Weak Demand Weighs on Philips
Philips slid to a net loss in the third quarter, weighed down by one-off charges and weak demand in Russia and China — a setback for the Dutch giant as it pushes ahead with a radical plan to spin off its lighting arm.
Philips is targeting an improvement in its earnings before interest tax and amortisation (EBITA) margin to 11 to 12 percent by 2016. That compares to 8.5 percent for the year to date.
Chief Executive Frans van Houten said the group was also pressing ahead with plans to spin off the lighting business which helped make Philips a global brand.
“Separation will take 12 to 18 months, and that’s when we’ll determine the right way to access the capital markets… By that time both companies will stand on their own feet and will be in excellent state,” he said.
Van Houten added an initial public offering was likely.
Philips swung to a net loss of 103 million euros ($131 million) on sales of 5.5 billion euros in the third quarter, compared to a net profit of 281 million euros on sales of 5.6 billion euros a year earlier.