Long-Term Perspectives for the European Lighting Fixtures Market
After two years of extraordinary growth, the lighting fixtures market in Europe declined in 2023 to a total value of almost EUR 17 billion.
Despite the drop of -12% registered in the last year, the market value is 6 percentage points higher than in 2018. In terms of segments, residential lighting performed better than professional lighting during the pandemic period, while the performance of the two segments reversed in the last two years. In particular, Outdoor lighting overperformed the average with annual growth of +1.5% since 2018.
The EU ban on fluorescent lamps, the increased cost of electricity and the shift to smart lighting represent the main drivers of this sector’s evolution. In Europe, LED Lighting is approaching a share of 90% on the whole market. According to lighting companies, challenging market conditions will persist in 2024.
Economic data points to a difficult two years for Residential construction investment across Europe, with an expected drop of over -5% in 2024 and a slight recovery in the following years. Non-Residential construction investments remained weak in 2024 with “civil engineering” showing +2.6% growth in the current year. The long-term outlook remains positive for the lighting business as the demand for energy-efficient lighting is increasing, due to high energy prices and environmental regulations. CSIL market forecasts in real terms show a reduction of for the current year and a recovery for both 2025 and 2026.
INTERNATIONAL TRADE OF LIGHTING FIXTURES
In 2023, the value of European lighting fixtures exports amounted to EUR 14 billion, following a decrease of -5% if compared to the previous year. On the other side, after a drop of -15%, imports of lighting fixtures reached EUR 18 billion in the year. The more pronounced drop in imports led the trade balance to improve. In 2023, the deficit worth EUR 3.8 billion while it was at EUR 6.1 billion the year before.
Total European trade recorded an average yearly growth of +1.1% in the considered period (around -11% in 2023/2022). Germany is the leading exporter of lighting fixtures with a 19% share, followed by Italy, the Netherlands, Poland and Austria.
Almost 80% of the exports remain within the European continent, while North America represents the largest destination overseas, followed by Asia-Pacific and the Middle East. Italy is the largest net exporter with EUR 900 million surplus. In terms of product segments, the export value is almost equally divided between residential (48%) and professional (52%) lighting fixtures.
Leading lighting fixture importers are Germany (16% of total), France, United Kingdom, Netherlands and Italy. In 2023, over 45% of imports originated in Asia-Pacific, while another 51% originated within the European region. In particular, China satisfied 43% of total imports, followed by Germany, Poland, Italy and the Netherlands. It has to be noticed that in 2023/22 imports from Asia-Pacific dropped by -25.5%. Professional lighting fixtures represent 53% of imported items, while residential covers the remaining 47%.CONNECTED LIGHTING
The expansion of Connected and Smart lighting technology is leading to a redefinition of the industry’s competitive landscape. The sector is experiencing a vertical integration process with large lighting groups acquiring connectivity companies to develop integrated products.
Currently, the incidence of connected lighting in Europe is equal to 19% of the market, a value that doubled since 2019.
Generally speaking, the interest in innovative smart & green lighting solutions are presently more widespread in commercial, industrial, and outdoor lighting rather than in consumer lighting (indoor lighting fixtures for home). However, as innovation proceeds and increasingly user-friendly solutions are developed by the industry, the consumer lighting segment will also experience a wider spread of connected lighting.
Smart and connected lighting products unlocked new opportunities for energy savings. Solutions as lighting systems enabling to schedule and optimize light settings, presence/occupancy sensors that adjust lighting based on the presence of humans, daylight harvesting systems that adjust lighting based on the presence of natural light, lighting systems connected with other systems such as HVAC (Heating Ventilation and Air Conditioning) – enable to save a huge amount of energy.
RELEVANT M&A OPERATIONS
Relevant merger & acquisitions deals of leading lighting companies in the year 2024:
• Luceco, a British industrial LED and LED lighting manufacturer acquired D-Line Europe, a British manufacturer of plastic cable and wiring products.
• The Brandon Group, a British medical operational lighting manufacturer acquired the British company Fulbourn Medical, another company in the same sector.
• ROBE Lighting, a Czech lighting equipment manufacturer acquired an Australian company that specializes in lighting control systems.
• Schreder, leading Belgian lighting company, acquired Photinus, an Austrian provider of solar lighting solutions.
• The Ragni Group, a French leader in public lighting solutions acquired the German company Hess, which is also a specialist in public lighting, active in the DACH region.
Source: CSIL Report ‘The European market for lighting fixtures’, a detailed analysis of the lighting fixtures industry for 30 countries. Sector figures are given for the last six years and includes market forecasts up to 2026. The international trade, the product segments and the distribution channels are also part of the analysis. Competitive system is offered by product category and by country.