Lighting giant Acuity Brands achieves profit growth in Q2

On April 3, 2024, U.S. time, Acuity Brands released its second quarter performance report for fiscal year 2024 as of February 29. The report shows that Acuity Brands’ net sales in the second quarter were US$905.9 million (approximately RMB 6.553 billion), a decrease of 4.0% from the same period last year.

Acuity Brands stated in the performance report that the company achieved satisfactory performance in the second quarter of fiscal year 2024. The company successfully improved adjusted operating profit, operating margin and diluted earnings per share. At the same time, it achieved strong free cash flow and effectively allocated capital to create value.

The report shows that in the second quarter of fiscal year 2024, Acuity Brands’ operating profit reached US$118.1 million (approximately RMB 854 million), an increase of 5.9% compared with the same period last year. Operating profit accounted for 13.0% of net sales, an increase of 120 basis points compared with the same period last year. Adjusted operating profit was $140.1 million, an increase of 6.1% from the same period last year. Adjusted operating profit as a percentage of net sales was 15.5%, an increase of 150 basis points from the same period last year.

In addition, diluted earnings per share in the second quarter of fiscal 2024 was US$2.84, an increase of 10.5% compared with the same period last year. Adjusted diluted earnings per share was $3.38, an increase of $0.32 from the same period last year, an increase of 10.5%.

In terms of business performance, Acuity Brands' lighting and lighting control business (ABL) posted net sales of US$843.5 million in the second quarter, a decrease of 5.3% from the same period last year, and operating profit of US$126.0 million, a year-on-year increase of 1.9%.

The operating profit of the ABL business accounted for 14.9% of net sales, an increase of 100 basis points compared with the same period last year. The adjusted operating profit of the ABL business was US$136.4 million, an increase of US$3.1 million or 2.3% compared with the same period last year. Adjusted operating profit accounted for 16.2% of ABL business net sales, an increase of 120 basis points from the same period last year.

Intelligent Space Group (ISG) second quarter net sales were US$68.1 million, a year-on-year increase of 17.0%. The operating profit of the ISG business was US$9.1 million, an increase of US$2.8 million compared with the same period last year. The operating profit accounted for 13.4% of the net sales of the ISG business, an increase of 260 basis points compared with the same period last year. Adjusted operating profit was US$143.0 million, an increase of US$3.5 million compared with the same period last year; adjusted operating profit accounted for 21.0% of ISG business net sales, an increase of 240 basis points compared with the same period last year.

In terms of cash flow and capital allocation, as of the first half of fiscal year 2024, Acuity Brands’ net cash generated from operating activities was US$292.6 million, a decrease of US$13.8 million compared with the same period last year. The company has repurchased approximately 370,000 shares of common stock so far, for a total amount of approximately US$68 million.

According to TrendForce's latest report "Global LED Lighting Market Analysis 2024-1H24", multiple factors have led to the failure of the lighting market demand to rebound as expected in 2023. TrendForce has once again revised down the LED lighting output value in 2023 to US$58.5 billion, a year-on-year decrease of 5%. Acuity Brands' performance also reflects the industry situation, with its net sales falling to US$3.95 billion in 2023.

Looking forward to 2024, TrendForce predicts that 5.788 billion LED light sources and lamps will gradually reach the limit of their service life and be retired, which will bring considerable demand for secondary replacement, and the LED lighting market is expected to reverse its decline. It is estimated that the global LED lighting market will grow by 4% to US$60.9 billion in 2024. Against this background, Acuity Brands is also actively looking forward to the company's business development in 2024, and is expected to achieve net sales of US$3.07 billion to US$4 billion, which is expected to increase slightly compared with 2023 performance.