Philips' earnings rise but sales growth disappoints

Philips ultrasound equipment

Dutch health technology company Philips has reported a rise in first quarter earnings, but its sales increased by less than expected.

The company - which has recently focused on health technology after selling its consumer electronics and lighting divisions - said core earnings rose 6% to €364m (£314m).

However, falling demand for hospital equipment in Europe meant sales grew by just 2%.

Despite this, Philips said it still expected to achieve sales growth of 4-6% a year until 2020.

"We continue to expect our performance momentum to improve over the course of the year," said chief executive Frans van Houten.

Philips reports 5% sales rise for 2018

Philips building

Dutch electronics giant Philips has posted a 5% rise in like-for-like sales for last year.

It said sales were €18.1bn in 2018 with fourth-quarter like-for-like sales also up 5% to €5.6bn.

The company is shifting its focus into software and services.

Frans van Houten, chief executive, said: “As Philips continues to navigate global geopolitical challenges and market volatility, for which we are taking necessary actions, we expect our performance momentum to improve in the course of the year.”

More on Philips plant closure

Philips UK and Ireland

Further to the news that Philips is to close its Glemsford factory in 2020.

Although a majority of the factory's operations will be moved to the Netherlands, Philips says the UK is still important.

“I recognise that our proposed plan will have a profound impact on our colleagues working at the Glemsford site, and our manufacturing presence in the UK,” said Neil Mesher, chief executive of Philips UK & Ireland.

“We have announced the proposal after careful consideration, and over the next period, we will work closely with the impacted colleagues on next steps. Philips has a long, established history of serving customers within the UK, and we remain committed to them.

"The UK is an important market for us, and we will continue to invest in our commercial organisation and innovation programs in the country.”

No trimming for Philips' sales

Chris Johnston

Business reporter, BBC News


Annual profits at Philips have jumped by a quarter to €1.87bn as the Dutch electronics giant increasingly focuses on health technology.

Sales were up 2% to almost €18bn in 2017 as health-conscious consumers snapped up everything from electric toothbrushes to kitchen appliances.

Chief executive Frans van Houten says the integration of acquisitions from across the "health continuum" (whatever that is) is on track.

He also singled out the new OneBlade - a "revolutionary hybrid styler" (or electric beard trimmer if you prefer) as a particular success. It has generated sales of more than €100m in 18 months.

Not only can it be used for facial hair, but Philips says it's also perfect for "sensitive areas" such as "underarms and yeah, down there too" as the website helpfully notes.