Philips Registers 5% Comp Sales Decline In Q3 As Supply Crisis, Inflation, Covid, Ukraine War Weigh; To Let Go Off 4K Workers

Philips Registers 5% Comp Sales Decline In Q3 As Supply Crisis, Inflation, Covid, Ukraine War Weigh; To Let Go Off 4K Workers
  • Koninklijke Philips N.V. PHG reported a third-quarter FY22 comparable sales decline of 5% year-on-year to €4.3 billion.
  • Continued supply shortages, inflationary pressures, the COVID situation in China, and the Russia-Ukraine war led to the decline.
  • The comparable order intake decreased by 6%.
  • Also Read: Philips Names Company Insider Roy Jakobs As New CEO, Succeeding Frans van Houten
  • Comparable sales for Diagnosis & Treatment businesses declined by 2%. 
  • The comparable sales in the Connected Care businesses declined 15% Y/Y due to supply challenges. 
  • The Personal Health businesses recorded a comparable sales growth of 4% Y/Y from the momentum in North America and Western Europe. 
  • Philips Respironics has produced 4 million replacement devices and repair kits to date.
  • Due to lower sales and supply chain headwinds, the adjusted EBITA margin contracted 750 bps to 4.8%. 
  • Philips used €180 million in operating cash flow. 
  • Outlook: The supply challenges, macroeconomic environment, and COVID measures in China led to Philips expecting a mid-single-digit comparable sales decline for Q4, with a high-single-to-double-digit Adjusted EBITA margin range.
  • During Q2, PHG disclosed a full-year 2022 outlook of 1%-3% comparable sales growth and ~10% Adjusted EBITA margin, driven by 6%-9% comparable sales growth in the second half of 2022.
  • For the 2023-2025 period, Philips expected 4%-6% average annual comparable sales growth and an Adjusted EBITA margin of 14%-15%.
  • Philips shared plans to reduce its global workforce by around 4,000 roles immediately.
  • Price Action: PHG shares closed lower by 1.51% at $13.07 on Friday.
  • Photo Via Wikimedia Commons

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