Philips Clocks 4% Comparable Sales Decline In Q1 Amid Supply Chain Headwinds, Respironics Field Action

Koninklijke Philips NV PHG reported a first-quarter FY22 sales growth of 2.6% year-on-year to €3.9 billion.
The comparable sales declined by 4% amid significant supply chain headwinds and the Respironics field action consequences. On April 8, Philips Respironics and certain of Philips' U.S. subsidiaries received a subpoena from the U.S. Department of Justice to provide information related to events leading to the Respironics recall.
The comparable order intake rose by 5%, driven by the Diagnosis & Treatment businesses and Hospital Patient Monitoring.
Comparable sales for Diagnosis & Treatment businesses declined 2%, with high-single-digit growth in Image-Guided Therapy, offset by declines in Ultrasound and Diagnostic Imaging due to electronic component shortages. The comparable order intake for the Diagnosis & Treatment businesses increased by 7%, with double-digit growth in Image-Guided Therapy and mid-single-digit growth in Ultrasound and Diagnostic Imaging. The adjusted EBITA margin contracted to 5.9% from 8.7% a year ago.
The comparable sales in the Connected Care businesses declined 21% Y/Y due to Respironics field action consequences. The Adjusted EBITA margin amounted to 0.4% versus 12.9% a year ago, mainly due to the decline in sales and supply chain headwinds, partly offset by cost savings.
The Personal Health businesses recorded a comparable sales growth of 8% Y/Y due to double-digit growth in Oral Healthcare. The adjusted EBITA expanded 130 bps to 15.3%, mainly due to increased sales.
Philips Respironics has more than tripled its weekly production output than 2020.
Philips Respironics raised the field action provision by €165 million, mainly due to the higher volume of registered devices eligible for remediation and higher communication costs.
Due to lower sales and supply chain headwinds, the adjusted EBITA contracted 330 bps to 6.2%.
Philips reported €227 million in operating cash outflow.
Price Action: PHG shares traded lower by 11.4% at $26.87 in the premarket session on the last check Monday.
Photo Via Wikimedia Commons

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