Philips sees growing demand for e-toothbrushes, apnea care

[AMSTERDAM] Royal Philips NV signaled orders are growing at a double-digit pace in some markets like electric toothbrushes and image guided therapy used in operations, helping first-quarter earnings meet analysts' estimates.

The maker of body scanners, electric toothbrushes and respiratory gear stepped up launches and increased marketing to help battle a slowdown in consumer confidence in markets like China. It reported first-quarter adjusted earnings before interest, taxes and amortization increased 5.8 per cent to 364 million euros (S$551.9 million). Analysts predicted 358 million euros.

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Demand for the latest models of Philips' Sonicare toothbrushes led to a step up in sales growth. Rather than offer discounts like some rivals, Chief Executive Officer Frans van Houten is expanding Philips' offering to accommodate all budgets. He's also tapping demand in fast-growing markets for breathing masks and equipment to help sufferers of sleep apnea.

Philips is also feeling the fallout from the ongoing trade war between the US and China that's prompting Van Houten to shift production to within the Asian country. Van Houten earlier said the impact of the trade war could shave 60 million euros. By contrast, growth in emerging markets is in the double digit per centage range, the CEO added.

Having exited legacy products like lightbulbs, TVs and CDs, van Houten is now seeking to improve margins from scanners and x-ray machines and sell add-on services to compete with General Electric Co and Siemens AG as well as new entrants in markets like oral care. Philips reiterated a target for 4 per cent to 6 per cent sales growth per year through 2020.

BLOOMBERG