Philips, the renowned Dutch technology conglomerate, has reported a significant milestone: an uptick in orders for the first time in three years. While the company saw profits increase in 2024, challenges persist in the crucial Chinese market, where a notable decline in orders has been observed.
In 2024, Philips experienced a 1% growth in orders, capitalizing on a robust final quarter with a 2% increase, largely fueled by strong demand from North American markets. However, the dynamism in these regions was counterbalanced by a drastic decline in Chinese orders, which plummeted by several tens of percent over the year, tempering overall growth.
According to Philips’ annual results report, the company anticipates continued volatility in China, with an expectation of further demand contraction in 2025. This downturn is attributed to stringent regulatory requirements on medical technology, aimed at curbing corruption, alongside waning consumer and business confidence due to economic sluggishness.
Despite these challenges, Philips’ turnover in 2024 surpassed €18 billion, marking a 1% increase over the previous year, while earnings before interest, taxes, depreciation, and amortization (EBITDA) rose from €1.9 billion to €2.1 billion.
Looking ahead, Philips remains optimistic, forecasting sales growth between 1% and 3% this year, with projections of enhanced profitability despite the hurdles in the Chinese market. The firm underscores its resilience, having navigated a challenging phase marked by costly settlements in the U.S. related to its sleep apnea devices, amounting to over €1 billion.
Philips plans to commence shareholder payouts in the first half of this year, signaling confidence in its ongoing recovery and growth trajectory.