Signify Announces Third-Quarter Results

Global lighting leader Signify officially announced its third-quarter 2026 financial results on October 23. This quarter, Signify reported total sales of €1.367 billion (approximately RMB 10.2 billion), with nominal sales down 2.9% year-on-year (YoY) and comparable sales declining by 3.4%. Despite ongoing revenue pressures, profitability improved significantly.

Adjusted EBITA (Earnings Before Interest, Taxes, Depreciation, and Amortization) reached €145 million, up 6.1% YoY, with the margin expanding from 9.7% in the same period last year to 10.6%. Profit stood at €88 million, higher than the €76 million recorded in Q3 2025. Free cash flow totaled €118 million, a substantial increase from €71 million a year earlier, driven primarily by optimized working capital management and tariff refund proceeds.

Amid a persistently weak global lighting market, Signify enhanced profitability through price control, cost optimization, and favorable U.S. tariff refunds.

The report indicates that the company completed most of the U.S. IEEPA tariff refund process this quarter. These refunds represent previously paid tariffs on goods imported into the United States; after accounting for supplier settlements, customer credits, and employee incentive provisions, a net benefit of €28 million was recognized in the income statement.

Looking at segment performance, Professional Lighting remained the strongest. Third-quarter sales reached €921 million, with nominal sales slightly down 0.7% and comparable sales falling 1.5%. However, adjusted EBITA stood at €115 million, yielding a robust 12.5% margin, boosted by approximately 2.0 percentage points from tariff refunds. Project business in the U.S. and other regions demonstrated resilience, while Agricultural Lighting entered its peak season, delivering strong operational results. Nevertheless, inventory and distribution activities in the European professional market remained sluggish.

Consumer Lighting performed less favorably this quarter, with sales totaling €283 million—down 6.1% nominally and 5.3% on a comparable basis—largely due to weak performance in connected lighting. Philips Hue and similar products faced continued inventory destocking by retailers, resulting in orders below actual end‑user demand. Notably, Luminaire products in the Indian market posted growth, partially offsetting the decline. Signify is addressing these challenges by cutting fixed costs and boosting productivity, with some measures expected to yield results in 2027.

OEM business generated €88 million in sales this quarter, down 5.5% nominally and 6.7% on a comparable basis, yet adjusted EBITA margin improved from 4.7% to 5.9%. Although overall market conditions remain subdued, pricing dynamics across regions have improved, and ongoing gross margin expansion coupled with cost‑reduction initiatives underscore the segment’s resilience amid tough demand conditions.

Conventional Lighting saw comparable sales plunge 12.2% to €67 million, with nominal sales down 11.5% YoY. However, adjusted EBITA margin soared to 21.3%, with tariff refunds contributing 5.5 percentage points. Against the backdrop of structural decline in general lighting, overall sales volume continues to shrink, though growth in specialty lighting products has partially offset this contraction.

Signify CEO As Tempelman stated: “Our third-quarter results demonstrate progress in executing our strategy to build a more focused, higher‑performing Signify. Despite persistent market weakness, we’ve strengthened profitability quarter over quarter through disciplined pricing and rigorous cost management. The Harvest portfolio improvement plan is advancing smoothly, with profit gains seen across OEM and Genlyte segments. Meanwhile, in the Build portfolio, we’re accelerating expansion in India, making decisive adjustments to our European professional business, and ramping up customer acquisition while enhancing operational efficiency in the Consumer segment. We continue to allocate R&D resources to innovation areas offering the highest returns, focusing on controllable levers to strengthen Signify.”