Philips’ CEO comments on 2019 Q3 Results

2019 Q3 sales for Philips stood at EUR4.7 billion, with 6% comparable sales growth, EUR211 million income from continuing operations and an Adjusted EBITA margin of 12.4% of sales, compared to 13.2% in the same period last year. Income from operations was EUR320 million versus EUR451 million in Q3 2018, with operating cash flow at EUR356 million and free cash flow at EUR126 million versus 2018 Q3 results of EUR265 million and EUR52 million respectively.
Chief Executive Officer, Frans van Houten, said: “In the third quarter, we delivered mixed results for the Group. We recorded strong 6% comparable sales growth, driven by the innovative products and solutions across our businesses. This was reflected in the mid-single-digit comparable sales growth in mature geographies and high-single-digit growth in growth geographies, with double-digit growth in China. Comparable order intake was flat, on the back of strong 11% growth in the third quarter of 2018, reflecting the unevenness of order intake dynamics and softness in North America. Over the last 12 months, comparable order intake grew 5%. The Adjusted EBITA margin in the Diagnosis & Treatment and Personal Health businesses showed continued improvement. However, as we announced in our update on October 10, 2019, the Adjusted EBITA margin in the Connected Care businesses declined to 11.3%, due to increasing headwinds from tariffs and a delay in the impact of the mitigating actions, factory under-coverage and an adverse product mix impact. Adjusted EBITA for the Group was also impacted by lower license income in the segment Other. For the full-year 2019, we continue to expect growth to be within the 4-6% range. We expect the Adjusted EBITA margin to improve around 10 to 20 basis points given the overall significant headwinds and the performance trajectory of the Connected Care businesses, which we are addressing. For 2020, we expect 4-6% comparable sales growth and an Adjusted EBITA margin improvement of around 100 basis points.”