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Philips sees tough year ahead

Tuesday, January 28, 2014 - 01:44

Jan 28 - In an interview with Reuters, Philips CEO Frans van Houten warns of a tough year ahead and flags turmoil in the currency markets as a particular concern. As Hayley Platt reports, shares in the Dutch healthcare, lighting and consumer appliances company fell two per cent in early trading but recovered later on better-than-expected Q4 earnings.

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Philips' fourth quarter earnings were brighter than expected. But net profit of 412 million euros was below forecasts. And the Dutch healthcare and consumer appliances company warned of a tough year ahead. CEO Frans Van Houten. SOUNDBITE: Frans Van Houten, CEO, Philips, saying (English): "What worries me are the currency fluctuations and the unrest in some of the countries - for example Turkey, or the peso in Argentina and the rupiah in Indonesia. These are of course facts of life that we have to live with. And I'm cautiously optimistic for the longer term economic development, it's just that in the near term we do see several headwinds." The group's audio and video business is also a worry - losing market share to its low-cost Asian rivals. Philips is now focussing on more profitable businesses such as LED lighting and health-care equipment. It's done well in emerging markets - after a big push into countries like China, India and Russia, they now account for a third of sales. But North America remains tough. SOUNDBITE: Frans Van Houten, CEO, Philips, saying (English): "Reform in North America has had a big impact on the healthcare market. We see many hospitals consolidating in larger hospital systems. I think overall that is a good trend but it does mean that in the near term there is less than demand and interest to buy equipment so the market is kind of slow." Philips has cut jobs and operations over the past two years and invested heavily in high-tech systems. It says it's on track to achieve growth of 4-6 percent by 2015.

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Philips sees tough year ahead

Tuesday, January 28, 2014 - 01:44