Amsterdam, the Netherlands – At the company’s virtual Capital Markets Day with investors and financial analysts today, Royal Philips (NYSE: PHG, AEX: PHIA), a global leader in health technology, will provide further details of its strategic plan and performance trajectory for the 2021–2025 period. Starting at 13:00 CET / 12:00 GMT / 07:00 EST, Philips CEO Frans van Houten, together with CFO Abhijit Bhattacharya and several executives, will share deeper insights into the company’s path to value.
“We have transformed Philips into a global health technology leader, applying our innovation strength to improve the health and well-being of people,” said Frans van Houten, CEO of Royal Philips. “The systems, smart devices, AI & software, and services we develop help consumers improve their health and well-being, and healthcare providers achieve better outcomes, higher productivity, and improved patient and staff experiences. The transformation has also led to a structurally improved growth and profitability profile of the company. Looking ahead, we are excited to enter the next growth phase guided by our strategic imperatives to better serve customers and improve quality, boost growth in our core businesses, and win with solutions.”
As previously reported, Philips’ targets for accelerated growth, higher profitability and improved cash flow for the 2021–2025 period are :
- An acceleration of the average annual comparable sales growth to 5-6%, with all business segments within this range. For 2021, Philips’ current view is that Group comparable sales will deliver low-single-digit growth, driven by solid growth in Diagnosis & Treatment and Personal Health, partly offset by lower Connected Care sales;
- An Adjusted EBITA margin improvement of 60-80 basis points on average annually, starting in 2021 and reaching a high-teens Adjusted EBITA margin for the Group by 2025 ;
- A free cash flow above EUR 2 billion by 2025;
- An organic Return on Invested Capital (ROIC) of mid-to-high-teens by 2025.
“We plan to accelerate sales growth and improve the Adjusted EBITA margin to high-teens by 2025,” said Abhijit Bhattacharya, CFO of Royal Philips. “Our productivity initiatives will deliver additional cumulative net savings of EUR 2 billion by 2025. A strong cash conversion of over 90%, combined with the efficiency of our balance sheet, will drive the planned free cash flow generation of above EUR 2 billion by 2025. Overall, we have established a robust financial framework that is geared to value creation, which will enable us to deliver approximately 10% Adjusted Earnings per Share growth annually.”