Philips delivers 4% growth in second quarter; management team takes next steps to improve growth and performance trajectory. Comparable sales up 4%, led by strong growth at Healthcare, moderate growth at Lighting. Growth markets now represent one third of Group sales.
Frans van Houten, President and CEO of Royal Philips Electronics, commented: "Our second-quarter results were impacted by near-term operational challenges, weaker markets and a significant impairment charge. We are taking necessary steps to improve performance and we are confident in the prospects of our portfolio. Healthcare performed strongly, improving earnings and growing comparable sales by 8% over last year. In Consumer Lifestyle, we are encouraged by growth in all businesses, excluding Lifestyle Entertainment, though investments in growth affected earnings in the quarter."
Business highlights
- Philips expanded its capabilities in imaging equipment services with the acquisition of AllParts Medical, a privately owned US-based provider of imaging equipment parts and training.
- Philips signed a Memorandum of Understanding with the Russian Sate atomic Energy Corporation, under which the two intend to locally manufacture three important imaging modalities in nuclear medicine.
- Philips' Sleep business launched the GoLife for Women nasal pillow CPAP mask, expanding the GoLife platform that was launched earlier in the year with GoLife for Men. This platform is the first designed around the distinct features of men and women.
Financial performance
- Currency-comparable equipment order intake grew 4% year-on-year. Equipment order growth was seen at Imaging Systems, while Patient Care & Clinical Informatics orders were lower than in Q2 2010. Equipment orders in North American markets were 10% higher than in Q2 2010. Equipments orders in markets outside of North America were 4% lower year-on-year, with growth-market equipment orders growing by 5%.
- Comparable sales were 8% higher year-on-year, with solid sales increases in all businesses, notably high-single-digit growth at Home Healthcare and Imaging Systems. From a regional perspective, comparable sales in mature markets grew 4% year-on-year, with sales in North America 8% higher than in Q2 2010. Growth-market sales grew 22%, with notably better sales at Imaging Systems.
- EBITA increased by EUR 60 million year-on-year to EUR 276 million, or 13:3% of sales. EBITA improvement was driven by gross margin improvements in most businesses. Excluding restructuring and acquisition-related charges, EBITA amounted to EUR 275 million, or 13.2% of sales, compared to EUR 262 million, or 12.7% of sales, in Q2 2010.
Related news articles:
- Philips Healthcare's Profile
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 over 120,000 employees with sales and services in more than 100 countries worldwide. With sales of EUR 22.3 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 male shaving and grooming, portable entertainment and oral healthcare.