AMSTERDAM (Reuters) – Philips said Thursday it would be impossible for it to reach its margin improvement target for 2019 because of the negative impact of the trade war between the US and China and the rise customs barriers.
The Dutch health products manufacturer expects its operating profit margin (Ebita margin) to increase this year by 10 to 20 basis points, compared with an initial increase of 100 points.
On the other hand, the group maintains its objective of increasing its sales from 4% to 6% on a like-for-like basis.
"We continue to expect a good growth momentum for all our activities," Philips CEO Frans van Houten said in a statement.
"However, it is disappointing that margins are decreasing in our Connected Care business (…) because of the increasing handicap of customs barriers and the late impact of the measures taken to compensate for them."
Philips also released preliminary results for the third quarter.
The group expects to expect a 6% increase in its turnover over the period, to 4.7 billion euros, and a 3% increase, to 583 million euros, its operating profit before taxes, interest and depreciation (Ebita).
Net profit is expected to decrease by 28% to 210 million euros, due to a depreciation of 78 million euros in the Connected Care division, which specializes in remote controlled care.
Bart Meijer; Jean-Stéphane Brosse for French service, edited by Marc Angrand
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