Koninklijke Philips (PHG) 24 Jan 222021 Q4 Earnings call transcript

Welcome to the Royal Philips' Fourth Quarter and Full Year 2021 Results Conference Call on Monday, January 24, 2022.

During this call, hosted by Mr. Frans van Houten our CEO and Mr. Abhijit Bhattacharya, CFO all participants will be in a listen-only mode. After the instruction there will be an opportunity to ask questions. that available will website on Philips. note replay recorded of Please be will the Instructions] this be call and Royal [Operator Investor Relations will Mr. over I the to hand now conference Leandro of Mazzoni, Investor head Relations. sir. ahead Please go

after XXXX the Hi everyone. Welcome our we Frans I our Philips that take fourth CFO CEO and period Abhijit here our highlights Houten and strategic results Abhijit you your full with will take quarter am van questions. call. and to and year for and Bhattacharya. financial will Frans through

be Our as on press website. the at questions recall slide call website. release, made X the related also transcript Investor published our well on available information deck, full today were morning asked as this The frequently on this Relations a.m. CET of Respironics will

the one-off Comparable press you, assets, acquired of adjusted currency assets, restructuring Frans. costs release, excluding adjusted Over are defined charges, and intangible and EBITA sales intangible operations, from for portfolio as to other items. mentioned changes. acquisition-related As growth significant in for income and amortization orders impairment goodwill of is and

Hello, and Yes. joining you us everyone, for today. thank

Respironics an fourth the we recorded and remained of caregivers sales. As in reflecting deliver the comparable teams as continuity. remain solution and patients our health pandemic the a employees; the by actions supply ensuring billion of COVID-XX delivering our of was can of deliver doing and adjusted the strategic with global necessary focused well issues, everything chain roadmap, driving XX.X% of triple to we the recall. €X.X fully a intensified business on We needs; caused quarter performance as against to decline sales our through quarter, the EBITA disruption of safeguarding to the XX% duty we In affected working fourth by on focused what care call customer the meeting safety on of

headwinds, Respironics of several to challenges, of impacted January consequences sales postponement hospitals on action. As we namely XX, equipment the supply installations field were by the announced related and in chain COVID-XX,

year and the year a full X was a we reflecting sales. sales. sales on sales Sleep Health in chain Group generated despite in Personal €X.X following headwinds Comparable the X% COVID-XX full combined Adjusted Diagnosis & of growth Treatment in the in of comparable high was full The XXXX XXXX billion headwinds billion For half in EBITA in Care year or second Care decline. decline recorded & had impact supply the due of Respiratory comparable X% declined and the percentage aforementioned €XX.X in the points the year. XXXX to XX% X% in demand XX% Connected sales the recall.

to continued fact throughout in as of products is an than for year. a builds further by the page resulting equipment in order in for Philips resonate all-time XX intake portfolio presentation. the intake our XX% Diagnosis solutions and Group shown This X% book grew further high single-digit solid customers XX% XXXX growth Order consumers and very end order on monitoring. high on in and Treatment generating our in demand hospital well the and strategy strength Our patient with in the driven & year of XXXX which comparable the higher at

staff patient fourth we our have XX quarter which strategic the outcomes, to XXXX leaders help of cost signed improve enhance health in the world long-term were During and and signed of hospital also lower the care, across ability trust partnerships experience. XX them demonstrating the in

also electronic anticipated disruptions We was components, further stronger businesses the on shortage related COVID-XX this mentioned, faced primarily suppliers. so As affecting by now across than XXXX chain supply to impacted which and were volatility I our the intensified let me global of issues, sales supply and topic. shipping elaborate times, our

was have the were ability to earlier in even on supply supply We for the time availability times e-component increasingly risks but headwinds chain challenged visibility give on orders shipping unable now, mitigate year our working We been suppliers are or and higher. that short de-commitment to through global notice. some with

first the to half challenges then the and During situation making global strong our year, growth depleting of supply started inventory inventory tight. intensified the due very

was of upside This plan planned consequence to in in a de-commitments mitigate our impacted fact that semiconductor deliver suppliers. Respironics. we of shortfall our risk and part delays short-term As ability the the the which increased revenue exacerbated some from to had the from with on

of on saw struggle partly in material the operations customers by December and staff caused delayed In with which shortages. also readiness local COVID-XX and addition we hospital that, labor impact to site

our on driving address supply half suppliers. but further in in focused expanded orders already mitigation To teams XXXX, chain especially continue with remained the challenges have started we in headwinds these actions we to first the of year. long-term expect fully XXXX, the this we the Our

do We is to when it so. have buying spot expedient increased

partially have and transport alternate moved to ocean freight bypass of reliance congestion. We to on port modes

teams calling designs R&D governments diversify adjusting suppliers well of as on on to Our sourcing parts and components. components. senior levels the at are of products alternate prioritize as Moreover product healthcare supply to developing working and we are

The half date have capacity. recall. in remediation me XXXX. production over servers X.X we To produced Let customers. million aim have QX which devices kits about globally to ramped we speak and have now the our than underway reached substantially complete the more program repair and We of replacement repair and is up replacement repair and Respironics program

action the for increased eligible €XXX increased supply communication and As announced following patient volume field devices higher or repair due program, comprehensive January and Respironics cost. to on of XX, by a mainly million registered customer outreach replace and provision Philips the

testing ISO specified exposure limits safe and this in the we at provided to the e.g. of are in said completed for of DreamStation authorities time, are date and generation the second that with December interest corporate results the quarter analysis As be update of the done VOC in we expected devices to particular safety was patients. within VOCs applicable test on standard positive an that of XXXX. first Comprehensive which XX,XXX. indicated In the alignment in standard

We will results have I possible. to actions we the continue other would corrective to strong these recall that in are from to ensure like timely the assessments. the program and as place as related updates a to management on reiterate fast completed provide

organizational Respiratory business around have of and over We top leadership also who throughout Group, the added a and the their businessed. check is Committee. of further Roy Care We've our team our Moreover & the & new the surveillance, which strengthening toxicology a people management competent affairs, Sleep a strength our include Jakobs recall, Care and working under onboarding made Care thousand the Philips. and XXXX Sleep member sleep of equality, have the changes for we Executive regulatory affairs Respiratory in and biocompatibility within to medical the cross resources Connected from post-market capabilities relevant leadership learnings

and Our are well certified as closely experts, experts, as the qualified Respironics labs, third-party teams. working with

a its with and comprehensive XXXX work submitted well to have as we action the findings the to to and XXX requests. as the plan engage Respironics followup detailed we closely with Form will November clarify the and the with agency FDA a response continues Philips Importantly inspectional to FDA.

across Respironics quality As I reinforced and our the on focus awareness the already following part patient referred we company. and focus the recall, have as safety of to, on

around In the responding other and have scrutiny stepped a in raised actions. this this. bar recorded to further the we in around respect, quality topic and see organization provision in €XX the We Connected to Care that of businesses million up QX relation

informing stakeholders, process of we currently are now. right I in still As provide details cannot

as issues continue is are is of quality Care improvement the that at of and as While and small business sizable, Philips. top to in efforts These provision our our we the culture these relates lines well the everyone Connected for believe management it priority and business for ongoing approach a the mitigation portfolio.

defendant a As personal -- you know, and claims. lawsuits personal class-action injury individual Philips in several Respironics is

However, testing it focusing Right well of to referred completion now, at required, are about to any I conclusions the actions the corrective patients claims the and this handle as early we the merits on is that stage. the timelines as too and the to. draw

details related where some Leandro There details further mentioned asked published time. we to on litigation, questions, able this progress. have we clarification are provide not particularly the are at the provide and recall to As areas, to frequently FAQs on

We a additional transparent in information situation the will and share evolves. timely manner as

launched color complex automates they and portfolio. to provide in would a how automation and At definitive simplifies to December Meeting are our smart Annual RSNA AI system XXXX the of departments introduced some needs AI like in unique workflow today's for help clinical plan hospital on the to XXXX we and as to and MR use of I We solutions early connected care. diagnosis clinicians featuring MR slate we aid outpatient and continuing future. tasks globe Now of operational supporting advancement the access across the operating the the treatment. imaging our increase by Powered helium-free providing for quality MR affordable clinical leaders

We latest performance enhance enabled smart system. with market-leading are designed CT announcement is time. the Incisive up CT for of smart in introduced new suite of XXXX Incisive expanding continuous CT capabilities workflow, comprehensive maximize workflows, program we and our CT accelerate equipment CT have workflow the a portfolio AI a Philips diagnostic to confidence

based and is care. clinician we BioTelemetry, to organization. screener oral launch East. introductions and imaging to stenting CT monitoring Reflex two ambulatory as the rollout a first electric we finished Personal application provides through which and already our the America industry-leading diagnostic with we #X in the we also vendor-neutral Vesper spectral root the suite single China, learning image in unique such Warentest, cleaning to Cardiologs' and algorithms. consumer and healthcare areas guided in combining and now devices venous further we adding the portfolio care of interventionists completed the spectral integrated access technology key the disease, immediate workflow Spectral trauma solution and oncology, of deep disorder our and expanded detector machine In interdental In will invest new Europe’s leading accelerate quarter additional that further tableside for XXXX Prestige interventional and minimally diagnostics imaging successfully the the in toothbrush offer chronic the stroke brings Medical acquired continue detector these Cardiologs streamline ECG address and analysis expanded information valuable the Sonicare adding venous invasive of system with North world's offer, This cause the product of acquisition solution. China. reporting a North We Health on patient XXXX modalities. in a with solutions angio-CT Middle introduced platform premium cardiac innovative CT America, therapy leading solution Azurion we Stiftung Moreover arm procedures in and complementing heart Europe portfolio

based order volatility XXXX. customer however, growing ahead, our we actions taken, we margin we to continue term trajectory actions. see expansion the that ongoing strong despite shortages Short on and supply-chain demand, to and Looking course have and our expect related in the COVID-XX our headwinds to and mitigation resume book of growth the

& we the deliver sales Care, Sleep target growth. X% For Respiratory to comparable year, to full excluding X%

to For XX Group we the X% and target to deliver growth margin improvements. comparable overall points XX X% sales basis EBITA to adjusted

very strong and is book but headwinds. manage growth, through we order as want Our be we supports to clearly the cautious strong

provide the as appropriate progresses. will color We further year updates or as

about leadership in year's health grow and issue. value am optimistic our I to this continues to create overcoming journey and Our potential technology

us that customers we them. Our relevant tell to are

growth. higher Our unlock strategic will roadmap

achieve focused term on we are goals near facing. execution are and excellence to We that operational manage and headwinds our the

stronger more medium-term portfolio our call to of provide opportunity that, very ever color our confident Abhijit. to term summer. the I and I'll plan customers the and turn And our remain over performance growth than serve have to company. medium roadmap the We in We on margin a on that

and Thank for you, us you thank Frans, today. joining all

intake innovation. some In in our & to healthcare term China across in Short related Treatment color Diagnosis grew provide the order Diagnosis due was and world the grew order of the strength fourth course & additional growth were me comparable enterprise to affected implemented year imaging, resonance in the intake magnetic intake procedures XX% the order Let orders XX% growth. the which full strong informatics. by by and of momentum products on in strong the quarter demand imported year. driven Treatment therapy the image-guided

activity products position order and full as in in R&D including intake am fully innovation investing the levels Important declined see centers, of XXXX continue in of adoption and that back pleased demand I we year above both Connected team local generated remained patient of on realize market demand solutions Group in our that expanding in XXXX Care high the anticipated our addition and the to these further fourth business. Sleep management local to local and high double-digit and a have a the in management declined comparable and strong sales in are local Chinese the settings the in for capabilities. in quarter shares. for fundamental factories, We China XXXX. quarter COVID-XX care and shift base activity XXXX and the very care from the anticipated low comparison XX% in to businesses QX in headwinds spike

lower including of unexpected Adjusted modalities million impacted also for EBITA stronger sales quarter IP half on extraordinary €XXX image-guided patient supply pricing volume end by spot was as XX.X% supply primarily by productivity ultrasound, second in then of Adjusted is year push headwinds and in than such and an impact the particularly therapy in sales of the EBITA offset monitoring, strong We as with on the cost, by in first the the oral anticipated The half. offset by strong sales. healthcare faced the impact comparable magnetic Group and out the Frans was measures. bill quarter disruptions but at higher of or mentioned. partly businesses chain imaging. the impacted growth declined relevant the X% the high of also Full high year buys resonance the also like

December. the quarter of were supply Excluding in December impact in Respiratory seen impacted volume of full variants parts levels slowdown hospitals world. Diagnosis comparable sales year the chain pre-COVID fourth in before Care elective tracked in with & above due the The in of by installations X%. Treatment some equipment line headwinds the with XXXX year the of procedures various some grew the omicron during end to of towards Sleep business, the and mentioned & sales comparable postponement over

patients normalize COVID Treatment expect We their the margin risk in in Diagnosis continue to quarters, quarter We to course. the hospitals sales. & of and coming in XX% through work lower to although operations due a adjusted to of decrease the backlog remains the mainly

XX% of adjusted a business comparable full Treatment last & recorded EBITA the a in strong XXXX. EBITA sales as the however, the the businesses for substantial Connected margin year the The & Diagnosis the the on the of margin XX.X%. as an growth in XX% business adjusted fourth quarter. driven an in compares year Comparable and sales quarter by For the in EBITA mainly impact This X% decline of to declined well Sleep margin XX.X% Respiratory recall. Care of back very adjusted amounted to Care

by full mainly an while driven businesses Care adjusted the XX.X%. sales Personal quarter supply declined increased our The X% XX.X% solid. of productivity shortages EBITA the Connected chain driven to and strong for by decline recorded year, EBITA consumer sales quarter, XX% the margin measures. in comparable the adjusted in the demand remained margin For underlying portfolio comparable fourth Health

Personal EBITA an of XX.X% For a This comparable compares adjusted margin delivered adjusted X% margin and EBITA the XXXX. to increased businesses of full Health sales year, in an growth XX.X%. the

million related €XX continue earlier. in we recall savings provision savings We and €XXX included Adjusting other fourth delivered also of on the the provision rate After an quarter full which €XXX tax focus for positive €XXX and a cash €XXX fourth tax and year ventilator This net million to resulting quarter the Adjusting the was to lower quarter than XXXX contract to due items early This cash quarter €XXX lower €X.X the mentioned of transfers. legal the the recall. to the the in €XX action. year mainly income provision are the in business from and was in amounted deducting related spot in around full in in the out initial items provision billion not which the expectation the for to gain included quality million the of year. driving were related Respironics that onerous and impact million inflow the in actions the related field Income expense our the relating to quarter. a flow to in of increase the benefits a gross to the the million from year Free increases million and an impact in is purchases, initiatives cost inflow productivity cost to due around full fourth XXXX. million of inflow XXXX.

other, of we improvement certain income. for of the the for an EBITA guidance XXXX, cost XXXX additional some In At adjusted provide level the segment for and business. XXXX. year almost expect license our loss to million €XXX EBITA around million a the me full versus Let due higher XXXX €XXX of of €XXX to net million we compared in €XXX expect around mainly million areas

a For adjusted line are acquisition with quarter XX basis in and €XX be QX to the to XXXX in XX be XXXX. around Restructuring EBITA cost charges points million we of broadly net €XX expected the level. at expect of costs million at the around points around around and first EBITA related basis level,

million the taken €XXX free This provision is action excluding than higher costs cash to as any. of flow in be expect are income to XXXX expected the be in to as lower as net cost to We part costs Free be be as running if broader quarter. the income €XXX offset FDA XXX of million will the commitments XXXX. and from a and recall testing, expenses more around XXXX, as field around €XX Care to and related well advisory flow XXXX. our related to others million by incidentals, cash in is around per €XXX made Form costs expected cash million quality approximately to response improvements related Financial external than the Respironics such in Connected

capital of initiated in quarter Our fourth billion the announced a quarter the quarters of entered January we completed of in a programs program in dates open with already previous the cancellation and was to Investor the €X.X XXXX. under million the we XX repurchase our total the the of in Under million which December in on forward we buyback acquired in almost in In XXXX More transactions the of program XXXXwe allocation In the XXXX shares are on of a completed XXXX, were XXXX. program €X.X XXXX, of X% XX.X had available shares. that and related website. fourth outstanding acquired details market settlement XXXX, this quarter number share shares resulting first XXXX of into billion approximately both programs July through purchases. the reduction Relations

of We dividend we the will proposal income This at like of to submit or progress ratio detail. for share XX% more to expect to net net is per shareholder. the year option the a income. XX% the in the through €X.XX in shares conclude, would I pay-out take XXXX, continuing against you of cash To of of targeted within how

our and sales mentioned, actions. despite year. volatility Frans order to in we strong, chain supply year do see the in first the realization our headwinds but during COVID expect XXXX, the mitigating related continue This half to significant caused of book As the to especially is shortages in

the business, low of single of back XXXX. in XX% Excluding we growth Respiratory the the on year, the of Sleep first the half half decline digit sales & QX in and expect first Care

we the We in as of manage through headwinds comps. and experience the the year the back a half of on expect to second weaker strong recovery

the Sleep year. & growth full Care X% to Excluding business, deliver to comparable sales X% for the target we Respiratory

year in digit in For this and half decline first of of on the digit high X% half means in a the the a growth first the of back single mid-single total Group XXXX. decline the QX

full X% X% XX basis to for comparable adjusted the the EBITA year, deliver For we and to margin sales growth Group target to points XX improvement.

XXXX Let year me for saying Philips. was sum that mixed by up a

margin the as the highest points excluding the the sales first the year and X% supply start increased were that Respiratory chain in Care a headwinds, adjusted EBITA our While book. with year strong we meant grew in by business, corresponding XXX the as Sleep and basis recall, by well half impacted ended the of & we year Respironics our order

for that that, you. and mitigate as questions. Our and forward Frans focus improvements. to be program fast so back chain replace Thank headwinds to recall we can will I the complete as take supply repair the get will our possible With and going strategic

our [Operator Thank We will you, Sir. go Goldman question take first Dubajova from now from Please Sachs. Instructions] Veronika ahead.

to little thank to and questions. a and I supply you but to headwind I of know great the in Yes, the it's turn the that. love up I much broad-based on experienced to that quarter, for my we And visibility progress this after and of would of maybe you I'll things at can versus a the first as hi guys. moving leave in thoughts chain, have just Good the very sort bit €X.X and appreciate, sort you're how taking through the you headwinds that, would terms lots supply understand for there have morning much a give how looking the start chains have that? us if and what out can compensate anticipating there's that parts you quarter it have we of and have a of feel extent almost question, for that exactly wiggle there, flavour it the understand I'll at be you you Thanks. billion embedded you had your room second but in fourth guidance, time? way don't you point follow

but sales into QX with of into moves QX. readiness significant had in customer rooms supplies October love a all like much, A on Sure. ready. also as their twice headwind some deeper we I And to site of right? and to say supply make mind. QX Hi everybody's because missed we I'd top is If a basically flagged in then let's go own year, there this at that on outs bit part back this look became chain of some bit QX, I Veronika. customer understand the struggled because moves push that, Yes,

see have we had teams say, to -- So understand variability of work a through, parts. the and this of, our results. lot of we sales scenarios multiple moving the moving To quarter-on-quarter results make let's

be of near We and uncertainty we the QX on the want taken QX, see cautious, more we have term. in and conservative because do lot view a to

have course of suppliers. our all with worked We

We have long-term orders in place.

have Tier X increased We visibility to X, suppliers. and X

have postpone on And is qualifying customers. how as Still, batteries who Coast time example mitigations, being confronted delayed are with deliveries, been get on or to typical boat with port de-commit or the We working United five were our other the similarly to so and such West a we and suppliers. ultrasound suppliers able weeks from up States, time that congestions, basically chains. by a stuck and supply our on of to production, holding not

a inventory issues. Philips higher all to we to before, We So why seen sleep that compensate getting you started it. know you then to where Well, a eagerness in to of these tight were that with stock we to orders chain missed be But working but does we of lot safety easy, than we in mouth time it said all at of so supply feel the better much? want seem to restore To of XXXX, have the that much are be just recall, so are had. a very any which back others, people many to affected I hand bring and in deplete I year remain or time. on handle pace about our growing beginning is not And that could takes sales, that deliveries. in for the strong it the became second with a what half we call or bit and here the you buffer really

As we look to approach I said, a cautious XXXX. take to

the look provided quarter the we we guidance of you We have for from as to the insight our half by to year a progress. at it place better first and more in expect Page then in be a give with and gradually table XX, year sales how

just that impact just related mean, challenges I everyone Frans, having can pace not orders so hearing if broader are And competitors retention, someone relationships, because their to deliver starting issues, customer them I'm customers these is any just you of that, seeing appreciate be the and orders, to are the from able MRIs curious that to facing facing ordering else I faster? we ask your of that here, I your start are who are problems signs you are some specifically but might different your indeed from canceling

not customers any taking us. I've out No, seen on are this that indication

We have I not lost face example, referred, own site for also as to their a readiness. supply challenges, single Customers order.

tell no there. influence some new orders recording am delivered. Well, of orders, our what you new customers issues also orders may answer stuck aware not air times an know also that customers to say not be customer actually also has QX for does have But postponed or COVID the Also cancellations is, that's place terms for room a actually QX. seen you to Now mean? more from I've a short and on boat, seen skipping understanding that if lead and in also and long there. I QX own I competitors in delays. installations needs have to an that have conditioner a It means some customers

So I what don't we are said. despite actually, in think unique this you

Okay, that's into helpful. jump Thank the guys. you, I'll queue. back

We Al-Wakeel from our take Barclays. Please go next question from will ahead. now Hassan

have questions. a I please. you taking for couple my Thank

is should the likely components the expect to the medium of you. And term what the other supply just So full segments parts electronic ability your impact range? source of following and firstly, having Connected Care? for year about to extent and in D&T guide, recall sit on Respironics up at composition how we And is chain to volatility, all any on at growth do you then on in all secondly, the business? an across think growth supply and if the PH Thank the

morning. no is Good hi, and volatility chain the relationship There Respironics Yes, between Hassan. supply recall.

for Of to unique materials, particular blower is lot motors, think also of course, the recall, that about need that but we production. to plastics, a

to for able been have production the increase We significantly. recall

triple a rate at are versus currently last running We year.

follow have that We to on course. and will further intent it raise a its

give We reporting Abhijit bit on suppliers are intensely other color our you of rates with businesses. will working growth segment. by a the on

Yes. Hi, Hassan.

say For we expect Treatment, of to the that years. couple Diagnosis trajectory the like built strong over continue, & the we've last

well. single and digit growth have a single So if be in a it then Health will Care, be Personal we growth & exclude mid In although, single will be digit digit, a digit single as about Sleep Connected low mid you Care rate. will high Respiratory decline, will

performance helpful. looks And transitional term outlook given your can in in the thoughts XXXX, to us on confidence this? year That's what if and achieving XXXX I and your you be medium up the just on, another in could follow give

we that to and come life. medium to outlook at to the want live start I same own would time, flagged we its the living over like that Yes, the don't on back summer term

the in we course, steeper. full of and year XXXX which have We ended to belief opportunities our growth lower that has the trajectory at starting means Philips base, become

we We also all keel water sorts guided before get will you this of you we making question. some which the need for year then this that start to felt we year under statements, and

the felt here you the and trajectory in of dedicated rightfully So steepness detailing rather terms a we we will remain other we and that over underpinning should out than it the all committed, have have, session questions of that but the piece-mealing today. summer

see the contracting get, development that partnerships of any order So I out of don't the our the strong we courage really reluctance book innovations with or in interest take us. we and customers

year. more confidence we So issues the the that would as deeper about appropriate in this that time feel working through year, a gain conversation have to next trajectory be a we

That's helpful. Thank you.

next question Kate We will take from our Kalashnikova [Citigroup]. now

open. Your Please line ahead. is go

got Citi. question is testing assess comment risks ISO you explain asked respect Kalashnikova in one do testing, please mission Hi, to are Philips tests clear example, get particulates with results? done show VOC that will you Frans. what of that need is particulates than to expected or this? of less implanted? now is Kate to additional steps, for first tests FDA up what being what you from if results. follow of For Abhijit. Could This My being means standard, on Hi, specifically, initially I've take on you but applicable kinds form longer And it could afterwards. question ingested, to clear to And it's respect

Yes. Kate. Hi

pretty with to already testing. regards expert sound to me You

dwell lot for the encouragement first a patients that that norms we the VOC you on said, of to fact have out particulates well within out happens these series The and you where let's when this on the and have indeed, the tests you the they reassuring. we stay of so to ingest, when particulates, very testing with standard. And take that take really come briefly indeed, the ingest the of therefore, one, And fact doing testing for respective continue ISO the what use your longer do body. to is as that related device, safety in

And applies. so protocol testing a different then

the longer but period it about no but that the a it's why understanding not ISO are on Both device, it's the is a duration, the testing be longer. takes a XXXXX is standards need of momentary right? and just to it time test, that inside two it and So So test a over apply done relevant is particulates does body. of what XXXXX. The

work the the we results use is we with of test tests after working tests ozone that, results. making we of to and the quarter publication the, have all to particular than ozone. let's as here to results on only the regards a the houses the that second done Besides expect sure of on, deem to other are rather are rush in right or such to also external happen particular year. testing thing of We say test being that with of believe this should do, We few to test course, doesn't the independent make also that But completed. that closely bodies is the It an take We evaluate FDA, careful all tests outcome. out sense sequence. with testing,

you, Frans. Thank

used, to some ozone testing, will of correct by we So when the is expect in actually cleaners how show to understand are test risk the form testing which requested results, the ozone particular after this, FDA after accelerates to foam? to receive silicone likely of VOC when so QX placement, that come And and do the point. were degradation, assess emission also instead at

Yes.

foam repair safe. was you'll the the and the released talk tests we And for in All needs whole execution line for tests tests testing. the foam for let's I they an us with those take with on authorized recall a more don't conducted of it. use silicone anything also let's is the negative that silicone, authorized And about quarter that our the foam tests and our expect that testing FDA program are on are with FDA out the has in that own have be full results from knowledge silicone testing. using The these all requirements. products industry desire first indication available. the comprehensive expect additional how as replace when come and second in the silicone we are say, foam FDA FDA do silicone I silicone demonstrate market So foam to, that and we it. of that passed to that are should and silicone the the have proposal that foam engaged on asked

quarter. what On and are in ongoing also potentially those testing, A the the expected both second be particulates, the does form to completed and of tests to battery ozone but also are it VOCs.

clarifying. Okay, thank you for Frans. Thanks,

You’re welcome.

Please our ahead. take now from Adlington next David We’ll from JPMorgan. question go

about risk we of question. mentioned. result we you Hey, should are issues? commentary viewing around as expect guys. a those do ongoing costs further sales on Thanks quality you lot going you not just a off forward? see know I wider secondly, any I you've the one of And be taking product giving maybe wanted recalls or as to million just or my issues those touch quality but should issues quality cost, provision, for XX around said

comes morning. Good are amount need that in is your defined, be the is a should to discovered see a small we two it and through to likely issues David. relatively release referred have the apologize discovered in are that sizable off that, call we of issue issues a unusual Hi, The to order. I amount. remediated field It's, these I on and recently this quality realized you and relate the are well These Yes. businesses, it. terminology, our field. And XX product January dealing as in with issues unfortunately but of but timing products back for the technology recall, sleep the recently two not have could to forthrightly in were FCOs that think money, just medical one

working the the on disclosed stakeholders the haven't let's products FCO? say are We still exact we because with

Frans, disclose be follow you do what Just up to the quick to a products are? able expect when

would, I Yes, regulator as all should FCO QX, we that as expect? what the will would soon have like, the with right, in agreed but probably is what on that be happen

great. you. Thank That’s

welcome. You're

We ahead. will Clive from go from next question Lisa now Please take our Bernstein.

Hi, Frans.

on you the just the well? in follow QX took compliance the future across over something are across that about with about given Just million maybe a you overhaul doing actually of the may commentary extensive to think few you avoid €XX and topic, sort Form Care years any broader even or the Connected FDA? up a the And actions, into D&T in around FDA regulatory as this looking XXX issues is that next quality

Lisa. hi, Yes,

trajectory year on we that been number. the of years -- following quality have a the April well that claim as quality also the the was a In Sleep for as Connected as all already function in business we of Connected XX. years actions correct people whole XX & broadly million measures with a of In improvement, release, and in leader, in as Care people Respiratory first ton improvements have in last progress. we ago Care several not Philips quality Sleep replaced consequences so already well Q&R recall half regulatory a has set measures. and several made the also The Philips, regards March, Care, and discovery of there on to taken and I Philips of in me the overall for business, with Let the cultural have one

used whole market and Sleep The and company the need recall & to post risk reinforce the the as right a within of and surveillance, a we that very do of importance occurrence far look the yielded patient we also quality It assessment Respiratory also have missed feedback has are not actions. strengthen safety business, Care a we is broad that to the We of FDA the back the have to so discovery something. anything a important taking we topic. look that missed left moment say, that and have to based in

we pass always to to audits very it. of without also I much are top We in point you In FDA want are can we have we on issues. many that compliance. respect, that that We demonstrate to the that

We not and and quality. from the it it when doom FDA bodies. comes Philips to inspections all routinely other So is gloom pass across regulatory

comments. your for Thanks

go our will ahead. question We take Ed next Redburn. from from Ridley-Day Please

thank we Good and first divisional Firstly, Health potentially would have you in couple us you growth half that help this profitability you. on around Abhijit, assumptions the to given? if of your year, you've I guidance on wider know headwinds we making will clearly, also are and morning. where bridge historic obviously, the year, for relative normalization margin see on a follow Thank are the Personal of just on can in challenges Are and assuming sort D&T? stabilize where you commentary speak full ups, XXXX the terms you of the this seen or helpful, please. you outlook assuming of can that supply in the to the the you the for do inflation? And that be assumptions inflation second inflation year? you also, inflation have should for that just you same that that or half assume levels, the cost

Health start with profitability. me Personal let so, Yes,

up during the we stepped saw profitability. course You the year of continually

already price increases in from see Health January. Personal will We

place in to input cost. So we the increase are in putting compensate measures for

Personal overall, So, see up in go Health profitability year. you will the

that profitability Treatment, they give impact. will increase say we high I think growth I an will Diagnosis leverage single the similar will from mentioned us because an get in you see that for the operating that & digit

better come in are at orders new at prices. increases, putting the systems the the impact only book, We order is of so of which big prices also but will because course, have limited, that health price a has we earlier and therefore, come in businesses

that I the something pricing, in is will cost, is et terms chain cost, people, higher but staff through also supply happen but think it years. component cost whether of cetera, of that

in So pricing about. price we to the talked and expansion think the normalization, happen is measures -- need to we've we put margin I have think likely before XXXX not that therefore we drive

a bit and how of get. to on range course much are we Now we've of a given ultimately able about that depends broader growth

related just this once we As the quality group it's there in sales, will issue about this of because mentioned. the to the that chain. including have are David and the guided range the it, -- we And orders mentioned, supply -- part get all Frans challenge is is make able we around growth then not is the them, yes to

push you, any you Thank Abhijit, in able that's can gives on the helpful. And been to color through increases Health? Personal you've price

I are Yes, rounds -- there January pricing think in two but it's increases, per one different from category, and of it's April. one

percentage. digit a of So single mid single it's kind mid digit increase about price

you. Thank helpful. That's

Please Paribas. our go from from take Julien question will next We Dormois BNP ahead.

morning morning for Frans. Abhijit. taking Thanks good Good question. my Hi,

particularly, is business QX, feel The giving already to a on much you you missed the IGTs take growth, I'm got the was thoughts chain, is comfortable that at in the the you sort of curious multi recovery how housekeeping of it growth run you mind? first the would multiyear supply million in one, D&T follow one issues, QX your just if relates else by an could that, sorry I action, maybe on impacted legal of onwards. Just could of of just a you it a digit your question cases quarter And is quick and update play to rate then still if were IGT double per or despite to that get it is whether number up anything it in have return it? to your but would quarter but but to terms process of I Respironics in number underlying for able was because here? plaintiffs thoughts was second long one. And from stronger just if on €XXX whether is or a pace curious in maybe and why on deliver be process of provide supply to there some trend the and chain understand And

here. Julien, Frans Hi,

able We Sleep production on we some business are to allocate to the quarter. that capacity in and expecting in be getting are intent back to the very play fourth

a then on refer pipeline inventory we I -- a DMEs to When we recovery rebuild have can I you that we et session, want look don't imagine XXXX the find working to also as course, of onwards. have Of cetera, the Today, are business from I hanging team over summer, too there. with that to speak. perhaps the talk we business leave we Sleep but would we dare early, how at the about nevertheless I

I think a the years. share recovery of take few to market strong likely is our

so the get market the at into will time, boost of pent-up fall and market kind However, in same the of out months. the in the are we a gate the to our devices for sleep it's should that just market. sleep there's strong back apnea But our not first realistic XX% a systems in in laps revenue share demand we once

give hope I to of as So speaks take and time the to more lot bit on kind that will a over session. color it that a and summer when refer of I the

we is say States from then many, or then we in your well the the the suits. injury as claim have Australia, have question XXX about U.S. nature not actions, one personal similar and And this shareholder in or Canada, action, of SEC legal otherwise, and two class as on in of let's suit. United Now U.S. about XXX then outside the

really of put therefore, ahead be situation to somewhere the what as scope the kind determined know that there's getting you very, the the ourselves scoping classify my let's to is we VOC before that say, start the XXXX. in we to going evidence place. able It's in estimation real early now that such litigation very to testing, And this. that earliest provide, no So very is point data, to we all in is of with are And as risk. are is have

therapy cardiovascular minimally strengths is surgical but is this broader into of very very lot in wanting portfolio invasive business of for also Now We expand then, more invasive and reinforces chain IGT, Also expanded question, last have our and very, issues that supply a of see tear. areas is buy well growing significant see being We so demand, into more We a stroke, the much all positioned on minimally centers on nicely. therapy see oncology our business. order very beyond capacity neuro, and procedures. in and application, ambulatory devices just interest. strong We spine, do therapeutic hospitals Image-Guided book to your broader in Philips is really our this. elective

helpful. you, that's Thank Okay, very Frans.

Societe from We question will now our next from go Generale. Le take Please ahead. Louet Delphine

hi. term the in precision of distribution, And a the doing you would years business, to is meaning you Thank or you hello, regarding us Frans think active five contract can still or Do I of your but additional your on have talking think can with Good of in you Abhijit far term the been first do some sheets of you timeframe market everybody. way of appropriate regarding you, basis? when be there do your restructuring how internally reorganizing to and you wondering can give you right made? we precision the size you're question. finally, journey? post And marketing now a more inflation very more the the your And distributor? more more to very give setup can recovery according you've have multiyear you Respironics please, certainly quality, it, you contract? part much. morning, this in to regarding organization are Yes, us years think that current targets was about share, within guidance a two-three divisional seven That have be normal

question? Well, for your ready are you --

inflation, have. will we have than probably Yes, more normally X.X% on on I top we what the think of

to like typically that. compensate in there are to for cost And for increases probably guide be X.X% range So, will we more yes we do X.X% about and then, said, year. inflation I the next

not the from a there one business is huge per other. really So, shift to

have reorganizing. matter feel question taken measures of all the that Delphine I quality on the the we journey, on a Then not organization right is So, right? structure, this

We up people. quality of have stepped also

upgrading with at We eyes Surveillance and business have eyes sets we have fresh And look some also ability been and have review attract processes look also that multiple than the to to Post-Market able enabled the quite have to an of unit. AI there have systems can we who rather opportunity so talent, of new the data. do only been data

what commitment As part relook say, rated to learn We severe and anything? want we that inferred have to Have of company months, the undoubtedly incidents want I that. missed. incidents, and SX Probably Nevertheless, to as I are or raise back anything whole have earlier then question, say, of through taken past have as the the to kind halfway to from will significant on completion, and safety from have for say, in found that look can your also that quality, learning that question will we And it? program back. all to look a next see SX missed through again learned complete I two diligence we we a three we and in our what you we or patient already an not that exercise we process.

incident with never processes I your I discovered both The question, look DMEs and their the can the analyze be in you the big patient brand the that as only. recovery all dependent the with take to far, want one to in and business, from the to very not it on have capabilities lineup. another and the to importance a the we discussions market disease on using But don't recover. reinforce of to they informatics be to time experience will So be the diligence wanted when know look They the on away. I big appreciate player you issue. third are much device progression said DMEs, skip Sleep share and doctors our Then us of well also as just physicians for back. all the want we beat so the these do cannot is that realistic want

are signs is the positive product those all So competitive. and

ongoing of have as get make our recoup market the So -- time a while we By I as won’t actually become the case we the claim way mask going started. compelling and good the to to speak, is the victory little to a sell to continuing originally skis with ahead business that sales point, we has At of ability and accessories. data share. same to even still been we are to gap and some traction smaller our bit extent that, have get masks guided not a because

Okay. Thank you very much.

take go will from Sezgi We Oezener Please our now from ahead. next question HSBC.

very thanks for and presentation. Hi, much the thanks my for question

the my able expect question the I XX/XX divided over think that provide of changed XXXX. changed the there? how repair seeing for mix, Would expansion of how And issue, progression XX% you the and would of quarters, about idea about to to you terms will maybe the different terms in recall repair for what could that XX%, be to in mix as growth well to EBITA some how XX replace, you give down progression guidance, was be, as very be from and break be the second your EBITA, XX like XX over adjusted will Slide similar a helpful like segments? basis between sales points you that to

with volume they have it that deal quantity the on then from comes unsure products is also we factory In that lag time we Yes, can with and back there in back. and place. the back and a whether Still, developments. back you between many state and get repairable meantime, replace, the margin and what are it. and a time get about our the sizeable by know patients maybe start -- you pass we we what repair how repair would significant can a we evaluated a to how are, Abhijit and were first Initially, in they I'll

the days, much you was two So of in the ratio consequence early a factors, the replace know. higher as

will and have beginning then filling ratio up become will therefore we been the course, constantly, repair can back. and see, now you need you out Now, more only, the the which And get because And summer, achieve go we the the covered, the last plot say if of towards comfortable, in we the XX/XX this would smaller. we ratio. next, of logistics between let's summer as gain confident that more feel pipeline more experience, that that for happened volumes replace

what off only only we guidance basically, the of authorization message August, maybe also that's are happened. protocols So add, I September segment. maybe top approved on EBITA I in has if repair was October, in a from my And the should for Abhijit fact not that was the and we the and had that development initially, were replace I think what give recall able it? by of to head. FDA lot

more per I going the is make volatility segment, uncertainties, and there then quarter complex. think Sezgi, that the it given is I now to per think giving only

of has profitability. on lower that in the a the to growth course, guided have we first half think, impact, big I So

I that be using So to model it. think should able you

up, it there? Okay, as thanks, Like difference a lead in there repair terms eventual or that of there that like very follow just a difference nowadays? is changed helpful. And and projecting costs has cost a between you might is is -- the replace to are the

obviously, I processes would I mean, you on difference Nevertheless, between on even realize much have replace, because a intuitively, logistical think pass. is return there substantial more are replace, Yes, some than that. and the everybody repair cost repair

also course you still, to to than But units we us to and cost is that that need By not the the of way difference back so is device, replace. it. need come the clean huge. favorable You therefore the to more photograph all repair need inspect

leave in included is Yes, it this that. at of let's the All provision.

helpful. very lot. a Okay, Thanks

You're welcome.

will question Jefferies. our We take go James from next Please now Vane-Tempest from ahead.

good up. this then Hi, a items questions. you taking mentioned first I'll issues. and I'll pause with morning. million the two Thanks and And related follow relates my discovered recently one quality product just on start for to the XX for for

for wondering facility you product XX a I'll recalls you, the a for includes absorption your these further and and come guidance same you Just the if risk see confirm and follow sales can any what up. are received Thank then from you if revenue potential there?

let's products It's two some of out the on lines. come that sales product on are the that say, an FCO from XXX field those issues we've FDA. will likely one got These different and there that facilities two than is, the will to order product with impact be call

comments that product said a a said We therefore introductory expect these smaller in question, and I on are have and we an don't off. the major impact was provision the lines one earlier

can in your the guidance. high single first single X%, Group second single half and we've overall half guidance, the growth And that's high digit then end if I you, that, I'm decline year, at seeing second get half, mid first because to that other digit first just help half. your which confidence? X% heard the single you're half, us is to and around in out of the and kind end a And this over on helpful. bridge low the related second some Thank give the full so you companies of in of lower curious to at the half cautious to at And digit look more stage you just digit X% get to if at decline I the tone what just second mid half, give in and some

see to what to to X%? wondering you. Thank get else just I'm So we need

me first. let take the Yes, question second

So you, look, if we range. given a have not guidance

lower half, and in of half, you'll then in in So second course to if range and you half, of the get first to take our the guidance. first end better we get low second better If of the the will you end in a and roughly half the you high the do the would the end guidance. get, higher

declined declined higher in at at you half the by look of important second the first half half second overall about Right? the need because half the think we grew comps. XXXX, you X.X% and now thing we I to X.X%. in look we X.X% the weightage the growth if in of second and the is, the So by

year similar you of the So high if of or end the on the the that weightage basis take area guided we range, the to this single top you digit for. come for roughly high will

table be But we on page reason the thought will helpful. that for XX

Yes.

you. Thank

next Please from our Suisse. take ahead. go now will We Yates Credit from Max question

my just the further obviously of further you you. that whether some about I and sort XXXX? we a on may portfolio consider domestic on was in had of are thoughts any sort completed question you Thank today, That you had but I wondering appliances quick first. opportunities and thinking was portfolio were disposal, the whether there that where

Yes, hi Max.

have with the plans this time. there at no portfolio happy to are make further and as are we We it divestitures

that from of of the of us about But quite returns sort completion plan? this when And continuing here, thinking price. go the doing how wondering something given you you're of clearly, summer in update on sort quickly the it the may in share Okay. just you when capital in the last the probably of updating moments about how the relates you've speed is or you're I you quickly think just a obviously or the or expected. market going more of buyback, opportune than completed forward of think to bit sort sort mean, about more summer of plans

the recognizing share looking the vis-a-vis the at let's company buyback low also also we for summer Yes, price added the say last M&A. priorities and

continually evaluation how allocation also was continue market the that given so about review is And in do. the can the nothing deck, else we that continuously we this we will accelerated in make responsible the other policy. the where capital there's enact announce on policy than view. that again slide We At taking time, to the buyback was to a we

and in Yes happen the XXXX, continue will of XXXX to and transactions delivery forward XXXX.

So all for it's not everything that we in. paid and it's

could to and and delivering an question mechanism six had sort Do I term of kind sort we months go actually last hedging? quick the out under worked current in between cost of year just or the Is to maybe it later how final of later. on taking that orders were was you environment? required? acquire you I the sort exactly we're last deliver mid wanted backlog of materials and diagnosis in on and and And taken there just the that sort year whether margins division order then margins understand are just maybe see Understood, any the sort reflecting short of pressure as treatment, of

also sizeable higher prices it's which bucket in with business of can maybe cope helpful second therefore, as So cycle equipment still First, basically course, on business. increased where portfolio year. you cost Health think is revenue business, mentioned against is of three that Abhijit of you refer year of cases, were we to where the buckets, we input input the many some to and service, the mentioned is fast orders and in relatively Health right? third those service course, bucket have recurring last and and last have expand January have, then we we is clauses Then margins. arena. the protection bucket our of on indexation the in that, prices already higher costs cost, that right? Personal came have Abhijit Yes, which Systems the in on as And which

in a starting for staging can because and process quite the make see that together. you'll build already the look inventory and inventory, you the a Right? some of to and order things -- Now, to to months of where stock. program, then come can lot is So, then installation typically, have with ship at several in take WIP an

is installations course, order cost Abhijit protection some allocated, you of have flow of wanted exposed. course, about to that the book on mention part do deliveries but the gives or their input of so inventory to already postponed still And some the And business? of book, higher something then the order

like businesses business, flow along. where have as course year, the amount to as you in book a large options biotech ultrasound, well have the those of and move bill the we So monitoring pricing better of

in more follows Health. the category as Personal That same

Exactly.

fine. That's

you. Thank understood. Okay,

welcome. You're

will our go Wim from now next take Please ahead. question from We ABN Gille ODDO.

about business, we the and million at with XX% about guys question morning, Personal a it seen, made of term very fungible then and Personal Health. remains so miss will between you already second less that, And is back added you And guidance orders. within they say at the least is or you the XX systems for to margin cancellation My look not quarter other said XXX be a growth more X% moving actual, to I Whereas the is guys is of other in XX on guidance. is that more be to, January will shifting to XX% have related orders XX that to well likely than that back. X% this comparable the basis to but related Health the that missed kind that Yes, quite then XXXX of sales a XX% said, from medium comment was time rather good let's gentlemen. and to one sales come if points the that’s

to the coming I that should missed or guiding these let's have guidance? just quarter more there's XXXX? say as that XXXX And So in the you two missed you. actually Thank likely orders all indeed we the for the fourth that are basically guidance the we combine if how in shifts it in year, you fourth to for to conservatively statements? Is see that the upsides sales quarter your lost are

the you can't and we to we But wouldn't range get we growth we X% at said look to happen. quite goes Anything opening everything So, right? that the But is to because a year. lot All order of and Yes, comments therefore sales to yes, if X% credibility it's also the hence how attractive then sales an add year. right, Abhijit? to be if in know, a could perceptive about question bit Wim to the talk want quite we book strong it. a of this cautious X%. X% a The gives realization supplies, need the

chain sales. reiterate in lost our so the not They are into businesses systems we with year. No, remediated in be XXX guidance, there the don't to is think this this saying some because the that expect to will are issues million supply flow year, it's year that will fully I any fully to to be flow next all health the but year that good from dealt this or of we

think So that's the -- explain to that's that's it. why how I

next guidance a you've sales where to gave to then of summarize, for there also outgrow as the happens, XXXX, possible year you let's say is count slip if bit that taking it a with guidance the to And So respect over caution the likely next that we'll that given? year? might of to in term basically a to is see then, indeed

said, feel speculating technically, some quite XXXX. to wise I start growth the already But we originally to the wanted how to then I above to statements the I orders discussion, to do ambition discussion yes range, into we useful possible. to back In that's don't the about we that can shift now are far more of to very how with guided earlier a today. be as fast think going think that And get have in summer speak it’s as comfortable

much. very you Thank

welcome. You're

Dubajova the take last our Veronika Please now go Due from follow time, ahead. up we will Sachs]. to question [Goldman

squeezing Thank about or midterm and I of am saying unclear. a Frans end you of little guys clarification, just what guidance think the of point it misunderstanding in maybe a bit the me there's you're for certainly I because at

clarify if update you what or guidance the in that? told get understand us it's last in mind still which stepping us give you just guidance implicitly to midterm are there, can your a give midterm is new back will that intention the you you and does the you of year us about from the to want with past the therefore summer, hold I So and

Veronika, latter, to credibility you we the the terms the and but of water pass that credibility others, I with need realized in give progress It's to under make to that to keel get targets. also some and some

that's and I let's I over I, chain supply next the -- recall it. coming year. deliver on are feel And any with much we make challenges so and do can then need get least lot about focused the year, ambition some say this away how it the more this have talk walking which get this, commitment, Right? the on credibility in how And depends And not on there can need than but quarters. need and we At we year. and are we from and to out we to that progress we and months we let's detail say therefore, conversation on how All and performance a today. about perform right? let's intensely then focus about

Perfect, excellent.

is to But that That's is not this walk how means anything. from we by want it signaling no at intended away all.

Thanks, That's very clear. guys.

for that this your ending I I to your Philips right. thank questions. all book you hanging. with And for All then Well, really leave that. conversation everybody We engagement and appreciate think Veronika. want didn't

So close with conference. we can I that, think the

Philips on XXth, the XXXX and fourth the XXXX. Royal call concludes January This Thank participating. results quarter full-year you for conference Monday

You may now disconnect.