C27.40 | 1,124 | 15.0% | 15.0% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Installation, maintenance and repair of energy efficiency equipment (7.3) | F43.21 | — | —% | —% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings (7.5) | F43.21 | — | —% | —% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Total Turnover of taxonomy-eligible but not aligned activities (A.2) | 5,416 | 72.1% | 72.1% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. | |
Total Taxonomy-eligible Turnover (A.1 + A.2) | 6,242 | 83.1% | 83.1% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 11.0% | n.a. | |
B. TAXONOMY NON-ELIGIBLE ACTIVITIES | ||||||||||||||||||
Total Turnover of Taxonomy-non-eligible Activities (B) | 1,272 | 16.9% | ||||||||||||||||
Total (A+B) | 7,514 | 100.0% | ||||||||||||||||
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2022 | ||||||||||||||||||
Substantial contribution criteria | DNSH criteria ('Does Not Significantly Harm') | |||||||||||||||||
EU NACE CODE | Absolute CapEx | Proportion of total CapEx | Climate change mitigation | Climate change adaptation | Water and marine resources | Circular economy | Pollution | Biodiversity and ecosystems | Climate change adaptation | Water and marine resources | Circular economy | Pollution | Biodiversity and ecosystems | Taxonomy- aligned proportion of CapEx year 2022 | Category (Enabling or Transitional) | |||
Economic activities | EUR million | % | % | % | % | % | % | % | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E/T | |
A. TAXONOMY-ELIGIBLE ACTIVITIES | ||||||||||||||||||
A.1 Taxonomy-eligible and aligned activities (Taxonomy-Aligned) | ||||||||||||||||||
Manufacture of energy efficiency equipment for buildings (3.5) | C27.40 | 8 | 3.4% | 3.4% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | Y | Y | Y | Y | Y | 3.4% | E |
Manufacture other low carbon technologies that result in substantial GHG emission reductions in other sectors of the economy (3.6) | C27.40 | 21 | 8.7% | 8.7% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | Y | Y | Y | Y | Y | 8.7% | E |
Installation, maintenance and repair of energy efficiency equipment (7.3) | F43.21 | 0.2 | 0.1% | 0.1% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | n.a. | n.a. | Y | n.a. | Y | 0.1% | E |
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings (7.5) | F43.21 | 0.3 | 0.1% | 0.1% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | n.a. | n.a. | n.a. | n.a. | Y | 0.1% | E |
Total CapEx from taxonomy-eligible and aligned activities (A.1) | 29 | 12.4% | 12.4% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 12.4% | E | |
A.2 Taxonomy-eligible but not aligned activities (Taxonomy-Eligible) | ||||||||||||||||||
Manufacture of energy efficiency equipment for buildings (3.5) | C27.40 | 135 | 56.7% | 56.7% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Manufacture other low carbon technologies that result in substantial GHG emission reductions in other sectors of the economy (3.6) | C27.40 | 33 | 14.0% | 14.0% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Installation, maintenance and repair of energy efficiency equipment (7.3) | F43.21 | — | —% | —% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings (7.5) | F43.21 | — | —% | —% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Total CapEx of taxonomy-eligible but not aligned activities (A.2) | 169 | 70.8% | 70.8% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. | |
Total Taxonomy-eligible CapEx (A.1 + A.2) | 198 | 83.1% | 83.1% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 12.4% | n.a. | |
B. TAXONOMY NON-ELIGIBLE ACTIVITIES | ||||||||||||||||||
Total CapEx of Taxonomy-non-eligible Activities (B) | 40 | 16.9% | ||||||||||||||||
Total (A+B) | 238 | 100.0% | ||||||||||||||||
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities - disclosure covering year 2022 | ||||||||||||||||||
Substantial contribution criteria | DNSH criteria ('Does Not Significantly Harm') | |||||||||||||||||
EU NACE CODE | Absolute OpEx | Proportion of total OpEx | Climate change mitigation | Climate change adaptation | Water and marine resources | Circular economy | Pollution | Biodiversity and ecosystems | Climate change adaptation | Water and marine resources | Circular economy | Pollution | Biodiversity and ecosystems | Taxonomy- aligned proportion of OpEx year 2022 | Category (Enabling or Transitional) | |||
Economic activities | EUR million | % | % | % | % | % | % | % | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | Y/N | % | E/T | |
A. TAXONOMY-ELIGIBLE ACTIVITIES | ||||||||||||||||||
A.1 Taxonomy-eligible and aligned activities (Taxonomy-Aligned) | ||||||||||||||||||
Manufacture of energy efficiency equipment for buildings (3.5) | C27.40 | 15 | 3.1% | 3.1% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | Y | Y | Y | Y | Y | 3.1% | E |
Manufacture other low carbon technologies that result in substantial GHG emission reductions in other sectors of the economy (3.6) | C27.40 | 39 | 7.9% | 7.9% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | Y | Y | Y | Y | Y | 7.9% | E |
Installation, maintenance and repair of energy efficiency equipment (7.3) | F43.21 | 0.3 | 0.1% | 0.1% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | n.a. | n.a. | Y | n.a. | Y | 0.1% | E |
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings (7.5) | F43.21 | 0.6 | 0.1% | 0.1% | —% | n.a. | n.a. | n.a. | n.a. | Y | Y | n.a. | n.a. | n.a. | n.a. | Y | 0.1% | E |
Total OpEx from taxonomy-eligible and aligned activities (A.1) | 55 | 11.3% | 11.3% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 11.3% | E | |
A.2 Taxonomy-eligible but not aligned activities (Taxonomy-Eligible) | ||||||||||||||||||
Manufacture of energy efficiency equipment for buildings (3.5) | C27.40 | 249 | 50.6% | 50.6% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Manufacture other low carbon technologies that result in substantial GHG emission reductions in other sectors of the economy (3.6) | C27.40 | 61 | 12.3% | 12.3% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Installation, maintenance and repair of energy efficiency equipment (7.3) | F43.21 | — | —% | —% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Installation, maintenance and repair of instruments and devices for measuring, regulation and controlling energy performance of buildings (7.5) | F43.21 | — | —% | —% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. |
Total OpEx of taxonomy-eligible but not aligned activities (A.2) | 309 | 62.9% | 62.9% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | —% | n.a. | |
Total Taxonomy-eligible OpEx (A.1 + A.2) | 365 | 74.1% | 74.1% | —% | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | n.a. | 11.3% | n.a. | |
B. TAXONOMY NON-ELIGIBLE ACTIVITIES | ||||||||||||||||||
Total OpEx of Taxonomy-non-eligible Activities (B) | 127 | 25.9% | ||||||||||||||||
Total (A+B) | 492 | 100.0% | ||||||||||||||||
On the 2022 financial statements and sustainability information |
To: the Annual General Meeting of Shareholders and Supervisory Board of Signify N.V. |
Materiality | EUR 32 million (2021: EUR 32 million) |
Benchmark applied | |
Explanation | Based on our professional judgment we consider earnings-based measures as the most appropriate basis to determine materiality. Adjustments are made to earnings before interest, taxes and amortization for elements that are not directly related to the operational performance of the company as disclosed in chapter 18, Reconciliation of non-IFRS measures. |
Presumed risk of fraud in revenue recognition | |
Fraud risk | We presumed that there are risks of fraud in revenue recognition. We evaluated that revenue from sales of goods recognized at a point in time in particular gives rise to such risks. We also considered whether the judgments and assumptions in the determination of these revenues indicate a management bias that might represent a risk of material misstatement due to fraud. |
Our audit approach | We describe the audit procedures responsive to the presumed risk of fraud in revenue recognition in the description of our audit approach for the key audit matter “Improper revenue recognition”. |
Key audit matters for the audit of the financial statements | ||
Key audit matter 2021 | Change | Reason for change |
Improper revenue recognition | Changed | We reassessed the risk and concluded the risk of improper revenue recognition is only related to the sale of goods and not related to material projects as was included in prior year. |
Valuation of inventories and related obsolescence provision | New | The current macroeconomic developments impacted Signify’s inventory levels and valuation thereof. |
For the audit of the sustainability information | ||
Key audit matter 2021 | Change | Reason for change |
Brighter Lives, Better World 2025 program: commitments and criteria | Excluded | This is the second year Signify’s Brighter Lives, Better World 2025 program is disclosed in the Sustainability statements. The suitability of the criteria and the sufficiency of the disclosures applied related to this program therefore required significantly less auditor’s attention compared to last year. |
Inclusion of Cooper Lighting and Klite in sustainability reporting | Excluded | This is the second year the sustainability information of Cooper Lighting and Klite are included in the Sustainability statements. Any risk of misalignment between Signify’s sustainability reporting principles and its acquired businesses therefore decreased. |
Carbon footprint (“scope 1 & scope 2”) and Impact revenues (“Circular revenues, Brighter lives revenues and Climate action revenues”) | New | Increased attention of stakeholders and public at large with regards to climate-related matters and ESG. |
The key audit matters were addressed in the context of our audit procedures for the financial statements and the sustainability information as a whole and to conclude thereon, and we do not provide a separate opinion on these matters. For the audit of the financial statements we identified the following key audit matters. | Risk | Our audit approach | Key observations | |||
Improper revenue recognition | ||||||
Revenue from the sale of goods is recognized at the point in time that the customer obtains control of the goods. For standard sale of products, control generally passes to the customer at the time the product is delivered and accepted, depending on the delivery conditions. Management focuses on sales as a key performance measure, which could create an incentive to recognize revenues in the incorrect period due to the pressure management may feel to achieve desired results. Further reference is made to note 2, Significant accounting policies, to the Consolidated financial statements. We assessed that improper revenue recognition due to risk of management override relating to sale of goods, represents a key audit matter. | Our audit procedures included: •The assessment of the appropriateness of the company’s revenue recognition accounting policies. •Obtaining an understanding of the design of key controls in the revenue recognition process. •The use of data analytics to audit key risk areas and identify exceptional or unusual revenue streams and patterns. •Detailed testing of significant sales contracts; and •Performing cut-off procedures to ensure revenue is recognized in the correct period. | We concur with the revenue recognized in the financial statements. | ||||
Risk | Our audit approach | Key observations | ||||
At December 31, 2022, uncertain tax positions are recognized as part of the net deferred tax assets of EUR 393 million and the income tax payable under non-current liabilities of EUR 111 million. Further reference is made in chapter 14, Consolidated financial statements, note 9, Income taxes. The ultimate tax effects of transactions might be uncertain for a considerable period of time, requiring management to estimate the related current and deferred tax treatments, resulting in uncertain tax positions. The accounting for uncertain tax positions is a focus area in our audit as the company has extensive international operations and is required to make judgments and estimates. These judgments and estimates relate to, among others, the tax risks as disclosed in note 9, of the Consolidated financial statements on the valuation of deferred tax assets and liabilities for uncertain tax positions. | Together with our tax experts we evaluated the tax accounting in various jurisdictions the company operates in, taking into account the impact of the local jurisdictions. We specifically focused on the tax uncertainties as disclosed in note 9, of the Consolidated financial statements. We evaluated and challenged the company’s judgments and estimates of uncertain tax positions resulting from ongoing local tax audits and legislative developments, and relevant historical and recent judgments. Where possible, we compared information provided by management to corroborative or contradictory information. We also assessed the adequacy of the company’s disclosure included in note 9, of the Consolidated financial statements, in respect of deferred tax assets and other tax liabilities related to tax uncertainties. | We concur with the estimates and assumptions made by management relating to the valuation of uncertain tax positions (assets and liabilities), and conclude the related disclosures to be sufficient. | ||||
Risk | Our audit approach | Key observations | ||||
Valuation of inventories and related obsolescence provision | ||||||
Macroeconomic developments posed challenges to Signify. Key challenges include global supply chain disruptions and business climate uncertainties, which led to longer supplier lead times, cost price volatility and increased uncertainty in predicting future sales. These developments impacted Signify's inventory levels and valuation thereof. Further reference is made to note 1, Basis of preparation, of the Consolidated financial statements. At December 31, 2022, inventories amounted to EUR 1,361 million (2021: EUR 1,410 million). Further reference is made to note 17, Inventories, of the Consolidated financial statements. The accounting for valuation of inventories and related obsolescence provision is a focus area in our audit as the company is required to make judgments and estimates with regards to the above-mentioned developments. These judgments and estimates relate to: •Forward-looking estimates on future sales levels. •Cost revision to determine the allocation of cost to inventories in light of current macroeconomic conditions. | As a result of the increased focus on valuation of inventories and related obsolescence provision, we have further extended our centralized and local audit procedures on the valuation of inventories resulting in a higher coverage. Our audit procedures included: •Obtaining an understanding of the design of key controls in the future sales planning process and the cost revision process. •Performing analytical procedures including retrospective analysis on the future sales planning. •Detailed testing of the obsolescence provision calculations and cost revisions. | We concur with the valuation of inventories and related obsolescence provision recognized in the financial statements. | ||||
For the audit of the sustainability information, we identified the following key audit matters: | Risk | Our audit approach | Key observations | |||
Carbon footprint (“scope 1 & scope 2”) and Impact revenues (“Circular revenues, Brighter lives revenues and Climate action revenues”) | ||||||
Climate-related matters, ESG developments and the energy transition are high on the public agenda. Signify’s ambition, commitments, obligations and achievements with regards to these matters are disclosed in its Annual Report and Sustainability statements. Further reference is made in chapter 3, Creating long-term value. In our audit we have considered the risk of non-financial information being presented too optimistically. We specifically considered this to be applicable for Carbon footprint (“scope 1 and scope 2”) and Impact revenues (“Circular revenues, Brighter lives revenues and Climate action revenues”), as these are the most material topics in Signify’s Materiality Matrix, which concerns the outcome of the stakeholder dialogue, and Signify’s own commitments. Further reference is made to Signify’s Brighter Lives, Better World 2025 program in section 3.1, Our strategy. | Our audit procedures included: •Obtain an understanding of the design of key controls in obtaining relevant data for carbon footprint and Impact revenues and consolidating in the sustainability information •Evaluate whether the self-developed reporting criteria for Impact revenues are suitable and consistently applied •Assess whether the disclosure of the reporting criteria related to carbon footprint and Impact revenues are sufficient for proper understanding by the reader •Statistical sampling to obtain suitable audit evidence that the products underlying the Impact revenues are indeed sustainable, based on the relevant criteria •Statistical sampling to obtain suitable audit evidence (external and internal documentation such as invoices for carbon footprint and conversion factors), that reported information reconciles with underlying records of the company •Reconcile the presented carbon footprint and Impact revenues with underlying records •Reconcile the relevant financial information used in calculating Impact revenues with the financial statements •Assess and challenge management that the non-financial information is relevant, suitable, accurate and presented in a balanced matter in the Sustainability statements and in this Annual Report. | We concur with the carbon footprint and Impact revenues as presented in this Annual Report. | ||||
Comparable growth | Currency effects | Consolidation and other changes | Nominal growth | |
Digital Solutions | 7.8 | 7.3 | 5.0 | 20.1 |
Digital Products | (3.8) | 4.4 | 0.0 | 0.7 |
Conventional Products | (12.6) | 4.6 | 0.0 | (7.9) |
Signify | 1.2 | 6.0 | 2.4 | 9.5 |
Comparable growth | Currency effects | Consolidation and other changes | Nominal growth | |
Europe | 3.9 | 0.4 | 0.4 | 4.7 |
Americas | 3.2 | 12.2 | 0.0 | 15.4 |
Rest of the World | (1.5) | 4.1 | 3.9 | 6.5 |
Global businesses | (9.2) | 4.5 | 14.6 | 9.9 |
Signify | 1.2 | 6.0 | 2.4 | 9.5 |
2022 | Signify | Digital Solutions | Digital Products | Conventional Products | Signify Other |
Adjusted EBITA | 762 | 424 | 297 | 116 | (75) |
Restructuring | (64) | (15) | (11) | (34) | (4) |
Acquisition-related charges | (27) | (27) | — | — | — |
Incidental items | 173 | (8) | (14) | (22) | 217 |
EBITA | 844 | 374 | 272 | 60 | 138 |
Amortization 1 | (126) | (118) | (7) | — | (1) |
Income from operations (EBIT) 2 | 718 | 256 | 265 | 60 | 137 |
2021 | |||||
Adjusted EBITA | 795 | 397 | 339 | 161 | (102) |
Restructuring | (86) | (19) | (4) | (5) | (58) |
Acquisition-related charges | (50) | (49) | (1) | — | — |
Incidental items | (22) | (11) | (10) | 2 | (4) |
EBITA | 636 | 318 | 323 | 158 | (164) |
Amortization 1 | (122) | (114) | (7) | — | (1) |
Income from operations (EBIT) 2 | 514 | 205 | 316 | 158 | (165) |
Income from operations to Adjusted EBITA in millions of EUR | |||||
2022 | Reported | Restruc- turing 2 | Acquisition- related charges | Incidental items 1 | Adjusted |
Sales | 7,514 | — | — | — | 7,514 |
Cost of sales | (4,781) | 43 | 6 | 25 | (4,708) |
Gross margin | 2,732 | 43 | 6 | 25 | 2,806 |
Selling, general and administrative expenses | (1,927) | 21 | 18 | 11 | (1,877) |
Research and development expenses | (295) | — | — | — | (294) |
Indirect costs | (2,222) | 21 | 19 | 11 | (2,171) |
Impairment of goodwill | — | — | — | — | — |
Other business income | 227 | — | (1) | (218) | 8 |
Other business expenses | (19) | — | 3 | 10 | (6) |
Income from operations | 718 | 64 | 27 | (173) | 636 |
Amortization | (126) | — | — | — | (126) |
844 | 64 | 27 | (173) | 762 | |
2021 | |||||
Sales | 6,860 | — | — | — | 6,860 |
Cost of sales | (4,189) | 19 | 8 | 4 | (4,157) |
Gross margin | 2,671 | 19 | 8 | 4 | 2,702 |
Selling, general and administrative expenses | (1,882) | 66 | 43 | 25 | (1,748) |
Research and development expenses | (286) | 1 | — | — | (284) |
Indirect costs | (2,168) | 67 | 44 | 25 | (2,032) |
Impairment of goodwill | — | — | — | — | |
Other business income | 19 | — | (2) | (11) | 7 |
Other business expenses | (8) | — | — | 4 | (5) |
Income from operations | 514 | 86 | 50 | 22 | 673 |
Amortization 1 | (122) | — | — | — | (122) |
636 | 86 | 50 | 22 | 795 | |
Composition of cash flows in millions of EUR | ||
2021 | 2022 | |
Cash flows from operating activities | 704 | 376 |
Cash flows from investing activities | (91) | (256) |
Cash flows before financing activities | 613 | 119 |
Cash flows from operating activities | 704 | 376 |
Net capital expenditures: | ||
• Additions of intangible assets | (34) | (62) |
• Capital expenditures on property, plant and equipment | (84) | (70) |
• Proceeds from disposal of property, plant and equipment | 27 | 201 |
Free cash flows | 614 | 445 |
Free cash flows in millions of EUR | ||
Digital Solutions 1 | 364 | 321 |
Digital Products 1 | 383 | 170 |
Conventional Products 1 | 136 | 56 |
Other | (270) | (101) |
Signify total | 614 | 445 |
Composition of net debt to total equity in millions of EUR unless otherwise stated | ||
2021 | 2022 | |
Short-term debt | 77 | 83 |
Long-term debt | 1,931 | 1,950 |
Gross debt | 2,007 | 2,033 |
Cash and cash equivalents | (851) | (677) |
Net debt | 1,156 | 1,356 |
Shareholders' equity | 2,459 | 2,920 |
Non-controlling interests | 138 | 145 |
Total equity | 2,597 | 3,065 |
Net debt and total equity | 3,753 | 4,421 |
Net debt divided by net debt and total equity (in %) | 31% | 31% |
Total equity divided by net debt and total equity (in %) | 69% | 69% |
Working capital to total assets in millions of EUR | ||
2021 | 2022 | |
Working capital | 250 | 564 |
Eliminate liabilities comprised in WoCa: | ||
• Trade and other payables | 2,334 | 1,859 |
• Derivative financial liabilities | 44 | 42 |
• Other current liabilities | 213 | 194 |
Include assets not comprised in WoCa: | ||
• Non-current assets | 4,536 | 4,895 |
• Income tax receivable | 24 | 56 |
• Cash and cash equivalents | 851 | 677 |
• Assets classified as held for sale | 3 | 1 |
Total assets | 8,256 | 8,286 |
Signify N.V. High Tech Campus 48 5656 AE Eindhoven The Netherlands E-mail: [email protected] www.signify.com Dutch Chamber of Commerce registration no. 65220692 VAT NL8560.25.823.B.01 |