Philips maakt cijfers tweede kwartaal 2020 bekend

Kerncijfers tweede kwartaal

• De omzet bedroeg EUR 4,4 miljard, met een afname van de vergelijkbare omzet van 6%
• De vergelijkbare orderontvangst nam toe met 27%
• Het resultaat uit doorlopende activiteiten bedroeg EUR 213 miljoen, vergeleken met EUR 260 miljoen in het tweede kwartaal van 2019
• De gecorrigeerde EBITA-marge was 9,5% van de omzet, vergeleken met 11,8% van de omzet in het tweede kwartaal van 2019
• Het bedrijfsresultaat bedroeg EUR 229 miljoen, vergeleken met EUR 350 miljoen in het tweede kwartaal van 2019
• WpA uit doorlopende activiteiten (verwaterd) bedroeg EUR 0,23; de gecorrigeerde WpA was EUR 0,35, vergeleken met EUR 0,42 in het tweede kwartaal van 2019
• De operationele kasstroom verbeterde naar EUR 558 miljoen, vergeleken met EUR 390 miljoen in het tweede kwartaal van 2019
• De vrije kasstroom steeg naar EUR 311 miljoen, vergeleken met EUR 174 miljoen in het tweede kwartaal van 2019

Frans van Houten, CEO:

“Terwijl de wereldwijde maatschappelijke en economische weerslag van de COVID-19-uitbraak heviger werd in het tweede kwartaal van 2020, bleven wij ons concentreren op onze drieledige zorgplicht: het beantwoorden van kritieke behoeften bij onze klanten, het zekerstellen van de veiligheid en gezondheid van onze medewerkers en het borgen van de bedrijfscontinuïteit. In nauwe samenwerking met onze leveranciers en partners hebben wij gezorgd voor een sterke toename van de productievolumes van producten voor de acute zorg en oplossingen om COVID-19-patiënten te diagnosticeren, behandelen, bewaken en managen. In deze moeilijke tijden hebben onze field service engineers zorgverleners overal ter wereld ondersteund. Gelet op de omstandigheden ben ik tevreden over onze prestaties en ben ik dankbaar voor en trots op de manier waarop al onze medewerkers hebben bijgedragen.

Dit kwartaal nam de omzet van Philips af met 6% op vergelijkbare basis en behaalden wij een gecorrigeerde EBITA-marge van 9,5%. De vergelijkbare orderontvangst groeide met nog eens 27%, na een dubbelcijferige groei in het vorige kwartaal, met name vanuit CT-beeldvormingssystemen, beademingsapparatuur en patiëntmonitoren. Zoals verwacht veroorzaakte COVID-19 een sterke afname van de consumentenvraag en een uitstel van ziekenhuisinstallaties en facultatieve procedures, wat leidde tot een afname van de vergelijkbare omzet van 19% voor onze Personal Health-activiteiten en een afname van 9% voor onze Diagnosis & Treatment-activiteiten. Dit werd deels gecompenseerd door een sterke vergelijkbare omzetgroei van 14% voor onze Connected Care business.

Wij verwachten in de tweede helft van het jaar weer groei en verbeterde winstgevendheid voor de Groep te kunnen realiseren, ervan uitgaand dat wij onze bestaande orderportefeuille voor de Diagnosis & Treatment- en Connected Care-activiteiten kunnen omzetten, facultatieve procedures naar het normale niveau terugkeren en de consumentenvraag geleidelijk verbetert. Als gevolg hiervan blijven wij voor het gehele jaar 2020 streven naar een bescheiden vergelijkbare omzetgroei en verbetering van de gecorrigeerde EBITA-marge.

Als wij naar de toekomst kijken, is onze missie relevanter dan ooit. Onze strategie om de zorgverlening over het hele gezondheidsspectrum te transformeren, waarbij we optimaal gebruik maken van de mogelijkheden die informatica en zorg op afstand bieden, naast onze innovatieve systemen en diensten, heeft zich tijdens deze crisis bewezen. Ik ben ervan overtuigd dat Philips zich in een goede positie bevindt om aan de huidige en toekomstige behoeften van ziekenhuizen en zorgstelsels tegemoet te komen.”

Business segment performance

The Diagnosis & Treatment businesses recorded a 9% comparable sales decline due to the postponement of installations and elective procedures. Although Diagnostic Imaging sales were in line with Q2 2019, Ultrasound showed a mid-single-digit decrease, and Image-Guided Therapy a double-digit decline. Comparable order intake showed a double-digit decrease. The Adjusted EBITA margin decreased to 8.6%, mainly due to the sales decline.

Comparable sales in the Connected Care businesses increased 14%, with double-digit growth in Sleep & Respiratory Care and mid- single-digit growth in Monitoring & Analytics. Comparable order intake more than doubled, driven by strong demand for patient monitors and hospital ventilators. The Adjusted EBITA margin increased to 17.8%, as additional investments to ramp up production were more than offset by operating leverage.

The Personal Health businesses recorded a comparable sales decline of 19%, with all businesses declining due to significantly decreased consumer demand. The Adjusted EBITA margin declined to 5.6%, due to the sales decline, partly offset by cost savings.

Philips’ ongoing focus on innovation and partnerships resulted in the following key developments in the quarter:

• Highlighting its strength in strategic partnerships to enhance patient care and improve care provider productivity, Philips signed 14 new agreements in the quarter. For example, Philips and the US Department of Veterans Affairs entered a 10-year agreement to expand their tele-critical care program, creating the world’s largest system to provide veterans with remote access to intensive care expertise, regardless of their location. In the Netherlands, Philips and Flevo Hospital signed a 10-year strategic partnership agreement to support precision diagnosis and optimize workflows and patient pathways, while driving efficiencies and cost optimization.
• In collaboration with its partners and suppliers, Philips tripled the production of its hospital ventilators in the quarter and is on track to achieve the planned four-fold increase to 4,000 units per week in July 2020, supporting the treatment of COVID-19 patients in the most affected regions around the world.
• Philips launched several new monitoring solutions for the Intensive Care Unit (ICU), the general ward and the home that feature remote monitoring capabilities and advanced analytics. These include Philips’ IntelliVue Patient Monitors MX750/MX850 for the ICU, Philips’ Biosensor BX100 for early patient deterioration detection in the general ward, and in collaboration with BioIntelliSense, the BioSticker medical device to help monitor at-risk patients from the hospital to the home.
• University of Kentucky HealthCare teamed up with Philips to implement the company’s tele-ICU technology to enhance patient care and improve utilization and patient flows across 160 ICU beds at the academic medical center’s two hospitals. Leveraging Philips’ acute telehealth platform, eCareManager, UK HealthCare is implementing the state’s first centralized virtual care model to help nurses detect risk of patient deterioration, so they can intervene earlier and help improve care outcomes.
• Philips received an industry-first 510(k) clearance from the FDA to market a wide range of its ultrasound solutions – including CX50 and Lumify – for the management of COVID-19-related lung and cardiac complications. Portable ultrasound solutions in particular have become valuable tools for clinicians treating COVID-19 patients, due to their imaging capabilities, portability and ease of disinfection.
• Supporting the increased demand for flexible ICU capacity, Philips introduced its new mobile ICUs in India. The ICUs can be furnished with a range of medical equipment, including ventilators, defibrillators, and patient monitoring. In the Philippines, Philips introduced a modular diagnostic imaging cabin with a CT or diagnostic X-ray system for rapid deployment.
• Complementing Philips Sonicare’s existing teledentistry services for patients, Philips and dental technology company Toothpic announced a new teledentistry platform for dental professionals. The multi-service platform provides a tool to build direct patient engagement, acquisition and retention while improving office efficiency, in-chair time and remote care.

Cost savings

In the second quarter, procurement savings amounted to EUR 57 million. Overhead and other productivity programs delivered savings of EUR 51 million. As a result, Philips is on track to deliver over EUR 400 million productivity savings for 2020 and EUR 1.8 billion productivity savings for the Group for the 2017-2020 period.

Executive Committee update

On July 16, Philips announced the appointment of Deeptha Khanna as the Chief Business Leader of the Personal Health businesses, effective July 20, 2020, and the appointment of Edwin Paalvast as Chief of International Markets, effective August 1, 2020.  Ms. Khanna and Mr. Paalvast will become members of Philips’ Executive Committee, reporting to Philips CEO Frans van Houten.

Ms. Khanna joins Philips from Johnson & Johnson to lead its Personal Health businesses, which were temporarily led by Frans van Houten. Mr. Paalvast joins Philips from Cisco Systems, and will succeed current Chief of International Markets Henk de Jong, who has been appointed as CEO of Philips’ EUR 2.3 billion Domestic Appliances business, effective August 1, 2020. As announced in January 2020, the Domestic Appliances business is being separated from Philips, a process that is expected to be completed in the third  quarter of 2021. Mr. de Jong will continue to report to Frans van Houten and remain a member of the Executive  Committee.

Capital allocation

Share buyback program

At the end of the first quarter of 2020, Philips had completed 50.3% of its EUR 1.5 billion share buyback program for capital reduction purposes that was announced on January 29, 2019. In line with the company’s announcement on March 23, 2020, Philips has executed the second half of the program through individual forward transactions with settlement dates extending into the second half of 2021. Further details can be found here.

Share cancellation

In June 2020, Philips completed the cancellation of 3,809,675 shares that were acquired as part of the share buyback program mentioned above.

Dividend

In July 2020, Philips issued a total number of 18,080,198 new common shares for settlement of the 2019 dividend. After deduction of treasury shares, this results in a total number of outstanding shares of 909,395,209, compared to 909,194,188 shares in 2019 following the settlement of the 2018 dividend.

Regulatory update

Philips’ Emergency Care and Resuscitation (ECR) business resumed manufacturing and shipping of external defibrillators for the US, following notification from the FDA that the injunction prohibiting those activities has been lifted. Philips continues to comply with the terms of the Consent Decree, which remains in effect, and includes ongoing regulatory compliance monitoring and facility inspections of the ECR business and of Philips’ other patient care businesses by the FDA. In connection with the ECR portfolio, Philips received FDA pre-market approval (PMA) for the HeartStart FR3 [1] and HeartStart FRx [2] automated external defibrillators (AEDs), and their supporting accessories, including batteries and pads.

In connection with the COVID-19 pandemic, Philips is working with the FDA’s Emergency Response and Product Evaluation teams to provide them with relevant information, such as Philips’ production ramp-up and availability of acute care products and solutions to combat COVID-19. Philips has obtained authorizations through the FDA’s Emergency Use Authorization (EUA) process for the expanded use of several of its devices during the COVID-19 public health emergency, including for the Philips IntelliVue Patient Monitors MX750/MX850 and its IntelliVue Active Displays AD75/AD85. Moreover, Philips has received FDA 510(k) clearances to market its Biosensor BX100 for early patient deterioration detection in the general ward, and to market a wide range of its ultrasound solutions for the management of COVID-19-related lung and cardiac complications.

[1] Model 861388 and Model 861389

[2] Model 861304

Report

Second Quarter Results 2020 - Report

Presentation

Second Quarter Results 2020 - Results Presentation