While the reconfiguration of the portfolio has gone remarkably well overall, the breakthrough in healthcare has hit a snag with the massive recall of faulty fans. The case cost CEO Frans van Houten, the architect of Philips' new strategy, his job.

After extreme fears - a litigation that would cost billions of dollars to settle with the civil parties - the bill will finally be less expensive than expected: this is precisely what we learn from the results of the first quarter of 2023, published yesterday.

Philips has set aside EUR600 million to put the case behind it. In a timely and somewhat inelegant manner, the group seized the opportunity to resize its payroll, and fired 5% of its employees. This should eventually generate EUR 300 million in savings per year.

Recently, Philips was aiming to return to a turnover of EUR 23 billion by 2025 - a level it has not seen for 15 years. In fact, it is difficult to see how it will achieve this. Its turnover for the last quarter reached EUR 4.2 billion, or EUR 16.8 billion on an annualized basis.

So there are still a lot of billions to be found to meet the target. This will not be obvious from the point of view of organic growth, since at this stage there is none - nominal growth in revenues compared with the previous year is equal to or even lower than inflation.

The same applies to external growth opportunities. Philips has about EUR 6 billion of net debt, so its room for maneuver is limited. Unless, of course, the group decides to cut back on its generous returns of capital - dividends and share buybacks - to shareholders, but such a choice would certainly not be well received by the market.