Signify: margin up in the third quarter thanks to refunded customs duties, sales down
Signify published its third-quarter results on October 23, 2026, in which reported profitability rose while sales fell again. This increase includes a refund of U.S. customs duties, whose contribution to margin (2.1 points) exceeds the year-on-year margin increase (0.9 point).
The Dutch lighting manufacturer posted revenue of €1,367 million. Excluding the refund, its adjusted EBITA margin stood at 8.5%, compared with 9.7% in the third quarter of 2025.
Free cash flow reached €118 million, compared with €71 million a year earlier, and net debt was reduced to €986 million.
Sales down 3.4% on a like-for-like basis, adjusted EBITA at €145 million
Quarterly revenue fell 2.9% on a reported basis, to €1,367 million from €1,407 million, with a positive currency effect of 0.4%. On a like-for-like basis, the decline reached 3.4%, after a 3.9% drop in the third quarter of 2025.
Adjusted EBITA rose 6.1%, to €145 million from €136 million, for a margin of 10.6% versus 9.7%. Net income came to €88 million, compared with €76 million, and basic earnings per share to €0.73, compared with €0.60.
Adjusted gross margin improved by 300 basis points, to 42.5%, including the refund. Excluding this effect, according to the group, it improved slightly, thanks to higher prices across all businesses and control of cost of sales.
The cost reduction program generated €37 million in gross savings over the quarter. These gains were offset by an unfavorable comparison of variable compensation provisions, wage inflation and higher variable costs: adjusted indirect costs rose €12 million, to €451 million, or 33.0% of sales versus 31.2%.
Excluding the customs refund, a margin of 8.5% versus 9.7% a year earlier
Signify has completed a large part of the refund procedure for IEEPA customs duties on imports into the United States. After payments to suppliers, customer credits and provisions for employee compensation, the net effect reached €28 million on adjusted EBITA.
Excluding this item, the 8.5% margin reflects, according to the group, lower sales and margin pressure in the Consumer division. Cost reductions and gross margin helped stabilize profitability.
The Professional division (€921 million in sales, down 1.5% on a like-for-like basis) posted a margin of 12.5% versus 10.4%, including 2.0 points related to the refund. Excluding this effect, its margin is stable year on year.
The Consumer division saw sales fall 6.1%, to €283 million, mainly due to distributor destocking on the Hue range. Its margin went from 9.1% to 6.8%, despite 2.3 points contributed by the refund. The OEM division raised its margin from 4.7% to 5.9%.
Over nine months, revenue fell 7.0%, to €3,973 million, and adjusted EBITA dropped 14.8%, to €309 million, for a margin of 7.8% versus 8.5%. Net income came to €112 million, compared with €199 million, after €100 million in restructuring costs.
Annual margin target confirmed, in the lower part of the range excluding refunds
Signify confirmed its target for an annual adjusted EBITA margin in the upper part of the 7.5% to 8.5% range including refunds received through the third quarter, and in the lower part of this range excluding them. The free cash flow target remains set between 6.5% and 7.5% of sales.
The group expects difficult market conditions to persist, with continued pressure in the Professional business in Europe and slower demand for projects in the United States. Facing a high comparison base in Consumer, it expects fourth-quarter like-for-like sales growth equal to or slightly below that of the third quarter.
On the balance sheet side, cash rose €105 million over the quarter, to €601 million, and net debt decreased €104 million, to €986 million, compared with €1,191 million at the end of September 2025. The net debt to EBITDA ratio stands at 1.9 times, versus 1.7 times a year earlier.
Headcount fell from 28,064 to 24,961 full-time equivalents over one year, due to lower production volumes and the cost reduction plan announced in January 2026. The annual target, between 7.5% and 8.5%, is thus confirmed, its position within the range depending on customs refunds.
