[News] Signify Reports 2025 Financials: Revenue at €5.8 Billion, Announces €180 Million Cost Reduction

On January 30, Signify officially released its full-year 2025 earnings report. Navigating macroeconomic headwinds and intensified global price competition, the company reported a contraction in revenue, though cash flow management remained robust.

To counter persistent market pressures, Signify announced a strategic cost-reduction program totaling €180 million and initiated significant price adjustments in the Chinese market, defining 2026 as a “transitional year”.

Financial Overview: Revenue Contraction with Strong Cash Flow

Signify’s full-year 2025 sales stood at €5.765 billion. Impacted by currency fluctuations, nominal sales declined by 6.2% year-over-year, with a comparable sales growth (CSG) of -3.4%. Despite revenue pressures, the company demonstrated disciplined financial management, delivering a free cash flow of €440 million, representing 7.6% of sales.

Regarding profitability, Adjusted EBITA for 2025 was €511 million with a margin of 8.9%, a decline from the previous year. Net income fell 22.3% to €259 million. Performance was primarily impacted by weak demand in Europe and the Chinese consumer market, alongside fierce price wars in non-connected and OEM channels which eroded the adjusted gross margin to 40.1%.

Business Segment Highlights The Professional business, Signify’s largest segment, recorded sales of €3.767 billion. While the US market and connected systems showed strength, overall momentum was dragged down by weakness in European distribution channels.

The Consumer business achieved sales of €1.274 billion with comparable growth of 1.4%, driven by strong global sales of connected products. However, the Chinese market experienced a significant decline due to a sluggish consumer environment, offsetting growth elsewhere.

The OEM business faced severe challenges, with sales shrinking due to structural overcapacity and reduced orders from major customers. Consequently, the segment’s Adjusted EBITA margin dropped to just 4.8%.

The Conventional business continued its structural decline, with sales falling to €327 million and comparable sales down 23.1%.

Strategic Response: Cost Cuts and Price Adjustments

Facing a challenging outlook for 2026, Signify launched a cost-reduction program of €180 million to structurally reset its cost base, with full benefits expected by 2027. The company is also conducting a strategic portfolio review and has paused share repurchases to preserve financial flexibility.

In the Chinese market, Signify is implementing aggressive price hikes to manage rising raw material costs. Effective February 1, 2026, prices for traditional products—including health, industrial, and UV lamps—will increase by up to 50%. Furthermore, starting March 1, 2026, prices for professional project luminaires will rise by 5% to 10% across various categories.

Outlook for 2026 Signify has defined 2026 as a transitional year. While not providing sales guidance due to market volatility, the company forecasts an Adjusted EBITA margin between 7.5% and 8.5%, with free cash flow generation of 6.5% to 7.5% of sales.

(Photo credit: Signify)