por John R. Fischer
, Senior Reporter | January 28, 2020
van Housten warned that while Philips' financial status was strong going into 2020, tariffs from the trade war between the U.S. and China, as well as suspicions of growing trade tensions between the U.S. and Europe may pose as challenges during the year. He also said the healthcare sector is beginning to feel the effects of the Coronavirus, especially in China, where not just Philips' facilities but ones across the country have shut down due to the government mandating that people remain in their homes to avoid contracting the disease.
"China is 50 percent of our overall global revenue," he said. "It has been a very strong market for us over the last few years. Now we’re seeing the Coronavirus bringing public lives to a standstill. We already can see that retail sales are dropping. Hospital sales are focused on keeping the machines running, so supplies, maintenance and tubes are all in demand. Our support staff are supporting all these hospitals to do the best they can to allow for 24/7 diagnostic services."
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In addition to Philips’ 2019 earnings, van Houten discussed a number of reformations to take place within the Dutch-headquartered enterprise, including creating a separate legal structure for its domestic appliances business.
“We feel that we need to focus more on our healthcare technology strategy,” he said. “By externalizing domestic appliances, it will also then free up the capital for potential reinvestment in the portfolio and thereby accelerate our progress in the health technology space… I do feel we have come to a point where making that step around the focus of health technology is a good move.”
That process is expected to take 12-18 months to complete. Another change is one in leadership, with Roy Jakobs, who currently is chief business leader of the Personal Health businesses, immediately taking over as the new chief business leader of Connected Care businesses. He succeeds Carla Kriwet, who will leave the company. van Houten will head the personal health businesses on an interim basis.
van Houten also discussed the focus of the company, saying that it would continue to execute mergers and acquisitions that strengthen its portfolio, particularly in informatics and data science. He also mentioned a number of changes he expects to see for healthcare more generally in the 2020s.
“I think it will be the decade where the business model in healthcare is going to tilt toward a much better measurement of a value in healthcare,” he said. “In other words, we will see real-world evidence of healthcare’s impact on populations and individual patients and a much better transparency of cost. This may differ from country to country but when I speak to ministers of health, everybody is going in this direction.”Back to HCB News