Philips expects sales to pick up this summer

AMSTERDAM, Jan 24 (Reuters) – Dutch health technology company Philips said on Monday it expects a strong recovery in sales in the second half of the year even though the global shortage of spare parts is expected to persist in the coming months .

Earlier this month, Philips warned that supply chain issues would hurt its profits and that a ventilator recall was to be extended, sending its stock price plummeting by more than 15%.

“We expect to start the year with a decline in comparable sales, followed by a recovery and a strong second half,” chief executive Frans van Houten said in a statement.

This should lead to comparable sales growth of between 3% and 5% in 2022, with a 40 to 90 basis point increase in earnings before interest, taxes, depreciation and amortization (EBITA) margin, he added. .

Growth will nevertheless be hampered by the sleep and respiratory care division, which is still faced with the massive recall of respiratory aid devices that began last year, due to a risk of degradation and toxicity of a foam component that could become carcinogenic.

Growth, without taking this division into account, should reach 5% to 6%, said Frans van Houten.

Philips has provisioned 725 million euros to repair and replace some five million devices worldwide, but this sum does not cover the possible costs of litigation, the company having to face more than a hundred class action lawsuits. Fear of a high cost of damages has already caused Philips’ market capitalization to fall by around 15 billion euros in the past nine months. (Bart Meijer report, French version Augustin Turpin, edited by Blandine Hénault)