Benzinga | Jan 24, 2022 06:05AM EST

Philips Registers 10% Comparable Sales Decline In Q4

* Koninklijke Philips NV (NYSE:PHG) reported a fourth-quarter FY21 sales decline of 5.6% year-on-year to (euro)4.9 billion.

* The company attributed the comparable sales decline of 10% to headwinds caused by global supply chain challenges, postponement of equipment installations in hospitals, and consequences of the Respironics field action.

* The comparable order intake rose by 4%, with double-digit growth in the Diagnosis & Treatment businesses, partly offset by a double-digit decline in the Connected Care businesses.

* Comparable sales for Diagnosis & Treatment businesses were in line with Q4 2020, with double-digit growth in Image-Guided Therapy, offset by declines in Ultrasound and Diagnostic Imaging. The comparable order intake for the Diagnosis & Treatment businesses increased 10%, with double-digit growth in Image-Guided Therapy and mid-single-digit growth in Ultrasound. The adjusted EBITDA margin contracted 100 bps to 16.2%.

* The comparable sales in the Connected Care businesses declined 32% Y/Y due to pandemic induced demand correction. The adjusted EBITDA margin contracted 1,510 bps to 16.3%.

* The Personal Health businesses recorded a comparable sales decline of 3% Y/Y due to the supply chain crisis. The adjusted EBITDA was nearly flat at 24.6%.

* Philips Respironics raised the field action provision by (euro)220 million, mainly due to the higher volume of registered devices eligible for remediation.

* It recorded an adjusted EPS of (euro)0.57.

* The adjusted EBITA contracted 590 bps to 13.1% due to lower sales associated with supply chain headwinds. The adjusted EBITDA contracted 580 bps to 18.3%.

* Philips generated (euro)720 million in operating cash flow. It held (euro)2.3 billion in cash and equivalents.

* "As we announced on January 12, 2022, sales were impacted by several headwinds, namely supply chain challenges, postponement of equipment installations in hospitals related to COVID-19, and the consequences of the Respironics field action," CEO Frans van Houten said.

* Looking ahead, the company expects to resume its growth and margin expansion trajectory in the course of 2022.

* Price Action: PHG shares traded lower by 4.35% at $31.68 in the premarket session on the last check Monday.