On July 29, 2021, the Philips office building in Warsaw, Poland.
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Philips Demand from China has slumped in recent months, forcing the Dutch medical device maker to cut its sales forecast for this year, it said on Monday.
“Demand from hospitals and consumers in China deteriorated further in the third quarter, while we continued to see strong growth in other regions,” Chief Executive Roy Jacobs said in a statement.
“In the long term, China remains a fundamentally attractive growth market for Philips, but market conditions are expected to remain uncertain.”
Philips now expects comparable sales to grow by only 0.5% to 1.5% in 2024, down from its previous forecast of 3% to 5%, and said this growth can still be achieved in other regions.
The company sells products ranging from toothbrushes to medical imaging systems and is a major competitor to General Electric and Siemens Healthineers.
The slowdown was most pronounced in the personal health segment, where sales fell 5% in the third quarter due to double-digit declines in China.
The Amsterdam-based company said sales in its unit that sells medical equipment (diagnostics and treatments) to hospitals fell 1%, but sales outside China grew “solidly.”
Overall, comparable sales were flat at 4.4 billion euros ($4.75 billion), missing analysts’ average forecast of 2.1% growth.
Adjusted earnings before interest, taxes and amortization (EBITA) were fully in line with expectations, at 516 million euros, an increase of 13% over the same period last year. Cost reductions pushed the profit margin to 11.8%.
Philips said it expects full-year core profit margin to be around 11.5%, the upper end of its previous forecast.
