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Finance

Published on October 29th, 2013 | by The GC Team

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Philips reports “solid quarter” as operational results increase 33%

Philips has reported comparable sales growth of €5.6 billion, up 3% for its third fiscal quarter, with a 33% improvement in operational results to €634 million. Net income increased to €281 million compared to €105 million in Q3 2012

CEO Frans van Houten (pictured) said: “This was another solid quarter for Philips, especially in light of the challenging global economic environment. I am pleased with the 33% increase in our operational results, clearly reflecting the continuing benefits of our Accelerate! programme. At Healthcare, EBITA improved while sales were flat and order intake declined by 2%. Consumer Lifestyle continued its strong sales performance with a comparable sales growth of 9%, driven by our focus on locally relevant products. At Lighting, LED-based sales grew 33% over the previous year, leading to an overall growth of 3%.”

The company’s overhead cost reduction programme has resulted in €856 million in total gross savings to date, including €183 million realised in Q3 2013.

Philips also announced that it will terminate its agreement with Funai Electric Co. for the transfer of its Audio, Video, Multimedia and Accessories business, following a breach of contract by Funai.

Philips is to take legal action to recover damages caused by Funai and will proceed to investigate other opportunities for the Audio, Video, Multimedia and Accessories business, while continuing to run the business within Philips, operating with a significantly lower cost structure as a standalone entity called WOOX Innovations.

“We regret that we have to take this action, but we do so to protect our business and the interests of all our stakeholders,” said Frans van Houten.

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