Lighting

Signify’s Connected Lighting Business 2022 Examined

In this Research Note, we examine the lighting business of Signify, based on their 2022 annual results, investor presentations and connected lighting technology-related activities throughout 2022. This is an update on our previous coverage of Signify last year. Signify, headquartered in Eindhoven, the Netherlands, is a market leader in energy-efficient lighting systems and services, with approximately 35,000 employees and a presence in over 70 countries. The business reported 2022 sales of EUR 7,514 million on 27th January 2023. Full-year sales increased by 9.5% to EUR 7,514 million, including a positive currency effect of 6.0%, primarily driven by the appreciation of the USD, and a positive impact of 2.4% from the consolidation of Fluence and Pierlite. Comparable sales growth was 1.2%, benefiting from traction in the professional segment, partly offset by China, which was impacted by COVID-related measures, and softness in the consumer segment. Over the past few years, Signify has strengthened its position as the […]

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In this Research Note, we examine the lighting business of Signify, based on their 2022 annual results, investor presentations and connected lighting technology-related activities throughout 2022. This is an update on our previous coverage of Signify last year.

Signify, headquartered in Eindhoven, the Netherlands, is a market leader in energy-efficient lighting systems and services, with approximately 35,000 employees and a presence in over 70 countries. The business reported 2022 sales of EUR 7,514 million on 27th January 2023.

Full-year sales increased by 9.5% to EUR 7,514 million, including a positive currency effect of 6.0%, primarily driven by the appreciation of the USD, and a positive impact of 2.4% from the consolidation of Fluence and Pierlite. Comparable sales growth was 1.2%, benefiting from traction in the professional segment, partly offset by China, which was impacted by COVID-related measures, and softness in the consumer segment.

Over the past few years, Signify has strengthened its position as the lighting industry transitioned from conventional to LED and to connected lighting.  Signify's installed base of connected light points increased from 96 million in 2021 to 114 million in 2022 while their connected lighting business grew to EUR 1.6 billion of sales.

In 2022, the two digital divisions, Digital Solutions and Digital Products represented more than 85% of sales, profit and cash, up from 80% in 2021 as the transformation of their business accelerated, driven by high demand for energy-efficient lighting solutions.

Signify Connected Lighting Business 2022 Examined
Signify Q4 2022 Analyst Presentation, 27th January 2023

Sales in the Digital Solutions division increased by 20.1% to 4,231 million, including a positive currency effect of 7.3% and a positive impact of 5.0% from the acquisitions of Fluence and Pierlite. Comparable sales growth was 7.8%, driven by growth across most markets, despite a slowdown in the fourth quarter. Connected-based sales were 22% of Digital Solutions' total sales, stable with last year. 

Signify Connected Lighting

Connected lighting technology-related activities throughout 2022 are highlighted below across horticultural lighting, IoT sensor technology and the smart cities market:

One of Signify technologies growth platforms, agricultural lighting, was augmented in December 2021 with the acquisition of Austin, Texas-based Fluence, purchased for $272 million from ams Osram. The acquisition adds Fluence’s complementary horticultural lighting technology, particularly for the legal growing of cannabis in North America which generated the majority of Fluence’s $141 million revenue in 2021. Fluence employs more than 200 people.

In June 2022, Signify nv acquired the Australian connected lighting technology of SenseAgent to bolster its Interact IoT ecosystem offering.  Pierlite, its Australian lighting and technology solutions subsidiary, acquired the SenseAgent smart building technology portfolio from Levaux for an undisclosed sum. SenseAgent offers IoT sensor technology and real-time monitoring software for Health, Education, Commercial, Retail offices and other segments.

The SenseAgent portfolio features intelligent IoT sensors which track a diverse range of environmental and physical metrics such as air quality (TVOC/Co2), air flow, energy consumption, temperature, humidity, building occupancy, and people track and trace. These sensor products feed real-time data into a cloud dashboard software enabling asset managers to track building analytics in real-time and integrate with existing building management systems (BMS), leveraging this data for optimisation, planning and physical built asset management.

In September 2022, Signify and Upciti announced a partnership to help cities and utilities across North America leverage their street lighting infrastructure to improve transportation, public safety and sustainability.  By leveraging Signify’s road and street LED luminaires and Interact IoT connected lighting system and Upciti’s “privacy by design” edge computing image analysis sensors, cities can:

  • Improve services like parking. Sensors can detect open spaces, communicate availability to drivers and assist them with navigation, reducing traffic congestion, supporting economic activity and even generating direct parking revenue.
  • Support public safety. Sensors can help identify potential situations and alert emergency services in the event they are needed.
  • Identify vehicle queue sizing on streets and understand public transportation and bike lane usage. With this data, the traffic flow can be adjusted and optimized in real-time to reduce congestion and its contribution to carbon emissions.

Sales in the Digital Products Division increased by 0.7% to EUR 2,469 million, benefiting from a positive currency effect of 4.4%. Comparable sales declined by 3.8%, due to lower consumer sales and a Chinese market that was impacted by COVID-related disruptions. Connected-based sales were 24% of Digital Products' total sales, stable with 2021.

Signify continues to aim for growth, both organic and through selected acquisitions in its outlook for 2023. According to the CEO, despite the volatile market environment, the fundamentals of the Signify business remain strong, driven by the growing need for energy efficient and digital lighting and technologies.

This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.

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