By Bart H. Meijer
AMSTERDAM (Reuters) -Philips said on Monday that demand in China slumped significantly in recent months, forcing the Dutch medical devices maker to lower its sales outlook for the year.
“In the (third) quarter, demand from hospitals and consumers in China further deteriorated, while we continue to see solid growth in other regions,” Chief Executive Roy Jakobs said in a statement.
“China remains a fundamentally attractive growth market for Philips in the long term, with market conditions expected to remain uncertain.”
Philips now expects its comparable sales to grow by only 0.5% to 1.5% in 2024, down from previous forecast of 3% to 5% which it said would still be met in other regions.
The company, which sells products ranging from toothbrushes to medical imaging systems, is a main competitor of General Electric (NYSE:GE) and Siemens Healthineers.
The slowdown was most visible in the personal health segment, where sales fell 5% in the third quarter due to a double-digit decline in China.
The division that sells medical devices to hospitals (Diagnosis & Treatment) saw sales decline by 1%, with “solid growth” outside China, the Amsterdam-based company said.
Overall, comparable sales were flat at 4.4 billion euros ($4.75 billion), missing the 2.1% growth analysts on average had predicted.
Adjusted earnings before interest, taxes and amortisation (EBITA) were exactly in line with expectations at 516 million euros, up 13% year-on-year, as lower costs pushed the profit margin up to 11.8%.
Philips said it expects its full-year core profit margin to come in around 11.5%, the upper-end of its previous outlook.
($1 = 0.9266 euros)