Health technology company Philips is getting out of the home appliance business in order to focus on the healthcare space.
Its domestic appliances business, which includes kitchen appliances like coffee makers, air fryers and home care appliances such as vacuums and air purifiers, reported EUR 2.3 billion ($2.54 billion) in sales 2019. The company posted a 17% decline in fourth quarter net profit.
“As we continue our transformation to expand leadership in health technology, today, we announced we will review ownership options for the Domestic Appliances business,” CEO Frans van Houten said during the company’s fourth quarter earnings call Tuesday. “This business has significantly contributed to Philips, but it is not a strategic fit for our future as we choose to further sharpen the focus along the health continuum and invest in our consumer health and professional healthcare-related businesses.”
Van Houten anticipated a “smooth disentanglement process,” with complete removal of the business in the next 12 to 18 months.
Philips, based in Amsterdam, has increasingly been investing in the health space and finding strategic partners in health technology. The company teamed up with Humana to help monitor the insurer’s Medicare Advantage members and has focused on AI development with companies such as Paige. Philips has also become a big name in the imaging space through its ultrasound machines and partnerships with hospitals.