Philips has revised its sales expectations for 2025, projecting a growth rate of 1% to 3% in comparable sales. This update follows a period of underperformance in the previous quarter, influenced significantly by declining sales in China.
Philips, the Dutch health technology firm, has faced challenges in meeting market predictions. For the last quarter ending in December, the company reported total sales of €5.04 billion ($5.27 billion), falling short of the anticipated €5.07 billion. The decline is attributed to a substantial drop in demand from China, which experienced a double-digit downturn.
The company also acknowledged the adverse effects of tariffs imposed by both the U.S. and China on its sales forecast. Despite these hurdles, Philips expects a modest sales growth of up to 3% by 2025. The forecast considers continued challenges in the Chinese market, projecting a mid- to high-single-digit decrease in sales there.
In response to the shifting market dynamics, Philips had previously lowered its sales forecast for 2024. CEO Roy Jakobs noted that China’s contribution to the company’s revenue has reduced to about 10%, down from over 13% in earlier years. The company’s workforce in China remains significant, with over 7,000 employees.
Regarding its financial health, Philips reported adjusted earnings before interest, taxes, and amortization (EBITA) of €679 million for the last quarter, slightly below analyst expectations of €683 million. Nevertheless, the company maintained its annual dividend proposal at €0.85 per share, consistent with the previous year.
Despite recent setbacks and ongoing global challenges, Philips remains cautiously optimistic about its future growth prospects. The company continues to adapt its strategies, aiming to overcome current market adversities while maintaining stable financial health.
