Signify's Q3 sales amounted to €1.728 billion
Sales were €1.728 billion, with nominal sales growth of 12.1% and CSG at -8.3%.
LED sales accounted for 82% of total sales (Q3 2019: 81%);
Adjusted EBITA increased by 50 basis points to 11.5%, including a negative currency impact of 30 basis points;
The adjusted growing EBITA margin increased by 130 basis points to 12.3%;
Net income was €90 million (Q3 2019: €74 million);
Free cash flow increased to €214 million (Q3 2019: €45 million);
Signify's installed base of connected lighting points increased from 64 million in Q2 to 71 million in Q3;
Cooper Lighting integrates and achieves synergies ahead of schedule;
Achieve carbon neutrality and generate a dual positive impact on the environment and society by 2025.
Global lighting leader Signify today announced its Q3 2020 financial results. Sales for the quarter reached €1.728 billion (approximately RMB 13.687 billion), representing nominal growth of 12.1%. After adjusting for an adverse currency impact of 3.6% and a consolidation effect of 24.0%, comparable sales declined by 8.3%. Cumulative sales revenue for the first three quarters amounted to €4.624 billion, compared to €4.497 billion in the same period last year, showing nominal growth of 2.8% but a comparable decline of 15.3%.
Sales based on LED decreased by 8.2%, currently accounting for 82% of total sales. Adjusted gross margin increased by 200 basis points to 39.9%, including a -10 basis point currency impact, primarily due to sound pricing management.
Among them, the digital solutions business segment achieved sales of €916 million in Q3, representing a nominal growth of 31.2% due to the merger with Cooper. Comparable sales declined by 11.2%, reflecting continued difficulties in the market environment, although trends have improved compared to the previous quarter. The most affected markets were Latin America, Canada, India, Southeast Asia, Italy, and France.
In terms of the digital products division, sales reached €575 million in Q3, up 1.9% nominally but down 2.0% year-on-year. Among these, consumer channel sales performed strongly, particularly in smart connected home categories, where sell-through rates remained robust.
Sales of traditional product lines reached €233 million in the third quarter, a year-on-year (YoY) decrease of 11.0%. Despite the impact of the pandemic, the traditional business performed well due to strong consumer demand for luminaires, UV lighting, and horticultural lighting.
In terms of markets, comparable sales in Europe declined by 3.8%. Comparable sales in the Americas fell by 13.2%, reflecting a continued challenging market situation. In other regions of the world, comparable sales dropped by 8.2%, particularly in India, Indonesia, and Southeast Asia. Demand in the Chinese market continues to show signs of recovery.
"We are proud of the achievements we made in carbon neutrality in the third quarter, as well as the launch of our new sustainability plan, which aims to double our positive environmental and social impact by 2025. In this fiscal quarter, amidst the difficult market environment caused by the COVID-19 pandemic, we achieved resilient performance thanks to our consumer lighting and smart connected lighting businesses. Through strict price management, we increased gross margins, thereby improving operating profit margins," said CEO Eric Rondolat.
"Given the worsening pandemic in many regions, the company remains cautious about market development but is confident in its further adaptability demonstrated since the beginning of the year. Our team will continue to strive for significant progress in integrating Cooper Lighting and Klite (Kaiyao Lighting), while tirelessly advancing our growth platform and developing new business opportunities in line with our strategy."
(Source: China Light Network)