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Royal Philips announced on Wednesday that the CEO of Philips Healthcare, Deborah DiSanzo, has left the company, and the health care business groups will now report directly to the company's CEO, Frans van Houten.
With the change, the reporting lines between Philips Healthcare and the executive committee will be much shorter, Steve Klink, senior press officer and director of communications at Philips, told DOTmed News.
"We can have quicker decision making, quicker assessment of where to invest and where not to, so that we can more quickly adapt to the transforming health care landscape and capitalize on the opportunities that it presents," he said.
Philips is also looking to develop a new type of customer relationship and they're hoping this new management structure will accelerate that. "We see a bigger demand for partnership agreements where we team up with a hospital and we work through performance based revenue models rather than just selling an individual scanner," said Klink.
The earnings before interest, taxes, depreciation and amortization (EBITA) for the health care sector were about EUR 220 million for the second-quarter of this year and Philips described it as "disappointing." Based on what analysts on average expect, Philips' EBITA was about EUR 40 million below market expectations.
The first quarter of this year was also not up to expectations for the company. The reasons for this are headwinds from currencies, the temporary Cleveland suspension and softness in select markets, said Klink.
At the end of last year, the FDA inspected Philips' Cleveland manufacturing facility and issues regarding the manufacturing process controls were brought to the company's attention. Before the inspection was completed, Philips decided in January to temporarily suspend production of PET/CT and SPECT/CT scanners in order to devote all of its time and energy to resolving the issue, said Klink.
He added that they are working hard on fixing the issue and will gradually resume production in the second half of this year.
The EBITA performance of the whole company is EUR 400 million, which is in line with the current market expectations.
The company is anticipating that EBITA performance in the health care sector will improve in the second half of the year, compared to the same period last year. In two weeks, they will provide further details of the second-quarter results.
