Signify takes 3% sales hit from weaker dollar and yuan, but keeps guidance

By Leo Marchandon

(Reuters) -Dutch lighting manufacturer Signify on Friday reported a 4.4% drop in its second-quarter sales, which included a 3% currency exchange hit from the weakening U.S. dollar and Chinese yuan, but reaffirmed its forecast for annual growth.

The world's largest lighting manufacturer is entering a new chapter after Eric Rondolat, its CEO of 13 years who led Signify through the 2016 spin-off from Philips, stepped down in April.

Its nominal sales fell to 1.418 billion euros ($1.66 billion) in the quarter, while analysts had forecast them at 1.415 billion euros in a company-provided consensus.

Despite currency headwinds, Signify noted that the second-quarter performance maintained the momentum seen in the previous three months, with strong growth in its Professional business in North America and solid demand for connected home products in its Consumer business.

However, adjusted operating earnings before amortisation (EBITA) fell 6.5% to 110 million euros in the second quarter, slightly lower than the 116 million expected by analysts. 

"Our adjusted EBITA performance was impacted by higher cost absorption in some parts of the business with strong headwinds, and re-investments to drive growth," Signify said in a statement.

It also reported a nearly 6% reduction in its headcount to 29,456 employees at the end of June, from 31,219 a year earlier, after it reorganised operations and adjusted factory workforce in response to lower production volumes.

Signify reaffirmed its 2025 guidance for low single-digit percentage growth in sales, excluding its Conventional business. It also added an EBITA margin forecast of 9.6% to 9.9% for the full year.

($1 = 0.8517 euros)

(Reporting by Leo Marchandon in Gdansk, editing by Milla Nissi-Prussak)