Philips no longer has control over Philips Lighting and has ceased to consolidate Philips Lighting. Even the last remaining 29% shares in Philips Lighting is for sale. In a comment with the presentation of the results of the fourth quarter and full year of 2017, Philips says “the remaining interest in Philips Lighting is presented as an investment included in ‘Assets classified as held for sale’ in the financial statements of Royal Philips as from the end of November 2017.” Philips Lighting will publish results for the fourth quarter and full year 2017 next Friday.
Philips reports 2017 sales of € 17.8 billion, with comparable sales growth of 4%; net income from continuing operations, which included a one-time non-cash tax charge of € 72 million, increased to just over € 1 billion, compared to € 831 million in 2016. The margin improved to 12.1% of sales, compared to 11.0% of sales in 2016. Operating cash flow totaled € 1.9 billion, compared to € 1.2 billion in 2016; free cash flow increased to € 1,185 million, compared to € 429 million in 2016. Philips wants to maintain dividend at € 0.80 per share.
Frans van Houten, CEO, says 2017 was a good year for Philips, “as we continued the transformation of Philips into a focused leader in health technology and delivered on our improvement targets for the year.” He says Philips strengthened its strategic platforms through acquisitions, and introduced several breakthrough innovations.
“Philips’ performance in the fourth quarter demonstrates that we are gaining momentum. We further strengthened our portfolio through targeted acquisitions across the health continuum. The integration of these acquisitions is on track.” According to Van Houten, Philips’ organic growth initiatives are delivering tangible results as well, “such as the strong order intake growth in our Digital Pathology Solutions business, the double-digit growth of our Sleep & Respiratory Care devices, and the continued success of Philips OneBlade.”
Philips expects continued growth at 3–5% in 2018. “Given the phasing of our order book, we expect improvements to be at the back end of the year.”
Following the US Food and Drug Administration (FDA) inspection of the Cleveland facility (Illinois) in the third quarter of 2017, Philips submitted its response to the inspectional observations for review by the FDA. In December 2017, the company had a meeting with the FDA. Philips has agreed to provide monthly status reports to the FDA highlighting the progress in addressing the observations. Philips has resumed shipments of its HS1 AEDs globally, as well as consumables, accessories and service parts for all of its defibrillators.
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