Philips 3Q beats, targets higher profitability

Philips 3Q beats, targets higher profitability

Koninklijke Philips NV said Monday that third-quarter net profit rose and exceeded expectations, and that the company is targeting accelerated sales growth and higher profitability in the 2021-2025 period.

The Dutch medical-technology group made a net profit from continuing operations of 340 million euros ($398.4 million) for the quarter, compared with EUR208 million for the same period a year before. Analysts expected a net profit of EUR274 million, according to a consensus estimate provided by the company.

Quarterly sales increased to EUR4.98 billion from EUR4.70 billion a year before, Philips said. Comparable sales grew 10%, it said. Analysts expected third-quarter sales to come in at EUR4.82 billion with comparable sales growth of 5.4%, according to a company-provided consensus.

Adjusted earnings before interest, taxes and amortization margin for the third quarter was 15.4%, the company said

Philips said it continues to see uncertainty and volatility related to the impact of the coronavirus pandemic across the world, but reiterated its guidance of modest comparable sales growth and an unchanged adjusted Ebita margin for 2020.

For the 2021-2025 period, the company said it is targeting an acceleration in the average annual comparable sales growth to 5%-6%, an adjusted Ebita margin improvement of 60-80 basis points on average annually from 2021 and a free cash flow above EUR2 billion by 2025.

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