Signify Nv Unsp/Adr

Hello, welcome to the Signify Third Quarter 2026 Results Conference Call hosted by As Tempelman, CEO, Zeljko Kosanovic, CFO, and Thelke Gerdes, Head of Investor Relations. For the first part of this call, all participants will be in listen-only mode. And afterwards, there will be a question and answer session. If you wish to ask a question, please press pound key five on your telephone keypad. Please note that you're limited to one question and a follow up per round. I would now like to give the floor to Thelke Gerdes. Ms. Gerdes, please go ahead.

Good morning everyone and welcome to Signify's third quarter 2026 earnings call. With me today are our CEO As Tempelman and our CFO Zeljko Kosanovic. As will start with an update on our strategy and key business developments. Zeljko will then walk you through our financial performance before As returns to the call for the outlook and closing remarks. Our press release and presentations are available on the investor relations website. The transcript of this call will be made available shortly after. And with that, I would like to hand over to us.

Thank you, Thelke. And good morning, everyone. Thank you for joining us today. Now, this third quarter results really, I think, show the progress that we are making in executing our strategy that we introduced at Capital Markets Day back in June. We strengthened profitability sequentially, quarter on quarter, supported by pricing and cost actions, while the end markets actually remained quite challenging. Now we introduced the portfolio split of build and harvest. The build and harvest portfolio split and the specific playbooks for performance areas give us a much better visibility now and are really helping us to take more targeted action. So we are making progress in harvest and I would say in build there's still considerably more work to do. So let me comment on both, starting with Harvest. The Genlite, one of our North American business is in turnaround and the turnaround is progressing well. Costs have already come down. We are simplifying the product portfolio and also significantly reducing the number of SKUs. And of course that then translates into improved profitability. On the OEM side, at turnaround 2, that turnaround is also on track with another sequential improvement in profitability. We've lowered the cost base in OEM and positive pricing is also supporting growth margins despite continuous market softness. Earlier, we also announced at Capital Markets Day that all portfolio options remain open for our OEM business. So meaning we either divest, we partner, or we keep and optimize. And to support this optionality and this flexibility, we have decided to separate the OEM business and make it standalone. So in fact, a carving. and we expect that carving to be completed in the second half of next year. That might sound like a long time, but it's actually quite complex. So while we do this, we will of course continue to improve the operational performance of that business. Then moving to K-Lite, our manufacturing business in China, where we have the same optionality. So we either divest or we keep. It's already partnered. It's a joint venture setup. And while we are improving operational performance in K-Lite, we are actively exploring divestiture opportunities with the parties involved. Too early to conclude on that, but it is actively going on. Now turning to the build part of the portfolio, India remains a powerhouse for Signify in lighting, contributing both to growth and profitability. And we also see opportunities to use our brands in our distribution power to expand into adjacent categories. And fans were our first step and I'll come back to that in a moment. Now, professional Europe, a large business requires a turnaround. We got to be honest and face that the performance over the past three years has not met our expectations. Market conditions have played a key part, but we've also not been adapting fast enough. And under new leadership, we will right-size the organization and strengthen our execution capacity in key countries. and powering really our local country teams operating close to the market, close to customers. And this will yield significant cost savings and improve competitiveness. And with these changes underway, I mean, 2027 will be a transitionary change, a transitionary year for Europe because these changes take some time. Moving to another of our build businesses, consumer. Our priorities are growth and productivity. So we are investing in customer acquisition to grow connected, our U offer, while maintaining profitability in the harvest area. So we are also putting in place an additional cost reduction program for consumer. We will reinvest part of the savings in growth and both operating leverage and lower indirect costs will drive profitability up. And finally, I do want to mention that we are reviewing our R&D spend. Actually, that is about to be completed. And we are sharpening our investments priorities and taking costs out, significant costs out of our R&D spend to improve returns on R&D. And those returns need to really come through in sales from innovation and in lower cost products. That's how we target our R&D. It needs to lead to more revenue, more profitability. And as a reminder, about 40% of our R&D costs actually relate to product redesign and value engineering. So this is not just about innovation. So these are the actions that we are taking to turn the strategy into better performance with clear priorities for each part of the portfolio. And we are happy to take your questions on it. Now, Dan, we wanted to share a few examples, as we always do. Let me illustrate the capabilities we have in professionals. You see here on the slide, and you also saw it on the opening slides when we started the call, it concerns a project in Romania where we bring an iconic landmark to life by combining architectural luminaires, lighting design, and controls in one integrated lighting solution. We deliver this project with our local partner Luxten. Multiple lighting solutions illuminate the façade, the roofline, the dome and all the architectural details. I think it's a really cool project and a good example of the value we bring to complex projects through technology, application expertise and very important, our partners. The next example I wanted to share is winning with adjacencies in India. I referred to it earlier. Our fence business shows that we can build on our local strength to grow beyond just lighting. We entered India's 1.4 billion euro fence market in 2021 under the EcoLink brands, local brands. In 24, we stepped up our focus on design-led innovation in brushless direct current fans, so called BLDC, brushless direct current fans. And these motors make fans more energy efficient and quieter than conventional alternatives. So it was a real opportunity to get in the market with this new technology. We have supported the business with brand investments, including advertising, digital campaigns, sponsorship on the India Premier League and in-store activities. And you see, it works. Fan sales grew 61% in just the first nine months compared to last year across more than 11,000 retail outlets. So this is a very good example, I think, of how we can use our distribution and brand capabilities and product innovation to develop adjacent business. And it gives us also a foundation as we assess further opportunities in India. Now moving to the sustainability side. and of course our Brighter Lives Better Worlds 2030 program. We continue to see progress against the four measures in our program. Year-to-date revenues from products and solutions that deliver benefits beyond illumination, i.e. beyond lighting, reached 36.3% of sales. So that's well on track towards our 2030 target of 41%. Our LED products sold under the program have contributed cumulative energy savings of 12 terawatt hours and the annualized reduction in our portfolio carbon emission intensity reached 11.1%. And all these things are important in the context of large scale electrification going on in the world. Signify Circle revenues reached 21.8% of professional Europe sales. That program is very much targeted towards Europe, towards 27.5 target for 2030. So basically all four measures are on track. We are also very proud that we have again received the Ecovades Platinum Rating for the 7th consecutive year with a record score of 88 out of 100, so placing us in the top 1% globally and that is very much where we would like to be. Now, with that, I will hand it over to Zeljko to discuss the third quarter financial performance. Zeljko.