Signify: 2025 full-year revenue of 47.27 billion yuan

On January 30, Signify officially released its 2025 annual performance report. Under the multiple challenges of macroeconomic headwinds, fluctuations in tariff policies, and intensified price competition in global trade channels, Signify's annual revenue scale has shrunk, but its cash flow management has performed steadily. In response to continued market pressure, Signify not only announced the launch of a cost reduction plan of 180 million euros (approximately RMB 1.48 billion) at the strategic level, but also launched substantial price adjustments in the Chinese market at the execution level, and set 2026 as a "transitional year" for strategic transformation. Signify’s full-year revenue in 2025 is 47.27 billion yuan
According to the latest disclosed financial data, Signify’s full-year sales in 2025 were 5.765 billion euros (equivalent to approximately RMB 47.27 billion). Affected by exchange rate fluctuations such as the depreciation of the U.S. dollar, nominal sales fell by 6.2% year-on-year, of which the exchange rate had a negative impact of 2.8%, and the comparable sales growth rate was -3.4%. Despite the pressure to shrink revenue, Signify has demonstrated strong cash flow generation capabilities with strict financial and working capital management. Full-year free cash flow reached 440 million euros (approximately RMB 3.61 billion), accounting for 7.6% of sales, which is slightly higher than the 438 million euros in 2024. In terms of profitability indicators, Signify's adjusted EBITA for the full year of 2025 is 511 million euros (approximately RMB 4.19 billion), and the adjusted EBITA profit margin is 8.9%, which has declined from the previous fiscal year. In terms of net profit, 259 million euros (approximately RMB 2.12 billion) were recorded for the full year, a decrease of 22.3% from 2024. Signify said that the core factors affecting the performance in 2025 are mainly concentrated in three dimensions: first, weak demand and regional differentiation. The uncertainty of the global macroeconomic has led to weakened end market demand, especially the European market and the Chinese consumer market. The downturn in demand has significantly affected the company's overall revenue. Secondly, price game and gross profit are under pressure. Although connected lighting products have maintained a good premium, in the field of non-connected products, especially in trade channels and OEM business, fierce price wars have seriously eroded profit margins. Data shows that the adjusted gross profit margin for the year dropped by 60 basis points to 40.1%. Finally, there is the rigidity of the cost structure. Due to the insufficient allocation of factory fixed costs due to the decline in production, the proportion of adjusted indirect costs in sales increased by 30 basis points to 32.3%. Judging from the performance of each business segment, as the revenue pillar of Signify, the professional lighting business achieved annual sales of 3.767 billion euros, a nominal decrease of 4.2%. Highlights for the segment were the continued penetration of connected lighting systems and strong performance in the U.S. market, but weakness in the European market, particularly in distribution channels, impacted the overall pace. The consumer lighting business recorded sales of 1.274 billion euros throughout the year, with comparable sales increasing by 1.4%, mainly due to the strong sales of connected products such as Philips Hue throughout the year. However, the financial report specifically pointed out that although the performance of the Internet home business during the peak season at the end of the year was in line with expectations, the Chinese market experienced a significant decline due to the sluggish consumer environment, offsetting growth in other regions. The performance of the OEM business was weak, and the continued weakness in end market demand weakened the growth momentum of this business. In addition, the market faces the long-term problem of structural overcapacity, which has triggered fierce price competition and resulted in the business segment being under huge long-term price pressure. The order volume from the two major customers decreased significantly, further exacerbating the decline of the OEM business. The decline in sales coupled with continued gross profit margin pressure ultimately led to a significant loss in profitability of the OEM business segment, with the full-year adjusted EBITA profit margin being only 4.8%. The annual sales of the traditional lighting business were 327 million euros, and comparable sales fell by 23.1%. Adjusted EBITA margin was 16.1%. In the fourth quarter, due to the temporary increase in manufacturing costs caused by factory consolidation, the profit margin of the traditional lighting business once fell to 9.8%, but the company expects this impact to return to normal in the second half of 2026. Signify launches 180 million euro cost reduction plan; the Chinese market announces price increases
Facing the severe market environment that will continue in 2026, Signify officially announced the implementation of a cost reduction plan totaling 180 million euros (approximately RMB 1.48 billion). The plan aims to structurally reset the cost base and improve operational efficiency. Most of the cost-saving measures will be implemented within 2026, with full benefits expected to be realized in 2027. In addition, in order to focus on future core growth points, Signify is conducting a comprehensive strategic and investment portfolio review, the results of which will be announced at the Capital Markets Day on June 23, 2026. During this period, the company decided to suspend its share repurchase program for cancellation purposes to preserve financial flexibility. Signify defines 2026 as a "year of transition." Considering the volatility of the end market, the company has not yet provided full-year sales growth guidance, but has given clear profit expectations. It is expected that the adjusted EBITA profit margin in 2026 will be between 7.5% and 8.5%, and free cash flow generation is expected to account for 6.5% to 7.5% of sales. In addition to significant cost reductions, Signify has also begun to increase product prices to maintain reasonable profit margins. In response to the above-mentioned severe challenges of rising raw material costs, exchange rate fluctuations and pressure on profit margins, Signify (China) Investment Co., Ltd. recently issued two price increase letters. Among them, the "2026 Philips Traditional Product Price Adjustment Notice" shows that starting from February 1, 2026, Signify will increase the sales price and recommended resale price of many traditional products of the Philips brand. This price adjustment covers many categories of traditional lighting products such as health lamps, industrial lamps, ultraviolet purification lamps and ballasts, with a maximum increase of 50%. The second price increase letter issued at the same time - "2026 Philips Brand Engineering Channel Professional Lamps Product Price Adjustment Notice" is specifically for engineering channel dealers. The document shows that starting from March 1, 2026, the purchase price of dealers for professional lighting products through some engineering channels will be adjusted. In terms of specific increases: landscape and lighting products, road and tunnel products, and office products are all increased by 5% to 10%, sports and floodlight products, downlights and light strip products are increased by 5%, and industrial products and control products are increased by 10%. This series of price increases, together with the cost reshaping plan announced by Signify globally, form a combination of increasing revenue and reducing expenditure.