Philips and the challenge of Chinese demand
Royal Philips, a well-known medical technology manufacturer, recently announced a revision of its growth forecasts for the current year. The root cause of this change is attributable to lukewarm demand from China, which has had a significant impact on the company’s orders. According to the new estimates, Philips expects comparable sales to grow only up to 1.5% in 2024, a sharp drop compared to the previous forecast that indicated growth of up to
5%.
Impact of the anti-corruption campaign
The drop in orders was particularly evident in the third quarter, where there was a decrease of 2%. This decline was influenced by an anti-corruption campaign affecting the Chinese healthcare sector. Local authorities have intensified controls on purchases of medical technology, imposing strict product requirements for many categories. This situation has created a climate of uncertainty that, according to CEO Roy Jakobs, will persist in
the coming quarters.
Philips’ global performance
Despite difficulties in the Chinese market, Philips reported adjusted operating profits of 516 million euros for the period, in line with analysts’ estimates. Jakobs emphasized that, while the situation in China remains complex, the company is seeing solid growth in the rest of the world. This suggests that, although there are significant challenges, Philips continues to maintain a competitive position in other global markets.