Signify share buyback, CEO exit cheer investors despite declining profits

By Hugo Lhomedet and Leo Marchandon

(Reuters) -Signify, the world's largest lighting manufacturer, said CEO Eric Rondolat would step down in April, after it reported lower sales and core earnings for 2024 on Friday.

The abrupt leadership change comes at a time when the company is bracing for the impact of U.S. President Donald Trump's possible tariffs, though J.P.Morgan analysts said his departure could be taken as a positive due to his "mixed track record".

Rondolat, 58, who oversaw Signify's 2016 spin-off from Philips, was appointed for a new four-year term last year. The company gave no reason for his exit.

Signify's board will consider both internal and external candidates as potential successors for him.

The Dutch group's shares rose more than 8% in early trading, after it also promised higher shareholder returns through a raised dividend and a new share buyback programme. They were trading 5.5% higher by 0920 GMT.

"We believe that the buyback will outweigh the weaker results and guidance," ING analysts said in a note to clients.

Signify's core profit (EBITA) fell nearly 10% to 606 million euros ($633 million) in 2024, largely as expected. Organic sales fell only 2.8%, while analysts were expecting a 3.6% drop, a company-provided consensus showed.

The company expects its comparable sales to grow in a low single-digit percentage this year, with a stable EBITA margin compared to the 9.9% it reported for 2024.

Signify said it would increase its cash dividend to 1.56 euros per share for 2024, from 1.55 euros paid for the prior year.

It also unveiled a share repurchase programme of up to 150 million euros starting from the first quarter, and said it planned to buy back between 350 million and 450 million euros worth of shares by the end of 2027.

($1 = 0.9568 euros)

(Reporting by Leo Marchandon and Hugo Lhomedet in Gdansk, additional reporting from Toby Sterling in Amsterdam; Editing by Milla Nissi)