By Ian Walker

Royal Philips reported a swing to a fourth-quarter net loss on the back of a tax charge, and said comparable sales rose despite a double-digit decline in China due to subdued consumer sentiment.

The Dutch health-technology company said Wednesday that for the year ahead it expects 1%-3% comparable sales growth, including a mid- to high-single-digit decline in China.

It added that the board expects comparable sales growth to be back-end-loaded this year, with a mid-single-digit decline in the first quarter mainly due to lower demand in China and royalties phasing, with correspondingly lower adjusted Ebita margin.

Comparable sales for 2024 rose 1% compared with company guidance of between 0.5% and 1.5%.

Net loss for the fourth quarter was 334 million euros ($348.9 million) compared with a profit of 39 million euros for the comparable period a year earlier and a company-compiled consensus profit of 302 million euros.

The loss mainly reflects a tax charge of 449 million euros against a credit of 132 million euros.

Adjusted earnings before interest, taxes and amortization--one of the company's preferred metrics--was 679 million euros compared with 653 million euros and a consensus of 683 million euros, while its adjusted Ebita margin was 13.5%.

Adjusted Ebita margin for the year was 11.5% compared with a company forecast of around 11.5%, the upper range of its 11% to 11.5% range.

For the year ahead, the company expects adjusted Ebita margin to increase between 30 and 80 basis points to a range of 11.8% and 12.3%

Sales for the quarter rose to 5.04 billion euros compared with 5.06 billion euros taking the full-year total to 18.02 billion euros compared with 18.17 billion euros.

"Looking ahead, we remain confident in our long-term plan and will continue to work closely with customers as we build on our strong innovation pipeline and focus on execution excellence to drive profitable growth," Chief Executive Roy Jakobs said.

The company has increased its savings target for the 2023-25 period to 2.2 billion euros from 2 billion euros as it benefits from cost efficiencies and further simplification of its operating model, with 800 million euros expected to be delivered this year.

The board has kept its dividend payout at 85 European cents a share.

Write to Ian Walker at ian.walker@wsj.com

(END) Dow Jones Newswires

February 19, 2025 01:40 ET (06:40 GMT)

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