- Strongly improved performance across all sectors
- Comparable sales on par with Q4 2008; sales in emerging markets up 8%
- EBITA improves to 9.1% of sales; adjusted EBITA of 12.3% at record level
- Operating cash flow of EUR 1.4 billion, once adjusted for legal settlement in North America
- Net income of EUR 260 million, driven by strong improvement in operational earnings and significantly lower charges
- Proposed dividend maintained at EUR 0.70 per share
Gerard Kleisterlee, President and CEO of Royal Philips Electronics:
“Thanks to the increased resilience of our company, we ended the year with a strong fourth quarter. Comparable sales came in at last year’s level, delivering a record adjusted profitability of 12.3%. This reflects our strengthened fundamentals and the successful manner in which we have been managing through the downturn.
I am particularly pleased as our improved performance is visible across all three operating sectors:
- Despite continuing weakness in the US market, our Healthcare sector managed to deliver another bumper quarter with sales broadly on par with the strong performance of last year and with significantly higher earnings;
- Our Consumer Lifestyle sector managed to show sales growth, with Television turning a profit and virtually all other businesses posting significantly higher earnings despite the absence of a material recovery in consumer confidence;
- The Lighting sector continued on its road to recovery with strongly improved earnings and rebounding sales even though the commercial construction market continued to be in decline; and for the first time, LED-based products exceeded 10% of total sector sales.
Philips today is a simpler company that is both agile and more resilient to market fluctuations. We faced the economic recession in 2009 head-on, but without sacrificing our longer-term ambitions: we sustained our investments in marketing and innovation, while continuing with responsible acquisitions to fill gaps in our portfolio, such as with Saeco, establishing ourselves as a leader in the high-growth, high-margin espresso machine market.
While today’s economic circumstances do not allow for a reliable prediction of future developments, I am confident that based on our Q4 performance, the strength of our portfolio of globally leading businesses and our engaged workforce, 2010 will be a year of further progress towards becoming the leading company in Health & Well-being. And as a sign of our confidence in our future, we propose to maintain, despite the high pay-out ratio, our dividend at EUR 0.70 a share, on par with last year; with an eye on maintaining our financial prudence, we will offer our shareholders a choice of cash or stock.”
Quarterly report
Q4 2009 - Quarterly report
Presentation
Q4 and Annual Results 2009 - Press conference
Speech
Q4 and Annual Results 2009 Press Conference Speech
Audio Webcast: Q4 2009 results conference call
A conference call with Gerard Kleisterlee, President & CEO, and Pierre-Jean Sivignon, CFO, to discuss the results, will start at 9:15AM CET. A live audio webcast of the conference call will be available through the link below.
Q4 2009 conference call audio webcast
Video Webcast: Press Conference Annual Results 2009
The 2009 Annual Results press conference will be held at 11:00AM CET and will be available via video webcast. Members from the media are able to ask questions during this webcast.
Fourth Quarter and Annual results 2009 - Press Conference video webcast
Philips' Business Highlights 2009
Download and watch hi-res video
More information about Pierre-Jean Sivignon and Gerard Kleisterlee
Click here for Mr. Sivignon's CV and images
Click here for Mr. Kleisterlee's CV and images
About Royal Philips Electronics
Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a diversified Health and Well-being company, focused on improving people’s lives through timely innovations. As a world leader in healthcare, lifestyle and lighting, Philips integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of "sense and simplicity". Headquartered in the Netherlands, Philips employs approximately 116,000 employees in more than 60 countries worldwide. With sales of EUR 23 billion in 2009, the company is a market leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as lifestyle products for personal well-being and pleasure with strong leadership positions in flat TV, male shaving and grooming, portable entertainment and oral healthcare. 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 paragraphs on "Looking ahead" and "Outlook". Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future EBITA and future developments in our organic business. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.
These factors include but are not limited to domestic and global economic and business conditions, the successful implementation of our strategy and our ability to realize the benefits of this strategy, our ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates, pension costs and actuarial assumptions, raw materials and employee costs, our ability to identify and complete successful acquisitions and to integrate those acquisitions into our business, our ability to successfully exit certain businesses or restructure our operations, the rate of technological changes, political, economic and other developments in countries where Philips operates, industry consolidation and competition. As a result, Philips’ actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see the Risk management chapter included in our Annual Report 2008 and the "Risk and uncertainties" section in our semi-annual financial report for the six months ended June 28, 2009.
Third-party market share data
Statements regarding market share, including those regarding Philips’ competitive position, contained in this document are based on outside sources such as 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-GAAP information
In presenting and discussing the Philips Group’s financial position, operating results and cash flows, management uses certain non-GAAP financial measures. These non-GAAP financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures. A reconciliation of such measures to the most directly comparable IFRS measures is contained in this document. Further information on non-GAAP measures can be found in our Annual Report 2008.
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 observable market data does not exist, we estimated the fair values using appropriate valuation models. They require management to make significant assumptions with respect to future developments, which are inherently uncertain and may therefore deviate from actual developments. Critical assumptions used are disclosed in our 2008 financial statements. Independent valuations may have been obtained to support management’s determination of fair values.