Philips' First Quarter Results 2007

Philips reports 27% growth in Q1 EBITA

Net income increases to EUR 875 million

 

  • EBITA amounted to EUR 353 million, or 5.9% of sales, compared with EUR 279 million, or 4.5% of sales, in Q1 2006.
  • Including a gain on the sale of TSMC shares, net income increased to EUR 875 million from EUR160million in Q1 2006.
  • Sales totaled EUR 5,991 million, up 3% on a comparable basis compared to the same period last year, driven by a very strong performance at DAP and Lighting. 
  • So far this year, announcement of three strategically aligned acquisitions that will add to growth.

Gerard Kleisterlee,

President and CEO of Royal Philips Electronics:

 

"Philips had an excellent start to 2007, with our EBITA growing by 27% to EUR 353 million in the first quarter. This significant growth reflects the strong market position of our more sharply focused portfolio of businesses, and validates the strategic choices we have made in the past.

In the first quarter, our businesses showed significant - and in parts of Consumer Retail exceptional - growth driven by innovation and the leveraging of investments we are making to deliver on our "sense and simplicity" brand promise. The integration of recent acquisitions such as Partners in Lighting will further add to this.

It is encouraging to see that the acquisitions we have made are contributing quickly to value creation. At Medical Systems the important integration of Intermagnetics is well on track, once completed, to deliver the expected benefits to our MR business. Our recent announcement on Health Watch will further strengthen our leadership position in the fast growing market for Emergency Response Services.

Our Lighting division is well positioned to benefit from the increasing awareness of the need for lower energy consumption, and we are already seeing the impact. In the first quarter, the strong top-line growth at Lighting was partly attributable to our eco-friendly, energy-efficient solutions.
In the first months of this year, Philips continued efforts to forge alliances with governments, industry partners and other organizations around the world to accelerate the replacement of inefficient lighting with newer, more efficient lighting solutions in the years to come.

We feel confident Philips will continue establishing a track record as a successful acquirer and operator of businesses that create sustainable value and drive increased growth and profitability for the group."

Financial report

Presentation

Audio webcast

The first quarter results conference call with Pierre-Jean Sivignon, CFO,  will start at 10:00 am CET. Replay will be made available via audio webcast at approximately 12:30 pm CET and will be available for a year.

 

Pierre-Jean Sivignon


 

Images

Personal Emergency Response Systems (Consumer Health and Wellness)

Personal Emergency Response Systems (PERS) – otherwise known as medical alert services – offered by Philips through Philips Lifeline and soon Health Watch, involve subscribers wearing a personal help button. In an emergency, subscribers simply press the button and are immediately connected to a caring, specially trained Response Associate, 24 hour-a-day, 365 day-a-year.

Patient Ambient Experience (Philips Medical Systems)

Philips Ambient Experience Design harnesses technology to enhance patient comfort and understanding, while providing a personalized experience that eases anxiety. The new concept for hospital care refocuses space, lighting and technology to create a positive experience for patients as well as hospital staff.

Softone Energy Savers (Lighting)

Philips' Softone Energy Savers look like ordinary light bulbs, and are ideal for warm background lighting. Use Softone in places where the light is left on for some time, or places that are difficult to reach. The Softone Energy Saver offers energy savings of 80% compared to incandescent light bulbs and has a life span of 8 years (8000 hours).

SmartTouch-XL Shaver (Domestic Appliances and Personal Care)

The innovative SmartTouch-XL incorporates the very latest in shaving technology. Thanks to the SmartTouch Contour-Following System, the entire head of the shaver as well as the individual shaving heads can move, closely following the curves of your face.

Kitchen Appliances (Domestic Appliances and Personal Care)

The Philips Aluminium Collection brings together the beauty of anodized aluminium, the efficiency of advanced, easy-to-use technology and the satisfaction of perfect results to form a masterpiece combination offering 'quality without compromise'.

Peripherals and Accessories (Consumer Electronics)

Peripherals and accessories are among the fastest growing and higher-margin product categories in consumer electronics today, with retailers increasingly looking to offer these products as part of a complete consumer electronics portfolio to their customers. Philips recently acquired Digital Lifestyle Outfitters to further strengthen its position in the peripherals and accessories market.

amBX (Consumer Electronics)

amBX provides gamers with a full "sensory surround experience" by empowering game developers to use light, color, sound, vibration and even air flow during gameplay.

More information:

For more information, please contact:

Arent Jan Hesselink

Philips Corporate Communications
Tel:  +31 20 59 77415   
Email:  arentjan.hesselink@philips.com


About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 161,100 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.philips.com/newscenter


Forward-looking statements

This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items, in particular the outlook paragraph in this report.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, levels of consumer and business spending in major economies, changes in consumer tastes and preferences, changes in law, the performance of the financial markets, pension costs, the levels of marketing and promotional expenditures by Philips and its competitors, raw materials and employee costs, changes in exchange and interest rates, changes in tax rates and future business combinations, acquisitions or dispositions and the rate of technological changes, political and military developments in countries where Philips operates, and industry consolidation.
Statements regarding market share, including as to Philips’ competitive position, contained in this document are based on outside sources such as specialized research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Philips, those statements may also be based on estimates and projections prepared by outside sources or management. Rankings are based on sales unless otherwise stated.

 

Use of non-US GAAP information
In presenting and discussing the Philips Group’s financial position, operating results and cash flows, management uses certain non-US GAAP financial measures. These non-US GAAP financial measures should not be viewed in isolation as alternatives to the equivalent US GAAP measure(s) and should be used in conjunction with the most directly comparable US GAAP measure(s). A discussion of the non-US GAAP measures included in this document and a reconciliation of such measures to the most directly comparable US GAAP measure(s) are contained in this document.

 

Use of fair value measurements
In presenting the Philips Group’s financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that are deemed to be reliable.
Readers are cautioned that these values are subject to changes over time and are only valid at the balance sheet date. When a readily determinable market value does not exist, fair values are estimated using valuation models which we believe are appropriate for their purpose. They require management to make significant assumptions with respect to future developments which are inherently uncertain and may therefore deviate from actual developments. In certain cases, independent valuations are obtained to support management’s determination of fair values.