first-quarter numbers boosted by cost-cutting measures including layoffs. Adjusted earnings before interest, taxes and amortisation of 359 million euros beat analysts’ average estimate of 226 million euros, per Visible Alpha data. The recall of faulty breathing devices and ventilators means Philips needs to set aside another 575 million euros for lawsuits on top of over 1 billion euros last year, but that’s less than Bernstein analysts’ expectation of 2.4 billion euros.
Still, probes by the U.S. Department of Justice and further claims from injured patients mean Philips may need to cough up more money. And the company’s valuation is still miles off the 49 billion euros it fetched only two years ago: supply chain constraints have helped crater the share price since then. These may be subsiding, but geopolitical risk remains: 15% of the group’s revenue comes from China.
Jakobs still faces some fundamental questions: Philips’ 7% EBITA margin last year was way off rival Siemens Healthineers’ 18%. That explains why the latter trades on 28 times its 2023 earnings, versus Philips’ 19 times. Cutting costs is all very well, but to properly boost his moribund valuation Jakobs may need to think of a chunkier strategic pivot – perhaps even a