Philips sees some improvement in Q4 2022 and takes firm actions to address operational challenges in an uncertain environment

January 30, 2023

Fourth-quarter highlights

• Group sales amounted to EUR 5.4 billion, with 3% comparable sales growth driven by component supply improvements, while Philips’ supply chain conditions remain challenging
• Comparable order intake decreased 8%, due to lower demand for COVID-19-related products compared to 2021 and company actions to improve the order book margin profile
• Income from operations amounted to EUR 171 million, compared to EUR 162 million in Q4 2021
• Adjusted EBITA of EUR 651 million, or 12.0% of sales, compared to EUR 647 million, or 13.1% of sales, in Q4 2021
• Operating cash flow was EUR 540 million, compared to EUR 720 million in Q4 2021

Full-year highlights

• Group sales amounted to EUR 17.8 billion, with a 3% comparable sales decline due to operational and supply challenges, lower sales in China, the consequences of the Respironics field action, and the Russia-Ukraine war
• Comparable order intake decreased 3% compared to 4% growth in 2021
• Income from operations amounted to a loss of EUR 1,529 million, largely due to the previously disclosed EUR 1.5 billion non-cash goodwill and R&D impairment charges, compared to income of EUR 553 million in 2021
• Adjusted EBITA of EUR 1,318 million, or 7.4% of sales, compared to EUR 2,054 million, or 12.0% of sales, in 2021
• Operating cash outflow of EUR 173 million, compared to an inflow of EUR 1,629 million in 2021
• Proposed dividend maintained at EUR 0.85 per share, to be distributed in shares

Roy Jakobs, CEO of Royal Philips:
“2022 has been a very difficult year for Philips and our stakeholders, and we are taking firm actions to improve our execution and step up performance with urgency. When I took over as CEO in October 2022, I said that our priorities are first to further strengthen our patient safety and quality management and address the Philips Respironics recall; second, to improve our supply chain reliability to convert our order book to sales and improve performance; and third, to simplify how we work to increase agility and productivity. This is a step-by-step improvement journey supported by our leading market positions, extended customer base, meaningful innovations, ecosystem partnerships, strong brand, and talented employees.