Signify announced the company’s first quarter 2020 results with sales amounted to EUR 1.43 billion (US$ 1.53 billion), down by 3.5% YoY. With adjusted for 1.3% currency effects and 10.6% consolidation (mainly related to the acquisitions of Cooper Lighting and Klite) and other changes, comparable sales declined by 15.3%. LED-based sales represent 78% of total sales.

The adjusted gross margin increased by 50 bps to 38.2%, including a negative currency effect of 10 bps. Adjusted indirect costs decreased by EUR 4 million (US$ 4.295 million). The Adjusted EBITA margin increased by 10 bps to 7.9%, with a neutral effect from currencies. Net income decreased from EUR 44 million (US$ 47.23 million) last year to EUR 27 million (US$ 28.98 million) in 1Q20. Free cash flow doubled to EUR 112 million (US$ 120.23 million) compared to EUR 55 million (US$ 59.04 million) last year in the first quarter based on strong working capital management in the growing profit engines, and the consolidation of Cooper Lighting.

In response to the COVID-19 pandemic, Eric Rondolat, CEO of Signify, noted that it has “rapidly implemented a set of dedicated actions that enabled us to improve our operating margin and double our free cash flow despite a decline in demand.” He commented, “We are building on these achievements to manage our performance in the second quarter as we expect demand to be further impacted. In addition, we are taking extra measures to protect our profitability and cash flow. We have also started to explore new business opportunities arising from the situation whilst remaining very close to our customers. I believe that all these measures will help us to strengthen our market positions.”

Signify did not provide financial outlook at the point considering the uncertainty about the future course of the pandemic, and the length and depth of the impact on the global economy.