Philips says it will cut 6,000 extra jobs by 2025

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Royal Philips NV on Monday said it will cut an extra 6,000 jobs by 2025, including around 3,000 this year, as part of a plan to improve performance and drive value creation.

The Dutch health-technology company PHIA, +4.99% PHG, +0.59% –which said in October that it was cutting 4,000 jobs, or about 5% of its 80,000-strong workforce–said Monday that the simplified operating model will make it more agile and competitive, while reducing costs. The job cuts announced Monday are in addition to those outlined in October.

Philips said that it will now focus on extracting the full value of its portfolio through a strategy of focused organic growth.

The company made the disclosure as it reported a swing to net loss for the fourth quarter of last year amid higher costs, but said that it has seen some improvement in the period and that is taking actions to address operational challenges in an uncertain environment.

The Dutch health-technology company–which sells products including MRI scanners and ultrasound machines–posted a net loss attributable to shareholders of 106 million euros ($170.6 million) compared with a profit of EUR157 million for the fourth quarter of 2021 and a company-compiled consensus loss of EUR16 million.

Adjusted earnings before interest, taxes and amortization–which strips out exceptional and other one-off items–was EUR651 million compared with EUR647 million and a consensus of EUR428 million.

The company said its performance was hit by cost inflation that was partly offset by pricing and productivity measures.

Group sales in the period were EUR5.42 billion compared with EUR4.94 billion and a consensus of EUR5.03 billion.

Like-for-like sales were up 3%, compared with a company-compiled forecast for a fall of 5.2%, due to improved component supplies

Royal Philips said it now expects low-single-digit comparable sales growth and high-single-digit adjusted Ebita margin for this year.

It has also targeted mid-single-digit comparable sales growth and a low-teens adjusted Ebita margin by 2025, and for mid-single-digit comparable sales growth and mid-to-high-teens adjusted Ebita margin beyond 2025.

“Considering the slowing of consumer demand and a gradual improvement of the order book conversion during 2023, Philips anticipates a slow start to the year, with improvements throughout the year supported by the ongoing productivity, pricing and other actions,” it said.

Write to Ian Walker at ian.walker@wsj.com

The company said its performance was hit by cost inflation that was partly offset by pricing and productivity measures.

Group sales in the period were EUR5.42 billion compared with EUR4.94 billion and a consensus of EUR5.03 billion.

Like-for-like sales were up 3%, compared with a company-compiled forecast for a fall of 5.2%, due to improved component supplies

Royal Philips said it now expects low-single-digit comparable sales growth and high-single-digit adjusted Ebita margin for this year.

“Considering the slowing of consumer demand and a gradual improvement of the order book conversion during 2023, Philips anticipates a slow start to the year, with improvements throughout the year supported by the ongoing productivity, pricing and other actions,” it said.

Write to Ian Walker at ian.walker@wsj.com

This article was originally published by Marketwatch.com. Read the original article here.

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