Lekker Truitje schreef op 16 augustus 2023 11:02:
Exor’s Philips bet looks well-timed
(The author is a Reuters Breakingviews columnist. The opinions expressed are their own.)
LONDON, Aug 14 (Reuters) - Exor Chief Executive John Elkann is making a bold but potentially shrewd punt on troubled medical and consumer group Koninklijke Philips . The Agnelli family’s investment company on Monday said it bought a 15% stake in the toothbrushes-to-defibrillators group for 2.6 billion euros ($2.8 billion). The deal, part of a broader push into healthcare, comes as the Dutch group is facing lawsuits and probes by the U.S. Department of Justice relating to faulty breathing devices.
A crisis can also be an opportunity. Philips’ shares are down some 62% since the peak in April 2021, and it now looks much cheaper than the sum of its parts. Based on peer multiples, its diagnostics business could be worth 14 times 2024 EBITDA, while its connected care unit, which helps hospitals manage patient data, might be valued at 18.5 times EBITDA. Lastly, throw in the consumer division, which could fetch 12 times EBITDA. Using Refinitiv forecasts, that would imply a total enterprise value of 33 billion euros, and equity of some 24 billion euros, after taking off debt and 2.4 billion euros for legal costs estimated by Bernstein analysts. That’s some 37% above Philips’ current market value.
To realise that value, Exor will need new CEO Roy Jakobs to complete his turnaround. Analysts are optimistic he can: they now expect Philips’ EBITDA to hit 3.4 billion euros in 2025, close to the 3.6 billion euros the company generated in 2020 before the recall of millions of breathing machines in 2021, according to Refinitiv data. Exor’s show of faith may help convince other investors that Jakobs is on the right track. (By Karen Kwok)