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In this Research Note, we examine the lighting business of Signify, based on their 2023 annual results announced on 26th January 2024, investor presentations and connected lighting technology-related activities throughout the last 12 months. This is an update on our previous coverage of Signify last year.
Signify (Euronext: LIGHT), headquartered in Eindhoven, the Netherlands, is the global vendor of conventional lighting, LED and connected lighting, with approximately 32,000 employees and a presence in over 70 countries. The business reported 2023 sales of EUR 6.7 billion on 26th January 2024. LED-based solutions and products represented 87% of total sales.
Signify Financials
Full-year sales decreased by 10.8% to EUR 6,704 million, including a negative currency effect of 3.3%, mainly due to the depreciation of the USD and CNY, and a positive effect of 0.8% from the consolidation of Fluence, Pierlite and Intelligent Lighting Controls. Comparable sales declined by 8.3%, mainly due to weakness in consumer, OEM and indoor professional lighting.
Connected Lighting
Signify's installed base of connected light points increased from 114 million at y/e 2022 to 124 million at y/e 2023. Connected lighting and growth platforms accounted for 30% of total sales, driven by a strong performance in the professional connected segment worldwide.
In March 2023, Signify announced the acquisition of Intelligent Lighting Controls, Inc. (ILC), an Edina, Minnesota, U.S. manufacturer of wired control systems, expanding its connected portfolio. Intelligent Lighting Controls’ sales are primarily focused on energy-saving control systems in applications such as healthcare, education, offices, and sporting venues.
ILC’s wired control systems expand the Cooper Lighting Solutions portfolio of energy-saving solutions, providing enhanced opportunities to sell a broad range of energy-efficient LED lighting products in the U.S., Canada, and Mexico.
On 11th April 2023, Kontakt.io and Signify announced a partnership to enable smart lighting with BLE-powered indoor IoT and real-time location services for the healthcare sector. The connected lighting solutions will come with cloud services and IoT sensors that track the real-time location of BLE tags carried by staff, patients, and medical devices.
This connectivity will also enable input from patient-room sensors through APIs, offer room-level location as-a-service, and support mobile indoor navigation, addressing a range of care delivery digitization scenarios.
“We specialize in using the lighting infrastructure to host value-added services in a digital ceiling. Our partnership with Kontakt.io will allow us to bring a proven solution in real-time location services for healthcare into our offer,” said Greg Nelson, Business Leader Digital Solutions at Signify. “We’re excited that this combines the benefits of excellent lighting with efficiency for healthcare staff, to the benefit of patient health and well-being.”
New Organization Structure
On 1st December 2023, Signify announced a new organization structure for 2024 reporting against four businesses:
- The Professional business will offer LED lamps, luminaires, connected lighting systems and services to customers in the professional segment.
- The Consumer business will offer LED lamps, luminaires, and connected products, including Philips Hue and WiZ, to customers in the consumer segment.
- The OEM business will offer lighting components to the industry.
- The Conventional business will offer special lighting, digital projection, and lamp electronics.
Restructuring Plan
Aligned to the new customer-centric structure, Signify also announced a restructuring plan to reduce non-manufacturing costs, generating expected annualized savings in excess of €200 million.
Overall, around 1,000 people will be impacted, representing 7% of their non-manufacturing cost population. The plan will affect people in 37 countries with ongoing negotiations for 28 social plans. The changes will be implemented through 2024, with the majority achieved by Q2.
This article was written by Daphne Tomlinson, Senior Research Associate at Memoori.
