Philips India Limited
Philips India Limited is a subsidiary of Royal Philips of the Netherlands, a leading health technology company focused on improving people’s health and enabling better outcomes across the health continuum from healthy living and prevention, to diagnosis, treatment and home care. Philips leverages advanced technology and deep clinical and consumer insights to deliver integrated solutions. The company is a leader in diagnostic imaging, image-guided therapy, patient monitoring and health informatics, as well as in consumer health and home care.
The Notes to the Profit and Loss Account for the year provide segment results. The required disclosure is made below for the Health Systems, Personal Health and Innovation Services business of your Company.
During the year 2019-20, Health Systems business of your Company delivered another year of strong performance driven by growth in Image Guided Therapy (IGT 19.6%) and Patient Care & Monitoring Solutions (10%) despite macroeconomic challenges including credit squeeze in the financial market attributable to crisis in the non-banking financial companies (NBFC) sector. The Health Systems equipment business lost 140 bps market sharein a market that declined by 1.8% at Q4 2019-20 MAT (Moving Annual Turnover) level.
In Image Guided Therapy (IGT), Philips Market share improved by 5%. The market is still reeling under the stent price capping which is causing the value and performance segments to grow. In Magnetic Resonance (MR), Philips Market share declined by 8% whereas in Computed Tomography (CT), your company witnessed a dip of 3% in market share.
Ultrasound business of your Company improved market share from 17.3% to 18%.
Your Company continues to do strong business with most of its strategic key accounts focusing on multi-modality deals and in government tenders. There are multiple NPI launches such as IGT–Zenition (50 and 70) that would result in your company gaining share in a de-growing market. Magnetic Resonance (MR) -Ambition and Evolutionare expected to further grow your company’s share in premium MR market whereaslaunch of value patient monitors (GS20) is further expected to Strengthen market share for MA business of your company in 2020-21. Year 2020-21 is also going to be a landmark year for Ultrasound business of your company as we kick off local manufacturing of Affiniti series in our manufacturing centre in Pune (HIC).Your Company’s global innovation strengths at Bangalore (PIC) along with global design and manufacturing at Pune(HIC) are delivering world-class “Made in India” medical equipment. Your Company has implemented a strong strategy for regaining its market share in the next financial year, however, due to onset of COVID-19 pandemic, overall optimism remains subdued.
Financial year 2019-20 has been a challenging year with unfavorable macro-economic conditions, slowing market growth and then Covid-19 outbreak followed by lockdown as containment measures. With these ongoing headwinds, Personal Health business of your Company was still able to deliver sales growth of 5.8%, over the previous financial year. There has been and increase in cost trends of the commodities and adverse currency fluctuations due to global factors.
Domestic Appliances and Personal Care business grew in mid-single digit over previous financial year with continuous focus on core category creation while low cost players continue to be a challenge. Both the business groups are leveraging new opportunities to keep the growth engine running with investment on marketing campaigns and multichannel activations.
With the aim of improving brand preference, Company has enhanced presence across various social media platforms to target youth of the Country. The Company continues to engage Cricket stars, Bollywood Celebrities and Influencers in order to target young consumers.
Your Company continues to focus on strengthening core brands, enriching the portfolio, driving market development at scale and building a new product portfolio to stay competitive among new entrants and low cost players through innovation. Moreover, the Personal Health business of your Company continues to focus on building talent, competencies and processes to drive sustainable profitable future growth.
Philips Innovation Campus (PIC), based at Bangalore, established as a Software Centre in 1996, is one of the 4 major Philips R&D Hubs globally. The Charter of this Hub is to create best in class innovative solutions to save and improve lives. The vision of this hub is to drive meaningful and clinically relevant innovations, both for the developed world as well as for the underserved markets. Enabled by highly qualified, passionate and motivated professionals over the last 25 years, this centre has grown to become a strategic innovation hub for Philips.
PIC builds clinically relevant software products and solutions across the health continuum starting with healthy living, disease prevention to diagnosis, treatment and homebased care. Significant portion of the global platforms (Health Suite Systems of Engagement) are also built out of PIC. With almost all businesses having their presence in the campus, the site is also well represented in terms of global roles and responsibilities.
In addition, PIC also interacts with markets in the region and along with the businesses, helps conceive, build and deliver solutions to them. Ecosystem connect is another important aspect which PIC does it with elan.
In this campus, there are some broad areas of competence that have been built over the years: Software development, AI & Machine learning, Data Science, Architecture, platforms & Innovation as also building solutions for the assigned markets. The software and product innovations enable global advancements in common platforms for various products in the Precision Diagnosis, Connected Care, Personal Health as also in Interventional Guided Therapy clusters. PIC has extensive expertise in cutting-edge technologies such as Mobility, AI, Cloud, Data Analytics, Data Science, etc. These technologies are leveraged to improve patient outcomes through care co-ordination and patient empowerment. Creating experience-centric products and service innovations, PIC has dedicated team focused on harmonizing software through a common platform approach. They help businesses design, build, and launch connected digital health solutions. Its expertise also includes developing solutions that provide connectivity to a range of home appliances from air purifiers to coffee makers, oral care for kids and adults, which make consumers’ lives easier in today’s busy world. Prevention of diseases is where the world is heading towards and PIC would like to have a significant play in that space.
Some relevant innovations at PIC
Pedestal: It’s an ALM (Application Lifecycle Management) framework that orchestrates medical grade agile execution at scale, from portfolio to shipping binaries to production. Pedestal powers HSDP to do Less than 100 releases a year. Pedestal went to the Semifinals of PEC and won the CEO Awards India 2019 in Excellence in Product/Software Quality Category.
MR: The MR team at PIC has not only delivered some of the most advanced Clinical Applications that helps in faster diagnosis of Tumor Grading (3D APT), 4D Free Breathing application for Liver patients, Spinal disease diagnosis through IRIS, but also helped improving the operational excellence of our end customers by increasing the number of patients that can be scanned per day through Reconstruction for Compressed Sense and improving the uptime through predictive serviceability. The team has great expertise in MR and proved time and again in delivering end to end clinical applications, Service Software for reducing downtime and great workflow improvements (eg., ScanWise) for patients with implants.
Ultrasound: Protego 1.0 is an NPI that will deliver ~$ 900 MM of revenue to Ultrasound business over 5 year period. Protego has been designed to deliver two form factors of Compact and Cart with 11 different offerings; specific to Clinical segments. Protego Compact is currently in industrialization phase and the tooling has been completed. The systems have undergone extensive user evaluations in multiple markets and the feedback has been incorporated in the design. Reliability testing is also completed. Protego AFxx cart system tooling is underway. Protego team is in the process of creating detailed GTM plans for the impending release in early 2021.
Monitoring & Analytics: Monitoring & Analytics R&D team is being set up at PIC Bangalore that is part of global MA R&D footprint. Aligning with business roadmap, this team either owns or contributes to programs that deliver value to business. Team closely collaborates with its other R&D sites in Cambridge USA and Boeblingen Germany. Driven by purpose, this team is instrumental in fostering innovation in the business. Some of the examples are medical device interfacing, service solution and more. Team started its ramp up in Q4 2019 and within three quarters scaled up to deliver on its commitment. A strong technology and domain focus motivates the team to drive quality into its deliverables.
PERFORMANCE OF THE SUBSIDARY COMPANIES
PREETHI KITCHEN APPLIANCES PRIVATE LIMITED (“PREETHI”)
During the year, Preethi has registered comparable sales growth of 5% (excluding intercompany sales) with improved profitability over last year. In March, 2020 the sales were impacted by Covid-19 pandemic affecting the year’s performance. Internal estimates show an improvement in counter share due to upsurge in premium range led by Zodiac series in Mixer grinders, Décor & Valentino in Gas stoves & distribution expansion. This year marks a key milestone for Preethi by venturing into Kitchen Hood category. The product-service solution with hassle free installation & deep cleaning service has had an overwhelming response both from consumes & trade. Preethi’s core philosophy of growth from the three pillars of – innovation, quality and service, has carefully converted internal competencies and emerging market opportunities into success drivers to become a stronger brand in Kitchen Appliances. As culinary borders dissolve, consumer’s evolution with respect to preferences and behaviors are kept at the heart of the innovation cycle to deliver meaningful products that add value to consumers.
People have always been the strength of this organization and it prides itself with the ability to attract and retain the best talent. Preethi continuously strives to promote a culture of transparency, collaboration & entrepreneurship which helps to drive great execution at the marketplace. This has also led to an external recognition, where Preethi was awarded CII Award for HR excellence, a testimony to our people focus, evolving HR processes for talent development, engagement, rewards & recognition and performance management.
However, the management has undergone a risk assessment exercise in lieu of the volatile situation the industry is in. Business risks span from stiff local competition to volatile forex, revised import duties, raw material fluctuations & varying consumer demands. The top risks have been assessed and an action plan is drawn to mitigate the impact as far as possible. Nevertheless, business is positive with a strong growth strategy taking into account adequate brand investments, building a strong portfolio of innovation across multiple core categories, ensuring a refreshed consumer experience across various touch points, strengthening the people capability and employer branding of Preethi.
PHILIPS HOME CARE SERVICES INDIA PRIVATE LIMITED (“PHILIPS HOME CARE’’)
Philips Home Care was incorporated in May 2016, to provide treatment, diagnosis and care for ailments such as chronic heart failure, chronic respiratory disease, post-surgical treatment, sleep disorders, nephrology care, oncology care and similar such diseases, afflictions to the patients at their homes through a team of nurses, para-medics, respiratory therapists and other trained personnel monitored remotely by doctors. Subsequently, ICU@home and sale of medical equipment like Oxygen Concentrators, were also added to the services for the patients. During the past years, in order to achieve the set financial targets, Philips Home Care, had explored certain alternate business propositions and models.
However, despite bringing in a lot of effort to its core business and venturing into some of these alternate businesses, the desired financial performance could not be achieved by Philips Home Care. For the past few months, there had been no significant business operations in Philips Home Care. It was felt that since Philips Home Care was losing money, it was prudent to consider discontinuing of its operations to stop the bleed.
In the meeting of the Board held on December 19, 2019, the approval of the Board was accorded to make an application with ROC, Kolkata to Strike off the name of Philips Home Care as prescribed under section 248(2) of the Companies Act, 2013 and to waive off any outstanding amount due from Philips Home Care Services India Private Limited including the outstanding amount of Inter Corporate Deposits extended by the Company. Application to Strike off Philips Home Care was filed with Ministry of Corporate affairs (Ministry) on January 23, 2020. The approval on the aforesaid application is pending from the Ministry as on the date of this report. All the employees engaged with the Philips Home Care and its assets were transferred and sold off, as appropriate.
|98||32||Philips India Ltd||Koninklijke Philips N.V.||55290182||0||2020-03-31|
|100||32||Philips India Ltd||Public Shareholding||2227000||0||2020-03-31|
|99||32||Philips India Ltd||Philips Radio B.V.||60||0||2020-03-31|