AFP – Philips yesterday posted worse-than-expected losses in 2024, as the Dutch medical device maker bids to turn the page on a damaging recall of faulty sleep machines.
The firm reported a net loss of EUR698 million for the full year 2024, compared to the EUR463-million loss it posted in 2023.
Chief Executive Roy Jakobs noted “double-digit declines in demand in both consumer and health systems in China” as well as “a persistently challenging macro environment” as reasons for the losses.
Analysts polled by the company were expecting a full-year loss of EUR65 million and sales of EUR18.0 billion. Total sales for 2024 came in as forecast at EUR18 billion, compared to the EUR18.1 billion gained in 2023.
The losses were aggravated by a number of one-off items, such as a negative tax impact and restructuring charges, the firm explained.
In November, Philips had lowered its full-year sales target, blaming a drop in demand from Chinese hospitals. That caused stocks to plunge by more than 11 per cent.
Jakobs said a slowing Chinese economy was hurting consumer demand for Philips products and the government’s anti-corruption drive was hitting procurement.
He said the firm expected the drag from China to be especially severe in the first half of this year, before easing towards the end of 2025.
“China will… be a long-term attractive market,” he told reporters. “The question is when it comes back.”
“It’s not an if question for us, because there’s a big underlying demand, an ageing population. And also on the consumer side, of course, a very big population,” he added.
Once famous for making lightbulbs and televisions among other products, Amsterdam-based Philips in recent years has sold off subsidiaries to focus on medical care technology.
Since 2021, the company has been battling a series of crises over its DreamStation machines for sleep apnoea, a disorder in which breathing stops and starts during sleep.
Millions of devices were recalled over concerns that users were at risk of inhaling pieces of noise-cancelling foams and fears it could potentially cause cancer.
In April, it announced it had reached a USD1.1 billion deal to settle United States (US) lawsuits from the faulty machines. Philips got a boost the day before the results when the French agency for medical safety said it could sell its respirators in the country again.
