December 8, 2022

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Philips entered the red for 1.3 billion in the third quarter and cut 4,000 seats

Dutch group Philips posted a net loss of 1.3 billion euros in the third quarter, mainly due to the huge cost of a massive recall of defective sleep ventilators, and announced the layoffs of 4,000 employees.

Emphasizing the “need for better implementation,” new Philips CEO Roy Jakobs shared the “difficult but necessary decision to immediately reduce our workforce to nearly 4,000 jobs worldwide,” equivalent to 5% of its strength. total work. The group expects a fee of around 300 million euros in the coming quarters after the immediate start of these restructuring measures.

Sales 4.3 billion, down 5%

Philips warned nearly two weeks ago that it expects to face an impact in the third quarter from the massive recall of faulty sleep ventilators.

The loss of 1.3 billion euros in the third quarter comes from a net profit of 3 billion euros a year earlier, mainly due to the sale of the home appliance business in March. In the third quarter, the Philips Group recorded sales of 4.3 billion euros, down 5%, in line with the indicators presented two weeks ago: new orders fell by 6% after 47% growth in the third quarter of 2021. .

Philips reported an operating loss of €1.5 billion compared to a profit of €358 million in the same period in 2021. Adjusted earnings before interest, tax and depreciation (EBITA) were €209 million, or 4.8% of sales, compared to €512 million (12.3%) in the third quarter of 2021. Commenting on the data, new President and CEO Roy Jacobs – in office since October 15 – acknowledges that “in recent years we have not lived up to stakeholder expectations” and announces maximum membership.

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