Consumer electronics giant Royal Philips Electronics has today reported a second straight quarterly loss, with a 17pc decline in year-on-year sales to €5.1bn in Q1 of 2009.
The group suffered a net loss of €59m in sales for the first quarter of 2009, compared to a net income of €294m in sales in the same quarter of 2008.
The group, which is the largest maker of consumer electronics in Europe, reported a downturn in both consumer electronics and lighting markets.
Consumer lifestyle sales declined 25pc overall to €1.76bn, with sales at both Television and Audio & Video Multimedia falling by 33pc, while Peripherals and Accessories saw a decline of 19cpc.
The Lighting division also reported a 19pc fall in sales to €1.5bn, with the largest decline seen in automotive lighting and the construction-related business of Lighting Electronics and Professional Luminaries. Sales of lamps were also down 15pc year-on-year.
Philips is aiming to diversify its business to areas such as healthcare to make up for the decline in the consumer electronics market. However, the group reported that it faces a very soft US hospital market, although it said that performance in emerging markets and Home Healthcare Solutions remains strong,
According to president and CEO of Philips, Gerard Kleisterlee, the group has seen a “significant further deterioration” in its markets in Q1 of 2009.
“While the effects were felt most strongly in our activities that cater to the consumer market and to the construction and automotive industries, our Healthcare sales are now impacted as well. We expect no material change to this situation in Q2,” Kleisterlee said.
He said that despite these losses, Philips has continued to execute its strategy to further build leadership in Health and Well-being, maintaining investments in R&D, marketing and small acquisitions, while divesting the remaining part of its holding in LG Display.
“We remain convinced that Philips will come out of this recession as a stronger company. The portfolio of leading businesses we have built up is clearly not immune to the market woes we are now experiencing, but it is certainly more resilient than the portfolio we operated in the previous downturn.
“In addition, our strong balance sheet, including our solid cash position, and our ability to adjust our management priorities in line with the dynamics of external circumstances give me confidence in the future prospects of Philips,” Kleisterlee said.
Article courtesy of businessandleadership.com