Philips' Fourth Quarter Results 2010 - Healthcare Sector

Royal Philips ElectronicsPhilips and leading Russian medical equipment manufacturer Electron announced the completion of Russia's first installation of a domestically made Computer Tomography (CT) scanner at the Hospital of War Veterans in St. Petersburg.

At the annual Radiological Society of North America (RSNA) meeting in Chicago, Philips unveiled "Imagine 2.0", a concept of integration of technology, clinician and patient. Imaging 2.0 is fueled by eight breakthrough innovations in imaging, proving Philips' leadership in radiology.

Philips extended its patient monitoring portfolio within the hospital with the introduction of IntelliVue Guardian Solutions, a comprehensive range of monitoring solutions designed specifically for hospital-based general care settings.

Philips signed a 10-year contract as system integrator with the Rijnstate hospital in The Netherlands. For the delivery and maintenance of imaging equipment for all their radiology and nuclear medicine departments.

Financial performance
Currency-comparable equipment order intake increased by 3% year-on-year. With notable improvements at Patient Care & Clinical Informatics. Equipment orders in North America grew by 8%, while order intake in markets outside of North America was flat. Emerging market equipment orders grew by 9% compared to Q4 2009. For the year, currency-comparable equipment orders grew by 9%, whereas 16% comparable growth was recorded in emerging market equipment order intake.

Nominal sales grew 10% compared with Q4 2009. Comparable sales were 2% higher year-on-year, with sales increases at Home Healthcare Solution, Patient Care & Clinical Informatics and Customer Services. Imaging Systems sales were slightly lower than in Q4 2009 as a result of lower sales in the Latin America region. From a regional perspective, comparable sales in North America were in line with Q4 2009, while in markets outside North America sales grew by 2%. Emerging market sales grew by 8%, with notably better sales in China and at Customer Services.

EBITA increased by EUR 70 million year-on-year to EUR 522 million, or 19,8% of sales. Excluding restructuring and acquisition-related charges, EBITA amounted to EUR 518 million, or 19,6% of sales, compared to EUR 479 million, or 19,9% of sales, in Q4 2009. The EBITA improvement was driven by higher sales as well as service productivity improvements.

Net operating capital increased by EUR 474 million to EUR 8,9 billion. Excluding 713 million currency impact, net operating capital decreased by EUR 239 million.

Gerard Kleisterlee, President and CEO of Royal Philips Electronics, commented: "We continued to see good mid-single-digit comparable sales growth at Home Healthcare Solutions and Patient Care & Clinical Informatics in Healthcare. Additionally, Healthcare orders grew 3% in the quarter, allowing order intake to grow 9% for the year, providing an excellent basis for sales growth in 2011. In Consumer Lifestyle, Personal Care and Health & Wellness posted strong high-single-digit growth."

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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 119,000 employees in more than 60 countries worldwide. With sales of EUR 25.4 billion in 2010, 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.

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