By Alberto Chiumento
(Reuters) -Signify CEO Eric Rondolat blamed a "gloomy" economic situation in Europe and "increased difficulties in China" after the world's biggest maker of lights missed expectations on Friday for second-quarter adjusted core profit.
The result knocked 9% off the shares of the Dutch company, which has seen "a real lack of traction" in the professional segment in Europe, Rondolat told Reuters in an interview.
The many elections on the continent were "destabilizing the investment pattern" in countries going to the polls, especially on the public side of the business, he added.
The company has faced greater price competition in the Chinese market, which he described as "economically not developing at the right level", as projects were stopped and payment terms stretched.
However, he said, "The second quarter has been pretty much in continuity with Q1, where we have already seen those signs of weakness."
Signify was looking at alternatives, he added, as a trade spat among the United States, the European Union and China could lead to higher commercial tariffs, or retention of existing ones.
India, where the company already has plants, and Indonesia could be alternatives, Rondolat said, adding that working in big national markets while staying in the same region as China was fundamental for business.
Adjusted earnings before interest, taxes and amortisation (EBITA) of 118 million euros ($128.11 million) in the second quarter were down 13.2% from a year earlier, missing the 138 million analysts expected on average in a company-compiled consensus.
Net sales fell 9.8% from a year earlier to 1.48 billion euros, the company said.
"We remain cautious on professional Europe and China for the second semester, but expect to see positive traction for professional in the Americas, as well as the OEM and consumer businesses," Rondolat said in a previous statement.
In the second quarter, the professional business accounted for about 65% of total sales.
The company maintained its guidance for 2024, seeing free cash flow generation at 6% to 7% of net sales and indicating the adjusted EBITA margin would be at the lower end of a range from 10% to 10.5%.
($1=0.9211 euros)