Philips plans to divest home appliances division

Philips has been focusing more and more on the production of health equipment for several years now. Now there is the intention to sell the consumer products division.

Frans van Houten, the CEO of Philips, says this business unit is not a good strategic fit for Philips’ future as a player in the field of health technology. The company has started the process to create a separate legal entity for the division. Van Houten says that Philips will find a good home for this division and that various options for future ownership are being explored. No final decisions have yet been taken on this; all options are still open, says the CEO. He emphasizes that Philips aims to achieve a seamless transition of the division with ‘continuity for employees and customers’.

This division, called Domestic Appliances, is responsible for the production of household appliances such as air fryers, vacuum cleaners, espresso machines, kettles and irons. The turnover of this branch in 2019 was good for 2.3 billion euros. The shavers and electric toothbrushes will remain part of Philips. These products fall under a different division, called Personal Health, and will continue to play an important role within the company, according to Van Houten. The turnover of this division amounted to 3.5 billion euros last year.

Philips also divested the lighting division in 2016. This part was then listed on the stock exchange as the independent Philips Lighting, which was given a new name in 2018 with Signify. In September last year, all of Signify’s shares were definitively sold. It is still unclear whether the household appliances division will follow the same path or whether a sale will take place without the involvement of the stock exchange.

The presentation of the quarterly figures shows that Philips achieved a turnover of 19.5 billion euros in 2019, an increase of four percent compared to 2018. The profit came in at 1.19 billion euros, compared to 1.19 billion euros two years ago. 31 billion euros. In the fourth quarter, turnover amounted to 6 billion euros, an increase of three percent. At 550 million euros, the profit was considerably lower than the profit figure for the fourth quarter of 2018, which then amounted to 723 million euros.