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Philips Q3 Profit Climb, Orders Down; Backs FY20 View; Issues Targets For 2021-2025

Dutch consumer electronics giant Philips Electronics NV (PHGFF.PK,PHG) reported Monday that its third-quarter net income grew to 340 million euros from 208 million euros last year. Earnings per share were 0.37 euro, up from 0.22 euro last year.

Adjusted earnings per share were 0.60 euro, compared to 0.46 euro a year ago. Adjusted EBITA margin improved 300 basis points to 15.4 percent.

Philips delivered third-quarter sales of 4.98 billion euros, up 6 percent from last year's 4.70 billion euros. On a comparable basis, sales increased 10 percent.

Comparable order intake, meanwhile, declined 18 percent on a reported basis, but grew 3 percent excluding the partial termination of the ventilator contract with HHS.

Looking ahead, the company continues to see uncertainty and volatility related to the impact of COVID-19 across the world, but its order book remains solid.

For the full year 2020, the company continues to expect to deliver modest comparable sales growth, with an adjusted EBITA margin of around the level of last year.

Further, Philips provided new financial targets for the 2021-2025 period.

The company sees an acceleration of the average annual comparable sales growth to 5-6 percent, with all business segments within this range.

For 2021, Philips' current view is that Group comparable sales will deliver low-single-digit growth, driven by solid growth in Diagnosis & Treatment and Personal Health, partly offset by lower Connected Care sales.

Further, the company projects an adjusted EBITA margin improvement of 60-80 basis points on average annually from 2021, reaching the high teens for the Group by 2025.

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