Even though supply chain conditions remain challenging, improvements in supply of components helped Philips to achieve a 3% increase in comparable sales for its fourth quarter.
For the period (end-December 31), Philips had 5.4 billion euros ($5.9 billion) in group sales. However, comparable order intake decreased by 8% due to lower demand for COVID-19-related products and company actions to improve its order bookings margin profile, according to Philips.
Philips' Diagnosis and Treatment business, which hosts most of the company's medical imaging products, had 2.8 billion euros ($3 billion) in sales, up 5.3% on a comparable basis due in large part to high-single-digit growth in ultrasound and image-guided therapy sales. A 7% drop in comparable order intake experienced by this business was due to some orders being canceled by Philips to improve its margin profile, according to the company.
The firm's Connected Care business, which includes Philips' imaging informatics portfolio, generated 1.4 billion euros ($1.5 billion) in fourth-quarter sales, contributing 5.2% comparable sales growth. The Diagnosis & Treatment business had an adjusted earnings before interest, taxes, and amortization (EBITA) margin of 11.3%, while the Connected Care segment had an adjusted EBITA margin of 12.6%.
Overall, Philips had fourth-quarter EBITA of 651 million euros ($707.6 million), compared with 647 million euros ($703.2 million) in the same period last year.
For the year, Philips reported group sales of 17.8 billion euros ($19.4 billion), representing a 3% drop in comparable sales. Philips attributed the decline to operational and supply challenges, lower sales in China, the consequences of field actions for its Respironics sleep therapy and ventilator devices, and the Russia-Ukraine war. Adjusted EBITA was 1.3 billion euros ($1.4 billion), compared with 2.1 billion euros ($2.2 billion) last year.
The vendor's Diagnosis & Treatment business had 9.2 billion ($10 billion) in sales in 2022, down 0.7% on a comparable basis compared with 2021. The Connected Care segment garnered 4.4 billion ($4.8 billion) in sales, down 10.8%. The Diagnosis & Treatment business had an adjusted EBITA margin of 8.4%, while the Connected Care business had an adjusted EBITA margin of 2.2%.
In yearly highlights, Philips noted that its image-guided therapy business reached sales of over 3 billion euros ($3.3 billion).