Philips Electronics NV, a leading Dutch consumer electronics company, disclosed on Monday that their operational income for the fourth quarter was 24 million euros. This total includes 363 million euros of charges related to the Respironics consent decree that the company has consented to with the US Department of Justice (DOJ) on behalf of the US Food and Drug Administration.
The adjusted EBITA margin for the quarter was 12.9 percent. Without including provisions charged to sales largely tied to the Respironics consent decree, the adjusted EBITA margin stood at 12.5 percent.
Total group sales were 5.06 billion euros, marking a one percent decline on a comparable basis. However, comparable sales growth excluding provisions charged to sales increased by 3 percent in the same quarter.
Comparable order intake, however, experienced a downturn of 3 percent. Furthermore, the company has proposed retaining the dividend at 0.85 euro per share, which will be distributed in the form of shares.
Looking forward, Philips anticipates achieving a comparable sales growth of 3-5 percent and an adjusted EBITA margin of 11-11.5 percent in 2024, up from 10.6% in 2023.
Moreover, Philips has reaffirmed its faith in delivering the 2023-2025 plan, despite acknowledging the presence of uncertainties. The company continues to project a mid-single-digit comparable sales growth, a low-teens Adjusted EBITA margin, and a free cash flow of between 1.4 and 1.6 billion euros.
It's worth noting that these projections do not take into account the investigation by US DOJ connected to the Respironics field action and the effect of ongoing litigation.
Finally, in regards to the consent decree concerning Philips Respironics in the US, Philips stated that the agreement provides a clear direction and a path to demonstrate compliance and revitalize the business. This consent decree is currently in the final stages of drafting and will soon be submitted to the suitable US court for approval.
