Healthcare technology group Philips has had a good third quarter, including 11 percent sales growth. The company expects turnover to be 6 to 7 percent higher than last year. This is evident from the company’s quarterly figures published on Monday. The profit margin was 10.2 percent.
While the company has saved 258 million euros this quarter. To arrive at that amount, Philips has stabbed its own flesh in the past year. The company did this, among other things, by reducing expenditure on research & development and laying off almost 8 percent of its workforce until 2025.
These are major interventions, but Philips is facing a serious crisis. The company supplied sleep apnea devices that could deliver foam crumbs into users’ lungs, which put it in a bad light and lost 70 percent of its market value. In 2021, Philips recalled around 5.5 million devices. The costs for the recall and possible compensation payments are estimated at billions of euros. General manager Roy Jakobs wrote about it in the quarterly figures: “The recall of [de slaapapneu-apparaten] remains our top priority.”
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Emphasis on safety
Jakobs is also explicitly committed to improving the safety of its products, including by making business units responsible for safety, instead of inspectors. Against it Financial Daily he also said before the weekend that room is being made to pull the emergency brake for employees, even outside management: “If someone does not feel heard, they can contact [mij] report. Anonymously if desired. There is a direct line outside the business, directly to me: for finance, HR and safety.”
This emphasis on safety is justified, as shown by an interview by the ANP news agency with the chairman of the Philips Securities Owners Association, Gerben Everts. He said on Sunday: “Solving this major problem from the past will do them much more good than a few percent growth. The board itself must convey that it is responsible for the settlement. That can give customers and investors confidence.”