Philips expects further growth and acquisitions in Medical systems
21 June, 2005
Amsterdam, The Netherlands. At a meeting with investors and financial
analysts on 15 June, Royal Philips Electronics (NYSE: PHG, AEX: PHI)
discussed the company's ongoing progress in building a steadily growing
Medical Systems division. Senior management from Philips Medical Systems
also highlighted emerging technology trends that continue to reshape the
global healthcare market, and how Philips can position itself to expand in
this changing market.
Ongoing improvements in Medical Systems
"After completing a series of acquisitions, Philips Medical Systems now
has a three-year record of improving financial returns. While we've
completed integrating these acquisitions, I still see many opportunities to
create more value for our shareholders and customers. We expect operational
efficiency, innovation and customer support will provide us with additional
margin points in a few years," said Jouko Karvinen, president and CEO of
Philips Medical Systems. "As we explore areas for further expansion — either
through acquisitions or alliances — we'll be looking for market, technology
and clinical synergies with our existing activities to build an even
stronger healthcare business," Mr. Karvinen added.
Senior management from Philips Medical Systems reviewed progress being
made in areas of medical imaging like ultrasound, magnetic resonance and
X-ray, while highlighting the company's activities in healthcare IT, global
services and in the high-growth Asia Pacific market. Discussions also
addressed how market drivers and emerging technologies will change the
practice of medicine, and how Philips can help drive these trends. Minimally
invasive techniques and the field of molecular medicine, for example, have
the potential to extend the capabilities of medical technology beyond
diagnosing conditions like heart disease and cancer, to treating and
preventing such conditions.
Lighter demand expected in consumer markets in the second quarter
The meeting ended with concluding remarks by Gerard Kleisterlee,
president and CEO of Royal Philips Electronics, who provided an update on
current market conditions.
"Economic indicators around the world point to reduced growth rates.
Europe in particular is suffering from a weakened consumer retail
environment in the second quarter, hampering our growth ambitions in the
short term. Against this background, we're maintaining our commitment to the
brand campaign, investing around EUR 75 million in the second quarter," Mr.
"In our Other Activities segment, we also expect a deteriorating business
performance. Philips will continue to pursue measures to boost the
efficiency of its core operations, while continuing to dispose of non-core
activities to achieve its medium term goals," Mr. Kleisterlee added.