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00:00The guidance so good morning. Well done on the headline beat . We've got all the numbers in front of us here but to the guidance. Twenty one low single digit growth. Can you just tell me the restraint on that guidance. Is it restrained until there is a substantive vaccine and a more normal operations can be applied around the medical facilities of the world. Good morning . Good morning. Well to explain the guidance I first need to talk briefly about 2020. First time we had a negative growth this quarter 10 percent growth. We expect to finish the year with growth year on year. And part of that growth is driven by the pandemic response. We had huge. We have huge demand for acute care equipment inpatient monitoring and ventilators. We expect that demand to be much lower next year. So the Connected Care segment will actually turn into negative for one year in 2021 . All the other segments will have strong positive growth. In fact in line with our longer term guidance of 5 to 6 percent . And then from 2022 onwards Philips is expected to grow 5 to 6 percent. So in fact we are not lowering our guidance. We are increasing our guidance. We used to be at 4 to 6. Now we will be a five to six till 2025 and that's on the back or fill as being very well positioned to cater for the changing trends in healthcare leveraging more cloud technology telehealth getting to precision diagnosis minimally inventive invasive interventions and people enabling people to take good care of themselves. Profitability will expand by 60 to 80 basis points every year in the period 2021 till 2025. That brings us into high teens adjusted EBITDA territory and our cash flow will exceed 2 billion. So it's I think a strong guidance of a company that is having strong innovative portfolio that we can continue to self-help of operational excellence and growing the core. And also our strategy around solutions resonates. We just want 11 big multi year orders . Strategic partnerships with hospitals ranging from Vietnam to Indonesia to Europe to the United States. So the strategy is well-received . France. I just want to dig a little bit deeper into the outlook . You know better than anyone else. The Corona virus is making a worrisome comeback in Europe. It's not even influenza season . I mean it's not even winter. How much is that playing into your outlook on revenue growth . I'm certainly concerned by the resurgence of cold. And you can also see it back in elective procedures still not having fully recovered versus last year and our diagnosis and treatment segment into third quarter improved to a minus 3 percent revenue comparison to last year which means we are still in negative territory in debt part of the business because hospitals are focused on the acute care for the pandemic. But we take a longer view and we think that we are well positioned for higher growth even though we have to kind of navigate the short term disparities in the market . And yes cause it rears its head in the fourth quarter . It's a bit uncertain but we are pretty confident that we can deliver positive growth for the year on the back of a strong order book and continued deliveries of acute care equipment and telehealth services . Friends the shock that we had in September was the U.S. canceled more than thousand ventilators. Did you find any buyers. Are you going to have to take a right. Dying of any description on that. You said Connected Car is gonna have a tough year in 2021 . So are you talking to anybody about those ventilators. Have you sold any of them. You're gonna have to write down what's going on there with the inventory leftover from the US . Yeah of course that the U.S. government was not our only customer. We had customers around the world but it is very sad that this order was partially cancelled especially after so many people worked so hard to increase production eightfold from the request of HHS. And we are working hard to find other customers for that volume. But we did have to take a provision in the third quarter given this surprise partial cancellation . On the ventilators you know in the United States there's a debate in the US even a hearing about how the prices for the ventilators were too high. Is that why the US didn't take this 30 plus thousand bundle from you. France . No I think it has nothing to do with that. You know at the height of the pandemic back in April governments around the world scrambled to to take the right decisions. And the US government in fact made contracts with over 10 ventilator suppliers. And then I think the inside post somewhere was dead . The stockpile of ventilators probably more than enough. And three suppliers including us were confronted with a partial cancellation. So emotionally that's tough for us. Rationally there is some understanding that if you have a big stockpile then you also need to take measures. So we are moving on and there is plenty to do for Philips in other areas. I mentioned that patient monitoring is in strong demand. Teller houses a strong demand . We saw the consumer demand coming back into quarter with 6 percent growth driven by personal care oral care. So you know there's plenty to do for Philips and we don't have to be just focused on on ventilators . No but on 40 the world is focused on on coke in France. I know it's monopolizing a great deal of this discussion. I just want to get a sense from you. Use the language there again that the word scrambled as we went into trying to grapple with Kogut in the first round. Here we are. Europe's facing wave to it's accelerating around the world. Would you describe the world is scrambling again. Or do we have enough ventilators globally . How would you describe the situation on a global health level as we go into wave to . I do think governments are better prepared than in the first half of the year but we are already seeing in several countries still a shortage of testing. A shortage of acute care bed capacity. I don't think it's so much a equipment issue. It's also a staffing issue. And we need to have a lot of understanding that the medical staff is working very hard and that part of the lockdowns are to avoid that. Hospitals are overwhelmed with the day work and we see that also in elective procedures being again ramped down or postponed. That's not good news of course but I think it's a temporary matter as the society is dealing with it . And in the meantime we need to look ahead and also work all our strengths where we can find growth. For example I'm very excited about leveraging cloud technology to create interoperability and data exchange between primary care doctors and hospitals and enabling patients to take better care in order care settings where it is safe and sound from a pandemic point of view .

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Working Hard to Sell Ventilators Not Wanted by U.S.: Philips CEO

Frans van Houten, chief executive officer at Koninklijke Philips NV, discusses third-quarter earnings, forward guidance, the connected care division and his business outlook. He speaks on “Bloomberg Daybreak: Europe.” (Source: Bloomberg)

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