Royal Philips to sell its consumer applinaces division

Royal Philips, the Dutch conglomerate announced the disposal of one of the best-known consumer electronic domestic appliances arm or spin it off into a separately listed company, so that they can focus on the health care sector.

Frans van Houten, CEO said the domestic appliances unit was no longer a “strategic fit”  for the company and a disposal would free up resources for its healthcare business, as the coronavirus outbreak in China was affecting demand for the group’s products and services in the country but that it was too early to determine whether this would be positive or negative.

“Hospitals are working around the clock to support patients and we are supporting hospitals and the demand for face masks and CT scanners that are used to detect the virus had increased while more general consumer activity has slowed down tremendously because people are staying at home ” Mr van Houten said.

Philips appliances unit generated sales which include coffee machines, vacuum cleaners and air purifiers of €2.3bn last year. Philips sold its audio and video business in 2013 for €150m to Japan’s Funai Electric and four years later Philips Lighting was hived off in an IPO that valued the company at €3bn.

Philips reported group sales of €19.5bn, up 4 per cent year-on-year because of strong demand from China.

Shares in Philips fell 2 per cent.