Philips reports declines in 2022 

AMSTERDAM – Philips has reported an 11% comparable sales decline for its Connected Care businesses for 2022, mainly due to a double-digit decline in Sleep & Respiratory Care. 

The company has also reported an increased field action provision of EUR  85 million to expedite the completion of its recall of certain sleep therapy and ventilator devices. It has not, however, made any provisions to account for an investigation by the Department of Justice, several class-action lawsuits and personal injury claims, and negotiations with the U.S. Food and Drug Administration related to a consent decree. 

“Given the uncertain nature of the relevant events, and of their potential financial and operational impact and associated obligations, if any, the company has not made any provisions in the accounts for these matters,” the company stated. 

The Connected Care businesses saw a 5% comparable sale increase for the fourth quarter of 2022, driven by strong double-digit growth in Hospital Patient Monitoring. The businesses saw a 10% decrease in comparable order intake, mainly due to lower demand for COVID-19-related products. 

Overall, Philips reported group sales of EUR 4.5 billion for the fourth quarter, with 3% comparable sales growth, driven by supply improvements; and EUR 17.8 billion for 2022, a 3% comparable sales decline, driven by operational and supply challenges, lower sales in China, the impact of the recall and the Russia-Ukraine war. Comparable order intake decreased 8% in the fourth quarter and 3% for 2022. 

Philips has also announced a plan to address challenges, improve performance and drive progressive value creation through a strategy of focused organic growth and innovate to increase the impact of patient- and people-centric innovation at scale. The company says execution across three categories will be key: patient safety and quality; supply chain reliability; and a simplified, more agile operating model. 

“Philips aims to improve its performance to mid-single-digit comparable sales growth with a low-teens Adjusted EBITA margin by 2025, and to mid-single-digit comparable sales growth and mid-to-high-teens Adjusted EBITA margin beyond 2025,” the company stated. 

As part of its plan, Philips will reduce its workforce by an additional 6,000 roles globally by 2025, with 3,000 of those implemented in 2023. The company previously announced in 2022 that it reduced its workforce by 4,000 roles. 

The company also announced that it plans to announce a new leader for its Connected Care businesses this year.