Philips, once the pride of Eindhoven as a lamp manufacturer, sold its lighting division four years ago and announced the sale of its home appliances division earlier this year. This should give the company wings on its new course; that of a global player in medical equipment.
Monday it turned out that the company has the wind in its sails with this strategy. Philips’ turnover increased in the third quarter by 10 percent to 5 billion euros, as was shown when the quarterly figures were announced. And wry, but true: this is partly due to the corona virus. The division that makes respirators and monitors, among other things, has experienced a 42 percent growth in turnover in the past three months.
The Philips share rose by 2.3 percent in value on the stock exchange. With a price of 42.48 euros, the share is almost back to its pre-corona value of approximately 45 euros. The profit margin for the group as a whole was 15.4 percent, three percentage points better than the 12.4 percent in the same quarter last year. The company wants to increase its profit margin of more than 13 percent per year even further in the coming years. A strategic plan for further growth will be presented in two weeks.
The growth in sales in respiratory equipment also had an economic downside. In the section “Diagnosis & Treatment” with, for example, CT scanners, sales fell. Many hospitals bought less other equipment because of the corona crisis.
At the end of August, the cancellation of an order for more than 30,000 breathing machines by the United States was damper. This may also result in Philips compensation.