| | | | | Philips delivers on its targets: solid Q4 with 8% comparable sales growth and EBITA of EUR 865 million |
| Full-year 2007 comparable sales up 5%, delivering an EBITA margin of 7.7%. Comparable sales increased by 8% to EUR 8,365 million, driven by strong growth at Lighting and the consumer businesses, particularly in emerging markets, where sales growth was 18%. EBITA as a percentage of sales grew by 1.1 percentage points compared to Q4 2006 to reach 10.3%, or EUR 865 million. Net income amounted to EUR 1,393 million; the increase in earnings was boosted by EUR 1,087 million in gains on the sale of stakes in LG.Philips LCD and TSMC. The announced acquisitions of Genlyte and Respironics strengthen Philips leadership positions in Lighting and Home Healthcare. Following an amendment to Dutch tax legislation, the Company announced a further EUR 5 billion (tax-free) share repurchase plan. It is proposed to increase the dividend for 2007 by 17% to EUR 0.70 per share. Our Q4 financial performance – and the other progressive steps taken during the quarter – puts Philips well on track to achieve its Vision 2010 goals.
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| Gerard Kleisterlee, President and CEO of Royal Philips Electronics: |
| “I am pleased to report that in the fourth quarter Philips once again delivered on its targets. Q4’s 8% comparable sales growth and 10.3% EBITA margin brought our full-year numbers to 5% for growth and 7.7% for EBITA, meeting, respectively exceeding, our targets for the year thereby sustaining our track record of “saying what we do and doing what we say”.
Operationally, we are well-positioned to achieve our Vision 2010 targets. Strategically, the acquisitions of Genlyte and Respironics, together with other important acquisitions of 2007 such as Partners in Lighting and Color Kinetics, will strengthen our portfolio by further building up global leadership positions in promising markets such as LED lighting and home healthcare. Financially, our capital reallocation program gathered pace through the sale of further stakes in LG.Philips LCD and TSMC and the EUR 5 billion share repurchase program we announced in December, which we expect to be largely completed by the end of 2008. We are well on our way to realize our objective of an efficient balance sheet before the end of 2009, further underpinning the achievement of our 2010 objectives. In 2007, we also continued to invest in strengthening our position in important emerging markets in Asia, Eastern Europe and Latin America. Throughout our businesses, growth in these markets was strong in 2007, with both China and India growing in excess of 20% in the fourth quarter. The healthy geographical spread of our activities, together with our balanced portfolio of professional and consumer businesses, provides Philips with a built-in cushion to help soften the impact of change in established economies.
With our portfolio restructuring nearing completion, delivering on our 2007 objectives puts us in a good starting position to meet the more ambitious medium-term targets set as part of our Vision 2010 strategy, especially as this portfolio of activities has shown resilience in earlier periods of a deteriorating economy. I am confident that we will continue to deliver and that Philips is well geared to sustained profitable growth and increased shareholder value.”
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| | | | | | The fourth quarter results conference call with Gerard Kleisterlee, President & CEO, and Pierre-Jean Sivignon, CFO, will start at 09:15AM CET on Monday, January 21, 2008. A replay will be made available via audio webcast at approximately 11.30AM CET and will be accessible for a year. Furthermore a transcript of this call will be published the following day. |
| | | The 2007 Annual Results press conference will start at 11:00AM CET on January 21, 2008 and will be made available via video webcast. Replay will be made available immediately after the ending of the press conference. |
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| For further information, please contact: |
| About Royal Philips ElectronicsRoyal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lighting and consumer lifestyle, delivering people-centric, innovative products, services and solutions through the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 123,800 employees in more than 60 countries worldwide. With sales of EUR 27 billion in 2007, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, as well as lifestyle solutions for personal wellbeing. 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. 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, forward-looking 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 forward-looking 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, changes in exchange and interest rates, changes in tax rates, pension costs, 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 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.
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. |
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