Signify Faces Leadership Shake-Up and Profit Decline Amid Market Challenges

Signify, the world’s largest lighting manufacturer, announced a nearly 10% decline in its 2024 core profit on Friday. The company also revealed that CEO Eric Rondolat would step down following the annual general meeting scheduled for April.

Rondolat, who is 58, played a critical role in guiding Signify’s 2016 spin-off from Philips and was reappointed for another four-year term just last year. The company did not provide an explanation for his decision to leave but stated that the board would consider both internal and external candidates for his replacement.

The company reported a 9.6% drop in adjusted earnings before interest, taxes, and amortization (EBITA), bringing it to approximately $633 million in 2024. This figure fell short of analysts’ expectations of $641 million based on consensus estimates provided by the company. Additionally, its adjusted EBITA margin stood at 9.9%, narrowly missing its forecasted range of 10% to 10.5%.

Despite the lower profit figures, Signify highlighted strong gross margins, which it attributed to cost-saving initiatives that helped offset pricing pressures in certain markets. These measures included a workforce reduction of 1,000 employees by the end of 2024.

To maintain investor confidence, the company announced plans to increase its cash dividend to $1.64 per share for 2024, slightly up from $1.63 the previous year. Signify also launched a share repurchase program valued at approximately $157 million, starting in the first quarter of 2025, with additional plans to buy back between $367 million and $472 million worth of shares by 2027.

Looking ahead, the company projected low single-digit growth in comparable sales for 2025, with expectations of maintaining a stable EBITA margin. However, investor sentiment may remain cautious as Signify navigates the ongoing effects of U.S. tariffs on goods produced in China, where much of its manufacturing is based.

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