Philips Lighting reports improvement in comparable sales growth, continued increase in operational profitability and free cash flow

Press release
April 21, 2017

Philips Lighting reports improvement in comparable sales growth, continued increase in operational profitability and free cash flow

First quarter 2017 highlights

• Sales of EUR 1,690 million, with comparable sales of -0.8% (Q1 2016: -1.3%)
• Total LED-based sales growth of 19%, now representing 61% of total sales

Continued year-on-year improvement in operational profitability

• Adjusted EBITA of EUR 142 million (Q1 2016: EUR 121 million)
• Adjusted EBITA margin improvement of 130 basis points to 8.4% (Q1 2016: 7.1%)

Net income of EUR 61 million (Q1 2016: EUR 14 million)

Free cash flow of EUR 2 million (Q1 2016: EUR -78 million)

Eindhoven, the Netherlands - Philips Lighting (Euronext Amsterdam: LIGHT) today announced the company's 2017 first quarter results. "Our comparable sales growth improved in comparison to previous quarters, driven by double-digit growth in our business groups LED and Home and a return to growth in Europe and the Rest of the World, despite ongoing challenging conditions in some markets. We continued to increase our operational profitability and free cash flow compared to the first quarter of last year, demonstrating the rigorous implementation of our strategy," said CEO Eric Rondolat. "These results reinforce our confidence that the company is well positioned to achieve its 2017 outlook and medium term goals."

Key figures

	First Quarter
in € million, unless otherwise indicated[1]	2016	2017	change
Sales	1,702	1,690	-0.7%
Comparable sales growth			-0.8%
Adjusted gross margin	640	669	4.5%
Adjusted EBITA	121	142	17.4%
EBITA	100	122	22.0%
Income from operations (EBIT)	71	94	32.4%
Net income	14	61	335.7%
% of sales
Adjusted gross margin	37.6%	39.6%
Adjusted EBITA margin	7.1%	8.4%
Free cash flow	-78	2
Basic EPS (€)		0.43
Employees (FTE)	36,350	34,379

Outlook

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