Signify CEO cites renewed interest in energy efficiency amid recession (UPDATED)
Aug 12, 2022
As economists debate whether the world has tipped into recession, the CEO of the world’s largest lighting company clearly believes it has. But with part of the problem being soaring energy prices, Signify boss Eric Rondolat sees a revitalized interest in efficient LEDs, spelling top-line growth.
The strong outlook in the commercial sector including offices, schools, factories, warehouses, outdoor public spaces, and so on relates to the money that end users save using LEDs as opposed to conventional lighting, and to the extra savings accrued when they connect LED luminaires into smart control systems.
Payback time
Energy savings is by no means a new story in the LED narrative, but it is now an even more compelling one given the rampant escalation of fossil fuel prices.
Energy prices are a big part of the current global inflationary environment, which, while presenting plenty of business opportunities for Signify, has also cut markedly into the company’s profit margins.
The illusion of consumer growth
As LEDs Magazine reported earlier this week, overall company revenue for the quarter that ended June 30 was €1.84 billion, marking a 5.1% increase in comparable sales over the second quarter of 2021. Still, from a volume perspective, some of that growth was an illusion because it came from inflationary price increases, especially in the consumer and conventional segments.
As LEDs noted in our earlier story this week, Signify has also reevaluated the portion of its UV-C product stable aimed at disinfecting surfaces, which had targeted the professional and consumer markets. A Signify spokesperson has since clarified that the "obsolescence" to which Rondolat referred in that report is a partial accounting provision for inventory that may not be sold according to previously anticipated demand, or those products that will take longer to sell but remain in the company's portfolio. Get the full details in the linked story above.
