(Reuters) – Signify cut its 2022 earnings and cash flow outlook on Friday after supply chain disruptions, inflation and currency effects weighed on its second-quarter performance.
The Dutch group is now targeting an adjusted profit before interest, tax, depreciation and amortization (Ebita) margin of 11.0-11.4% for the full year, and free cash flow equal to 5-7% Sales.
It had previously forecast an upside of up to 50 basis points from last year’s 11.6% margin, with free cash flow over 8% of sales.
The title Signify fell 7.6% to 33.07 euros at 08:27 GMT on the Amsterdam Stock Exchange.
“The challenging external environment has led us to revise our outlook for Adjusted Ebita margin,” Chief Executive Eric Rondolat said in a statement.
“In addition, continued supply chain disruptions and long lead times from suppliers will impact our free cash flow performance,” he added.
Signify expects to return to its previous cash flow target once lead times reduce and no longer require it to hold larger inventory, the company said.
Its adjusted Ebita amounted to 174 million euros in the quarter ended June, while analysts on average expected 186 million euros, according to a consensus provided by the company.
The Ebita margin went from 10.9% to 9.5%.
Signify, a former subsidiary of Philips, mainly sells LED lamps and lighting systems to individuals and businesses.
(Report Valentine Baldassari and Elitsa Gadeva in Gdansk; French version Diana Mandiá, edited by Kate Entringer)
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