With Q1 over, the CEO is confident that Philips will deliver on its plan for 2023.
Shares of multinational conglomerate corporation Philips (NYSE: PHG) popped 12.72% at the pre-market trading on Monday as the company released its Q1 2023 financial results. The company recorded gains after reporting higher adjusted EBITA and sales during the first quarter. Adjusted EBITA increased by 8.6% to EUR 359 million. Meanwhile, the company saw EUR 243 million, or 6.2% of sales, in Q1 2022. According to the Q1 2023 quarterly report, group sales soared with 6% comparable sales growth to EUR 4.2 billion. At the same time, there was an improvement in the operating cash flow. While Philips highlighted that the cash flow did better to EUR 202 million in Q1 2023, there was an outflow of EUR 227 million in Q1 2022.
Philips Posts Q1 2023 Results
However, Philips said the net loss in Q1 was wider than the previous year’s first quarter. This is because of the significant litigation provision related to the anticipated resolution of the Respironics recall-related economic loss class action in the US. The multinational company noted that operating income amounted to a loss of EUR 583 million.
The CEO of Royal Philips, Roy Jakobs, said in the Q1 report that the company had a strong start for fiscal 2023. The CEO said:
“I am encouraged that we delivered a solid start to the year, with sales, profitability and operating cash flow improvements in the quarter, a first step to drive progressive value creation. We are executing on our three priorities to enhance patient safety and quality, strengthen our supply chain reliability, and establish a simplified, more agile operating model.”
Furthermore, Jakobs said the highest priority is to resolve the Philips Respironics recall for patients. He stated that the Amsterdam-based company recorded a provision of an anticipated resolution in the US, which is crucial in addressing the litigation related to the call. Also, the Royal Philips CEO mentioned “good growth” across its Diagnosis & Treatment businesses and in Hospital Patient Monitoring.
Philips’ Progress on Headcount Reduction
In addition, Philips was among the multiple companies that dismissed specific percentages of their workforce. The company announced in January that it would be firing another 6,000 employees after saying in October 2022 that it would cut 4,000 jobs. Combined, it planned to let go of 10,000 people or about 13% of its global workforce. While commenting on the Q1 financial performance, Jakobs said that Philips had reduced its employees by approximately 5,400. He applauded the workers’ efforts and commitment to fulfilling the organization’s purpose. The chief executive also expressed his appreciation to partners and customers for maintaining their trust and support for the company.
With Q1 over, the CEO is confident that Philips will deliver on its plan for 2023. He stated:
“Looking ahead, based on our solid performance in the quarter, our order book, and the ongoing actions to further improve execution, we are confident in our plan for the year 2023, acknowledging that uncertainties remain.”
On the New York stock exchange, Philips is up 12.72% to $21.45 in the pre-market trading session.