Philips' Third Quarter Results 2012 - Healthcare Sector

Royal Philips ElectronicsPhilips reports third-quarter comparable sales growth of 5% to EUR 6.1 billion; EBITA of EUR 450 million. Healthcare comparable sales grew by 7%, led by double-digit growth at Imaging Systems and high-single-digit growth at Home Healthcare Solutions. In growth geographies, comparable sales increased by 14%. Currency-comparable order intake increased by 6% year-on-year. Reported EBITA margin for the quarter was 13.5%.

Business highlights:

  • Philips has entered into a joint venture with AI Faisaliah Medical Systems in Saudi Arabia, continuing the company's expansion in fast-growing markets such as the Middle East. In addition, Philips has entered into its first partnership solutions agreement in the region with Burjeel Hospita, a new 196-bed facility in Abu Dhabi.
  • Reinforcing its strong position in the premium segment in China. Philips has received SFDA clearance to market its innovative Ingenia 1.5T and 3.0T MRI systems in this fast-growing market. In addition, Philips' first Big Bore PET/CT the only 85 cm bore system with Time-of-Flight technology for enhanced PET image quality in the market, was installed in China's Shandong Tumor Hospital.
  • To expand its offering in the fast-growing image-guided intervention and therapy market, Philips has become the exclusive distributor of Corindus' CorPath 200 System, the world's first robotic-assisted system for minimally invasive treatments of obstructed coronary arteries.
  • Philips and Isala Klinieken, a major Dutch hospital with close to 1,000 beds, have entered into a multi-year collaboration for the acquisition, use and maintenance of medical equipments as well as the improvement of the hospital's care processes. This is to date the largest partnership solution agreement for Philips in the Netherlands.
  • Philips has secured a five-year multi-million euro contract with the UK's Surrey & Sussex Healthcare NHS Trust for its IntelliSpace Picture Archiving and Communications solution.

"Philips' operational and financial performance in the third quarter demonstrates further progress on our path towards our 2013 financial targets, driven by our transformation program Accelerate!. Our investments in building meaningful innovative solutions to meet the needs of our customers in local markets are positively impacting our growth and performance. Improvements in our operational excellence and agility are positioning the company for better performance in the coming years. The recently announced additional cost savings, as well as our actions to drive higher savings from procurement, further underpin our profitability potential.

"Group sales growth in the quarter of 5%, together with the cost productivity improvements we have made, enabled us to deliver an EBITA margin of 9.2%, excluding non-operational charges.

"Our Healthcare business continues to perform well as comparable sales grew 7% and order intake increased by 6%. The growth businesses in Consumer Lifestyle posted another solid quarter, delivering a double-digit revenue increase. In Lighting, LED-based sales continued to show strong momentum with comparable sales growth of over 50%, which requires us to accelerate the rationalization of our conventional lighting industrial footprint.

"We continue to experience strong economic headwinds on a global scale, which affect growth going forward. Our Accelerate! program is helping to mitigate some of these pressures, and we have full confidence in our ability to continue improving the operational and financial performance of the company," mentioned Frans van Houten, CEO of Royal Philips Electronics.

About Royal Philips Electronics
Royal Philips Electronics (NYSE: PHG, AEX: PHI) is a diversified health and well-being company, focused on improving people's lives through meaningful innovation in the areas of Healthcare, Consumer Lifestyle and Lighting. Headquartered in the Netherlands, Philips posted 2011 sales of EUR 22.6 billion and employs approximately 122,000 employees with sales and services in more than 100 countries. The company is a leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as male shaving and grooming, home and portable entertainment and oral healthcare.

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