April 24 (Reuters) - The world's biggest lighting maker Signify reported a 12% drop in its quarterly nominal sales to 1.27 billion euros ($1.48 billion) on Friday, dragged by currency effects related
Signify's sales fall as weak US dollar drags professional lighting unit
Quarterly Financial Performance and Business Overview
By Leo Marchandon
April 24 (Reuters) - The world's biggest lighting maker Signify reported a 12% drop in its quarterly nominal sales to 1.27 billion euros ($1.48 billion) on Friday, dragged by the costs of converting weak U.S. dollars into euros.
Profit Margin and Guidance
The Dutch group confirmed its full-year guidance for a core profit margin, or proportion of earnings before interest, taxes and amortisation to sales, of between 7.5% and 8.5%. The margin was 6.5% in the first quarter, down from 8% a year ago.
Signify declined to provide a sales forecast for the year.
Stock Performance
Its Amsterdam-listed shares were down 1% at 0900 GMT, reversing course after rising around 2.5% initially.
Business Segments and Restructuring Efforts
Global Operations and Strategic Review
Active in more than 70 markets with brands such as Philips, Philips Hue and Color Kinetics, the company faces sluggish global lighting demand while navigating a recently launched restructuring programme. A strategic portfolio review is also underway, aimed at repositioning Signify for growth.
Net Income and Cost-Cutting Measures
Its net income plunged to 8 million euros from 67 million euros a year ago, mainly due to restructuring charges of 63 million euros linked to the 180-million-euro cost-cutting plan.
Performance by Segment
Professional Segment
The Professional segment, Signify's largest, saw nominal sales fall 11% to 839 million euros, hurt by a 7.3% currency impact and continued softness in public projects across Europe and the United States.
Consumer Segment
The Consumer segment, which sells Philips Hue smart lights, posted an 11.5% sales drop to 276 million euros, as inventory adjustments by retailers weighed on volumes despite strong consumer appetite.
Workforce Reduction
At the end of March, Signify had a workforce of 26,008, down by 12% from 29,697 a year earlier. Most of the job cuts were tied to factory roles as production volumes dipped.
Additional Information
($1 = 0.8563 euros)
(Reporting by Leo Marchandon in Gdansk, editing by Milla Nissi-Prussak)
