Signify Premium Insight: Philips Q3 Results – Key Imaging Business Takeaways
Published: November 5, 2020
Philips was upbeat in its third quarter results announcement amid news that group sales returned to growth and profitability improved during the quarter.
The company announced sales of Eur5bn, representing a 6% improvement on Q3 2019. This was largely a result of Covid-driven growth in the company’s Connected Care segment, which saw sales increase by 36%. This, combined with a 1% improvement in sales in Personal Health (a dramatic reversal of the huge decline in Q2), was more than enough to negate a 6.9% decline for the Diagnosis & Treatment segment.
Philips also took the opportunity to update on its new financial targets for the next five years. Over the 2021-2025 period: Philips plans to accelerate the average annual comparable sales growth to 5-6% for all business segments; improve EBITA margins by, on average, 60-80 basis points annually; achieve a free cash flow of more than Eur2bn; and achieve an organic return on invested capital of mid-to-high teens by 2025.