
Philips agrees US recall deal, orders fall
Philips has agreed a deal with US regulators on a recall of medical equipment as it shows growth of 7% in 2023. However the company made a loss on the year and order intake fell 5%, indicating a softening in the medical market.
The deal with the FDA on terms of consent decree focused on Philips Respironics in the US provides clarity and a roadmap to demonstrate compliance and to restore the business says the company,
Group sales were €18.2bn in 2023, a growth of 7%, with a loss of €115m following charges of €363m in Q4 from the Respironics consent decree.
The company continues with its restructuring and productivity plans, with savings of €956m in the year but expects lower growth in 2024 at 3-5%.
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“Our strong results in 2023 were driven by solid execution of the first year of our three-year plan to create value with sustainable impact. While there is more work to be done, the progress we achieved in a volatile world lays a solid foundation for sustained performance,” said Roy Jakobs, CEO of Royal Philips.
“Resolving the consequences of the Respironics recall for our patients and customers is a key focus area and I acknowledge and apologize for the distress and concern caused. We are fully committed to complying with the consent decree, which is an important step and provides a clear path forward.”
“We saw strong growth throughout the year based on the actions we have taken to improve supply chain reliability and simplify our organization. Our order book is strong, and we are focused on improving order intake. Our new operating model enabled more effective ways of working across the company, and drove significant productivity improvements,” he said. This follows significant layoff in 2023.
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The consent decree is being finalized and will be submitted to the relevant US court for approval. The decree will provide Philips Respironics with a roadmap of defined actions, milestones, and deliverables to demonstrate compliance with regulatory requirements and to restore the business. Until the relevant requirements of the consent decree are met, Philips Respironics will not sell new CPAP or BiPAP sleep therapy devices or other respiratory care devices in the US.
