[CC may contain inaccuracies] Give us a sense of how business is going right now then because you're guiding comparable sales down a little bit versus
previous got the previous guidance you'd given. So how is business going.
Yes thanks. Good morning. And the second quarter was impacted by a lot of headwinds. You had China locked down supply issues and
rising inflation. We have taken decisive action in terms of further improvements on the supply chain as well as productivity
and pricing. We see for the second half of the year a six to nine percent growth and that is under pinned by a very strong
order book. In fact orders continue to come in. If I disregard China for a moment we saw 6 percent order growth and 19 more
hospital groups signing up for long partnerships. So orders here is not the issue. We are well-placed. We just need to get the
supplies into ships and the ships as managers said in place to deliver on that strong order book. We expect that we are able to
do that much better in the second half than in the first half leading to a 6 to 9 percent growth in the second half. Still for
the full year that means indeed a one to three percent revenue growth and an EBITDA of around 10 percent which is lower than
what we had anticipated before. France good to have you with us this morning.
OK. So that's the table. You say leave China aside for the moment but the world the world is obsessed with what's happening
in China in terms of supply chains and economic delivery and recovery. What needs to happen in China and in Asia to
materially unlock the blockages. Yeah I'm certainly concerned in China. He saw these massive
lockdown that lasted for more than two months that affected the China revenue itself but also further disrupted global supply
chains. For example we have factories in the Shanghai area that were affected.
What I understand from the situation now that it is improving and these massive lockdowns will probably not happen again. But
still the risk is there. I really hope that we can see let's say a further relaxation of
the policies because we are all dependent on supplies out of Asia.
OK so. That would benefit the business. Then if you saw a relaxation of the policies I'm sure many other businesses would
feel would feel the same. Let me ask you about what's happening with your sleep apnea devices. You've had to recall some of
those. When are you planning to. You know you're repairing and replacing these recalled items. When are you planning to to do
that. What time scale can you give us on that story. France. Do you recall if our sleep apnea machines is very large it
affects or around five and half million units even though the incident rate of actual foam degradation inside these machines
is below 1 percent. And in the meantime also tests look favorable that we will complete this recall. We have in the
meantime produced three million devices already. So we are well underway. And by the end of the year we expect to complete 90
percent. Still my heart goes out to all the patients because they're waiting and it takes a very long time. And from their
perspective that's not good. But we are making progress. Friends the reality of this for your investors is that you've
made an eight hundred eighty five million euro provision. You set that aside for the recall but you've not made any provision
for legal action. Is that imprudent and can we expect the beginning of provisions for legal action. And if so in what size
and scale. They are. It's difficult at this time to make a provision for
legal action. We are still at the early phases of potential litigation. And I don't expect that its estimate. Asked about
the wall before. Sometime in 2023. At this moment a comprehensive testing program.
We are able to much better characterize risk associated with the machine. We have been able to tick off the risks or many items
for example on organic compounds within ISO norms. Also inhale respectable particles that ISE within safety norms. We have done
visual inspection of over sixty thousand machines and found that it is less than 1 percent likelihood that form actually
degrades. So the risks are starting to look more contained. Still it is going to take time to get a handle on litigation.
Okay. So the risks are starting to look more contained. Could you just clarify for us France what when you when your business
and when you found out about the issues. I know that you say that they're rare and 1 percent incidents but when you found out
what year how far back we have to go. Yeah. When we found out we immediately took the field safety
notice out last year in April. When you look back and you look for signals then yeah you can reconstruct how this is all
happened. It is clear by now that for those people that use ozone cleaning methodologies to clean our machine that that has
massively aggravated the issue.
And that is more so in the United States than anywhere else in the world that in fact we have seen even lower incidence rates.
France let's just pivot again to your global perspective. We part China we're debating and I myself and every show on
Bloomberg ISE to the scale of the global recession or just how precarious the global economy is right now. Do you think we're
at a make or break moment. Are we at a precarious moment in the global economy.
I would definitely say so minus. There are so many forces at work with regards to. First of all Covid. Of course the pandemic
is not over yet. We see all these supply disruptions. We see inflation. The war in Ukraine.
It's something that in recent times we read the world has not experienced. And from an inflation risk point of view I think we
would need to go away or way back to to the 1980s. Still at Phillips we are focused on what we can do. We have been able to
mitigate supply risks leading to a much better situation in the second half year. We are also taking action on productivity and
pricing. And perhaps best of all is the fact that our customers really like our innovations because the world will have health
care needs. Whether there is a recession or not. Friends I hear all those mentioned there and you don't wait. You've given us a
list of issues that CEOs are dealing with. But as a European CEO are you ready for a power crisis and copying in Europe. Are you
ready for that. Is that the next major risk that you face. Well as a European citizen and not as a global CEO I am
definitely very worried about the upcoming power situation and let alone when winter comes and how that is all going to be
contained. But that's let's say also me as a human being talking. And I think that Europe is not yet out of that
situation.