- Philips cuts 2021 gross sales and revenue outlook
- Says provide chain issues more likely to improve in This fall
- Comparable gross sales fell 7.6% in Q3, with core revenue down 25%
AMSTERDAM, Oct 18 (Reuters) – Dutch well being know-how firm Philips (PHG.AS) on Monday lower its outlook for gross sales and revenue progress this 12 months and mentioned the worldwide provide chain issues that added to its rising record of worries within the third quarter would possible intensify.
Amsterdam-based Philips mentioned comparable gross sales dropped 7.6% within the July-September interval to 4.2 billion euros ($4.9 billion) as a scarcity of digital elements akin to reminiscence chips and a scarcity of transport containers hampered manufacturing and supply.
“It is chips and ships”, Chief Govt Frans van Houten informed Reuters in a phone interview.
Reminiscence chip producers weren’t in a position to sustain with Philips’ elevated demand, Van Houten mentioned, with orders for its merchandise starting from electrical toothbrushes to affected person monitoring programs rising 17% final quarter.
Ships transporting Philips’ merchandise have been additionally backed up in ports worldwide as worldwide commerce quickly recovered from the COVID-19 induced stoop.
“We anticipate the port congestion to be non permanent, whereas it might take till the second half of subsequent 12 months to get the scarcity of chips beneath management”, Van Houten mentioned.
The influence of the availability chain issues will possible improve to 200 million euros in missed gross sales within the last quarter of 2021, the CEO mentioned, up from 150 million euros within the third quarter.
Though the problems will in all probability nonetheless hit gross sales into 2022, Van Houten mentioned he anticipated progress to return in the midst of subsequent 12 months.
Philips shares fell virtually 1% in early buying and selling in Amsterdam, having already misplaced round a fifth of their worth for the reason that firm recalled tens of millions of respiratory units in June. read more
It has put aside 500 million euros to restore or exchange the favored machines used primarily for the therapy of sleep apnea.
The quantity doesn’t, nevertheless, cowl the attainable prices of litigation, with Philips dealing with greater than 100 class motion fits from nervous sufferers, a few of whom have mentioned degrading foam within the units might trigger most cancers or different well being points.
Van Houten mentioned it was nonetheless too early to estimate the prices of litigation, as Philips was working with consultants to find out the precise well being dangers from the degrading foam, one thing that wasn’t anticipated to be identified till some level subsequent 12 months.
The recall and provide chain issues pushed adjusted earnings earlier than curiosity, taxes and amortisation (EBITA) down 25% within the third quarter to 512 million euros, barely above analysts’ expectations.
($1 = 0.8639 euros)
Reporting by Bart Meijer; Enhancing by Himani Sarkar, Kim Coghill, Kirsten Donovan
Our Requirements: The Thomson Reuters Trust Principles.