Philips Realigns Business Segments to Enhance Diagnosis, Treatment, and Connected Care

Amsterdam, the Netherlands – Royal Philips, a global leader in health technology, has announced a strategic realignment of its business segments. This reorganization is designed to better align with the evolving needs of customers and to strengthen Philips’ focus on delivering integrated solutions across the healthcare spectrum. The core of this realignment centers around three key reporting segments: Diagnosis & Treatment, Connected Care, and Personal Health, emphasizing a holistic approach to healthcare from diagnosis to ongoing care.

Effective January 1, 2019, the most significant changes include the Sleep & Respiratory Care business moving from Personal Health to the newly emphasized Connected Care segment. Additionally, Healthcare Informatics has shifted from Connected Care to Diagnosis & Treatment. This strategic move underscores the increasing importance of integrated healthcare solutions and the synergistic potential between these business areas. In recognition of the growing investment and significance of Image-Guided Therapy, Bert van Meurs, leader of these businesses, has joined Philips’ Executive Committee.

The redefined segments are structured to enhance Philips’ capabilities in key areas:

Diagnosis & Treatment: This segment is dedicated to advancing precision diagnosis and guiding effective disease pathway selection. It encompasses businesses focused on image-guided and minimally invasive treatments. Key components include Diagnostic Imaging, Ultrasound, Healthcare Informatics, and Image-Guided Therapy. Under the leadership of Rob Cascella and Bert van Meurs, this segment aims to provide clinicians with superior tools for accurate diagnosis and targeted treatment interventions, driving better patient outcomes.

Connected Care: Focusing on patient-centric solutions both within and beyond the hospital setting, the Connected Care segment aims to optimize patient care pathways through advanced analytics and workflow optimization. This segment is crucial for integrating care delivery and leveraging provider-payer-patient business models. It includes Monitoring & Analytics, Therapeutic Care, Population Health Management, and Sleep & Respiratory Care (including Home Respiratory Care). Led by Carla Kriwet, Connected Care is positioned to bridge the gap between diagnosis and treatment, ensuring seamless and continuous patient management. This segment embodies the “connected care” aspect of Philips’ strategy, fostering a more integrated and efficient healthcare ecosystem.

Personal Health: This segment remains focused on promoting healthy living and preventative care. It includes Personal Care, Domestic Appliances, Oral Healthcare, and Mother & Child Care businesses, under the leadership of Roy Jakobs. While distinct from the diagnosis and treatment segments, Personal Health plays a vital role in Philips’ broader vision of proactive and continuous health management.

Philips has reaffirmed its financial targets for 2017–2020, including a comparable sales growth of 4-6% and an Adjusted EBITA margin improvement of 100 basis points annually. The company also anticipates increasing annual free cash flow to over EUR 1.5 billion in 2020.

Further details regarding these changes were provided during the presentation of Philips’ fourth quarter and full-year 2018 results on January 29, 2019. This realignment demonstrates Philips’ commitment to innovation and its strategic focus on delivering enhanced “Diagnosis Treatment Connected Care” solutions to meet the evolving needs of the healthcare industry and ultimately improve patient lives.

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