October 23, 2017 / 6:02 AM / in 10 months

UPDATE 2-Philips growth spurred by toothbrush demand in China

* Philips sales grow 4 percent in Q3 on strong demand in China

* Core earnings rise 12 percent to 532 million euros

* Company says on track to meet 2017 targets (Adds CEO quotes and more information)

By Bart H. Meijer

AMSTERDAM, Oct 23 (Reuters) - Strong demand for its electric toothbrushes in China helped Dutch healthcare technology company Philips to a 4 percent rise in sales in the third quarter, on track to hit its full-year target, the company said on Monday.

Philips, which spun off its lighting division last year to focus on medical devices and healthcare products, recorded double-digit growth in China, which made up for flat sales in North America and a 6 percent decline in Western Europe.

“We had a particularly strong quarter in China”, Chief Executive Frans van Houten told reporters, as he singled out the strong demand for electric toothbrushes and the emergence of private healthcare in the world’s second-largest economy as drivers of present and future growth.

“We are very optimistic about our opportunities in China,” Van Houten said. “Our toothbrushes continue to sell very well, while the growth of private hospitals diminishes the risk of government preferring domestic suppliers.”

Philips recorded total sales of 4.1 billion euros in the July-September period, while core profits increased 12 percent to 532 million euros ($626 million)


Overall, sales growth slowed at the company’s main divisions, which sell consumer products, including toothbrushes, and high-end medical equipment, such as scanners and imaging tools used in surgery.

The connected care and informatics business, which offers patient monitoring systems and software used by hospitals to gather and analyse data, was a notable exception, with sales growth picking up to 8 percent after stagnating in the second quarter.

Total sales growth in the third quarter put Philips on the right path towards its goal for the whole year, Van Houten said. “We have achieved average growth of 4 percent this year, and we believe the fourth quarter will be stronger. That will comfortably lift us to the 4-6 percent range targeted for 2017.”

Adjusted earnings before interest, taxes and amortisation (EBITA) in the third quarter were in line with analyst expectations, but sales growth fell short of the 4.5 percent forecast in a Reuters poll.

Philips shares traded down 0.3 percent at 35.30 euros at 0812 GMT. ($1 = 0.8499 euros) (Reporting by Bart Meijer; Editing by Biju Dwarakanath and Ralph Boulton)

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