Philips Cuts Q4 Group Sales View, Comps Down - Quick Facts

Dutch consumer electronics giant Philips Electronics NV (PHGFF.PK,PHG) Wednesday trimmed its fourth-quarter sales forecast amid intensified global supply chain shortages.

For the fourth quarter, Group sales are now expected to be around 4.9 billion euros, around 350 million euros lower than Philips' earlier expectations. The update mainly reflect intensified global supply chain shortages, primarily related to electronic components and freight capacity, as well as the postponement of customer equipment installations.

The comparable sales decline was approximately 10 percent, mainly due to these effects and the impact of the earlier announced Philips Respironics recall.

Group Adjusted EBITA for the quarter is expected to be around 650 million euros, which is around 13 percent of sales, impacted by the decline in sales and higher supply costs.

Group restructuring, acquisition-related and other charges in the fourth quarter are expected to amount to 420 million euros, which is 315 million euros above the previously guided charges.

Philips Respironics is increasing the field action provision by around 225 million euros, mainly due to the higher volume of devices now requiring remediation and increased supply costs. Philips Respironics now expects to remediate a total of approximately 5.2 million registered devices globally.

Group comparable order intake growth in the quarter grew 4 percent driven by double-digit-growth in the Diagnosis & Treatment businesses

For fiscal 2021, Group sales are now expected to be approximately 17.2 billion euros, resulting in an expected Group comparable sales decline of approximately 1 percent for the year.

The company said the supply chain headwinds along with the impact related to the Philips Respironics recall amounted to an impact of around 5 percentage points on comparable sales.

Group Adjusted EBITA for the full year is expected to be around 2.1 billion euros, or approximately 12 percent of sales.

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