Philips EV300 ventilator supply contract with U.S. Department of Health and Human Services to end after delivery of 12,300 bu...
August 31 2020 - 1:30AM
August 31, 2020 Amsterdam, the Netherlands
– Royal Philips (NYSE: PHG, AEX: PHIA), a global
leader in health technology, today announced that it has received
notice from the U.S. Department of Health and Human Services (HHS)
of the partial termination of the April 2020 contract to
deliver 43,000 bundled EV300 ventilator configurations to HHS
through December 2020. Philips will complete the deliveries for
this month, resulting in a total of 12,300 bundled ventilator
configurations supplied to the Strategic National Stockpile by the
end of August 2020, in line with the contract. As directed by
HHS, Philips will not supply the remaining 30,700 Philips EV300
ventilators to the Strategic National Stockpile.
Philips’ hospital ventilator contract with HHS was one of
several contracts that the department announced in April 2020 for
the production and delivery of a total of more than 156,000
ventilators to the Strategic National Stockpile by the end of
August 2020, and a total of more than 187,000 ventilators by the
end of the year [1].
“To date, we have delivered on our commitments to HHS,” said
Frans van Houten, CEO of Royal Philips. “I am proud that with great
urgency and under intense pressure, we achieved a fourfold
ventilator production expansion with substantial investments: we
hired hundreds of new colleagues for our factories in the U.S. and
called upon our supply chain partners to massively step up, all in
response to the COVID-19 pandemic. While we are disappointed in
light of these vast efforts, we will adjust our plans and work with
HHS to effectuate the partial termination of this contract.”
Frans van Houten added: “The COVID-19 pandemic is far from over,
and we will continue to focus on our triple duty of care: meeting
critical customer needs, ensuring business continuity, and
safeguarding the health and safety of our employees. In the U.S.,
Philips is committed to work with the government and several of its
agencies to support healthcare providers with the diagnosis,
treatment, monitoring and management of COVID-19 patients, as well
as the provision of regular health care.”
As the epicenter of the pandemic started to shift to the West in
February 2020, Philips reached out to various governments around
the world to discuss how to collaboratively combat COVID-19. From
March 2020 onwards, Philips achieved a massive fourfold increase in
ventilator production in just five months, adding production lines
in the U.S. as well as creating hundreds of new jobs. Employees in
Philips’ factories in Western Pennsylvania and California have been
working around the clock to produce these ventilators.
Frans van Houten ended: “While we continue to see
uncertainty and volatility related to the impact of COVID-19 across
the world, our order book remains solid. The reduction in our
ventilator deliveries to HHS will obviously impact Philips’
financial performance, but we continue to expect to return to
growth and improved profitability in the second half of the year,
starting in the third quarter. For the full year 2020, we now
expect to deliver modest comparable sales growth with an Adjusted
EBITA margin of around the level of last year.”
Philips has a comprehensive portfolio of products, services and
solutions to support the delivery of high-quality care to COVID-19
patients worldwide. Solutions include secure, connected and
intelligent approaches to diagnosis, treatment and predictive
monitoring in the hospital, plus screening, remote patient
monitoring and care at home. Philips’ telehealth and AI-enabled
data analytics can help support workflows, facilitate remote
collaboration and optimize resources. Philips’ COVID-19-related
solutions are designed for rapid deployment and
scalability.
[1] HHS Announces Ventilator Contract with Philips under Defense
Production Act; HHS Announces Ventilator Contract with GM under
Defense Production Act; HHS Announces New Ventilator Contracts,
Orders Now Totaling Over 130,000 Ventilators; HHS Announces
Ventilator Contract with GE Under Defense Production Act.
For further information, please
contact:
Steve KlinkPhilips Global Press OfficeTel.: +31 6
10888824E-mail: steve.klink@philips.com
Leandro MazzoniPhilips Investor RelationsTel.: +31 20 59
77222E-mail: leandro.mazzoni@philips.com
About Royal PhilipsRoyal Philips (NYSE: PHG,
AEX: PHIA) is a leading health technology company focused on
improving people's health and enabling better outcomes across the
health continuum from healthy living and prevention, to diagnosis,
treatment and home care. Philips leverages advanced technology and
deep clinical and consumer insights to deliver integrated
solutions. Headquartered in the Netherlands, the company is a
leader in diagnostic imaging, image-guided therapy, patient
monitoring and health informatics, as well as in consumer health
and home care. Philips generated 2019 sales of EUR 19.5 billion and
employs approximately 81,000 employees with sales and services in
more than 100 countries. News about Philips can be found at
www.philips.com/newscenter.
Forward-looking statements This release
contains certain forward-looking statements with respect to the
financial condition, results of operations and business of Philips
and certain of the plans and objectives of Philips with respect to
these items. Examples of forward-looking statements include
statements made about the strategy, estimates of sales growth,
future EBITA, future developments in Philips’ organic business and
the completion of acquisitions and divestments. By their nature,
these statements involve risk and uncertainty because they relate
to future events and circumstances and there are many factors that
could cause actual results and developments to differ materially
from those expressed or implied by these statements.
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