Philips Sees Sustained Growth in 2021 After Profit Meets Target

(Bloomberg) -- Royal Philips NV said it expects growth to remain resilient in 2021, bolstered by acquisitions and a record quarterly haul of contracts to upgrade hospital equipment.

The maker of respiratory gear and body scanners increased sales 3% in 2020 and predicted another year of low-single-digit growth this year in a statement on Monday. Fourth-quarter earnings totaled 1.14 billion euros ($1.4 billion), in line with estimates.

The coronavirus pandemic is driving a long-term shift toward virtual care, boosting demand for equipment that allows health practitioners to look after patients remotely. Philips also saw a return to growth at its diagnostics division in the quarter.

“We finished the year strongly,” Chief Executive Officer Frans van Houten said in a Bloomberg Television interview. The Dutch company pulled in 25 long-term contracts with hospitals in the fourth quarter. “I don’t ever recall that,” Van Houten said.

Philips is moving forward with divesting its domestic appliance unit, which could fetch at least 3 billion euros, people with knowledge of the matter said. At the same time, Philips has announced a string of health-related purchases as it builds out its telehealth and diagnostics portfolio to provide a one-stop shop for hospitals and clinics looking for ways to optimize costs.