Koninklijke Philips N.V. (NYSE:PHG) stock is trading lower Monday after it reported a second-quarter comparable sales growth of 9% year-on-year to €4.47 billion ($4.87 billion), driven by growth across all segments and geographies.
Adjusted EPS was €0.28 ($0.305).
Philips’ order book grew by 3% Y/Y. Following a high order intake in Q2 2022, comparable order intake declined 8% (-4% excluding Russia).
Comparable sales for Diagnosis & Treatment businesses grew by 12%, with double-digit growth in Ultrasound and Image-Guided Therapy and mid-single-digit growth in Diagnostic Imaging. Following a high order intake in Q2 2022, comparable order intake showed a high-single-digit decrease (low-single-digit decline excluding Russia).
The comparable sales in the Connected Care businesses increased by 6% Y/Y, with double-digit growth in Monitoring, partly offset by a decline in Sleep & Respiratory Care. Comparable order intake showed a high-single-digit decrease due to the normalization of demand.
The Personal Health businesses recorded a comparable sales growth of 3% Y/Y, driven by mid-single-digit growth in Personal Care.
To date, Philips has reduced the workforce by approximately 6,600 roles out of the planned reduction of 7,000 positions by 2023 and 10,000 by 2025.
The adjusted EBITA margin expanded by 490 bps to 10.1%, mainly driven by increased sales, royalty income, and productivity measures, partly offset by cost inflation.
Philips generated €135 million in operating cash flow, compared to an outflow of €(306) million in Q2 FY22.
Roy Jakobs, CEO of Royal Philips: “Completing the Philips Respironics field action remains our highest priority. The vast majority of the sleep therapy devices are now with patients and home care providers, and we are fully focused on the remediation of the affected ventilators.”
Outlook: Based on Philips’ improved performance in the first half of the year, and solid order book, the company now expects to deliver mid-single-digit comparable sales growth and an Adjusted EBITA margin at the upper end of the high-single-digit range for the full year 2023.
Price Action: PHG shares traded lower by 4.30% at $22.06 premarket on the last check Monday.
