Philips reviews its SDA business to focus on health technology


Philips announced that it will review options for future ownership of the Domestic Appliances business, and start the process of creating a separate legal structure for this area. The Domestic Appliances sector reached 2.3 billion sales euro in 2019 with kitchen appliances, coffee, garment care and home care appliances. «The Domestic Appliances business – the CEO, Frans van Houten explains – has significantly contributed to Philips, but it is not a strategic fit for our future as a health technology leader, as we choose to further sharpen our focus along the health continuum and invest in our consumer health and professional healthcare-related businesses.»
The Personal Health businesses delivered comparable sales growth of 4% in the last quarter 2019, driven by double-digit growth in Oral Healthcare and mid-single-digit growth in Personal Care. The Adjusted EBITA margin increased to 20.1%, mainly due to sales growth, a positive mix impact and productivity, partly offset by tariffs. For the full year, the Personal Health businesses delivered 5% comparable sales growth and an increase in Adjusted EBITA margin to 16.1%.
Building on the success of Philips’ leading oral care solutions, the company rolled out the BrushSmart program in collaboration with Delta Dental of California, the largest provider of dental benefits in the US. The subscription-based program includes a discounted Sonicare toothbrush, coaching and teledentistry, and connects brushing behaviors at home with professional dental care to better understand, motivate and drive improvements in oral health.
During 2019, total Philips sales increased to 19.5 billion euro, with 4% comparable sales growth, while comparable order intake increased 3%.
«Looking ahead at 2020 we continue to see geopolitical and economic risks – van Houten goes on – We aim for 4-6% comparable sales growth and an Adjusted EBITA margin improvement of around 100 basis points, with a performance momentum that is expected to improve in the course of the year.»