Philips to sell home appliances unit, focus on health
January 28, 2020 08:22 PM
Dutch giant Philips said Tuesday that 2019 net profit rose seven percent and it planned to sell or hive-off its home appliances unit in order to concentrate on the health sector.
The appliances business, which includes kitchen robots, coffee machines and garden tools, had sales of 2.3 billion euros ($2.5 billion) last year. The sale will take place after a corporate restructuring exercise expected to take 12-18 months to complete, it said.
"We will look for ways to sell or make it independent," CEO Frans van Houten said. "The idea is that Philips will no longer be the owner of that business and that we then use the proceeds to reinvest in the company," van Houten said. "We think that it's a valuable business that will gather a lot of interest," he added.
On the Amsterdam stock exchange mid-morning, Philip shares were down nearly two percent in a flat overall market. Philips said its health business, now its main activity, chalked up sales of 5.85 billion euros last year.
The company, once a major lighting and electronics player, said total 2019 net profit hit 1.17 billion euros on sales up 7.5 percent from 2018 to 19.48 billion euros. Van Houten said the results were "satisfactory," noting that US-China trade tensions had impacted activity. There continues to be geopolitical risk this year, he said, putting sales growth at 4.0-6.0 percent.