Philips(PHG)2024-02-19 16:00Financial Performance - Sales reached EUR 18.2 billion with an adjusted EBITA margin of 10.6%[16] - Free cash flow amounted to EUR 1,582 million, indicating strong cash generation[16] - Total revenues from goods sold amounted to EUR 12.4 billion[69] - Comparable sales growth was reported at 6.0%[75] - Group sales increased by 6% on a comparable basis to EUR 18.2 billion in 2023, with a nominal sales growth of 2%[188] - Adjusted EBITA rose to EUR 1,921 million, representing 10.6% of sales, compared to 7.4% in 2022, driven by increased sales and productivity measures[191] - Operating cash flow improved significantly to EUR 2,136 million, compared to an outflow of EUR 173 million in 2022[188] - Net income for 2023 was a loss of EUR 463 million, an improvement from a loss of EUR 1.6 billion in 2022, influenced by a EUR 575 million provision related to Respironics litigation[191] Strategic Initiatives - A strategic investment by Exor resulted in a 15% minority stake in the company, signaling confidence in its future[30] - The company is on track to reduce 10,000 roles by 2025, with 8,000 roles already eliminated[29] - The company is implementing a simplified operating model to remain competitive in an inflationary environment[64] - The company is concentrating resources on areas with strong positions for accelerated growth, such as Image Guided Therapy and Personal Health[55] - The company plans to consolidate its R&D locations into a new hub in Bangalore, India, hosting around 5,000 employees[184] Sustainability and Environmental Commitment - Circular revenues accounted for 20% of total sales, highlighting a commitment to sustainability[15] - The company aims to achieve 'Zero Waste to Landfill' across all industrial sites by year-end 2023[76] - The company is collaborating with customers and suppliers to decarbonize healthcare and create a more sustainable industry[36] - Philips has entered into several power purchase agreements to meet its long-term Science Based Targets and reduce full value chain emissions in line with a 1.5°C global warming scenario[200] - The company achieved a reduction in CO₂ emissions to 22 kilotons in 2023, surpassing its target of 35 kilotons[185] Product and Market Development - Approximately 40% of revenues are recurring, reflecting a stable revenue base[14] - Approximately 48% of revenues came from new products and solutions introduced in the last three years[76] - 70.5% of revenues were generated from Green/EcoDesigned products[75] - The Diagnosis & Treatment segment accounted for 49% of total sales[89] - The Connected Care segment generated total sales with Monitoring at 60%, Sleep & Respiratory Care at 17%, and Enterprise Informatics at 23% in 2023[109] - Philips launched the MR 7700 3.0T system and Spectral CT 7500 imaging system, enhancing diagnostic capabilities in over 10,000 hospital beds in Shanghai[100] - Philips expanded its ultrasound portfolio with the launch of the Ultrasound Compact 5500 CV, enhancing bedside care for cardiology and vascular patients[101] Customer Engagement and Brand Strength - Philips' Pregnancy+ app has over 1.5 million daily active users and was ranked among the best pregnancy apps of 2023 by Forbes[123] - Philips' brand strength increased in China, with significant growth in Male Grooming and Oral Healthcare, solidifying leadership positions despite a weak consumer market[155] - The partnership with Babybell Maternal & Child Supplies aims to accelerate growth of the Philips Avent brand in China, leveraging local market understanding[130] - Philips Sonicare remains the leading electric rechargeable toothbrush brand in the US and Canada, while Philips Norelco leads in electric male grooming[150] Operational Challenges and Improvements - Order intake showed a decline, prompting necessary improvement actions[22] - The Sleep & Respiratory Care business faced operational challenges but is gradually returning to the market for sleep therapy devices outside the US[105] - Limited availability and delays in the supply of certain components and products impacted results in 2022, leading to increased overall working capital, particularly inventories[197] - The geopolitical environment, including the situation in the Middle East, increases economic and political uncertainty for the company's global operations[199] Innovation and Research - The company invested EUR 1.9 billion in R&D, with EUR 142 million specifically for Green/EcoDesigned Innovation[74] - New patent filings totaled 795, generating royalties of EUR 434.2 million[75] - Philips won 160 awards for design excellence in 2023, highlighting its commitment to innovation and customer experience[136] - The Enterprise Monitoring as a Service model (EMaaS) has enabled health systems to standardize patient monitoring platforms, enhancing patient safety and outcomes[149]