Full year 2016 highlights

Sales of EUR 7.12 billion (US $7.66 billion), with comparable sales of -2.4% (2015: -3.5%)

• Continued year-on-year improvement in operational profitability
• Adjusted EBITA of EUR 645 million (2015: EUR 547 million
• Adjusted EBITA margin improvement of 180 basis points to 9.1% (2015: 7.3%) 
• Net income of EUR 185 million (2015: EUR 240 million), including EUR 143 million charges not applicable in 2015 for brand license, separation costs and financial expenses 
• Free cash flow of EUR 418 million (2015: EUR 632 million) or 5.9% of sales

Fourth quarter 2016 highlights

• Sales amounted to EUR 1,934 million, with comparable sales of -3.2% (Q4 2015: -2.7%)
• Total LED-based sales growth of 16%, now representing 59% of total sales
• Continued year-on-year improvement in operational profitability
• Adjusted EBITA of EUR 188 million (Q4 2015: EUR 159 million
• Adjusted EBITA margin improvement of 190 basis points to 9.7% (Q4 2015: 7.8%)
• Net income of EUR 63 million, including EUR 41 million charges not applicable in 2015 for brand license, separation costs and financial expenses
• Free cash flow of EUR 272 million 

Shareholder return

• Proposed cash dividend of EUR 1,10 per share, a pay-out ratio of 52%
• Additional capital up to EUR 300 million to be returned to shareholders over the period 2017-2018 by participating in share disposals by our main shareholder.

Eindhoven, the Netherlands – Philips Lighting (Euronext Amsterdam: LIGHT) today announced the company’s fourth quarter and full year results 2016. “In 2016, our businesses performed in accordance with their strategic objectives, despite challenging conditions in some markets. We are pleased with the significant increase in profitability and solid free cash flow in our first year as a standalone company. These results mark a continued progression to achieve our strategic goals and medium term financial objectives,” said CEO Eric Rondolat. “Our team remains focused on the opportunities ahead and is committed to meeting the needs of our customers through innovation, while executing concrete actions to continue improving our growth profile.” 

Outlook

In 2017, we expect further improvement in our Adjusted EBITA margin by approximately 50-100 basis points, in line with our medium term outlook to gradually improve the Adjusted EBITA margin to 11-13%. We also remain committed to delivering solid free cash flow. While we are cautious given global economic uncertainty, we remain committed to our ambition to return to positive comparable sales growth in the course of this year. 

2016 dividend proposal and capital return to shareholders

We propose a dividend of EUR 1.10 per share in cash, which represents a pay-out ratio of 52% of continuing net income. The dividend payment is subject to approval by the Annual General Meeting of Shareholders (AGM) to be held on 9 May 2017. Further details will be given in the agenda for the AGM.

Given our capital position whilst maintaining a compatible investment-grade profile, and in line with our capital allocation policy, we will return additional capital to our shareholders. Over the period 2017-2018, we will return up to EUR 300 million, by participating in share disposals by our main shareholder.

For the full and original version of the press release click here

For the presentation click here