Light maker Signify's Q1 core earnings miss forecast on tepid China demand (updated)

Signify

26/04/2024 06:57

(Adds details and comments on cost cuts and layoffs in
paragraphs 4-7)
       April 26 (Reuters) - Signify  LIGHT.AS , the world's
biggest maker of lights, said on Friday its first-quarter
adjusted core profit came in lower than market expectations,
dented by soft demand in China and lacklustre performance in its
European Professional segment.
    Adjusted earnings before interest, taxes and amortisation
(EBITA) fell 18.3% to 122 million euros ($130.78 million),
falling short of the 131 million euros expected on average by
analysts in a company-compiled consensus.
    "In the first quarter, we saw improving dynamics in our   
U.S. Professional, OEM and Consumer businesses, while the market
in China remained soft    and the European Professional business
was substantially below our expectation," CEO Eric Rondolat said
in a statement.
    Rondolat assured that the company should start seeing
benefits from its cost-reduction programme in the quarters
ahead.
        Signify, spun off from Philips  PHG.AS  in 2016, said in
January it would lay off 1,000 employees this year, in an
attempt to generate savings of 200 million euros annually. 
    Its number of employees fell to 31,339 at the end of the
quarter, from 34,408 in the year-ago period.     
    "The year-on-year decrease is     mostly related to a
reduction of factory personnel due to lower    production
volumes," the company said.         
    Nominal sales in the quarter fell 12.5% to 1.47 billion
euros, the group said, while reaffirming its 2024 outlook.

        ($1 = 0.9328 euros)

 (Reporting by Olivier Sorgho; Editing by Jamie Freed and Sherry
Jacob-Phillips)
 ((Olivier.Sorgho@thomsonreuters.com;))