# Lights maker Signify cuts annual outlook on lower consumer demand, China woes
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2022-10-28
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: Signify Cuts Profit Margin and Sales Guidance Amid Demand
Meta Description: Signify, the world's biggest maker of lights, adjusts to a weaker external environment with lower profit margin and sales guidance, focusing on cost
URL: https://financedigest.com/lights-maker-signify-cuts-annual-outlook-on-lower-consumer-demand-china-woeshtml

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(Reuters) -Signify, the world’s biggest maker of lights, cut its full-year profit margin and sales guidance on Friday, hit by lower consumer demand and a slowdown in China amid uncertain growth outlook.

“We have shifted gears to adapt the company to a structurally weaker external environment in the coming quarters, when current headwinds and volatility are likely to persist,” Chief Executive Officer Eric Rondolat said in a statement, adding that Signify would focus on controlling costs and cash flow. The Dutch group said it now expects adjusted earnings before interest, taxes and amortisation (EBITA) margins and free cash flow to be at the lower end of its guidance.

Comparable [sales growth](https://www.financedigest.com/swedish-match-continues-to-see-strong-smoke-free-sales-growth.html "Swedish Match continues to see strong smoke-free sales growth") will be between 2% and 3% for 2022, down from previous guidance of 3-6%, it added.

Its range for adjusted EBITA margin is between 11.0% and 11.4%, with free [cash flow](https://www.financedigest.com/xerox-shares-slide-as-annual-revenue-cash-flow-forecasts-take-a-hit.html "Xerox shares slide as annual revenue, cash flow forecasts take a hit") equal to 5% to 7% of sales.

Signify, the former [lighting arm of Philips, sells mostly LED lights and lighting systems to both consumers and businesses](https://www.financedigest.com/lighting-maker-signify-cuts-2022-outlook-again-on-china-business-lighting.html "Lighting maker Signify cuts 2022 outlook again on China, business lighting").

In the third quarter, the professional segment offset weaker demand from consumers, the group said, with total sales [rising to 1.91 billion euros](https://www.financedigest.com/euro-zone-economic-sentiment-rises-in-january-to-seven-month-high.html "Euro zone economic sentiment rises in January to seven-month high") ($1.90 billion), up 4.3% in comparable sales.

In July, Signify had [lowered its margin and free cash flow outlook](https://www.financedigest.com/britains-next-sees-lower-clothing-inflation-shares-dip-on-cautious-outlook.html "Britain’s Next sees lower clothing inflation, shares dip on cautious outlook"), saying it expected its profit margins to decline as supply chain disruption and currency effects weighed on its earnings.

($1 = 1.0026 euros)

(Reporting by Valentine Baldassari; editing by Josephine Mason and Rashmi Aich)


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