Philips revival continues as it doubles profit

PHILIPS boss Frans van Houten’s comprehensive cost-saving plan is paying off, the Dutch company revealed yesterday, as it revealed that profits more than doubled in the three months to October.

Van Houten has overseen thousands of job cuts and ditched Philips’ loss-making TV business since he took over the ailing firm 18 months ago. Yesterday’s results beat expectations for the third quarter in a row, sending the Amsterdam-listed firm’s shares up almost five per cent.

“Improvements in our operational excellence and agility are positioning the company for better performance in the coming years,” van Houten said. However, he did warn of “strong economic headwinds on a global scale”.

Much of the boost in profits – from €74m (£60m) in the same period last year to €169m – was down to the disposal of the TV business, which had booked a €54m loss last year.

The strong performance was not all down to cutting costs, however. Sales hit €6.1bn, a 14 per cent rise, or five per cent when the effects of currency changes were stripped out.

Growth was most impressive in Philips’ healthcare division, which saw an 18 per cent rise in turnover, while even the struggling consumer lifestyle division improved as sales of items such as electric toothbrushes offset falls in its consumer electronics ranges.

Much of the growth was put down to stronger turnover in emerging markets. While Western European sales were flat, new markets rose 18 per cent, and now make up more than a third of total revenue.