Philips bids farewell to home appliances to sharpen health focus  

  29 January 2020    Read: 1108
Philips bids farewell to home appliances to sharpen health focus  

Philips (PHG.AS) will complete its transformation to a health technology business with the sale of its domestic appliances division, which no longer fits with the company’s range of hospital equipment and personal health products, reports citing Reuters.

Once a sprawling conglomerate, Amsterdam-based Philips has narrowed its focus in recent years, spinning off the lighting and consumer electronics divisions for which it was previously best known.

Philips said on Tuesday it would carve out the domestic appliances business, which produces coffee machines, vacuum cleaners and airfryers and generated 2.3 billion euros ($2.6 billion) in sales last year, in the coming 12 to 18 months.

“This business is not a strategic fit for our future as a health technology leader,” Chief Executive Officer Frans van Houten said.

He added that all options remained open for the division, which he said had a double-digit profit margin that was “slightly less” than the average for Philips.

ING analyst Marc Hesselink said a “quick and dirty” calculation valued the division at around 3 billion euros, assuming a 10% profit margin with a price tag of 12 times gross profit.

“This was a, in our view, widely expected focus even more on health tech”, he said.

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