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Key takeaways:
- An agreement in principle with the US Department of Justice aims to resolve criminal and civil investigations related to the sleep and respiratory care recall.
- A provision of EUR 288 million was recorded in the third quarter of 2026, with payment expected in the first quarter of 2027.
- The sleep and respiratory care business saw mid-single-digit sales growth in the third quarter, driven by demand for sleep therapy devices in Japan and Europe.
Philips Respironics has reached an agreement in principle with the US Department of Justice (DOJ) to resolve previously disclosed criminal and civil investigations related to its sleep and respiratory care recall.
As a result of the agreement, Philips recorded a provision of EUR 288 million in the third quarter of 2026. The settlement is subject to the finalization of relevant documentation, with payment expected in the first quarter of 2027.
“We continue to make progress in resolving the consequences of the Sleep & Respiratory Care recall,” says Roy Jakobs, CEO, in a release. “The Respironics agreement in principle with the US Department of Justice marks an important step in this process.”
In related legal developments during the third quarter, the Enterprise Chamber of the Amsterdam Court of Appeal denied requests from certain investors for an investigation into the affairs of Philips in connection with the recall.
Despite the ongoing legal proceedings, the company’s sleep and respiratory care division experienced sales growth acceleration to mid-single digits during the third quarter. This growth was driven by strong demand for sleep therapy devices in Japan and Europe.
The broader connected care segment, which houses the sleep and respiratory care business, reported a 5% comparable sales increase and an adjusted EBITA margin increase of 190 basis points to 13.3%.
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