The lighting experts at Signify, formerly Philips Lighting, are feeling the pressure from the corona health crisis. In its recent Q1 2020 financial report, the Eindhoven-based lighting company revealed its total sales of just over 1.4 billion – a 3.5 percent decrease from Q1 2019. More troubling for the company, however, was the reported 27 million euros in net income, which is a drop of more than 39 percent from the 44 million that was reported in the first quarter of last year.
This slump is certainly not a surprise. The company has known for some time that they were in trouble and caused controversy when it asked employees to reduce their hours (and wages) by 20 percent in an effort to avoid layoffs. Now, the lighting specialist is weighing options and looking for emergency relief from the Dutch government. According to a report in the Financieele Dagblad (link in Dutch), the company is trying to determine its eligibility for the government’s NOW program, which compensates businesses with up to 90 percent of their wage costs due to sharp declines in turnover brought on by the coronavirus.
“We were early to mobilize our teams worldwide and implement a broad range of actions to face the unprecedented situation caused by the COVID-19 pandemic. We largely restored the performance of our supply chain to minimize the impact on our customers, while we also implemented a set of dedicated actions to improve our operating margin and double our free cash flow despite a decline in demand,” explains CEO Eric Rondolat. “We’re building on these achievements to manage our performance in the second quarter as we expect demand to be further impacted. In addition, we’re taking extra measures to protect our profitability and cash flow and have started to explore new business opportunities arising from the situation whilst remaining very close to our customers.”