Koninklijke Philips N.V. (NYSE:PHG) Q2 2023 Earnings Call Transcript

So that’s the color I can give you on how we expect growth to play out for the remainder of the year. It’s not that there is a specific issue or something that we want to signal at all. We need to just get through quarter by quarter. The supply chain improvements have happened, but it’s not over. So we are still working these through. And as we get through every quarter, hopefully we are able to deliver in line with the commitment. Coming to the second question, maybe I hand it over to Roy?

Roy Jakobs: Yeah, I think — Veronika, thank you for the question. And on the order book indeed, I think important a few parts to take together. First of all, as we highlighted, we have still been growing versus last year. So it’s really important to recognize the strength of the order book that we have. And actually, we are still challenged to burn it down faster. So actually that is one area that we also want to work through and that where this remaining focus on getting more supply to be able to deliver more of the products actually will help us to deliver also better to customers and then also take more orders into our order book. Secondly, there is indeed a certain lumpiness. I started the year with saying that this is not a business-as-usual year.

Now, I’ve been talking to many customers. I’ve been — a few weeks ago, I went to China. China actually is coming back very strong as you have seen. That started already in Q1. It continued in Q2. We actually see it continuing in Q3 and Q4. So we can expect, I think, a double-digit contribution out of China for this year and that’s great to see China coming back. We also saw now in Q2 that Personal Health came back into growth. That’s also important momentum that we will continue into third and fourth quarter. But I also went to the US, and actually I was there even last week. I’ve been talking to customers also there. And I must say that I’ve been encouraged by some of the signs that I’m seeing when talking to customers that there is some stabilization coming in, and [Technical Difficulty] challenges.

So whilst they are still challenged on it, actually they seem to be finding resolutions, we’re also helping them with that, with our technology and innovations. That’s what we’re also talking about. And also they’re combating the inflation, I think, more effectively. So that’s what I would also take into the second half where actually I would expect that the order intake would see growth coming back into play and that will then not only be growth of the absolute order book but also in order intake. And we will work hard for that across the globe. And that’s maybe the last piece. I think what I was also happy about is that kind of — you saw that our contribution into the growth delivery in this quarter came from all businesses and all regions, which also means that there is no specific kind of part that is laying back or kind of is behind.

So Personal Health was the one that was still not as strong as we hoped for in the first, kind of, half. We knew it. We expected that. So now we hope to continue the growth momentum across all segments into the second half. So there is no, I would say, specific reason for caution or for kind of concern. But we remain at the same time, realistic that this is not a business-as-usual year and that our customers and also the world is working through the current inflation, the interest and the challenges that there are in the labor market.

Veronika Dubajova: And can I just ask a quick follow-on towards — from a consent decree I think, before you had talked about, you had hoped to get it resolved and settled in the first half of the year? I might have missed it, but I didn’t see a comment on the updated timeline in the press release this morning. Do you have any thoughts on when we might see a resolution there?