Philips
Philips is a global life sciences company manufacturing a range of medical and care products for healthcare professionals and consumers.
NOTE: Philips has divested of the appliances part of the business that makes kettles, TVs and irons! They are still sold under the Philips brand name but are a completely separate business.
Employees: 80,000
Revenue: €17.8bn for FY2022
HQ Location: Eindhoven, Netherlands
What they do:
Pureplay healthcare company (they divested of the consumer tech business)
Three business units: Diagnosis and Treatment, Connected Care and Personal Health
“2022 was a very disappointing year for Philips and its stakeholders, and we are taking firm action to strengthen patient safety and quality, improve our execution and step up performance with urgency in 2023.”
Their vision and priorities:
In January 2023 CEO Roy Jakobs presented the company’s new strategy
Focused organic growth and patient- and people-centric, scalable innovation
The company will focus their R&D efforts on fewer business areas - Image Guided Therapy, Monitoring, Ultrasound, and Personal Health business, scaling its Enterprise Informatics business, improving the Imaging business and restoring the Sleep & Respiratory Care business.
Patient safety and quality
Following the Responics recall strengthening patient safety and quality is Philips’ highest priority.
End-to-end supply chain reliability and agility
Philips is changing its supply chain to a dedicated end-to-end set-up by business to better manage and improve supply chain reliability and agility
Simplified operating model
Philips will change its operating model to end-to-end-businesses with single accountability. They will be supported by lean central functions and strong customer facing organisations in the regions and countries.
Things to know right now
Roy Jakobs is the new CEO
Roy became CEO in November 2022. He had previously run two other business units and was promoted when the previous CEO retired.
“My focus is on returning Philips to profitability”
The Respironics recall
In 2010 Philips announced that some of their home ventilator products were deteriorating meaning foam from within the product could be ingested into patients lungs.
Philips has carried out a full recall consisting of 5.5 million units.
90% of the recall was to be completed by the end of 2022
6000 reduction in workforce
In November 2022 new CEO Roy Jakobs announced that in an effort to improve the productivity of the business 4000 roles would be removed from the business.
This has been followed in January 2023 with the news of 6,000 further roles being removed by 2025 - 3,000 of which will go in 2023.
What does each business unit do?
Diagnosis and Treatment
This business unit sells devices to hospitals and healthcare providers.
Think of large scanners, data solutions and machinery that supports patients.
Connected Care
This business unit focuses on patients outside of the hospital - back at home or in an outpatient facility.
Think of ventilators or blood pressure sensors you might use yourself.
Personal Care
This business unit focuses on products you might use at home like shavers and hair dryers.
Their financial calendar
Q1: January-March - Earnings 25th April
Q2: April-June - Earnings 25th July
Q3: July-September - Earnings 25th October
Q4: September-December - Earnings 25th January
Next Earnings Report:
Around 25th April 2023
Positives from the last earnings report (Q4 FY22):
Sales of €5.4bn with 3% comparable growth
Income from operations €171m compared to €162m previous year
Around 90% of Respironics recall completed
Challenges from the last earnings report:
Operating cashflow was €540m compared to €720 previous year
Adjusted EBITA 12% of sales compared to 13.1% in previous year