Philips delivers first-quarter results in line with 2024 performance improvement plan; Resolves the Respironics personal injury and medical monitoring litigation in the US for USD 1.1 billion

April 29, 2024


First-quarter highlights

• Group sales amounted to EUR 4.1 billion, with comparable sales growth of 2.4%
• Comparable order intake -3.8%, mainly due to China
• USD 1.1 billion Respironics litigation settlement reached in the US (provision recognized of EUR 982 million)
• Income from operations EUR -824 million, including above provision
• Adjusted EBITA margin of 9.4% of sales
• Free cash outflow of EUR 336 million
• EUR 540 million agreement reached with insurers for Respironics recall-related product liability claims
  
  

Roy Jakobs, CEO of Royal Philips:
“We started the year in line with our plan, with order intake growth outside China turning positive and strong margin improvement. Supported by key innovation launches and strong focus on our execution priorities, we remain confident in our performance improvement plan for 2024.

Patient safety and quality is our highest priority, and we have taken important steps in further resolving the consequences of the Respironics recall. The remediation of the sleep therapy devices for patients is almost complete, and the test results to date show the use of these devices is not expected to result in appreciable harm to health. We do regret the concern that patients may have experienced.

The approved consent decree and economic loss settlement, and now the resolution of the personal injury and medical monitoring litigation in the US, are significant milestones and provide further clarity on the way forward for Philips.”

Respironics litigation


Philips and plaintiffs’ leadership have reached an agreement, following a mediation with Judge Diane M. Welsh, to resolve the personal injury litigation and the medical monitoring class action to end the uncertainty associated with litigation in the US. Philips and Philips Respironics do not admit any fault or liability, or that any injuries were caused by Respironics’ devices.

The settlement addresses the claims filed in the US courts and potential claims submitted to the census registry. Under the settlement, Philips Respironics has agreed to pay a total of USD 1.1 billion. The related payments are expected in 2025 and will be funded from Philips’ cash flow generation. As a consequence, a EUR 982 million*) provision was recognized in Q1 2024.

In April 2024, Philips Respironics signed a consent decree, which was court-approved, and obtained the final court approval for the previously announced economic loss settlement in the US, for which a provision was recognized in Q1 2023.