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Improved financial performance from Philips

25 April 2012 12.00 BST

(Netherlands) - Positive results for Philips Lighting for first quarter of 2012 but net operating profit down.

Lighting comparable sales increased by 2% year-on-year with mid-single-digit sales growth in all lighting businesses being partly offset by a decrease at Lumileds. LED-based sales grew 22% compared to the same period in 2011, and now represent 16% of total Lighting sales. Lighting achieved high-single-digit sales growth in its growth geographies. Results were impacted by operational issues at Consumer Luminaires and Lumileds, as well as a one-time loss on the sale of assets.

EBITA was EUR 61 million or 3% of sales, lower than last year's Q1 EBITA of 10.1% due to an increase in raw material prices and operational performance issues at Lumileds and Consumer Luminaires. Increased restructuring and acquisition-related charges of EUR 24 mil and a EUR 25 mil loss on the sale of assets also impacted EBITA.

The net operting profit of Philips Lighting decreased by EUR 520 mil to EUR 5.06 bil, driven by a combination of goodwill and intangible asset write-downs in 2011 totaling EUR 660 mil, currency impact, the consolidation of outdoor lighting company Indal in Q1 2012 and improved working capital management.

Frans van Houten, CEO of Philips, commented: “I am encouraged by our results in the first quarter of 2012, which is a further step in the right direction for Philips on our path to value to achieve the mid-term 2013 financial targets. Accelerate! is beginning to impact the company’s performance, and cost-saving initiatives are on track. After a declining trend over the past seven quarters, I am quite pleased with the sequential performance improvement at Lighting, as organizational changes and operational improvements began to show positive results.”

The financial presentation document also revealed Philips Lighting's customer segments in 2011 with home lighting accounting for 23% of its EUR 7.6 bil sales. This was followed by office lighting at 17%, outdoor and retail lighting, both at 15%, and industry and automotive lighting at 9% each. Hospitality lighting represented 5% of Philips Lighting's business whilst healthcare accounted for 4%. Entertainment lighting was 3%.

Regionally, EMEA accounted for 38% of Philips Lighting's sales in 2011 with Asia Pacific accounting for 31%. North America represented 25& of sales whilst Latin America was 6%.


Philips CEO Frans van Houten: “encouraged by results”.

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