(Recasts with growth projections for divisions, CEO quote from capital markets day)
AMSTERDAM, Nov 8 (Reuters) - Dutch health technology company Philips expects only slow growth next year in sales of equipment allowing doctors and carers to monitor patients’ data remotely, after a weak performance in so-called connected care this year.
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”, Chief Executive 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 3-6 percent target range next year, 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 percent per year until 2020, as it expects its two larger divisions, selling hospital equipment and personal care products, to post 5-7 percent sales growth annually.
Philips also reiterated its goal of improving the adjusted core earnings (EBITDA) margin by 1 percentage point each year, while increasing the free cash flow to more than 1.5 billion euros ($1.7 billion) by 2020.
$1 = 0.8754 euros Reporting by Bart Meijer; Editing by Mark Potter and Alexandra Hudson