Shares in medical technology company Philips rose sharply on Tuesday as the company published better than expected results for last year and forecast a further improvement in profitability.

The company said its operating result for last year came in at €2.2 billion, above market expectations. Free cash flow also exceeded forecasts.

Performance in the final quarter was driven mainly by strong sales of electric toothbrushes and shavers as the personal health division recorded revenue growth of 14% in the final quarter of the year.

Total comparable sales rose by 2% last year to €17.8 billion and Philips said it expects revenue growth of between 3% and 4.5% this year.

The stronger operating result helped the group return to net profit for the first time in several years at €897 million. Philips had posted losses for the past few years, largely due to the costly recall of sleep apnoea devices.

The company has been at the centre of legal claims on both sides of the Atlantic after it started recalling 15 million Respironics devices and other machines used to treat sleep apnoea from April 2021.

Last year more than 100 institutional investors wrote to Philips demanding a total of €800 million to compensate “significant losses to shareholders”.

Later on Tuesday, the company is due to present a new strategy to investors in London including plans to cut costs by €1.5 billion over the next three years.