Philip headquarters in Amsterdam, Netherlands. Reuters
Rising healthcare spending by the Chinese government helped Dutch health technology company Philips post better-than-expected sales growth for the second quarter (Q2), putting its shares among the top performers in Europe on Monday.
Philips, which sells products ranging from toothbrushes to medical imaging systems, said comparable sales had improved 6 per cent in the second quarter. Analysts had on average only pencilled in a 4.5 per cent improvement.
Philips shares rose 4 per cent in the first hours of trading in Amsterdam, making them one of the top performers in the Stoxx600.
Growth was helped by a “double digit” sales increase in China, Philips said, as the Chinese government ramps up healthcare spending, expanding hospitals and investing in more advanced technologies.
“Healthcare in China is still not sufficient to meet the demands of an ageing society,” Chief Executive Frans van Houten told Reuters in a phone interview.
“The government has said it would expand capacity, and that is exactly what is happening. This trend for us is more important than fluctuations in GDP (gross domestic product) growth, and we expect it to continue in the coming years.”
Demand and orders for hospital equipment, medical systems and personal care devices also increased in the United States and Europe, keeping Philips optimistic about the months to come.
“We saw growth in all our segments in the second quarter and we expect that to continue”, Van Houten told reporters.
“We had strong traction in emerging markets and that is set to continue. Also, we expect mature markets to come in stronger in the second half of the year.”