Royal Philips NV yesterday said the lingering impact from the COVID-19 pandemic and changes in the way healthcare is delivered would help boost sales of its medical gear for years to come.
The Dutch maker of body scanners and monitors set out a target for average annual sales growth of 5 to 6 percent from next year to 2025, it said.
Growth would be “modest” this year, and in the low single digits next year based on the current solid order book, it added.
Photo: Reuters
During the height of the pandemic, Philips struggled to keep up with orders for its ventilators used to help COVID-19 patients with severe breathing difficulties. Now into the tail-end, Philips expects to benefit from a deep fundamental shift in how patients receive care through remote monitoring and virtual appointments.
“We take a longer view and think we are well positioned for a higher growth even though we have to kind of navigate the short-term disparities in the market,” CEO Frans van Houten said in a Bloomberg interview.
Providing a longer-term outlook, including improved margins, sets Philips apart from a swathe of manufacturers still unable to set mid-term goals.
While the focus remains on acute pandemic care, hospitals are now pushing ahead with surgery and other medical procedures that were put on hold.
Even with increased national debtloads, governments would need to increase spending on healthcare having seen resources stretched, Van Houten said.
Philips reported a 32 percent jump in earnings before interest, taxes and amortization to 769 million euros (US$902 million) in the third quarter. That beat an average estimate of 630.6 million euros.
Philips invested more than 100 million euros on quadrupling ventilator production in just five months.
A US$400 million emergency order from the US backfired when the state unexpectedly canceled the purchase.
Philips booked a 57 million euro provision to cover the lost contract as it seeks to find buyers for the excess stock in Africa.
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