By Bart H. Meijer
AMSTERDAM (Reuters) – Healthcare technology company Philips said on Monday it expects sales to rebound strongly in the second half, but a sharp decline due to global parts shortages is likely to persist in the coming months.
The Dutch company warned earlier this month that supply chain problems would affect profit and that a ventilator recall needed to be expanded, causing its stock to tumble more than 15% in its worst day in decades.
“We expect to start the year with a decline in sales, followed by a recovery and strong second half of the year,” Chief Executive Frans van Houten said in a statement.
This should lead to between 3% and 5% growth in comparable sales in 2022, with an improvement of 40 to 90 basis points in Ebitda, he added.
Overall growth will be limited by the sleep and respiratory care unit, which is working on a recall of respiratory aids introduced last year, amid fears that a type of foam used in the devices could degrade and become toxic.
Growth excluding this unit is expected to be 5% to 6%, Van Houten said.
Philips has set aside €725 million to repair and replace around 5 million devices worldwide, but that amount does not cover potential litigation costs, with the company facing more than a hundred class actions. Fears of a large claims bill have already reduced Philips’ market value by around €15 billion in the past nine months.
The company said its comparable sales fell 10% in the fourth quarter, while adjusted Ebitda fell 35% to 647 million euros, in line with earlier figures released in January.
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