Koninklijke Philips N.V. (PHG) Q1 2022 Earnings Call Transcript

For the period ending March 31, 2022

April 25, 2022 4:00 a.m. ET

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

Welcome to the Royal Philips First Quarter 2022 Results Conference Call on Monday, April 25, 2022. During the call, hosted by Mr. Frans van Houten, CEO; and Mr. Abhijit Bhattacharya, CFO; all participants will be in a listen-only mode. After the introduction, there would be an opportunity to ask questions. [Operator Instructions] Please note that this call will be recorded and replay will be available on the Investor Relations website of Royal Philips.

I will now hand the conference over to Mr. Leandro Mazzoni, Head of Investor Relations. Please go ahead, sir.

Leandro Mazzoni

Hi, everyone. Welcome to the Philips first quarter 2022 results call. Our CEO, Frans van Houten; and our CFO, Abhijit Bhattacharya, will take you through our strategic and financial highlights for the period. And after that, we will take your questions.

Our press release, slide deck as well as frequently asked questions on the Respironics recall were published at 7 a.m. CET this morning on our Investor Relations website. The full transcript of this call will also be made available today on the website. As mentioned in the press release, adjusted EBITA is defined as income from operations, excluding amortization of acquired intangible assets, impairment of goodwill and other intangible assets, restructuring charges, acquisition-related costs and significant one-off items. Comparable growth for sales and orders are adjusted for currency and portfolio changes.

With that, I'll turn the call to Frans.

Frans van Houten

Yes. Thanks, Leandro and thanks, everyone, for joining us this morning. There are three factors shaping our Q1 results and outlook today. Number one, it's the continued strong delivery of our strategy and operational performance, leading to an increased order book despite the very challenging backdrop; two are obviously the shortages and dislocation in the supply chain, geopolitical challenges and increasing inflationary environment; and three, the huge undertaking at Philips Respironics to do everything to deliver a solution to patients and caregivers affected as fast as we can. Patient well-being remains at the heart of everything that we do at Philips.

Now, let me unpack these three factors. Our strategy and portfolio continue to resonate very well with customers and consumers and we again experienced solid demand for our products and solutions. Order intake grew 5% in the quarter for the group or 8%, excluding the Sleep & Respiratory Care business, driven by strengths across the Diagnosis & Treatment businesses, Hospital Patient Monitoring and Connected Care Informatics, to just name a few. This further builds on the good order intake growth in recent quarters, resulting in an all-time high equipment order book for Philips, in fact more than 30% higher than a year ago, as shown on Page 27 of our presentation. During the first quarter, we also signed 12 more long-term strategic partnerships across the world, demonstrating the trust hospital leaders have in our ability to help them enhance health outcomes, lower the cost of care, improve patient and staff experience. Also, in China, we signed an agreement with Shanghai East Hospital to provide its hospitals in the Shandong and Hainan provinces with a broad range of advanced imaging and critical care solutions.