Signify gives gloomy forecasts for China
2023.01.12 04:21
Signify gives gloomy forecasts for China
Budrigannews.com – The largest lighting manufacturer in the world, Signify NV, reduced its full-year 2022 profit margin and sales guidance on Thursday. The company cited a slower-than-anticipated slowdown in China and lower demand for professional indoor lighting.
In early Amsterdam trading, Signify’s shares fell 3.9% to 31.84 euros.
The Dutch company, which had previously reduced its forecasts in July and October, now anticipates an adjusted margin of approximately 10% on earnings before interest, taxes, and amortization (EBITA).
That contrasts with the lower end of the 11.0%-11.40% range that had been provided for the previous full-year guidance. On January 27, it will release its full 2022 results for the fourth quarter.
In a statement, the company stated, “Signify experienced a stronger than anticipated deterioration of its business in China due to ongoing COVID-related disruptions, a much lower growth in… (component sales) and a weaker indoor professional business than expected.”
Comparable sales growth for 2022 is now expected to be 1.2%, down from a previous guidance of 2% to 3%, with a 8% drop in the fourth quarter.
In a note, ING analyst Marc Hesselink stated that the company’s shares have already been weak, falling 27% from a year earlier due to the company’s classification as cyclical.
However, in October, the company stated that its energy-efficient lights were in high demand, particularly in Europe.
According to Hesselink, “We expected that the focus on energy efficiencies would have offset some of the cyclical weakness, but that was clearly not the case.”
Hesselink said that Signify’s full-year free cash flow of 445 million euros (or $479 million) was better than expected.
In 2016, a spin-off of Philips’ lighting business led to the creation of Signify.
