Philips Sees 2021 Sales Growth as Recovery Continues in 4Q -- Update
--Philips expects growth to come from diagnosis-and-treatment
and personal health
--Company reported better-than-expected sales for the fourth
--Philips's fourth-quarter net profit rose, but missed
By Adria Calatayud
Koninklijke Philips NV said Monday that it expects sales to grow
in line with previous guidance this year, as it posted a rise in
fourth-quarter net profit helped by better-than-forecast sales.
The Dutch health-technology company said it plans to deliver
low-single-digit comparable sales growth for 2021. Solid growth in
its diagnosis-and-treatment segment and in personal health is
expected to offset a decline in connected-care sales, but the
company said its outlook is still clouded by coronavirus-related
"Covid-19 is far from over," Philips Chief Executive Frans van
Houten said in a call with reporters.
Mr. van Houten said Philips is off to a good start in 2021,
although hospitals are postponing elective procedures and equipment
installations due to a resurgence of Covid-19 cases.
For the fourth quarter of 2020, Philips made a net profit of 603
million euros ($734.1 million) compared with EUR556 million for the
same period last year. This included a charge of EUR144 million on
the back of a write-down on its personal emergency-response system
business as a result of lower demand.
Analysts expected a net profit of EUR636 million, according to a
consensus provided by the company.
Quarterly sales rose to EUR6.00 billion from EUR5.96 billion,
beating analysts' expectations of EUR5.91 billion. On a comparable
basis, sales grew 7%, ahead of company-provided consensus
Comparable order intake increased 7% in the quarter, the company
Philips said adjusted earnings before interest, taxes and
amortization margin was 19% in the quarter compared with 17.9% a
The company said it anticipates an adjusted Ebita margin
improvement of 60-80 basis points this year.
"These results set us up well for 2021," Mr. van Houten
In 2021, the company expects a stronger sales performance in the
first half to be followed by a weaker second half, but this will be
mainly due to the effect of the pandemic on its 2020 results, when
the company was hit early in the year and recovered in the latter
part, Mr. van Houten said.
Shares at 1143 GMT were up 2.7% at EUR46.85.
Write to Adria Calatayud at firstname.lastname@example.org
(END) Dow Jones Newswires
January 25, 2021 06:59 ET (11:59 GMT)
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