Philips Lighting reports first quarter sales of EUR 1.5 billion and operational profitability of 7%
Donnerstag, 26.04.2018 07:05 von GlobeNewswire
Press release
April 26, 2018
Philips Lighting reports first quarter sales of EUR 1.5 billion and operational profitability of 7%
First quarter 2018 highlights¹
- Sales of EUR 1,501 million, a comparable decrease of 3.5%
- Total LED-based comparable sales growth of 5.6%, representing 68% of total sales (Q1 2017: 61%)
- Adjusted EBITA of EUR 106 million (Q1 2017: EUR 127 million)
- Adjusted EBITA margin decreased 50 basis points to 7.0%; improvements in Lamps, LED and Professional offset by Home
- Cost reduction initiatives on track; adjusted indirect costs down 13%
- Net income of EUR 20 million (Q1 2017: EUR 61 million) reflecting higher restructuring costs, lower profitability and a one-off real estate gain in Q1 2017
- Free cash flow of EUR -6 million (Q1 2017: EUR -17 million excluding real estate proceeds)
Eindhoven, the Netherlands - Philips Lighting (Euronext: LIGHT), the world leader in lighting, today announced the company's 2018 first quarter results. "As previously indicated, the first quarter marks a soft start to the year, mainly due to a weak performance in Home, most notably in the United States. Our other three businesses further improved their operational profitability, particularly Professional which increased its adjusted EBITA margin by 310 basis points," said Eric Rondolat, CEO of Philips Lighting. "I am pleased with the progress made on the cost side with a 13% reduction in our indirect cost base, and with our free cash flow performance after a strong fourth quarter. Our focus remains on implementing our strategy toward the shift to LED, Systems & Services."
Financial review
| First quarter | |||
| in € million, except percentages | 2017 | 2018 | change |
| Comparable sales growth | -3.5% | ||
| Effects of currency movements | -7.1% | ||
| Consolidation and other changes | -0.6% | ||
| Sales | 1,690 | 1,501 | -11.2% |
| Adjusted gross margin | 670 | 580 | -13.5% |
| Adj. gross margin (as % of sales) | 39.7% | 38.6% | |
| Adj. SG&A expenses | -483 | -417 | |
| Adj. R&D expenses | -88 | -81 | |
| Adj. indirect costs | -570 | -498 | 12.8% |
| Adj. indirect costs (as % of sales) | 33.8% | 33.2% | |
| Adjusted EBITA | 127 | 106 | -16.8% |
| Adjusted EBITA margin (%) | 7.5% | 7.0% | |
| Adjusted items | -4 | -43 | |
| EBITA | 122 | 62 | -48.9% |
| Income from operations (EBIT) | 94 | 39 | -58.2% |
| Net financial income/expense | -11 | -9 | |
| Income tax expense | -23 | -10 | |
| Net income | 61 | 20 | -67.0% |
| Free cash flow | 2 | -6 | |
| Basic EPS (€) | 0.43 | 0.15 | |
| Employees (FTE) | 34,379 | 31,615 | |
Outlook
We aim to improve our Adjusted EBITA margin from 9.6% to 10.0-10.5%. We will continue to focus on our cost reduction initiatives, and expect to benefit from higher savings as of the second half of 2018. We also aim to deliver positive comparable sales growth for the full year on the basis of a strong second half. We expect to generate solid free cash flow in 2018, which is, however, expected to be somewhat lower than the level in 2017 due to higher restructuring payments.
Changes to financial reporting
As of the first quarter of 2018, Philips Lighting reports and discusses its financial performance based on the recently announced portfolio changes to further align the organizational structure with the strategy. In March 2018, the company provided an update to show the effect of changes to the business portfolio as well as changes to the allocation methods of centrally-managed costs and to the threshold for other incidental items as adjusting items when presenting certain non-IFRS measures such as Adjusted EBITA.
Financial calendar 2018
May 15, 2018: Annual General Meeting of Shareholders
July 27, 2018: Half year results 2018
October 26, 2018: Third quarter results 2018
For the full and original version of the press release click here
For the presentation click here
Conference call and audio webcast
Eric Rondolat (CEO) and Stéphane Rougeot (CFO) will host a conference call for analysts and institutional investors at 09:00 a.m. CET to discuss first quarter results. A live audio webcast of the conference call will be available via the Philips Lighting Investor Relations website.
For further information, please contact:
Philips Lighting Investor Relations
Robin Jansen
Tel: +31 6 1594 4569
E-mail: robin.j.jansen@philips.com
Philips Lighting Communications
Elco van Groningen
Tel: +31 6 1086 5519
E-mail: elco.van.groningen@philips.com
About Philips Lighting
Philips Lighting (Euronext: LIGHT), the world leader in lighting products, systems and services, delivers innovations that unlock business value, providing rich user experiences that help improve lives. Serving professional and consumer markets, we lead the industry in leveraging the Internet of Things to transform homes, buildings and urban spaces. With 2017 sales of EUR 7.0 billion, we have approximately 32,000 employees in over 70 countries. News from Philips Lighting is located at the Newsroom, Twitter and LinkedIn. Information for investors can be found on the Investor Relations page.
Important Information
Forward-Looking Statements and Risks & Uncertainties
This document and the related oral presentation contain, and responses to questions following the presentation may contain, forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Philips Lighting N.V. (the "Company", and together with its subsidiaries, the "Group"), including statements regarding strategy, estimates of sales growth and future operational results.
By their nature, these statements involve risks and uncertainties facing the Company and its Group Companies and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties and other important factors include but are not limited to: adverse economic and political developments, the impacts of rapid technological change, competition in the general lighting market, development of lighting systems and services, successful implementation of business transformation programs, impact of acquisitions and other transactions, impact of the Group's operation as a separate publicly listed company, pension liabilities and costs, establishment of corporate and brand identity, adverse tax consequences from the separation from Royal Philips and exposure to international tax laws. Please see "Risk Factors and Risk Management" in Chapter 12 of the Annual Report 2017 for discussion of material risks, uncertainties and other important factors which may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group. Such risks, uncertainties and other important factors should be read in conjunction with the information included in the Company's Annual Report 2017.
Risks currently not known to the Group or that the Group has not considered material as of the date of this document could also prove to be important and may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group or could cause the forward-looking events discussed in this document not to occur. The Group undertakes no duty to and will not necessarily update any of the forward-looking statements in light of new information or future events, except to the extent required by applicable law.
Market and Industry Information
All references to market share, market data, industry statistics and industry forecasts in this document consist of estimates compiled by industry professionals, competitors, organizations or analysts, of publicly available information or of the Group's own assessment of its sales and markets. Rankings are based on sales unless otherwise stated.
Non-IFRS Financial Measures
Certain parts of this document contain non-IFRS financial measures and ratios, such as comparable sales growth, adjusted gross margin, EBITA, adjusted EBITA, and free cash flow, and other related ratios, which are not recognized measures of financial performance or liquidity under IFRS. The non-IFRS financial measures presented are measures used by management to monitor the underlying performance of the Group's business and operations and, accordingly, they have not been audited or reviewed. Not all companies calculate non-IFRS financial measures in the same manner or on a consistent basis and these measures and ratios may not be comparable to measures used by other companies under the same or similar names. A reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures is contained in this document. For further information on non-IFRS financial measures, see "Chapter 18 Reconciliation of non-IFRS measures" in the Annual Report 2017.
Presentation
All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up to totals provided. All reported data are unaudited. Unless otherwise indicated, financial information has been prepared in accordance with the accounting policies as stated in the Annual Report 2017.
Changes to financial reporting following organizational changes to further align the organizational structure with the strategy
As the market trend of both professionals and consumers switching from buying lamps and luminaires to integrated LED luminaires is accelerating, the company has decided to modify the current portfolios of its business groups. As of January 1, 2018, Philips Lighting has implemented the following changes to the following portfolios:
- Consumer and professional trade downlights, the recessed spots portfolio and the LED Light strips moved from Home and Professional to LED;
- Consumer LED functional ceiling products moved from Home to LED;
- LED battens moved from Home to Professional; and
- Consumer and professional trade LED panels moved from Home and LED to Professional.
- Next to this, the financial performance of the Ventures activities is reported in Other instead of in Professional and in Home, as these activities are managed outside of the aforementioned business groups. In addition, the switches business within Lamps has been moved to LED.
Therefore, with effect from the first quarter of 2018, Philips Lighting reports and discusses its financial performance based on the above portfolio changes. In March 2018, the company provided an update to show the effect of changes to the business portfolio as well as changes to the allocation methods of centrally-managed costs and expenses and threshold for other incidental items as adjusting items when presenting certain non-IFRS measures such as Adjusted EBITA.
In addition, the cash flow presentation has been amended to better correspond to the balance sheet and to further improve transparency on cash flow movements. As of the first quarter of 2018, Philips Lighting will provide cash flow statements per quarter.
Market Abuse Regulation
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Philips Lighting via Globenewswire