Philips (PHG) Reports Q4 EPS of EUR0.94 on Revenues of EUR6.0B

Philips (NYSE: PHG) reported Q4 EPS of EUR0.94, versus EUR0.83 reported last year. Revenue for the quarter came in at EUR6 billion.

Fourth-quarter highlights

• Sales amounted to EUR 6.0 billion, with 7% comparable sales growth
• Comparable order intake increased 7%
• Income from continuing operations increased to EUR 608 million, compared to EUR 550 million in Q4 2019
• Adjusted EBITA margin increased to 19.0% of sales, compared to 17.9% of sales in Q4 2019
• Income from operations improved to EUR 795 million, compared to EUR 730 million in Q4 2019
• EPS from continuing operations (diluted) amounted to EUR 0.66; Adjusted EPS increased to EUR 0.94, compared to EUR 0.83 in Q4 2019
• Operating cash flow improved to EUR 1,305 million, compared to EUR 1,271 million in Q4 2019
• Free cash flow improved to EUR 1,055 million, compared to EUR 959 million in Q4 2019

Full-year highlights

• Sales amounted to EUR 19.5 billion, with 3% comparable sales growth
• Comparable order intake increased 9%
• Income from continuing operations increased to EUR 1,205 million, compared to EUR 1,192 million in 2019
• Adjusted EBITA margin was 13.2% of sales, in line with 2019
• Income from operations amounted to EUR 1,542 million, compared to EUR 1,644 million in 2019
• EPS from continuing operations (diluted) amounted to EUR 1.31; Adjusted EPS amounted to EUR 1.98, in line with 2019
• Operating cash flow improved to EUR 2,777 million, compared to EUR 2,031 million in 2019
• Free cash flow improved to EUR 1,852 million, compared to EUR 1,053 million in 2019
• Proposed dividend of EUR 0.85 per share, in cash or shares at the option of the shareholder

Frans van Houten, CEO of Royal Philips:

“Against the backdrop of the ongoing COVID-19 pandemic, we continued to support healthcare providers and medical staff with the provision of both acute COVID-19 care and regular healthcare. In the quarter, Philips entered into 25 new long-term strategic partnerships with hospitals in the US, Europe and Asia, to help them achieve their clinical and operational goals with our integrated solutions. We also supported consumers in their homes with telehealth solutions such as tele-dentistry services and remote monitoring.

I am pleased that, as a result of these efforts, in the quarter we recorded 7% comparable sales growth for the Group and 7% comparable order intake growth. The Adjusted EBITA margin improved by 110 basis points, and we delivered a strong free cash flow of EUR 1,055 million.

We launched several new products and solutions in the quarter, including the Philips Shaver Series 1000 that specifically addresses the personal care needs of young men in China. We also introduced our next-generation IntelliSpace Portal advanced visualization workspace with AI capabilities to support a precision diagnosis. To expand our Connected Care solutions, we signed agreements to acquire BioTelemetry and Capsule Technologies. These acquisitions will further broaden and scale Philips’ patient care management solutions for the hospital and the home to enhance patient outcomes, streamline clinical workflows and increase productivity. We target significant revenue synergies, and these businesses will be accretive to Philips' sales growth and Adjusted EBITA margin in 2021. This is another important step in our strategy to become a leading solutions provider.

As a result of our stronger performance in the second half of the year, following a challenging first half due to the impact of COVID-19, our performance was resilient. For the full year 2020 we delivered 3% comparable sales growth, an Adjusted EBITA margin of 13.2% and a strong free cash flow of EUR 1.9 billion. Moreover, driven by 9% comparable order intake growth, we continued to gain market share in our healthcare businesses, and ended the year with a strong order book.

I am very grateful and proud of the commitment, resourcefulness and hard work of our more than 80,000 employees in 2020. Through our efforts, we were able to deliver against our triple duty of care - meeting critical customer needs, safeguarding the health and safety of our employees, and ensuring business continuity.

Looking ahead, we continue to see uncertainty related to the impact of COVID-19 across the world. For 2021, Philips plans to deliver low-single-digit comparable sales growth, driven by solid growth in Diagnosis & Treatment and Personal Health, partly offset by lower Connected Care sales, and an Adjusted EBITA margin improvement of 60-80 basis points.”

For earnings history and earnings-related data on Philips (PHG) click here.

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