During the fourth quarter, Signify experienced a stronger than anticipated deterioration of its business in China due to ongoing COVID-related disruptions, a much lower growth in the OEM channel and a weaker indoor professional business than expected. Signify now expects a comparable sales decline of 8.8% for the quarter, resulting in a comparable sales growth of 1.2% for the full year 2022, compared to the previous range of 2-3% for the year.
While the gross margin stabilised, fixed costs did not keep pace with lower sales volumes. Signify therefore expects an Adjusted EBITA margin of approximately 10% for both the fourth quarter and the full year 2022. This compares with the previous full-year guidance of the lower end of the 11.0-11.4% range.
During the final quarter, Signify significantly reduced its inventory, leading to a better than expected working capital performance. The company now expects to report a full year 2022 free cash flow of approximately EUR 445 million or 5.9% of sales, compared to the previous guidance of the lower end of the 5-7% range.
Signify will publish its fourth quarter and full-year results 2022 on January 27, 2023.
