-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, LIb9qOTKCs7oNFY6b7JQC93QTm8XhlZvrNIpbJ0FrzMsDZurIPS4sZ2zxUVgiMEz +vRHWkLVA70rSmQ8R4JFJA== 0000950123-00-003888.txt : 20000421 0000950123-00-003888.hdr.sgml : 20000421 ACCESSION NUMBER: 0000950123-00-003888 CONFORMED SUBMISSION TYPE: 6-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000419 FILED AS OF DATE: 20000420 FILER: COMPANY DATA: COMPANY CONFORMED NAME: KONINKLIJKE PHILIPS ELECTRONICS NV CENTRAL INDEX KEY: 0000313216 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC & OTHER ELECTRICAL EQUIPMENT (NO COMPUTER EQUIP) [3600] STATE OF INCORPORATION: P7 FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 6-K SEC ACT: SEC FILE NUMBER: 001-05146-01 FILM NUMBER: 605793 BUSINESS ADDRESS: STREET 1: REMBRANDT TOWER AMSTELPLEIN 1 STREET 2: 1096 HA AMSTERDAM CITY: THE NETHERLANDS MAIL ADDRESS: STREET 1: REMBRANDT TOWER AMSTELPLEIN 1 STREET 2: 1096 HA AMSTERDAM CITY: THE NETHERLANDS FORMER COMPANY: FORMER CONFORMED NAME: PHILIPS ELECTRONICS N V DATE OF NAME CHANGE: 19930727 6-K 1 KONINKLIJKE PHILIPS ELECTRONICS N.V. 1 2000 - 4 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------- FORM 6-K REPORT OF FOREIGN ISSUER Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934 For the period commencing April 4, 2000 through April 19, 2000 ------- KONINKLIJKE PHILIPS ELECTRONICS N.V. -------------------- (Name of registrant) Rembrandt Tower, Amstelplein 1, 1096 HA Amsterdam, The Netherlands ------------------------------------- (Address of principal executive offices) Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F: Form 20-F X Form 40-F --- --- Indicate by check mark whether the registrant by furnishing the information contained in this form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934: Yes No X --- --- If "Yes" is marked, indicate below the file number assigned to the registrant in connection with Rule 12g3-2 (b): 82- -------------- Name and address of person authorized to receive notices and communications from the Securities and Exchange Commission: Richard C. Morrissey, Esq. Sullivan & Cromwell St. Olave's House 9a Ironmonger Lane London EC2V 8EY, UNITED KINGDOM 2 This report comprises a copy of the Quarterly Report of the Philips Group for the three months ended March 31, 2000, dated April 19, 2000, as well as a press release entitled "Philips to again execute a Share Reduction Program" of the same date. Pursuant to the requirements of the Securities Exchange Act of 1934, the registrants have duly caused this report to be signed on their behalf, by the undersigned, thereunto duly authorized at Amsterdam, on the 19th day of April, 2000. KONINKLIJKE PHILIPS ELECTRONICS N.V. /s/ C. Boonstra C. Boonstra (President, Chairman of the Board of Management) /s/ J.H.M. Hommen J.H.M. Hommen (Executive Vice-President, Member of the Board of Management and Chief Financial Officer) EX-99.1 2 REPORT 1 Exhibit 1 Quarterly report March 31, 2000 Philips (LOGO) 2 STATEMENTS OF INCOME all amounts in millions of euros (EUR) unless otherwise stated The data included in this report are unaudited.
- ------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF INCOME January to March -------------------------- 2000 1999 --------- ---------- Sales 8,329 6,837 - --------------------------------------------------------------- --------- ---------- Ebitda 1,147 915 - --------------------------------------------------------------- --------- ---------- Income from operations (Ebit) 663 549 Financial income and expenses 480 21 - --------------------------------------------------------------- --------- ---------- Income before taxes 1,143 570 Income taxes (124) (114) - --------------------------------------------------------------- --------- ---------- Income after taxes 1,019 456 Results relating to unconsolidated companies 135 25 Minority interests (14) (12) - --------------------------------------------------------------- --------- ---------- Income from continuing operations 1,140 469 Extraordinary items - net - - - --------------------------------------------------------------- --------- ---------- NET INCOME 1,140 469 Basic earnings per common share in EUR (after stock split): - - income from continuing operations 0.86 0.32 - - net income 0.86 0.32
PRESENTATION AND ACCOUNTING ISSUES The data per share in this report have been based on the (average) number of shares outstanding after the 4-for-1 stock split which was effected per April 14, 2000. Prior-year data have been restated accordingly. As of this quarter, the segment reporting is extended to nine segments. Consumer Electronics and Domestic Appliances and Personal Care (DAP), formerly part of Consumer Products, are shown separately, as is Medical Systems which was part of Professional. Additionally, revenues and income from operations are provided for the business groups within Consumer Electronics. In order to further align Philips' accounting principles under Dutch GAAP with US GAAP requirements, certain product development and process development costs are no longer included in inventories. In line with Dutch GAAP, the relevant costs included in the January 1 balance sheet were debited direct to stockholders' equity. 3 REPORT ON THE PERFORMANCE OF THE PHILIPS GROUP - - Income from continuing operations in Q1 2000 was EUR 1,140 million (EUR 0.86 per share) vs. EUR 469 million (EUR 0.32 per share) in Q1 1999. Q1 2000 income included a EUR 526 million gain from the sale of a portion of JDS Uniphase shares. - - All sectors, except Origin, contributed to the increase in income. - - Ebitda on a comparable basis was more than 50% up on the year-earlier quarter. - - RONA came to 25.1% vs. a comparable 16.2% last year. - - Comparable sales growth was 11% vs. 3% last year. Income from continuing operations in the first three months amounted to EUR 1,140 million (EUR 0.86 per share) compared to EUR 469 million (EUR 0.32 per share) in the corresponding period of 1999. Included in income is a gain of EUR 526 million from the sale of a portion of the JDS Uniphase shares received upon the sale of Optoelectronics in mid-1998. Income from operations in the first quarter of 1999 included a gain of EUR 169 million (EUR 150 million after tax) from the sale of Conventional Passive Components. Without these non-recurring items, income from continuing operations in the first quarter improved by 92% over the same period of last year. Improvement in income from continuing operations was the result of strong sales performance in virtually all product sectors, significantly lower employment costs, mainly as a result of pension credits, and strong performance at unconsolidated companies. Sales in the first quarter amounted to EUR 8,329 million, reflecting a 22% nominal increase over the same period a year ago. Adjusted for exchange rate fluctuations (9%), and consolidation changes (2%), comparable sales growth came to 11% compared to 3% a year earlier. Sales growth is accelerating, especially in Semiconductors, Components, Miscellaneous and Domestic Appliances and Personal Care, and within the Consumer Electronics sector, in Consumer Communications and Digital Networks. Price erosion in the first quarter was 5%, substantially down from 8% in the corresponding quarter last year and also down from the fourth quarter of 1999 (7%). Volume growth came to 17% compared with 11% a year ago. Income from operations (EUR 663 million or 8.0% of sales, against EUR 549 million or 8.0% of sales in 1999), is reflecting higher depreciation/amortization charges, mainly resulting from a number of acquisitions in 1999. Excluding the non-recurring gains from the sale of participations in 1999, income from operations was 8.0% versus 5.4% in the year-earlier period. The result was positively impacted by pension credits which are partly (EUR 50 million) allocated to the various segments. The RONA ratio amounted to 25.1% compared to 16.2% in the year-earlier period, when excluding the gain on the sale of Conventional Passive Components. Positive income developments occurred across the board except at Origin, which is suffering from a slow start of the IT sector post-millennium. Financial income and expenses came to a positive balance of EUR 480 million compared to a positive amount of EUR 21 million in the year-earlier period. The current quarter includes a EUR 526 million gain from the sale of a block of JDS Uniphase shares. This positive effect was partly offset by higher net interest expense and exchange rate differences. The tax burden has been determined at a tentative rate of 20% excluding the JDS Uniphase gain, which is not taxable. This resulted in an overall tax burden of less than 11% compared with 20% in the same period of last year. Philips' results relating to unconsolidated companies rose to EUR 135 million from EUR 25 million a year earlier, primarily coming from the joint venture LG.Philips LCD Co., established mid-1999, and the sharply higher contribution from Taiwan Semiconductor Manufacturing Co. Last year's figure included a non-recurring gain in relation to the transfer of 27% of Philips' shareholding in Navigation Technologies to a Dutch investor group. Minority interests were virtually unchanged. 4 TREND PER PRODUCT SECTOR Growth is expressed on a comparable basis In the Lighting sector, the nominal increase in sales was 10%, which was attributable to strengthening Asian markets, combined with positive currency influences. Comparable growth came to 2%. Income from operations improved to EUR 205 million from EUR 178 million, benefiting from stronger market conditions and improved margins, resulting from a richer product mix, as well as from past restructuring initiatives which address continuing pricing pressures. Sales in the Consumer Electronics sector increased by 9%, reflecting 18% volume growth partly offset by 9% price erosion. The larger part of the growth relates to Consumer Communications, Digital Networks and CE Specialty Products. Despite a restructuring charge of EUR 18 million, income from operations improved to EUR 72 million from last year's EUR 40 million, mainly due to the turnaround at Philips Consumer Communications and higher license income. The results of Mainstream CE, however, were adversely affected by price erosion offsetting volume growth, and a restructuring charge for downsizing of its Singapore operations. Income in Digital Networks is reflecting the cost of investments in new high-growth digital business opportunities, which will lead to improved sales and earnings in the near future. The Domestic Appliances and Personal Care sector saw a considerable sales increase of 11%, primarily attributable to vigorous growth in Male shaving and grooming. Income from operations reached EUR 45 million versus EUR 25 million a year-earlier, benefiting mainly from successful product launches such as the Quadra action shaver, favorable currency effects, and improved economies in emerging markets. The Components sector reported a strong 20% increase in sales compared to the prior year, mainly attributable to Display Components and Optical Storage. Income from operations of EUR 95 million compares to last year's EUR 201 million, which included the EUR 169 million gain relating to the divestment of Conventional Passive Components. The improvement is primarily attributable to strong performance in Optical Storage and Advanced Ceramics & Modules. In the Semiconductors sector sales increased by 58% on a nominal basis, to which VLSI contributed strongly. On a comparable basis, sales growth was 23%, in line with the market served by Philips Semiconductors. Income from operations was up at EUR 241 million or 16.8% of segment revenues from EUR 167 million or 17.7% in 1999. Higher sales delivered improvements in all businesses; the relative decrease of the operating margin was due to higher goodwill amortization charges related to VLSI. Sales of the Medical Systems sector were 9% up on the prior year, largely attributable to North America. Income from operations turned to EUR 20 million from a break-even result last year, due to a strong sales performance and strict cost control. Sales at Origin remained 10% below last year as a result of reduced market demand in the post-millennium period. Income from operations of EUR 1 million was down on last year's EUR 25 million, mainly as a consequence of these lower sales. Also a restructuring charge for the alignment of workforce and facilities costs, and higher goodwill charges negatively impacted on the results. The Miscellaneous sector saw a 25% increase in sales, mainly due to FEI/Micrion, Machinefabrieken and Electronic Manufacturing Technology (EMT). Income from operations was down at a loss of EUR 6 million versus a EUR 3 million loss in the year-earlier period, which included income contributions from activities that have meanwhile been divested. This year's results include a restructuring charge involving certain research activities in the Netherlands. In the Unallocated segment, the quarter has been positively impacted by pension credits of approximately EUR 70 million. 5 TREND PER GEOGRAPHIC AREA Growth is expressed on a comparable basis Sales in Europe increased strongly (14%) in the first quarter, driven by Consumer Electronics - in particular Mainstream CE and Consumer Communications -, Components and Semiconductors. A major upturn occurred in Eastern Europe, which saw a 46% increase in sales. North American sales were 7% up on the prior year, mainly attributable to strong sales in Medical Systems, Semiconductors and DAP. Latin America posted strong sales growth, 23% ahead of last year. Brazil and Mexico recorded the most significant increases, driven by Mainstream CE and Components. Sales in Asia Pacific were 7% up on the prior year with the main contributions coming from Semiconductors, Lighting and DAP. Sales in China ended 5% higher. Income from operations improved in all regions except North America. Europe recorded higher results even including last year's one-off gain on the sale of Conventional Passive Components. This was primarily driven by the turnaround in Consumer Communications, as well as stronger performance in Semiconductors and Components. Latin America benefited from rationalization measures in prior years, which are particularly visible in the results of Consumer Electronics and Components. Asia Pacific saw the strongest improvement in income despite a substantial restructuring charge for CE's Singapore operations. BALANCE SHEET RATIOS AND CASH FLOWS Inventories at the end of March 2000 came to 14.5% of sales as compared to 15.6% a year earlier. The average collection period of outstanding trade receivables was the equivalent of 1.6 months' sales, unchanged from one year ago. Cash flow from operating activities was EUR 405 million versus EUR 71 million last year mainly as a result of much higher operating performance. Cash provided by investing activities of EUR 130 million was below 1999, because of higher capital expenditures. The resulting cash flow before financing activities was EUR 535 million compared with EUR 284 million in the first quarter of last year. EMPLOYEES The number of people employed at the end of March 2000 was 229,341, an increase of 1,998 employees over the comparable position on January 1, 2000. OUTLOOK Results of the first quarter confirm our positive outlook for the year 2000, and we continue to see opportunities for further improvements ahead. We have reached our RONA target of 24% in the first quarter and will achieve double-digit growth in earnings and a positive cash flow again this year. April 19, 2000 Royal Philips Electronics Board of Management 6 PRODUCT SECTORS AND CASH FLOWS all amounts in millions of euros (EUR) unless otherwise stated
- --------------------------------------------------------------------------------------------------------------------------- SEGMENT REVENUES January to March AND INCOME FROM ------------------------------------------------------------------------------------------ OPERATIONS 2000 1999 ------------------------------------------- --------------------------------------------- segment income as % of segment income as % of revenues (loss) from segment revenues (loss) from segment operations revenues operations revenues Lighting 1,237 205 16.6 1,122 178 15.9 Consumer Electronics * 3,178 72 2.3 2,863 40 1.4 DAP 387 45 11.6 327 25 7.6 Components 1,491 95 6.4 1,210 201 16.6 Semiconductors 1,435 241 16.8 946 167 17.7 Medical Systems 574 20 3.5 486 0 - Origin 400 1 0.3 414 25 6.0 Miscellaneous 430 (6) (1.4) 409 (3) (0.7) Unallocated (10) (84) - ----------------------------- ----------- ----------- ------------ ----------- Total 9,132 663 7,777 549 Intersegment revenues (803) (940) - ----------------------------- ----------- ------------ SALES 8,329 6,837 Income from operations as a % of sales 8.0 8.0 * of wich: Mainstream CE 1,868 (17) (0.9) 1,829 9 0.5 Consumer Communications 521 24 4.6 393 (37) (9.4) Digital Networks 197 (21) (10.7) 170 (14) (8.2) Specialty Products 552 3 0.5 430 11 2.6 Licenses 94 83 88.3 75 71 94.7 Intrasegment revenues (54) (34) ----------- ----------- ---------- ------------ ----------- ----------- 3,178 72 2.3 2,863 40 1.4
- ------------------------------------------------------------------------------------------------- CONSOLIDATED STATEMENTS OF CASH FLOWS* January to March ----------------------- 2000 1999 --------- -------- Cash flows from operating activities: Net income 1,140 469 Depreciation and amortization 502 366 Net gain on sale of investments (545) (240) Income unconsolidated companies (153) 14 Minority interests 14 8 Increase in working capital (475) (450) Increase in provisions 70 43 Other items (148) (139) - ----------------------------------------------------------------------- --------- -------- Net cash provided by operating activities 405 71 Proceeds from the sale of securities 550 0 Net capital expenditures (456) (236) Purchase/proceeds other non-current financial assets (45) (6) Acquisition/sale of businesses 81 455 - ----------------------------------------------------------------------- --------- -------- CASH FLOWS BEFORE FINANCING ACTIVITIES 535 284
* For a number of reasons, principally the effects of translation differences and consolidation changes, certain items in the statements of cash flows do not correspond to the differences between the balance sheet amounts for the respective items. 7 PRODUCT SECTORS AND MAIN COUNTRIES all amounts in millions of euros (EUR) unless otherwise stated
- ------------------------------------------------------------------------------------------------------------- SALES AND TOTAL ASSETS sales (to third parties) total assets ------------------------------------ ----------------------------- January to March 2000 2000 1999 ------------------------------------ ------------- ------------ % growth March 31, December 31, ----------------------- amount nominal comparable * Lighting 1,226 11 2 2,972 2,849 Consumer Electronics 3,160 18 9 4,875 4,683 DAP 381 19 11 749 777 Components 1,100 29 20 5,460 5,179 Semiconductors 1,224 58 23 5,628 5,188 Medical Systems 573 19 9 1,869 1,840 Origin 248 (10) (10) 686 683 Miscellaneous 417 21 25 1,416 1,545 Unallocated 7,206 6,752 - --------------------------- --------- ------------- ------------ TOTAL 8,329 22 11 30,861 29,496
* Adjusted for the effects of changes in consolidations and exchange rate movements
- ------------------------------------------------------------------------------------------------------------- SALES AND FIXED ASSETS sales (to third parties) (in)tangible fixed assets ------------------------------------ ----------------------------- January to March 2000 2000 1999 ------------------------------------ ------------- ------------ % growth March 31, December 31, ----------------------- amount nominal comparable * Netherlands 438 8 9 1,822 1,811 United States 1,849 25 7 2,576 2,476 Germany 795 20 21 625 632 France 509 20 15 405 392 United Kingdom 497 9 (2) 331 321 China (incl. Hong Kong) 579 20 5 681 635 Other countries 3,662 25 14 4,032 3,887 - --------------------------- --------- ------------- ------------ Total 8,329 22 11 10,472 10,154
* Adjusted for the effects of changes in consolidations and exchange rate movements `SAFE HARBOR' STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF OCTOBER 1995 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. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future. There are a number of factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements. These factors include, but are not limited to, levels of consumer and business spending in major economies, changes in consumer tastes and preferences, the levels of marketing and promotional expenditures by Philips and its competitors, raw materials and employee costs, changes in future exchange and interest rates, changes in tax rates and future business combinations, acquisitions or dispositions and the rate of technical changes. Market share estimates contained in this report are based on outside sources such as specialized research institutes, industry and dealer panels, etc. in combination with management estimates. 8 BALANCE SHEETS AND ADDITIONAL RATIOS all amounts in millions of euros (EUR) unless otherwise stated
- ----------------------------------------------------------------------------------------------- CONSOLIDATED BALANCE SHEETS 2000 1999 MARCH 31, December 31, Cash and cash equivalents 2,579 2,331 Securities 1,499 1,523 Receivables 6,619 6,453 Inventories 4,785 4,566 Unconsolidated companies 2,429 2,091 Other non-current financial assets 365 340 Non-current receivables 2,113 2,038 Property, plant and equipment 7,640 7,332 Intangible assets 2,832 2,822 - ---------------------------------------------------- --------------- ------------- TOTAL ASSETS 30,861 29,496 Current liabilities 8,203 7,974 Dividend payable 399 - Debt 3,288 3,314 Provisions 3,248 3,118 Minority interests 365 333 Stockholders' equity 15,358 14,757 - ---------------------------------------------------- --------------- ------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 30,861 29,496 Stockholders' equity: Per common share in EUR (after stock split) 11.55 11.08
- ------------------------------------------------------------------------------------------------ End of March ------------------------------------- NUMBER OF COMMON SHARES OUTSTANDING (after stock split) Shares in thousands (December 31, 1999: 1,331,601) 1,329,965 1,445,350 - ------------------------------------------------------------------------------------------------ NUMBER OF EMPLOYEES Comparable figure on 1.1.2000: 227,300 229,300 228,800 - ------------------------------------------------------------------------------------------------ RATIOS Net debt : group equity ratio 4:96 * Inventories as a % of sales 14.5 15.6 Outstanding trade receivables, in months' sales 1.6 1.6
January to March ------------------------------------- Income from operations: As a % of sales 8.0 8.0 As a % of net operating capital (RONA) 25.1 24.1 Income from continuing operations as a % of stockholders' equity (ROE) 31.2 17.7
* As the current net cash situation exceeds the level of debt, the net debt to group equity ratio is not meaningful. Information also available on Internet, address: http://www.philips.com Printed in the Netherlands EX-99.2 3 PRESS RELEASE 1 Exhibit 2 Amsterdam, 19 April, 2000 PHILIPS TO AGAIN EXECUTE A SHARE REDUCTION PROGRAM Royal Philips Electronics announced today that it will execute again a Share Reduction Program. A share reduction of 3% will be effected by reducing the share capital, resulting in a total cash distribution of approximately EUR 1.7 billion to all shareholders, and a subsequent reduction of the number of outstanding ordinary shares by 3%. Consequently, Philips will convene an extraordinary General Meeting of Shareholders to which it will propose: 1. Conversion of surplus paid-in capital into nominal share capital; 2. Reduction of the adjusted nominal share capital by distributing a cash amount of EUR 1.26 per share to all Philips shareholders, which equals 3% of yesterday's closing price in Amsterdam of EUR 42.05; and 3. Exchange of all presently existing 100 shares into 97 shares, each of which will have a par value of EUR 0.20. A detailed proposal will be submitted to the extraordinary General Meeting of Shareholders to be held in May. Upon adoption, consummation is expected in July/August upon completion of the required legal procedures and formalities. The Board of Management believes that reducing the number of outstanding shares represents an excellent use of cash for Philips at the moment. In 1999, Philips successfully completed a similar Share Reduction Program. FOR FURTHER INFORMATION PLEASE CONTACT: Ben Geerts, Philips Corporate Communications, tel: +31 20 59 77215 ROYAL PHILIPS ELECTRONICS OF THE NETHERLANDS IS ONE OF THE WORLD'S BIGGEST ELECTRONICS COMPANIES AND EUROPE'S LARGEST, WITH SALES OF EUR 31.5 BILLION IN 1999. IT IS A GLOBAL LEADER IN COLOR TELEVISION SETS, LIGHTING, ELECTRIC SHAVERS, COLOR PICTURE TUBES FOR TELEVISIONS AND MONITORS, AND ONE-CHIP TV PRODUCTS. ITS 226,900 EMPLOYEES IN MORE THAN 60 COUNTRIES ARE ACTIVE IN THE AREAS OF LIGHTING, CONSUMER ELECTRONICS, DOMESTIC APPLIANCES, COMPONENTS, SEMICONDUCTORS, MEDICAL SYSTEMS, AND IT SERVICES (ORIGIN). PHILIPS IS QUOTED ON THE NYSE (SYMBOL: PHG), LONDON, FRANKFURT, AMSTERDAM (SYMBOL: PHI) AND OTHER STOCK EXCHANGES. NEWS FROM PHILIPS IS LOCATED AT WWW.NEWS.PHILIPS.COM -----END PRIVACY-ENHANCED MESSAGE-----