News
Philips announces its annual and fourth quarter 2023 results
Forward-looking statements
This document and the related oral presentation, including responses to questions following the presentation, contain certain forward-looking statements with respect to Philips’ financial condition, results of operations and business and certain of Philips’ plans and objectives with respect to these items. . Examples of forward-looking statements include statements made about our strategy, sales growth estimates, future adjusted EBITA*), future restructuring and acquisition-related charges and other costs, future developments in Philips’ organic business and the completion of acquisitions and divestitures. Forward-looking statements can generally be identified as those that contain words such as “anticipates,” “assumes,” “believes,” “estimates,” “expects,” “should,” “will,” “will likely result,” “predicts,” “ perspectives”, “projects”, “may” or similar expressions. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.
These factors include, but are not limited to: Philips’ ability to achieve leadership in health informatics in response to developments in the health technology industry; Philips’ ability to transform its business model into healthcare technology solutions and services; macroeconomic and geopolitical changes; integration of acquisitions and their delivery into business plans and value creation expectations; protect and maintain Philips’ intellectual property rights and unauthorized use of third party intellectual property rights; Philips’ ability to meet expectations regarding ESG-related issues; failure of products and services to meet quality or safety standards, negatively affecting patient safety and customer operations; cybersecurity breaches; challenges related to Philips’ strategy to improve execution and other business performance initiatives; the resilience of our supply chain; attract and retain staff; challenges to drive operational excellence and speed in introducing innovations to the market; compliance with regulations and standards, including quality, product safety and (cyber) security; compliance with business conduct rules and regulations, including privacy and future ESG disclosures and due diligence requirements; treasury and financing risks; tax risks; reliability of internal controls, financial reports and management processes; global inflation. As a result, Philips’ actual future results may differ materially from the plans, objectives and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see also the Risk Management chapter included in Annual Report 2022. Reference is also made to the Risk Management section in the Philips 2023 Semi-Annual Report.
Israel
Risk factors discussed in the Philips 2022 Annual Report (section 6.3) include the strategic risk that the company’s global operations are exposed to geopolitical and macroeconomic changes. The current situation in Israel further increases economic and political uncertainty and may affect the company’s operating results, financial position and cash flows. Philips is present in Israel with several subsidiaries, mainly in Diagnostics and Treatment and Connected Care, which are mainly involved in manufacturing and research and development (R&D) activities. Please see our 2022 Country Activity and Taxes Report (p. 37) for more information about our activities in Israel.
Respironics
Philips has recognized a provision regarding voluntary U.S. recall notification/non-U.S. field safety advisory for certain sleep and respiratory care products, based on Philips’ best estimate of expected field actions. Future developments are subject to uncertainty, which requires management to make estimates and assumptions. Actual results in future periods may differ from these estimates and affect the company’s operating results, financial position and cash flows. Additionally, Philips is a defendant in several class action lawsuits and individual personal injury claims, and is in the process of finalizing a consent decree with the FDA. Given the uncertain nature of the relevant events, and their potential financial and operational impact and associated obligations, if any, the company has not constituted any legal provisions in the accounts for these matters, except the following. In the first quarter of 2023, Philips Respironics recorded a provision in connection with an early resolution of the pending U.S. economic loss class action lawsuit. The provision is subject to final court approval of the negotiated settlement and is based on Philips’ best estimate of expected settlement amounts, which is, in part, based on the expected number of claims ultimately asserted under the terms of the settlement once approved. . Actual results in future periods from the above matters may differ from these estimates and affect the company’s operating results, financial positions and cash flows.
Third-party market share data
Statements regarding market share contained in this document, including those regarding Philips’ competitive position, are based on external sources, such as specialized research institutes, industry and dealer panels, in combination with management estimates. When information is not already available to Philips, market share statements may also be based on estimates and projections prepared by management and/or based on external sources of information. Management’s rating estimates are based on order intake or sales, depending on the business.
Market Abuse Regulation
This press release contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation. This press release was distributed at 07:00 CET on January 29, 2024.
Use of non-IFRS information
In presenting and discussing the financial position, operating results and cash flows of the Philips Group, management uses certain non-IFRS financial measures. These non-IFRS financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measure and should be used in conjunction with the most directly comparable IFRS measures. Non-IFRS financial measures do not have a standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. A reconciliation of these non-IFRS measures to the most directly comparable IFRS measures is contained in this document. More information about non-IFRS measures can be found in Annual Report 2022.
Presentation
All values are in millions of euros unless otherwise stated. Due to rounding, values may not correspond exactly to the totals provided. All reported data is unaudited. The financial reporting is in accordance with the accounting policies indicated in Annual Report 2022. Prior period amounts have been reclassified to conform to the current period presentation.
Philips has realigned the composition of its reporting segments effective April 1, 2023. The most notable change is the move of the previous Enterprise Diagnostics Informatics business from the Diagnostics and Treatment segment to the Connected Care segment. This business, together with other IT solutions in the Connected Care segment, now form the Enterprise Informatics business. Therefore, the comparative numbers of the affected segments were restated. The reformulation was published on the Philips Investor Relations website and can be accessed here.
Per share calculations have been adjusted retrospectively for all periods presented to reflect the issuance of shares for the stock dividend in relation to 2022.