Abstract
Headquartered in Best, the Netherlands, and Andover, Massachusetts, the US,
Philips Healthcare is part of the multinational electronics giant, Royal
Philips Electronics Group. At the beginning of 2008, Philips had realigned its
business activities into three separate ‘sectors' - Healthcare, Lighting
and Consumer Lifestyle - each of which was made responsible for the management
of its businesses worldwide. Philips Healthcare was formed through the
combination of the former Medical Systems and Home Healthcare Solutions
divisions, the latter of which had been hived off from Philips' Innovation and
Emerging Businesses unit.
Bolstered by the product lines and research activities of smaller rival
companies that have been acquired in recent years, Philips Healthcare offers a
broad portfolio of medical systems. Its product line includes X-ray,
ultrasound, magnetic resonance, computed tomography, nuclear medicine and PET
imaging technologies, as well as radiation oncology systems, patient
monitoring, information management and resuscitation products. Philips
Healthcare also offers a wide range of services to support its businesses.
Philips Healthcare is a leader in many of the markets in which it participates
and, in the financial year ended 31st December 2008, had sales of more than
EUR7.6 billion (approximately US$11.1 billion).
Central to Philips Healthcare' s strategy is the aim of achieving a leading
position in the high-growth sector of home healthcare. Given the unsustainably
high healthcare costs in many markets and increased emphasis on both
efficiency and patient comfort, there is a growing shift towards diagnosing,
treating and monitoring patients in their homes, rather than in hospitals.
Demand for home healthcare is also growing due to the increasing number of
elderly people and the rising incidence of chronic diseases.
Consequently, Philips has adopted an aggressive merger and acquisition policy
with regards to the home healthcare market. Key purchases have included
Lifeline Systems, Health Watch and Raytel Cardiac Services. Its most important
acquisition made to date in connection with this strategy was the 2008
purchase of US-based Respironics, for a total consideration of US$5.1 billion.
At the time of the transaction, Respironics was the global leader in the
treatment of obstructive sleep apnoea (OSA), a sleep disorder characterised by
the repeated cessation of breathing during sleep. The purchase also gave
Philips access to a substantial non-invasive ventilation solutions business,
and this is being augmented with further strategic acquisitions. Most
importantly, however, is that Philips is no longer heavily reliant on its
imaging systems business (affected by softening demand in the key North
American market, increased competition and customers' reluctance to invest in
new equipment during the current recession).
At the same time, Philips has also been expanding its healthcare informatics
business. In the hospital market, Philips strengthened its global leadership
in critical care with the purchase of VISICU, which provides advanced IT
solutions for monitoring patients in the intensive care unit. This purchase
complemented the earlier acquisitions of Emergin (a provider of alarm
management and event notification software and solutions) and Ximis (a
provider of a web-based RIS solution). Philips went on to buy Ireland-based
TOMCAT Systems (a provider of cardiovascular information systems). Philips
aims to expand the use of information technology in healthcare to improve
patient outcomes and help hospitals work more efficiently.
Emerging markets are also of growing importance to Philips Healthcare, where
investment in healthcare aimed at low-income demographic groups is now being
prioritised by both state and private healthcare institutions. Here, Philips
is establishing or ramping-up its manufacturing presence in low-cost economies
and has spent the last 18 months buying strategic operations in India, China
and Brazil that have come with existing diagnostic imaging, patient monitoring
and critical care product lines. Philips believes that emerging healthcare
markets, such as Latin America (which it claims is growing at twice the rate
of developed markets), represent a real growth opportunity for its Healthcare
business.
Although further acquisitions may yet be announced, Philips is now focusing on
growing its business organically and integrating these acquired companies and
product lines into its portfolio.
This company report provides Overview
Key contact information
- Introduction to the company and its current activities
- Summary of its financial performance
- Who are the company' s major competitors?
- Key recent events in an “at a glance” format
Financial Review
- Current year and annual financial data, including revenue breakdowns by
product area and geographic region (if available)
- Table providing in-depth five-year financial analysis
- Employee data, including breakdown by company division and geographic
location
Strategic Focus
Investigates the company' s aims and its areas of focus
Products
Core product areas, key brands, product approvals and launches
Research and Development
- How much has been invested in R&D?
- Where is the research based?
- What alliances and agreements does the company have and with whom?
Manufacturing and Distribution
- Identifying the company' s manufacturing locations
- Sales and marketing facilities
Agreements
- With whom has the company reached agreements and what do they involve?
- Key contracts awarded
Mergers, Acquisitions, Minority Investments, Joint Ventures and Divestments
Litigation
Key Corporate Events
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