Royal Philips 4Q Sales, Net Profit Fell Amid Supply Chain, Covid-19 Issues -- Update

By Kyle Morris

Royal Philips NV said Monday that sales and net profit for the last quarter of the year fell as it continued to experience challenges related to the supply chain and Covid-19.

The Dutch health-technology company said group sales for the fourth quarter of 2021 were 4.9 billion euros ($5.56 billion), against comparable sales of EUR5.24 billion a year earlier.

Net profit was EUR157 million compared with EUR603 million for the same period the year before.

Fourth-quarter group adjusted earnings before interest taxes and amortization--one of the company's preferred metrics, which strips out exceptional and other one-off items--were EUR647 million compared with EUR995 million in 2020.

Full-year 2021 sales were EUR17.2 billion and 2021 adjusted Ebita was EUR2.05 billion

For 2022, Philips expects growth and margin expansion, despite short-term volatility and headwinds related to Covid-19 and supply-chain challenges. It expects to start the year with a comparable sales decline, followed by a recovery and strong second half. For the full year, it targets 3%-5% comparable sales growth.

"Sales were impacted by several headwinds, namely supply chain challenges, postponement of equipment installations in hospitals related to Covid-19, and the consequences of the Respironics field action," Chief Executive Frans van Houten said.

On an earnings call, Mr. van Houten said supply chain issues included a shortage of electronic components and longer shipping times, and that the company has expanded long-term orders and partially moved to alternate modes of transportation to bypass shipping delays. He added that suppliers have experienced trouble fulfilling orders, but that this has been factored into guidance. He noted, however, that Covid-19 risks persist, which could present further supply issues.

Philips declared a dividend of EUR0.85, flat on year.

Shares in Philips at 0839 GMT were down EUR0.50, or 1.7%, at EUR28.89.

Write to Kyle Morris at kyle.morris@dowjones.com

(END) Dow Jones Newswires

January 24, 2022 04:15 ET (09:15 GMT)

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