Philips sales decline in Q4 – disappointing TV sales

24 Jan 2011

Dutch technology giant Philips has reported a 2pc increase in revenues of €7.4bn. However, sales year on year are down 4pc due to a weak TV market and a particularly slow December.

“On the positive side, we continued to see good mid-single-digit comparable sales growth at Home Healthcare Solutions and Patient Care & Clinical Informatics in Healthcare,” the company’s CEO and president Gerard Kleisterlee said.

“Additionally, Healthcare orders grew 3pc in the quarter, allowing order intake to grow 9pc 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. And in Lighting, Lumileds and LED-based lighting products and solutions continued their high double-digit growth rate.”

He said that for the full year, sales rebounded strongly in the first half of the year, yielding the company revenues of €25.4bn for the financial year – up 10pc on 2009.

Economic constraints

“(The year) 2010 was an eventful and overall positive year for Philips. We rebounded strongly from the economic downturn caused by the financial crisis. Within the constraints of an economy that remained weak, with fragile consumer confidence in most mature markets, we successfully implemented a major part of our Vision 2010 road map.

“Television profitability, however, remained a major issue that we are committed to resolve. We continued to strengthen our business portfolio and achieved an adjusted EBITA margin of 10.5pc, significantly exceeding the target we had set ourselves three years ago. With that we set the stage for a successful future as outlined by our Vision 2015 program. Last but not least, we started to prepare for a seamless transition to a new leadership team,” Kleisterlee said.

The company said that emerging market sales increased from 31pc to 33pc of total sales and the company achieved a strong cash flow of €1.3bn.

However, the company pointed out that weak consumer demand in Europe is a cause for concern.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years