Koninklijke Philips N.V. (NYSE:PHG) Q4 2022 Earnings Call Transcript

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We also know that that’s something that you are very eager to learn about, as do we. But in the process of the discovery of the litigation and actually then leading up to the consequences, we are not yet in a position to disclose that. But we will hope to do that in the second half of this year.

Veronika Dubajova: Understood. Thanks, Roy. And maybe just as you’ve done the structural review of the company, I kind of wonder what your commitment remains to the Sleep & Respiratory business, and how you think it fits into the broader portfolio at Philips, and is this something that still makes sense for the business to retain?

Roy Jakobs: Yes. As you saw earlier in my presentation, so when looking at Philips, actually, we have refocused the portfolio. And the portfolio we have actually, I think, is a very strong and compelling portfolio, and that is including the Sleep & Respiratory Care business. If you look to the fundamentals of that business, we know that actually sleep apnea, as a disease, as something that needs to be treated, is still growing in size. Patients still are in need for more treatment and we are in that segment, the second player. We are still the second player. So actually, we see a role for us when we work through remediation of the recall work also through potential consequences that (ph) might bring to restore our business position, because this is something that really fits what we are good at is bringing innovation to patients in the home but also in hospital settings.

Veronika Dubajova: Understood. Thank you, guys. I’ll jump back into the queue.

Operator: Thank you. We will now go to our next question. And your next question comes from the line of Hassan Al-Wakeel from Barclays. Please go ahead. Your line is open.

Hassan Al-Wakeel: Good morning. Thanks for the presentation and taking my questions. I have a couple, please. Firstly, on the outlook for 2023, could you talk about how you are thinking of the year in terms of supply constraints, particularly given a strong exit rate in Q4 2022? Is it fair to assume that this is not a stretch target in the way that Abhijit has guided and talked about in the past, but maybe a more conservative or realistic one? Secondly, could you talk a bit about the Sleep & Respiratory Care assumptions for this year in terms of revenues and margins? And whether you are assuming a consent decree that is broader than just systems and encompasses all of Respironics? Thank you.

Roy Jakobs: Thank you. Let me maybe start with the first one. So, as I presented today, we are and I have put out a realistic outlook, and that’s what you see reflected in the plan for 2023. We were happy to see what happens to order book conversion, like in Q4 if we get more supply. And we will work very hard to get more supply so that we actually see that continued in 2023. And that’s also what we have built into the plan. But it’s also fair to say that we are not yet at a point that we can count on that all the time. That’s so reliable and so predictable that we already have the full year outlook on our supply chain and the supply chain availability to underpin an even stronger plan that we have presented. So, we go in with a realistic plan.

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