Koninklijke Philips NV reported a fourth-quarter FY21 sales decline of 5.6 percent year-on-year to €4.9 billion ($5.56 billion).
The company attributed the comparable sales decline of 10 percent to headwinds caused by global supply chain challenges, postponement of equipment installations in hospitals, and consequences of the Respironics field action.
The comparable order intake rose by 4 percent, with double-digit growth in the Diagnosis & Treatment businesses, partly offset by a double-digit decline in the Connected Care businesses.
Comparable sales for Diagnosis & Treatment businesses were in line with Q4 2020, with double-digit growth in Image-Guided Therapy, offset by declines in Ultrasound and Diagnostic Imaging. The comparable order intake for the Diagnosis & Treatment businesses increased 10 percent, with double-digit growth in Image-Guided Therapy and mid-single-digit growth in Ultrasound. The adjusted EBITDA margin contracted 100 bps to 16.2 percent.
The comparable sales in the Connected Care businesses declined 32 percent Y/Y due to pandemic induced demand correction. The adjusted EBITDA margin contracted 1,510 bps to 16.3 percent.
The Personal Health businesses recorded a comparable sales decline of 3 percent Y/Y due to the supply chain crisis. The adjusted EBITDA was nearly flat at 24.6 percent.
Philips Respironics raised the field action provision by €220 million ($250 million), mainly due to the higher volume of registered devices eligible for remediation.
It recorded an adjusted EPS of €0.57.
The adjusted EBITA contracted 590 bps to 13.1 percent due to lower sales associated with supply chain headwinds. The adjusted EBITDA contracted 580 bps to 18.3 percent.
Philips generated €720 million ($817 million) in operating cash flow. It held €2.3 billion ($2.6 billion) in cash and equivalents.
“As we announced on January 12, 2022, sales were impacted by several headwinds, namely supply chain challenges, postponement of equipment installations in hospitals related to COVID-19, and the consequences of the Respironics field action,” CEO Frans van Houten said.
Looking ahead, the company expects to resume its growth and margin expansion trajectory in the course of 2022.
By Anusuya Lahiri
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