Philips Sees 2021 Sales Growth as Recovery Continues in 4Q -- Update

--Philips expects growth to come from diagnosis-and-treatment and personal health

--Company reported better-than-expected sales for the fourth quarter

--Philips's fourth-quarter net profit rose, but missed expectations

By Adria Calatayud

Koninklijke Philips NV said Monday that it expects sales to grow in line with previous guidance this year, as it posted a rise in fourth-quarter net profit helped by better-than-forecast sales.

The Dutch health-technology company said it plans to deliver low-single-digit comparable sales growth for 2021. Solid growth in its diagnosis-and-treatment segment and in personal health is expected to offset a decline in connected-care sales, but the company said its outlook is still clouded by coronavirus-related uncertainty.

"Covid-19 is far from over," Philips Chief Executive Frans van Houten said in a call with reporters.

Mr. van Houten said Philips is off to a good start in 2021, although hospitals are postponing elective procedures and equipment installations due to a resurgence of Covid-19 cases.

For the fourth quarter of 2020, Philips made a net profit of 603 million euros ($734.1 million) compared with EUR556 million for the same period last year. This included a charge of EUR144 million on the back of a write-down on its personal emergency-response system business as a result of lower demand.

Analysts expected a net profit of EUR636 million, according to a consensus provided by the company.

Quarterly sales rose to EUR6.00 billion from EUR5.96 billion, beating analysts' expectations of EUR5.91 billion. On a comparable basis, sales grew 7%, ahead of company-provided consensus estimates.

Comparable order intake increased 7% in the quarter, the company said.

Philips said adjusted earnings before interest, taxes and amortization margin was 19% in the quarter compared with 17.9% a year before.

The company said it anticipates an adjusted Ebita margin improvement of 60-80 basis points this year.

"These results set us up well for 2021," Mr. van Houten said.

In 2021, the company expects a stronger sales performance in the first half to be followed by a weaker second half, but this will be mainly due to the effect of the pandemic on its 2020 results, when the company was hit early in the year and recovered in the latter part, Mr. van Houten said.

Shares at 1143 GMT were up 2.7% at EUR46.85.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

January 25, 2021 06:59 ET (11:59 GMT)

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