Signify N.V. is a public company with limited liability incorporated under the laws of the Netherlands and listed on Euronext Amsterdam under the symbol \"LIGHT\".
As used herein, the term Signify is used for Signify N.V. (\u2018the Company\u2019) and its subsidiaries.
The Consolidated financial statements as at December 31, 2025, have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) and with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. The Consolidated financial statements are prepared by the Board of Management of the Company and authorized for issue on February 24, 2026, and will be submitted for adoption to the Annual General Meeting of Shareholders on April 24, 2026. The Consolidated financial statements have been prepared on a going concern basis.
The Consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments, including derivatives (measured at fair value), assets held for sale (measured at the lower of carrying amount and its fair value less costs to sell), and defined-benefit pension plans (plan assets are measured at fair value).
The Consolidated financial statements are presented in euros (EUR), which is the functional and presentation currency of Signify N.V. All amounts are presented in EUR million and have been rounded to the nearest EUR million, unless otherwise stated. Due to rounding, amounts may not add up to totals provided.
The preparation of the Consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These estimates inherently contain a degree of uncertainty. Actual results may differ from these estimates.
These judgments and estimates are evaluated on an ongoing basis and are based on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that are considered reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities, as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Signify revises material estimates if changes occur in the circumstances or if there is new information or experience on which an estimate was or can be based.
The areas where the most significant judgments and estimates are made are:
Revenue recognition - note 3, Income from operations;
Income tax and deferred tax assets including recoverability of deferred tax assets and non-current income tax payables - note 8, Income taxes;
Determination of lease term of contracts with renewal options - note 13, Leases;
Valuation of goodwill - note 14, Intangible assets;
Inventory valuation and obsolescence provision - note 16, Inventories ;
Impairment of trade receivables and contract assets - note 17, Trade and other receivables;
Provisions and insurance cover asset recoverability - note 17, Trade and other receivables and note 23, Provisions;
Employee benefit obligations - note 24, Post-employment benefits.
For further discussion on these significant judgments and estimates, reference is made to the respective notes within these Consolidated financial statements that relate to the above topics.
The impact of climate change generates opportunities as well as challenges for Signify\u2019s existing and future lighting products and solutions portfolio. Sustainability is an integral part of Signify's strategy, aiming to address global challenges by focusing on sustainable growth areas, based on low-carbon technological innovation. Through its global leadership in energy-efficient lighting, Signify's portfolio is uniquely positioned to mitigate transition risks and capture opportunities related to climate change. In 2024, Signify released its Climate Transition Plan to reduce greenhouse gas (GHG) emissions by 90% across its entire value chain against a 2019 baseline and reach net-zero by 2040.
Signify did not identify any significant financial investment required because the plan is integrated into our current business processes and strategy. In addition, Signify did not identify any significant impacts resulting from the commitments made in this respect in the valuation of its property, plant and equipment and intangible assets (including goodwill) and did not identify any material additional provisions for environmental liabilities and risks beyond the ones already provided for.
We performed our annual double materiality assessment and climate physical and transition risk assessment (see, subsection 5.2.1, Climate change) which resulted in one material physical risk. However, based on our resilience analysis we concluded that we have no significant financial exposure in 2025.
The Professional and Consumer businesses benefit from the global transition away from conventional lighting toward high\u2011efficiency LED and connected solutions. In Europe, regulatory momentum is creating an especially strong tailwind. The Clean Industrial Deal, the revised Energy Performance of Buildings Directive (EPBD), and renewed impetus on energy efficiency across both public and private sectors are setting higher performance standards and encouraging the adoption of sustainable, digitally enabled lighting technologies. Together, these trends create a multi\u2011year strategic opportunity for Signify, as its global product portfolio is well positioned to capture growth as customers modernize their infrastructure and accelerate their sustainability commitments.
The conventional lamps market is expected to continue to decline in the coming years due to the ongoing adoption of LED lighting technologies and regulatory changes. While the overall conventional market continues to decline, Conventional's focus is on further increasing its leading market share in key segments and markets. The specialty lighting products see a much slower conversion rate to LED. The business continues to proactively manage its manufacturing footprint and reduce operational costs to optimize free cash flow.
Developments on climate-related matters were considered in preparing the Consolidated financial statements. Specifically, the key assumptions used in the annual goodwill impairment test for Conventional have taken into account external market assumptions, including potential phase out of products due to market conditions and legislation likely to be ratified. In the 2025 annual goodwill test, the estimated recoverable amount of Conventional exceeded its carrying value, therefore no impairment loss was recognized. For further details, refer to note 14, Intangible assets. In addition, Property, Plant and Equipment of Conventional were reviewed for impairment triggering events. Where applicable, assets were impaired to their recoverable amounts, and useful lives were adjusted accordingly.
The current macroeconomic environment poses risks and uncertainties which are closely monitored by Signify. Such risks, uncertainties and other important factors include but are not limited to adverse economic and geopolitical developments, supply chain disruptions, cost inflation, and the potential impact of trade tariffs. To mitigate risks, the company has taken measures and executed longer-term structural actions, such as diversifying its sourcing and manufacturing footprint.\u00a0
The annual impairment test performed in the fourth quarter did not result in an impairment loss being recognized. The key assumptions of the goodwill impairment test include sales growth rates, EBITA and the rates used for discounting the projected cash flows. All key assumptions were updated to reflect management\u2019s current best estimates. For further details, refer to note 14, Intangible assets.
Signify monitors changes in the economic environment which could indicate that the carrying amount of the asset may not be recoverable, and performs an impairment test when an impairment trigger is identified. No material impairment was identified based on the procedures performed.
Macroeconomic developments impacted underlying assumptions of post-employment liabilities such as interest rates and investment performance. Signify performed an updated quantification of the net defined benefit liability as at December 31, 2025, based on the most recent assumptions. Details of the underlying assumptions used can be found in note 24, Post-employment benefits.
In the context of macroeconomic developments, Signify has also assessed whether it is still probable that deferred tax assets recognized on the balance sheet will be realized. No material derecognition as a result of this assessment was recorded.
Signify\u2019s inventories are stated at the lower of cost or net realizable value. In determining the appropriate level of value allowance, Signify has considered the impact of the macroeconomic environment, including trade tariffs. Refer to note 16, Inventories for further disclosure.
Signify has applied the following amendment for the first time to its annual reporting period commencing January 1, 2025:
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
Signify changed its accounting policies in accordance with the amendment listed above. The change did not have any significant impact on the amounts recognized in the prior period and current period.
Several new standards or amendments to existing standards that are mandatory for reporting periods commencing on or after January 1, 2026, have been published. IFRS 18 Presentation and Disclosure in Financial Statements was issued in April 2024, replacing IAS 1 Presentation of Financial Statements. The standard will be effective on January 1, 2027. Signify is in the process of reviewing the impact of this new standard. The initial expected material impact on Signify's financial statements is as follows:
Certain items in financial income and expenses will be reclassified as \"investing\" or \"financing\" category in profit and loss;
Interest received and paid will be classified in investing and financing activities, respectively, in the statement of cash flows.
Other new standards or amendments are not expected to have a material impact on Signify in the current or future reporting periods and on foreseeable future transactions. Signify has not early adopted any of these new standards or amendments.
Signify N.V. is a public company with limited liability incorporated under the laws of the Netherlands and listed on Euronext Amsterdam under the symbol \"LIGHT\".
As used herein, the term Signify is used for Signify N.V. (\u2018the Company\u2019) and its subsidiaries.
The Consolidated financial statements as at December 31, 2025, have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) and with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. The Consolidated financial statements are prepared by the Board of Management of the Company and authorized for issue on February 24, 2026, and will be submitted for adoption to the Annual General Meeting of Shareholders on April 24, 2026. The Consolidated financial statements have been prepared on a going concern basis.
The Consolidated financial statements have been prepared on a historical cost basis, except for certain financial instruments, including derivatives (measured at fair value), assets held for sale (measured at the lower of carrying amount and its fair value less costs to sell), and defined-benefit pension plans (plan assets are measured at fair value).
The Consolidated financial statements are presented in euros (EUR), which is the functional and presentation currency of Signify N.V. All amounts are presented in EUR million and have been rounded to the nearest EUR million, unless otherwise stated. Due to rounding, amounts may not add up to totals provided.
The Consolidated financial statements comprise the financial statements of Signify N.V. and all subsidiaries it controls (i.e. when it is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee). The existence and effect of potential voting rights are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. All intercompany balances and transactions have been eliminated in the Consolidated financial statements.
Refer to \u201cBasis of consolidation\u201d in note 1, General information.
The Consolidated financial statements comprise the assets and liabilities of approximately 150 legal entities. Set out below is a list of material subsidiaries, in alphabetical order, representing more than 5% of either the consolidated company sales, income from operations or net income (before any intra-company eliminations). All the entities are 100% owned.
Legal entity name | Principal country of business |
|---|---|
Cooper Lighting Netherlands B.V. | Netherlands |
Cooper Lighting, LLC | United States |
Genlyte Thomas Group LLC | United States |
Signify (China) Investment Co., Ltd. | China |
Signify France | France |
Signify GmbH | Germany |
Signify Holding B.V. | Netherlands |
Signify Netherlands B.V. | Netherlands |
Signify North America Corporation | United States |
Signify Poland Sp. z.o.o. | Poland |
Signify does not have subsidiaries that have non-controlling interests that are material for its Consolidated financial statements.
Signify has investments in several associates and joint ventures, none of which are regarded as individually material. In aggregate, the carrying amount, share of profit and other comprehensive income of the associates are shown in the Consolidated statement of financial position, Consolidated statement of income and Consolidated statement of comprehensive income.
The Consolidated financial statements comprise the financial statements of Signify N.V. and all subsidiaries it controls (i.e. when it is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee). The existence and effect of potential voting rights are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. All intercompany balances and transactions have been eliminated in the Consolidated financial statements.
Refer to \u201cBasis of consolidation\u201d in note 1, General information.
The Consolidated financial statements comprise the assets and liabilities of approximately 150 legal entities. Set out below is a list of material subsidiaries, in alphabetical order, representing more than 5% of either the consolidated company sales, income from operations or net income (before any intra-company eliminations). All the entities are 100% owned.
Legal entity name | Principal country of business |
|---|---|
Cooper Lighting Netherlands B.V. | Netherlands |
Cooper Lighting, LLC | United States |
Genlyte Thomas Group LLC | United States |
Signify (China) Investment Co., Ltd. | China |
Signify France | France |
Signify GmbH | Germany |
Signify Holding B.V. | Netherlands |
Signify Netherlands B.V. | Netherlands |
Signify North America Corporation | United States |
Signify Poland Sp. z.o.o. | Poland |
Signify does not have subsidiaries that have non-controlling interests that are material for its Consolidated financial statements.
The Consolidated financial statements as at December 31, 2025, have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) and with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. The Consolidated financial statements are prepared by the Board of Management of the Company and authorized for issue on February 24, 2026, and will be submitted for adoption to the Annual General Meeting of Shareholders on April 24, 2026. The Consolidated financial statements have been prepared on a going concern basis.
The Consolidated financial statements as at December 31, 2025, have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) and with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. The Consolidated financial statements are prepared by the Board of Management of the Company and authorized for issue on February 24, 2026, and will be submitted for adoption to the Annual General Meeting of Shareholders on April 24, 2026. The Consolidated financial statements have been prepared on a going concern basis.
The Consolidated financial statements as at December 31, 2025, have been prepared in accordance with the International Financial Reporting Standards (IFRS) as endorsed by the European Union (EU) and with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. The Consolidated financial statements are prepared by the Board of Management of the Company and authorized for issue on February 24, 2026, and will be submitted for adoption to the Annual General Meeting of Shareholders on April 24, 2026. The Consolidated financial statements have been prepared on a going concern basis.
The Consolidated financial statements are presented in euros (EUR), which is the functional and presentation currency of Signify N.V. All amounts are presented in EUR million and have been rounded to the nearest EUR million, unless otherwise stated. Due to rounding, amounts may not add up to totals provided.
The preparation of the Consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These estimates inherently contain a degree of uncertainty. Actual results may differ from these estimates.
These judgments and estimates are evaluated on an ongoing basis and are based on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that are considered reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities, as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Signify revises material estimates if changes occur in the circumstances or if there is new information or experience on which an estimate was or can be based.
The areas where the most significant judgments and estimates are made are:
Revenue recognition - note 3, Income from operations;
Income tax and deferred tax assets including recoverability of deferred tax assets and non-current income tax payables - note 8, Income taxes;
Determination of lease term of contracts with renewal options - note 13, Leases;
Valuation of goodwill - note 14, Intangible assets;
Inventory valuation and obsolescence provision - note 16, Inventories ;
Impairment of trade receivables and contract assets - note 17, Trade and other receivables;
Provisions and insurance cover asset recoverability - note 17, Trade and other receivables and note 23, Provisions;
Employee benefit obligations - note 24, Post-employment benefits.
For further discussion on these significant judgments and estimates, reference is made to the respective notes within these Consolidated financial statements that relate to the above topics.
The impact of climate change generates opportunities as well as challenges for Signify\u2019s existing and future lighting products and solutions portfolio. Sustainability is an integral part of Signify's strategy, aiming to address global challenges by focusing on sustainable growth areas, based on low-carbon technological innovation. Through its global leadership in energy-efficient lighting, Signify's portfolio is uniquely positioned to mitigate transition risks and capture opportunities related to climate change. In 2024, Signify released its Climate Transition Plan to reduce greenhouse gas (GHG) emissions by 90% across its entire value chain against a 2019 baseline and reach net-zero by 2040.
Signify did not identify any significant financial investment required because the plan is integrated into our current business processes and strategy. In addition, Signify did not identify any significant impacts resulting from the commitments made in this respect in the valuation of its property, plant and equipment and intangible assets (including goodwill) and did not identify any material additional provisions for environmental liabilities and risks beyond the ones already provided for.
We performed our annual double materiality assessment and climate physical and transition risk assessment (see, subsection 5.2.1, Climate change) which resulted in one material physical risk. However, based on our resilience analysis we concluded that we have no significant financial exposure in 2025.
The Professional and Consumer businesses benefit from the global transition away from conventional lighting toward high\u2011efficiency LED and connected solutions. In Europe, regulatory momentum is creating an especially strong tailwind. The Clean Industrial Deal, the revised Energy Performance of Buildings Directive (EPBD), and renewed impetus on energy efficiency across both public and private sectors are setting higher performance standards and encouraging the adoption of sustainable, digitally enabled lighting technologies. Together, these trends create a multi\u2011year strategic opportunity for Signify, as its global product portfolio is well positioned to capture growth as customers modernize their infrastructure and accelerate their sustainability commitments.
The conventional lamps market is expected to continue to decline in the coming years due to the ongoing adoption of LED lighting technologies and regulatory changes. While the overall conventional market continues to decline, Conventional's focus is on further increasing its leading market share in key segments and markets. The specialty lighting products see a much slower conversion rate to LED. The business continues to proactively manage its manufacturing footprint and reduce operational costs to optimize free cash flow.
Developments on climate-related matters were considered in preparing the Consolidated financial statements. Specifically, the key assumptions used in the annual goodwill impairment test for Conventional have taken into account external market assumptions, including potential phase out of products due to market conditions and legislation likely to be ratified. In the 2025 annual goodwill test, the estimated recoverable amount of Conventional exceeded its carrying value, therefore no impairment loss was recognized. For further details, refer to note 14, Intangible assets. In addition, Property, Plant and Equipment of Conventional were reviewed for impairment triggering events. Where applicable, assets were impaired to their recoverable amounts, and useful lives were adjusted accordingly.
The current macroeconomic environment poses risks and uncertainties which are closely monitored by Signify. Such risks, uncertainties and other important factors include but are not limited to adverse economic and geopolitical developments, supply chain disruptions, cost inflation, and the potential impact of trade tariffs. To mitigate risks, the company has taken measures and executed longer-term structural actions, such as diversifying its sourcing and manufacturing footprint.\u00a0
The annual impairment test performed in the fourth quarter did not result in an impairment loss being recognized. The key assumptions of the goodwill impairment test include sales growth rates, EBITA and the rates used for discounting the projected cash flows. All key assumptions were updated to reflect management\u2019s current best estimates. For further details, refer to note 14, Intangible assets.
Signify monitors changes in the economic environment which could indicate that the carrying amount of the asset may not be recoverable, and performs an impairment test when an impairment trigger is identified. No material impairment was identified based on the procedures performed.
Macroeconomic developments impacted underlying assumptions of post-employment liabilities such as interest rates and investment performance. Signify performed an updated quantification of the net defined benefit liability as at December 31, 2025, based on the most recent assumptions. Details of the underlying assumptions used can be found in note 24, Post-employment benefits.
In the context of macroeconomic developments, Signify has also assessed whether it is still probable that deferred tax assets recognized on the balance sheet will be realized. No material derecognition as a result of this assessment was recorded.
Signify\u2019s inventories are stated at the lower of cost or net realizable value. In determining the appropriate level of value allowance, Signify has considered the impact of the macroeconomic environment, including trade tariffs. Refer to note 16, Inventories for further disclosure.
For contracts with multiple performance obligations, the total consideration of the contract is allocated to all distinct performance obligations in the contract based on their stand-alone selling prices. Stand-alone selling prices are determined based on other stand-alone sales transactions that are directly observable, when possible. If no direct observable prices are available, the stand-alone selling price is normally based on the expected cost plus a margin approach.
The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
The company has sales promotions-related agreements with distributors and retailers designed to promote the sale of products. Among the programs are arrangements under which rebates and discounts can be earned by attaining agreed upon sales levels or for participating in specific marketing programs. Management estimates the sales-related accruals associated with these arrangements based on a combination of historical patterns and future expectations regarding promotional targets to be met. Accrued customer rebates are presented as other current liabilities, unless there is a right to offset against the respective accounts receivable.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. The evaluation of the recoverability of deferred tax assets requires judgment about the future taxable profitability of the legal entity holding the tax loss carry forward. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the countries where the deferred tax assets originated and during the periods when the deferred tax assets become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A lack of future taxable profits or taxable profits below the level of current estimates may cause deferred tax assets to be impaired.
The ultimate tax effects of transactions may be uncertain for a considerable period of time, requiring management to estimate the related current and deferred tax treatments. In assessing the uncertainty, Signify considers whether it is probable that a taxation authority will accept or revise the uncertain tax treatment. Income tax payable includes liabilities for uncertain tax positions which are recognized when it is probable that tax will be due. To the extent uncertain tax positions relate to deferred tax assets, these are offset against each other. Actual tax assessments in relation to these uncertain tax positions may significantly deviate from estimates.
In determining the amount of current and deferred income tax, Signify takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes Signify to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact the income tax expense in the period that such a determination is made.
Signify is within the scope of the OECD Pillar Two model rules, and it applies the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Under this legislation, the group is liable to pay a top-up tax for the difference between its GloBE effective tax rate in each jurisdiction and the 15% minimum rate. For the financial year 2025, Signify can apply a transitional safe harbor in all of the jurisdictions it operates. The income tax expense related to Pillar Two was EUR nil million in 2025 (2024: EUR nil million).
Assessing the amount of tax liabilities for these tax uncertainties is highly judgmental and the timing of possible outflows, if any, is uncertain. Signify has considered the merits of its filing position in its overall evaluation of potential tax liabilities and believes it has adequate tax liabilities recorded in its Consolidated financial statements for exposures on these matters. Based on its evaluation of the potential tax liabilities and the merits of Signify's filing positions, it is unlikely that potential tax exposures over the amounts currently recorded as liabilities in its Consolidated financial statements will be material to its financial condition or future results of operations.
Tax uncertainties also include exposures with a risk assessment which are deemed lower than probable, but possible. The best estimate of the maximum amount in connection with these uncertainties is EUR 57 million (2024: EUR 55 million). Signify believes that in connection with these uncertainties it is probable that no additional taxes will be due. Therefore, no income tax payable is recognized.
Signify determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, Signify considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include Signify\u2019s strategic plans, the industrial footprint of Signify and divisions and the importance of the site to Signify\u2019s operations.
The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values.
The expected useful lives in years of intangible assets excluding goodwill are as follows:
Product development | from 2 to 5 |
Software | from 3 to 10 |
Technology | from 2 to 20 |
Customer relations | from 5 to 20 |
Brand names | from 5 to 20 |
Other | from 2 to 10 |
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
The cash flow projections used in the value in use calculation for the annual impairment test for goodwill require significant judgment and estimations, which are further disclosed in this note.
The key assumptions used in the impairment tests were the sales growth rates and the discount rates applied to the projected cash flows, while EBITA reflects the combined effects of sales growth and cost measures. These cash flow projections cover an initial period with specific estimates from 2026 to 2028. Projections were extrapolated with declining growth rates for a period of five years, after which a terminal value was calculated. The sales growth rates and EBITA used to estimate cash flows are based on past performance, external market growth assumptions, taking into account current market conditions, and industry long-term growth averages. The applied discount rates are determined based on the weighted average cost of capital, which reflects the risks relevant to the cash-generating units. These estimates inherently contain a degree of uncertainty as they relate to future events. Actual results may differ from these estimates.
EBITA (excluding impact for uncommitted restructurings) assumed for Professional (main geographies) is expected to increase over the projection period due to volume growth, positive sales mix and cost efficiencies. Cash flow projections for the impairment tests in 2025 and 2024 were based on the key assumptions included in the table below:
| \u00a0 | Compound sales growth rate1 | \u00a0 | ||
|---|---|---|---|---|
| \u00a0 | Initial period | Extrapolation period | Used to calculate terminal value | Pre-tax discount rates |
Professional (main geographies) 2025 | (0.1)% | 1.8% | 0.5% | 11.3% |
Professional (main geographies) 2024 | n.a. | 2.0% | 0.5% | 11.0% |
Based on the annual impairment test of Professional (main geographies), the estimated recoverable amount exceeds the carrying amount by approximately EUR 300 million. The following changes could, individually, cause the value in use to fall to the level of the carrying value, with all other assumptions held constant:
Key assumption | Deviation |
|---|---|
Compound sales growth rate \u2013 initial period | Decrease of more than 3 percentage points |
Compound sales growth rate \u2013 extrapolation period | Decrease of more than 4.5 percentage points |
Pre-tax discount rate | Increase of more than 0.9 percentage point |
Terminal growth rate | Decrease of 1 percentage point |
Inventories are stated at the lower of cost and net realizable value. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include direct labor and fixed and variable production overheads, considering the stage of completion and the normal capacity of production facilities. Costs of idle facility and abnormal waste are expensed. The cost of inventories is determined using the first-in, first-out (FIFO) method. On each reporting date, management performs an analysis of net realizable values and determines the lower of cost and net realizable value to measure its inventories. The write-down is included in Cost of sales.
Due to price erosion and technological developments, inventory valuation requires forward-looking estimates on future sales levels, future price erosion and related expected gross margin percentages.
Financial assets arising from insurance contracts are only recognized when it is virtually certain that reimbursement will be received if Signify settles the obligation. Signify recognizes the reimbursement as a separate financial asset.
Signify estimates lifetime expected loss allowance for all Trade receivables and Contract assets via calculating the expected credit losses. Trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due whereby the lifetime expected credit loss on the Trade receivables is recognized based on a matrix model calculated per country, which utilizes historical recoverability data and default probability per country.
As soon as individual trade accounts receivable can no longer be collected in a normal course of business and are expected to result in a loss, they are designated as doubtful trade accounts receivable and valued at the expected collectible amounts. They are written off when they are deemed to be uncollectable because of bankruptcy or other forms of receivership at the debtors. Any previously recognized expected loss is offset against the carrying amount of such trade receivable and the difference is taken as a loss accounted for within Selling, general and administrative expenses.
Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify\u2019s provisions is as follows:
Environmental provisions - Measurement of liabilities associated with environmental obligations is based on current legal and constructive requirements. The carrying amount of environmental provisions is regularly reviewed and adjusted for new facts and changes in law;
Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it;
Product warranty - A provision for product warranty is recognized at the time of revenue recognition and reflects the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to the products. The provision is based on historical warranty data and a weighing of possible outcomes against their associated probabilities. Manufacturing of Signify\u2019s products involves complex processes and defects might occur. In addition, it is possible that some of Signify\u2019s products may not perform as expected (for example, in terms of estimated life span and projected energy savings). These defects or shortfalls may cause Signify to incur significant warranty, support and replacement costs;
Legal provisions \u2013 Liabilities and expected insurance recoveries, if any, are recorded separately. Balances are transferred to Other liabilities when the amount and timing of cash flows are no longer uncertain;
Onerous contract provisions - Provisions are recognized for a contract if it is onerous. The present obligation under the contract is measured and recognized as a provision. An onerous contract is a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
By their nature, the recognition and measurement of provisions involve the use of estimates and assumptions regarding the timing and the amount of outflows of resources. The main areas requiring significant estimation are as follows:
Estimates for environmental remediation may change significantly due to the emergence of additional information regarding the extent or nature of the contamination, the need to utilize alternative technologies, actions by regulatory authorities as well as changes in judgments and discount rates. Signify is exposed to environmental risks, mainly because it has been in the business of manufacturing products for more than a century. During that period, Signify has opened, discontinued and acquired many manufacturing plants and sites. Some of these plants and sites have been used for industrial purposes for decades and as such, there is a latent risk that these premises may have environmental conditions that require corrective actions as a result of such use. The environmental provisions include accrued costs recorded with respect to environmental remediation in various countries.
Provisions for product warranty reflect the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to products sold.
Signify and certain of its group companies are involved in legal proceedings and claims relating to various matters including commercial transactions, alleged intellectual property infringement and product liability claims for property damage and personal injury, alleged to have been caused by failure or malfunction of Signify products. The outcome of asserted claims and proceedings, or the impact of any claims that may be asserted in the future, cannot be predicted with certainty. Provisions for legal claims are recognized when it is probable that an outflow of resources will be required to settle an obligation, taking into account the advice from internal and external counsels, and a reliable estimate of the amount can be made.
During the year ended December 31, 2025, additions to restructuring provision included programs in Professional, Other (mainly in Belgium) and Conventional (mainly in Belgium). Utilizations of restructuring provision included payments related to restructuring programs in Professional and Conventional (mainly in Belgium).
Signify expects the provision will be mainly utilized within the next five years.
Signify expects the provision will be mainly utilized within the next two years.
The legal provisions were mainly related to the legal case as described below. Signify expects the provision will be mainly settled within a year.
On October 5, 2022, a jury in trial court in Connecticut awarded compensation of USD 90 million in a lawsuit against Signify relating to a workplace accident that occurred in September 2017 in a warehouse leased and operated by a Signify customer, where the customer's employee was injured when struck by a pallet of Signify products that was pushed off a storage rack by a temporary worker operating a forklift at the warehouse. In Q1 2023, the court issued an order reducing the jury\u2019s damages award (as allocated to Signify) to approximately USD 42 million.
Signify continues to exercise all its rights to appeal the verdict issued in this case. Signify's appeal to the Connecticut Appellate Court, challenging its liability in this matter, is currently pending.
Signify has comprehensive global liability insurance and has confirmation that the case is fully covered without reservations of rights, including interest and other costs. Both the legal provision and the insurance cover asset have been adjusted in the balance sheet as per year end without any net profit and loss impact.
Signify\u2019s retirement benefit obligation is calculated by an independent actuary, using the projected unit credit method. This calculation is performed separately for each plan by estimating the amount of the benefit that employees have earned in relation to their past services. The measurement date for all defined benefit plans is December 31. For plans with a relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit obligation with a lower frequency. The liability recognized in the Consolidated statement of financial position is the present value of these benefits at the end of the reporting period (defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation is determined by discounting the estimated future cash flows using a discount yield curve of high-quality corporate bonds with durations matching the terms of the benefits.
The valuation of defined benefit obligations is based on actuarial calculation that require specific assumptions, which are disclosed in this note.
The mortality tables used for Signify\u2019s major schemes are:
US: Base table PRI-2012 White Collar mortality table, projected forward with future mortality improvements according to Scale MP-2021;
Germany: Richttafeln 2018 G K. Heubeck.
The weighted averages of the assumptions used to calculate the defined-benefit obligation as of December 31, 2025, are shown in the table below. The assumptions for pension cost, healthcare cost, and wage increases are only relevant for a limited number of plans.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Discount rate | 4.6% | 4.7% |
Pension cost increases | 1.0% | 1.0% |
Healthscare cost increases | 1.1% | 0.9% |
Wage increases | 2.3% | 2.5% |
The average duration of the defined-benefit obligation of the defined-benefit plans is 7.4 years.
For the defined-benefit plans in the US and Germany, the average duration is respectively 6.4 years and 6.7 years. The average discount rates for the plans in these countries are respectively 4.9% and 3.8%. The pension cost increase rate assumption for the German defined-benefit plans is 2.0%.
The table below illustrates the approximate impact on the defined-benefit obligation if Signify were to change key assumptions. The defined-benefit obligation was recalculated using a change of 1% in the respective assumptions which overall is considered a reasonably possible change. The impact on the defined-benefit obligation of changes in discount rate is for funded plans normally accompanied by offsetting movements in plan assets, especially when using matching strategies.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Increase | \u00a0 | \u00a0 |
Discount rate (1% movement) | (23) | (19) |
Wage change (1% movement) | 3 | 4 |
Pension indexation change (1% movement) | 8 | 10 |
Longevity (see explanation) | 9 | 8 |
Healthcare cost change (1% movement) | 2 | 3 |
Decrease | \u00a0 | \u00a0 |
Discount rate (1% movement) | 25 | 22 |
Wage change (1% movement) | (5) | (3) |
Pension indexation change (1% movement) | (7) | (9) |
Longevity (see explanation) | (12) | (7) |
Healthcare cost change (1% movement) | (2) | (2) |
Longevity also impacts the post-employment defined-benefit obligation which is illustrated in the above sensitivity table for the impact of a 10% increase and a 10% decrease in the assumed rates of mortality for Signify\u2019s major schemes. A 10% decrease in assumed mortality rates equals improvement of life expectancy by six months to a year. Vice versa, an increase in the assumed mortality rates equals a reduction of life expectancy.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market.
A sensitivity analysis conducted at reporting date shows that if interest rates were to increase instantaneously by 1% from their level of December 31, 2025, with all other variables held constant, the annualized net interest expense would decrease by EUR 1 million. This impact was based on the outstanding net floating debt position as of December 31, 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i9475": { "value": "Critical accounting judgments and key sources of estimation uncertainty The preparation of the Consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. These estimates inherently contain a degree of uncertainty. Actual results may differ from these estimates. These judgments and estimates are evaluated on an ongoing basis and are based on historical experience, current and expected future outcomes, third-party evaluations and various other assumptions that are considered reasonable under the circumstances. The results of these estimates form the basis for making judgments about the carrying values of assets and liabilities, as well as identifying and assessing the accounting treatment with respect to commitments and contingencies. Signify revises material estimates if changes occur in the circumstances or if there is new information or experience on which an estimate was or can be based. The areas where the most significant judgments and estimates are made are: Revenue recognition - note 3, Income from operations; Income tax and deferred tax assets including recoverability of deferred tax assets and non-current income tax payables - note 8, Income taxes; Determination of lease term of contracts with renewal options - note 13, Leases; Valuation of goodwill - note 14, Intangible assets; Inventory valuation and obsolescence provision - note 16, Inventories ; Impairment of trade receivables and contract assets - note 17, Trade and other receivables; Provisions and insurance cover asset recoverability - note 17, Trade and other receivables and note 23, Provisions; Employee benefit obligations - note 24, Post-employment benefits. For further discussion on these significant judgments and estimates, reference is made to the respective notes within these Consolidated financial statements that relate to the above topics. Climate-related matters Conventional Developments on climate-related matters were considered in preparing the Consolidated financial statements. Specifically, the key assumptions used in the annual goodwill impairment test for Conventional have taken into account external market assumptions, including potential phase out of products due to market conditions and legislation likely to be ratified. In the 2025 annual goodwill test, the estimated recoverable amount of Conventional exceeded its carrying value, therefore no impairment loss was recognized. For further details, refer to note 14, Intangible assets. In addition, Property, Plant and Equipment of Conventional were reviewed for impairment triggering events. Where applicable, assets were impaired to their recoverable amounts, and useful lives were adjusted accordingly. Revenue recognition Transaction price For contracts with multiple performance obligations, the total consideration of the contract is allocated to all distinct performance obligations in the contract based on their stand-alone selling prices. Stand-alone selling prices are determined based on other stand-alone sales transactions that are directly observable, when possible. If no direct observable prices are available, the stand-alone selling price is normally based on the expected cost plus a margin approach. The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract. 8 Income taxes Deferred tax asset recoverability A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. The evaluation of the recoverability of deferred tax assets requires judgment about the future taxable profitability of the legal entity holding the tax loss carry forward. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the countries where the deferred tax assets originated and during the periods when the deferred tax assets become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A lack of future taxable profits or taxable profits below the level of current estimates may cause deferred tax assets to be impaired. Uncertain tax positions The ultimate tax effects of transactions may be uncertain for a considerable period of time, requiring management to estimate the related current and deferred tax treatments. In assessing the uncertainty, Signify considers whether it is probable that a taxation authority will accept or revise the uncertain tax treatment. Income tax payable includes liabilities for uncertain tax positions which are recognized when it is probable that tax will be due. To the extent uncertain tax positions relate to deferred tax assets, these are offset against each other. Actual tax assessments in relation to these uncertain tax positions may significantly deviate from estimates. In determining the amount of current and deferred income tax, Signify takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes Signify to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact the income tax expense in the period that such a determination is made. Tax risks Tax uncertainties due to permanent establishments Assessing the amount of tax liabilities for these tax uncertainties is highly judgmental and the timing of possible outflows, if any, is uncertain. Signify has considered the merits of its filing position in its overall evaluation of potential tax liabilities and believes it has adequate tax liabilities recorded in its Consolidated financial statements for exposures on these matters. Based on its evaluation of the potential tax liabilities and the merits of Signify's filing positions, it is unlikely that potential tax exposures over the amounts currently recorded as liabilities in its Consolidated financial statements will be material to its financial condition or future results of operations. Tax uncertainties also include exposures with a risk assessment which are deemed lower than probable, but possible. The best estimate of the maximum amount in connection with these uncertainties is EUR 57 million (2024: EUR 55 million). Signify believes that in connection with these uncertainties it is probable that no additional taxes will be due. Therefore, no income tax payable is recognized. 14 Intangible assets Intangible assets other than goodwill The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values. The expected useful lives in years of intangible assets excluding goodwill are as follows: Product development from 2 to 5 Software from 3 to 10 Technology from 2 to 20 Customer relations from 5 to 20 Brand names from 5 to 20 Other from 2 to 10 Impairment of goodwill and intangible assets not yet ready for use Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows. An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal. Impairment of goodwill The cash flow projections used in the value in use calculation for the annual impairment test for goodwill require significant judgment and estimations, which are further disclosed in this note. Goodwill The key assumptions used in the impairment tests were the sales growth rates and the discount rates applied to the projected cash flows, while EBITA reflects the combined effects of sales growth and cost measures. These cash flow projections cover an initial period with specific estimates from 2026 to 2028. Projections were extrapolated with declining growth rates for a period of five years, after which a terminal value was calculated. The sales growth rates and EBITA used to estimate cash flows are based on past performance, external market growth assumptions, taking into account current market conditions, and industry long-term growth averages. The applied discount rates are determined based on the weighted average cost of capital, which reflects the risks relevant to the cash-generating units. These estimates inherently contain a degree of uncertainty as they relate to future events. Actual results may differ from these estimates. EBITA (excluding impact for uncommitted restructurings) assumed for Professional (main geographies) is expected to increase over the projection period due to volume growth, positive sales mix and cost efficiencies. Cash flow projections for the impairment tests in 2025 and 2024 were based on the key assumptions included in the table below: Key assumptions in % \u00a0Compound sales growth rate1 \u00a0\u00a0Initial period Extrapolation period Used to calculate terminal value Pre-tax discount rates Professional (main geographies) 2025 (0.1)% 1.8% 0.5% 11.3% Professional (main geographies) 2024 n.a. 2.0% 0.5% 11.0% Compound sales growth rate is the annualized steady growth rate over the forecast period. 16 Inventories Inventories are stated at the lower of cost and net realizable value. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include direct labor and fixed and variable production overheads, considering the stage of completion and the normal capacity of production facilities. Costs of idle facility and abnormal waste are expensed. The cost of inventories is determined using the first-in, first-out (FIFO) method. On each reporting date, management performs an analysis of net realizable values and determines the lower of cost and net realizable value to measure its inventories. The write-down is included in Cost of sales. 17 Trade and other receivables Impairment of trade receivables and contract assets Signify estimates lifetime expected loss allowance for all Trade receivables and Contract assets via calculating the expected credit losses. Trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due whereby the lifetime expected credit loss on the Trade receivables is recognized based on a matrix model calculated per country, which utilizes historical recoverability data and default probability per country. 23 Provisions Accounting policies Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated. The accounting and presentation for some of Signify\u2019s provisions is as follows: Environmental provisions - Measurement of liabilities associated with environmental obligations is based on current legal and constructive requirements. The carrying amount of environmental provisions is regularly reviewed and adjusted for new facts and changes in law; Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it; Product warranty - A provision for product warranty is recognized at the time of revenue recognition and reflects the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to the products. The provision is based on historical warranty data and a weighing of possible outcomes against their associated probabilities. Manufacturing of Signify\u2019s products involves complex processes and defects might occur. In addition, it is possible that some of Signify\u2019s products may not perform as expected (for example, in terms of estimated life span and projected energy savings). These defects or shortfalls may cause Signify to incur significant warranty, support and replacement costs; Legal provisions \u2013 Liabilities and expected insurance recoveries, if any, are recorded separately. Balances are transferred to Other liabilities when the amount and timing of cash flows are no longer uncertain; Onerous contract provisions - Provisions are recognized for a contract if it is onerous. The present obligation under the contract is measured and recognized as a provision. An onerous contract is a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Accounting judgments and estimates By their nature, the recognition and measurement of provisions involve the use of estimates and assumptions regarding the timing and the amount of outflows of resources. The main areas requiring significant estimation are as follows: Environmental Estimates for environmental remediation may change significantly due to the emergence of additional information regarding the extent or nature of the contamination, the need to utilize alternative technologies, actions by regulatory authorities as well as changes in judgments and discount rates. Signify is exposed to environmental risks, mainly because it has been in the business of manufacturing products for more than a century. During that period, Signify has opened, discontinued and acquired many manufacturing plants and sites. Some of these plants and sites have been used for industrial purposes for decades and as such, there is a latent risk that these premises may have environmental conditions that require corrective actions as a result of such use. The environmental provisions include accrued costs recorded with respect to environmental remediation in various countries. Product warranty Provisions for product warranty reflect the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to products sold. Legal Signify and certain of its group companies are involved in legal proceedings and claims relating to various matters including commercial transactions, alleged intellectual property infringement and product liability claims for property damage and personal injury, alleged to have been caused by failure or malfunction of Signify products. The outcome of asserted claims and proceedings, or the impact of any claims that may be asserted in the future, cannot be predicted with certainty. Provisions for legal claims are recognized when it is probable that an outflow of resources will be required to settle an obligation, taking into account the advice from internal and external counsels, and a reliable estimate of the amount can be made. Environmental Signify expects the provision will be mainly utilized within the next five years. Product warranty Signify expects the provision will be mainly utilized within the next two years. Legal The legal provisions were mainly related to the legal case as described below. Signify expects the provision will be mainly settled within a year. On October 5, 2022, a jury in trial court in Connecticut awarded compensation of USD 90 million in a lawsuit against Signify relating to a workplace accident that occurred in September 2017 in a warehouse leased and operated by a Signify customer, where the customer's employee was injured when struck by a pallet of Signify products that was pushed off a storage rack by a temporary worker operating a forklift at the warehouse. In Q1 2023, the court issued an order reducing the jury\u2019s damages award (as allocated to Signify) to approximately USD 42 million. Signify continues to exercise all its rights to appeal the verdict issued in this case. Signify's appeal to the Connecticut Appellate Court, challenging its liability in this matter, is currently pending. Signify has comprehensive global liability insurance and has confirmation that the case is fully covered without reservations of rights, including interest and other costs. Both the legal provision and the insurance cover asset have been adjusted in the balance sheet as per year end without any net profit and loss impact. 24 Post-employment benefits Defined-benefit plans Signify\u2019s retirement benefit obligation is calculated by an independent actuary, using the projected unit credit method. This calculation is performed separately for each plan by estimating the amount of the benefit that employees have earned in relation to their past services. The measurement date for all defined benefit plans is December 31. For plans with a relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit obligation with a lower frequency. The liability recognized in the Consolidated statement of financial position is the present value of these benefits at the end of the reporting period (defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation is determined by discounting the estimated future cash flows using a discount yield curve of high-quality corporate bonds with durations matching the terms of the benefits. Assumptions The mortality tables used for Signify\u2019s major schemes are: US: Base table PRI-2012 White Collar mortality table, projected forward with future mortality improvements according to Scale MP-2021; Germany: Richttafeln 2018 G K. Heubeck. The weighted averages of the assumptions used to calculate the defined-benefit obligation as of December 31, 2025, are shown in the table below. The assumptions for pension cost, healthcare cost, and wage increases are only relevant for a limited number of plans. \u00a02024 2025 Discount rate 4.6% 4.7% Pension cost increases 1.0% 1.0% Healthscare cost increases 1.1% 0.9% Wage increases 2.3% 2.5% The average duration of the defined-benefit obligation of the defined-benefit plans is 7.4 years. For the defined-benefit plans in the US and Germany, the average duration is respectively 6.4 years and 6.7 years. The average discount rates for the plans in these countries are respectively 4.9% and 3.8%. The pension cost increase rate assumption for the German defined-benefit plans is 2.0%. Sensitivity analysis The table below illustrates the approximate impact on the defined-benefit obligation if Signify were to change key assumptions. The defined-benefit obligation was recalculated using a change of 1% in the respective assumptions which overall is considered a reasonably possible change. The impact on the defined-benefit obligation of changes in discount rate is for funded plans normally accompanied by offsetting movements in plan assets, especially when using matching strategies. \u00a02024 2025 Increase \u00a0\u00a0Discount rate (1% movement) (23) (19) Wage change (1% movement) 3 4 Pension indexation change (1% movement) 8 10 Longevity (see explanation) 9 8 Healthcare cost change (1% movement) 2 3 Decrease \u00a0\u00a0Discount rate (1% movement) 25 22 Wage change (1% movement) (5) (3) Pension indexation change (1% movement) (7) (9) Longevity (see explanation) (12) (7) Healthcare cost change (1% movement) (2) (2) Longevity also impacts the post-employment defined-benefit obligation which is illustrated in the above sensitivity table for the impact of a 10% increase and a 10% decrease in the assumed rates of mortality for Signify\u2019s major schemes. A 10% decrease in assumed mortality rates equals improvement of life expectancy by six months to a year. Vice versa, an increase in the assumed mortality rates equals a reduction of life expectancy. 27 Financial risk management Level 2 The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2. The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. Level 3 If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3. This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market. Financial Risk management Signify is exposed to several types of financial risks, as they arise in the normal course of business: interest rate risk, liquidity risk, currency risk, commodity price risk, credit risk and country risk. This note comprises the disclosures on Signify's financial risk management objectives, policies and procedures to monitor and manage these risks. Interest rate risk A sensitivity analysis conducted at reporting date shows that if interest rates were to increase instantaneously by 1% from their level of December 31, 2025, with all other variables held constant, the annualized net interest expense would decrease by EUR 1 million. This impact was based on the outstanding net floating debt position as of December 31, 2025. ", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i9489": { "value": "The accounting policies set out below have been consistently applied by Signify to all periods presented in these Consolidated financial statements. Material accounting policies relating to specific financial statement items are included in the respective notes within these Consolidated financial statements.
The Consolidated financial statements comprise the financial statements of Signify N.V. and all subsidiaries it controls (i.e. when it is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee). The existence and effect of potential voting rights are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. All intercompany balances and transactions have been eliminated in the Consolidated financial statements.
Items included in the financial statements of each of the Signify entities are measured using the currency of the primary economic environment in which the entity operates (\"the functional currency\").
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation when items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the Consolidated statement of income, except when deferred in Other comprehensive income as qualifying cash flow hedges. The exchange differences are presented as part of Cost of sales, except for tax items and Financial income and expenses, which are recognized in the same line item as they relate to.
Upon consolidation, the assets and liabilities of non-euro entities, including goodwill and fair value adjustments at the time of the acquisition, are translated into euros at the year-end rates of exchange. The items of the statement of income of foreign activities are translated at the rates which are approximating the rates at the dates of transactions. The resulting translation differences of the net investments in foreign operations are recognized in Other comprehensive income.
Signify classifies a non-current asset (or disposal group) as held for sale if the carrying amount is expected to be recovered primarily through sale rather than through continuing use. The asset or disposal group should be available for immediate sale in its present condition, and the sale should be highly probable, evidenced by Signify's commitment to sell the asset or disposal group within one year from classification date. Signify's actions to complete the sale should demonstrate that withdrawal from the plan is unlikely. The assessment of the held for sale criteria requires judgment. Non-current assets held for sale are carried at the lower of carrying amount or fair value less cost to sell. Comparatives in the balance sheet are not changed when a non-current asset is classified as held-for-sale.
When the economy of a country in which Signify operates is deemed hyperinflationary and the functional currency of a Signify entity is the currency of that hyperinflationary economy, the financial statements of such entity are adjusted so that they are stated in terms of the measuring unit current at the end of the reporting period. This involves adjustment of historical cost in purchasing power caused by inflation from the date of initial recognition to the balance sheet date. The hyperinflation adjustment is recognized directly in equity. Comparative amounts are not adjusted.
The Consolidated statement of cash flows is prepared using the indirect method. Cash flows from derivative instruments that are accounted for as cash flow hedges are classified in the same category as the cash flows from the hedged items. Cash flows from other derivative instruments are classified consistent with the nature of the instrument. Cash flows in foreign currencies have been translated into euros using the exchange rate at the date of the cash flow. Borrowings which are repaid within the quarter, with a maturity of less than three months, are reported on a net basis in cash flows from financing activities.
Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of Signify\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Signify has applied the following amendment for the first time to its annual reporting period commencing January 1, 2025:
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
Signify changed its accounting policies in accordance with the amendment listed above. The change did not have any significant impact on the amounts recognized in the prior period and current period.
Several new standards or amendments to existing standards that are mandatory for reporting periods commencing on or after January 1, 2026, have been published. IFRS 18 Presentation and Disclosure in Financial Statements was issued in April 2024, replacing IAS 1 Presentation of Financial Statements. The standard will be effective on January 1, 2027. Signify is in the process of reviewing the impact of this new standard. The initial expected material impact on Signify's financial statements is as follows:
Certain items in financial income and expenses will be reclassified as \"investing\" or \"financing\" category in profit and loss;
Interest received and paid will be classified in investing and financing activities, respectively, in the statement of cash flows.
Other new standards or amendments are not expected to have a material impact on Signify in the current or future reporting periods and on foreseeable future transactions. Signify has not early adopted any of these new standards or amendments.
Operating segments are components of Signify\u2019s business activities about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Board of Management of Signify).
Signify's reportable segments are Professional, Consumer, OEM and Conventional. The reportable segments are based on customer type (Professional, Consumer, OEM), except for Conventional, which is dedicated to conventional lighting technologies.
The Professional business offers LED lamps, luminaries, connected lighting systems and services to customers in the professional segment;
The Consumer business offers LED lamps, luminaries, and connected products, including Philips Hue and WiZ, to customers in the consumer segment;
The OEM business offers lighting components to the industry;
The Conventional business offers special lighting, digital projection, and lamp electronics.
The Consumer and Professional reportable segments include operating segments, organized based on geography, which are aggregated to form the reportable segments. The aggregated operating segments are similar in respect of the nature of products, production processes, customer and distribution method. In addition, long-term gross margins relative to sales are expected at a similar level.
\"Other\" reflects the P&L of Signify's venture business and centrally incurred costs not allocated to the operating segments, which mainly includes costs related to exploratory research and audit activities.
Revenue from the sale of goods is recognized at the point in time when the customer obtains control over the goods. For standard sale of products, control generally passes to the customer when the product is delivered and accepted, depending on the delivery conditions and incoterms. For products for which a right to return exists during a defined period, revenue is recognized by considering the historical pattern of actual returns. Return policies are typically based on customary return arrangements in local markets.
Signify accounts for cloud-enabled services, extended warranties and lifecycle services as separate performance obligations. Control over these services is transferred over time and revenue is recognized, in most cases, on a straight-line basis over the duration of the service period.
The transaction price is the amount of consideration to which Signify expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price excludes amounts collected on behalf of third parties, such as sales taxes.
For contracts with multiple performance obligations, the total consideration of the contract is allocated to all distinct performance obligations in the contract based on their stand-alone selling prices. Stand-alone selling prices are determined based on other stand-alone sales transactions that are directly observable, when possible. If no direct observable prices are available, the stand-alone selling price is normally based on the expected cost plus a margin approach.
The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
Signify does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to most sales transactions.
Payments made to customers for distinct goods or services are excluded from revenue recognized and recorded as part of Selling, general and administrative expenses.
Signify may incur costs for obtaining a contract, including payments made to agents that depend on winning the contract. Signify applies the practical expedient from IFRS 15, allowing the incremental costs of obtaining a contract to be expensed if the associated amortization period is 12 months or less.
Signify applies accrual accounting. This means that expenses are recognized when incurred and Income is recognized when earned, irrespective of the actual cash flows.
Consideration received from customers for shipping and handling is recognized as Sales. Shipping and handling expenses related to sales to third parties are generally recorded as Selling, general and administrative expenses. When shipping and handling are distinct performance obligations, then the related expenses are recorded as Cost of sales.
Advertising and promotion costs and costs related to the brand license fee are included in Selling, general and administrative expenses.
Contributions to defined-contribution plans are recognized in the Consolidated income statement in Personnel expenses as incurred.
Termination benefits are payable when employment is terminated by Signify before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Signify recognizes termination benefits when they are demonstrably committed to a termination and when they have a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
Other business income and expenses include gains and losses on the sale of businesses, gains and losses on the sale of property, plant and equipment, and other gains and losses not related to the company's operating activities.
Interest income and expenses are recognized as they accrue, using the effective interest method.
Income tax comprises current and deferred tax. Income tax is recognized in the Consolidated statement of income except to the extent that it relates to items recognized directly within equity or in Other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities are recognized, using the balance sheet method, for the expected tax consequences of temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantially enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Deferred tax liabilities for withholding taxes are recognized for subsidiaries in situations where the income is to be paid out as dividend in the foreseeable future and for undistributed earnings of unconsolidated companies to the extent that these withholding taxes are not expected to be refundable or deductible.
Signify has applied the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Changes in tax rates are reflected in the period when the change has been enacted or substantially enacted by the reporting date.
Signify presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the Net income (loss) attributable to shareholders of Signify N.V. by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprises of restricted shares, conditional shares and performance shares granted to employees.
Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred. Non-controlling interests are measured at their proportionate share of the acquiree\u2019s identifiable net assets at the date of acquisition.
Refer to \u201cBasis of consolidation\u201d in note 1, General information.
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. The useful lives and residual values are evaluated annually. The costs of property, plant and equipment comprise all directly attributable costs (including the cost of materials and direct labor). Government grants for assets are deducted from the cost of the related asset.
Depreciation of property, plant and equipment, other than freehold land, is calculated using the straight-line method taking into account the residual values and estimated useful lives and is primarily included in Cost of sales. Freehold land is not depreciated. Gains and losses on the sale of property, plant and equipment are included in Other business income and expense. Costs related to repair and maintenance activities are expensed in the period in which they are incurred unless leading to an extension of the original lifetime of capacity.
The expected useful lives in years of property, plant and equipment are as follows:
Building | from 5 to 50 |
Machinery and installations | from 3 to 20 |
Other equipment | from 2 to 10 |
Right-of-use assets | from 2 to 20 |
For a description of the accounting policies for asset impairment, refer to note 14, Intangible assets, which equally apply to property, plant and equipment.
Signify entered into contracts that convey the right to use the identified asset and as such Signify accounted for these contracts as a lessee.
Signify recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Signify applies the short-term lease recognition exemption to its short-term leases for real estate (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.
The measurement of goodwill at initial recognition is described under the Business combinations accounting policy in note 10, Acquisitions and divestments. Goodwill is subsequently measured at cost, less accumulated impairment losses.
The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized as an intangible asset when Signify can demonstrate that: the product or process is technically and commercially feasible, the costs can be reliably measured, Signify has sufficient resources and the intention to complete the development.
The development expenditure capitalized comprises all directly attributable costs (including the cost of materials and direct labor). Other development expenditures and expenditures on research activities are recognized in the Consolidated statement of income. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Amortization of capitalized development expenditure is charged to the Consolidated statement of income on a straight- line basis over the estimated useful lives of the intangible assets in Research and development expenses.
Amortization of other intangible assets is reported in Selling, general and administrative expenses for brand names and customer relationships and in Cost of sales for technology-based and other intangible assets.
The expected useful lives in years of intangible assets excluding goodwill are as follows:
Product development | from 2 to 5 |
Software | from 3 to 10 |
Technology | from 2 to 20 |
Customer relations | from 5 to 20 |
Brand names | from 5 to 20 |
Other | from 2 to 10 |
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
Inventories are stated at the lower of cost and net realizable value. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include direct labor and fixed and variable production overheads, considering the stage of completion and the normal capacity of production facilities. Costs of idle facility and abnormal waste are expensed. The cost of inventories is determined using the first-in, first-out (FIFO) method. On each reporting date, management performs an analysis of net realizable values and determines the lower of cost and net realizable value to measure its inventories. The write-down is included in Cost of sales.
A financial asset is recognized when Signify becomes a party to a contract that is a financial instrument. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial assets and liabilities is at fair value. Dividend income is recognized when declared. After initial recognition, these financial assets are measured at amortized cost using the effective interest method, less loss allowance and net of discounts given or agreed to, if the offset requirements are met.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, Signify continues to recognize the transferred asset to the extent of its continuing involvement. In that case, Signify also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Signify has retained.
Trade and other payables are initially measured at fair value and subsequently at amortized cost. Trade payables are derecognized when the contractual obligation is either discharged, cancelled or expired.
The Company classifies financial liabilities that arise from supplier finance arrangement within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Company\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement.
Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, satisfied performance obligations but not yet billed the customer. These are recorded under either Other current assets or Other non-current assets. The contract assets are transferred to receivables when the rights become unconditional, which is mostly when the customer is billed. For accounting policy on the impairment of contract assets, refer to note 17, Trade and other receivables.
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. Dividends are recognized as a liability in the period in which they are declared. The income tax consequences of dividends are recognized when a liability to pay the dividend is recognized.
Treasury shares that are reacquired are recognized at cost, representing the market price on the acquisition date, and deducted from equity until the shares are cancelled or reissued. When reissued, shares are removed from treasury shares on a first-in, first-out (FIFO) basis. When treasury shares are delivered under Signify\u2019s share plans, the difference between the market price of the shares delivered and the cost is recorded in retained earnings, the market price is recorded in share premium. Upon cancellation, treasury shares are deducted from the share capital at their nominal value of EUR 0.01 per share and retained earnings for the difference.
Costs including dividend withholding tax in connection with Signify\u2019s purchase of treasury shares for capital reduction purposes are recorded in retained earnings.
Debt is initially measured at fair value net of directly attributable transaction costs. Subsequently, debt is measured at amortized cost using the effective interest rate method. Debt is derecognized when the obligation under the liability is discharged, cancelled or has expired.
Lease liabilities are measured at the present value of lease payments to be made over the lease term, discounted using the incremental borrowing rate. Lease payments include (in-substance) fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, the exercise price of a purchase option reasonably certain to be exercised and payments of penalties for terminating a lease. Lease liabilities increase to reflect the accretion of interest and decrease for the payments made. Lease liabilities are remeasured if there is a modification or reassessment of the lease.
Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify\u2019s provisions is as follows:
Environmental provisions - Measurement of liabilities associated with environmental obligations is based on current legal and constructive requirements. The carrying amount of environmental provisions is regularly reviewed and adjusted for new facts and changes in law;
Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it;
Product warranty - A provision for product warranty is recognized at the time of revenue recognition and reflects the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to the products. The provision is based on historical warranty data and a weighing of possible outcomes against their associated probabilities. Manufacturing of Signify\u2019s products involves complex processes and defects might occur. In addition, it is possible that some of Signify\u2019s products may not perform as expected (for example, in terms of estimated life span and projected energy savings). These defects or shortfalls may cause Signify to incur significant warranty, support and replacement costs;
Legal provisions \u2013 Liabilities and expected insurance recoveries, if any, are recorded separately. Balances are transferred to Other liabilities when the amount and timing of cash flows are no longer uncertain;
Onerous contract provisions - Provisions are recognized for a contract if it is onerous. The present obligation under the contract is measured and recognized as a provision. An onerous contract is a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
Signify\u2019s retirement benefit obligation is calculated by an independent actuary, using the projected unit credit method. This calculation is performed separately for each plan by estimating the amount of the benefit that employees have earned in relation to their past services. The measurement date for all defined benefit plans is December 31. For plans with a relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit obligation with a lower frequency. The liability recognized in the Consolidated statement of financial position is the present value of these benefits at the end of the reporting period (defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation is determined by discounting the estimated future cash flows using a discount yield curve of high-quality corporate bonds with durations matching the terms of the benefits.
Pension costs in respect of defined benefit post-employment plans primarily represent the increase of the actuarial present value of the obligation for post-employment benefits based on employee service during the year. The increase in the defined-benefit obligation due to the passage of time and the expected return on plan assets, using the same interest rate as for the defined-benefit obligation, are included in the pension costs. Interest on the net defined-benefit obligation is recognized in Financing income and expenses in the Consolidated statement of income.
Past-service costs are recognized immediately in the Personnel costs in the Consolidated statement of income. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity via other comprehensive income in the period in which they arise.
When a plan is changed, settled or when a plan is curtailed, the resulting change in the defined-benefit obligation that relates to past-service or the gain or loss on curtailment is recognized immediately in the Consolidated statement of income. Signify recognizes gains and losses on the settlement of a defined-benefit plan when the settlement occurs.
Signify presents all net defined-benefit post-employment obligations on one line within non-current liabilities on the Consolidated statement of financial position.
The cost of equity-settled transactions is determined by the fair value at the grant date using an appropriate valuation model.
The grant-date fair value of equity-settled share-based payment awards granted to employees is recognized as personnel expense, with a corresponding increase in equity, over the vesting period of the award. The cumulative expense recognized for equity-settled transactions at each reporting date reflects Signify\u2019s best estimate of the number of equity instruments that will ultimately vest.
Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of Signify\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at amortized cost: The business model for these instruments is to hold them to collect contractual cash flows. This financial asset category mainly consists of Trade and other receivables;
Financial assets at fair value through profit or loss (FVTPL): The business model for these instruments is to hold them for trading. This financial asset category mainly consists of Signify's participations in Virtual Power Purchase Agreements and other Derivatives;
Financial assets at fair value through other comprehensive income (FVOCI): The business model for these instruments is to hold them to collect contractual cash flows and to sell them. Fair value gains and losses are subsequently not reclassified to profit or loss following the derecognition of the investment. This category consists of minor equity investments;
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
When the potential cash outflow is possible or remote and the risk covered by a guarantee is not a financial risk, Signify applies off-balance sheet treatment to such guarantees. For example, environmental remediation and legal proceedings. When the expectation of the cash outflow becomes probable, such guarantees become provisions, see guidance above.
When guarantees are covering credit risk or any other financial risk they are accounted for as financial assets and liabilities.
The estimated fair value of financial instruments has been determined by Signify using available market information and appropriate valuation methods. The estimates presented are not necessarily indicative of the amounts that will ultimately be realized by Signify upon maturity or disposal. The use of market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts.
The following hierarchy is applied to classify the financial assets and liabilities:
Instruments included in Level 1 are comprised primarily of listed Eurobonds classified as financial liabilities at amortized cost. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i9490": { "value": "The Consolidated financial statements comprise the financial statements of Signify N.V. and all subsidiaries it controls (i.e. when it is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee). The existence and effect of potential voting rights are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. All intercompany balances and transactions have been eliminated in the Consolidated financial statements.
The Consolidated financial statements comprise the financial statements of Signify N.V. and all subsidiaries it controls (i.e. when it is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee). The existence and effect of potential voting rights are considered when assessing whether the Company controls another entity. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. All intercompany balances and transactions have been eliminated in the Consolidated financial statements.
Items included in the financial statements of each of the Signify entities are measured using the currency of the primary economic environment in which the entity operates (\"the functional currency\").
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions or valuation when items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognized in the Consolidated statement of income, except when deferred in Other comprehensive income as qualifying cash flow hedges. The exchange differences are presented as part of Cost of sales, except for tax items and Financial income and expenses, which are recognized in the same line item as they relate to.
Upon consolidation, the assets and liabilities of non-euro entities, including goodwill and fair value adjustments at the time of the acquisition, are translated into euros at the year-end rates of exchange. The items of the statement of income of foreign activities are translated at the rates which are approximating the rates at the dates of transactions. The resulting translation differences of the net investments in foreign operations are recognized in Other comprehensive income.
Signify classifies a non-current asset (or disposal group) as held for sale if the carrying amount is expected to be recovered primarily through sale rather than through continuing use. The asset or disposal group should be available for immediate sale in its present condition, and the sale should be highly probable, evidenced by Signify's commitment to sell the asset or disposal group within one year from classification date. Signify's actions to complete the sale should demonstrate that withdrawal from the plan is unlikely. The assessment of the held for sale criteria requires judgment. Non-current assets held for sale are carried at the lower of carrying amount or fair value less cost to sell. Comparatives in the balance sheet are not changed when a non-current asset is classified as held-for-sale.
Signify classifies a non-current asset (or disposal group) as held for sale if the carrying amount is expected to be recovered primarily through sale rather than through continuing use. The asset or disposal group should be available for immediate sale in its present condition, and the sale should be highly probable, evidenced by Signify's commitment to sell the asset or disposal group within one year from classification date. Signify's actions to complete the sale should demonstrate that withdrawal from the plan is unlikely. The assessment of the held for sale criteria requires judgment. Non-current assets held for sale are carried at the lower of carrying amount or fair value less cost to sell. Comparatives in the balance sheet are not changed when a non-current asset is classified as held-for-sale.
The Consolidated statement of cash flows is prepared using the indirect method. Cash flows from derivative instruments that are accounted for as cash flow hedges are classified in the same category as the cash flows from the hedged items. Cash flows from other derivative instruments are classified consistent with the nature of the instrument. Cash flows in foreign currencies have been translated into euros using the exchange rate at the date of the cash flow. Borrowings which are repaid within the quarter, with a maturity of less than three months, are reported on a net basis in cash flows from financing activities.
Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i9498": { "value": "Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of Signify\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
A financial asset is recognized when Signify becomes a party to a contract that is a financial instrument. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial assets and liabilities is at fair value. Dividend income is recognized when declared. After initial recognition, these financial assets are measured at amortized cost using the effective interest method, less loss allowance and net of discounts given or agreed to, if the offset requirements are met.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, Signify continues to recognize the transferred asset to the extent of its continuing involvement. In that case, Signify also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Signify has retained.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at amortized cost: The business model for these instruments is to hold them to collect contractual cash flows. This financial asset category mainly consists of Trade and other receivables;
Financial assets at fair value through profit or loss (FVTPL): The business model for these instruments is to hold them for trading. This financial asset category mainly consists of Signify's participations in Virtual Power Purchase Agreements and other Derivatives;
Financial assets at fair value through other comprehensive income (FVOCI): The business model for these instruments is to hold them to collect contractual cash flows and to sell them. Fair value gains and losses are subsequently not reclassified to profit or loss following the derecognition of the investment. This category consists of minor equity investments;
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of Signify\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
A financial asset is recognized when Signify becomes a party to a contract that is a financial instrument. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial assets and liabilities is at fair value. Dividend income is recognized when declared. After initial recognition, these financial assets are measured at amortized cost using the effective interest method, less loss allowance and net of discounts given or agreed to, if the offset requirements are met.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, Signify continues to recognize the transferred asset to the extent of its continuing involvement. In that case, Signify also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Signify has retained.
Trade and other payables are initially measured at fair value and subsequently at amortized cost. Trade payables are derecognized when the contractual obligation is either discharged, cancelled or expired.
The Company classifies financial liabilities that arise from supplier finance arrangement within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Company\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement.
Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
Debt is initially measured at fair value net of directly attributable transaction costs. Subsequently, debt is measured at amortized cost using the effective interest rate method. Debt is derecognized when the obligation under the liability is discharged, cancelled or has expired.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at amortized cost: The business model for these instruments is to hold them to collect contractual cash flows. This financial asset category mainly consists of Trade and other receivables;
Financial assets at fair value through profit or loss (FVTPL): The business model for these instruments is to hold them for trading. This financial asset category mainly consists of Signify's participations in Virtual Power Purchase Agreements and other Derivatives;
Financial assets at fair value through other comprehensive income (FVOCI): The business model for these instruments is to hold them to collect contractual cash flows and to sell them. Fair value gains and losses are subsequently not reclassified to profit or loss following the derecognition of the investment. This category consists of minor equity investments;
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
The estimated fair value of financial instruments has been determined by Signify using available market information and appropriate valuation methods. The estimates presented are not necessarily indicative of the amounts that will ultimately be realized by Signify upon maturity or disposal. The use of market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts.
The following hierarchy is applied to classify the financial assets and liabilities:
Instruments included in Level 1 are comprised primarily of listed Eurobonds classified as financial liabilities at amortized cost. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market.
Cash and cash equivalents include all cash balances and short-term highly liquid investments with an original maturity of three months or less that are readily convertible into known amounts of cash. Bank overdrafts form an integral part of Signify\u2019s cash management and often fluctuate from being positive to overdrawn and are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Signify has applied the following amendment for the first time to its annual reporting period commencing January 1, 2025:
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
Signify changed its accounting policies in accordance with the amendment listed above. The change did not have any significant impact on the amounts recognized in the prior period and current period.
Several new standards or amendments to existing standards that are mandatory for reporting periods commencing on or after January 1, 2026, have been published. IFRS 18 Presentation and Disclosure in Financial Statements was issued in April 2024, replacing IAS 1 Presentation of Financial Statements. The standard will be effective on January 1, 2027. Signify is in the process of reviewing the impact of this new standard. The initial expected material impact on Signify's financial statements is as follows:
Certain items in financial income and expenses will be reclassified as \"investing\" or \"financing\" category in profit and loss;
Interest received and paid will be classified in investing and financing activities, respectively, in the statement of cash flows.
Other new standards or amendments are not expected to have a material impact on Signify in the current or future reporting periods and on foreseeable future transactions. Signify has not early adopted any of these new standards or amendments.
Signify has applied the following amendment for the first time to its annual reporting period commencing January 1, 2025:
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
Signify changed its accounting policies in accordance with the amendment listed above. The change did not have any significant impact on the amounts recognized in the prior period and current period.
Several new standards or amendments to existing standards that are mandatory for reporting periods commencing on or after January 1, 2026, have been published. IFRS 18 Presentation and Disclosure in Financial Statements was issued in April 2024, replacing IAS 1 Presentation of Financial Statements. The standard will be effective on January 1, 2027. Signify is in the process of reviewing the impact of this new standard. The initial expected material impact on Signify's financial statements is as follows:
Certain items in financial income and expenses will be reclassified as \"investing\" or \"financing\" category in profit and loss;
Interest received and paid will be classified in investing and financing activities, respectively, in the statement of cash flows.
Other new standards or amendments are not expected to have a material impact on Signify in the current or future reporting periods and on foreseeable future transactions. Signify has not early adopted any of these new standards or amendments.
Operating segments are components of Signify\u2019s business activities about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Board of Management of Signify).
Signify's reportable segments are Professional, Consumer, OEM and Conventional. The reportable segments are based on customer type (Professional, Consumer, OEM), except for Conventional, which is dedicated to conventional lighting technologies.
The Professional business offers LED lamps, luminaries, connected lighting systems and services to customers in the professional segment;
The Consumer business offers LED lamps, luminaries, and connected products, including Philips Hue and WiZ, to customers in the consumer segment;
The OEM business offers lighting components to the industry;
The Conventional business offers special lighting, digital projection, and lamp electronics.
The Consumer and Professional reportable segments include operating segments, organized based on geography, which are aggregated to form the reportable segments. The aggregated operating segments are similar in respect of the nature of products, production processes, customer and distribution method. In addition, long-term gross margins relative to sales are expected at a similar level.
\"Other\" reflects the P&L of Signify's venture business and centrally incurred costs not allocated to the operating segments, which mainly includes costs related to exploratory research and audit activities.
The following is an overview of Signify revenues and results by segment. Sales between the segments mainly relate to the supply of goods. The pricing of such transactions is determined on an \"arm\u2019s length basis\". |
| \u00a0 | Professional | Consumer | OEM | Conventional | Other1 | Inter-segment | Signify |
|---|---|---|---|---|---|---|---|
2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Sales to external customers | 3,767 | 1,274 | 355 | 327 | 42 | \u00a0 | 5,765 |
Sales including intersegment | 3,769 | 1,351 | 461 | 328 | 45 | (190) | 5,765 |
Depreciation and amortization2 | (84) | (32) | (11) | (8) | (56) | \u00a0 | (192) |
Adjusted EBITA | 334 | 135 | 17 | 53 | (27) | \u00a0 | 511 |
Adjusted EBITA as a % of sales | 8.9% | 10.6% | 4.8% | 16.1% | \u00a0 | \u00a0 | 8.9% |
Restructuring | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (73) |
Acquisition-related charges | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 7 |
Incidental items | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (7) |
EBITA3 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 439 |
Amortization4 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (56) |
Income from operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 383 |
Financial income and expenses | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (61) |
Results from investments in associates and joint ventures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (1) |
Income before taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 321 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Sales to external customers | 3,933 | 1,297 | 437 | 437 | 39 | \u00a0 | 6,143 |
Sales including intersegment | 3,938 | 1,413 | 541 | 439 | 40 | (230) | 6,143 |
Depreciation and amortization2 | (80) | (23) | (10) | (13) | (63) | \u00a0 | (189) |
Adjusted EBITA | 367 | 144 | 48 | 78 | (32) | \u00a0 | 606 |
Adjusted EBITA as a % of sales | 9.3% | 11.1% | 11.1% | 17.9% | \u00a0 | \u00a0 | 9.9% |
Restructuring | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (74) |
Acquisition-related charges | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 5 |
Incidental items | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 7 |
EBITA3 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 543 |
Amortization4 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (66) |
Income from operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 477 |
Financial income and expenses | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (82) |
Results from investments in associates and joint ventures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (1) |
Income before taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 394 |
The key segmental performance measure is Adjusted EBITA. Adjusted EBITA is not a recognized measure of financial performance under IFRS, and represents income from operations excluding amortization and impairments of acquisition-related intangible assets and goodwill, restructuring costs, acquisition-related charges, and other incidental items.
Incidental items of EUR 7 million for the year ended December 31, 2025 were related to environmental provision for inactive sites and discounting effect of long-term provisions (EUR 10 million loss, mainly in Professional and Other), impairment of development assets (EUR 10 million loss in Consumer), and gain on real estate transactions (EUR 14 million, in Professional).
Incidental items of EUR 7 million gain for the year ended December 31, 2024 were mainly related to the one-day FX loss from the devaluation of the Egyptian Pound by the Egyptian government (EUR 10 million, mainly in Professional), environmental provisions for inactive sites and the discounting effect of long-term provisions (EUR 7 million, mainly in Other), gains from the movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation (EUR 9 million, in Other), and gain on real estate transactions (EUR 15 million, in Conventional).
The table below presents the sales, tangible and intangible assets of Signify by main countries. Signify has no external customer that represents 10% or more of total sales.
| \u00a0 | Sales | Tangible and intangible assets1 | ||
|---|---|---|---|---|
| \u00a0 | 2024 | 2025 | 2024 | 2025 |
Netherlands | 510 | 456 | 583 | 587 |
United States | 2,095 | 1,999 | 2,590 | 2,241 |
China | 381 | 372 | 264 | 232 |
Germany | 347 | 347 | 7 | 7 |
India | 265 | 261 | 49 | 31 |
Other countries | 2,544 | 2,331 | 586 | 586 |
Total countries | 6,143 | 5,765 | 4,079 | 3,683 |
Operating segments are components of Signify\u2019s business activities about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the Board of Management of Signify).
Signify's reportable segments are Professional, Consumer, OEM and Conventional. The reportable segments are based on customer type (Professional, Consumer, OEM), except for Conventional, which is dedicated to conventional lighting technologies.
The Professional business offers LED lamps, luminaries, connected lighting systems and services to customers in the professional segment;
The Consumer business offers LED lamps, luminaries, and connected products, including Philips Hue and WiZ, to customers in the consumer segment;
The OEM business offers lighting components to the industry;
The Conventional business offers special lighting, digital projection, and lamp electronics.
The Consumer and Professional reportable segments include operating segments, organized based on geography, which are aggregated to form the reportable segments. The aggregated operating segments are similar in respect of the nature of products, production processes, customer and distribution method. In addition, long-term gross margins relative to sales are expected at a similar level.
\"Other\" reflects the P&L of Signify's venture business and centrally incurred costs not allocated to the operating segments, which mainly includes costs related to exploratory research and audit activities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSegmentReportingExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i9506": { "value": "The following is an overview of Signify revenues and results by segment. Sales between the segments mainly relate to the supply of goods. The pricing of such transactions is determined on an \"arm\u2019s length basis\". |
| \u00a0 | Professional | Consumer | OEM | Conventional | Other1 | Inter-segment | Signify |
|---|---|---|---|---|---|---|---|
2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Sales to external customers | 3,767 | 1,274 | 355 | 327 | 42 | \u00a0 | 5,765 |
Sales including intersegment | 3,769 | 1,351 | 461 | 328 | 45 | (190) | 5,765 |
Depreciation and amortization2 | (84) | (32) | (11) | (8) | (56) | \u00a0 | (192) |
Adjusted EBITA | 334 | 135 | 17 | 53 | (27) | \u00a0 | 511 |
Adjusted EBITA as a % of sales | 8.9% | 10.6% | 4.8% | 16.1% | \u00a0 | \u00a0 | 8.9% |
Restructuring | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (73) |
Acquisition-related charges | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 7 |
Incidental items | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (7) |
EBITA3 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 439 |
Amortization4 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (56) |
Income from operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 383 |
Financial income and expenses | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (61) |
Results from investments in associates and joint ventures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (1) |
Income before taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 321 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Sales to external customers | 3,933 | 1,297 | 437 | 437 | 39 | \u00a0 | 6,143 |
Sales including intersegment | 3,938 | 1,413 | 541 | 439 | 40 | (230) | 6,143 |
Depreciation and amortization2 | (80) | (23) | (10) | (13) | (63) | \u00a0 | (189) |
Adjusted EBITA | 367 | 144 | 48 | 78 | (32) | \u00a0 | 606 |
Adjusted EBITA as a % of sales | 9.3% | 11.1% | 11.1% | 17.9% | \u00a0 | \u00a0 | 9.9% |
Restructuring | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (74) |
Acquisition-related charges | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 5 |
Incidental items | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 7 |
EBITA3 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 543 |
Amortization4 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (66) |
Income from operations | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 477 |
Financial income and expenses | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (82) |
Results from investments in associates and joint ventures | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | (1) |
Income before taxes | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 394 |
The table below presents the sales, tangible and intangible assets of Signify by main countries. Signify has no external customer that represents 10% or more of total sales.
| \u00a0 | Sales | Tangible and intangible assets1 | ||
|---|---|---|---|---|
| \u00a0 | 2024 | 2025 | 2024 | 2025 |
Netherlands | 510 | 456 | 583 | 587 |
United States | 2,095 | 1,999 | 2,590 | 2,241 |
China | 381 | 372 | 264 | 232 |
Germany | 347 | 347 | 7 | 7 |
India | 265 | 261 | 49 | 31 |
Other countries | 2,544 | 2,331 | 586 | 586 |
Total countries | 6,143 | 5,765 | 4,079 | 3,683 |
Revenue from the sale of goods is recognized at the point in time when the customer obtains control over the goods. For standard sale of products, control generally passes to the customer when the product is delivered and accepted, depending on the delivery conditions and incoterms. For products for which a right to return exists during a defined period, revenue is recognized by considering the historical pattern of actual returns. Return policies are typically based on customary return arrangements in local markets.
Signify accounts for cloud-enabled services, extended warranties and lifecycle services as separate performance obligations. Control over these services is transferred over time and revenue is recognized, in most cases, on a straight-line basis over the duration of the service period.
The transaction price is the amount of consideration to which Signify expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price excludes amounts collected on behalf of third parties, such as sales taxes.
For contracts with multiple performance obligations, the total consideration of the contract is allocated to all distinct performance obligations in the contract based on their stand-alone selling prices. Stand-alone selling prices are determined based on other stand-alone sales transactions that are directly observable, when possible. If no direct observable prices are available, the stand-alone selling price is normally based on the expected cost plus a margin approach.
The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
Signify does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to most sales transactions.
Payments made to customers for distinct goods or services are excluded from revenue recognized and recorded as part of Selling, general and administrative expenses.
Signify may incur costs for obtaining a contract, including payments made to agents that depend on winning the contract. Signify applies the practical expedient from IFRS 15, allowing the incremental costs of obtaining a contract to be expensed if the associated amortization period is 12 months or less.
A breakdown by nature of the income (loss) from operations is as follows:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Sales | 2 | 6,143 | 5,765 |
Cost of materials used1 | \u00a0 | (2,472) | (2,350) |
Employee benefit expenses | 4 | (1,757) | (1,638) |
Depreciation and amortization | 5 | (255) | (248) |
Shipping and handling | \u00a0 | (363) | (358) |
Advertising and promotion | \u00a0 | (135) | (144) |
Lease-related expenses | 13 | (30) | (26) |
Other operational costs | \u00a0 | (691) | (650) |
Other business income, net | 6 | 38 | 31 |
Income from operations | \u00a0 | 477 | 383 |
Total sales consist primarily of the sales of goods to customers (2025: 97%, 2024: 97%). Remaining sales include revenue from services, and sales- and usage-based royalties. The amount of revenue recognized for the year ended 2025, from performance obligations satisfied (or partially satisfied) in previous periods, amounts to EUR 40 million (2024: EUR 59 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i9893": { "value": "Revenue from the sale of goods is recognized at the point in time when the customer obtains control over the goods. For standard sale of products, control generally passes to the customer when the product is delivered and accepted, depending on the delivery conditions and incoterms. For products for which a right to return exists during a defined period, revenue is recognized by considering the historical pattern of actual returns. Return policies are typically based on customary return arrangements in local markets.
Signify accounts for cloud-enabled services, extended warranties and lifecycle services as separate performance obligations. Control over these services is transferred over time and revenue is recognized, in most cases, on a straight-line basis over the duration of the service period.
The transaction price is the amount of consideration to which Signify expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price excludes amounts collected on behalf of third parties, such as sales taxes.
For contracts with multiple performance obligations, the total consideration of the contract is allocated to all distinct performance obligations in the contract based on their stand-alone selling prices. Stand-alone selling prices are determined based on other stand-alone sales transactions that are directly observable, when possible. If no direct observable prices are available, the stand-alone selling price is normally based on the expected cost plus a margin approach.
The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
Signify does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to most sales transactions.
Payments made to customers for distinct goods or services are excluded from revenue recognized and recorded as part of Selling, general and administrative expenses.
Signify may incur costs for obtaining a contract, including payments made to agents that depend on winning the contract. Signify applies the practical expedient from IFRS 15, allowing the incremental costs of obtaining a contract to be expensed if the associated amortization period is 12 months or less.
Signify applies accrual accounting. This means that expenses are recognized when incurred and Income is recognized when earned, irrespective of the actual cash flows.
Consideration received from customers for shipping and handling is recognized as Sales. Shipping and handling expenses related to sales to third parties are generally recorded as Selling, general and administrative expenses. When shipping and handling are distinct performance obligations, then the related expenses are recorded as Cost of sales.
Advertising and promotion costs and costs related to the brand license fee are included in Selling, general and administrative expenses.
The company has sales promotions-related agreements with distributors and retailers designed to promote the sale of products. Among the programs are arrangements under which rebates and discounts can be earned by attaining agreed upon sales levels or for participating in specific marketing programs. Management estimates the sales-related accruals associated with these arrangements based on a combination of historical patterns and future expectations regarding promotional targets to be met. Accrued customer rebates are presented as other current liabilities, unless there is a right to offset against the respective accounts receivable.
A breakdown by nature of the income (loss) from operations is as follows:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Sales | 2 | 6,143 | 5,765 |
Cost of materials used1 | \u00a0 | (2,472) | (2,350) |
Employee benefit expenses | 4 | (1,757) | (1,638) |
Depreciation and amortization | 5 | (255) | (248) |
Shipping and handling | \u00a0 | (363) | (358) |
Advertising and promotion | \u00a0 | (135) | (144) |
Lease-related expenses | 13 | (30) | (26) |
Other operational costs | \u00a0 | (691) | (650) |
Other business income, net | 6 | 38 | 31 |
Income from operations | \u00a0 | 477 | 383 |
Total sales consist primarily of the sales of goods to customers (2025: 97%, 2024: 97%). Remaining sales include revenue from services, and sales- and usage-based royalties. The amount of revenue recognized for the year ended 2025, from performance obligations satisfied (or partially satisfied) in previous periods, amounts to EUR 40 million (2024: EUR 59 million).
Other operational costs contain items which are dissimilar in nature and individually insignificant in amount to disclose separately. These costs contain, among others, sales-related expenses, outsourcing services, mainly in IT and HR, third-party workers, utilities and repair and maintenance for fixed assets.
The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i9884": { "value": "Signify applies accrual accounting. This means that expenses are recognized when incurred and Income is recognized when earned, irrespective of the actual cash flows.
Consideration received from customers for shipping and handling is recognized as Sales. Shipping and handling expenses related to sales to third parties are generally recorded as Selling, general and administrative expenses. When shipping and handling are distinct performance obligations, then the related expenses are recorded as Cost of sales.
Advertising and promotion costs and costs related to the brand license fee are included in Selling, general and administrative expenses.
Other business income and expenses include gains and losses on the sale of businesses, gains and losses on the sale of property, plant and equipment, and other gains and losses not related to the company's operating activities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i9885": { "value": "Revenue from the sale of goods is recognized at the point in time when the customer obtains control over the goods. For standard sale of products, control generally passes to the customer when the product is delivered and accepted, depending on the delivery conditions and incoterms. For products for which a right to return exists during a defined period, revenue is recognized by considering the historical pattern of actual returns. Return policies are typically based on customary return arrangements in local markets.
Signify accounts for cloud-enabled services, extended warranties and lifecycle services as separate performance obligations. Control over these services is transferred over time and revenue is recognized, in most cases, on a straight-line basis over the duration of the service period.
The transaction price is the amount of consideration to which Signify expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price excludes amounts collected on behalf of third parties, such as sales taxes.
For contracts with multiple performance obligations, the total consideration of the contract is allocated to all distinct performance obligations in the contract based on their stand-alone selling prices. Stand-alone selling prices are determined based on other stand-alone sales transactions that are directly observable, when possible. If no direct observable prices are available, the stand-alone selling price is normally based on the expected cost plus a margin approach.
The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
Signify does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to most sales transactions.
Payments made to customers for distinct goods or services are excluded from revenue recognized and recorded as part of Selling, general and administrative expenses.
Signify may incur costs for obtaining a contract, including payments made to agents that depend on winning the contract. Signify applies the practical expedient from IFRS 15, allowing the incremental costs of obtaining a contract to be expensed if the associated amortization period is 12 months or less.
Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, satisfied performance obligations but not yet billed the customer. These are recorded under either Other current assets or Other non-current assets. The contract assets are transferred to receivables when the rights become unconditional, which is mostly when the customer is billed. For accounting policy on the impairment of contract assets, refer to note 17, Trade and other receivables.
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i9887": { "value": "Signify applies accrual accounting. This means that expenses are recognized when incurred and Income is recognized when earned, irrespective of the actual cash flows.
Consideration received from customers for shipping and handling is recognized as Sales. Shipping and handling expenses related to sales to third parties are generally recorded as Selling, general and administrative expenses. When shipping and handling are distinct performance obligations, then the related expenses are recorded as Cost of sales.
Advertising and promotion costs and costs related to the brand license fee are included in Selling, general and administrative expenses.
A breakdown by nature of the income (loss) from operations is as follows:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Sales | 2 | 6,143 | 5,765 |
Cost of materials used1 | \u00a0 | (2,472) | (2,350) |
Employee benefit expenses | 4 | (1,757) | (1,638) |
Depreciation and amortization | 5 | (255) | (248) |
Shipping and handling | \u00a0 | (363) | (358) |
Advertising and promotion | \u00a0 | (135) | (144) |
Lease-related expenses | 13 | (30) | (26) |
Other operational costs | \u00a0 | (691) | (650) |
Other business income, net | 6 | 38 | 31 |
Income from operations | \u00a0 | 477 | 383 |
Other operational costs contain items which are dissimilar in nature and individually insignificant in amount to disclose separately. These costs contain, among others, sales-related expenses, outsourcing services, mainly in IT and HR, third-party workers, utilities and repair and maintenance for fixed assets.
Contributions to defined-contribution plans are recognized in the Consolidated income statement in Personnel expenses as incurred.
Termination benefits are payable when employment is terminated by Signify before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Signify recognizes termination benefits when they are demonstrably committed to a termination and when they have a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
Personnel expenses by nature as included in the Consolidated statement of income:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Salaries and wages | \u00a0 | (1,127) | (1,064) |
Social securities | \u00a0 | (197) | (203) |
Defined contribution plans | \u00a0 | (73) | (63) |
Cost of termination plans | \u00a0 | (61) | (57) |
Temporary personnel | \u00a0 | (83) | (76) |
Share-based compensation | 25 | (31) | (20) |
Other | \u00a0 | (185) | (155) |
Total | \u00a0 | (1,757) | (1,638) |
Other personnel expenses mainly relate to travel expenses, incentives and other personnel related costs. For further details on the cost of termination plans, refer to note 23, Provisions.
The average number of full-time equivalent (FTE) employees is summarized as follows:
| \u00a0 | \u00a0 | 2024 | 2025 |
|---|---|---|---|
Employees | \u00a0 | 26,591 | 24,984 |
Third-party workers | \u00a0 | 4,228 | 3,209 |
Total1 | \u00a0 | 30,819 | 28,192 |
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Property, plant and equipment | 12 | (146) | (134) |
Software | 14 | (14) | (16) |
Other intangible assets | 14 | (66) | (56) |
Product development | 14 | (28) | (41) |
Total | \u00a0 | (255) | (248) |
Other business income and expenses include gains and losses on the sale of businesses, gains and losses on the sale of property, plant and equipment, and other gains and losses not related to the company's operating activities.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Disposal of businesses | 0 | 6 |
Disposal of fixed assets | 18 | 15 |
Other remaining businesses | 20 | 10 |
Other business income and expenses | 38 | 31 |
Total other business income | 41 | 35 |
Total other business expense | (3) | (3) |
In 2025, the result on disposal of businesses includes EUR 4 million income related to a prior year's disposal.
In 2025, the result on disposal of fixed assets includes EUR 14 million income from a sale of a factory in the United States, in Professional. In 2024, it mainly relates to a sale of a factory in China, in Conventional.
In 2025, the result on other remaining businesses includes EUR 7 million income from the release of a warranty provision related to balances of prior acquisitions. In 2024, it includes EUR 9 million income related to prior years acquisitions and EUR 9 million income from the movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation.
Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify\u2019s provisions is as follows:
Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it;
| \u00a0 | Restruct-uring | Environ-mental | Product warranty | Legal | Other | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 121 | 99 | 103 | 50 | 95 | 470 |
Acquisitions | - | - | - | - | - | - |
Additions | 69 | 11 | 45 | 2 | 13 | 141 |
Utilizations | (133) | (14) | (52) | (1) | (15) | (215) |
Reclassifications | 0 | (1) | 0 | (0) | (0) | (1) |
Releases | (12) | (0) | (9) | (2) | (3) | (26) |
Changes in discount rate | - | (1) | - | - | 0 | (0) |
Accretion | - | 4 | - | 2 | 1 | 7 |
Translation differences and other movements | 0 | 1 | 4 | 3 | 2 | 10 |
Balance as at December 31, 2024 | 46 | 100 | 91 | 55 | 93 | 384 |
Short-term | 34 | 45 | 44 | 48 | 22 | 192 |
Long-term | 12 | 56 | 47 | 6 | 71 | 192 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 46 | 100 | 91 | 55 | 93 | 384 |
Acquisitions | - | - | 0 | - | 0 | 0 |
Additions | 59 | 14 | 42 | 2 | 12 | 129 |
Utilizations | (54) | (15) | (48) | (0) | (15) | (132) |
Reclassifications | 1 | (0) | - | (0) | (1) | (0) |
Releases | (5) | (1) | (10) | (0) | (6) | (23) |
Changes in discount rate | - | (2) | - | - | 0 | (2) |
Accretion | - | 3 | - | 3 | 1 | 7 |
Translation differences and other movements | (1) | (4) | (7) | (6) | (4) | (22) |
Balance as at December 31, 2025 | 46 | 95 | 66 | 53 | 80 | 341 |
Short-term | 41 | 18 | 30 | 47 | 20 | 156 |
Long-term | 5 | 77 | 36 | 6 | 60 | 185 |
During the year ended December 31, 2025, additions to restructuring provision included programs in Professional, Other (mainly in Belgium) and Conventional (mainly in Belgium). Utilizations of restructuring provision included payments related to restructuring programs in Professional and Conventional (mainly in Belgium).
Signify applies accrual accounting. This means that expenses are recognized when incurred and Income is recognized when earned, irrespective of the actual cash flows.
Consideration received from customers for shipping and handling is recognized as Sales. Shipping and handling expenses related to sales to third parties are generally recorded as Selling, general and administrative expenses. When shipping and handling are distinct performance obligations, then the related expenses are recorded as Cost of sales.
Advertising and promotion costs and costs related to the brand license fee are included in Selling, general and administrative expenses.
A breakdown by nature of the income (loss) from operations is as follows:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Sales | 2 | 6,143 | 5,765 |
Cost of materials used1 | \u00a0 | (2,472) | (2,350) |
Employee benefit expenses | 4 | (1,757) | (1,638) |
Depreciation and amortization | 5 | (255) | (248) |
Shipping and handling | \u00a0 | (363) | (358) |
Advertising and promotion | \u00a0 | (135) | (144) |
Lease-related expenses | 13 | (30) | (26) |
Other operational costs | \u00a0 | (691) | (650) |
Other business income, net | 6 | 38 | 31 |
Income from operations | \u00a0 | 477 | 383 |
Other operational costs contain items which are dissimilar in nature and individually insignificant in amount to disclose separately. These costs contain, among others, sales-related expenses, outsourcing services, mainly in IT and HR, third-party workers, utilities and repair and maintenance for fixed assets.
Contributions to defined-contribution plans are recognized in the Consolidated income statement in Personnel expenses as incurred.
Termination benefits are payable when employment is terminated by Signify before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Signify recognizes termination benefits when they are demonstrably committed to a termination and when they have a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
Personnel expenses by nature as included in the Consolidated statement of income:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Salaries and wages | \u00a0 | (1,127) | (1,064) |
Social securities | \u00a0 | (197) | (203) |
Defined contribution plans | \u00a0 | (73) | (63) |
Cost of termination plans | \u00a0 | (61) | (57) |
Temporary personnel | \u00a0 | (83) | (76) |
Share-based compensation | 25 | (31) | (20) |
Other | \u00a0 | (185) | (155) |
Total | \u00a0 | (1,757) | (1,638) |
Other personnel expenses mainly relate to travel expenses, incentives and other personnel related costs. For further details on the cost of termination plans, refer to note 23, Provisions.
The average number of full-time equivalent (FTE) employees is summarized as follows:
| \u00a0 | \u00a0 | 2024 | 2025 |
|---|---|---|---|
Employees | \u00a0 | 26,591 | 24,984 |
Third-party workers | \u00a0 | 4,228 | 3,209 |
Total1 | \u00a0 | 30,819 | 28,192 |
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Property, plant and equipment | 12 | (146) | (134) |
Software | 14 | (14) | (16) |
Other intangible assets | 14 | (66) | (56) |
Product development | 14 | (28) | (41) |
Total | \u00a0 | (255) | (248) |
Other business income and expenses include gains and losses on the sale of businesses, gains and losses on the sale of property, plant and equipment, and other gains and losses not related to the company's operating activities.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Disposal of businesses | 0 | 6 |
Disposal of fixed assets | 18 | 15 |
Other remaining businesses | 20 | 10 |
Other business income and expenses | 38 | 31 |
Total other business income | 41 | 35 |
Total other business expense | (3) | (3) |
In 2025, the result on disposal of businesses includes EUR 4 million income related to a prior year's disposal.
In 2025, the result on disposal of fixed assets includes EUR 14 million income from a sale of a factory in the United States, in Professional. In 2024, it mainly relates to a sale of a factory in China, in Conventional.
In 2025, the result on other remaining businesses includes EUR 7 million income from the release of a warranty provision related to balances of prior acquisitions. In 2024, it includes EUR 9 million income related to prior years acquisitions and EUR 9 million income from the movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation.
| \u00a0 | Restruct-uring | Environ-mental | Product warranty | Legal | Other | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 121 | 99 | 103 | 50 | 95 | 470 |
Acquisitions | - | - | - | - | - | - |
Additions | 69 | 11 | 45 | 2 | 13 | 141 |
Utilizations | (133) | (14) | (52) | (1) | (15) | (215) |
Reclassifications | 0 | (1) | 0 | (0) | (0) | (1) |
Releases | (12) | (0) | (9) | (2) | (3) | (26) |
Changes in discount rate | - | (1) | - | - | 0 | (0) |
Accretion | - | 4 | - | 2 | 1 | 7 |
Translation differences and other movements | 0 | 1 | 4 | 3 | 2 | 10 |
Balance as at December 31, 2024 | 46 | 100 | 91 | 55 | 93 | 384 |
Short-term | 34 | 45 | 44 | 48 | 22 | 192 |
Long-term | 12 | 56 | 47 | 6 | 71 | 192 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 46 | 100 | 91 | 55 | 93 | 384 |
Acquisitions | - | - | 0 | - | 0 | 0 |
Additions | 59 | 14 | 42 | 2 | 12 | 129 |
Utilizations | (54) | (15) | (48) | (0) | (15) | (132) |
Reclassifications | 1 | (0) | - | (0) | (1) | (0) |
Releases | (5) | (1) | (10) | (0) | (6) | (23) |
Changes in discount rate | - | (2) | - | - | 0 | (2) |
Accretion | - | 3 | - | 3 | 1 | 7 |
Translation differences and other movements | (1) | (4) | (7) | (6) | (4) | (22) |
Balance as at December 31, 2025 | 46 | 95 | 66 | 53 | 80 | 341 |
Short-term | 41 | 18 | 30 | 47 | 20 | 156 |
Long-term | 5 | 77 | 36 | 6 | 60 | 185 |
During the year ended December 31, 2025, additions to restructuring provision included programs in Professional, Other (mainly in Belgium) and Conventional (mainly in Belgium). Utilizations of restructuring provision included payments related to restructuring programs in Professional and Conventional (mainly in Belgium).
A breakdown by nature of the income (loss) from operations is as follows:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Sales | 2 | 6,143 | 5,765 |
Cost of materials used1 | \u00a0 | (2,472) | (2,350) |
Employee benefit expenses | 4 | (1,757) | (1,638) |
Depreciation and amortization | 5 | (255) | (248) |
Shipping and handling | \u00a0 | (363) | (358) |
Advertising and promotion | \u00a0 | (135) | (144) |
Lease-related expenses | 13 | (30) | (26) |
Other operational costs | \u00a0 | (691) | (650) |
Other business income, net | 6 | 38 | 31 |
Income from operations | \u00a0 | 477 | 383 |
Interest income and expenses are recognized as they accrue, using the effective interest method.
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Interest income | \u00a0 | 38 | 15 |
Change in fair value of financial assets at fair value through profit or loss | 27 | 2 | 3 |
Other financial income | \u00a0 | 2 | 4 |
Financial income | \u00a0 | 42 | 22 |
Interest expense | 22 | (71) | (46) |
Interest on the net defined-benefit obligation | 24 | (14) | (9) |
Interest expense on lease liabilities | 13 | (9) | (9) |
Change in fair value of financial assets at fair value through profit or loss | 27 | (14) | (7) |
Net foreign exchange gains (losses) | \u00a0 | (2) | (1) |
Monetary gains (losses)1 | \u00a0 | (4) | (3) |
Other financial expenses | 22 | (11) | (6) |
Financial expenses | \u00a0 | (124) | (83) |
Financial income and expenses | \u00a0 | (82) | (61) |
| \u00a0 | Owned assets | Right-of-use assets | Property, plant and equipment | ||||||
|---|---|---|---|---|---|---|---|---|---|
Land and buildings | Machinery and installations | Other equipment | Assets under construction | Total | Land and buildings | Other equipment | Total | Total | |
Balance as at January 1, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 559 | 1,041 | 415 | 39 | 2,054 | 461 | 71 | 532 | 2,586 |
Accumulated amortization / impairment | (344) | (919) | (369) | - | (1,632) | (275) | (46) | (321) | (1,953) |
Book value | 215 | 122 | 46 | 39 | 422 | 186 | 25 | 211 | 633 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | 2 | 2 | 1 | 43 | 49 | 28 | 12 | 40 | 88 |
Assets available for use | 7 | 23 | 18 | (48) | - | - | - | - | - |
Transfer to assets classified as held for sale and other disposals | (10) | (2) | (0) | 0 | (13) | 0 | (1) | (1) | (14) |
Depreciation | (24) | (34) | (18) | - | (77) | (55) | (11) | (66) | (143) |
Impairment | (3) | (1) | (0) | (0) | (4) | (1) | - | (1) | (5) |
Reversal of impairment | - | 2 | 0 | - | 2 | - | - | - | 2 |
Translation differences and other movements | 1 | 2 | (4) | 2 | 1 | 2 | 4 | 6 | 7 |
Total changes | (27) | (8) | (4) | (3) | (42) | (26) | 4 | (23) | (65) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 535 | 1,001 | 378 | 37 | 1,950 | 492 | 85 | 577 | 2,527 |
Accumulated depreciation / impairment | (347) | (887) | (335) | - | (1,569) | (332) | (58) | (390) | (1,959) |
Book value | 188 | 114 | 43 | 37 | 382 | 159 | 27 | 186 | 568 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | 3 | 3 | 3 | 58 | 67 | 84 | 9 | 93 | 159 |
Assets available for use | 12 | 20 | 19 | (51) | 0 | - | - | - | 0 |
Acquisitions | 0 | 0 | 0 | - | 0 | 2 | - | 2 | 2 |
Transfer to assets classified as held for sale and other disposals | (4) | (4) | (0) | (0) | (8) | (1) | (1) | (1) | (10) |
Depreciation | (20) | (27) | (18) | (0) | (65) | (52) | (11) | (63) | (127) |
Impairment | (2) | (3) | (1) | (0) | (6) | (0) | - | (0) | (6) |
Translation differences and other movements | (8) | (6) | (3) | (5) | (23) | (6) | (0) | (6) | (29) |
Total changes | (19) | (17) | (0) | 2 | (35) | 27 | (3) | 24 | (11) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 479 | 741 | 342 | 38 | 1,601 | 481 | 92 | 572 | 2,174 |
Accumulated amortization / impairment | (311) | (644) | (300) | - | (1,255) | (295) | (67) | (362) | (1,617) |
Book value | 169 | 97 | 42 | 38 | 347 | 186 | 24 | 210 | 557 |
In 2025, the additions in land and buildings under right-of-use assets relate mostly to new real estate lease contracts, mainly in the Netherlands, Australia and the United States.
Signify entered into contracts that convey the right to use the identified asset and as such Signify accounted for these contracts as a lessee.
Signify recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Signify applies the short-term lease recognition exemption to its short-term leases for real estate (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.
Signify determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised. When determining the lease term, Signify considers all relevant facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. These circumstances include Signify\u2019s strategic plans, the industrial footprint of Signify and divisions and the importance of the site to Signify\u2019s operations.
The carrying amounts, depreciation charge and additions to right-of-use assets are disclosed in note 12, Property, plant and equipment. The movements of the related lease liabilities are disclosed in note 22, Debt. For maturity analysis on lease liabilities, refer to note 27, Financial risk management.
The following are the amounts recognized in profit or loss and cash flow:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Short-term lease expenses | 3 | (21) | (19) |
Low value lease expenses | 3 | (9) | (7) |
Interest expense on lease liabilities | 7 | (9) | (9) |
Repayment of lease liabilities | 22 | (71) | (66) |
Total cash outflow for leases | \u00a0 | (110) | (102) |
Lease liabilities are measured at the present value of lease payments to be made over the lease term, discounted using the incremental borrowing rate. Lease payments include (in-substance) fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, the exercise price of a purchase option reasonably certain to be exercised and payments of penalties for terminating a lease. Lease liabilities increase to reflect the accretion of interest and decrease for the payments made. Lease liabilities are remeasured if there is a modification or reassessment of the lease.
Movements of debt were as follows:
| \u00a0 | Term loans | Eurobonds | Lease liabilities | Other debt | Bank overdrafts | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 704 | 1,271 | 237 | 18 | - | 2,230 |
Acquisitions | - | - | - | - | - | - |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 504 | - | - | 10 | - | 513 |
| (488) | (675) | (71) | (4) | - | (1,238) |
Translation differences | 5 | - | 2 | - | - | 6 |
Other movements1 | (0) | 2 | 40 | - | 1 | 42 |
Balance as at December 31, 2024 | 724 | 597 | 207 | 23 | 1 | 1,553 |
From which current | 325 | - | 67 | 23 | 1 | 416 |
From which non-current | 399 | 597 | 140 | - | - | 1,137 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 724 | 597 | 207 | 23 | 1 | 1,553 |
Acquisitions | - | - | 2 | - | - | 2 |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 325 | - | - | 34 | - | 359 |
| (325) | - | (66) | (26) | - | (417) |
Translation differences | - | - | (10) | (2) | - | (13) |
Other movements1 | - | 1 | 94 | - | (0) | 95 |
Balance as at December 31, 2025 | 724 | 599 | 227 | 29 | 0 | 1,579 |
From which current | 400 | - | 60 | 29 | - | 489 |
From which non-current | 324 | 599 | 167 | - | - | 1,090 |
Signify entered into new lease contracts mainly related to real estate in the Netherlands, Australia and the United States.
The table below analyzes Signify's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
| \u00a0 | \u00a0 | Payments due by period | ||
|---|---|---|---|---|
| \u00a0 | Total | Less than | Between | Over |
Debt, including bank overdrafts | 1,352 | 429 | 923 | - |
Interest on debt | 63 | 41 | 22 | - |
Trade and other payables | 1,363 | 1,363 | - | - |
Lease liability | 268 | 66 | 137 | 65 |
Derivative liabilities | 7 | 7 | - | - |
Off-balance sheet commitments | 120 | 40 | 80 | - |
Purchase obligations1 | 358 | 148 | 208 | 2 |
Contractual cash obligations 2025 | 3,530 | 2,093 | 1,370 | 67 |
Contractual cash obligations 2024 | 3,805 | 2,234 | 1,513 | 58 |
Revolving credit facility (RCF) | 600 | - | - | - |
Revenue from the sale of goods is recognized at the point in time when the customer obtains control over the goods. For standard sale of products, control generally passes to the customer when the product is delivered and accepted, depending on the delivery conditions and incoterms. For products for which a right to return exists during a defined period, revenue is recognized by considering the historical pattern of actual returns. Return policies are typically based on customary return arrangements in local markets.
Signify accounts for cloud-enabled services, extended warranties and lifecycle services as separate performance obligations. Control over these services is transferred over time and revenue is recognized, in most cases, on a straight-line basis over the duration of the service period.
The transaction price is the amount of consideration to which Signify expects to be entitled in exchange for transferring promised goods or services to a customer. The transaction price excludes amounts collected on behalf of third parties, such as sales taxes.
For contracts with multiple performance obligations, the total consideration of the contract is allocated to all distinct performance obligations in the contract based on their stand-alone selling prices. Stand-alone selling prices are determined based on other stand-alone sales transactions that are directly observable, when possible. If no direct observable prices are available, the stand-alone selling price is normally based on the expected cost plus a margin approach.
The transaction price may be variable due to discounts, rebates or similar arrangements. Revenue is only recognized for the part of the consideration for which it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur. Judgment is required in determining the probability and level of discounts and rebates that will be granted. The estimate is updated throughout the term of the contract.
Signify does not adjust the transaction price for the effects of significant financing component if, at contract inception, it is expected that the period between customer payment and the transfer of goods or services is one year or less. This applies to most sales transactions.
Payments made to customers for distinct goods or services are excluded from revenue recognized and recorded as part of Selling, general and administrative expenses.
Signify may incur costs for obtaining a contract, including payments made to agents that depend on winning the contract. Signify applies the practical expedient from IFRS 15, allowing the incremental costs of obtaining a contract to be expensed if the associated amortization period is 12 months or less.
A breakdown by nature of the income (loss) from operations is as follows:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Sales | 2 | 6,143 | 5,765 |
Cost of materials used1 | \u00a0 | (2,472) | (2,350) |
Employee benefit expenses | 4 | (1,757) | (1,638) |
Depreciation and amortization | 5 | (255) | (248) |
Shipping and handling | \u00a0 | (363) | (358) |
Advertising and promotion | \u00a0 | (135) | (144) |
Lease-related expenses | 13 | (30) | (26) |
Other operational costs | \u00a0 | (691) | (650) |
Other business income, net | 6 | 38 | 31 |
Income from operations | \u00a0 | 477 | 383 |
Total sales consist primarily of the sales of goods to customers (2025: 97%, 2024: 97%). Remaining sales include revenue from services, and sales- and usage-based royalties. The amount of revenue recognized for the year ended 2025, from performance obligations satisfied (or partially satisfied) in previous periods, amounts to EUR 40 million (2024: EUR 59 million).
Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, satisfied performance obligations but not yet billed the customer. These are recorded under either Other current assets or Other non-current assets. The contract assets are transferred to receivables when the rights become unconditional, which is mostly when the customer is billed. For accounting policy on the impairment of contract assets, refer to note 17, Trade and other receivables.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract assets | 41 | 35 |
Indirect taxes | 55 | 34 |
Prepayments | 43 | 50 |
Other assets | 35 | 21 |
Total | 173 | 140 |
From which current | 147 | 112 |
From which non-current | 26 | 28 |
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract liability | 224 | 208 |
Other tax liabilities | 79 | 76 |
Other liabilities | 39 | 72 |
Total | 342 | 356 |
From which current | 196 | 201 |
From which non-current | 145 | 155 |
Out of the total amount of EUR 224 million recognized in contract liabilities at the end of 2024 (2023: EUR 226 million), EUR 41 million has been recognized as revenue for the year ended December 31, 2025 (2024: EUR 55 million). The non-current portion of contract liabilities is recognized over time over the duration of the contract, generally beyond 1 and up to 15 years.
Contributions to defined-contribution plans are recognized in the Consolidated income statement in Personnel expenses as incurred.
Termination benefits are payable when employment is terminated by Signify before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Signify recognizes termination benefits when they are demonstrably committed to a termination and when they have a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
Personnel expenses by nature as included in the Consolidated statement of income:
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Salaries and wages | \u00a0 | (1,127) | (1,064) |
Social securities | \u00a0 | (197) | (203) |
Defined contribution plans | \u00a0 | (73) | (63) |
Cost of termination plans | \u00a0 | (61) | (57) |
Temporary personnel | \u00a0 | (83) | (76) |
Share-based compensation | 25 | (31) | (20) |
Other | \u00a0 | (185) | (155) |
Total | \u00a0 | (1,757) | (1,638) |
Other personnel expenses mainly relate to travel expenses, incentives and other personnel related costs. For further details on the cost of termination plans, refer to note 23, Provisions.
The average number of full-time equivalent (FTE) employees is summarized as follows:
| \u00a0 | \u00a0 | 2024 | 2025 |
|---|---|---|---|
Employees | \u00a0 | 26,591 | 24,984 |
Third-party workers | \u00a0 | 4,228 | 3,209 |
Total1 | \u00a0 | 30,819 | 28,192 |
Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify\u2019s provisions is as follows:
Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it;
| \u00a0 | Restruct-uring | Environ-mental | Product warranty | Legal | Other | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 121 | 99 | 103 | 50 | 95 | 470 |
Acquisitions | - | - | - | - | - | - |
Additions | 69 | 11 | 45 | 2 | 13 | 141 |
Utilizations | (133) | (14) | (52) | (1) | (15) | (215) |
Reclassifications | 0 | (1) | 0 | (0) | (0) | (1) |
Releases | (12) | (0) | (9) | (2) | (3) | (26) |
Changes in discount rate | - | (1) | - | - | 0 | (0) |
Accretion | - | 4 | - | 2 | 1 | 7 |
Translation differences and other movements | 0 | 1 | 4 | 3 | 2 | 10 |
Balance as at December 31, 2024 | 46 | 100 | 91 | 55 | 93 | 384 |
Short-term | 34 | 45 | 44 | 48 | 22 | 192 |
Long-term | 12 | 56 | 47 | 6 | 71 | 192 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 46 | 100 | 91 | 55 | 93 | 384 |
Acquisitions | - | - | 0 | - | 0 | 0 |
Additions | 59 | 14 | 42 | 2 | 12 | 129 |
Utilizations | (54) | (15) | (48) | (0) | (15) | (132) |
Reclassifications | 1 | (0) | - | (0) | (1) | (0) |
Releases | (5) | (1) | (10) | (0) | (6) | (23) |
Changes in discount rate | - | (2) | - | - | 0 | (2) |
Accretion | - | 3 | - | 3 | 1 | 7 |
Translation differences and other movements | (1) | (4) | (7) | (6) | (4) | (22) |
Balance as at December 31, 2025 | 46 | 95 | 66 | 53 | 80 | 341 |
Short-term | 41 | 18 | 30 | 47 | 20 | 156 |
Long-term | 5 | 77 | 36 | 6 | 60 | 185 |
During the year ended December 31, 2025, additions to restructuring provision included programs in Professional, Other (mainly in Belgium) and Conventional (mainly in Belgium). Utilizations of restructuring provision included payments related to restructuring programs in Professional and Conventional (mainly in Belgium).
Signify\u2019s retirement benefit obligation is calculated by an independent actuary, using the projected unit credit method. This calculation is performed separately for each plan by estimating the amount of the benefit that employees have earned in relation to their past services. The measurement date for all defined benefit plans is December 31. For plans with a relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit obligation with a lower frequency. The liability recognized in the Consolidated statement of financial position is the present value of these benefits at the end of the reporting period (defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation is determined by discounting the estimated future cash flows using a discount yield curve of high-quality corporate bonds with durations matching the terms of the benefits.
Pension costs in respect of defined benefit post-employment plans primarily represent the increase of the actuarial present value of the obligation for post-employment benefits based on employee service during the year. The increase in the defined-benefit obligation due to the passage of time and the expected return on plan assets, using the same interest rate as for the defined-benefit obligation, are included in the pension costs. Interest on the net defined-benefit obligation is recognized in Financing income and expenses in the Consolidated statement of income.
Past-service costs are recognized immediately in the Personnel costs in the Consolidated statement of income. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity via other comprehensive income in the period in which they arise.
When a plan is changed, settled or when a plan is curtailed, the resulting change in the defined-benefit obligation that relates to past-service or the gain or loss on curtailment is recognized immediately in the Consolidated statement of income. Signify recognizes gains and losses on the settlement of a defined-benefit plan when the settlement occurs.
Signify presents all net defined-benefit post-employment obligations on one line within non-current liabilities on the Consolidated statement of financial position.
The valuation of defined benefit obligations is based on actuarial calculation that require specific assumptions, which are disclosed in this note.
Post-employment benefits covered in this note relate to defined-benefit pension and other post-retirement benefit plans, including defined-benefit retiree medical plans. The benefits provided by these plans are based on employees\u2019 years of service and compensation levels. Employee post-employment defined-benefit plans have been established in several countries in accordance with the legal requirements, customs and local practice.
| \u00a0 | 2024 | \u00a0 | 2025 | \u00a0 | ||
|---|---|---|---|---|---|---|
| \u00a0 | Obligation | Plan assets | Net Liability | Obligation | Plan assets | Net Liability |
Germany | 154 | (15) | 139 | 141 | 15 | 126 |
United States | 51 | - | 51 | 35 | - | 35 |
Other Countries | 112 | (47) | 65 | 106 | 43 | 63 |
Total Countries | 317 | (62) | 255 | 282 | 58 | 224 |
Signify has an unfunded pension plan in place for higher salaried employees with a net liability of EUR 13 million and a post-retirement welfare plan with a net liability of EUR 22 million. Signify expects cash outflows of EUR 4 million in 2026 for the unfunded plans.
For employees with a salary above a certain salary threshold, there is a funded defined-benefit pension plan which has a deficit of EUR 4 million. This plan has been closed for new entrants since January 1, 2018. Since 2016, Signify no longer makes any contributions to this plan but funds the liabilities when these are paid out to retirees. New employees accrue pension benefits through a defined-contribution plan. For other closed defined-benefit plans, Signify had an unfunded liability of EUR 122 million as at December 31, 2025. Signify expects cash outflows of EUR 15 million in 2026 for the pension plans. Cash outflows for the defined-benefit plans in countries other than the USA and Germany are expected to total EUR 11 million in 2026.
The defined-benefit plans expose Signify to various demographic and economic risks, such as longevity, investment, currency and interest rate risks and, in some cases, inflation risk. The latter plays a role in the assumed wage increase and in some plans with pension indexation.
The larger plans are governed by either independent boards, committees or trustees who have a legal obligation to evenly balance the interests of all stakeholders and operate under the local regulatory frameworks. These bodies are responsible for and have full discretion over the investment strategy of the plan assets; in general they manage pension fund risks by diversifying the investments of plan assets and by (partially) matching interest rate risk of liabilities.
Signify has an active de-risking strategy in which it constantly looks for opportunities to reduce the risks associated with its defined-benefit plans.
| \u00a0 | 2024 | 2025 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Obligation | Plan assets | Net Liability | Obligation | Plan assets | Net Liability |
Balance as at January 1, 2024 | 705 | (383) | 322 | 317 | (62) | 255 |
Service Costs | 9 | - | 9 | 6 | - | 6 |
(Negative) past service cost | (1) | - | (1) | 2 | - | 2 |
Admin expenses paid | - | 3 | 3 | - | - | - |
Settlements | (2) | - | (2) | - | - | - |
Plan amendments | (1) | \u00a0 | (1) | (1) | - | (1) |
Recognized in employee benefit expenses | 4 | 3 | 7 | 7 | - | 7 |
Interest (cost)/income | 19 | (6) | 13 | 10 | (2) | 8 |
Included in Statements of Income | 23 | (3) | 21 | 17 | (2) | 15 |
Actuarial gains/(losses) | \u00a0 | \u00a0 | \u00a0 | 0 | 0 | 0 |
| - | - | - | - | - | - |
| (11) | (1) | (13) | (3) | 2 | (1) |
| 2 | - | 2 | (2) | - | (2) |
Exchange rate differences | 4 | (7) | (2) | (8) | 1 | (7) |
Included in Statements of comprehensive income | (5) | (8) | (13) | (13) | 3 | (10) |
Employee contributions | 1 | (1) | - | 1 | (1) | - |
Employer contributions | - | (44) | (44) | - | (4) | (4) |
Benefits paid: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 0 |
| (30) | \u00a0 | (30) | (25) | 0 | (25) |
| (52) | 52 | - | (8) | 8 | - |
Reclassification | (1) | - | (1) | (7) | - | (7) |
Derecognition | (324) | 324 | - | \u00a0 | \u00a0 | - |
Other | (406) | 331 | (75) | (39) | 3 | (36) |
Balance as at December 31 | 317 | (62) | 255 | 282 | (58) | 224 |
During 2025, US interest rates decreased by some 49 bps and this has been reflected in lower discount rates. For the Eurozone, the interest rates were some 47bps higher at 31 December than the year before. As such, the unfunded defined benefit plans in the US and the German plans experienced respectively losses and gains on the financial assumptions.
The plan assets at 31 December 2025 consisted of 90% unquoted assets, mainly related to insurance contracts. The remaining 10% of plan assets was invested in debt securities EUR 3 million and equities EUR 2 million. Plan assets in 2025 did not include property occupied by, or financial instruments issued by Signify.
At 31 December 2024, plan assets mainly related to insurance contracts.
The mortality tables used for Signify\u2019s major schemes are:
US: Base table PRI-2012 White Collar mortality table, projected forward with future mortality improvements according to Scale MP-2021;
Germany: Richttafeln 2018 G K. Heubeck.
The weighted averages of the assumptions used to calculate the defined-benefit obligation as of December 31, 2025, are shown in the table below. The assumptions for pension cost, healthcare cost, and wage increases are only relevant for a limited number of plans.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Discount rate | 4.6% | 4.7% |
Pension cost increases | 1.0% | 1.0% |
Healthscare cost increases | 1.1% | 0.9% |
Wage increases | 2.3% | 2.5% |
The average duration of the defined-benefit obligation of the defined-benefit plans is 7.4 years.
For the defined-benefit plans in the US and Germany, the average duration is respectively 6.4 years and 6.7 years. The average discount rates for the plans in these countries are respectively 4.9% and 3.8%. The pension cost increase rate assumption for the German defined-benefit plans is 2.0%.
The table below illustrates the approximate impact on the defined-benefit obligation if Signify were to change key assumptions. The defined-benefit obligation was recalculated using a change of 1% in the respective assumptions which overall is considered a reasonably possible change. The impact on the defined-benefit obligation of changes in discount rate is for funded plans normally accompanied by offsetting movements in plan assets, especially when using matching strategies.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Increase | \u00a0 | \u00a0 |
Discount rate (1% movement) | (23) | (19) |
Wage change (1% movement) | 3 | 4 |
Pension indexation change (1% movement) | 8 | 10 |
Longevity (see explanation) | 9 | 8 |
Healthcare cost change (1% movement) | 2 | 3 |
Decrease | \u00a0 | \u00a0 |
Discount rate (1% movement) | 25 | 22 |
Wage change (1% movement) | (5) | (3) |
Pension indexation change (1% movement) | (7) | (9) |
Longevity (see explanation) | (12) | (7) |
Healthcare cost change (1% movement) | (2) | (2) |
Longevity also impacts the post-employment defined-benefit obligation which is illustrated in the above sensitivity table for the impact of a 10% increase and a 10% decrease in the assumed rates of mortality for Signify\u2019s major schemes. A 10% decrease in assumed mortality rates equals improvement of life expectancy by six months to a year. Vice versa, an increase in the assumed mortality rates equals a reduction of life expectancy.
Contributions to defined-contribution plans are recognized in the Consolidated income statement in Personnel expenses as incurred.
Termination benefits are payable when employment is terminated by Signify before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Signify recognizes termination benefits when they are demonstrably committed to a termination and when they have a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
Signify\u2019s retirement benefit obligation is calculated by an independent actuary, using the projected unit credit method. This calculation is performed separately for each plan by estimating the amount of the benefit that employees have earned in relation to their past services. The measurement date for all defined benefit plans is December 31. For plans with a relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit obligation with a lower frequency. The liability recognized in the Consolidated statement of financial position is the present value of these benefits at the end of the reporting period (defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation is determined by discounting the estimated future cash flows using a discount yield curve of high-quality corporate bonds with durations matching the terms of the benefits.
Pension costs in respect of defined benefit post-employment plans primarily represent the increase of the actuarial present value of the obligation for post-employment benefits based on employee service during the year. The increase in the defined-benefit obligation due to the passage of time and the expected return on plan assets, using the same interest rate as for the defined-benefit obligation, are included in the pension costs. Interest on the net defined-benefit obligation is recognized in Financing income and expenses in the Consolidated statement of income.
Past-service costs are recognized immediately in the Personnel costs in the Consolidated statement of income. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity via other comprehensive income in the period in which they arise.
When a plan is changed, settled or when a plan is curtailed, the resulting change in the defined-benefit obligation that relates to past-service or the gain or loss on curtailment is recognized immediately in the Consolidated statement of income. Signify recognizes gains and losses on the settlement of a defined-benefit plan when the settlement occurs.
Signify presents all net defined-benefit post-employment obligations on one line within non-current liabilities on the Consolidated statement of financial position.
The cost of equity-settled transactions is determined by the fair value at the grant date using an appropriate valuation model.
The grant-date fair value of equity-settled share-based payment awards granted to employees is recognized as personnel expense, with a corresponding increase in equity, over the vesting period of the award. The cumulative expense recognized for equity-settled transactions at each reporting date reflects Signify\u2019s best estimate of the number of equity instruments that will ultimately vest.
Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of Signify\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10055": { "value": "Termination benefits are payable when employment is terminated by Signify before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Signify recognizes termination benefits when they are demonstrably committed to a termination and when they have a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify\u2019s provisions is as follows:
Environmental provisions - Measurement of liabilities associated with environmental obligations is based on current legal and constructive requirements. The carrying amount of environmental provisions is regularly reviewed and adjusted for new facts and changes in law;
Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it;
Product warranty - A provision for product warranty is recognized at the time of revenue recognition and reflects the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to the products. The provision is based on historical warranty data and a weighing of possible outcomes against their associated probabilities. Manufacturing of Signify\u2019s products involves complex processes and defects might occur. In addition, it is possible that some of Signify\u2019s products may not perform as expected (for example, in terms of estimated life span and projected energy savings). These defects or shortfalls may cause Signify to incur significant warranty, support and replacement costs;
Legal provisions \u2013 Liabilities and expected insurance recoveries, if any, are recorded separately. Balances are transferred to Other liabilities when the amount and timing of cash flows are no longer uncertain;
Onerous contract provisions - Provisions are recognized for a contract if it is onerous. The present obligation under the contract is measured and recognized as a provision. An onerous contract is a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
Signify\u2019s retirement benefit obligation is calculated by an independent actuary, using the projected unit credit method. This calculation is performed separately for each plan by estimating the amount of the benefit that employees have earned in relation to their past services. The measurement date for all defined benefit plans is December 31. For plans with a relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit obligation with a lower frequency. The liability recognized in the Consolidated statement of financial position is the present value of these benefits at the end of the reporting period (defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation is determined by discounting the estimated future cash flows using a discount yield curve of high-quality corporate bonds with durations matching the terms of the benefits.
Pension costs in respect of defined benefit post-employment plans primarily represent the increase of the actuarial present value of the obligation for post-employment benefits based on employee service during the year. The increase in the defined-benefit obligation due to the passage of time and the expected return on plan assets, using the same interest rate as for the defined-benefit obligation, are included in the pension costs. Interest on the net defined-benefit obligation is recognized in Financing income and expenses in the Consolidated statement of income.
Past-service costs are recognized immediately in the Personnel costs in the Consolidated statement of income. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity via other comprehensive income in the period in which they arise.
When a plan is changed, settled or when a plan is curtailed, the resulting change in the defined-benefit obligation that relates to past-service or the gain or loss on curtailment is recognized immediately in the Consolidated statement of income. Signify recognizes gains and losses on the settlement of a defined-benefit plan when the settlement occurs.
Signify presents all net defined-benefit post-employment obligations on one line within non-current liabilities on the Consolidated statement of financial position.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10056": { "value": "Termination benefits are payable when employment is terminated by Signify before the normal retirement date, or whenever an employee accepts voluntary redundancy in exchange for these benefits. Signify recognizes termination benefits when they are demonstrably committed to a termination and when they have a detailed formal plan to terminate the employment of current employees without possibility of withdrawal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTerminationBenefits", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "p-blocktag-i10125": { "value": "The average number of full-time equivalent (FTE) employees is summarized as follows:
| \u00a0 | \u00a0 | 2024 | 2025 |
|---|---|---|---|
Employees | \u00a0 | 26,591 | 24,984 |
Third-party workers | \u00a0 | 4,228 | 3,209 |
Total1 | \u00a0 | 30,819 | 28,192 |
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Property, plant and equipment | 12 | (146) | (134) |
Software | 14 | (14) | (16) |
Other intangible assets | 14 | (66) | (56) |
Product development | 14 | (28) | (41) |
Total | \u00a0 | (255) | (248) |
Other business income and expenses include gains and losses on the sale of businesses, gains and losses on the sale of property, plant and equipment, and other gains and losses not related to the company's operating activities.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Disposal of businesses | 0 | 6 |
Disposal of fixed assets | 18 | 15 |
Other remaining businesses | 20 | 10 |
Other business income and expenses | 38 | 31 |
Total other business income | 41 | 35 |
Total other business expense | (3) | (3) |
In 2025, the result on disposal of businesses includes EUR 4 million income related to a prior year's disposal.
In 2025, the result on disposal of fixed assets includes EUR 14 million income from a sale of a factory in the United States, in Professional. In 2024, it mainly relates to a sale of a factory in China, in Conventional.
In 2025, the result on other remaining businesses includes EUR 7 million income from the release of a warranty provision related to balances of prior acquisitions. In 2024, it includes EUR 9 million income related to prior years acquisitions and EUR 9 million income from the movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation.
Other business income and expenses include gains and losses on the sale of businesses, gains and losses on the sale of property, plant and equipment, and other gains and losses not related to the company's operating activities.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Disposal of businesses | 0 | 6 |
Disposal of fixed assets | 18 | 15 |
Other remaining businesses | 20 | 10 |
Other business income and expenses | 38 | 31 |
Total other business income | 41 | 35 |
Total other business expense | (3) | (3) |
In 2025, the result on disposal of businesses includes EUR 4 million income related to a prior year's disposal.
In 2025, the result on disposal of fixed assets includes EUR 14 million income from a sale of a factory in the United States, in Professional. In 2024, it mainly relates to a sale of a factory in China, in Conventional.
In 2025, the result on other remaining businesses includes EUR 7 million income from the release of a warranty provision related to balances of prior acquisitions. In 2024, it includes EUR 9 million income related to prior years acquisitions and EUR 9 million income from the movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation.
Other business income and expenses include gains and losses on the sale of businesses, gains and losses on the sale of property, plant and equipment, and other gains and losses not related to the company's operating activities.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Disposal of businesses | 0 | 6 |
Disposal of fixed assets | 18 | 15 |
Other remaining businesses | 20 | 10 |
Other business income and expenses | 38 | 31 |
Total other business income | 41 | 35 |
Total other business expense | (3) | (3) |
In 2025, the result on disposal of businesses includes EUR 4 million income related to a prior year's disposal.
In 2025, the result on disposal of fixed assets includes EUR 14 million income from a sale of a factory in the United States, in Professional. In 2024, it mainly relates to a sale of a factory in China, in Conventional.
In 2025, the result on other remaining businesses includes EUR 7 million income from the release of a warranty provision related to balances of prior acquisitions. In 2024, it includes EUR 9 million income related to prior years acquisitions and EUR 9 million income from the movements in the indemnification positions with Koninklijke Philips N.V. originating from the separation.
Interest income and expenses are recognized as they accrue, using the effective interest method.
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Interest income | \u00a0 | 38 | 15 |
Change in fair value of financial assets at fair value through profit or loss | 27 | 2 | 3 |
Other financial income | \u00a0 | 2 | 4 |
Financial income | \u00a0 | 42 | 22 |
Interest expense | 22 | (71) | (46) |
Interest on the net defined-benefit obligation | 24 | (14) | (9) |
Interest expense on lease liabilities | 13 | (9) | (9) |
Change in fair value of financial assets at fair value through profit or loss | 27 | (14) | (7) |
Net foreign exchange gains (losses) | \u00a0 | (2) | (1) |
Monetary gains (losses)1 | \u00a0 | (4) | (3) |
Other financial expenses | 22 | (11) | (6) |
Financial expenses | \u00a0 | (124) | (83) |
Financial income and expenses | \u00a0 | (82) | (61) |
Interest income and expenses are recognized as they accrue, using the effective interest method.
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Interest income | \u00a0 | 38 | 15 |
Change in fair value of financial assets at fair value through profit or loss | 27 | 2 | 3 |
Other financial income | \u00a0 | 2 | 4 |
Financial income | \u00a0 | 42 | 22 |
Interest expense | 22 | (71) | (46) |
Interest on the net defined-benefit obligation | 24 | (14) | (9) |
Interest expense on lease liabilities | 13 | (9) | (9) |
Change in fair value of financial assets at fair value through profit or loss | 27 | (14) | (7) |
Net foreign exchange gains (losses) | \u00a0 | (2) | (1) |
Monetary gains (losses)1 | \u00a0 | (4) | (3) |
Other financial expenses | 22 | (11) | (6) |
Financial expenses | \u00a0 | (124) | (83) |
Financial income and expenses | \u00a0 | (82) | (61) |
Interest income and expenses are recognized as they accrue, using the effective interest method.
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Interest income | \u00a0 | 38 | 15 |
Change in fair value of financial assets at fair value through profit or loss | 27 | 2 | 3 |
Other financial income | \u00a0 | 2 | 4 |
Financial income | \u00a0 | 42 | 22 |
Interest expense | 22 | (71) | (46) |
Interest on the net defined-benefit obligation | 24 | (14) | (9) |
Interest expense on lease liabilities | 13 | (9) | (9) |
Change in fair value of financial assets at fair value through profit or loss | 27 | (14) | (7) |
Net foreign exchange gains (losses) | \u00a0 | (2) | (1) |
Monetary gains (losses)1 | \u00a0 | (4) | (3) |
Other financial expenses | 22 | (11) | (6) |
Financial expenses | \u00a0 | (124) | (83) |
Financial income and expenses | \u00a0 | (82) | (61) |
Interest income and expenses are recognized as they accrue, using the effective interest method.
| \u00a0 | Note | 2024 | 2025 |
|---|---|---|---|
Interest income | \u00a0 | 38 | 15 |
Change in fair value of financial assets at fair value through profit or loss | 27 | 2 | 3 |
Other financial income | \u00a0 | 2 | 4 |
Financial income | \u00a0 | 42 | 22 |
Interest expense | 22 | (71) | (46) |
Interest on the net defined-benefit obligation | 24 | (14) | (9) |
Interest expense on lease liabilities | 13 | (9) | (9) |
Change in fair value of financial assets at fair value through profit or loss | 27 | (14) | (7) |
Net foreign exchange gains (losses) | \u00a0 | (2) | (1) |
Monetary gains (losses)1 | \u00a0 | (4) | (3) |
Other financial expenses | 22 | (11) | (6) |
Financial expenses | \u00a0 | (124) | (83) |
Financial income and expenses | \u00a0 | (82) | (61) |
A financial asset is recognized when Signify becomes a party to a contract that is a financial instrument. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial assets and liabilities is at fair value. Dividend income is recognized when declared. After initial recognition, these financial assets are measured at amortized cost using the effective interest method, less loss allowance and net of discounts given or agreed to, if the offset requirements are met.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, Signify continues to recognize the transferred asset to the extent of its continuing involvement. In that case, Signify also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Signify has retained.
Financial assets arising from insurance contracts are only recognized when it is virtually certain that reimbursement will be received if Signify settles the obligation. Signify recognizes the reimbursement as a separate financial asset.
Signify estimates lifetime expected loss allowance for all Trade receivables and Contract assets via calculating the expected credit losses. Trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due whereby the lifetime expected credit loss on the Trade receivables is recognized based on a matrix model calculated per country, which utilizes historical recoverability data and default probability per country.
As soon as individual trade accounts receivable can no longer be collected in a normal course of business and are expected to result in a loss, they are designated as doubtful trade accounts receivable and valued at the expected collectible amounts. They are written off when they are deemed to be uncollectable because of bankruptcy or other forms of receivership at the debtors. Any previously recognized expected loss is offset against the carrying amount of such trade receivable and the difference is taken as a loss accounted for within Selling, general and administrative expenses.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Trade receivables | 966 | 805 |
Other receivables | 100 | 89 |
Total receivables, net of value allowance | 1,066 | 894 |
The aging of trade receivables, representing current and overdue, net of loss allowance, is as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Current | 917 | 760 |
Overdue 1-30 days | 27 | 18 |
Overdue 31-180 days | 22 | 27 |
Overdue >180 days | - | - |
Trade receivables, net | 966 | 805 |
The changes in loss allowance for accounts receivable are as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Balance as at January 1 | (83) | (78) |
Additions charged to expense | (3) | (3) |
Utilizations | 9 | 4 |
Translation differences and other movements | (2) | 5 |
Balance as at December 31 | (78) | (73) |
As per December 31, 2025, the loss allowance for accounts receivable included allowances for individually impaired receivables of EUR 67 million (2024: EUR 72 million).
Trade and other payables are initially measured at fair value and subsequently at amortized cost. Trade payables are derecognized when the contractual obligation is either discharged, cancelled or expired.
The Company classifies financial liabilities that arise from supplier finance arrangement within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Company\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement.
Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Payables to suppliers | 1,042 | 915 |
Amounts payable to employees | 171 | 120 |
Customer rebates and refunds related | 176 | 146 |
Marketing and sales related | 72 | 59 |
Materials and fixed assets related | 47 | 46 |
Other payables | 79 | 77 |
Trade and other payables | 1,588 | 1,363 |
Certain Signify suppliers factor their trade receivables from Signify with third parties through supplier finance arrangements. As of December 31, 2025, approximately EUR 136\u00a0million (2024: EUR 149 million) of the Signify accounts payable were known to have been sold onward under such arrangement, of which suppliers have received payments for EUR 120 million (2024: EUR 149 million). The liabilities under supplier finance arrangements are due on average 124 days (2024: 117 days) after invoice date, while comparable trade payables that are not part of the supplier finance arrangements are due on average 123 days (2024: 118 days) after invoice date.
Signify continues to recognize these liabilities as Payables to suppliers and will settle the liabilities in line with the original payment terms of the related invoices.
Debt is initially measured at fair value net of directly attributable transaction costs. Subsequently, debt is measured at amortized cost using the effective interest rate method. Debt is derecognized when the obligation under the liability is discharged, cancelled or has expired.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Term loan (EUR) | 724 | 724 |
Eurobonds | 597 | 599 |
Lease liabilities | 207 | 227 |
Other debt | 23 | 29 |
Subtotal | 1,553 | 1,578 |
Bank overdrafts | 1 | 0 |
Gross debt | 1,553 | 1,579 |
Cash and cash equivalents | (633) | (621) |
Net debt (cash) | 920 | 957 |
Total equity | 3,267 | 2,767 |
Net debt and total equity | 4,187 | 3,725 |
Net debt divided by net debt and total equity (in %) | 22% | 26% |
Total equity divided by net debt and total equity (in %) | 78% | 74% |
Movements of debt were as follows:
| \u00a0 | Term loans | Eurobonds | Lease liabilities | Other debt | Bank overdrafts | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 704 | 1,271 | 237 | 18 | - | 2,230 |
Acquisitions | - | - | - | - | - | - |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 504 | - | - | 10 | - | 513 |
| (488) | (675) | (71) | (4) | - | (1,238) |
Translation differences | 5 | - | 2 | - | - | 6 |
Other movements1 | (0) | 2 | 40 | - | 1 | 42 |
Balance as at December 31, 2024 | 724 | 597 | 207 | 23 | 1 | 1,553 |
From which current | 325 | - | 67 | 23 | 1 | 416 |
From which non-current | 399 | 597 | 140 | - | - | 1,137 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 724 | 597 | 207 | 23 | 1 | 1,553 |
Acquisitions | - | - | 2 | - | - | 2 |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 325 | - | - | 34 | - | 359 |
| (325) | - | (66) | (26) | - | (417) |
Translation differences | - | - | (10) | (2) | - | (13) |
Other movements1 | - | 1 | 94 | - | (0) | 95 |
Balance as at December 31, 2025 | 724 | 599 | 227 | 29 | 0 | 1,579 |
From which current | 400 | - | 60 | 29 | - | 489 |
From which non-current | 324 | 599 | 167 | - | - | 1,090 |
In July 2025, Signify entered into new long-term loan agreements consisting of EUR 325 million with maturity in August 2028. The proceeds were used to repay mainly in August 2025 its EUR 325 million short-term loans with original maturity date in October 2025.
As of December 31, 2025, the Company had EUR 400 million of outstanding loans maturing in December 2026, and EUR 325 million long-term loans maturing in August 2028, bearing interest at a variable rate based on EURIBOR plus a fixed margin of 1.30% and 1.00% respectively. In October 2025, Signify signed a new revolving credit facility (RCF) of EUR 600 million with a five-year maturity plus two one-year extension options replacing its EUR 500 million revolving credit facility maturing in January 2027. The new revolving credit facility has similar terms compared to the previous facility.
During 2025, Signify did not draw on either revolving credit facility.
The term loans and RCF agreement include a financial covenant providing that Signify maintains a net leverage ratio of no greater than 3.5x. The net leverage ratio may temporarily increase to 4.0x within 12 months of the closing of material acquisitions. The covenant does not apply if Signify has at least one investment grade rating, which is currently the case, as Signify has two investment grade ratings.
As of December 31, 2025, Signify had outstanding EUR 600 million of fixed rate notes due in May 2027 with an annual coupon of 2.375%.
Other debt includes short-term borrowings which Signify repays ultimately within one year. Borrowings which are drawn and repaid within the same quarter, with a maturity of less than three months, are reported on a net basis in the movement of other debt.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at amortized cost: The business model for these instruments is to hold them to collect contractual cash flows. This financial asset category mainly consists of Trade and other receivables;
Financial assets at fair value through profit or loss (FVTPL): The business model for these instruments is to hold them for trading. This financial asset category mainly consists of Signify's participations in Virtual Power Purchase Agreements and other Derivatives;
Financial assets at fair value through other comprehensive income (FVOCI): The business model for these instruments is to hold them to collect contractual cash flows and to sell them. Fair value gains and losses are subsequently not reclassified to profit or loss following the derecognition of the investment. This category consists of minor equity investments;
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
The summary of all financial assets and liabilities, including their classification and measurement and fair value hierarchy is presented below: |
| \u00a0 | Carried at | Gross amount recognized on the balance sheet | Amounts not offset on the balance sheet, but are subject to master netting arrangements | Net amount | Fair value hierarchy level | Estimated fair value |
|---|---|---|---|---|---|---|
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current financial assets1 | amortized cost | 23 | - | 23 | \u00a0 | 23 |
Unquoted equity shares | fair value (FVOCI) | 5 | - | 5 | 3 | 5 |
Trade and other receivables1 | amortized cost | 1,066 | - | 1,066 | \u00a0 | 1,066 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 17 | (8) | 9 | 2 | 17 |
Current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | - | - | - | 1 | - |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 10 | - | 10 | 3 | 14 |
Cash and cash equivalents | \u00a0 | 633 | - | 633 | \u00a0 | 633 |
Debt (Eurobonds) | amortized cost | (597) | - | (597) | 1 | (591) |
Debt (excluding Eurobonds)1 | amortized cost | (956) | - | (956) | 2 | (956) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (11) | 8 | (3) | 2 | (11) |
Trade and other payables1 | amortized cost | (1,586) | - | (1,586) | \u00a0 | (1,586) |
Contingent considerations | fair value (FVTPL) | (2) | - | (2) | 3 | (2) |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Current financial assets | amortized cost | 2 | \u00a0 | 2 | \u00a0 | 2 |
Non-current financial assets1 | amortized cost | 19 | - | 19 | \u00a0 | 19 |
Unquoted equity shares | fair value (FVOCI) | 4 | - | 4 | 3 | 4 |
Trade and other receivables1 | amortized cost | 894 | - | 894 | \u00a0 | 894 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 11 | (5) | 5 | 2 | 11 |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 5 | - | 5 | 3 | 7 |
Cash and cash equivalents | \u00a0 | 621 | - | 621 | \u00a0 | 621 |
Debt (Eurobonds) | amortized cost | (599) | - | (599) | 1 | (596) |
Debt (excluding Eurobonds)1 | amortized cost | (980) | - | (980) | 2 | (980) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (7) | 5 | (1) | 2 | (7) |
Trade and other payables1 | amortized cost | (1,360) | - | (1,360) | \u00a0 | (1,360) |
Contingent considerations | fair value (FVTPL) | (3) | - | (3) | 3 | (3) |
The estimated fair value of financial instruments has been determined by Signify using available market information and appropriate valuation methods. The estimates presented are not necessarily indicative of the amounts that will ultimately be realized by Signify upon maturity or disposal. The use of market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts.
The following hierarchy is applied to classify the financial assets and liabilities:
Instruments included in Level 1 are comprised primarily of listed Eurobonds classified as financial liabilities at amortized cost. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market.
Signify is exposed to several types of financial risks, as they arise in the normal course of business: interest rate risk, liquidity risk, currency risk, commodity price risk, credit risk and country risk. This note comprises the disclosures on Signify's financial risk management objectives, policies and procedures to monitor and manage these risks.
Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in the debt position create an inherent interest rate risk. Failure to effectively hedge this risk could negatively impact financial results.
Signify monitors interest rate coverage, short-term and long-term interest rate developments and has the flexibility to opt for different short-term interest periods for the variable debt instruments at roll-over dates and/or could enter into derivative financial instruments to fix interest rates for a certain period of time. As of December 31, 2025, Signify had a ratio of fixed-rate debt to total outstanding debt of approximately 52% (2024: 52%).
A sensitivity analysis conducted at reporting date shows that if interest rates were to increase instantaneously by 1% from their level of December 31, 2025, with all other variables held constant, the annualized net interest expense would decrease by EUR 1 million. This impact was based on the outstanding net floating debt position as of December 31, 2025.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.
Liquidity risk for Signify is monitored through the Treasury Risk Committee which tracks the development of the actual cash flow position and uses input from a number of sources in order to forecast the overall liquidity position.
The table below analyzes Signify's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
| \u00a0 | \u00a0 | Payments due by period | ||
|---|---|---|---|---|
| \u00a0 | Total | Less than | Between | Over |
Debt, including bank overdrafts | 1,352 | 429 | 923 | - |
Interest on debt | 63 | 41 | 22 | - |
Trade and other payables | 1,363 | 1,363 | - | - |
Lease liability | 268 | 66 | 137 | 65 |
Derivative liabilities | 7 | 7 | - | - |
Off-balance sheet commitments | 120 | 40 | 80 | - |
Purchase obligations1 | 358 | 148 | 208 | 2 |
Contractual cash obligations 2025 | 3,530 | 2,093 | 1,370 | 67 |
Contractual cash obligations 2024 | 3,805 | 2,234 | 1,513 | 58 |
Revolving credit facility (RCF) | 600 | - | - | - |
Signify invests surplus cash primarily in money market deposits with investment graded financial institutions, and with maturities up to three months, to ensure sufficient liquidity is available to meet liabilities when due.
Signify has various sources to mitigate liquidity risk. Signify pools cash from subsidiaries to the extent legally and economically feasible; cash not pooled remains available for operational or investment needs. The table below shows details of cash and cash equivalents and bank overdrafts as of the reporting date:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Cash at banks and in hand | 250 | 245 |
Short-term deposits | 359 | 363 |
Other cash equivalents | 24 | 13 |
Cash and cash equivalents | 633 | 621 |
Bank overdrafts | (1) | (0) |
Cash and cash equivalents and bank overdrafts | 633 | 621 |
Signify has a EUR 600 million revolving credit facility that can be used for general purposes. As of December 31, 2025, Signify did not have any amounts drawn under this facility.
Currency risk is the risk that reported financial performance, or the fair value or future cash flows of a financial instrument, will fluctuate because of changes in foreign exchange rates.
Signify operates in many countries and currencies and therefore currency fluctuations may inevitably impact its financial results. Signify is exposed to currency risk in the following areas:
Transaction exposures related to anticipated sales and purchases and on-balance-sheet receivables/payables resulting from such transactions;
Financing exposure arising from foreign currency intercompany and external debt and deposits;
Translation exposure of net income in foreign entities;
Translation exposure of foreign currency denominated equity invested in consolidated companies and goodwill;
Translation exposure to equity interests in non-functional-currency investments in associates and financial assets at fair value.
It is Signify\u2019s policy to reduce the volatility caused by foreign currency movements on its net earnings by hedging the anticipated net exposure of foreign currencies resulting from foreign currency sales and purchases. In general, net anticipated exposures are hedged during a period of 9 months in layers of 25% up to a hedge ratio of 75%, using derivatives.
Signify\u2019s policy requires significant committed foreign currency exposures to be fully hedged, generally using forwards. However, not every foreign currency can or shall be hedged as there may be regulatory barriers or prohibitive hedging cost preventing Signify from effectively and/or efficiently hedging its currency exposures. As a result, hedging activities cannot and will not eliminate all currency risks for anticipated and committed transaction exposures.
The following table outlines the estimated nominal value in millions of EUR for transaction exposures and related hedges for Signify\u2019s most significant currency exposures as per the hedging policy horizon:
| \u00a0 | Receivables / Sales | Payables / Purchases | ||
|---|---|---|---|---|
| \u00a0 | Exposure | Hedges | Exposure | Hedges |
Balance as at December 31 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Exposure currency | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
CNY | 2 | (2) | (534) | 349 |
PLN | 37 | (37) | (108) | 81 |
USD | 170 | (170) | (113) | 113 |
EUR1 | 52 | (52) | (18) | 18 |
CAD | 79 | (45) | - | - |
MXN | 5 | (5) | (16) | 16 |
Others | 57 | (57) | (5) | 5 |
Total 2025 | 402 | (369) | (793) | 581 |
Total 2024 | 570 | (540) | (902) | 684 |
As of December 31, 2025, a gain of EUR 1 million was deferred in equity as a result of these hedges (2024: gain of EUR 5 million). The result deferred in equity will be released to earnings in 2026 at the time when the related hedged transaction affects the Consolidated statement of income. During 2025, EUR nil million (2024: EUR nil million) was recorded within cost of goods sold in the Consolidated statement of income as a result of ineffectiveness on certain anticipated cash flow hedges.
The total net fair value of hedges related to transaction exposure as of December 31, 2025, was an unrealized asset of EUR 2 million (2024: asset EUR 2 million). An instantaneous 10% increase in the value of euro against all currencies, with all other variables held constant, would lead to a decrease of EUR 19 million in the value of the derivatives. The above sensitivity analysis includes a loss of EUR 5 million that would impact the income statement, which would partially offset the opposite revaluation effect on the underlying accounts receivable and payable, and the remaining loss of EUR 14 million would be recognized in equity to the extent that the cash flow hedges were effective.
Foreign exchange exposure also arises from loans and deposits. Where Signify enters into such arrangements the financing is generally provided in the functional currency of the subsidiary. The currency of Signify\u2019s external funding and liquid assets is matched with the required financing of subsidiaries either directly through external foreign currency loans and deposits or synthetically by using foreign exchange derivatives. In certain cases, where Signify subsidiaries may also have external foreign currency debt or liquid assets, these exposures are also hedged using foreign exchange derivatives. As of December 31, 2025, the fair value of these hedges was an unrealized asset of EUR 2 million (2024: asset EUR 4 million). An instantaneous 10% increase in the value of euro against all currencies, with all other variables held constant, would lead to a decrease of EUR 50 million in the value of the derivatives.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. As at December 31, 2025, no net investment hedges were outstanding (2024: nil). Signify may enter into further net investment hedges to partially offset these risks in the future. The unrealized loss on translation differences in 2025 of EUR 415 million (2024: unrealized gain of EUR 176 million) related primarily to the impact of translating US dollar-denominated investments into euros.
Commodity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in commodity prices.
Signify is a purchaser of certain base metals, precious metals and energy. Signify could hedge certain commodity price risks using derivative instruments to minimize significant, unanticipated earnings fluctuations caused by commodity price volatility. As of December 31, 2025, Signify had EUR 5 million of commodity derivatives recognized in the Statement of financial position (2024: EUR 10 million), which relate to Virtual Power Purchase Agreements. An increase of the energy prices by 10% will lead to the commodity derivatives value increase by EUR 3 million (2024: EUR 5 million increase).
Credit risk represents the loss that would be recognized at the reporting date if counterparties failed completely to perform their payment obligations as contracted. Credit risk is present within Signify trade and other receivables and contract assets. To have better insights into the credit exposures, Signify performs ongoing evaluations of the financial and non-financial condition of its customers and adjusts credit limits when appropriate. In instances where the creditworthiness of a customer is determined not to be sufficient to grant the credit limit required, there are a number of mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets.
Signify invests available cash and cash equivalents and enters into financial derivative instruments with various financial institutions and is exposed to credit risk with these counterparties. Signify does not enter into any financial derivative instruments to protect against default by financial institutions.
Where possible, Signify requires all financial institutions to complete legally enforceable netting agreements under an International Swap Dealers Association master agreement or otherwise prior to trading, and whenever possible, to have a solid credit rating from generally accepted rating agencies. Signify also regularly monitors the development of the credit risk of its financial counterparties.
Signify minimizes this risk by limiting the deposits made with any single bank and by making deposits, the majority of which are with banks that have strong credit ratings.
Maximum credit risk exposure for Signify equals carrying amounts of all financial assets recognized in the Statement of financial position plus off-balance sheet guarantees provided.
Country risk is the risk that political, legal, or economic developments in a single country could adversely impact Signify's performance. The country risk per country is defined as the sum of the equity of all subsidiaries and associated companies in country cross-border transactions, such as intercompany loans, accounts receivable from third parties and intercompany accounts receivable.
As of December 31, 2025, Signify had country risk exposure of EUR 2.5 billion in the United States and EUR 1.5 billion in the Netherlands. Countries where the risk exceeds EUR 200 million but was less than EUR 500 million are Belgium (EUR 478 million), Poland (EUR 435 million), China including Hong Kong (EUR 424 million) and France (EUR 246 million). Countries where the risk exceeded EUR 50 million but was less than EUR 200 million are Mexico, Saudi Arabia, Spain, Canada, United Kingdom, Australia and Germany. The degree of risk of a country is taken into account when new investments are considered. Signify does not, however, use financial derivative instruments to hedge country risk, except for the net investment hedge as described in the currency risk.
Income tax comprises current and deferred tax. Income tax is recognized in the Consolidated statement of income except to the extent that it relates to items recognized directly within equity or in Other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities are recognized, using the balance sheet method, for the expected tax consequences of temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantially enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Deferred tax liabilities for withholding taxes are recognized for subsidiaries in situations where the income is to be paid out as dividend in the foreseeable future and for undistributed earnings of unconsolidated companies to the extent that these withholding taxes are not expected to be refundable or deductible.
Signify has applied the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Changes in tax rates are reflected in the period when the change has been enacted or substantially enacted by the reporting date.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. The evaluation of the recoverability of deferred tax assets requires judgment about the future taxable profitability of the legal entity holding the tax loss carry forward. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the countries where the deferred tax assets originated and during the periods when the deferred tax assets become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A lack of future taxable profits or taxable profits below the level of current estimates may cause deferred tax assets to be impaired.
The ultimate tax effects of transactions may be uncertain for a considerable period of time, requiring management to estimate the related current and deferred tax treatments. In assessing the uncertainty, Signify considers whether it is probable that a taxation authority will accept or revise the uncertain tax treatment. Income tax payable includes liabilities for uncertain tax positions which are recognized when it is probable that tax will be due. To the extent uncertain tax positions relate to deferred tax assets, these are offset against each other. Actual tax assessments in relation to these uncertain tax positions may significantly deviate from estimates.
In determining the amount of current and deferred income tax, Signify takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes Signify to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact the income tax expense in the period that such a determination is made.
The components of income tax expense were as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Current tax expense | (37) | (45) |
Prior year benefit (expense) | (15) | 4 |
Current tax expense | (52) | (41) |
| \u00a0 | 2024 | 2025 |
|---|---|---|
Origination and reversal of tax losses, tax credits and temporary differences | 5 | (3) |
Change in tax losses, tax credits and temporary differences recognized | (16) | (13) |
Tax rate changes | - | - |
Prior year benefit (expense) | 2 | (5) |
Deferred tax benefit (expense) | (9) | (21) |
Signify\u2019s operations are subject to income taxes in various jurisdictions. The statutory income tax rates vary from 9% to 35%, which results in a difference between the weighted average statutory income tax rate and the Netherlands\u2019 statutory income tax rate of 25.8% (2024: 25.8%).
A reconciliation of the weighted average statutory income tax rate to the effective income tax rate is as follows:
| \u00a0 | 2024 | \u00a0 | 2025 | \u00a0 |
|---|---|---|---|---|
Income before taxes | 394 | \u00a0 | 321 | \u00a0 |
Weighted average statutory income tax rate | (100) | (25%) | (75) | (23%) |
Non-deductible expenses | (14) | (5%) | (11) | (3%) |
Tax incentives and exempt income | 22 | 6% | 23 | 7% |
Deferred tax expense related to (de)recognition of deferred tax assets - net | (16) | (4%) | (14) | (4%) |
Changes in the liability for uncertain tax positions | 62 | 16% | 11 | 3% |
Prior year tax benefit (expense) | (13) | (3%) | (1) | 0% |
Changes in tax rates | - | -% | - | 0% |
Other | (2) | (1%) | 5 | 1% |
Income tax expense recognized in Consolidated | (61) | (15%) | (62) | (19%) |
The weighted average statutory income tax rate decreased due to changes in the geographic distribution of profits.
The effective tax rate was 19% in 2025 (2024: 15%) which is below the statutory income tax rate of 25.8% in the Netherlands. The difference is primarily due to tax incentives and exempt income and changes in the liability for uncertain tax positions. Tax incentives and exempt income include a favorable foreign currency impact on income tax-related items. This is partly offset by non-deductible expenses and changes to recognition of temporary differences, which mostly represents deferred tax assets not fully recognized in the Netherlands.
Compared with 2024, the effective tax rate increased mainly because the tax benefit recognized from releases of uncertain tax positions was lower than in the prior year. In 2024, the income tax expense included a tax benefit from the resolution of tax uncertainties relating to multiple prior years in the Netherlands partly offset by a prior year tax expense in connection with this resolution.
| \u00a0 | Assets | Liabilities | Net |
|---|---|---|---|
2025 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 138 | (51) | 87 |
Property, plant and equipment | 8 | (37) | (29) |
Inventories | 37 | - | 37 |
Other receivables and assets | 23 | (1) | 22 |
Post-employment benefits | 33 | (1) | 32 |
Provisions | 41 | - | 41 |
Other liabilities | 56 | (15) | 41 |
Deferred tax assets on tax attributes1 | 107 | - | 107 |
Total allocations | 443 | (105) | 338 |
Set-off of deferred tax | (90) | 90 | - |
Net deferred tax assets | 353 | (15) | 338 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
2024 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 177 | (49) | 128 |
Property, plant and equipment | 11 | (33) | (22) |
Inventories | 45 | (1) | 44 |
Other receivables and assets | 32 | (13) | 19 |
Post-employment benefits | 38 | (1) | 37 |
Provisions | 45 | - | 45 |
Other liabilities | 64 | (15) | 49 |
Deferred tax assets on tax attributes1 | 74 | - | 74 |
Total allocations | 486 | (112) | 374 |
Set-off of deferred tax | (95) | 95 | - |
Net deferred tax assets | 391 | (17) | 374 |
The net deferred tax assets of EUR 338 million (2024: EUR 374 million) consist of deferred tax assets of EUR 353 million (2024: EUR 391 million) in countries with a net deferred tax asset position and deferred tax liabilities of EUR 15 million (2024: EUR 17 million) in countries with a net deferred tax liability position. An amount of EUR 21 million of deferred tax assets relates to several tax jurisdictions in which Signify has suffered a loss in the current or preceding period. Management projections support the assumption that it is probable that the results of future operations will generate enough taxable income to utilize these deferred tax assets.
Movement in deferred tax balances during 2025 and 2024 were as follows:
| \u00a0 | Balance | Recognized | Other | Balance |
|---|---|---|---|---|
2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 128 | (44) | 3 | 87 |
Property, plant and equipment | (22) | (8) | 1 | (29) |
Inventories | 44 | (5) | (2) | 37 |
Other receivables and assets | 19 | 3 | - | 22 |
Post-employment benefits | 37 | (4) | (1) | 32 |
Provisions | 45 | (4) | - | 41 |
Other liabilities | 49 | (2) | (6) | 41 |
Tax loss carryforwards (including tax credit carryforwards) | 74 | 43 | (10) | 107 |
Net deferred tax assets | 374 | (21) | (15) | 338 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 106 | 25 | (3) | 128 |
Property, plant and equipment | (30) | 7 | 1 | (22) |
Inventories | 50 | (8) | 2 | 44 |
Other receivables and assets | 16 | 3 | 0 | 19 |
Post-employment benefits | 49 | (12) | 0 | 37 |
Provisions | 48 | (3) | (1) | 44 |
Other liabilities | 58 | (8) | (1) | 49 |
Tax loss carryforwards (including tax credit carryforwards) | 85 | (13) | 2 | 74 |
Net deferred tax assets | 382 | (9) | 1 | 374 |
\u201cOther\u201d includes foreign currency translation differences and the impact of the remeasurement of the deferred tax balances relating to post-employment benefits.
At December 31, 2025, the temporary differences associated with investments, including potential income tax consequences on dividends for which no deferred tax liabilities are recognized, aggregate to EUR 271 million (2024: EUR 271 million).
At December 31, 2025, net operating loss carryforwards expire as follows:
Total | 2026 | 2027 | 2028 | 2029 | 2030 | After 2030 but not unlimited | Unlimited |
|---|---|---|---|---|---|---|---|
751 | 0 | 1 | 9 | 7 | 4 | 21 | 709 |
At December 31, 2025, the amount of operating loss and tax credit carryforwards for which no deferred tax assets have been recognized in the balance sheet was EUR 495 million (2024: EUR 497 million).
Out of EUR 495 million, an amount of EUR 455 million should not be limited in time, EUR 2 million will expire by 2026, EUR 1 million will expire by 2027, EUR 5 million will expire by 2028, EUR 6 million will expire by 2029, EUR 3 million will expire by 2030, and EUR 23 million expires after 2030, but carryforward is limited in time.
At December 31, 2025, the amount of deductible temporary differences for which no deferred tax asset has been recognized in the balance sheet is EUR 173 million (2024: EUR 142 million).
Classification of the income tax payable and receivable is as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Income tax receivable under other current assets | 52 | 37 |
Income tax receivable under other non-current assets | 1 | 1 |
Income tax payable under current liabilities | (19) | (20) |
Income tax payable under non-current liabilities | (68) | (48) |
Signify is within the scope of the OECD Pillar Two model rules, and it applies the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Under this legislation, the group is liable to pay a top-up tax for the difference between its GloBE effective tax rate in each jurisdiction and the 15% minimum rate. For the financial year 2025, Signify can apply a transitional safe harbor in all of the jurisdictions it operates. The income tax expense related to Pillar Two was EUR nil million in 2025 (2024: EUR nil million).
Signify is exposed to tax uncertainties for which, if deemed probable, a liability is recognized in the income tax payable under non-current liabilities, and when tax uncertainties relate to deferred tax assets, these are offset against each other. These uncertainties include, among others, the following:
Signify has issued transfer pricing directives, which are in accordance with international guidelines, such as those of the OECD. As transfer pricing has a cross-border effect, potential adjustments by local tax authorities on implemented transfer pricing procedures in a country may have an impact on results in another country. To reduce the transfer pricing uncertainties, monitoring procedures are carried out by Group Tax and Internal Audit to safeguard the correct implementation of the transfer pricing directives.
Due to the centralization of certain activities in a limited number of countries (such as research and development, IT, group functions and head office), costs are also centralized. Consequently, these costs and/or revenues must be allocated to the beneficiaries, i.e. the various Signify entities. This could lead to discussions with local tax authorities if they do not accept these charges. For that purpose, service contracts such as intra-group service agreements and licensing agreements are signed with Signify group entities. Tax authorities review these intra-group service and licensing agreements and may reject the implemented intra-group charges.
Signify may encounter tax uncertainties because of potential permanent establishments in countries where new operations are started or business models are altered. This could happen when operations in a country involve a foreign Signify organization. There is a risk that tax claims could arise on these operations in both countries.
When Signify has cross-border operations, there is a risk that tax claims will arise in all relevant countries.
Assessing the amount of tax liabilities for these tax uncertainties is highly judgmental and the timing of possible outflows, if any, is uncertain. Signify has considered the merits of its filing position in its overall evaluation of potential tax liabilities and believes it has adequate tax liabilities recorded in its Consolidated financial statements for exposures on these matters. Based on its evaluation of the potential tax liabilities and the merits of Signify's filing positions, it is unlikely that potential tax exposures over the amounts currently recorded as liabilities in its Consolidated financial statements will be material to its financial condition or future results of operations.
Tax uncertainties also include exposures with a risk assessment which are deemed lower than probable, but possible. The best estimate of the maximum amount in connection with these uncertainties is EUR 57 million (2024: EUR 55 million). Signify believes that in connection with these uncertainties it is probable that no additional taxes will be due. Therefore, no income tax payable is recognized.
Deferred tax assets and liabilities are recognized, using the balance sheet method, for the expected tax consequences of temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantially enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Deferred tax liabilities for withholding taxes are recognized for subsidiaries in situations where the income is to be paid out as dividend in the foreseeable future and for undistributed earnings of unconsolidated companies to the extent that these withholding taxes are not expected to be refundable or deductible.
Signify has applied the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Changes in tax rates are reflected in the period when the change has been enacted or substantially enacted by the reporting date.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10317": { "value": "Income tax comprises current and deferred tax. Income tax is recognized in the Consolidated statement of income except to the extent that it relates to items recognized directly within equity or in Other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax assets and liabilities are recognized, using the balance sheet method, for the expected tax consequences of temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantially enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Deferred tax liabilities for withholding taxes are recognized for subsidiaries in situations where the income is to be paid out as dividend in the foreseeable future and for undistributed earnings of unconsolidated companies to the extent that these withholding taxes are not expected to be refundable or deductible.
Signify has applied the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Changes in tax rates are reflected in the period when the change has been enacted or substantially enacted by the reporting date.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10319": { "value": "Deferred tax assets and liabilities are recognized, using the balance sheet method, for the expected tax consequences of temporary differences between the carrying amounts of assets and liabilities and the amounts used for taxation purposes. Deferred tax is not recognized for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets and liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantially enacted by the reporting date.
Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realized simultaneously.
Deferred tax liabilities for withholding taxes are recognized for subsidiaries in situations where the income is to be paid out as dividend in the foreseeable future and for undistributed earnings of unconsolidated companies to the extent that these withholding taxes are not expected to be refundable or deductible.
Signify has applied the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Changes in tax rates are reflected in the period when the change has been enacted or substantially enacted by the reporting date.
A deferred tax asset is recognized for unused tax losses, tax credits and deductible temporary differences, to the extent that it is probable that future taxable profits will be available against which they can be utilized. The evaluation of the recoverability of deferred tax assets requires judgment about the future taxable profitability of the legal entity holding the tax loss carry forward. The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income in the countries where the deferred tax assets originated and during the periods when the deferred tax assets become deductible. Management considers the scheduled reversal of deferred tax liabilities, projected future taxable income and tax planning strategies in making this assessment. A lack of future taxable profits or taxable profits below the level of current estimates may cause deferred tax assets to be impaired.
The ultimate tax effects of transactions may be uncertain for a considerable period of time, requiring management to estimate the related current and deferred tax treatments. In assessing the uncertainty, Signify considers whether it is probable that a taxation authority will accept or revise the uncertain tax treatment. Income tax payable includes liabilities for uncertain tax positions which are recognized when it is probable that tax will be due. To the extent uncertain tax positions relate to deferred tax assets, these are offset against each other. Actual tax assessments in relation to these uncertain tax positions may significantly deviate from estimates.
In determining the amount of current and deferred income tax, Signify takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. New information may become available that causes Signify to change its judgment regarding the adequacy of existing tax liabilities; such changes to tax liabilities will impact the income tax expense in the period that such a determination is made.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Origination and reversal of tax losses, tax credits and temporary differences | 5 | (3) |
Change in tax losses, tax credits and temporary differences recognized | (16) | (13) |
Tax rate changes | - | - |
Prior year benefit (expense) | 2 | (5) |
Deferred tax benefit (expense) | (9) | (21) |
| \u00a0 | Assets | Liabilities | Net |
|---|---|---|---|
2025 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 138 | (51) | 87 |
Property, plant and equipment | 8 | (37) | (29) |
Inventories | 37 | - | 37 |
Other receivables and assets | 23 | (1) | 22 |
Post-employment benefits | 33 | (1) | 32 |
Provisions | 41 | - | 41 |
Other liabilities | 56 | (15) | 41 |
Deferred tax assets on tax attributes1 | 107 | - | 107 |
Total allocations | 443 | (105) | 338 |
Set-off of deferred tax | (90) | 90 | - |
Net deferred tax assets | 353 | (15) | 338 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
2024 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 177 | (49) | 128 |
Property, plant and equipment | 11 | (33) | (22) |
Inventories | 45 | (1) | 44 |
Other receivables and assets | 32 | (13) | 19 |
Post-employment benefits | 38 | (1) | 37 |
Provisions | 45 | - | 45 |
Other liabilities | 64 | (15) | 49 |
Deferred tax assets on tax attributes1 | 74 | - | 74 |
Total allocations | 486 | (112) | 374 |
Set-off of deferred tax | (95) | 95 | - |
Net deferred tax assets | 391 | (17) | 374 |
The net deferred tax assets of EUR 338 million (2024: EUR 374 million) consist of deferred tax assets of EUR 353 million (2024: EUR 391 million) in countries with a net deferred tax asset position and deferred tax liabilities of EUR 15 million (2024: EUR 17 million) in countries with a net deferred tax liability position. An amount of EUR 21 million of deferred tax assets relates to several tax jurisdictions in which Signify has suffered a loss in the current or preceding period. Management projections support the assumption that it is probable that the results of future operations will generate enough taxable income to utilize these deferred tax assets.
Movement in deferred tax balances during 2025 and 2024 were as follows:
| \u00a0 | Balance | Recognized | Other | Balance |
|---|---|---|---|---|
2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 128 | (44) | 3 | 87 |
Property, plant and equipment | (22) | (8) | 1 | (29) |
Inventories | 44 | (5) | (2) | 37 |
Other receivables and assets | 19 | 3 | - | 22 |
Post-employment benefits | 37 | (4) | (1) | 32 |
Provisions | 45 | (4) | - | 41 |
Other liabilities | 49 | (2) | (6) | 41 |
Tax loss carryforwards (including tax credit carryforwards) | 74 | 43 | (10) | 107 |
Net deferred tax assets | 374 | (21) | (15) | 338 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Intangible assets | 106 | 25 | (3) | 128 |
Property, plant and equipment | (30) | 7 | 1 | (22) |
Inventories | 50 | (8) | 2 | 44 |
Other receivables and assets | 16 | 3 | 0 | 19 |
Post-employment benefits | 49 | (12) | 0 | 37 |
Provisions | 48 | (3) | (1) | 44 |
Other liabilities | 58 | (8) | (1) | 49 |
Tax loss carryforwards (including tax credit carryforwards) | 85 | (13) | 2 | 74 |
Net deferred tax assets | 382 | (9) | 1 | 374 |
\u201cOther\u201d includes foreign currency translation differences and the impact of the remeasurement of the deferred tax balances relating to post-employment benefits.
At December 31, 2025, the temporary differences associated with investments, including potential income tax consequences on dividends for which no deferred tax liabilities are recognized, aggregate to EUR 271 million (2024: EUR 271 million).
At December 31, 2025, net operating loss carryforwards expire as follows:
Total | 2026 | 2027 | 2028 | 2029 | 2030 | After 2030 but not unlimited | Unlimited |
|---|---|---|---|---|---|---|---|
751 | 0 | 1 | 9 | 7 | 4 | 21 | 709 |
At December 31, 2025, the amount of operating loss and tax credit carryforwards for which no deferred tax assets have been recognized in the balance sheet was EUR 495 million (2024: EUR 497 million).
Out of EUR 495 million, an amount of EUR 455 million should not be limited in time, EUR 2 million will expire by 2026, EUR 1 million will expire by 2027, EUR 5 million will expire by 2028, EUR 6 million will expire by 2029, EUR 3 million will expire by 2030, and EUR 23 million expires after 2030, but carryforward is limited in time.
At December 31, 2025, the amount of deductible temporary differences for which no deferred tax asset has been recognized in the balance sheet is EUR 173 million (2024: EUR 142 million).
Classification of the income tax payable and receivable is as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Income tax receivable under other current assets | 52 | 37 |
Income tax receivable under other non-current assets | 1 | 1 |
Income tax payable under current liabilities | (19) | (20) |
Income tax payable under non-current liabilities | (68) | (48) |
Signify is within the scope of the OECD Pillar Two model rules, and it applies the IAS 12 exception to recognize and disclose information about deferred tax assets and liabilities related to Pillar Two income taxes. Under this legislation, the group is liable to pay a top-up tax for the difference between its GloBE effective tax rate in each jurisdiction and the 15% minimum rate. For the financial year 2025, Signify can apply a transitional safe harbor in all of the jurisdictions it operates. The income tax expense related to Pillar Two was EUR nil million in 2025 (2024: EUR nil million).
Signify is exposed to tax uncertainties for which, if deemed probable, a liability is recognized in the income tax payable under non-current liabilities, and when tax uncertainties relate to deferred tax assets, these are offset against each other. These uncertainties include, among others, the following:
Signify has issued transfer pricing directives, which are in accordance with international guidelines, such as those of the OECD. As transfer pricing has a cross-border effect, potential adjustments by local tax authorities on implemented transfer pricing procedures in a country may have an impact on results in another country. To reduce the transfer pricing uncertainties, monitoring procedures are carried out by Group Tax and Internal Audit to safeguard the correct implementation of the transfer pricing directives.
Due to the centralization of certain activities in a limited number of countries (such as research and development, IT, group functions and head office), costs are also centralized. Consequently, these costs and/or revenues must be allocated to the beneficiaries, i.e. the various Signify entities. This could lead to discussions with local tax authorities if they do not accept these charges. For that purpose, service contracts such as intra-group service agreements and licensing agreements are signed with Signify group entities. Tax authorities review these intra-group service and licensing agreements and may reject the implemented intra-group charges.
Signify may encounter tax uncertainties because of potential permanent establishments in countries where new operations are started or business models are altered. This could happen when operations in a country involve a foreign Signify organization. There is a risk that tax claims could arise on these operations in both countries.
When Signify has cross-border operations, there is a risk that tax claims will arise in all relevant countries.
Assessing the amount of tax liabilities for these tax uncertainties is highly judgmental and the timing of possible outflows, if any, is uncertain. Signify has considered the merits of its filing position in its overall evaluation of potential tax liabilities and believes it has adequate tax liabilities recorded in its Consolidated financial statements for exposures on these matters. Based on its evaluation of the potential tax liabilities and the merits of Signify's filing positions, it is unlikely that potential tax exposures over the amounts currently recorded as liabilities in its Consolidated financial statements will be material to its financial condition or future results of operations.
Tax uncertainties also include exposures with a risk assessment which are deemed lower than probable, but possible. The best estimate of the maximum amount in connection with these uncertainties is EUR 57 million (2024: EUR 55 million). Signify believes that in connection with these uncertainties it is probable that no additional taxes will be due. Therefore, no income tax payable is recognized.
Income tax comprises current and deferred tax. Income tax is recognized in the Consolidated statement of income except to the extent that it relates to items recognized directly within equity or in Other comprehensive income. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Income tax receivable under other current assets | 52 | 37 |
Income tax receivable under other non-current assets | 1 | 1 |
Income tax payable under current liabilities | (19) | (20) |
Income tax payable under non-current liabilities | (68) | (48) |
Signify presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the Net income (loss) attributable to shareholders of Signify N.V. by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprises of restricted shares, conditional shares and performance shares granted to employees.
In millions of EUR, unless otherwise stated | 2024 | 2025 |
|---|---|---|
Net income attributable to shareholders of Signify N.V. | 328 | 254 |
Weighted average number of ordinary shares outstanding (after deduction of treasury shares) during the year | 126,221,752 | 123,089,869 |
Plus incremental shares assumed from conversions of: | \u00a0 | \u00a0 |
| 873,987 | 1,017,639 |
| 414,250 | 612,553 |
| 25,632 | 95,403 |
Diluted weighted average number of ordinary shares outstanding (after deduction of treasury shares) during the year | 127,535,620 | 124,815,464 |
Net income attributable to shareholders per ordinary share in EUR: | \u00a0 | \u00a0 |
| 2.60 | 2.06 |
| 2.57 | 2.03 |
Signify presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the Net income (loss) attributable to shareholders of Signify N.V. by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted EPS is determined by adjusting the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held, for the effects of all dilutive potential ordinary shares, which comprises of restricted shares, conditional shares and performance shares granted to employees.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i10889": { "value": "Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred. Non-controlling interests are measured at their proportionate share of the acquiree\u2019s identifiable net assets at the date of acquisition.
There were no acquisitions and divestments material to the Consolidated financial statements in 2025.
Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred. Non-controlling interests are measured at their proportionate share of the acquiree\u2019s identifiable net assets at the date of acquisition.
The measurement of goodwill at initial recognition is described under the Business combinations accounting policy in note 10, Acquisitions and divestments. Goodwill is subsequently measured at cost, less accumulated impairment losses.
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10883": { "value": "Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
Costs related to the acquisition, other than those associated with the issue of debt or equity securities, are expensed as incurred. Non-controlling interests are measured at their proportionate share of the acquiree\u2019s identifiable net assets at the date of acquisition.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10884": { "value": "Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
The measurement of goodwill at initial recognition is described under the Business combinations accounting policy in note 10, Acquisitions and divestments. Goodwill is subsequently measured at cost, less accumulated impairment losses.
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10885": { "value": "Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
The measurement of goodwill at initial recognition is described under the Business combinations accounting policy in note 10, Acquisitions and divestments. Goodwill is subsequently measured at cost, less accumulated impairment losses.
The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized as an intangible asset when Signify can demonstrate that: the product or process is technically and commercially feasible, the costs can be reliably measured, Signify has sufficient resources and the intention to complete the development.
The development expenditure capitalized comprises all directly attributable costs (including the cost of materials and direct labor). Other development expenditures and expenditures on research activities are recognized in the Consolidated statement of income. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Amortization of capitalized development expenditure is charged to the Consolidated statement of income on a straight- line basis over the estimated useful lives of the intangible assets in Research and development expenses.
Amortization of other intangible assets is reported in Selling, general and administrative expenses for brand names and customer relationships and in Cost of sales for technology-based and other intangible assets.
The expected useful lives in years of intangible assets excluding goodwill are as follows:
Product development | from 2 to 5 |
Software | from 3 to 10 |
Technology | from 2 to 20 |
Customer relations | from 5 to 20 |
Brand names | from 5 to 20 |
Other | from 2 to 10 |
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10886": { "value": "Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
The measurement of goodwill at initial recognition is described under the Business combinations accounting policy in note 10, Acquisitions and divestments. Goodwill is subsequently measured at cost, less accumulated impairment losses.
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
The cash flow projections used in the value in use calculation for the annual impairment test for goodwill require significant judgment and estimations, which are further disclosed in this note.
| \u00a0 | Goodwill | Customer relationships | Technology based | Brand names | Product development | Software | Other | Total |
|---|---|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,466 | 1,034 | 354 | 393 | 205 | 103 | 38 | 5,594 |
Accumulated amortization / impairment | (711) | (730) | (300) | (249) | (124) | (62) | (21) | (2,199) |
Book value | 2,755 | 304 | 54 | 144 | 81 | 41 | 17 | 3,396 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 41 | 7 | 2 | 49 |
Amortization | - | (36) | (16) | (12) | (27) | (14) | (3) | (107) |
Acquisitions | - | - | - | - | - | - | - | - |
Impairment | - | - | - | - | (2) | - | (0) | (2) |
Translation differences and other movements | 148 | 15 | 1 | 8 | 2 | 0 | 0 | 174 |
Total changes | 148 | (21) | (15) | (4) | 15 | (7) | (1) | 115 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,641 | 1,082 | 367 | 412 | 251 | 109 | 40 | 5,902 |
Accumulated depreciation / impairment | (737) | (798) | (329) | (272) | (155) | (75) | (24) | (2,391) |
Book value | 2,903 | 283 | 39 | 140 | 96 | 34 | 16 | 3,511 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 47 | 19 | 0 | 66 |
Amortization | - | (26) | (16) | (11) | (29) | (13) | (3) | (99) |
Acquisitions | 10 | - | - | - | - | - | - | 10 |
Impairment | - | - | - | - | (12) | (3) | (0) | (15) |
Translation differences and other movements | (299) | (28) | (1) | (15) | (5) | (5) | 5 | (348) |
Total changes | (288) | (54) | (16) | (26) | 1 | (2) | 1 | (385) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,301 | 976 | 339 | 370 | 273 | 121 | 44 | 5,424 |
Accumulated amortization / impairment | (687) | (747) | (317) | (256) | (176) | (89) | (26) | (2,298) |
Book value | 2,615 | 229 | 22 | 114 | 96 | 31 | 18 | 3,126 |
Goodwill as of December 31, 2025, was EUR 2,615 million. During the year ended December 31, 2025, a translation difference of EUR 296 million was mainly due to the change in the USD/EUR rate, which impacted the goodwill denominated in USD.
For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments.
Goodwill allocated to the cash-generating unit Professional (main geographies) is considered to be significant in comparison to the total book value of goodwill of Signify at December 31, 2025. The goodwill allocated to each of the cash-generating units as of December 31, 2024, and December 31, 2025, is presented below.
In millions of EUR | 2024 | 2025 |
|---|---|---|
Professional (main geographies) | 2,379 | 2,124 |
Consumer (main geographies) | 144 | 133 |
Other1 | 380 | 358 |
Book value | 2,903 | 2,615 |
The basis of the recoverable amount used of the cash-generating units is the value in use. In the annual impairment test performed in the fourth quarter of 2025, the estimated recoverable amount of the tested cash-generating units exceeded the carrying value of the units. Therefore, no impairment loss was recognized.
The key assumptions used in the impairment tests were the sales growth rates and the discount rates applied to the projected cash flows, while EBITA reflects the combined effects of sales growth and cost measures. These cash flow projections cover an initial period with specific estimates from 2026 to 2028. Projections were extrapolated with declining growth rates for a period of five years, after which a terminal value was calculated. The sales growth rates and EBITA used to estimate cash flows are based on past performance, external market growth assumptions, taking into account current market conditions, and industry long-term growth averages. The applied discount rates are determined based on the weighted average cost of capital, which reflects the risks relevant to the cash-generating units. These estimates inherently contain a degree of uncertainty as they relate to future events. Actual results may differ from these estimates.
EBITA (excluding impact for uncommitted restructurings) assumed for Professional (main geographies) is expected to increase over the projection period due to volume growth, positive sales mix and cost efficiencies. Cash flow projections for the impairment tests in 2025 and 2024 were based on the key assumptions included in the table below:
| \u00a0 | Compound sales growth rate1 | \u00a0 | ||
|---|---|---|---|---|
| \u00a0 | Initial period | Extrapolation period | Used to calculate terminal value | Pre-tax discount rates |
Professional (main geographies) 2025 | (0.1)% | 1.8% | 0.5% | 11.3% |
Professional (main geographies) 2024 | n.a. | 2.0% | 0.5% | 11.0% |
Based on the annual impairment test of Professional (main geographies), the estimated recoverable amount exceeds the carrying amount by approximately EUR 300 million. The following changes could, individually, cause the value in use to fall to the level of the carrying value, with all other assumptions held constant:
Key assumption | Deviation |
|---|---|
Compound sales growth rate \u2013 initial period | Decrease of more than 3 percentage points |
Compound sales growth rate \u2013 extrapolation period | Decrease of more than 4.5 percentage points |
Pre-tax discount rate | Increase of more than 0.9 percentage point |
Terminal growth rate | Decrease of 1 percentage point |
Business combinations are accounted for using the acquisition method. Under the acquisition method, the identifiable assets acquired, liabilities assumed and any non-controlling interest in the acquiree are recognized at the acquisition date, which is the date on which control is transferred to Signify.
Signify measures goodwill at the acquisition date as:
The fair value of the consideration transferred; plus
The recognized amount of any non-controlling interest in the acquiree; plus
If the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
The net recognized amount (generally fair value) of the identifiable assets acquired and liabilities assumed.
The measurement of goodwill at initial recognition is described under the Business combinations accounting policy in note 10, Acquisitions and divestments. Goodwill is subsequently measured at cost, less accumulated impairment losses.
The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized as an intangible asset when Signify can demonstrate that: the product or process is technically and commercially feasible, the costs can be reliably measured, Signify has sufficient resources and the intention to complete the development.
The development expenditure capitalized comprises all directly attributable costs (including the cost of materials and direct labor). Other development expenditures and expenditures on research activities are recognized in the Consolidated statement of income. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Amortization of capitalized development expenditure is charged to the Consolidated statement of income on a straight- line basis over the estimated useful lives of the intangible assets in Research and development expenses.
Amortization of other intangible assets is reported in Selling, general and administrative expenses for brand names and customer relationships and in Cost of sales for technology-based and other intangible assets.
The expected useful lives in years of intangible assets excluding goodwill are as follows:
Product development | from 2 to 5 |
Software | from 3 to 10 |
Technology | from 2 to 20 |
Customer relations | from 5 to 20 |
Brand names | from 5 to 20 |
Other | from 2 to 10 |
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
The cash flow projections used in the value in use calculation for the annual impairment test for goodwill require significant judgment and estimations, which are further disclosed in this note.
| \u00a0 | Goodwill | Customer relationships | Technology based | Brand names | Product development | Software | Other | Total |
|---|---|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,466 | 1,034 | 354 | 393 | 205 | 103 | 38 | 5,594 |
Accumulated amortization / impairment | (711) | (730) | (300) | (249) | (124) | (62) | (21) | (2,199) |
Book value | 2,755 | 304 | 54 | 144 | 81 | 41 | 17 | 3,396 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 41 | 7 | 2 | 49 |
Amortization | - | (36) | (16) | (12) | (27) | (14) | (3) | (107) |
Acquisitions | - | - | - | - | - | - | - | - |
Impairment | - | - | - | - | (2) | - | (0) | (2) |
Translation differences and other movements | 148 | 15 | 1 | 8 | 2 | 0 | 0 | 174 |
Total changes | 148 | (21) | (15) | (4) | 15 | (7) | (1) | 115 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,641 | 1,082 | 367 | 412 | 251 | 109 | 40 | 5,902 |
Accumulated depreciation / impairment | (737) | (798) | (329) | (272) | (155) | (75) | (24) | (2,391) |
Book value | 2,903 | 283 | 39 | 140 | 96 | 34 | 16 | 3,511 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 47 | 19 | 0 | 66 |
Amortization | - | (26) | (16) | (11) | (29) | (13) | (3) | (99) |
Acquisitions | 10 | - | - | - | - | - | - | 10 |
Impairment | - | - | - | - | (12) | (3) | (0) | (15) |
Translation differences and other movements | (299) | (28) | (1) | (15) | (5) | (5) | 5 | (348) |
Total changes | (288) | (54) | (16) | (26) | 1 | (2) | 1 | (385) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,301 | 976 | 339 | 370 | 273 | 121 | 44 | 5,424 |
Accumulated amortization / impairment | (687) | (747) | (317) | (256) | (176) | (89) | (26) | (2,298) |
Book value | 2,615 | 229 | 22 | 114 | 96 | 31 | 18 | 3,126 |
Goodwill as of December 31, 2025, was EUR 2,615 million. During the year ended December 31, 2025, a translation difference of EUR 296 million was mainly due to the change in the USD/EUR rate, which impacted the goodwill denominated in USD.
For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments.
Goodwill allocated to the cash-generating unit Professional (main geographies) is considered to be significant in comparison to the total book value of goodwill of Signify at December 31, 2025. The goodwill allocated to each of the cash-generating units as of December 31, 2024, and December 31, 2025, is presented below.
In millions of EUR | 2024 | 2025 |
|---|---|---|
Professional (main geographies) | 2,379 | 2,124 |
Consumer (main geographies) | 144 | 133 |
Other1 | 380 | 358 |
Book value | 2,903 | 2,615 |
The basis of the recoverable amount used of the cash-generating units is the value in use. In the annual impairment test performed in the fourth quarter of 2025, the estimated recoverable amount of the tested cash-generating units exceeded the carrying value of the units. Therefore, no impairment loss was recognized.
The key assumptions used in the impairment tests were the sales growth rates and the discount rates applied to the projected cash flows, while EBITA reflects the combined effects of sales growth and cost measures. These cash flow projections cover an initial period with specific estimates from 2026 to 2028. Projections were extrapolated with declining growth rates for a period of five years, after which a terminal value was calculated. The sales growth rates and EBITA used to estimate cash flows are based on past performance, external market growth assumptions, taking into account current market conditions, and industry long-term growth averages. The applied discount rates are determined based on the weighted average cost of capital, which reflects the risks relevant to the cash-generating units. These estimates inherently contain a degree of uncertainty as they relate to future events. Actual results may differ from these estimates.
EBITA (excluding impact for uncommitted restructurings) assumed for Professional (main geographies) is expected to increase over the projection period due to volume growth, positive sales mix and cost efficiencies. Cash flow projections for the impairment tests in 2025 and 2024 were based on the key assumptions included in the table below:
| \u00a0 | Compound sales growth rate1 | \u00a0 | ||
|---|---|---|---|---|
| \u00a0 | Initial period | Extrapolation period | Used to calculate terminal value | Pre-tax discount rates |
Professional (main geographies) 2025 | (0.1)% | 1.8% | 0.5% | 11.3% |
Professional (main geographies) 2024 | n.a. | 2.0% | 0.5% | 11.0% |
Based on the annual impairment test of Professional (main geographies), the estimated recoverable amount exceeds the carrying amount by approximately EUR 300 million. The following changes could, individually, cause the value in use to fall to the level of the carrying value, with all other assumptions held constant:
Key assumption | Deviation |
|---|---|
Compound sales growth rate \u2013 initial period | Decrease of more than 3 percentage points |
Compound sales growth rate \u2013 extrapolation period | Decrease of more than 4.5 percentage points |
Pre-tax discount rate | Increase of more than 0.9 percentage point |
Terminal growth rate | Decrease of 1 percentage point |
The additions for 2025 contain internally generated assets of EUR 47 million for product development and EUR 19 million for software.
The capitalized product development costs and software, for which amortization has not yet commenced, amounted to EUR 61 million as of December 31, 2025 (December 31, 2024: EUR 54 million).
As of December 31, 2025, the carrying amount of the customer relationships originating from the Cooper Lighting acquisition was EUR 202 million with a remaining amortization period of 14.8 years (2024: EUR 245 million; 15.8 years).
Signify has investments in several associates and joint ventures, none of which are regarded as individually material. In aggregate, the carrying amount, share of profit and other comprehensive income of the associates are shown in the Consolidated statement of financial position, Consolidated statement of income and Consolidated statement of comprehensive income.
Signify has investments in several associates and joint ventures, none of which are regarded as individually material. In aggregate, the carrying amount, share of profit and other comprehensive income of the associates are shown in the Consolidated statement of financial position, Consolidated statement of income and Consolidated statement of comprehensive income.
Signify does not have subsidiaries that have non-controlling interests that are material for its Consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10926": { "value": "The Consolidated financial statements comprise the assets and liabilities of approximately 150 legal entities. Set out below is a list of material subsidiaries, in alphabetical order, representing more than 5% of either the consolidated company sales, income from operations or net income (before any intra-company eliminations). All the entities are 100% owned.
Legal entity name | Principal country of business |
|---|---|
Cooper Lighting Netherlands B.V. | Netherlands |
Cooper Lighting, LLC | United States |
Genlyte Thomas Group LLC | United States |
Signify (China) Investment Co., Ltd. | China |
Signify France | France |
Signify GmbH | Germany |
Signify Holding B.V. | Netherlands |
Signify Netherlands B.V. | Netherlands |
Signify North America Corporation | United States |
Signify Poland Sp. z.o.o. | Poland |
Signify does not have subsidiaries that have non-controlling interests that are material for its Consolidated financial statements.
Signify considers the Board of Management and the Supervisory Board to be key management personnel as defined in IAS 24 \"Related parties\".
In 2025, the total remuneration costs relating to the members of Key Management amounted to EUR 6,380,167 (2024: EUR 6,333,856).
In 2025, the total remuneration costs relating to the members of the Board of Management amounted to EUR 5,675,667 (2024: EUR 5,573,855).
| \u00a0 | 2024 | 2025 |
|---|---|---|
Salary/Base compensation | 2,440,202 | 2,171,378 |
Annual incentive1 | 699,388 | 805,300 |
Long-term equity-based Incentive2 | 1,691,436 | 1,014,417 |
Pension allowances | 474,718 | 434,016 |
Pension scheme costs | 116,276 | 88,472 |
Other compensation3 | 132,496 | 116,861 |
Termination benefits4 | 19,339 | 1,045,223 |
Total costs | 5,573,855 | 5,675,667 |
For further information on remuneration costs, see chapter 10, Remuneration report.
The remuneration costs of the members of the Supervisory Board amounted to EUR 704,500 (2024: EUR 760,001).
| \u00a0 | 2024 | 2025 |
|---|---|---|
Membership | 523,125 | 495,000 |
Committees | 166,876 | 162,000 |
Other compensation1 | 70,000 | 47,500 |
Total costs | 760,001 | 704,500 |
Signify has investments in several associates and joint ventures, none of which are regarded as individually material. In aggregate, the carrying amount, share of profit and other comprehensive income of the associates are shown in the Consolidated statement of financial position, Consolidated statement of income and Consolidated statement of comprehensive income.
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. The useful lives and residual values are evaluated annually. The costs of property, plant and equipment comprise all directly attributable costs (including the cost of materials and direct labor). Government grants for assets are deducted from the cost of the related asset.
Depreciation of property, plant and equipment, other than freehold land, is calculated using the straight-line method taking into account the residual values and estimated useful lives and is primarily included in Cost of sales. Freehold land is not depreciated. Gains and losses on the sale of property, plant and equipment are included in Other business income and expense. Costs related to repair and maintenance activities are expensed in the period in which they are incurred unless leading to an extension of the original lifetime of capacity.
The expected useful lives in years of property, plant and equipment are as follows:
Building | from 5 to 50 |
Machinery and installations | from 3 to 20 |
Other equipment | from 2 to 10 |
Right-of-use assets | from 2 to 20 |
For a description of the accounting policies for asset impairment, refer to note 14, Intangible assets, which equally apply to property, plant and equipment.
| \u00a0 | Owned assets | Right-of-use assets | Property, plant and equipment | ||||||
|---|---|---|---|---|---|---|---|---|---|
Land and buildings | Machinery and installations | Other equipment | Assets under construction | Total | Land and buildings | Other equipment | Total | Total | |
Balance as at January 1, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 559 | 1,041 | 415 | 39 | 2,054 | 461 | 71 | 532 | 2,586 |
Accumulated amortization / impairment | (344) | (919) | (369) | - | (1,632) | (275) | (46) | (321) | (1,953) |
Book value | 215 | 122 | 46 | 39 | 422 | 186 | 25 | 211 | 633 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | 2 | 2 | 1 | 43 | 49 | 28 | 12 | 40 | 88 |
Assets available for use | 7 | 23 | 18 | (48) | - | - | - | - | - |
Transfer to assets classified as held for sale and other disposals | (10) | (2) | (0) | 0 | (13) | 0 | (1) | (1) | (14) |
Depreciation | (24) | (34) | (18) | - | (77) | (55) | (11) | (66) | (143) |
Impairment | (3) | (1) | (0) | (0) | (4) | (1) | - | (1) | (5) |
Reversal of impairment | - | 2 | 0 | - | 2 | - | - | - | 2 |
Translation differences and other movements | 1 | 2 | (4) | 2 | 1 | 2 | 4 | 6 | 7 |
Total changes | (27) | (8) | (4) | (3) | (42) | (26) | 4 | (23) | (65) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 535 | 1,001 | 378 | 37 | 1,950 | 492 | 85 | 577 | 2,527 |
Accumulated depreciation / impairment | (347) | (887) | (335) | - | (1,569) | (332) | (58) | (390) | (1,959) |
Book value | 188 | 114 | 43 | 37 | 382 | 159 | 27 | 186 | 568 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | 3 | 3 | 3 | 58 | 67 | 84 | 9 | 93 | 159 |
Assets available for use | 12 | 20 | 19 | (51) | 0 | - | - | - | 0 |
Acquisitions | 0 | 0 | 0 | - | 0 | 2 | - | 2 | 2 |
Transfer to assets classified as held for sale and other disposals | (4) | (4) | (0) | (0) | (8) | (1) | (1) | (1) | (10) |
Depreciation | (20) | (27) | (18) | (0) | (65) | (52) | (11) | (63) | (127) |
Impairment | (2) | (3) | (1) | (0) | (6) | (0) | - | (0) | (6) |
Translation differences and other movements | (8) | (6) | (3) | (5) | (23) | (6) | (0) | (6) | (29) |
Total changes | (19) | (17) | (0) | 2 | (35) | 27 | (3) | 24 | (11) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 479 | 741 | 342 | 38 | 1,601 | 481 | 92 | 572 | 2,174 |
Accumulated amortization / impairment | (311) | (644) | (300) | - | (1,255) | (295) | (67) | (362) | (1,617) |
Book value | 169 | 97 | 42 | 38 | 347 | 186 | 24 | 210 | 557 |
In 2025, the additions in land and buildings under right-of-use assets relate mostly to new real estate lease contracts, mainly in the Netherlands, Australia and the United States.
Depreciation of property, plant and equipment, other than freehold land, is calculated using the straight-line method taking into account the residual values and estimated useful lives and is primarily included in Cost of sales. Freehold land is not depreciated. Gains and losses on the sale of property, plant and equipment are included in Other business income and expense. Costs related to repair and maintenance activities are expensed in the period in which they are incurred unless leading to an extension of the original lifetime of capacity.
The expected useful lives in years of property, plant and equipment are as follows:
Building | from 5 to 50 |
Machinery and installations | from 3 to 20 |
Other equipment | from 2 to 10 |
Right-of-use assets | from 2 to 20 |
Property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. The useful lives and residual values are evaluated annually. The costs of property, plant and equipment comprise all directly attributable costs (including the cost of materials and direct labor). Government grants for assets are deducted from the cost of the related asset.
Depreciation of property, plant and equipment, other than freehold land, is calculated using the straight-line method taking into account the residual values and estimated useful lives and is primarily included in Cost of sales. Freehold land is not depreciated. Gains and losses on the sale of property, plant and equipment are included in Other business income and expense. Costs related to repair and maintenance activities are expensed in the period in which they are incurred unless leading to an extension of the original lifetime of capacity.
The expected useful lives in years of property, plant and equipment are as follows:
Building | from 5 to 50 |
Machinery and installations | from 3 to 20 |
Other equipment | from 2 to 10 |
Right-of-use assets | from 2 to 20 |
For a description of the accounting policies for asset impairment, refer to note 14, Intangible assets, which equally apply to property, plant and equipment.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i10981": { "value": "| \u00a0 | Owned assets | Right-of-use assets | Property, plant and equipment | ||||||
|---|---|---|---|---|---|---|---|---|---|
Land and buildings | Machinery and installations | Other equipment | Assets under construction | Total | Land and buildings | Other equipment | Total | Total | |
Balance as at January 1, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 559 | 1,041 | 415 | 39 | 2,054 | 461 | 71 | 532 | 2,586 |
Accumulated amortization / impairment | (344) | (919) | (369) | - | (1,632) | (275) | (46) | (321) | (1,953) |
Book value | 215 | 122 | 46 | 39 | 422 | 186 | 25 | 211 | 633 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | 2 | 2 | 1 | 43 | 49 | 28 | 12 | 40 | 88 |
Assets available for use | 7 | 23 | 18 | (48) | - | - | - | - | - |
Transfer to assets classified as held for sale and other disposals | (10) | (2) | (0) | 0 | (13) | 0 | (1) | (1) | (14) |
Depreciation | (24) | (34) | (18) | - | (77) | (55) | (11) | (66) | (143) |
Impairment | (3) | (1) | (0) | (0) | (4) | (1) | - | (1) | (5) |
Reversal of impairment | - | 2 | 0 | - | 2 | - | - | - | 2 |
Translation differences and other movements | 1 | 2 | (4) | 2 | 1 | 2 | 4 | 6 | 7 |
Total changes | (27) | (8) | (4) | (3) | (42) | (26) | 4 | (23) | (65) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 535 | 1,001 | 378 | 37 | 1,950 | 492 | 85 | 577 | 2,527 |
Accumulated depreciation / impairment | (347) | (887) | (335) | - | (1,569) | (332) | (58) | (390) | (1,959) |
Book value | 188 | 114 | 43 | 37 | 382 | 159 | 27 | 186 | 568 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Capital expenditure | 3 | 3 | 3 | 58 | 67 | 84 | 9 | 93 | 159 |
Assets available for use | 12 | 20 | 19 | (51) | 0 | - | - | - | 0 |
Acquisitions | 0 | 0 | 0 | - | 0 | 2 | - | 2 | 2 |
Transfer to assets classified as held for sale and other disposals | (4) | (4) | (0) | (0) | (8) | (1) | (1) | (1) | (10) |
Depreciation | (20) | (27) | (18) | (0) | (65) | (52) | (11) | (63) | (127) |
Impairment | (2) | (3) | (1) | (0) | (6) | (0) | - | (0) | (6) |
Translation differences and other movements | (8) | (6) | (3) | (5) | (23) | (6) | (0) | (6) | (29) |
Total changes | (19) | (17) | (0) | 2 | (35) | 27 | (3) | 24 | (11) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 479 | 741 | 342 | 38 | 1,601 | 481 | 92 | 572 | 2,174 |
Accumulated amortization / impairment | (311) | (644) | (300) | - | (1,255) | (295) | (67) | (362) | (1,617) |
Book value | 169 | 97 | 42 | 38 | 347 | 186 | 24 | 210 | 557 |
In 2025, the additions in land and buildings under right-of-use assets relate mostly to new real estate lease contracts, mainly in the Netherlands, Australia and the United States.
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
The cash flow projections used in the value in use calculation for the annual impairment test for goodwill require significant judgment and estimations, which are further disclosed in this note.
| \u00a0 | Goodwill | Customer relationships | Technology based | Brand names | Product development | Software | Other | Total |
|---|---|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,466 | 1,034 | 354 | 393 | 205 | 103 | 38 | 5,594 |
Accumulated amortization / impairment | (711) | (730) | (300) | (249) | (124) | (62) | (21) | (2,199) |
Book value | 2,755 | 304 | 54 | 144 | 81 | 41 | 17 | 3,396 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 41 | 7 | 2 | 49 |
Amortization | - | (36) | (16) | (12) | (27) | (14) | (3) | (107) |
Acquisitions | - | - | - | - | - | - | - | - |
Impairment | - | - | - | - | (2) | - | (0) | (2) |
Translation differences and other movements | 148 | 15 | 1 | 8 | 2 | 0 | 0 | 174 |
Total changes | 148 | (21) | (15) | (4) | 15 | (7) | (1) | 115 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,641 | 1,082 | 367 | 412 | 251 | 109 | 40 | 5,902 |
Accumulated depreciation / impairment | (737) | (798) | (329) | (272) | (155) | (75) | (24) | (2,391) |
Book value | 2,903 | 283 | 39 | 140 | 96 | 34 | 16 | 3,511 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 47 | 19 | 0 | 66 |
Amortization | - | (26) | (16) | (11) | (29) | (13) | (3) | (99) |
Acquisitions | 10 | - | - | - | - | - | - | 10 |
Impairment | - | - | - | - | (12) | (3) | (0) | (15) |
Translation differences and other movements | (299) | (28) | (1) | (15) | (5) | (5) | 5 | (348) |
Total changes | (288) | (54) | (16) | (26) | 1 | (2) | 1 | (385) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,301 | 976 | 339 | 370 | 273 | 121 | 44 | 5,424 |
Accumulated amortization / impairment | (687) | (747) | (317) | (256) | (176) | (89) | (26) | (2,298) |
Book value | 2,615 | 229 | 22 | 114 | 96 | 31 | 18 | 3,126 |
For impairment testing, goodwill is allocated to cash-generating units, which represent the lowest level at which the goodwill is monitored internally for management purposes. The cash-generating units correspond to the operating segments.
Goodwill allocated to the cash-generating unit Professional (main geographies) is considered to be significant in comparison to the total book value of goodwill of Signify at December 31, 2025. The goodwill allocated to each of the cash-generating units as of December 31, 2024, and December 31, 2025, is presented below.
In millions of EUR | 2024 | 2025 |
|---|---|---|
Professional (main geographies) | 2,379 | 2,124 |
Consumer (main geographies) | 144 | 133 |
Other1 | 380 | 358 |
Book value | 2,903 | 2,615 |
The basis of the recoverable amount used of the cash-generating units is the value in use. In the annual impairment test performed in the fourth quarter of 2025, the estimated recoverable amount of the tested cash-generating units exceeded the carrying value of the units. Therefore, no impairment loss was recognized.
The key assumptions used in the impairment tests were the sales growth rates and the discount rates applied to the projected cash flows, while EBITA reflects the combined effects of sales growth and cost measures. These cash flow projections cover an initial period with specific estimates from 2026 to 2028. Projections were extrapolated with declining growth rates for a period of five years, after which a terminal value was calculated. The sales growth rates and EBITA used to estimate cash flows are based on past performance, external market growth assumptions, taking into account current market conditions, and industry long-term growth averages. The applied discount rates are determined based on the weighted average cost of capital, which reflects the risks relevant to the cash-generating units. These estimates inherently contain a degree of uncertainty as they relate to future events. Actual results may differ from these estimates.
EBITA (excluding impact for uncommitted restructurings) assumed for Professional (main geographies) is expected to increase over the projection period due to volume growth, positive sales mix and cost efficiencies. Cash flow projections for the impairment tests in 2025 and 2024 were based on the key assumptions included in the table below:
| \u00a0 | Compound sales growth rate1 | \u00a0 | ||
|---|---|---|---|---|
| \u00a0 | Initial period | Extrapolation period | Used to calculate terminal value | Pre-tax discount rates |
Professional (main geographies) 2025 | (0.1)% | 1.8% | 0.5% | 11.3% |
Professional (main geographies) 2024 | n.a. | 2.0% | 0.5% | 11.0% |
Based on the annual impairment test of Professional (main geographies), the estimated recoverable amount exceeds the carrying amount by approximately EUR 300 million. The following changes could, individually, cause the value in use to fall to the level of the carrying value, with all other assumptions held constant:
Key assumption | Deviation |
|---|---|
Compound sales growth rate \u2013 initial period | Decrease of more than 3 percentage points |
Compound sales growth rate \u2013 extrapolation period | Decrease of more than 4.5 percentage points |
Pre-tax discount rate | Increase of more than 0.9 percentage point |
Terminal growth rate | Decrease of 1 percentage point |
Signify entered into contracts that convey the right to use the identified asset and as such Signify accounted for these contracts as a lessee.
Signify recognizes right-of-use assets at the commencement date of the lease (i.e. the date the underlying asset is available for use). Right-of-use assets are initially measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognized, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. The recognized right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Right-of-use assets are subject to impairment.
Signify applies the short-term lease recognition exemption to its short-term leases for real estate (i.e. those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered of low value. Lease payments on short-term leases and leases of low-value assets are recognized as an expense on a straight-line basis over the lease term.
Lease liabilities are measured at the present value of lease payments to be made over the lease term, discounted using the incremental borrowing rate. Lease payments include (in-substance) fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, the exercise price of a purchase option reasonably certain to be exercised and payments of penalties for terminating a lease. Lease liabilities increase to reflect the accretion of interest and decrease for the payments made. Lease liabilities are remeasured if there is a modification or reassessment of the lease.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i11473": { "value": "The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
The estimated fair value of financial instruments has been determined by Signify using available market information and appropriate valuation methods. The estimates presented are not necessarily indicative of the amounts that will ultimately be realized by Signify upon maturity or disposal. The use of market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts.
The following hierarchy is applied to classify the financial assets and liabilities:
Instruments included in Level 1 are comprised primarily of listed Eurobonds classified as financial liabilities at amortized cost. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i11475": { "value": "Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
Signify estimates lifetime expected loss allowance for all Trade receivables and Contract assets via calculating the expected credit losses. Trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due whereby the lifetime expected credit loss on the Trade receivables is recognized based on a matrix model calculated per country, which utilizes historical recoverability data and default probability per country.
As soon as individual trade accounts receivable can no longer be collected in a normal course of business and are expected to result in a loss, they are designated as doubtful trade accounts receivable and valued at the expected collectible amounts. They are written off when they are deemed to be uncollectable because of bankruptcy or other forms of receivership at the debtors. Any previously recognized expected loss is offset against the carrying amount of such trade receivable and the difference is taken as a loss accounted for within Selling, general and administrative expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i11476": { "value": "Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i11478": { "value": "The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized as an intangible asset when Signify can demonstrate that: the product or process is technically and commercially feasible, the costs can be reliably measured, Signify has sufficient resources and the intention to complete the development.
The development expenditure capitalized comprises all directly attributable costs (including the cost of materials and direct labor). Other development expenditures and expenditures on research activities are recognized in the Consolidated statement of income. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Amortization of capitalized development expenditure is charged to the Consolidated statement of income on a straight- line basis over the estimated useful lives of the intangible assets in Research and development expenses.
Amortization of other intangible assets is reported in Selling, general and administrative expenses for brand names and customer relationships and in Cost of sales for technology-based and other intangible assets.
The expected useful lives in years of intangible assets excluding goodwill are as follows:
Product development | from 2 to 5 |
Software | from 3 to 10 |
Technology | from 2 to 20 |
Customer relations | from 5 to 20 |
Brand names | from 5 to 20 |
Other | from 2 to 10 |
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i11480": { "value": "Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized as an intangible asset when Signify can demonstrate that: the product or process is technically and commercially feasible, the costs can be reliably measured, Signify has sufficient resources and the intention to complete the development.
The development expenditure capitalized comprises all directly attributable costs (including the cost of materials and direct labor). Other development expenditures and expenditures on research activities are recognized in the Consolidated statement of income. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Amortization of capitalized development expenditure is charged to the Consolidated statement of income on a straight- line basis over the estimated useful lives of the intangible assets in Research and development expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i11484": { "value": "The fair value of other intangible assets, which mainly consist of customer relations, brand names and technology-based intangibles acquired through business combinations is determined using a valuation technique that estimates the fair value of an asset based on market participants' expectations of the cash flows associated with that asset over its remaining useful life. Acquired finite-lived intangible assets are amortized using the straight-line method over their estimated useful life. The useful lives are evaluated annually. Intangible assets are initially capitalized at cost, with the exception of intangible assets acquired as part of a business combination that are capitalized at their acquisition-date fair values.
Expenditure on development activities, whereby research findings are applied to a plan or design for the production of new or substantially improved products and processes, is capitalized as an intangible asset when Signify can demonstrate that: the product or process is technically and commercially feasible, the costs can be reliably measured, Signify has sufficient resources and the intention to complete the development.
The development expenditure capitalized comprises all directly attributable costs (including the cost of materials and direct labor). Other development expenditures and expenditures on research activities are recognized in the Consolidated statement of income. Capitalized development expenditure is stated at cost less accumulated amortization and impairment losses. Amortization of capitalized development expenditure is charged to the Consolidated statement of income on a straight- line basis over the estimated useful lives of the intangible assets in Research and development expenses.
Amortization of other intangible assets is reported in Selling, general and administrative expenses for brand names and customer relationships and in Cost of sales for technology-based and other intangible assets.
The expected useful lives in years of intangible assets excluding goodwill are as follows:
Product development | from 2 to 5 |
Software | from 3 to 10 |
Technology | from 2 to 20 |
Customer relations | from 5 to 20 |
Brand names | from 5 to 20 |
Other | from 2 to 10 |
Goodwill and intangible assets not yet ready for use are not amortized but tested for impairment annually and whenever impairment indicators require impairment testing. Signify performed and completed annual impairment tests in the last quarter of the financial year. Judgment is required when analyzing impairments triggers and tests of goodwill and intangible assets not yet ready for use. These analyses are based on the estimation of the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
An impairment loss is recognized in the Consolidated statement of income whenever and to the extent that the carrying amount of a cash-generating unit exceeds the unit\u2019s recoverable amount, which is the greater of its value in use and fair value less costs of disposal.
Property, plant and equipment and finite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. Recoverability of assets to be held and used is assessed by a comparison of the carrying amount of an asset with the greater of its value in use and fair value less costs of disposal. Value in use is measured as the present value of future cash flows expected to be generated by the asset. If the carrying amount of an asset is deemed not recoverable, an impairment charge is recognized in the amount by which the carrying amount of the asset exceeds the recoverable amount. The review for impairment is carried out at the level where cash flows occur that are independent of other cash flows.
Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the Consolidated income statement.
| \u00a0 | Goodwill | Customer relationships | Technology based | Brand names | Product development | Software | Other | Total |
|---|---|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,466 | 1,034 | 354 | 393 | 205 | 103 | 38 | 5,594 |
Accumulated amortization / impairment | (711) | (730) | (300) | (249) | (124) | (62) | (21) | (2,199) |
Book value | 2,755 | 304 | 54 | 144 | 81 | 41 | 17 | 3,396 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 41 | 7 | 2 | 49 |
Amortization | - | (36) | (16) | (12) | (27) | (14) | (3) | (107) |
Acquisitions | - | - | - | - | - | - | - | - |
Impairment | - | - | - | - | (2) | - | (0) | (2) |
Translation differences and other movements | 148 | 15 | 1 | 8 | 2 | 0 | 0 | 174 |
Total changes | 148 | (21) | (15) | (4) | 15 | (7) | (1) | 115 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,641 | 1,082 | 367 | 412 | 251 | 109 | 40 | 5,902 |
Accumulated depreciation / impairment | (737) | (798) | (329) | (272) | (155) | (75) | (24) | (2,391) |
Book value | 2,903 | 283 | 39 | 140 | 96 | 34 | 16 | 3,511 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Change in book value: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Additions | - | - | - | - | 47 | 19 | 0 | 66 |
Amortization | - | (26) | (16) | (11) | (29) | (13) | (3) | (99) |
Acquisitions | 10 | - | - | - | - | - | - | 10 |
Impairment | - | - | - | - | (12) | (3) | (0) | (15) |
Translation differences and other movements | (299) | (28) | (1) | (15) | (5) | (5) | 5 | (348) |
Total changes | (288) | (54) | (16) | (26) | 1 | (2) | 1 | (385) |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Cost | 3,301 | 976 | 339 | 370 | 273 | 121 | 44 | 5,424 |
Accumulated amortization / impairment | (687) | (747) | (317) | (256) | (176) | (89) | (26) | (2,298) |
Book value | 2,615 | 229 | 22 | 114 | 96 | 31 | 18 | 3,126 |
The additions for 2025 contain internally generated assets of EUR 47 million for product development and EUR 19 million for software.
The capitalized product development costs and software, for which amortization has not yet commenced, amounted to EUR 61 million as of December 31, 2025 (December 31, 2024: EUR 54 million).
As of December 31, 2025, the carrying amount of the customer relationships originating from the Cooper Lighting acquisition was EUR 202 million with a remaining amortization period of 14.8 years (2024: EUR 245 million; 15.8 years).
Signify generated cash flows from operating activities of EUR 531 million in 2025. During 2025, the total cash position decreased by EUR 12 million and gross debt increased by EUR 25 million.
In line with its commitment to maintain a robust capital structure and an investment grade credit rating, as of December 31, 2025, the net leverage ratio was 1.5x (December 31, 2024: 1.3x).
Signify manages free cash flow performance by continuous structural working capital initiatives and gradual costs optimization, including post-merger integration costs related to previous acquisitions.
Signify is subject to certain debt covenants, for details refer to note 22, Debt.
Free cash flows for the year ended December 31, 2025, and comparative information are presented below:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Cash flows from operating activities | 514 | 531 |
Cash flows from investing activities | (72) | (110) |
Cash flows before financing activities | 442 | 421 |
| \u00a0 | \u00a0 | \u00a0 |
Cash flows from operating activities | 514 | 531 |
Net capital expenditures: | \u00a0 | \u00a0 |
| (48) | (64) |
| (51) | (68) |
| 22 | 40 |
Free cash flows | 438 | 440 |
Working capital position as at December 31, 2025, and comparative information are presented below:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Inventories | 1,035 | 929 |
Trade and other receivables1 | 1,018 | 848 |
Trade and other payables | (1,588) | (1,363) |
Other working capital items | (43) | (85) |
Working capital | 422 | 329 |
In July 2025, Signify entered into new long-term loan agreements consisting of EUR 325 million with maturity in August 2028. The proceeds were used to repay mainly in August 2025 its EUR 325 million short-term loans with original maturity date in October 2025.
As of December 31, 2025, the Company had EUR 400 million of outstanding loans maturing in December 2026, and EUR 325 million long-term loans maturing in August 2028, bearing interest at a variable rate based on EURIBOR plus a fixed margin of 1.30% and 1.00% respectively. In October 2025, Signify signed a new revolving credit facility (RCF) of EUR 600 million with a five-year maturity plus two one-year extension options replacing its EUR 500 million revolving credit facility maturing in January 2027. The new revolving credit facility has similar terms compared to the previous facility.
During 2025, Signify did not draw on either revolving credit facility.
The term loans and RCF agreement include a financial covenant providing that Signify maintains a net leverage ratio of no greater than 3.5x. The net leverage ratio may temporarily increase to 4.0x within 12 months of the closing of material acquisitions. The covenant does not apply if Signify has at least one investment grade rating, which is currently the case, as Signify has two investment grade ratings.
Inventories are stated at the lower of cost and net realizable value. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include direct labor and fixed and variable production overheads, considering the stage of completion and the normal capacity of production facilities. Costs of idle facility and abnormal waste are expensed. The cost of inventories is determined using the first-in, first-out (FIFO) method. On each reporting date, management performs an analysis of net realizable values and determines the lower of cost and net realizable value to measure its inventories. The write-down is included in Cost of sales.
Due to price erosion and technological developments, inventory valuation requires forward-looking estimates on future sales levels, future price erosion and related expected gross margin percentages.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Raw materials and components | 406 | 328 |
Finished goods | 629 | 601 |
Total | 1,035 | 929 |
The write-down of inventories to net realizable value amounted to EUR 42 million for the year ended December 31, 2025 (2024: EUR 44 million), which includes EUR 3 million (2024: EUR 5 million) related to restructuring programs.
Inventories are stated at the lower of cost and net realizable value. The cost of inventories comprises all costs of purchase, costs of conversion and other costs incurred in bringing the inventories to their present location and condition. The costs of conversion of inventories include direct labor and fixed and variable production overheads, considering the stage of completion and the normal capacity of production facilities. Costs of idle facility and abnormal waste are expensed. The cost of inventories is determined using the first-in, first-out (FIFO) method. On each reporting date, management performs an analysis of net realizable values and determines the lower of cost and net realizable value to measure its inventories. The write-down is included in Cost of sales.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i12176": { "value": "A financial asset is recognized when Signify becomes a party to a contract that is a financial instrument. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial assets and liabilities is at fair value. Dividend income is recognized when declared. After initial recognition, these financial assets are measured at amortized cost using the effective interest method, less loss allowance and net of discounts given or agreed to, if the offset requirements are met.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, Signify continues to recognize the transferred asset to the extent of its continuing involvement. In that case, Signify also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Signify has retained.
Financial assets arising from insurance contracts are only recognized when it is virtually certain that reimbursement will be received if Signify settles the obligation. Signify recognizes the reimbursement as a separate financial asset.
Signify estimates lifetime expected loss allowance for all Trade receivables and Contract assets via calculating the expected credit losses. Trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due whereby the lifetime expected credit loss on the Trade receivables is recognized based on a matrix model calculated per country, which utilizes historical recoverability data and default probability per country.
As soon as individual trade accounts receivable can no longer be collected in a normal course of business and are expected to result in a loss, they are designated as doubtful trade accounts receivable and valued at the expected collectible amounts. They are written off when they are deemed to be uncollectable because of bankruptcy or other forms of receivership at the debtors. Any previously recognized expected loss is offset against the carrying amount of such trade receivable and the difference is taken as a loss accounted for within Selling, general and administrative expenses.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Trade receivables | 966 | 805 |
Other receivables | 100 | 89 |
Total receivables, net of value allowance | 1,066 | 894 |
The aging of trade receivables, representing current and overdue, net of loss allowance, is as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Current | 917 | 760 |
Overdue 1-30 days | 27 | 18 |
Overdue 31-180 days | 22 | 27 |
Overdue >180 days | - | - |
Trade receivables, net | 966 | 805 |
The changes in loss allowance for accounts receivable are as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Balance as at January 1 | (83) | (78) |
Additions charged to expense | (3) | (3) |
Utilizations | 9 | 4 |
Translation differences and other movements | (2) | 5 |
Balance as at December 31 | (78) | (73) |
As per December 31, 2025, the loss allowance for accounts receivable included allowances for individually impaired receivables of EUR 67 million (2024: EUR 72 million).
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
A financial asset is recognized when Signify becomes a party to a contract that is a financial instrument. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial assets and liabilities is at fair value. Dividend income is recognized when declared. After initial recognition, these financial assets are measured at amortized cost using the effective interest method, less loss allowance and net of discounts given or agreed to, if the offset requirements are met.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, Signify continues to recognize the transferred asset to the extent of its continuing involvement. In that case, Signify also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Signify has retained.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at fair value through profit or loss (FVTPL): The business model for these instruments is to hold them for trading. This financial asset category mainly consists of Signify's participations in Virtual Power Purchase Agreements and other Derivatives;
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
Signify estimates lifetime expected loss allowance for all Trade receivables and Contract assets via calculating the expected credit losses. Trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due whereby the lifetime expected credit loss on the Trade receivables is recognized based on a matrix model calculated per country, which utilizes historical recoverability data and default probability per country.
As soon as individual trade accounts receivable can no longer be collected in a normal course of business and are expected to result in a loss, they are designated as doubtful trade accounts receivable and valued at the expected collectible amounts. They are written off when they are deemed to be uncollectable because of bankruptcy or other forms of receivership at the debtors. Any previously recognized expected loss is offset against the carrying amount of such trade receivable and the difference is taken as a loss accounted for within Selling, general and administrative expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i12168": { "value": "A financial asset is recognized when Signify becomes a party to a contract that is a financial instrument. Regular way purchases and sales of financial instruments are accounted for at the trade date. Initial measurement of financial assets and liabilities is at fair value. Dividend income is recognized when declared. After initial recognition, these financial assets are measured at amortized cost using the effective interest method, less loss allowance and net of discounts given or agreed to, if the offset requirements are met.
A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is primarily derecognized when:
The rights to receive cash flows from the asset have expired; or Signify has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a \"pass-through\" arrangement;
and either (a) Signify has transferred substantially all the risks and rewards of the asset, or (b) Signify has neither transferred nor retained substantially all the risks and rewards of the asset but has transferred control of the asset.
When Signify has neither transferred nor retained substantially all of the risks and rewards of the asset, nor transferred control of the asset, Signify continues to recognize the transferred asset to the extent of its continuing involvement. In that case, Signify also recognizes an associated liability. The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that Signify has retained.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at amortized cost: The business model for these instruments is to hold them to collect contractual cash flows. This financial asset category mainly consists of Trade and other receivables;
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i12170": { "value": "Signify estimates lifetime expected loss allowance for all Trade receivables and Contract assets via calculating the expected credit losses. Trade receivables and contract assets are grouped based on shared credit risk characteristics and the days past due whereby the lifetime expected credit loss on the Trade receivables is recognized based on a matrix model calculated per country, which utilizes historical recoverability data and default probability per country.
As soon as individual trade accounts receivable can no longer be collected in a normal course of business and are expected to result in a loss, they are designated as doubtful trade accounts receivable and valued at the expected collectible amounts. They are written off when they are deemed to be uncollectable because of bankruptcy or other forms of receivership at the debtors. Any previously recognized expected loss is offset against the carrying amount of such trade receivable and the difference is taken as a loss accounted for within Selling, general and administrative expenses.
The changes in loss allowance for accounts receivable are as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Balance as at January 1 | (83) | (78) |
Additions charged to expense | (3) | (3) |
Utilizations | 9 | 4 |
Translation differences and other movements | (2) | 5 |
Balance as at December 31 | (78) | (73) |
As per December 31, 2025, the loss allowance for accounts receivable included allowances for individually impaired receivables of EUR 67 million (2024: EUR 72 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfAllowanceForCreditLossesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i12171": { "value": "The changes in loss allowance for accounts receivable are as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Balance as at January 1 | (83) | (78) |
Additions charged to expense | (3) | (3) |
Utilizations | 9 | 4 |
Translation differences and other movements | (2) | 5 |
Balance as at December 31 | (78) | (73) |
As per December 31, 2025, the loss allowance for accounts receivable included allowances for individually impaired receivables of EUR 67 million (2024: EUR 72 million).
Credit risk represents the loss that would be recognized at the reporting date if counterparties failed completely to perform their payment obligations as contracted. Credit risk is present within Signify trade and other receivables and contract assets. To have better insights into the credit exposures, Signify performs ongoing evaluations of the financial and non-financial condition of its customers and adjusts credit limits when appropriate. In instances where the creditworthiness of a customer is determined not to be sufficient to grant the credit limit required, there are a number of mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets.
Signify invests available cash and cash equivalents and enters into financial derivative instruments with various financial institutions and is exposed to credit risk with these counterparties. Signify does not enter into any financial derivative instruments to protect against default by financial institutions.
Where possible, Signify requires all financial institutions to complete legally enforceable netting agreements under an International Swap Dealers Association master agreement or otherwise prior to trading, and whenever possible, to have a solid credit rating from generally accepted rating agencies. Signify also regularly monitors the development of the credit risk of its financial counterparties.
Signify minimizes this risk by limiting the deposits made with any single bank and by making deposits, the majority of which are with banks that have strong credit ratings.
Maximum credit risk exposure for Signify equals carrying amounts of all financial assets recognized in the Statement of financial position plus off-balance sheet guarantees provided.
The changes in loss allowance for accounts receivable are as follows:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Balance as at January 1 | (83) | (78) |
Additions charged to expense | (3) | (3) |
Utilizations | 9 | 4 |
Translation differences and other movements | (2) | 5 |
Balance as at December 31 | (78) | (73) |
As per December 31, 2025, the loss allowance for accounts receivable included allowances for individually impaired receivables of EUR 67 million (2024: EUR 72 million).
Signify is exposed to several types of financial risks, as they arise in the normal course of business: interest rate risk, liquidity risk, currency risk, commodity price risk, credit risk and country risk. This note comprises the disclosures on Signify's financial risk management objectives, policies and procedures to monitor and manage these risks.
Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in the debt position create an inherent interest rate risk. Failure to effectively hedge this risk could negatively impact financial results.
Signify monitors interest rate coverage, short-term and long-term interest rate developments and has the flexibility to opt for different short-term interest periods for the variable debt instruments at roll-over dates and/or could enter into derivative financial instruments to fix interest rates for a certain period of time. As of December 31, 2025, Signify had a ratio of fixed-rate debt to total outstanding debt of approximately 52% (2024: 52%).
A sensitivity analysis conducted at reporting date shows that if interest rates were to increase instantaneously by 1% from their level of December 31, 2025, with all other variables held constant, the annualized net interest expense would decrease by EUR 1 million. This impact was based on the outstanding net floating debt position as of December 31, 2025.
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.
Liquidity risk for Signify is monitored through the Treasury Risk Committee which tracks the development of the actual cash flow position and uses input from a number of sources in order to forecast the overall liquidity position.
The table below analyzes Signify's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
| \u00a0 | \u00a0 | Payments due by period | ||
|---|---|---|---|---|
| \u00a0 | Total | Less than | Between | Over |
Debt, including bank overdrafts | 1,352 | 429 | 923 | - |
Interest on debt | 63 | 41 | 22 | - |
Trade and other payables | 1,363 | 1,363 | - | - |
Lease liability | 268 | 66 | 137 | 65 |
Derivative liabilities | 7 | 7 | - | - |
Off-balance sheet commitments | 120 | 40 | 80 | - |
Purchase obligations1 | 358 | 148 | 208 | 2 |
Contractual cash obligations 2025 | 3,530 | 2,093 | 1,370 | 67 |
Contractual cash obligations 2024 | 3,805 | 2,234 | 1,513 | 58 |
Revolving credit facility (RCF) | 600 | - | - | - |
Signify invests surplus cash primarily in money market deposits with investment graded financial institutions, and with maturities up to three months, to ensure sufficient liquidity is available to meet liabilities when due.
Signify has various sources to mitigate liquidity risk. Signify pools cash from subsidiaries to the extent legally and economically feasible; cash not pooled remains available for operational or investment needs. The table below shows details of cash and cash equivalents and bank overdrafts as of the reporting date:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Cash at banks and in hand | 250 | 245 |
Short-term deposits | 359 | 363 |
Other cash equivalents | 24 | 13 |
Cash and cash equivalents | 633 | 621 |
Bank overdrafts | (1) | (0) |
Cash and cash equivalents and bank overdrafts | 633 | 621 |
Signify has a EUR 600 million revolving credit facility that can be used for general purposes. As of December 31, 2025, Signify did not have any amounts drawn under this facility.
Currency risk is the risk that reported financial performance, or the fair value or future cash flows of a financial instrument, will fluctuate because of changes in foreign exchange rates.
Signify operates in many countries and currencies and therefore currency fluctuations may inevitably impact its financial results. Signify is exposed to currency risk in the following areas:
Transaction exposures related to anticipated sales and purchases and on-balance-sheet receivables/payables resulting from such transactions;
Financing exposure arising from foreign currency intercompany and external debt and deposits;
Translation exposure of net income in foreign entities;
Translation exposure of foreign currency denominated equity invested in consolidated companies and goodwill;
Translation exposure to equity interests in non-functional-currency investments in associates and financial assets at fair value.
It is Signify\u2019s policy to reduce the volatility caused by foreign currency movements on its net earnings by hedging the anticipated net exposure of foreign currencies resulting from foreign currency sales and purchases. In general, net anticipated exposures are hedged during a period of 9 months in layers of 25% up to a hedge ratio of 75%, using derivatives.
Signify\u2019s policy requires significant committed foreign currency exposures to be fully hedged, generally using forwards. However, not every foreign currency can or shall be hedged as there may be regulatory barriers or prohibitive hedging cost preventing Signify from effectively and/or efficiently hedging its currency exposures. As a result, hedging activities cannot and will not eliminate all currency risks for anticipated and committed transaction exposures.
The following table outlines the estimated nominal value in millions of EUR for transaction exposures and related hedges for Signify\u2019s most significant currency exposures as per the hedging policy horizon:
| \u00a0 | Receivables / Sales | Payables / Purchases | ||
|---|---|---|---|---|
| \u00a0 | Exposure | Hedges | Exposure | Hedges |
Balance as at December 31 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Exposure currency | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
CNY | 2 | (2) | (534) | 349 |
PLN | 37 | (37) | (108) | 81 |
USD | 170 | (170) | (113) | 113 |
EUR1 | 52 | (52) | (18) | 18 |
CAD | 79 | (45) | - | - |
MXN | 5 | (5) | (16) | 16 |
Others | 57 | (57) | (5) | 5 |
Total 2025 | 402 | (369) | (793) | 581 |
Total 2024 | 570 | (540) | (902) | 684 |
As of December 31, 2025, a gain of EUR 1 million was deferred in equity as a result of these hedges (2024: gain of EUR 5 million). The result deferred in equity will be released to earnings in 2026 at the time when the related hedged transaction affects the Consolidated statement of income. During 2025, EUR nil million (2024: EUR nil million) was recorded within cost of goods sold in the Consolidated statement of income as a result of ineffectiveness on certain anticipated cash flow hedges.
The total net fair value of hedges related to transaction exposure as of December 31, 2025, was an unrealized asset of EUR 2 million (2024: asset EUR 2 million). An instantaneous 10% increase in the value of euro against all currencies, with all other variables held constant, would lead to a decrease of EUR 19 million in the value of the derivatives. The above sensitivity analysis includes a loss of EUR 5 million that would impact the income statement, which would partially offset the opposite revaluation effect on the underlying accounts receivable and payable, and the remaining loss of EUR 14 million would be recognized in equity to the extent that the cash flow hedges were effective.
Foreign exchange exposure also arises from loans and deposits. Where Signify enters into such arrangements the financing is generally provided in the functional currency of the subsidiary. The currency of Signify\u2019s external funding and liquid assets is matched with the required financing of subsidiaries either directly through external foreign currency loans and deposits or synthetically by using foreign exchange derivatives. In certain cases, where Signify subsidiaries may also have external foreign currency debt or liquid assets, these exposures are also hedged using foreign exchange derivatives. As of December 31, 2025, the fair value of these hedges was an unrealized asset of EUR 2 million (2024: asset EUR 4 million). An instantaneous 10% increase in the value of euro against all currencies, with all other variables held constant, would lead to a decrease of EUR 50 million in the value of the derivatives.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. As at December 31, 2025, no net investment hedges were outstanding (2024: nil). Signify may enter into further net investment hedges to partially offset these risks in the future. The unrealized loss on translation differences in 2025 of EUR 415 million (2024: unrealized gain of EUR 176 million) related primarily to the impact of translating US dollar-denominated investments into euros.
Commodity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in commodity prices.
Signify is a purchaser of certain base metals, precious metals and energy. Signify could hedge certain commodity price risks using derivative instruments to minimize significant, unanticipated earnings fluctuations caused by commodity price volatility. As of December 31, 2025, Signify had EUR 5 million of commodity derivatives recognized in the Statement of financial position (2024: EUR 10 million), which relate to Virtual Power Purchase Agreements. An increase of the energy prices by 10% will lead to the commodity derivatives value increase by EUR 3 million (2024: EUR 5 million increase).
Credit risk represents the loss that would be recognized at the reporting date if counterparties failed completely to perform their payment obligations as contracted. Credit risk is present within Signify trade and other receivables and contract assets. To have better insights into the credit exposures, Signify performs ongoing evaluations of the financial and non-financial condition of its customers and adjusts credit limits when appropriate. In instances where the creditworthiness of a customer is determined not to be sufficient to grant the credit limit required, there are a number of mitigation tools that can be utilized to close the gap, including reducing payment terms, cash on delivery, prepayments and pledges on assets.
Signify invests available cash and cash equivalents and enters into financial derivative instruments with various financial institutions and is exposed to credit risk with these counterparties. Signify does not enter into any financial derivative instruments to protect against default by financial institutions.
Where possible, Signify requires all financial institutions to complete legally enforceable netting agreements under an International Swap Dealers Association master agreement or otherwise prior to trading, and whenever possible, to have a solid credit rating from generally accepted rating agencies. Signify also regularly monitors the development of the credit risk of its financial counterparties.
Signify minimizes this risk by limiting the deposits made with any single bank and by making deposits, the majority of which are with banks that have strong credit ratings.
Maximum credit risk exposure for Signify equals carrying amounts of all financial assets recognized in the Statement of financial position plus off-balance sheet guarantees provided.
Country risk is the risk that political, legal, or economic developments in a single country could adversely impact Signify's performance. The country risk per country is defined as the sum of the equity of all subsidiaries and associated companies in country cross-border transactions, such as intercompany loans, accounts receivable from third parties and intercompany accounts receivable.
As of December 31, 2025, Signify had country risk exposure of EUR 2.5 billion in the United States and EUR 1.5 billion in the Netherlands. Countries where the risk exceeds EUR 200 million but was less than EUR 500 million are Belgium (EUR 478 million), Poland (EUR 435 million), China including Hong Kong (EUR 424 million) and France (EUR 246 million). Countries where the risk exceeded EUR 50 million but was less than EUR 200 million are Mexico, Saudi Arabia, Spain, Canada, United Kingdom, Australia and Germany. The degree of risk of a country is taken into account when new investments are considered. Signify does not, however, use financial derivative instruments to hedge country risk, except for the net investment hedge as described in the currency risk.
Trade and other payables are initially measured at fair value and subsequently at amortized cost. Trade payables are derecognized when the contractual obligation is either discharged, cancelled or expired.
The Company classifies financial liabilities that arise from supplier finance arrangement within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Company\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement.
Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Payables to suppliers | 1,042 | 915 |
Amounts payable to employees | 171 | 120 |
Customer rebates and refunds related | 176 | 146 |
Marketing and sales related | 72 | 59 |
Materials and fixed assets related | 47 | 46 |
Other payables | 79 | 77 |
Trade and other payables | 1,588 | 1,363 |
Certain Signify suppliers factor their trade receivables from Signify with third parties through supplier finance arrangements. As of December 31, 2025, approximately EUR 136\u00a0million (2024: EUR 149 million) of the Signify accounts payable were known to have been sold onward under such arrangement, of which suppliers have received payments for EUR 120 million (2024: EUR 149 million). The liabilities under supplier finance arrangements are due on average 124 days (2024: 117 days) after invoice date, while comparable trade payables that are not part of the supplier finance arrangements are due on average 123 days (2024: 118 days) after invoice date.
Signify continues to recognize these liabilities as Payables to suppliers and will settle the liabilities in line with the original payment terms of the related invoices.
Trade and other payables are initially measured at fair value and subsequently at amortized cost. Trade payables are derecognized when the contractual obligation is either discharged, cancelled or expired.
The Company classifies financial liabilities that arise from supplier finance arrangement within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Company\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement.
Cash flows related to liabilities arising from supplier finance arrangements that are classified in Trade and other payables in the consolidated statement of financial position are included in operating activities in the consolidated statement of cash flows.
Debt is initially measured at fair value net of directly attributable transaction costs. Subsequently, debt is measured at amortized cost using the effective interest rate method. Debt is derecognized when the obligation under the liability is discharged, cancelled or has expired.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
Trade and other payables are initially measured at fair value and subsequently at amortized cost. Trade payables are derecognized when the contractual obligation is either discharged, cancelled or expired.
The Company classifies financial liabilities that arise from supplier finance arrangement within Trade and other payables in the statement of financial position if they have a similar nature and function to trade payables. This is the case if the supplier finance arrangement is part of the working capital used in the Company\u2019s normal operating cycle, the level of security provided is similar to trade payables and the terms of the liabilities that are part of the supply chain finance arrangement are not substantially different from the terms of trade payables that are not part of the arrangement.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i12383": { "value": "Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, satisfied performance obligations but not yet billed the customer. These are recorded under either Other current assets or Other non-current assets. The contract assets are transferred to receivables when the rights become unconditional, which is mostly when the customer is billed. For accounting policy on the impairment of contract assets, refer to note 17, Trade and other receivables.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract assets | 41 | 35 |
Indirect taxes | 55 | 34 |
Prepayments | 43 | 50 |
Other assets | 35 | 21 |
Total | 173 | 140 |
From which current | 147 | 112 |
From which non-current | 26 | 28 |
Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, satisfied performance obligations but not yet billed the customer. These are recorded under either Other current assets or Other non-current assets. The contract assets are transferred to receivables when the rights become unconditional, which is mostly when the customer is billed. For accounting policy on the impairment of contract assets, refer to note 17, Trade and other receivables.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract assets | 41 | 35 |
Indirect taxes | 55 | 34 |
Prepayments | 43 | 50 |
Other assets | 35 | 21 |
Total | 173 | 140 |
From which current | 147 | 112 |
From which non-current | 26 | 28 |
Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, satisfied performance obligations but not yet billed the customer. These are recorded under either Other current assets or Other non-current assets. The contract assets are transferred to receivables when the rights become unconditional, which is mostly when the customer is billed. For accounting policy on the impairment of contract assets, refer to note 17, Trade and other receivables.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract assets | 41 | 35 |
Indirect taxes | 55 | 34 |
Prepayments | 43 | 50 |
Other assets | 35 | 21 |
Total | 173 | 140 |
From which current | 147 | 112 |
From which non-current | 26 | 28 |
Contract assets mostly comprise of unbilled positions, where Signify has, partially or in full, satisfied performance obligations but not yet billed the customer. These are recorded under either Other current assets or Other non-current assets. The contract assets are transferred to receivables when the rights become unconditional, which is mostly when the customer is billed. For accounting policy on the impairment of contract assets, refer to note 17, Trade and other receivables.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract assets | 41 | 35 |
Indirect taxes | 55 | 34 |
Prepayments | 43 | 50 |
Other assets | 35 | 21 |
Total | 173 | 140 |
From which current | 147 | 112 |
From which non-current | 26 | 28 |
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract liability | 224 | 208 |
Other tax liabilities | 79 | 76 |
Other liabilities | 39 | 72 |
Total | 342 | 356 |
From which current | 196 | 201 |
From which non-current | 145 | 155 |
Out of the total amount of EUR 224 million recognized in contract liabilities at the end of 2024 (2023: EUR 226 million), EUR 41 million has been recognized as revenue for the year ended December 31, 2025 (2024: EUR 55 million). The non-current portion of contract liabilities is recognized over time over the duration of the contract, generally beyond 1 and up to 15 years.
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract liability | 224 | 208 |
Other tax liabilities | 79 | 76 |
Other liabilities | 39 | 72 |
Total | 342 | 356 |
From which current | 196 | 201 |
From which non-current | 145 | 155 |
Out of the total amount of EUR 224 million recognized in contract liabilities at the end of 2024 (2023: EUR 226 million), EUR 41 million has been recognized as revenue for the year ended December 31, 2025 (2024: EUR 55 million). The non-current portion of contract liabilities is recognized over time over the duration of the contract, generally beyond 1 and up to 15 years.
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract liability | 224 | 208 |
Other tax liabilities | 79 | 76 |
Other liabilities | 39 | 72 |
Total | 342 | 356 |
From which current | 196 | 201 |
From which non-current | 145 | 155 |
Out of the total amount of EUR 224 million recognized in contract liabilities at the end of 2024 (2023: EUR 226 million), EUR 41 million has been recognized as revenue for the year ended December 31, 2025 (2024: EUR 55 million). The non-current portion of contract liabilities is recognized over time over the duration of the contract, generally beyond 1 and up to 15 years.
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract liability | 224 | 208 |
Other tax liabilities | 79 | 76 |
Other liabilities | 39 | 72 |
Total | 342 | 356 |
From which current | 196 | 201 |
From which non-current | 145 | 155 |
Out of the total amount of EUR 224 million recognized in contract liabilities at the end of 2024 (2023: EUR 226 million), EUR 41 million has been recognized as revenue for the year ended December 31, 2025 (2024: EUR 55 million). The non-current portion of contract liabilities is recognized over time over the duration of the contract, generally beyond 1 and up to 15 years.
Contract liabilities, recorded under Other current liabilities and Other non-current liabilities, consist of customer payments received in advance, for which Signify still needs to satisfy (part of) the performance obligations. Contract liabilities mainly consist of recurring services performance obligations, such as extended warranties, life-cycle services and cloud-enabled services as well as advances for projects.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Contract liability | 224 | 208 |
Other tax liabilities | 79 | 76 |
Other liabilities | 39 | 72 |
Total | 342 | 356 |
From which current | 196 | 201 |
From which non-current | 145 | 155 |
Out of the total amount of EUR 224 million recognized in contract liabilities at the end of 2024 (2023: EUR 226 million), EUR 41 million has been recognized as revenue for the year ended December 31, 2025 (2024: EUR 55 million). The non-current portion of contract liabilities is recognized over time over the duration of the contract, generally beyond 1 and up to 15 years.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. Dividends are recognized as a liability in the period in which they are declared. The income tax consequences of dividends are recognized when a liability to pay the dividend is recognized.
Treasury shares that are reacquired are recognized at cost, representing the market price on the acquisition date, and deducted from equity until the shares are cancelled or reissued. When reissued, shares are removed from treasury shares on a first-in, first-out (FIFO) basis. When treasury shares are delivered under Signify\u2019s share plans, the difference between the market price of the shares delivered and the cost is recorded in retained earnings, the market price is recorded in share premium. Upon cancellation, treasury shares are deducted from the share capital at their nominal value of EUR 0.01 per share and retained earnings for the difference.
Costs including dividend withholding tax in connection with Signify\u2019s purchase of treasury shares for capital reduction purposes are recorded in retained earnings.
The Company has an authorized share capital of EUR 6 million, divided into 300,000,000 ordinary shares with a nominal value of EUR 0.01 per share and 300,000,000 preference shares with a nominal value of EUR 0.01 per share.
On December 31, 2025, the issued and fully paid share capital consisted of 122,581,104 ordinary shares with a nominal value of EUR 0.01 per share (2024: 128,344,238).
As a defense measure, Stichting Continu\u00efteit Signify, a foundation organized under the laws of the Netherlands, has been granted the right to acquire preference shares in the Company. As of December 31, 2025, this right had not been exercised therefore no preference shares have been issued.
A proposal will be submitted to the 2026 Annual General meeting of Shareholders to pay a dividend of EUR 1.57 per ordinary share, in cash, from the 2025 net income.
In May 2025, the Company distributed a dividend of EUR 1.56 per ordinary share, representing a total value of EUR 195 million including costs.
The following table shows the movements in the outstanding number of shares over the last two years:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Balance as at January 1 | 126,315,101 | 126,169,871 |
Purchase of treasury shares | (513,800) | (7,202,664) |
Delivery of treasury shares | 368,570 | 575,442 |
Balance as at December 31 | 126,169,871 | 119,542,649 |
The following table shows the share transactions to cover obligations arising from share-based compensation plans (for further details refer to note 25, Share-based compensation):
| \u00a0 | 2024 | 2025 |
|---|---|---|
Shares acquired | 513,800 | 1,439,530 |
Average market price | EUR 26.29 | EUR 20.36 |
Amount paid | EUR 14 million | EUR 29 million |
Shares delivered | 368,570 | 575,442 |
Average price (FIFO) | EUR 45.57 | EUR 43.72 |
Cost of delivered shares | EUR 17 million | EUR 25 million |
Total shares in treasury at year-end | 2,174,367 | 3,038,455 |
Total cost | EUR 78 million | EUR 83 million |
In January 2025, the company announced a share repurchase program in line with its capital allocation policy. The repurchase program in 2025 included an allocation to cover share-based remuneration obligations, with the remainder allocated for the cancellation of shares.
The following table shows the transactions that took place to reduce share capital in 2025. There were no transactions in 2024.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Shares acquired | - | 5,763,134 |
Average market price | - | EUR 21.26 |
Amount paid | - | EUR 122 million |
Cancellation of treasury shares (number of shares) | - | 5,763,134 |
Cancellation of treasury shares (cost) | - | EUR 122 million |
In accordance with the Dutch Civil Code and statutory requirements in other countries, in certain circumstances legal reserves need to be established. Legal reserves are not available for distribution to the Company\u2019s shareholders. The currency translation reserve, cash flow hedging reserve and other reserves included in retained earnings include non-distributable amounts. If any reserve has a negative balance, distributions to shareholders are restricted to the extent of the negative amount.
The total distributable reserves as at December 31, 2025, amounted to EUR 2,405 million (2024: EUR 2,777 million). For further details of legal reserves, see note D, Shareholders' equity, in chapter 16, Signify N.V. financial statements.
The following table shows the limitations in the distribution of Shareholders' equity and the total distributable reserves:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Shareholders' equity as at December 31 | 3,162 | 2,673 |
Issued Share capital | 1 | 1 |
Currency translation reserve | 104 | - |
Cash flow hedges reserve | 4 | 1 |
Restrictions on subsidiaries to transfer funds to parent company | 137 | 129 |
Capitalized development costs reserve | 125 | 128 |
Revaluation reserve | 9 | 6 |
Reserves required by Articles of Association | 3 | 3 |
Limitations in the distribution of shareholders' equity | 385 | 268 |
Total distributable reserves as at December 31 | 2,777 | 2,405 |
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. Dividends are recognized as a liability in the period in which they are declared. The income tax consequences of dividends are recognized when a liability to pay the dividend is recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDividendsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i12477": { "value": "Treasury shares that are reacquired are recognized at cost, representing the market price on the acquisition date, and deducted from equity until the shares are cancelled or reissued. When reissued, shares are removed from treasury shares on a first-in, first-out (FIFO) basis. When treasury shares are delivered under Signify\u2019s share plans, the difference between the market price of the shares delivered and the cost is recorded in retained earnings, the market price is recorded in share premium. Upon cancellation, treasury shares are deducted from the share capital at their nominal value of EUR 0.01 per share and retained earnings for the difference.
Costs including dividend withholding tax in connection with Signify\u2019s purchase of treasury shares for capital reduction purposes are recorded in retained earnings.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i12478": { "value": "Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of shares are recognized as a deduction from equity. Dividends are recognized as a liability in the period in which they are declared. The income tax consequences of dividends are recognized when a liability to pay the dividend is recognized.
A proposal will be submitted to the 2026 Annual General meeting of Shareholders to pay a dividend of EUR 1.57 per ordinary share, in cash, from the 2025 net income.
In May 2025, the Company distributed a dividend of EUR 1.56 per ordinary share, representing a total value of EUR 195 million including costs.
Treasury shares that are reacquired are recognized at cost, representing the market price on the acquisition date, and deducted from equity until the shares are cancelled or reissued. When reissued, shares are removed from treasury shares on a first-in, first-out (FIFO) basis. When treasury shares are delivered under Signify\u2019s share plans, the difference between the market price of the shares delivered and the cost is recorded in retained earnings, the market price is recorded in share premium. Upon cancellation, treasury shares are deducted from the share capital at their nominal value of EUR 0.01 per share and retained earnings for the difference.
Costs including dividend withholding tax in connection with Signify\u2019s purchase of treasury shares for capital reduction purposes are recorded in retained earnings.
The following table shows the movements in the outstanding number of shares over the last two years:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Balance as at January 1 | 126,315,101 | 126,169,871 |
Purchase of treasury shares | (513,800) | (7,202,664) |
Delivery of treasury shares | 368,570 | 575,442 |
Balance as at December 31 | 126,169,871 | 119,542,649 |
The following table shows the share transactions to cover obligations arising from share-based compensation plans (for further details refer to note 25, Share-based compensation):
| \u00a0 | 2024 | 2025 |
|---|---|---|
Shares acquired | 513,800 | 1,439,530 |
Average market price | EUR 26.29 | EUR 20.36 |
Amount paid | EUR 14 million | EUR 29 million |
Shares delivered | 368,570 | 575,442 |
Average price (FIFO) | EUR 45.57 | EUR 43.72 |
Cost of delivered shares | EUR 17 million | EUR 25 million |
Total shares in treasury at year-end | 2,174,367 | 3,038,455 |
Total cost | EUR 78 million | EUR 83 million |
In January 2025, the company announced a share repurchase program in line with its capital allocation policy. The repurchase program in 2025 included an allocation to cover share-based remuneration obligations, with the remainder allocated for the cancellation of shares.
The following table shows the transactions that took place to reduce share capital in 2025. There were no transactions in 2024.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Shares acquired | - | 5,763,134 |
Average market price | - | EUR 21.26 |
Amount paid | - | EUR 122 million |
Cancellation of treasury shares (number of shares) | - | 5,763,134 |
Cancellation of treasury shares (cost) | - | EUR 122 million |
On December 31, 2025, the issued and fully paid share capital consisted of 122,581,104 ordinary shares with a nominal value of EUR 0.01 per share (2024: 128,344,238).
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "xbrlvalue-dividendsproposedordeclaredbeforefinancialstatementsauthorisedforissuebutnotrecognisedasdistributiontoownerspershare-i12497": { "value": "1.57", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersPerShare", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "xbrlvalue-dividendsrecognisedasdistributionstoownerspershare-i12498": { "value": "1.56", "decimals": 2, "dimensions": { "concept": "ifrs-full:DividendsRecognisedAsDistributionsToOwnersPerShare", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00", "unit": "iso4217:EUR/xbrli:shares" } }, "section-blocktag-i12593": { "value": "In accordance with the Dutch Civil Code and statutory requirements in other countries, in certain circumstances legal reserves need to be established. Legal reserves are not available for distribution to the Company\u2019s shareholders. The currency translation reserve, cash flow hedging reserve and other reserves included in retained earnings include non-distributable amounts. If any reserve has a negative balance, distributions to shareholders are restricted to the extent of the negative amount.
The total distributable reserves as at December 31, 2025, amounted to EUR 2,405 million (2024: EUR 2,777 million). For further details of legal reserves, see note D, Shareholders' equity, in chapter 16, Signify N.V. financial statements.
The following table shows the limitations in the distribution of Shareholders' equity and the total distributable reserves:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Shareholders' equity as at December 31 | 3,162 | 2,673 |
Issued Share capital | 1 | 1 |
Currency translation reserve | 104 | - |
Cash flow hedges reserve | 4 | 1 |
Restrictions on subsidiaries to transfer funds to parent company | 137 | 129 |
Capitalized development costs reserve | 125 | 128 |
Revaluation reserve | 9 | 6 |
Reserves required by Articles of Association | 3 | 3 |
Limitations in the distribution of shareholders' equity | 385 | 268 |
Total distributable reserves as at December 31 | 2,777 | 2,405 |
Debt is initially measured at fair value net of directly attributable transaction costs. Subsequently, debt is measured at amortized cost using the effective interest rate method. Debt is derecognized when the obligation under the liability is discharged, cancelled or has expired.
Lease liabilities are measured at the present value of lease payments to be made over the lease term, discounted using the incremental borrowing rate. Lease payments include (in-substance) fixed payments (less any lease incentives), variable lease payments that depend on an index or a rate, the exercise price of a purchase option reasonably certain to be exercised and payments of penalties for terminating a lease. Lease liabilities increase to reflect the accretion of interest and decrease for the payments made. Lease liabilities are remeasured if there is a modification or reassessment of the lease.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Term loan (EUR) | 724 | 724 |
Eurobonds | 597 | 599 |
Lease liabilities | 207 | 227 |
Other debt | 23 | 29 |
Subtotal | 1,553 | 1,578 |
Bank overdrafts | 1 | 0 |
Gross debt | 1,553 | 1,579 |
Cash and cash equivalents | (633) | (621) |
Net debt (cash) | 920 | 957 |
Total equity | 3,267 | 2,767 |
Net debt and total equity | 4,187 | 3,725 |
Net debt divided by net debt and total equity (in %) | 22% | 26% |
Total equity divided by net debt and total equity (in %) | 78% | 74% |
Movements of debt were as follows:
| \u00a0 | Term loans | Eurobonds | Lease liabilities | Other debt | Bank overdrafts | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 704 | 1,271 | 237 | 18 | - | 2,230 |
Acquisitions | - | - | - | - | - | - |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 504 | - | - | 10 | - | 513 |
| (488) | (675) | (71) | (4) | - | (1,238) |
Translation differences | 5 | - | 2 | - | - | 6 |
Other movements1 | (0) | 2 | 40 | - | 1 | 42 |
Balance as at December 31, 2024 | 724 | 597 | 207 | 23 | 1 | 1,553 |
From which current | 325 | - | 67 | 23 | 1 | 416 |
From which non-current | 399 | 597 | 140 | - | - | 1,137 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 724 | 597 | 207 | 23 | 1 | 1,553 |
Acquisitions | - | - | 2 | - | - | 2 |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 325 | - | - | 34 | - | 359 |
| (325) | - | (66) | (26) | - | (417) |
Translation differences | - | - | (10) | (2) | - | (13) |
Other movements1 | - | 1 | 94 | - | (0) | 95 |
Balance as at December 31, 2025 | 724 | 599 | 227 | 29 | 0 | 1,579 |
From which current | 400 | - | 60 | 29 | - | 489 |
From which non-current | 324 | 599 | 167 | - | - | 1,090 |
In July 2025, Signify entered into new long-term loan agreements consisting of EUR 325 million with maturity in August 2028. The proceeds were used to repay mainly in August 2025 its EUR 325 million short-term loans with original maturity date in October 2025.
As of December 31, 2025, the Company had EUR 400 million of outstanding loans maturing in December 2026, and EUR 325 million long-term loans maturing in August 2028, bearing interest at a variable rate based on EURIBOR plus a fixed margin of 1.30% and 1.00% respectively. In October 2025, Signify signed a new revolving credit facility (RCF) of EUR 600 million with a five-year maturity plus two one-year extension options replacing its EUR 500 million revolving credit facility maturing in January 2027. The new revolving credit facility has similar terms compared to the previous facility.
During 2025, Signify did not draw on either revolving credit facility.
The term loans and RCF agreement include a financial covenant providing that Signify maintains a net leverage ratio of no greater than 3.5x. The net leverage ratio may temporarily increase to 4.0x within 12 months of the closing of material acquisitions. The covenant does not apply if Signify has at least one investment grade rating, which is currently the case, as Signify has two investment grade ratings.
As of December 31, 2025, Signify had outstanding EUR 600 million of fixed rate notes due in May 2027 with an annual coupon of 2.375%.
Signify entered into new lease contracts mainly related to real estate in the Netherlands, Australia and the United States.
Other debt includes short-term borrowings which Signify repays ultimately within one year. Borrowings which are drawn and repaid within the same quarter, with a maturity of less than three months, are reported on a net basis in the movement of other debt.
Debt is initially measured at fair value net of directly attributable transaction costs. Subsequently, debt is measured at amortized cost using the effective interest rate method. Debt is derecognized when the obligation under the liability is discharged, cancelled or has expired.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i12598": { "value": "Movements of debt were as follows:
| \u00a0 | Term loans | Eurobonds | Lease liabilities | Other debt | Bank overdrafts | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 704 | 1,271 | 237 | 18 | - | 2,230 |
Acquisitions | - | - | - | - | - | - |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 504 | - | - | 10 | - | 513 |
| (488) | (675) | (71) | (4) | - | (1,238) |
Translation differences | 5 | - | 2 | - | - | 6 |
Other movements1 | (0) | 2 | 40 | - | 1 | 42 |
Balance as at December 31, 2024 | 724 | 597 | 207 | 23 | 1 | 1,553 |
From which current | 325 | - | 67 | 23 | 1 | 416 |
From which non-current | 399 | 597 | 140 | - | - | 1,137 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 724 | 597 | 207 | 23 | 1 | 1,553 |
Acquisitions | - | - | 2 | - | - | 2 |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 325 | - | - | 34 | - | 359 |
| (325) | - | (66) | (26) | - | (417) |
Translation differences | - | - | (10) | (2) | - | (13) |
Other movements1 | - | 1 | 94 | - | (0) | 95 |
Balance as at December 31, 2025 | 724 | 599 | 227 | 29 | 0 | 1,579 |
From which current | 400 | - | 60 | 29 | - | 489 |
From which non-current | 324 | 599 | 167 | - | - | 1,090 |
Debt is initially measured at fair value net of directly attributable transaction costs. Subsequently, debt is measured at amortized cost using the effective interest rate method. Debt is derecognized when the obligation under the liability is discharged, cancelled or has expired.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Term loan (EUR) | 724 | 724 |
Eurobonds | 597 | 599 |
Lease liabilities | 207 | 227 |
Other debt | 23 | 29 |
Subtotal | 1,553 | 1,578 |
Bank overdrafts | 1 | 0 |
Gross debt | 1,553 | 1,579 |
Cash and cash equivalents | (633) | (621) |
Net debt (cash) | 920 | 957 |
Total equity | 3,267 | 2,767 |
Net debt and total equity | 4,187 | 3,725 |
Net debt divided by net debt and total equity (in %) | 22% | 26% |
Total equity divided by net debt and total equity (in %) | 78% | 74% |
Movements of debt were as follows:
| \u00a0 | Term loans | Eurobonds | Lease liabilities | Other debt | Bank overdrafts | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 704 | 1,271 | 237 | 18 | - | 2,230 |
Acquisitions | - | - | - | - | - | - |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 504 | - | - | 10 | - | 513 |
| (488) | (675) | (71) | (4) | - | (1,238) |
Translation differences | 5 | - | 2 | - | - | 6 |
Other movements1 | (0) | 2 | 40 | - | 1 | 42 |
Balance as at December 31, 2024 | 724 | 597 | 207 | 23 | 1 | 1,553 |
From which current | 325 | - | 67 | 23 | 1 | 416 |
From which non-current | 399 | 597 | 140 | - | - | 1,137 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 724 | 597 | 207 | 23 | 1 | 1,553 |
Acquisitions | - | - | 2 | - | - | 2 |
Financing cash flows: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| 325 | - | - | 34 | - | 359 |
| (325) | - | (66) | (26) | - | (417) |
Translation differences | - | - | (10) | (2) | - | (13) |
Other movements1 | - | 1 | 94 | - | (0) | 95 |
Balance as at December 31, 2025 | 724 | 599 | 227 | 29 | 0 | 1,579 |
From which current | 400 | - | 60 | 29 | - | 489 |
From which non-current | 324 | 599 | 167 | - | - | 1,090 |
As of December 31, 2025, Signify had outstanding EUR 600 million of fixed rate notes due in May 2027 with an annual coupon of 2.375%.
Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify\u2019s provisions is as follows:
Environmental provisions - Measurement of liabilities associated with environmental obligations is based on current legal and constructive requirements. The carrying amount of environmental provisions is regularly reviewed and adjusted for new facts and changes in law;
Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it;
Product warranty - A provision for product warranty is recognized at the time of revenue recognition and reflects the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to the products. The provision is based on historical warranty data and a weighing of possible outcomes against their associated probabilities. Manufacturing of Signify\u2019s products involves complex processes and defects might occur. In addition, it is possible that some of Signify\u2019s products may not perform as expected (for example, in terms of estimated life span and projected energy savings). These defects or shortfalls may cause Signify to incur significant warranty, support and replacement costs;
Legal provisions \u2013 Liabilities and expected insurance recoveries, if any, are recorded separately. Balances are transferred to Other liabilities when the amount and timing of cash flows are no longer uncertain;
Onerous contract provisions - Provisions are recognized for a contract if it is onerous. The present obligation under the contract is measured and recognized as a provision. An onerous contract is a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
By their nature, the recognition and measurement of provisions involve the use of estimates and assumptions regarding the timing and the amount of outflows of resources. The main areas requiring significant estimation are as follows:
Estimates for environmental remediation may change significantly due to the emergence of additional information regarding the extent or nature of the contamination, the need to utilize alternative technologies, actions by regulatory authorities as well as changes in judgments and discount rates. Signify is exposed to environmental risks, mainly because it has been in the business of manufacturing products for more than a century. During that period, Signify has opened, discontinued and acquired many manufacturing plants and sites. Some of these plants and sites have been used for industrial purposes for decades and as such, there is a latent risk that these premises may have environmental conditions that require corrective actions as a result of such use. The environmental provisions include accrued costs recorded with respect to environmental remediation in various countries.
Provisions for product warranty reflect the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to products sold.
Signify and certain of its group companies are involved in legal proceedings and claims relating to various matters including commercial transactions, alleged intellectual property infringement and product liability claims for property damage and personal injury, alleged to have been caused by failure or malfunction of Signify products. The outcome of asserted claims and proceedings, or the impact of any claims that may be asserted in the future, cannot be predicted with certainty. Provisions for legal claims are recognized when it is probable that an outflow of resources will be required to settle an obligation, taking into account the advice from internal and external counsels, and a reliable estimate of the amount can be made.
| \u00a0 | Restruct-uring | Environ-mental | Product warranty | Legal | Other | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 121 | 99 | 103 | 50 | 95 | 470 |
Acquisitions | - | - | - | - | - | - |
Additions | 69 | 11 | 45 | 2 | 13 | 141 |
Utilizations | (133) | (14) | (52) | (1) | (15) | (215) |
Reclassifications | 0 | (1) | 0 | (0) | (0) | (1) |
Releases | (12) | (0) | (9) | (2) | (3) | (26) |
Changes in discount rate | - | (1) | - | - | 0 | (0) |
Accretion | - | 4 | - | 2 | 1 | 7 |
Translation differences and other movements | 0 | 1 | 4 | 3 | 2 | 10 |
Balance as at December 31, 2024 | 46 | 100 | 91 | 55 | 93 | 384 |
Short-term | 34 | 45 | 44 | 48 | 22 | 192 |
Long-term | 12 | 56 | 47 | 6 | 71 | 192 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 46 | 100 | 91 | 55 | 93 | 384 |
Acquisitions | - | - | 0 | - | 0 | 0 |
Additions | 59 | 14 | 42 | 2 | 12 | 129 |
Utilizations | (54) | (15) | (48) | (0) | (15) | (132) |
Reclassifications | 1 | (0) | - | (0) | (1) | (0) |
Releases | (5) | (1) | (10) | (0) | (6) | (23) |
Changes in discount rate | - | (2) | - | - | 0 | (2) |
Accretion | - | 3 | - | 3 | 1 | 7 |
Translation differences and other movements | (1) | (4) | (7) | (6) | (4) | (22) |
Balance as at December 31, 2025 | 46 | 95 | 66 | 53 | 80 | 341 |
Short-term | 41 | 18 | 30 | 47 | 20 | 156 |
Long-term | 5 | 77 | 36 | 6 | 60 | 185 |
During the year ended December 31, 2025, additions to restructuring provision included programs in Professional, Other (mainly in Belgium) and Conventional (mainly in Belgium). Utilizations of restructuring provision included payments related to restructuring programs in Professional and Conventional (mainly in Belgium).
Signify expects the provision will be mainly utilized within the next five years.
Signify expects the provision will be mainly utilized within the next two years.
The legal provisions were mainly related to the legal case as described below. Signify expects the provision will be mainly settled within a year.
On October 5, 2022, a jury in trial court in Connecticut awarded compensation of USD 90 million in a lawsuit against Signify relating to a workplace accident that occurred in September 2017 in a warehouse leased and operated by a Signify customer, where the customer's employee was injured when struck by a pallet of Signify products that was pushed off a storage rack by a temporary worker operating a forklift at the warehouse. In Q1 2023, the court issued an order reducing the jury\u2019s damages award (as allocated to Signify) to approximately USD 42 million.
Signify continues to exercise all its rights to appeal the verdict issued in this case. Signify's appeal to the Connecticut Appellate Court, challenging its liability in this matter, is currently pending.
Signify has comprehensive global liability insurance and has confirmation that the case is fully covered without reservations of rights, including interest and other costs. Both the legal provision and the insurance cover asset have been adjusted in the balance sheet as per year end without any net profit and loss impact.
Other provisions mainly comprise provisions for onerous contracts, other taxes, self-insurance, decommissioning and provision for employee jubilee funds. Other provisions are expected to be utilized mainly within the next five years.
Provisions are recognized if, as a result of a past event, Signify has a present legal or constructive obligation, it is probable that an outflow of economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Provisions are measured at the present value of the expenditures expected to be required to settle the obligation using a pre-tax discount rate that reflects current market assessments of time value of money. The increase in the provision due to passage of time is recognized as interest expense. Significant judgment is required in determining the amount and probability of resources outflow and discount rates used to calculate the present value of this outflow. A liability is recognized if the timing and amount of the settlement can be reliably estimated.
The accounting and presentation for some of Signify\u2019s provisions is as follows:
Environmental provisions - Measurement of liabilities associated with environmental obligations is based on current legal and constructive requirements. The carrying amount of environmental provisions is regularly reviewed and adjusted for new facts and changes in law;
Restructuring related provisions - The provision for restructuring relates to the estimated costs of programs that are planned and controlled by management that materially change the scope of Signify's business or the manner in which it is conducted. A provision is recognized when Signify has a detailed formal plan for the restructuring and has raised a valid expectation that it will carry out the restructuring by starting to implement the plan, or by announcing the plan's main features to those affected by it;
Product warranty - A provision for product warranty is recognized at the time of revenue recognition and reflects the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to the products. The provision is based on historical warranty data and a weighing of possible outcomes against their associated probabilities. Manufacturing of Signify\u2019s products involves complex processes and defects might occur. In addition, it is possible that some of Signify\u2019s products may not perform as expected (for example, in terms of estimated life span and projected energy savings). These defects or shortfalls may cause Signify to incur significant warranty, support and replacement costs;
Legal provisions \u2013 Liabilities and expected insurance recoveries, if any, are recorded separately. Balances are transferred to Other liabilities when the amount and timing of cash flows are no longer uncertain;
Onerous contract provisions - Provisions are recognized for a contract if it is onerous. The present obligation under the contract is measured and recognized as a provision. An onerous contract is a contract under which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
By their nature, the recognition and measurement of provisions involve the use of estimates and assumptions regarding the timing and the amount of outflows of resources. The main areas requiring significant estimation are as follows:
Estimates for environmental remediation may change significantly due to the emergence of additional information regarding the extent or nature of the contamination, the need to utilize alternative technologies, actions by regulatory authorities as well as changes in judgments and discount rates. Signify is exposed to environmental risks, mainly because it has been in the business of manufacturing products for more than a century. During that period, Signify has opened, discontinued and acquired many manufacturing plants and sites. Some of these plants and sites have been used for industrial purposes for decades and as such, there is a latent risk that these premises may have environmental conditions that require corrective actions as a result of such use. The environmental provisions include accrued costs recorded with respect to environmental remediation in various countries.
Provisions for product warranty reflect the estimated costs of replacement and free-of-charge services that will be incurred by Signify with respect to products sold.
Signify and certain of its group companies are involved in legal proceedings and claims relating to various matters including commercial transactions, alleged intellectual property infringement and product liability claims for property damage and personal injury, alleged to have been caused by failure or malfunction of Signify products. The outcome of asserted claims and proceedings, or the impact of any claims that may be asserted in the future, cannot be predicted with certainty. Provisions for legal claims are recognized when it is probable that an outflow of resources will be required to settle an obligation, taking into account the advice from internal and external counsels, and a reliable estimate of the amount can be made.
| \u00a0 | Restruct-uring | Environ-mental | Product warranty | Legal | Other | Total |
|---|---|---|---|---|---|---|
Balance as at January 1, 2024 | 121 | 99 | 103 | 50 | 95 | 470 |
Acquisitions | - | - | - | - | - | - |
Additions | 69 | 11 | 45 | 2 | 13 | 141 |
Utilizations | (133) | (14) | (52) | (1) | (15) | (215) |
Reclassifications | 0 | (1) | 0 | (0) | (0) | (1) |
Releases | (12) | (0) | (9) | (2) | (3) | (26) |
Changes in discount rate | - | (1) | - | - | 0 | (0) |
Accretion | - | 4 | - | 2 | 1 | 7 |
Translation differences and other movements | 0 | 1 | 4 | 3 | 2 | 10 |
Balance as at December 31, 2024 | 46 | 100 | 91 | 55 | 93 | 384 |
Short-term | 34 | 45 | 44 | 48 | 22 | 192 |
Long-term | 12 | 56 | 47 | 6 | 71 | 192 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Balance as at January 1, 2025 | 46 | 100 | 91 | 55 | 93 | 384 |
Acquisitions | - | - | 0 | - | 0 | 0 |
Additions | 59 | 14 | 42 | 2 | 12 | 129 |
Utilizations | (54) | (15) | (48) | (0) | (15) | (132) |
Reclassifications | 1 | (0) | - | (0) | (1) | (0) |
Releases | (5) | (1) | (10) | (0) | (6) | (23) |
Changes in discount rate | - | (2) | - | - | 0 | (2) |
Accretion | - | 3 | - | 3 | 1 | 7 |
Translation differences and other movements | (1) | (4) | (7) | (6) | (4) | (22) |
Balance as at December 31, 2025 | 46 | 95 | 66 | 53 | 80 | 341 |
Short-term | 41 | 18 | 30 | 47 | 20 | 156 |
Long-term | 5 | 77 | 36 | 6 | 60 | 185 |
During the year ended December 31, 2025, additions to restructuring provision included programs in Professional, Other (mainly in Belgium) and Conventional (mainly in Belgium). Utilizations of restructuring provision included payments related to restructuring programs in Professional and Conventional (mainly in Belgium).
Signify expects the provision will be mainly utilized within the next five years.
Signify expects the provision will be mainly utilized within the next two years.
The legal provisions were mainly related to the legal case as described below. Signify expects the provision will be mainly settled within a year.
On October 5, 2022, a jury in trial court in Connecticut awarded compensation of USD 90 million in a lawsuit against Signify relating to a workplace accident that occurred in September 2017 in a warehouse leased and operated by a Signify customer, where the customer's employee was injured when struck by a pallet of Signify products that was pushed off a storage rack by a temporary worker operating a forklift at the warehouse. In Q1 2023, the court issued an order reducing the jury\u2019s damages award (as allocated to Signify) to approximately USD 42 million.
Signify continues to exercise all its rights to appeal the verdict issued in this case. Signify's appeal to the Connecticut Appellate Court, challenging its liability in this matter, is currently pending.
Signify has comprehensive global liability insurance and has confirmation that the case is fully covered without reservations of rights, including interest and other costs. Both the legal provision and the insurance cover asset have been adjusted in the balance sheet as per year end without any net profit and loss impact.
Other provisions mainly comprise provisions for onerous contracts, other taxes, self-insurance, decommissioning and provision for employee jubilee funds. Other provisions are expected to be utilized mainly within the next five years.
Signify\u2019s retirement benefit obligation is calculated by an independent actuary, using the projected unit credit method. This calculation is performed separately for each plan by estimating the amount of the benefit that employees have earned in relation to their past services. The measurement date for all defined benefit plans is December 31. For plans with a relatively low defined-benefit obligation, Signify may decide to calculate the defined-benefit obligation with a lower frequency. The liability recognized in the Consolidated statement of financial position is the present value of these benefits at the end of the reporting period (defined-benefit obligation) less the fair value of plan assets. The defined-benefit obligation is determined by discounting the estimated future cash flows using a discount yield curve of high-quality corporate bonds with durations matching the terms of the benefits.
Pension costs in respect of defined benefit post-employment plans primarily represent the increase of the actuarial present value of the obligation for post-employment benefits based on employee service during the year. The increase in the defined-benefit obligation due to the passage of time and the expected return on plan assets, using the same interest rate as for the defined-benefit obligation, are included in the pension costs. Interest on the net defined-benefit obligation is recognized in Financing income and expenses in the Consolidated statement of income.
Past-service costs are recognized immediately in the Personnel costs in the Consolidated statement of income. Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity via other comprehensive income in the period in which they arise.
When a plan is changed, settled or when a plan is curtailed, the resulting change in the defined-benefit obligation that relates to past-service or the gain or loss on curtailment is recognized immediately in the Consolidated statement of income. Signify recognizes gains and losses on the settlement of a defined-benefit plan when the settlement occurs.
Signify presents all net defined-benefit post-employment obligations on one line within non-current liabilities on the Consolidated statement of financial position.
The valuation of defined benefit obligations is based on actuarial calculation that require specific assumptions, which are disclosed in this note.
Post-employment benefits covered in this note relate to defined-benefit pension and other post-retirement benefit plans, including defined-benefit retiree medical plans. The benefits provided by these plans are based on employees\u2019 years of service and compensation levels. Employee post-employment defined-benefit plans have been established in several countries in accordance with the legal requirements, customs and local practice.
| \u00a0 | 2024 | \u00a0 | 2025 | \u00a0 | ||
|---|---|---|---|---|---|---|
| \u00a0 | Obligation | Plan assets | Net Liability | Obligation | Plan assets | Net Liability |
Germany | 154 | (15) | 139 | 141 | 15 | 126 |
United States | 51 | - | 51 | 35 | - | 35 |
Other Countries | 112 | (47) | 65 | 106 | 43 | 63 |
Total Countries | 317 | (62) | 255 | 282 | 58 | 224 |
Signify has an unfunded pension plan in place for higher salaried employees with a net liability of EUR 13 million and a post-retirement welfare plan with a net liability of EUR 22 million. Signify expects cash outflows of EUR 4 million in 2026 for the unfunded plans.
For employees with a salary above a certain salary threshold, there is a funded defined-benefit pension plan which has a deficit of EUR 4 million. This plan has been closed for new entrants since January 1, 2018. Since 2016, Signify no longer makes any contributions to this plan but funds the liabilities when these are paid out to retirees. New employees accrue pension benefits through a defined-contribution plan. For other closed defined-benefit plans, Signify had an unfunded liability of EUR 122 million as at December 31, 2025. Signify expects cash outflows of EUR 15 million in 2026 for the pension plans. Cash outflows for the defined-benefit plans in countries other than the USA and Germany are expected to total EUR 11 million in 2026.
The defined-benefit plans expose Signify to various demographic and economic risks, such as longevity, investment, currency and interest rate risks and, in some cases, inflation risk. The latter plays a role in the assumed wage increase and in some plans with pension indexation.
The larger plans are governed by either independent boards, committees or trustees who have a legal obligation to evenly balance the interests of all stakeholders and operate under the local regulatory frameworks. These bodies are responsible for and have full discretion over the investment strategy of the plan assets; in general they manage pension fund risks by diversifying the investments of plan assets and by (partially) matching interest rate risk of liabilities.
Signify has an active de-risking strategy in which it constantly looks for opportunities to reduce the risks associated with its defined-benefit plans.
| \u00a0 | 2024 | 2025 | ||||
|---|---|---|---|---|---|---|
| \u00a0 | Obligation | Plan assets | Net Liability | Obligation | Plan assets | Net Liability |
Balance as at January 1, 2024 | 705 | (383) | 322 | 317 | (62) | 255 |
Service Costs | 9 | - | 9 | 6 | - | 6 |
(Negative) past service cost | (1) | - | (1) | 2 | - | 2 |
Admin expenses paid | - | 3 | 3 | - | - | - |
Settlements | (2) | - | (2) | - | - | - |
Plan amendments | (1) | \u00a0 | (1) | (1) | - | (1) |
Recognized in employee benefit expenses | 4 | 3 | 7 | 7 | - | 7 |
Interest (cost)/income | 19 | (6) | 13 | 10 | (2) | 8 |
Included in Statements of Income | 23 | (3) | 21 | 17 | (2) | 15 |
Actuarial gains/(losses) | \u00a0 | \u00a0 | \u00a0 | 0 | 0 | 0 |
| - | - | - | - | - | - |
| (11) | (1) | (13) | (3) | 2 | (1) |
| 2 | - | 2 | (2) | - | (2) |
Exchange rate differences | 4 | (7) | (2) | (8) | 1 | (7) |
Included in Statements of comprehensive income | (5) | (8) | (13) | (13) | 3 | (10) |
Employee contributions | 1 | (1) | - | 1 | (1) | - |
Employer contributions | - | (44) | (44) | - | (4) | (4) |
Benefits paid: | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 0 |
| (30) | \u00a0 | (30) | (25) | 0 | (25) |
| (52) | 52 | - | (8) | 8 | - |
Reclassification | (1) | - | (1) | (7) | - | (7) |
Derecognition | (324) | 324 | - | \u00a0 | \u00a0 | - |
Other | (406) | 331 | (75) | (39) | 3 | (36) |
Balance as at December 31 | 317 | (62) | 255 | 282 | (58) | 224 |
During 2025, US interest rates decreased by some 49 bps and this has been reflected in lower discount rates. For the Eurozone, the interest rates were some 47bps higher at 31 December than the year before. As such, the unfunded defined benefit plans in the US and the German plans experienced respectively losses and gains on the financial assumptions.
The plan assets at 31 December 2025 consisted of 90% unquoted assets, mainly related to insurance contracts. The remaining 10% of plan assets was invested in debt securities EUR 3 million and equities EUR 2 million. Plan assets in 2025 did not include property occupied by, or financial instruments issued by Signify.
At 31 December 2024, plan assets mainly related to insurance contracts.
The mortality tables used for Signify\u2019s major schemes are:
US: Base table PRI-2012 White Collar mortality table, projected forward with future mortality improvements according to Scale MP-2021;
Germany: Richttafeln 2018 G K. Heubeck.
The weighted averages of the assumptions used to calculate the defined-benefit obligation as of December 31, 2025, are shown in the table below. The assumptions for pension cost, healthcare cost, and wage increases are only relevant for a limited number of plans.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Discount rate | 4.6% | 4.7% |
Pension cost increases | 1.0% | 1.0% |
Healthscare cost increases | 1.1% | 0.9% |
Wage increases | 2.3% | 2.5% |
The average duration of the defined-benefit obligation of the defined-benefit plans is 7.4 years.
For the defined-benefit plans in the US and Germany, the average duration is respectively 6.4 years and 6.7 years. The average discount rates for the plans in these countries are respectively 4.9% and 3.8%. The pension cost increase rate assumption for the German defined-benefit plans is 2.0%.
The table below illustrates the approximate impact on the defined-benefit obligation if Signify were to change key assumptions. The defined-benefit obligation was recalculated using a change of 1% in the respective assumptions which overall is considered a reasonably possible change. The impact on the defined-benefit obligation of changes in discount rate is for funded plans normally accompanied by offsetting movements in plan assets, especially when using matching strategies.
| \u00a0 | 2024 | 2025 |
|---|---|---|
Increase | \u00a0 | \u00a0 |
Discount rate (1% movement) | (23) | (19) |
Wage change (1% movement) | 3 | 4 |
Pension indexation change (1% movement) | 8 | 10 |
Longevity (see explanation) | 9 | 8 |
Healthcare cost change (1% movement) | 2 | 3 |
Decrease | \u00a0 | \u00a0 |
Discount rate (1% movement) | 25 | 22 |
Wage change (1% movement) | (5) | (3) |
Pension indexation change (1% movement) | (7) | (9) |
Longevity (see explanation) | (12) | (7) |
Healthcare cost change (1% movement) | (2) | (2) |
Longevity also impacts the post-employment defined-benefit obligation which is illustrated in the above sensitivity table for the impact of a 10% increase and a 10% decrease in the assumed rates of mortality for Signify\u2019s major schemes. A 10% decrease in assumed mortality rates equals improvement of life expectancy by six months to a year. Vice versa, an increase in the assumed mortality rates equals a reduction of life expectancy.
Environmental provisions - Measurement of liabilities associated with environmental obligations is based on current legal and constructive requirements. The carrying amount of environmental provisions is regularly reviewed and adjusted for new facts and changes in law;
The cost of equity-settled transactions is determined by the fair value at the grant date using an appropriate valuation model.
The grant-date fair value of equity-settled share-based payment awards granted to employees is recognized as personnel expense, with a corresponding increase in equity, over the vesting period of the award. The cumulative expense recognized for equity-settled transactions at each reporting date reflects Signify\u2019s best estimate of the number of equity instruments that will ultimately vest.
Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of Signify\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
The total share-based compensation costs for the period ended December 31, 2025, amounted to EUR 20 million (period ended December 31, 2024: EUR 31 million).
Under the Signify Long-term Incentive Plan (LTIP), which is equity settled, eligible employees are granted both conditional and performance shares. Conditional shares have a three-year cliff vesting period and will vest if a grantee is still employed with Signify at the vesting date.
Vesting of performance shares is conditional on the achievement of performance conditions measured over a period of three years. The performance condition measurement is based on four measures, each one of them with an equal weight of 25% of the shares:
Total shareholder return (TSR);
Free cash flow (FCF);
Sustainability;
Return on capital employed (ROCE).
For the Board of Management and certain members of senior management, the LTIP consists of performance shares only. Shares are conditionally granted annually.
In addition to shares awarded under the Signify LTIP, Signify may in individual cases, such as in the hiring process of members of (senior) management, also grant restricted shares. Restricted shares have either a three-year cliff vesting period or vest gradually over the vesting period of one, two or three years.
Under the terms of the employee stock purchase plan (ESPP), employees are eligible to purchase a limited number of Signify shares at discounted prices through payroll withholdings.
The fair value of shares granted with the market performance condition of relative TSR is measured based on Monte Carlo simulation. The closing share price at grant date is adjusted for the present value of expected dividends during the vesting period, as participants are not compensated for Signify dividend payouts. Monte Carlo simulation takes into account market conditions expected to impact relative Total Shareholders\u2019 Return performance in relation to selected peers and the following weighted-average assumptions:
2025 | |
|---|---|
Risk-free interest rate | 1.8% |
Expected share price volatility | 32.0% |
The assumptions were used for these calculations only and do not necessarily represent an indication of Signify management\u2019s expectation of future developments for other purposes. Historic volatility was measured over the same timeframe as the simulation period (weighted average 2.6 years).
The amount calculated as an expense for TSR shares is not adjusted for actual performance.
FCF, Sustainability, and ROCE related measurements are non-market performance conditions. Fair value of shares granted under FCF, Sustainability, and ROCE objective conditions equals the closing share price on the grant date, adjusted for the present value of expected dividends during the vesting period.
The amount calculated as an expense for shares granted with a non-market performance condition is adjusted for actual performance.
A summary of Signify performance shares movements and outstanding balance is presented below.
| \u00a0 | 2024 | 2025 | ||
|---|---|---|---|---|
EUR-denominated | Shares | Weighted average grant-date fair value | Shares | Weighted average grant-date fair value |
Balance as at January 1 | 674,102 | 29.68 | 1,617,228 | 24.73 |
Granted | 678,141 | 22.02 | 850,282 | 16.08 |
Vested | (167,301) | 45.25 | (366,947) | 32.90 |
Forfeited | (149,062) | 27.47 | (242,312) | 20.92 |
Performance adjustment | 581,348 | 28.77 | (54,327) | 28.58 |
Balance as at December 31 | 1,617,228 | 24.73 | 1,803,923 | 19.39 |
The performance adjustment originates from updates in the number of shares which are expected to vest in relation to the mentioned non-market performance conditions.
On December 31, 2025, estimated unrecognized costs related to non-vested performance shares amounted to EUR 14 million. These costs are expected to be recognized over a weighted-average period of 1.8 years.
Fair value of conditional shares is determined by subtracting the present value of expected dividends from the closing share price on the grant date as participants are not compensated for Signify dividend payouts.
A summary of Signify conditional shares movements and outstanding balance is presented below.
| \u00a0 | 2024 | 2025 | ||
|---|---|---|---|---|
EUR-denominated | Shares | Weighted average grant-date fair value | Shares | Weighted average grant-date fair value |
Balance as at January 1 | 724,544 | 31.16 | 949,269 | 24.38 |
Granted | 470,520 | 22.43 | 602,756 | 15.07 |
Vested | (175,908) | 46.26 | (191,763) | 32.88 |
Forfeited | (69,887) | 26.45 | (102,688) | 21.10 |
Balance as at December 31 | 949,269 | 24.38 | 1,257,574 | 18.89 |
On December 31, 2025, estimated unrecognized costs related to non-vested conditional shares amounted to EUR 10 million. These costs are expected to be recognized over a weighted-average period of 1.8 years.
Fair value of restricted shares is determined by subtracting the present value of expected dividends from the closing share price on the grant date as participants are not compensated for Signify dividend payouts.
In 2025, Signify granted 172,806 restricted shares with weighted average grant date fair value of EUR 15.52.
On December 31, 2025, estimated unrecognized costs related to non-vested restricted shares amounted to EUR 3 million. These costs are expected to be recognized over a weighted-average period of 1.8 years.
The cost of equity-settled transactions is determined by the fair value at the grant date using an appropriate valuation model.
The grant-date fair value of equity-settled share-based payment awards granted to employees is recognized as personnel expense, with a corresponding increase in equity, over the vesting period of the award. The cumulative expense recognized for equity-settled transactions at each reporting date reflects Signify\u2019s best estimate of the number of equity instruments that will ultimately vest.
Service and non-market performance conditions are not considered when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of Signify\u2019s best estimate of the number of equity instruments that will ultimately vest. Market performance conditions are reflected within the grant date fair value.
No expense is recognized for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. Where awards include a market or non-vesting condition, the transactions are treated as vested irrespective of whether the market or non-vesting condition is satisfied, provided that all other performance and/or service conditions are satisfied.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "section-blocktag-i13676": { "value": "Signify considers the Board of Management and the Supervisory Board to be key management personnel as defined in IAS 24 \"Related parties\".
In 2025, the total remuneration costs relating to the members of Key Management amounted to EUR 6,380,167 (2024: EUR 6,333,856).
In 2025, the total remuneration costs relating to the members of the Board of Management amounted to EUR 5,675,667 (2024: EUR 5,573,855).
| \u00a0 | 2024 | 2025 |
|---|---|---|
Salary/Base compensation | 2,440,202 | 2,171,378 |
Annual incentive1 | 699,388 | 805,300 |
Long-term equity-based Incentive2 | 1,691,436 | 1,014,417 |
Pension allowances | 474,718 | 434,016 |
Pension scheme costs | 116,276 | 88,472 |
Other compensation3 | 132,496 | 116,861 |
Termination benefits4 | 19,339 | 1,045,223 |
Total costs | 5,573,855 | 5,675,667 |
For further information on remuneration costs, see chapter 10, Remuneration report.
The remuneration costs of the members of the Supervisory Board amounted to EUR 704,500 (2024: EUR 760,001).
| \u00a0 | 2024 | 2025 |
|---|---|---|
Membership | 523,125 | 495,000 |
Committees | 166,876 | 162,000 |
Other compensation1 | 70,000 | 47,500 |
Total costs | 760,001 | 704,500 |
When the potential cash outflow is possible or remote and the risk covered by a guarantee is not a financial risk, Signify applies off-balance sheet treatment to such guarantees. For example, environmental remediation and legal proceedings. When the expectation of the cash outflow becomes probable, such guarantees become provisions, see guidance above.
When guarantees are covering credit risk or any other financial risk they are accounted for as financial assets and liabilities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i13744": { "value": "At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
Signify presents financial assets and financial liabilities on a gross basis as separate line items in the Consolidated statement of financial position, unless the offset criteria are met.
The offsetting criteria are met if Signify has a legal right to offset financial assets with financial liabilities and if Signify intends either to settle on a net basis or to realize the asset and settle the liability simultaneously. To meet the requirement, the right of set-off should be available today and not contingent on a future event and it should be legally enforceable for all counterparties in a normal course of business, as well as in the event of default, insolvency or bankruptcy.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300072P3J1X8NZO35", "period": "2025-01-01T00:00:00/2026-01-01T00:00:00" } }, "title-blocktag-i13756": { "value": "Signify has various sources to mitigate liquidity risk. Signify pools cash from subsidiaries to the extent legally and economically feasible; cash not pooled remains available for operational or investment needs. The table below shows details of cash and cash equivalents and bank overdrafts as of the reporting date:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Cash at banks and in hand | 250 | 245 |
Short-term deposits | 359 | 363 |
Other cash equivalents | 24 | 13 |
Cash and cash equivalents | 633 | 621 |
Bank overdrafts | (1) | (0) |
Cash and cash equivalents and bank overdrafts | 633 | 621 |
When the potential cash outflow is possible or remote and the risk covered by a guarantee is not a financial risk, Signify applies off-balance sheet treatment to such guarantees. For example, environmental remediation and legal proceedings. When the expectation of the cash outflow becomes probable, such guarantees become provisions, see guidance above.
When guarantees are covering credit risk or any other financial risk they are accounted for as financial assets and liabilities.
The table below analyzes Signify's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
| \u00a0 | \u00a0 | Payments due by period | ||
|---|---|---|---|---|
| \u00a0 | Total | Less than | Between | Over |
Debt, including bank overdrafts | 1,352 | 429 | 923 | - |
Interest on debt | 63 | 41 | 22 | - |
Trade and other payables | 1,363 | 1,363 | - | - |
Lease liability | 268 | 66 | 137 | 65 |
Derivative liabilities | 7 | 7 | - | - |
Off-balance sheet commitments | 120 | 40 | 80 | - |
Purchase obligations1 | 358 | 148 | 208 | 2 |
Contractual cash obligations 2025 | 3,530 | 2,093 | 1,370 | 67 |
Contractual cash obligations 2024 | 3,805 | 2,234 | 1,513 | 58 |
Revolving credit facility (RCF) | 600 | - | - | - |
When the potential cash outflow is possible or remote and the risk covered by a guarantee is not a financial risk, Signify applies off-balance sheet treatment to such guarantees. For example, environmental remediation and legal proceedings. When the expectation of the cash outflow becomes probable, such guarantees become provisions, see guidance above.
When guarantees are covering credit risk or any other financial risk they are accounted for as financial assets and liabilities.
The table below analyzes Signify's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
| \u00a0 | \u00a0 | Payments due by period | ||
|---|---|---|---|---|
| \u00a0 | Total | Less than | Between | Over |
Debt, including bank overdrafts | 1,352 | 429 | 923 | - |
Interest on debt | 63 | 41 | 22 | - |
Trade and other payables | 1,363 | 1,363 | - | - |
Lease liability | 268 | 66 | 137 | 65 |
Derivative liabilities | 7 | 7 | - | - |
Off-balance sheet commitments | 120 | 40 | 80 | - |
Purchase obligations1 | 358 | 148 | 208 | 2 |
Contractual cash obligations 2025 | 3,530 | 2,093 | 1,370 | 67 |
Contractual cash obligations 2024 | 3,805 | 2,234 | 1,513 | 58 |
Revolving credit facility (RCF) | 600 | - | - | - |
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
The summary of all financial assets and liabilities, including their classification and measurement and fair value hierarchy is presented below: |
| \u00a0 | Carried at | Gross amount recognized on the balance sheet | Amounts not offset on the balance sheet, but are subject to master netting arrangements | Net amount | Fair value hierarchy level | Estimated fair value |
|---|---|---|---|---|---|---|
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current financial assets1 | amortized cost | 23 | - | 23 | \u00a0 | 23 |
Unquoted equity shares | fair value (FVOCI) | 5 | - | 5 | 3 | 5 |
Trade and other receivables1 | amortized cost | 1,066 | - | 1,066 | \u00a0 | 1,066 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 17 | (8) | 9 | 2 | 17 |
Current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | - | - | - | 1 | - |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 10 | - | 10 | 3 | 14 |
Cash and cash equivalents | \u00a0 | 633 | - | 633 | \u00a0 | 633 |
Debt (Eurobonds) | amortized cost | (597) | - | (597) | 1 | (591) |
Debt (excluding Eurobonds)1 | amortized cost | (956) | - | (956) | 2 | (956) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (11) | 8 | (3) | 2 | (11) |
Trade and other payables1 | amortized cost | (1,586) | - | (1,586) | \u00a0 | (1,586) |
Contingent considerations | fair value (FVTPL) | (2) | - | (2) | 3 | (2) |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Current financial assets | amortized cost | 2 | \u00a0 | 2 | \u00a0 | 2 |
Non-current financial assets1 | amortized cost | 19 | - | 19 | \u00a0 | 19 |
Unquoted equity shares | fair value (FVOCI) | 4 | - | 4 | 3 | 4 |
Trade and other receivables1 | amortized cost | 894 | - | 894 | \u00a0 | 894 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 11 | (5) | 5 | 2 | 11 |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 5 | - | 5 | 3 | 7 |
Cash and cash equivalents | \u00a0 | 621 | - | 621 | \u00a0 | 621 |
Debt (Eurobonds) | amortized cost | (599) | - | (599) | 1 | (596) |
Debt (excluding Eurobonds)1 | amortized cost | (980) | - | (980) | 2 | (980) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (7) | 5 | (1) | 2 | (7) |
Trade and other payables1 | amortized cost | (1,360) | - | (1,360) | \u00a0 | (1,360) |
Contingent considerations | fair value (FVTPL) | (3) | - | (3) | 3 | (3) |
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
The summary of all financial assets and liabilities, including their classification and measurement and fair value hierarchy is presented below: |
| \u00a0 | Carried at | Gross amount recognized on the balance sheet | Amounts not offset on the balance sheet, but are subject to master netting arrangements | Net amount | Fair value hierarchy level | Estimated fair value |
|---|---|---|---|---|---|---|
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current financial assets1 | amortized cost | 23 | - | 23 | \u00a0 | 23 |
Unquoted equity shares | fair value (FVOCI) | 5 | - | 5 | 3 | 5 |
Trade and other receivables1 | amortized cost | 1,066 | - | 1,066 | \u00a0 | 1,066 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 17 | (8) | 9 | 2 | 17 |
Current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | - | - | - | 1 | - |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 10 | - | 10 | 3 | 14 |
Cash and cash equivalents | \u00a0 | 633 | - | 633 | \u00a0 | 633 |
Debt (Eurobonds) | amortized cost | (597) | - | (597) | 1 | (591) |
Debt (excluding Eurobonds)1 | amortized cost | (956) | - | (956) | 2 | (956) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (11) | 8 | (3) | 2 | (11) |
Trade and other payables1 | amortized cost | (1,586) | - | (1,586) | \u00a0 | (1,586) |
Contingent considerations | fair value (FVTPL) | (2) | - | (2) | 3 | (2) |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Current financial assets | amortized cost | 2 | \u00a0 | 2 | \u00a0 | 2 |
Non-current financial assets1 | amortized cost | 19 | - | 19 | \u00a0 | 19 |
Unquoted equity shares | fair value (FVOCI) | 4 | - | 4 | 3 | 4 |
Trade and other receivables1 | amortized cost | 894 | - | 894 | \u00a0 | 894 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 11 | (5) | 5 | 2 | 11 |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 5 | - | 5 | 3 | 7 |
Cash and cash equivalents | \u00a0 | 621 | - | 621 | \u00a0 | 621 |
Debt (Eurobonds) | amortized cost | (599) | - | (599) | 1 | (596) |
Debt (excluding Eurobonds)1 | amortized cost | (980) | - | (980) | 2 | (980) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (7) | 5 | (1) | 2 | (7) |
Trade and other payables1 | amortized cost | (1,360) | - | (1,360) | \u00a0 | (1,360) |
Contingent considerations | fair value (FVTPL) | (3) | - | (3) | 3 | (3) |
The estimated fair value of financial instruments has been determined by Signify using available market information and appropriate valuation methods. The estimates presented are not necessarily indicative of the amounts that will ultimately be realized by Signify upon maturity or disposal. The use of market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts.
The following hierarchy is applied to classify the financial assets and liabilities:
Instruments included in Level 1 are comprised primarily of listed Eurobonds classified as financial liabilities at amortized cost. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at fair value through profit or loss (FVTPL): The business model for these instruments is to hold them for trading. This financial asset category mainly consists of Signify's participations in Virtual Power Purchase Agreements and other Derivatives;
Financial assets at fair value through other comprehensive income (FVOCI): The business model for these instruments is to hold them to collect contractual cash flows and to sell them. Fair value gains and losses are subsequently not reclassified to profit or loss following the derecognition of the investment. This category consists of minor equity investments;
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
All financial liabilities except for financial liabilities at fair value through profit and loss are classified and subsequently measured at amortized cost. This financial liability category primarily consists of Debt and Trade and other payables.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
The summary of all financial assets and liabilities, including their classification and measurement and fair value hierarchy is presented below: |
| \u00a0 | Carried at | Gross amount recognized on the balance sheet | Amounts not offset on the balance sheet, but are subject to master netting arrangements | Net amount | Fair value hierarchy level | Estimated fair value |
|---|---|---|---|---|---|---|
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current financial assets1 | amortized cost | 23 | - | 23 | \u00a0 | 23 |
Unquoted equity shares | fair value (FVOCI) | 5 | - | 5 | 3 | 5 |
Trade and other receivables1 | amortized cost | 1,066 | - | 1,066 | \u00a0 | 1,066 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 17 | (8) | 9 | 2 | 17 |
Current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | - | - | - | 1 | - |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 10 | - | 10 | 3 | 14 |
Cash and cash equivalents | \u00a0 | 633 | - | 633 | \u00a0 | 633 |
Debt (Eurobonds) | amortized cost | (597) | - | (597) | 1 | (591) |
Debt (excluding Eurobonds)1 | amortized cost | (956) | - | (956) | 2 | (956) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (11) | 8 | (3) | 2 | (11) |
Trade and other payables1 | amortized cost | (1,586) | - | (1,586) | \u00a0 | (1,586) |
Contingent considerations | fair value (FVTPL) | (2) | - | (2) | 3 | (2) |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Current financial assets | amortized cost | 2 | \u00a0 | 2 | \u00a0 | 2 |
Non-current financial assets1 | amortized cost | 19 | - | 19 | \u00a0 | 19 |
Unquoted equity shares | fair value (FVOCI) | 4 | - | 4 | 3 | 4 |
Trade and other receivables1 | amortized cost | 894 | - | 894 | \u00a0 | 894 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 11 | (5) | 5 | 2 | 11 |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 5 | - | 5 | 3 | 7 |
Cash and cash equivalents | \u00a0 | 621 | - | 621 | \u00a0 | 621 |
Debt (Eurobonds) | amortized cost | (599) | - | (599) | 1 | (596) |
Debt (excluding Eurobonds)1 | amortized cost | (980) | - | (980) | 2 | (980) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (7) | 5 | (1) | 2 | (7) |
Trade and other payables1 | amortized cost | (1,360) | - | (1,360) | \u00a0 | (1,360) |
Contingent considerations | fair value (FVTPL) | (3) | - | (3) | 3 | (3) |
The estimated fair value of financial instruments has been determined by Signify using available market information and appropriate valuation methods. The estimates presented are not necessarily indicative of the amounts that will ultimately be realized by Signify upon maturity or disposal. The use of market assumptions and/or estimation methods may have a material effect on the estimated fair value amounts.
The following hierarchy is applied to classify the financial assets and liabilities:
Instruments included in Level 1 are comprised primarily of listed Eurobonds classified as financial liabilities at amortized cost. The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date. A market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group, pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm\u2019s length basis.
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market.
The classification and subsequent measurement of financial assets and liabilities depends on Signify\u2019s business model for managing the financial assets and liabilities, the contractual terms of the cash flows and the solely payments of principal and interest (SPPI) test. Signify performs the analysis on an instrument-by-instrument basis. Financial assets and liabilities are classified into one of the following categories:
Financial assets at fair value through profit or loss (FVTPL): The business model for these instruments is to hold them for trading. This financial asset category mainly consists of Signify's participations in Virtual Power Purchase Agreements and other Derivatives;
Financial liabilities at fair value through profit or loss mainly consists of Derivatives and Contingent consideration in a business acquisition, to which IFRS 3 applies. Contingent consideration is subsequently measured at fair value with changes recognized in profit or loss;
At inception of the hedge relationship, Signify documents the economic relationship between hedging instruments and hedged items including whether changes in the cash flows of the hedging instruments are expected to offset changes in the cash flows of hedged items. Signify documents its risk management objective and strategy for undertaking its hedge transactions.
For foreign currency forwards, Signify designates the spot component of the change in fair value in cash flow hedge relationships. The spot component is determined with reference to the relevant spot market exchange rates. The differential between the contracted forward rate and the spot market exchange rate is defined as forward points. It is discounted, where material. Changes in the fair value related to forward points are continuously recognized in the statement of profit or loss.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. Signify designates the full instrument in the hedge relationship. The result of hedging of the translation risk, using net investment hedges is recognized in the Currency translation differences within equity, as can be seen in the Consolidated statement of comprehensive income if the hedge is effective.
Signify measures all derivative financial instruments at fair value derived from market prices of the instruments or calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates. These calculations are tested for reasonableness by comparing the outcome of the internal valuation with the valuation received from the counterparty.
Signify monitors that the economic relationship between the hedged item and hedging instrument and hedge ratio is the same as the one Signify uses for risk management purposes. A prospective effectiveness test is performed to prove that the hedge is effective.
If the hedge ratio for risk management purposes is no longer optimal due to the different timing or amount of the underlying transaction, but the risk management objective remains unchanged and the hedge continues to qualify for hedge accounting, Signify performs re-balancing of the hedge relationship by adjusting either the volume of the hedging instrument or the volume of the hedged item, so that the hedge ratio aligns with the ratio used for risk management purposes. Gains and losses that were accumulated in equity related to an ineffective portion of hedge, Signify records immediately in the Consolidated statement of income when such ineffectiveness occurs.
The derivatives related to transactions are, for hedge accounting purposes, split into hedges of on-balance-sheet accounts receivable/payable and forecasted sales and purchases. Gains or losses arising from changes in fair value of derivatives are recognized within Cost of sales in the Consolidated statement of income, except for derivatives that are effective and qualify for cash flow hedge accounting which are recorded in Other comprehensive income until the Consolidated statement of income is affected by the variability in cash flows of the designated hedged item. Changes in the fair value of hedges related to intercompany loans and deposits are recognized within Financial income and expenses in the Consolidated statement of income.
The derivatives used by Signify can be subject to master netting and set-off agreements with financial counterparties. In case of certain termination events, under the terms of these Master Agreements, Signify can terminate the outstanding transactions and aggregate their positive and negative values to arrive at a single net termination sum (or close-out amount). This contractual right is, among others, subject to the following:
The right may be limited by local law if the counterparty is subject to bankruptcy proceedings;
The right applies on a bilateral basis.
The summary of all financial assets and liabilities, including their classification and measurement and fair value hierarchy is presented below: |
| \u00a0 | Carried at | Gross amount recognized on the balance sheet | Amounts not offset on the balance sheet, but are subject to master netting arrangements | Net amount | Fair value hierarchy level | Estimated fair value |
|---|---|---|---|---|---|---|
Balance as at December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Non-current financial assets1 | amortized cost | 23 | - | 23 | \u00a0 | 23 |
Unquoted equity shares | fair value (FVOCI) | 5 | - | 5 | 3 | 5 |
Trade and other receivables1 | amortized cost | 1,066 | - | 1,066 | \u00a0 | 1,066 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 17 | (8) | 9 | 2 | 17 |
Current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | - | - | - | 1 | - |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 10 | - | 10 | 3 | 14 |
Cash and cash equivalents | \u00a0 | 633 | - | 633 | \u00a0 | 633 |
Debt (Eurobonds) | amortized cost | (597) | - | (597) | 1 | (591) |
Debt (excluding Eurobonds)1 | amortized cost | (956) | - | (956) | 2 | (956) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (11) | 8 | (3) | 2 | (11) |
Trade and other payables1 | amortized cost | (1,586) | - | (1,586) | \u00a0 | (1,586) |
Contingent considerations | fair value (FVTPL) | (2) | - | (2) | 3 | (2) |
Balance as at December 31, 2025 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Current financial assets | amortized cost | 2 | \u00a0 | 2 | \u00a0 | 2 |
Non-current financial assets1 | amortized cost | 19 | - | 19 | \u00a0 | 19 |
Unquoted equity shares | fair value (FVOCI) | 4 | - | 4 | 3 | 4 |
Trade and other receivables1 | amortized cost | 894 | - | 894 | \u00a0 | 894 |
Derivative financial assets designated as hedging instruments | fair value (FVTPL) | 11 | (5) | 5 | 2 | 11 |
Non-current derivative financial assets not designated as hedging instruments | fair value (FVTPL) | 5 | - | 5 | 3 | 7 |
Cash and cash equivalents | \u00a0 | 621 | - | 621 | \u00a0 | 621 |
Debt (Eurobonds) | amortized cost | (599) | - | (599) | 1 | (596) |
Debt (excluding Eurobonds)1 | amortized cost | (980) | - | (980) | 2 | (980) |
Derivative financial liabilities designated as hedging instruments | fair value (FVTPL) | (7) | 5 | (1) | 2 | (7) |
Trade and other payables1 | amortized cost | (1,360) | - | (1,360) | \u00a0 | (1,360) |
Contingent considerations | fair value (FVTPL) | (3) | - | (3) | 3 | (3) |
The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) are determined by using valuation techniques. These valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity specific estimates. If all significant inputs required to fair value an instrument are based on observable market data, the instrument is included in Level 2.
The fair value of derivatives is calculated as the present value of the estimated future cash flows based on observable interest yield curves, basis spread and foreign exchange rates.
If one or more of the significant inputs are not based on observable market data, the instrument is included in Level 3.
This applies for Derivative financial assets not designated as hedging instruments, which mainly relate to Signify\u2019s participation in Virtual Power Purchase Agreements. These contracts are accounted for as financial instruments (FVTPL) under IFRS 9 and valued by an external valuator on a quarterly basis. The fair value is calculated as the net forecasted cash inflows or outflows discounted to the present value. The unrealized loss in fair value of EUR 4 million (2024: EUR 12 million loss) is recorded in financial income or expense, refer to note 7, Financial income and expenses. Unobservable input data is the volume of generated wind power and the price curves of the respective electricity market.
Interest rate risk is the risk of the fair value or future cash flows of a financial instrument fluctuating because of changes in the market interest rates. Financial instruments included in the debt position create an inherent interest rate risk. Failure to effectively hedge this risk could negatively impact financial results.
Signify monitors interest rate coverage, short-term and long-term interest rate developments and has the flexibility to opt for different short-term interest periods for the variable debt instruments at roll-over dates and/or could enter into derivative financial instruments to fix interest rates for a certain period of time. As of December 31, 2025, Signify had a ratio of fixed-rate debt to total outstanding debt of approximately 52% (2024: 52%).
A sensitivity analysis conducted at reporting date shows that if interest rates were to increase instantaneously by 1% from their level of December 31, 2025, with all other variables held constant, the annualized net interest expense would decrease by EUR 1 million. This impact was based on the outstanding net floating debt position as of December 31, 2025.
Currency risk is the risk that reported financial performance, or the fair value or future cash flows of a financial instrument, will fluctuate because of changes in foreign exchange rates.
Signify operates in many countries and currencies and therefore currency fluctuations may inevitably impact its financial results. Signify is exposed to currency risk in the following areas:
Transaction exposures related to anticipated sales and purchases and on-balance-sheet receivables/payables resulting from such transactions;
Financing exposure arising from foreign currency intercompany and external debt and deposits;
Translation exposure of net income in foreign entities;
Translation exposure of foreign currency denominated equity invested in consolidated companies and goodwill;
Translation exposure to equity interests in non-functional-currency investments in associates and financial assets at fair value.
It is Signify\u2019s policy to reduce the volatility caused by foreign currency movements on its net earnings by hedging the anticipated net exposure of foreign currencies resulting from foreign currency sales and purchases. In general, net anticipated exposures are hedged during a period of 9 months in layers of 25% up to a hedge ratio of 75%, using derivatives.
Signify\u2019s policy requires significant committed foreign currency exposures to be fully hedged, generally using forwards. However, not every foreign currency can or shall be hedged as there may be regulatory barriers or prohibitive hedging cost preventing Signify from effectively and/or efficiently hedging its currency exposures. As a result, hedging activities cannot and will not eliminate all currency risks for anticipated and committed transaction exposures.
The following table outlines the estimated nominal value in millions of EUR for transaction exposures and related hedges for Signify\u2019s most significant currency exposures as per the hedging policy horizon:
| \u00a0 | Receivables / Sales | Payables / Purchases | ||
|---|---|---|---|---|
| \u00a0 | Exposure | Hedges | Exposure | Hedges |
Balance as at December 31 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
Exposure currency | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
CNY | 2 | (2) | (534) | 349 |
PLN | 37 | (37) | (108) | 81 |
USD | 170 | (170) | (113) | 113 |
EUR1 | 52 | (52) | (18) | 18 |
CAD | 79 | (45) | - | - |
MXN | 5 | (5) | (16) | 16 |
Others | 57 | (57) | (5) | 5 |
Total 2025 | 402 | (369) | (793) | 581 |
Total 2024 | 570 | (540) | (902) | 684 |
As of December 31, 2025, a gain of EUR 1 million was deferred in equity as a result of these hedges (2024: gain of EUR 5 million). The result deferred in equity will be released to earnings in 2026 at the time when the related hedged transaction affects the Consolidated statement of income. During 2025, EUR nil million (2024: EUR nil million) was recorded within cost of goods sold in the Consolidated statement of income as a result of ineffectiveness on certain anticipated cash flow hedges.
The total net fair value of hedges related to transaction exposure as of December 31, 2025, was an unrealized asset of EUR 2 million (2024: asset EUR 2 million). An instantaneous 10% increase in the value of euro against all currencies, with all other variables held constant, would lead to a decrease of EUR 19 million in the value of the derivatives. The above sensitivity analysis includes a loss of EUR 5 million that would impact the income statement, which would partially offset the opposite revaluation effect on the underlying accounts receivable and payable, and the remaining loss of EUR 14 million would be recognized in equity to the extent that the cash flow hedges were effective.
Foreign exchange exposure also arises from loans and deposits. Where Signify enters into such arrangements the financing is generally provided in the functional currency of the subsidiary. The currency of Signify\u2019s external funding and liquid assets is matched with the required financing of subsidiaries either directly through external foreign currency loans and deposits or synthetically by using foreign exchange derivatives. In certain cases, where Signify subsidiaries may also have external foreign currency debt or liquid assets, these exposures are also hedged using foreign exchange derivatives. As of December 31, 2025, the fair value of these hedges was an unrealized asset of EUR 2 million (2024: asset EUR 4 million). An instantaneous 10% increase in the value of euro against all currencies, with all other variables held constant, would lead to a decrease of EUR 50 million in the value of the derivatives.
Translation exposure of foreign-currency equity invested in consolidated entities is generally not hedged. However, if a hedge is entered into, it is accounted for as a net investment hedge. As at December 31, 2025, no net investment hedges were outstanding (2024: nil). Signify may enter into further net investment hedges to partially offset these risks in the future. The unrealized loss on translation differences in 2025 of EUR 415 million (2024: unrealized gain of EUR 176 million) related primarily to the impact of translating US dollar-denominated investments into euros.
Commodity price risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in commodity prices.
Signify is a purchaser of certain base metals, precious metals and energy. Signify could hedge certain commodity price risks using derivative instruments to minimize significant, unanticipated earnings fluctuations caused by commodity price volatility. As of December 31, 2025, Signify had EUR 5 million of commodity derivatives recognized in the Statement of financial position (2024: EUR 10 million), which relate to Virtual Power Purchase Agreements. An increase of the energy prices by 10% will lead to the commodity derivatives value increase by EUR 3 million (2024: EUR 5 million increase).
Liquidity risk is the risk that an entity will encounter difficulty in meeting obligations associated with financial liabilities.
Liquidity risk for Signify is monitored through the Treasury Risk Committee which tracks the development of the actual cash flow position and uses input from a number of sources in order to forecast the overall liquidity position.
The table below analyzes Signify's financial liabilities into relevant maturity groupings based on their contractual maturities. The amounts disclosed in the table are the contractual undiscounted cash flows. Balances due within 12 months equal their carrying balances as the impact of discounting is not significant. Interest on long-term debt is based on floating rate adjustments according to market expectations.
| \u00a0 | \u00a0 | Payments due by period | ||
|---|---|---|---|---|
| \u00a0 | Total | Less than | Between | Over |
Debt, including bank overdrafts | 1,352 | 429 | 923 | - |
Interest on debt | 63 | 41 | 22 | - |
Trade and other payables | 1,363 | 1,363 | - | - |
Lease liability | 268 | 66 | 137 | 65 |
Derivative liabilities | 7 | 7 | - | - |
Off-balance sheet commitments | 120 | 40 | 80 | - |
Purchase obligations1 | 358 | 148 | 208 | 2 |
Contractual cash obligations 2025 | 3,530 | 2,093 | 1,370 | 67 |
Contractual cash obligations 2024 | 3,805 | 2,234 | 1,513 | 58 |
Revolving credit facility (RCF) | 600 | - | - | - |
Signify invests surplus cash primarily in money market deposits with investment graded financial institutions, and with maturities up to three months, to ensure sufficient liquidity is available to meet liabilities when due.
Signify has various sources to mitigate liquidity risk. Signify pools cash from subsidiaries to the extent legally and economically feasible; cash not pooled remains available for operational or investment needs. The table below shows details of cash and cash equivalents and bank overdrafts as of the reporting date:
| \u00a0 | 2024 | 2025 |
|---|---|---|
Cash at banks and in hand | 250 | 245 |
Short-term deposits | 359 | 363 |
Other cash equivalents | 24 | 13 |
Cash and cash equivalents | 633 | 621 |
Bank overdrafts | (1) | (0) |
Cash and cash equivalents and bank overdrafts | 633 | 621 |
Signify has a EUR 600 million revolving credit facility that can be used for general purposes. As of December 31, 2025, Signify did not have any amounts drawn under this facility.
On January 30, 2026, Signify announced that the company will structurally reset its cost base and establish continuous productivity improvements, while remaining committed to its operating model. To drive this, Signify announced\u00a0a\u00a0EUR\u00a0180 million cost reduction program, which will impact 900 roles across Signify. The majority of savings will be delivered through 2026, with the full benefit realized in 2027.\u00a0
No other subsequent events occurred that are material to Signify.