Royal Philips Group expects a decline in comparable sales in the first quarter due to weak sales in the Chinese market. The company fell short of sales expectations in the final quarter of last year as sales volume in the Chinese market significantly dropped.
Philips forecasts a 5% to 9% decrease in sales revenue in the Chinese market in 2025, impacted by recent tariff announcements from Beijing and the United States.
CEO Roy Jakobs stated that consumer spending in the Chinese market has been lower, and regulatory measures by the Chinese government will affect medical procurement processes.
Jakobs confirmed that in the foreseeable future, sales in China will account for approximately 10% of the group’s revenue, lower than the period from 2020 to 2023 when Chinese sales made up more than 13% of total revenue.
Amid heightened concerns over global trade tensions, Philips is negotiating with governments in Beijing, Washington, and European countries to safeguard healthcare.
Headquartered in the Netherlands, Philips is a medical technology company with a product range spanning from toothbrushes to medical imaging systems.
Globally, Philips predicts a 1% to 3% growth in comparable sales in 2025, following a 1% growth in 2024.
From October to December last year, the group’s comparable sales grew by 1%, falling short of the expected 1.7% growth and notably lower than the growth in the same quarter of 2023 (6%), primarily due to the significant decline in sales volume in the Chinese market by over 10%.
However, strong demand in markets such as North America during this quarter offset the ongoing headwinds in the Chinese market, resulting in an overall increase in total global sales.
Total sales for the quarter amounted to 5.04 billion euros (approximately 5.27 billion US dollars), slightly below analysts’ predicted 5.07 billion euros.
(Adapted from a report by Reuters)