Fourth Quarter and Annual Results 2010

Philips reports fourth-quarter net income of EUR 465 million, EBITA of EUR 873 million and sales of EUR 7.4 billion

January 24, 2011

• Net income of EUR 465 million, an increase of EUR 205 million compared to Q4 2009
• EBITA of EUR 873 million at 11.8% of sales in the quarter
• Nominal sales of EUR 7.4 billion, 2% higher year-on-year
• Comparable sales declined 4%, primarily reflecting weak consumer demand in Western Europe
• Emerging market sales increased from 31% to 33% of Group sales
• Strong cash flow of EUR 1.3 billion
• Proposed dividend increased to EUR 0.75 per share


Gerard Kleisterlee, President and CEO of Royal Philips Electronics:


“We finished a strong 2010 on a stable note with fourth-quarter EBITA of EUR 873 million, or 11.8% of sales, bringing EBITA for the full year to a record 10%.

Revenue for the quarter came in at EUR 7.4 billion, a nominal increase of 2%. Comparable sales however declined by 4%, impacted by a weak Television market, negative consumer sentiment in developed markets and inventory management in the trade which resulted in a particularly slow December. Revenue in all three sectors was also negatively affected by fewer working days in the Philips reporting calendar.


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. Additionally, Healthcare orders grew 3% in the quarter, allowing order intake to grow 9% 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.


For the full-year, sales, having rebounded strongly in the first half of the year, came in at EUR 25.4 billion, a 10% nominal increase from 2009. On a comparable basis, that represents growth of almost 4.5% for 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 roadmap. 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 10.5%, 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.


Philips has undergone a profound transformation over the last decade. We are now a company with a clear focus, a customer-centric approach, a strong brand and a simpler structure. We are a global leader in important markets that are essential for tomorrow’s world. We are a new Philips and we are ready for an even better future.”


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Quarterly report

Q4 2010 - Quarterly report 



Q4 and Annual Results 2010 - Press Conference 



Q4 and Annual results 2010 Press Conference Speech 


Audio Webcast: Q4 2010 results conference call

A conference call with Gerard Kleisterlee, President & CEO, and Pierre-Jean Sivignon, CFO, to discuss the results, will start at 9:15AM CET. A live audio webcast of the conference call will be available through the link below.

Q4 2010 conference call audio webcast

Video Webcast: Press Conference Annual Results 2010
The 2010 Annual Results press conference will be held at 11:00AM CET and will be available via video webcast. Members from the media are able to ask questions during this webcast.

Fourth Quarter and Annual Results 2010 - Press Conference video webcast


Philips' Business Highlights 2010

Watch HD video 


More information about Gerard Kleisterlee and Pierre-Jean Sivignon
Click here for Mr. Kleisterlee's CV and images

Click here for Mr. Sivignon's CV and images 

Press Conference

Royal Philips Electronics CEO and President Gerard Kleisterlee (right) and CFO Pierre-Jean Sivignon(left) said the company ended the year on a stable note, with the highest full-year profitability in a decade.

Acquisition of NCW Holdings Ltd

Philips expanded its global leadership position in professional lighting entertainment solutions with the acquisition of NCW Holdings Ltd in China, a leading provider of LED, conventional entertainment lighting and lighting controls.

Growing LED presence in Asia

Philips quadrupled LED Lamps sales in Asia in 2010 compared to 2009, supported by an increase in branded lighting shops in the region to over 200 in China alone, and the launch of a range of energy-efficient professional LED solutions.

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Accelerated roll out of Philips airfryer

Following positive market feedback, Philips accelerated the roll out of the airfryer, now available in the Benelux, UK and Germany. The innovative kitchen appliance, which creates meals with up to 80% less fat, will be further rolled out in other markets around the world.

First installation of Russian made CT scanner

Philips and leading Russian medical equipment manufacturer Electron announced the completion of Russia’s first installation of a domestically made Computed Tomography (CT) scanner at the Hospital of War Veterans in St. Petersburg.

Extension of patient monitoring portfolio

Philips extended its patient monitoring portfolio within the hospital with the introduction of IntelliVue Guardian Solutions, a comprehensive range of monitoring solutions designed specifically for hospital-based general care settings.

iF Awards

Philips will receive a total of 28 prestigious iF product design awards in 2011, of which 15 are from Consumer Lifestyle and 9 from Lighting. 

For more information, please contact:

Joost Akkermans
Philips Corporate Communications
Tel: +31 20 59 77406


Joon Knapen
Philips Corporate Communications
Tel:  +31 20 59 77477


About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a diversified health and well-being company, focused on improving people’s lives through timely innovations. As a world leader in healthcare, lifestyle and lighting, Philips integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs 119,000 employees in more than 60 countries worldwide. With sales of EUR 25.4 billion in 2010, the company is a market leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as lifestyle products for personal well-being and pleasure with strong leadership positions in flat TV, male shaving and grooming, portable entertainment and oral healthcare. News from Philips is located at


Forward-looking statements

This document contains certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items, in particular the sections “Looking ahead” and “Outlook”. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future EBITA and future developments in our organic business. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements. These factors include but are not limited to domestic and global economic and business conditions, the successful implementation of our strategy and our ability to realize the benefits of this strategy, our ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates, pension costs and actuarial assumptions, raw materials and employee costs, our ability to identify and complete successful acquisitions and to integrate those acquisitions into our business, our ability to successfully exit certain businesses or restructure our operations, the rate of technological changes, political, economic and other developments in countries where Philips operates, industry consolidation and competition. As a result, Philips’ actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see the Risk management chapter included in our Annual Report 2009 and the “Risk and uncertainties” section in our semi-annual financial report for the six months ended July 4, 2010.


Third-party market share data

Statements regarding market share, including those regarding Philips’ competitive position, contained in this document are based on outside sources such as research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Philips, those statements may also be based on estimates and projections prepared by outside sources or management. Rankings are based on sales unless otherwise stated.


Use of non-GAAP information

In presenting and discussing the Philips Group’s financialposition, operating results and cash flows, management uses certain non-GAAP financial measures. These non-GAAP financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures. A reconciliation of such measures to the most directly comparable IFRS measures is contained in this document. Further information on non-GAAP measures can be found in our Annual Report 2009.


Use of fair-value measurements
In presenting the Philips Group’s financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that are deemed to be reliable. Readers are cautioned that these values are subject to changes over time and are only valid at the balance sheet date. When quoted prices do not exist, we estimated the fair values using appropriate valuation models, and when observable market data are not available, we used unobservable inputs. They require management to make significant assumptions with respect to future developments,which are inherently uncertain and may therefore deviate from actual developments. Critical assumptions used are disclosed in our 2009 financial statements. Independent valuations may have been obtained to support management’s determination offair values.


All amounts in millions of euros unless otherwise stated; data included are unaudited. Financial reporting is in accordance with IFRS, unless otherwise stated. This document comprises regulated information within the meaning of the Dutch Financial Markets Supervision Act ‘Wet op het Financieel Toezicht’.