Diagnostic imaging propels Philips growth in Q4

By AuntMinnie.com staff writers

January 25, 2021 -- Strong growth in the high single digits for its diagnostic imaging equipment helped propel fourth-quarter financial results in the healthcare business at Philips. Meanwhile, the company's Personal Health segment slipped on lower sales of oral healthcare products.

For the quarter (end-December 31, 2020), Philips' Diagnosis & Treatment division saw sales of 2.458 billion euros ($2.98 billion U.S.), down 5% on a nominal basis from sales of 2.582 billion euros ($3.13 billion) in the same period the year before, but up 1% after adjusting for currency changes. The division's earnings before interest, taxes, and amortization (EBITA) were 314 million euros ($381 million), unchanged from the year before.

In discussing the fourth-quarter results, Philips said it saw high-single-digit growth in sales of diagnostic imaging systems and a midsingle-digit decline in sales of image-guided therapy and ultrasound systems, due to the postponement of system sales because of the COVID-19 pandemic. The decline also led to a 14% drop in EBITA margin.

On a geographic basis, growth was driven by higher sales in China and Central and Eastern Europe, which was partially offset by the Middle East and Turkey. There was a decline in the low single digits in mature geographies, with low-single-digit growth in Western Europe and a midsingle-digit decline in North America.

For the full year, the Diagnosis & Treatment business saw sales of 8.175 billion euros ($9.92 billion), down 4% on a nominal basis and down 2% after currency adjustment from sales of 8.485 billion ($10.3 billion) for all of 2019. The division's EBITA for 2020 was 704 million euros ($854.5 million), compared with EBITA of 856 million euros ($1.039 billion) in 2019.

The company's Personal Health business saw sales of 1.824 billion euros ($2.21 billion), down 1% on a nominal basis but up 5% after currency adjustment from sales of 1.85 billion euros ($2.25 billion) in the fourth quarter of 2019. The company said that sales of oral healthcare products saw a decline in the low single digits.

For the full year, the Personal Health business saw sales of 5.407 billion euros ($6.56 billion), down 8% on a nominal basis and down 4% after currency adjustment from sales of 5.854 billion euros ($7.11 billion) in 2019. The division's EBITA was 639 million euros ($775.6 million) in 2020, compared with 869 million euros ($1.055 billion) in 2019.

Philips said a strong recovery in the second half of the year was not enough to offset declines in the Personal Health business in the first half, with the company seeing a decline in the high single digits in oral healthcare.


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