Created on 10.30

Recent Developments at Signify: A Comprehensive Overview

Signify (Euronext: LIGHT), the world leader in lighting, has navigated a complex landscape in 2025 marked by financial headwinds, strategic shifts under new leadership, and continued product innovation. Here's an in-depth look at what has recently transpired at the company.

📉 Financial Performance: A Challenging Quarter

Signify's financial results for the third quarter of 2025 revealed a company grappling with significant market challenges.

Declining Sales and Profitability

: The company reported Q3 2025 sales of €1.407 billion, representing an 8.4% decrease year-over-year, with comparable sales declining 3.9%. The adjusted EBITA margin contracted to 9.7%, down 80 basis points from the previous year. Net income fell to €76 million, and free cash flow decreased to €71 million compared to €119 million in the same period last year.

Divisional Performance Variability

: The company's struggles were particularly pronounced in its OEM division, where sales plummeted by 26%, partly due to the loss of two major OEM customers. The Professional segment declined by 6.8%, while the Consumer division, buoyed by the Philips Hue product line, showed resilience with 3.7% growth.

Broader 2025 Trend

: This quarterly performance continues a trend observed throughout 2025. In the second quarter, Signify reported sales of €14.18 billion, down 4.4% year-over-year, while the first quarter saw a more modest 1.3% decline.

👔 Leadership and Strategic Direction

The company has undergone significant leadership changes and is re-evaluating its strategic direction in response to current market conditions.

New CEO at the Helm

: As Tempelman took over as CEO just six weeks before the Q3 earnings announcement. He described the market environment as "very challenging" and identified three major headwinds: redirected Chinese overcapacity flooding European markets, soft demand in key European economies, and delayed public-sector projects in the United States.

Strategic Review and Shift

: Tempelman announced plans for a Capital Markets Day in mid-2026 where he will outline Signify's long-term direction. He intends to review the company's portfolio, revisit capital allocation, and sharpen its strategic focus. Under his leadership, Signify will maintain its current operating model but shift "from product-led to market-led," investing more heavily in digitalization and AI.

Commentary on Reconnecting with Design Community

: Industry commentary suggests that Signify needs to reconnect with architects, lighting designers, distributors, contractors, and reps—relationships that may have weakened over time. This recalibration effort will be crucial for the company's future in the specification-driven segment of the market.

💡 Product Innovation and Launches

Despite financial headwinds, Signify has continued to introduce innovative products and expand into new market segments.

Philips Hue Expansion

: September 2025 saw the successful launch of new Philips Hue products featuring motion-sensing capabilities. The company also introduced an entry-level Essential series of smart bulbs designed to compete with more affordable brands like Govee and Aqara. Priced at $25 for a single A19 bulb, this series offers a more accessible entry point into the Hue ecosystem while making minor functional trade-offs.

Venturing into Home Security

: In a strategic expansion, Signify introduced the Hue Secure video doorbell, marking its official entry into the home security market. The device features a 2K resolution fisheye lens, free 24-hour video history storage, and integrates with existing Hue lighting systems through Zigbee connectivity, allowing lights to automatically turn on when someone approaches the door.

Professional Lighting Solutions

: The company launched the SootheSpace range of professional luminaires, designed to meet WELL Building Standard and LEED Certification requirements. These fixtures feature a Unified Glare Rating (UGR) of less than 16, deliver up to 140 lumens per watt, and eliminate screen glare—addressing key concerns in modern digital work environments.

Sustainable Innovation

: Signify introduced Puzzle, its first 3D-printed luminaire made from 75% recycled PET materials, including sources like bottles, carpets, and clothing. This product exemplifies the company's commitment to circular economy principles and sustainable design.

🌍 Market Challenges and Competitive Landscape

Signify operates in a rapidly evolving global market characterized by several significant challenges.

Global Trade Dynamics

: The company is contending with redirected Chinese overcapacity into European markets, as Chinese manufacturers affected by U.S. import tariffs seek alternative outlets. This has intensified price pressure, particularly in professional trade channels.

Regional Market Softness

: While Signify's U.S. professional business had shown strength earlier in the year, the third quarter turned "flattish" with weaker project activity, especially in the public sector where projects are being delayed rather than canceled. European markets remain particularly challenging.

Competitive Pressures

: The company faces fierce competition at the lower end of the trade channel, especially for non-connected, price-sensitive products. The growth of affordable smart lighting brands has prompted Signify to respond with its own Essential series to maintain market share.

💎 Conclusion

Signify stands at a pivotal moment in its history as it navigates through a complex set of challenges including financial headwinds, intense global competition, and strategic repositioning under new leadership. While the company's core businesses show weakness, particularly in OEM and Professional segments, its consumer division continues to grow through innovative smart lighting solutions.

The appointment of As Tempelman as CEO signals a potential strategic shift, with detailed plans expected to be unveiled in mid-2026. Meanwhile, Signify continues to demonstrate product innovation across both consumer and professional segments while expanding into adjacent markets like home security.

As the lighting industry continues to evolve toward connected, sustainable, and human-centric solutions, Signify's ability to stabilize its core businesses, reconnect with key specification communities, and execute on its new strategic direction will determine its trajectory in the coming years.

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