EINDHOVEN: Signify, the world leader in lighting, reported a decline in third-quarter sales and profitability, prompting the company to lower its financial guidance for the full year due to a softer-than-expected U.S. market and ongoing challenges in its OEM component business.
The company, known for its Philips lighting brands, announced third-quarter sales of 1.41 billion euros ($1.51 billion), a nominal decrease of 8.4% from the same period last year. After adjusting for currency effects, comparable sales fell by 3.9%.
Operational profitability, measured by adjusted EBITA margin, was 9.7%, down from 10.5% a year earlier. Net income fell to 76 million euros from 108 million euros in the third quarter of 2024.
CEO As Tempelman described the current market conditions as “challenging,” citing subdued demand and price pressure in Europe and a slower recovery in the U.S. market. He noted that the professional trade channel and public sector spending were particularly soft.
Despite the overall decline, Tempelman highlighted strengths in the company’s strategy. “Our strategy to outperform in connected lighting and specialty offerings is delivering sustained growth,” he said in a statement.
The company’s divisions showed mixed results. The Consumer unit, which includes the Philips Hue smart lighting brand, saw comparable sales growth of 3.7%, driven by strong online sales and performance in India. The Professional business, while seeing a sales decline, was bolstered by strong project work and agricultural lighting.
However, these gains were offset by significant struggles in the OEM business, which makes components for other manufacturers. OEM comparable sales plummeted 23%, hurt by reduced orders from two major customers and intense price pressure. The Conventional lighting business, as expected, continued its structural decline.
In response to these challenges, Signify revised its 2025 outlook. The company now expects comparable sales growth between -2.5% and -3.0% for the full year, a significant drop from its previous forecast of low single-digit growth excluding the Conventional business. The expected adjusted EBITA margin was also narrowed to a range of 9.1% to 9.6%.
On a positive note, Signify reported progress on its “Brighter Lives, Better World 2025” sustainability goals, exceeding its targets for circular revenues and revenues from products that support health and well-being.
Looking ahead, Tempelman said the company would focus on supply chain improvements and continue to invest in digital and AI capabilities. Signify plans to hold a Capital Markets Day next year to provide more detail on its long-term strategy.