Share Buyback Announced By Philips Following Sales Boost

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Today, Philips, a technology company, said that it boosted its like-for-like sales by five percent in 2018 to €18.1 billion (£15.7 billion).

The technology firm is headquartered in Amsterdam. It said that it also increased its sales by five percent during the fourth quarter to €5.6 billion.

The company said that its adjusted earnings before interest, tax and amortisation (Ebita) grew by 100 basis points to 13.1 percent of the sales of last year as compared to the 12.1 percent that was recorded during the previous year.

The company shrugged off an economic slowdown in China, boosted the dividend of the company by six percent to €0.85 per share and announced a new €1.5 billion share buyback programme as the orders for the medical equipment of the company surged.

Frans van Houten, the chief executive of the company, stated: “As Philips continues to navigate global geopolitical challenges and market volatility, for which we are taking necessary actions, we expect our performance momentum to improve in the course of the year. We reaffirm our overall targets of four to six per cent comparable sales growth and an adjusted Ebita margin improvement of 100 basis points on average per year for the 2017–2020 period.”

Going against the grain in China, where the retail growth has generally weakened, Van Houten said that Philips has discovered specialized markets for such products as respiratory machines and electric toothbrushes, the latter having “fantastic margins.”

Earlier this month, Philips said that it was closing its only factory in the United Kingdom, potentially resulting in the loss of more than 400 jobs.

The factory is located in Glemsford, Suffolk. It manufactures babycare products which are predominantly exported to other countries in Europe.

The move came as a part of a push to decrease its number of manufacturing sites worldwide from 50 down to 30.

Last October, van Houten said that a no-deal or hard Brexit could affect the position of the United Kingdom as a manufacturing hub.