Signify shares plunge as dividend reset, medium-term targets jolt investors (updated)

Signify NV

23/06/2026 06:56

Shares down 15% after its targets, dividend update disappoint
Dividend payout target cut to 40% to 50% of earnings
Adjusted EBITA margin target of around 10% by 2029
CEO says "options open" to trim portfolio
Updates with market reaction, adds CEO quotes on portfolio paragraphs 8, 10, 12
By Jakob Van Calster
June 23 (Reuters) - Shares in Signify LIGHT.AS fell as much as 17.6% early on Tuesday after the lighting company's updated dividend policy and medium-term targets failed to convince investors a turnaround was imminent following 12 consecutive quarters of declining sales.
   Ahead of its first Capital Markets Day since 2020, the world's largest maker of electric lights, light fixtures and control systems said it would shift to a dividend payout of 40% to 50% of earnings from a prior approach of maintaining a stable and rising dividend. 
J.P. Morgan estimated in a note to clients the changes implied a roughly 45% cut to dividend-per-share consensus.
Signify also set out medium-term targets, including an adjusted earnings before interest, taxation and amortisation (EBITA) margin of around 10% by 2029, and organic growth of up to 1% over the same period.  
The former lighting division of Philips PHG.AS, spun off from the Dutch group in 2016, had previously guided for an adjusted EBITA margin of 7.5% to 8.5% for 2026 and had not issued sales guidance for this year.
Signify shares recovered some early losses to trade down 14.6% at 0925 GMT.

PORTFOLIO REVIEW
As part of an anticipated portfolio review, CEO As Tempelman said the group would reduce its in-house manufacturing of standard lighting products due to persistent Chinese overcapacity and instead leverage its scale as a global buyer to source them more competitively, particularly from Asian suppliers.
Signify has faced pressure on sales and margins as Chinese competition intensifies, the shift to LED extends replacement cycles, and weak public-sector demand weighs on its professional segment, which accounts for roughly 65% of revenue.
The CEO told Reuters he was keeping “all options open” for parts of the business exposed to commoditised manufacturing, including the Original Equipment Manufacturer (OEM) business, LED lamp production and conventional lighting.
Options included partnerships, consolidation, or potential divestments, Tempelman said.
He also outlined plans to scale back Signify's global reach, reducing the number of countries where it has a direct presence to 35 from 55 over time. Tempelman declined to name specific countries, but said North America would not be affected.
($1 = 0.8760 euros)

 (Reporting by Jakob Van Calster; Editing by Harikrishnan Nair and Tomasz Janowski)
 ((jakob.vancalster@thomsonreuters.com))