Philips expects growth in health data devices to be modest
Health technology company remains confident in the future of connected healthcare
Dutch health technology company Philips expects only slow growth in 2019 in sales of equipment allowing doctors and carers to monitor patients’ data remotely, after a weak performance in so-called connected care in 2018.
Philips spun off its lighting and consumer electronics divisions in recent years, and is now purely focused on healthcare, selling products ranging from toothbrushes to medical imaging systems.
It expects rising life expectancy and associated chronic diseases to lead to growing demand for devices that allow patients to stay at home, while their data is monitored.
“There has been no change in our confidence in the future of connected care on the long term,” CEO Frans van Houten said at Philips’ capital markets day on Thursday. “But realistically, growth has been slow and we still have to build the growth path.”
Van Houten has previously said the conservative nature of healthcare made it slow in adopting these technologies, and the situation has hardly changed in 2018.
Comparable sales of the connected care division are expected to come in at the low end of their 3% to 6% target range in 2019, Van Houten said, after stagnating in the first three quarters of 2018.
The company reaffirmed its target for total comparable sales growth of 4% to 6% per year until 2020, as it expects its two larger divisions, selling hospital equipment and personal care products, to post 5% to 7% sales growth annually.
Philips reiterated its goal of improving the adjusted core earnings margin by 1 percentage point each year, while increasing the free cash flow to more than €1.5bn by 2020.