April 25, 2022
- Group gross sales amounted to EUR 3.9 billion, with a 4% comparable gross sales decline on the again of 9% comparable gross sales development in Q1 2021
- Comparable order consumption elevated 5%, pushed by the Prognosis & Remedy companies and Hospital Affected person Monitoring
- Revenue from persevering with operations amounted to a lack of EUR 152 million, in comparison with a lack of EUR 34 million in Q1 2021
- Adjusted EBITA of EUR 243 million, or 6.2% of gross sales, in comparison with 9.5% of gross sales in Q1 2021
- Working money circulation was an outflow of EUR 227 million, in comparison with an influx of EUR 321 million in Q1 2021
- Philips offers replace on Philips Respironics area motion associated to particular CPAP, BiPAP and mechanical ventilators
Frans van Houten, CEO of Royal Philips:
“Our prospects affirm the relevance of our technique and portfolio, as evidenced by the additional development of our all-time-high order ebook. Comparable order consumption development for the Group amounted to five%, pushed by good development throughout the Prognosis & Remedy companies, in addition to Hospital Affected person Monitoring and Related Care Informatics. As well as, we partnered with 12 extra hospitals to assist them rework the supply of care, additional constructing on the 80 new long-term strategic partnerships signed in 2021. In China, we signed an settlement with Shanghai East Hospital to offer its hospitals within the Shandong and Hainan provinces with a broad vary of superior imaging and important care options. I’m additionally happy with the 8% comparable gross sales development for our Private Well being companies, which demonstrates continued sturdy shopper demand for our propositions enabling folks to deal with their well being and well-being.
Because of the onerous work of our folks, we recorded higher than anticipated gross sales of EUR 3.9 billion in very difficult circumstances, with vital provide chain headwinds in addition to the results of the Respironics area motion. Adjusted EBITA margin for the Group was 6.2% within the quarter.
The sturdy buyer demand and order ebook, coupled with our first-quarter gross sales efficiency, help the expansion and margin growth vary for the total 12 months as communicated in January 2022. On the identical time, it’s important we acknowledge the rising dangers associated to the COVID-19 scenario in China, the Russia-Ukraine warfare, provide chain challenges and inflationary pressures, which can probably affect our means to transform our sturdy order ebook to gross sales and obtain our margin goal if circumstances deteriorate additional. Our groups are absolutely targeted on on a regular basis execution, delivering on the shopper demand and powerful order ebook, and addressing the availability chain dangers. We’re implementing further price measures, in addition to value will increase, to mitigate the inflationary headwinds.”
Enterprise phase efficiency
The Prognosis & Remedy companies’ comparable gross sales decreased 2%, on the again of 9% comparable gross sales development in Q1 2021. Excessive-single-digit development in Picture-Guided Remedy was greater than offset by a decline in Ultrasound and in Diagnostic Imaging resulting from digital element shortages, and on the again of sturdy development in these companies final 12 months. Comparable order consumption elevated 7%, with double-digit development in Picture-Guided Remedy and mid-single-digit development in Ultrasound and Diagnostic Imaging, reflecting sturdy traction for Philips’ very enticing providing. The Adjusted EBITA margin was 5.9%, primarily as a result of decline in gross sales and the affect of provide chain headwinds.
The Related Care companies’ comparable gross sales decreased 21%, primarily as a result of penalties of the Respironics area motion. Comparable order consumption was in step with Q1 2021, with continued sturdy demand and share good points in Hospital Affected person Monitoring and Related Care Informatics. The Adjusted EBITA margin amounted to 0.4%, primarily as a result of decline in gross sales and the affect of provide chain headwinds, partly offset by price financial savings.
The Private Well being companies’ comparable gross sales elevated by a powerful 8%, primarily pushed by double-digit development in Oral Healthcare. The Adjusted EBITA margin amounted to fifteen.3%, primarily as a result of improve in gross sales, partly offset by provide chain headwinds and an adversarial foreign money affect.
Philips’ ongoing deal with innovation and partnerships resulted within the following key developments within the quarter:
- Philips signed 12 new long-term strategic partnerships within the quarter, together with a 10-year settlement with Oulu College Hospital in Finland to ship the most recent Philips Azurion image-guided remedy options, in addition to upkeep, consultancy and financing providers.
- Philips expanded its main ultrasound portfolio with superior hemodynamic measurement capabilities on its handheld ultrasound Lumify, enabling clinicians to quantify blood circulation in a variety of point-of-care diagnostic purposes, together with cardiology and obstetrics & gynecology.
- Philips entered into partnerships with healthcare suppliers within the UK and Germany to ship its vendor-neutral Radiology Operations Command Middle, which permits distant collaboration between technologists, radiologists and imaging operations groups throughout a number of websites, to assist improve productiveness and increase entry to MR- and CT-based analysis.
- Constructing available on the market share achieve in 2021, Philips MR delivered sturdy double-digit order consumption development within the quarter, pushed by all main product households. Additional highlighting the success of its distinctive helium-free working MR portfolio, since its launch Philips has put in greater than 500 of its Ingenia Ambition MRI programs, which ship excellent picture high quality and carry out MRI exams as much as 50% sooner.
- Philips is efficiently increasing into interventional oncology with the set up of its progressive lung most cancers analysis and remedy answer Lung Suite in hospitals in Belgium, France, Israel, and the UK. Based mostly on Philips Azurion, this answer enhances the accuracy of biopsy procedures and offers a remedy choice to instantly deal with early-stage lung most cancers sufferers.
- Underlining the medical and financial worth of distant cardiac affected person monitoring, Philips introduced new analysis demonstrating elevated atrial fibrillation detection and vital price financial savings utilizing Philips’ cellular cardiac outpatient telemetry monitoring. As well as, Philips expanded its distant cardiac monitoring portfolio with a patch-based, clinical-grade ECG to enhance affected person recruitment, compliance and retention for medical trials.
- Philips accomplished the worldwide introduction of its new Philips Shaver S9000 with SkinIQ with its launch in Japan, leading to accelerated gross sales development for this class, and a 4.9 (out of 5) shopper score and assessment rating inside the first month.
- Following the profitable refresh of its entry-range electrical toothbrushes, the launch of the Sonicare 9900 Status premium vary, and the launch of progressive interdental cleansing units in 2021, Philips Oral Healthcare recorded sturdy double-digit comparable gross sales development within the quarter, pushed by North America and China.
Price financial savings
Our price financial savings packages delivered EUR 97 million within the first quarter. After deducting provide price will increase, internet financial savings amounted to EUR 8 million within the first quarter. In response to the inflationary headwinds, the corporate is implementing further cost-saving measures of EUR 150-200 million for the total 12 months.
Philips Respironics area motion associated to particular CPAP, BiPAP and mechanical ventilators
“We’re dedicated to supporting the neighborhood of sufferers who depend on our sleep and respiratory care options for his or her well being and high quality of life, and the physicians and prospects who’re devoted to assembly affected person wants. We’re changing or repairing the units associated to the Respironics area motion as quick as doable and are persevering with to replace sufferers and prospects concerning the progress of this system. We’ve got a powerful program administration in place overseeing each facet of the remediation, which includes greater than 1,000 of our colleagues,” stated Frans van Houten, CEO of Royal Philips.
Philips has a powerful program administration in place led by Roy Jakobs, Chief Enterprise Chief of the Related Care companies and member of Philips’ Government Committee, to make sure the Respironics area motion is executed with pace and accuracy. Administration accountability and oversight have been strengthened with organizational adjustments carried out in Philips Respironics and the High quality & Regulatory operate. Staffing and experience associated to post-market surveillance, medical affairs, toxicology and bio-compatibility have additionally been elevated.
Philips Respironics has greater than tripled its weekly manufacturing output in comparison with 2020, regardless of the continuing world provide chain challenges. So far, Philips Respironics has produced greater than 2.2 million restore kits and substitute units. Following one other wave of Philips Respironics’ complete affected person and buyer communication outreach and based mostly on present insights, the full anticipated models to be remediated have elevated by roughly 300,000, primarily within the US. Philips Respironics recorded a EUR 65 million improve within the area motion provision within the quarter to cater for the upper anticipated quantity of units eligible for remediation and better communication prices. Moreover, an additional EUR 100 million provision was recorded for potential larger price of execution and to make sure the pace of this system in a risky atmosphere. Philips Respironics expects to finish over 90% of the manufacturing and shipments to prospects in 2022.
Philips Respironics continues to make good progress with the excellent take a look at and analysis program to higher characterize the doable well being dangers related to the sound abatement foam within the affected units. Complete testing and analyses associated to the affected CPAP and BiPAP units are anticipated to be accomplished within the second quarter of 2022.
On April 8, 2022, Philips Respironics and sure of Philips’ subsidiaries within the US acquired a subpoena from the US Division of Justice to offer info associated to occasions resulting in the Respironics recall. The related subsidiaries are cooperating with the company.
For additional info, please contact:
Philips International Press Workplace
Tel.: +31 6 1521 3446
Philips Investor Relations
Tel.: +31 20 59 77055
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a number one well being know-how firm targeted on bettering folks’s well being and well-being, and enabling higher outcomes throughout the well being continuum – from wholesome residing and prevention, to analysis, remedy and residential care. Philips leverages superior know-how and deep medical and shopper insights to ship built-in options. Headquartered within the Netherlands, the corporate is a frontrunner in diagnostic imaging, image-guided remedy, affected person monitoring and well being informatics, in addition to in shopper well being and residential care. Philips generated 2021 gross sales of EUR 17.2 billion and employs roughly 79,000 staff with gross sales and providers in additional than 100 nations. Information about Philips might be discovered at www.philips.com/newscenter.
Ahead-looking statements and different necessary info
This doc and the associated oral presentation, together with responses to questions following the presentation, comprise sure forward-looking statements with respect to the monetary situation, outcomes of operations and enterprise of Philips and sure of the plans and targets of Philips with respect to those objects. Examples of forward-looking statements embody statements made about our technique, estimates of gross sales development, future Adjusted EBITA*), future restructuring and acquisition- associated costs and different prices, future developments in Philips’ natural enterprise and the completion of acquisitions and divestments. Ahead-looking statements might be recognized usually as these containing phrases similar to “anticipates”, “assumes”, “believes”, “estimates”, “expects”, “ought to”, “will”, “will possible end result”, “forecast”, “outlook”, “tasks”, “could” or related expressions. By their nature, these statements contain threat and uncertainty as a result of they relate to future occasions and circumstances and there are a lot of components that would trigger precise outcomes and developments to vary materially from these expressed or implied by these statements.
These components embody however usually are not restricted to: Philips’ means to achieve management in well being informatics in response to developments within the well being know-how business; Philips’ means to rework its enterprise mannequin to well being know-how options and providers; macroeconomic and geopolitical adjustments; integration of acquisitions and their supply on enterprise plans and worth creation expectations; securing and sustaining Philips’ mental property rights, and unauthorized use of third-party mental property rights; Philips’ means to satisfy expectations with respect to ESG-related issues; failure of services to satisfy high quality or safety requirements, adversely affecting affected person security and buyer operations; breaches of cybersecurity; Philips’ means to execute and ship on packages on enterprise transformation and IT system adjustments and continuity; the effectiveness of our provide chain; attracting and retaining personnel; COVID-19 and different pandemics; challenges to drive operational excellence and pace in bringing improvements to market; compliance with rules and requirements together with high quality, product security and (cyber) safety; compliance with enterprise conduct guidelines and rules; treasury and financing dangers; tax dangers; reliability of inner controls, monetary reporting and administration course of. For a dialogue of things that would trigger future outcomes to vary from such forward-looking statements, see additionally the Danger administration chapter included within the Annual Report 2021.
Philips has acknowledged a provision associated to the voluntary recall notification within the US/area security discover outdoors the US for sure sleep and respiratory care merchandise, based mostly on Philips’ finest estimate for the anticipated area actions. Future developments are topic to vital uncertainties, which require administration to make estimates and assumptions about objects similar to portions and the portion to get replaced or repaired. Precise outcomes in future durations could differ from these estimates and have an effect on the corporate’s outcomes of operations, monetary place and money flows.
Third-party market share knowledge
Statements concerning market share, contained on this doc, together with these concerning Philips’ aggressive place, are based mostly on outdoors sources similar to specialised analysis institutes, business and supplier panels together with administration estimates. The place info shouldn’t be but out there to Philips, market share statements may be based mostly on estimates and projections ready by administration and/or based mostly on outdoors sources of data. Administration’s estimates of rankings are based mostly on order consumption or gross sales, relying on the enterprise.
Market Abuse Regulation
This press launch accommodates inside info inside the that means of Article 7(1) of the EU Market Abuse Regulation. This press launch was distributed at 07:00 am CET on April 25, 1922.
Use of non-IFRS info
In presenting and discussing the Philips Group’s monetary place, working outcomes and money flows, administration makes use of sure non-IFRS monetary measures. These non-IFRS monetary measures shouldn’t be seen in isolation as options to the equal IFRS measure and must be used at the side of essentially the most instantly comparable IFRS measures. Non-IFRS monetary measures would not have standardized that means beneath IFRS and subsequently might not be corresponding to related measures offered by different issuers. A reconciliation of those non-IFRS measures to essentially the most instantly comparable IFRS measures is contained on this doc. Additional info on non-IFRS measures might be discovered within the Annual Report 2021.
Truthful worth info
In presenting the Philips Group’s monetary place, honest values are used for the measurement of assorted objects in accordance with the relevant accounting requirements. These honest values are based mostly on market costs, the place out there, and are obtained from sources which might be deemed to be dependable. Readers are cautioned that these values are topic to adjustments over time and are solely legitimate on the steadiness sheet date. When quoted costs or observable market knowledge usually are not available, honest values are estimated utilizing acceptable valuation fashions and unobservable inputs. Such honest worth estimates require administration to make vital assumptions with respect to future developments, that are inherently unsure and should subsequently deviate from precise developments. Vital assumptions used are disclosed within the Annual Report 2021. In sure circumstances unbiased valuations are obtained to help administration’s willpower of honest values.
All quantities are in thousands and thousands of euros except in any other case said. On account of rounding, quantities could not add up exactly to totals supplied. All reported knowledge is unaudited. Monetary reporting is in accordance with the accounting insurance policies as said within the Annual Report 2021 apart from the adoption of recent requirements and amendments to requirements that are additionally anticipated to be mirrored within the firm’s consolidated IFRS monetary statements as at and for the 12 months ending December 31, 2022.
Prior-period quantities have been reclassified to evolve to the current-period presentation; this contains immaterial organizational adjustments.
*) Non-IFRS monetary measure. Confer with Reconciliation of non-IFRS info.