Medical technology company Philips sold less in the second quarter. The company suffered a lot from the lockdowns in China, but also from supply problems for parts and materials. This headwind also makes Philips more negative about the whole year. The company expects comparable sales to increase to 3 percent. Previously it was between 3 and 5 percent.
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In China, Philips’ comparable sales fell by almost a third due to the corona lockdowns in that country. Fewer new orders were also received. In addition, Philips was unable to produce for two months in some factories and suppliers also suffered from the strict measures against the corona virus.
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Other supply problems continued to play a role, as did global inflation, which is partly exacerbated by the war in Ukraine. All this put pressure on Philips’ results.
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Philips’ turnover fell on a comparable basis, so if you only look at business units that were also part of the group a year ago, by 7 percent. That amounted to just under 4.2 billion euros. That also led to a loss of 20 million euros in the quarter. However, the number of new orders that Philips won rose slightly.
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CEO Frans van Houten says that Philips has taken various measures to ensure that the supply chain becomes more resilient. He also says that Philips is adjusting prices to the higher material costs that the company has to pay itself, and that Philips is working on productivity.
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Philips also states that it has already made 3 million replacement sleep apnea devices or repair kits for those machines. In total, the company has to replace about 5.5 million sleep apnea devices. The insulating foam in those devices could come off and cause health problems for users.
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