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Philips puts back half a billion because of defective ventilators

2021-06-16T12:43:34.861Z


Because Philips ventilators may contain cancer-causing foam, the company has to set aside a total of 500 million euros. The share price of the medical technology group falls significantly.


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Philips headquarters in Amsterdam: Sensitive setback

Photo: Eva Plevier / REUTERS

Philips actually wanted to concentrate on what the traditional Dutch company can do best from a management perspective: the manufacture of medical technology products.

But now the group is suffering a serious setback in its core business, of all things.

The Amsterdam company said it has made millions of ventilators with noise-dampening foam that can break down into particles.

These particles could be swallowed or inhaled and could be toxic and carcinogenic.

Philips doubled the provision in the balance sheet for the expected costs in this connection to 500 million euros.

The company issued a recall notice for the United States only and a security advisory for the rest of the world.

Already in the first quarter a provision for quality defects in a product part for sleep and respiratory therapy with a volume of 250 million euros had depressed the quarterly result.

Billionaire deal with China

The recall is a setback for Philips as the company focuses on healthcare products.

The company recently sold its household appliances business such as vacuum cleaners and coffee machines to the Hillhouse Capital investment fund from China for around 3.7 billion euros.

Sleep apnea is a sleep disorder in which breathing stops.

Philips has a range of ventilators aimed at improving sleep patterns, many of which are sold under what is known as the DreamStation family of products.

According to its own information, the company is working with the supervisory authorities on a comprehensive repair and replacement program for the affected devices.

mic / dpa

Source: spiegel

All business articles on 2021-06-16

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