Philips Confident of Sales-Growth Target Amid U.S. Weakness

Philips said a strong order book and resilient performance in markets including China and India would allow the Dutch health-care equipment provider meet sales targets, even as uncertainty surrounding U.S. policy led hospitals there to delay spending, according to Bloomberg.

The company reiterated a full-year revenue growth target of between 4 percent and 6 percent for its health technology businesses, which excludes the Philips Lighting unit that was spun off last year. First-quarter sales on the same basis rose 3 percent, meaning the Amsterdam-based company needs “to do more“ in the second half, CEO Frans van Houten said.

There’s “nothing to worry about, we are confident,“ the CEO said on a call with journalists. “We saw a strong order intake growth in China, India and Europe. That compensates then for the somewhat slower U.S. market.“

Under Van Houten, Philips has sharpened focus on growing as a health-care technology company by spinning off Philips Lighting through an initial public offering last year, and the sale of its lighting-components unit Lumileds in December. The Dutch company aims to be seen as a provider of software, as opposed to a manufacturer of light bulbs, TVs and CD players that made up its core products during the company’s 125-year history.

Philips kept its outlook to raise profitability to the average industry standard for health care-equipment peers, including General Electric and Siemens, over the next three to four years. The full-year sales growth target will be accompanied by a 100 basis point improvement on average in the Ebita margin. First-quarter adjusted earnings before interest, taxes and amortization increased 18 percent to 442 million euros, the company said in a statement.