Dutch Philips looks east over Brexit concerns

Dutch electronics giant Philips said Monday it will increasingly rely on emerging markets as a buffer against the possible negative effects of Brexit, warning of a revenue drop and possible job losses in Britain.

"I don't think we've seen a big impact yet (from Brexit)," said the Amsterdam-based group's chief executive Frans van Houten.

"But I am certainly concerned about the situation," Van Houten told AFP by telephone.

Philips on Monday released its third-quarter figures, saying net profit jumped by 10 percent for the period from July to September, mainly buoyed by double-digit figures in eastern markets.

Sales climbed by four percent from the previous quarter while orders were up by five percent.

But "the threat of Brexit has reduced demand in Britain and the pound has gone down," Van Houten said.

"That means that the revenues that we had there translate into fewer euros, which is a headwind."

Philips, a global multinational with more than 104,000 employees and income streams in over 150 countries, is "more insulated against a single incident in one country," Van Houten said.

"Philips is able to compensate in other countries (for losses incurred by Brexit). I can point to the growth markets. We saw very strong performances in India and China," he said.

These growth markets "are an attractive opportunity for us to further build out our footprint," Van Houten said, adding that Philips believed emerging markets will play an increasingly important role in the world economy.

With more than 2.8 billion euros in sales, the Chinese market was second only to the United States in revenue for Philips last year, while the Indian market hovered in sixth place with more than 803 million euros in sales.

Asked if a shift in Britain could lead to job losses for Philips employees, Van Houten said: "That is possible."

"We need to monitor the situation carefully," he said, without giving further details.

Based in Guildford, southwest of London, Philips Electronics develops healthcare, lighting and consumer lifestyle products in Britain and was incorporated into the company in 1947.

British businesses said Monday they felt a "growing sense of urgency" for a Brexit transition deal, which they hoped would help keep investment and jobs in the country.

The businesses are concerned that Britain's planned exit from the European Union in March 2019 could involve an abrupt change in the trade relationship with the continent or even lead to a potential no-deal scenario involving heavy tariffs on exports and imports.

source: AFP