Philips settles additional lawsuits 

AMSTERDAM – Philips Respironics, without admitting any fault, has agreed to pay $1.1 billion to resolve the personal injury litigation and the medical monitoring class action related to a recall of certain sleep and respiratory devices in the U.S. 

The company has made a provision of EUR 982 million in the first quarter of 2024 and expects to make payments in 2025 from its cash flow generation. 

Philips has also concluded an agreement with insurers to pay the company EUR 540 million to cover recall-related product liability claims, income that is expected to be recognized in the second quarter of 2024, with payments expected this year. 

The settlements follow a previous economic loss settlement for which the company recognized a provision of EUR 575 million in the first quarter of 2023. 

Philips also signed a consent decree in April that requires, among other things, for the company to select and retain an independent expert to conduct inspections at certain facilities for several years. 

“The approved consent decree and economic loss settlement, and now the resolution of the personal injury and medical monitoring litigation in the U.S., are significant milestones and provide further clarity on the way forward for Philips,” said Roy Jakobs, CEO of Royal Philips. 

Philips made the announcement as part of releasing its financial results for the first quarter of 2024, which includes group sales of EUR 4.1 billion, with comparable sales growth of 2.4%. Income from operations was UER –824 million, including the provision for the litigation settlement. Adjusted EBITDA margin was 9.4% of sales. 

For the full year 2024, Philips continues to expect 3% to 5% comparable sales growth and an adjusted EBITA margin of 11% to 11.5%.