Royal Philips NV warned of growing macroeconomic risks and said sales growth next year would be “moderate” as the lighting and healthcare equipment company moves to split itself in two.
Profitability should be about 11 percent next year, on an adjusted basis, chief executive officer Frans van Houten said in a statement yesterday.
Margins will be lowered by about 200 basis points next year as a result of restructuring costs and expenses to carve out a lighting division.
“At the same time, macro-economic risks are increasing and, as a result, we expect modest sales growth in 2016,” Van Houten said.
The global economic outlook is “fragile” as Russia and Brazil declines, while Philips is budgeting on China growing less than 7 percent, Philips said.
Philips is moving beyond manufacturing equipment to complete personal-health programs that can track and store heart-rates and other data that can be relayed from a watch to a doctor.
The first program will go on sale in Germany next month.
Van Houten last year said that he sees the health-care technology market growing to US$100 billion in value.
To secure HealthTech’s financial stability, Van Houten is also focusing on long-term supply and maintenance contracts with hospitals for equipment including CT-scanners and monitors.
Earlier this year Philips signed a US$500 million, 15-year contract with the Westchester Medical Center Health Network.
The Amsterdan-based company is exploring strategic options for a lighting division, while hiring Bank of America Corp to help scout for multibillion-euro acquisitions.
It has already agreed to sell an 80.1 percent stake in a lighting-components business to GO Scale for US$2.8 billion.
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