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Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
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Securities Exchange Act of 1934
(Translation of registrants name into English)
(Jurisdiction of incorporation or organization)
(Address of principal executive offices)
and communications from the Securities and Exchange Commission:
Koninklijke Philips Electronics N.V.
Amstelplein 2
1096 BC Amsterdam The Netherlands
Philips CFO confirms Philips strategic direction at Credit Suisse conference in
London, dated September 12, 2007;
Philips sells entire stake in US-based Nuance Communications, dated September 13,
2007;
Philips appoints Maarten de Vries as Chief Information Officer, dated September 19,
2007;
Philips sets target to double sales from Green Products to 30% of total revenues
within five years, dated September 25, 2007;
Philips updates market on lighting sector and innovation activities, dated September
28, 2007;
Philips lowers its stake in LG.Philips LCD to 19.9%, dated October 10, 2007;
(General Secretary)
Philips reports robust growth in sales and EBITA
Comparable sales increased by 7% to EUR 6,524 million, driven by growth in the consumer
businesses and in key emerging markets.
EBITA grew to EUR 438 million, or 6.7% of sales, compared with EUR 71 million, or 1.1%
of sales, in Q3 2006.
Net income amounted to EUR 331 million; Q3 2006 net income included a gain of EUR 4,241
million, largely attributable to the sale of our Semiconductors division.
Gerard Kleisterlee,
President and CEO of Royal Philips Electronics:
Q3 was another quarter of improved year-on-year performance for Philips. Sales increased by
7% while EBITA rose to EUR 438 million, taking our EBITA margin to 6.7% for the quarter. Its
particularly encouraging to see impressive growth in areas that have become, and will
continue to be, increasingly important for our company, such as the key emerging markets of
Latin America, China and India.
Results at Medical Systems, while still a strong contributor to group earnings, were
adversely affected by the further contraction of the imaging systems market in North America,
largely due to the impact of the US Budget Deficit Reduction Act. However, the performance of
Medical Systems improved in all regions outside of the United States and in businesses such
as Ultrasound & Monitoring and Customer Services within the US.
In Lighting, we continued to capitalize on our strong position in energy-efficient lighting
solutions, and we will continue to grow our business in this
Financial reporting is in accordance with US GAAP, unless otherwise stated.
area going forward. In our consumer businesses, we benefited from the recent introduction of
a number of innovative and exciting new products, positioning our new Consumer Lifestyle
sector for a winning start.
With our results improving quarter after quarter, I feel that Philips is well positioned to
meet the objectives outlined in our recently communicated Vision 2010 strategic plan.
Q3
Q3
2006
2007
6,313
6,524
71
438
1.1
6.7
25
385
0.4
5.9
32
20
27
(201
)
(81
)
128
(2
)
1
1
333
4,241
(2
)
4,242
331
3.59
0.31
Net income
Income from continuing operations amounted to EUR 333 million, compared to EUR 1 million in
the same period of last year. Q3 2006 included the after-tax impact of a EUR 265 million
asbestos-related product liability charge.
Results relating to equity-accounted investees improved by EUR 209 million compared to the
corresponding period of 2006 due to higher income from LG.Philips LCD.
Income tax included EUR 91 million in charges related to a reduction in the value of
carried-forward tax losses resulting from a decrease in the corporate tax rate in Germany.
Income from discontinued operations in Q3 2006 was due to the estimated gain on the sale of
a majority stake in our former Semiconductors division.
% change
Q3
Q3
compa-
2006
2007
nominal
rable
1,575
1,600
2
3
577
718
24
20
2,407
2,520
5
8
1,370
1,496
9
2
355
146
(59
)
30
29
44
52
73
6,313
6,524
3
7
Sales by sector
Sales of EUR 6,524 million represent comparable growth of 7% compared to Q3 2006. Nominal
sales, including the impact of portfolio changes and currency movements, increased by 3%
year-on-year. All businesses contributed to the comparable growth, led by strong sales in the
consumer divisions and across key emerging markets.
Medical Systems saw double-digit sales growth in its Ultrasound & Monitoring and Healthcare
Informatics businesses tempered by lower sales in the North American imaging systems business.
Sales at DAP continued to show exceptional growth, supported by all businesses. Sales at CE
increased 8% on a comparable basis, with higher sales visible across all operational
businesses.
At Lighting, strong comparable sales growth at Luminaires, Automotive and Lamps was largely
offset by the ongoing contraction of the UHP lamp market and the exit from the LCD
backlighting business.
% change
Q3
Q3
compa-
2006
2007
nominal
rable
2,680
2,954
10
10
1,979
1,888
(5
)
(1
)
440
527
20
20
1,214
1,155
(5
)
9
6,313
6,524
3
7
Sales by region
The increase in comparable sales in Europe/Africa was driven by growth in the emerging
Eastern European markets as well as in the major economies. Sales in North America were impacted by
weaker market conditions while Latin America saw strong growth, particularly in the smaller
emerging countries. Comparable sales growth in Asia Pacific was particularly strong in China and
India.
Q3
Q3
2006
2007
192
182
96
135
27
36
134
190
(41
)
(33
)
(337
)
(72
)
71
438
1.1
6.7
Q3
Q3
2006
2007
166
151
94
132
27
34
126
178
(51
)
(38
)
(337
)
(72
)
25
385
0.4
5.9
Earnings
Excluding last years EUR 265 million product
liability charge, EBITA improved by EUR 102 million, or
1.4 percentage points, compared to Q3 2006, driven
mainly by Lighting and the consumer businesses.
At Medical Systems, lower EBITA at Imaging Systems, which continued to be impacted by the
US Budget Deficit Reduction Act, could not be fully compensated by improvements in the other
business areas.
DAPs EBITA increased as a result of sales growth in all businesses coupled with ongoing
cost management.
EBITA at CE improved due to higher earnings at Entertainment Solutions, Home Networks and
Peripherals & Accessories, partly offset by lower EBITA at Connected Displays.
Lightings EBITA improved year-on-year in most businesses, including the positive impact of
Consumer Luminaires (PLI). EBITA included a EUR 11 million net gain on the sale of real estate
as well as restructuring and other incidental charges; the corresponding amount in Q3 2006 for
restructuring and miscellaneous net charges was EUR 32 million.
EBITA at Innovation & Emerging Businesses improved compared to Q3 2006, driven by the
divestment of low-margin businesses and improved margin at Lifeline.
EBITA at Group Management & Services benefited from lower corporate and pension-related
costs. Q3 2006 included a product liability charge of EUR 265 million.
Q3
Q3
2006
2007
(71
)
(10
)
31
97
6
(1
)
32
20
Financial income and expenses
Net interest charges
decreased by EUR 61 million
compared to Q3 2006 as a result
of a higher liquid assets
balance and a lower debt
position.
Other income from non-current financial assets included a EUR 31 million gain on the sale
of shares in Nuance Communications.
A gain of EUR 97 million related to the receipt of a TSMC stock dividend was recognized in
Q3 2006; this years TSMC-related stock dividend was recognized in Q2.
Q3
Q3
2006
2007
(85
)
127
4
1
(81
)
128
Results relating to equity-accounted investees
Results relating to equity-accounted investees improved significantly from a loss of
EUR 81 million in Q3 2006 to a profit of EUR 128 million due to higher income from
LG.Philips LCD.
Q3
Q3
2006
2007
2,538
6,261
634
388
(237
)
(178
)
(704
)
(546
)
4
210
(1,705
)
(976
)
6,742
7,272
5,159
Cash balance
During the quarter, the cash balance decreased by EUR 1,102 million, primarily due to the
acquisition of Color Kinetics for EUR 515 million and additional share repurchases totaling
EUR 789 million, of which EUR 326 million for cancellation.
Net cash from discontinued operations in Q3 2006 consisted of cash received from the sale
of a majority stake in our former Semiconductors division.
Cash flows from operating activities
Operating activities generated cash flows totaling EUR 388 million in the third quarter,
largely driven by net income. The cash flow in Q3 2006 was positively impacted by certain
items related to the sale of a majority stake in the Semiconductors division which were
subsequently reclassified in Q4 2006.
Gross capital expenditures (PPE*)
Gross capital expenditures remained broadly in line with Q3 2006. Additional investments,
mainly at Medical Systems, were offset by lower capital expenditure at Lighting and DAP.
*
Capital expenditures on property, plant and equipment only
**
Excluding gross capital expenditures related to the Q3 2006
timing difference in the finalization of the sale of the Semiconductors division
Excluding the year-on-year impact of currency changes, inventories as a percentage of sales
increased by 1.1 percentage points. This was primarily due to higher inventories at Medical
Systems (mainly Customer Services-related) and at Lighting due to the acquisition of Color
Kinetics and Partners in Lighting International (PLI) which because of its business model -
has an inventory level above the divisional average.
During the quarter, the net cash position decreased by EUR 1.0 billion, mainly due to a EUR
1.1 billion decline in liquid assets. This decline was primarily attributable to a cash
outflow of EUR 789 million for share repurchases and EUR 515 million for the acquisition of
Color Kinetics.
In the quarter, Group equity declined by EUR 1.3 billion to EUR 20.9 billion as the
positive impact of net income was more than offset by additional share repurchases, a decline
in the market value of the Companys stake in TSMC and currency translation effects.
The number of employees at the end of Q3 2007 was 128,119 compared to 125,564 at the end of
Q3 2006. The increase is mainly due to acquisitions completed during the last 12 months -
notably Intermagnetics and PLI partly offset by divestments, mainly Optical Storage and the
Enabling Technologies Group within Corporate Investments.
in millions of euros unless otherwise stated
Q3
Q3
2006
2007
1,575
1,600
3
2
6
3
192
182
12.2
11.4
166
151
10.5
9.4
3,330
4,193
31,524
33,085
Philips announced it has acquired healthcare IT company XIMIS Inc., which focuses on
systems to help reduce errors and streamline workflow in hospital radiology wards.
For the 15th year in a row, US customers ranked Philips #1 for service performance in
ultrasound in an annual survey by IMV ServiceTrak a market research organization
focusing on medical imaging and clinical diagnostic instruments.
Medical Systems achieved important new business wins in the quarter, including a three-year
imaging systems contract from the US-based Premier Imaging Committee. Additionally, the
Wellmont Health System entered into a three-year strategic alliance with Philips through which
it is set to become the areas premier cardiovascular destination center.
During the quarter, equipment order intake grew 3% on a currency-comparable basis compared
to Q3 2006. Outside North America, order intake remained robust. In the US, growth at
Ultrasound & Monitoring and General X-Ray was tempered by lower order intake at Imaging
Systems, mainly in Computed Tomography, Nuclear Medicine and Cardiovascular X-Ray. The
increasing impact of the US Budget Deficit Reduction Act continued to pressure the imaging
systems industry.
Comparable sales grew 3% year-on-year thanks to strong growth at Ultrasound & Monitoring,
Healthcare Informatics and Customer Services. Year-on-year sales at Imaging Systems declined
however, particularly in CT, which suffered from the ongoing market contraction. MedQuist
sales fell 9% comparably due to a decline in transcription revenues.
EBITA declined by EUR 10 million, or 0.8 percentage points, compared to Q3 2006, primarily
driven by the decline in sales
performance of Computed Tomography. Excluding Computed Tomography, EBITA improved by 0.7
percentage points, driven by solid margin expansion in Ultrasound & Monitoring, Customer
Services and by sales growth outside of the US.
Net operating capital and headcount increased, mainly due to the acquisition of
Intermagnetics in Q4 2006.
The ongoing impact of the US Budget Deficit Reduction Act is expected to lead to a broadly
flat year-on-year US healthcare market. We expect to partially offset the impact on our
business through sales growth outside North America and the contribution from acquisitions.
in millions of euros unless otherwise stated
Q3
Q3
2006
2007
577
718
11
24
9
20
96
135
16.6
18.8
94
132
16.3
18.4
1,276
1,326
10,347
10,423
Philips introduced two new shaving innovations. The Arcitec targets the high end of the
male shaving market and was launched globally in September. Philips also launched in September
a new Moisturizing Shaving System developed with Nivea For Men.
Philips showcased the next-generation, ultra-slim Sonicare FlexCare electrical toothbrush
at a trade show of the American Dental Association in San Francisco. The FlexCare, which
features a bacteria-killing UV sanitizer, will be available in the coming months.
In coffee-making, Philips further strengthened its position by entering the German espresso
market with a new high-end espresso machine. This product will also be launched on other
European markets in the future. Philips also added two special-edition Senseo coffee-makers to
the product line-up.
Comparable sales grew 20% compared to Q3 2006, largely driven by strong growth at Shaving &
Beauty, supported by the launch of the new shavers (Arcitec and Moisturizing Shaving System),
and at Domestic Appliances, most notably Kitchen Appliances, due to a strong product portfolio
and the successful healthy-living positioning.
All regions reported strong double-digit sales growth, led by a 33% comparable increase in
emerging markets.
EBITA improved by EUR 39 million year-on-year, driven by higher sales and cost management.
Notwithstanding the 13% comparable sales growth achieved in Q4 2006, DAP expects sales
growth to continue. The growth will be supported by higher advertising and promotion
investments, particularly for the newly introduced ranges in Shaving and Oral Healthcare.
in millions of euros unless otherwise stated
Q3
Q3
2006
2007
2,407
2,520
(5
)
5
(1
)
8
27
36
1.1
1.4
27
34
1.1
1.3
192
181
16,142
15,117
At IFA 2007 in Berlin, Philips unveiled Aurea, the latest TV with Philips successful
Ambilight feature. Aurea creates a halo of dynamic light within the frame and around the TV
for an exceptionally immersive viewing experience.
Philips received two prestigious product awards from the European Imaging & Sound
Association (EISA). An Ambilight FlatTV with Perfect Pixel HD Engine was named European
Full-HD LCD TV 2007-2008, while the Philips SoundBar DVD Home Theater technology was named
European Home Theater Compact System 2007-2008.
Peripherals & Accessories has launched several innovative product solutions such as
Power4life a power solutions product that allows users to charge all their portable devices
with one integrated charger and its active crystal range of wearable accessories developed
in conjunction with Swarovski.
Consumer Electronics sales amounted to EUR 2,520 million, a year-on-year comparable
increase of 8%, with growth visible across all operating businesses and in all key emerging
markets.
EBITA improved to EUR 36 million (1.4% of sales), compared to EUR 27 million (1.1% of
sales) in Q3 2006. High margin pressure in Flat Displays, particularly in North America, was
more than offset by higher EBITA in the other businesses.
Despite the increased sales level, net operating capital remained low, consistent with the
divisions business model.
Sales in the fourth quarter are expected to show strong year-on-year growth, supported by a
number of new product introductions. It is expected that the competitive market environment in
Flat Displays will continue, with pressure on margins.
in millions of euros unless otherwise stated
Q3
Q3
2006
2007
1,370
1,496
16
9
10
2
134
190
9.8
12.7
126
178
9.2
11.9
2,697
4,116
48,753
54,951
Philips announced the completion of the acquisition of US-based Color Kinetics, a leader in
the design and marketing of innovative LED lighting systems, further strengthening Philips
position in the LED value chain and bolstering its strong LED intellectual property portfolio.
Enabling a 35% saving on energy costs, over 50,000 Philips CosmoPolis street-lighting
systems have been installed in Europe, with interest from Asia and particularly China growing
fast. There, energy-efficient products represent 44% of total Lighting sales, and 35
distribution points are being added each day in second and third-tier cities.
A study by the independent safety research organization TÜV Rheinland showed that if all
vehicles on German roads were equipped with Xenon car lights, 18% of all fatalities could be
avoided, saving 1,200 lives annually. Philips is the inventor and the worlds leading
manufacturer of Xenon car bulbs.
Sales amounted to EUR 1,496 million, representing 2% comparable growth compared to Q3 2006.
Excluding the impact of the contracting UHP lighting market and the exit this year from
fluorescent lamp-based LCD backlighting, sales increased 7% on a comparable basis, driven by
the global demand for energy-efficient lighting solutions and strong growth in emerging
markets.
EBITA increased by EUR 56 million compared to Q3 2006, including a EUR 20 million gain on
the sale of real estate, which was partly offset by purchase accounting, restructuring and
other net incidental charges totaling EUR 9 million. Q3 2006 included restructuring and
miscellaneous net charges totaling EUR 32 million.
The increase in net operating capital and number of employees is related to the acquisition
of PLI, Color Kinetics and TIR Systems.
Charges for restructuring, together with purchase accounting and integration-related
charges for Color Kinetics, of around EUR 15 million are expected in Q4 2007.
Lighting will continue to invest in green products to meet the rapidly growing global
demand for energy-efficient lighting solutions.
in millions of euros unless otherwise stated
Q3
Q3
2006
2007
355
146
(22
)
(59
)
1
30
(34
)
(33
)
(7
)
(41
)
(33
)
(51
)
(38
)
799
925
11,991
7,440
Philips and the Institute of Health Sciences (IHS) have announced an agreement to establish
a joint research laboratory in Shanghai, China, in order to apply the many benefits of
molecular medicine to patient care. The ultimate aim is to create new solutions for the early
diagnosis of disease and for monitoring the effectiveness of subsequent treatment.
Philips introduced the 3D WOWzone, a 132-inch multi-screen 3D wall designed to grab
peoples attention with stunning 3D multimedia presentations. By creating a spell-binding 3D
experience, marketing professionals can use this eye catcher to increase brand and product
awareness in larger public spaces at events, exhibitions and theme parks.
Philips has received recognition for its leading designs from Asian design organizations.
Five Philips lifestyle products have received iF China design awards 2008, while Philips
Designs SKIN Probe program for explorative research aimed at identifying emerging trends and
likely societal shifts has received the Red Dot Singapore: Best of the Best award, given to
concepts considered pioneering in their field.
The investment-driven results within the Technologies/ Incubators sector were consistent
with the run-rate of previous quarters.
Consumer Healthcare Solutions EBITA improved compared to Q3 2006. Sales grew 15% on a
comparable basis, led by Lifeline, which also supported the increase in earnings compared to
Q3 2006.
The year-on-year EBITA improvement within the Corporate Investments portfolio was largely
attributable to improved earnings driven by the divestment of low-margin businesses.
Investment in Research and the Incubators is expected to continue at approximately the same
level as in Q3 2007.
in millions of euros unless otherwise stated
Q3
Q3
2006
2007
29
44
(8
)
52
(7
)
73
(48
)
(37
)
(13
)
(26
)
(276
)
(9
)
(337
)
(72
)
(337
)
(72
)
666
728
6,807
7,103
Philips was one of the ten fastest-growing brands in terms of total brand value in the 2007
ranking of the top-100 global brands compiled by leading brand consultant Interbrand. The
total estimated value of the Philips brand increased by 15% to USD 7.7 billion, from
USD 6.7 billion in 2006. Philips was ranked the 42nd most valuable brand in the world,
compared with 48th last year.
Philips launched its EcoVision IV program, through which it aims to double sales of green
products over the next five years to 30% of total revenues in comparison to 15% in 2006. To
achieve this, Philips will, among other things, invest EUR 1 billion in green innovations.
Philips improved its performance in the Dow Jones Sustainability Indexes for the fourth
year in a row and was named global leader in the supersector Personal and Household Goods.
Philips scored 82 points out of 100, compared to 64 points in 2003.
E.com has awarded Philips Annual Report 2006 a first-class, top 3 rating, a further
improvement on last years 7th position in the ranking of the worlds best annual reports.
Philips and Infosys Technologies Ltd entered into a multi-year contract under which Infosys
will provide finance and accounting services to Philips and acquire three shared-service
centers in India, Poland and Thailand. As part of the agreement, approximately 1,400 Philips
professionals will transfer to Infosys.
The EBITA of Group Management & Services improved significantly year-on-year due to the Q3
2006 product liability charge of EUR 265 million as well as lower corporate overhead charges
and lower pension costs in the current quarter.
The increased investment in the brand campaign is wholly related to a shift in the annual
spend pattern.
Investments in the global brand campaign in Q4 are expected to total approximately
EUR 60 million.
Restructuring charges of approximately EUR 10 million related to the simplification of the
regional and country management structures are expected in Q4.
Comparable sales up 3%, driven by DAP and Lighting
EBITA amounted to EUR 1,180 million, or 6.3% of sales
EBIT of EUR 979 million, or 5.3% of sales
Net income of EUR 2,775 million, including the gain on the sale of shares in TSMC
Net debt : group equity ratio was (8) : 108 at the end of Q3
in millions of euros unless otherwise stated
January-September
2006
2007
18,848
18,615
640
1,180
3.4
6.3
518
979
2.7
5.3
136
2,039
(89
)
(403
)
(187
)
136
(10
)
2
368
2,753
4,335
22
4,703
2,775
3.96
2.54
Income from continuing operations increased by EUR 2,385 million compared to the first
nine months of 2006, due to higher EBITA, the sale of shares in TSMC and a significant
improvement in income from LG.Philips LCD.
Sales for the first nine months totaled EUR 18,615 million, 3% higher on a comparable basis
than in the corresponding period of 2006.
EBITA totaled EUR 1,180 million, a marked improvement compared to January-September 2006
driven by increased earnings at DAP and Lighting in particular, and reflecting the impact of a
EUR 265 million product liability charge taken in Q3 2006.
In 2006, income from discontinued operations of EUR 4,335 million included both the
operational results of Semiconductors for the first nine months and the gain from the sale of
a majority 80.1% stake in the division in the third quarter.
3rd quarter
January to September
2006
2007
2006
2007
6,313
6,524
18,848
18,615
(4,580
)
(4,347
)
(13,246
)
(12,344
)
1,733
2,177
5,602
6,271
(1,074
)
(1,183
)
(3,252
)
(3,484
)
(252
)
(233
)
(743
)
(663
)
(395
)
(412
)
(1,204
)
(1,222
)
(35
)
13
36
115
112
25
385
518
979
32
20
136
2,039
57
405
654
3,018
27
(201
)
(89
)
(403
)
84
204
565
2,615
(81
)
128
(187
)
136
(2
)
1
(10
)
2
1
333
368
2,753
4,241
(2
)
4,335
22
4,242
331
4,703
2,775
1,181,769
1,081,120
1,188,121
1,093,496
1,188,412
1,092,424
1,195,497
1,104,852
3.59
0.31
3.96
2.54
3.57
0.30
3.93
2.51
27.5
33.4
29.7
33.7
(17.0
)
(18.1
)
(17.3
)
(18.7
)
(4.0
)
(3.6
)
(3.9
)
(3.6
)
(6.3
)
(6.3
)
(6.4
)
(6.6
)
25
385
518
979
0.4
5.9
2.7
5.3
71
438
640
1,180
1.1
6.7
3.4
6.3
September 30,
December 31,
September 30,
2006
2006
2007
7,272
6,023
5,159
4,732
4,773
4,595
3,435
2,880
3,759
1,257
1,286
1,493
16,696
14,962
15,006
3,126
2,978
2,901
7,505
8,056
4,337
204
214
141
3,860
3,453
3,262
3,157
3,099
3,184
1,611
1,915
2,319
3,216
3,820
4,279
39,375
38,497
35,429
3,311
3,450
3,216
3,415
3,336
3,171
1,304
876
617
581
605
524
870
863
2,421
9,481
9,130
9,949
3,039
3,006
1,211
2,167
2,449
2,548
745
784
790
15,432
15,369
14,498
140
131
125
23,803
22,997
20,806
39,375
38,497
35,429
1,157,592
1,106,893
1,063,387
20.56
20.78
19.56
12.7
10.7
14.1
(16):116
(10):110
(8):108
8,960
8,724
11,469
125,564
121,732
128,119
3rd quarter
January to September
2006
2007
2006
2007
4,242
331
4,703
2,775
(4,241
)
2
(4,335
)
(22
)
206
215
584
632
8
74
(11
)
(59
)
(108
)
(2,050
)
78
(128
)
132
(102
)
2
(1
)
10
(2
)
(280
)
(30
)
(928
)
(1,253
)
428
38
(300
)
23
152
(3
)
105
(177
)
182
58
23
(269
)
78
634
388
(398
)
158
(19
)
(27
)
(68
)
(99
)
(218
)
(151
)
(584
)
(491
)
19
30
62
64
2
43
62
52
(17
)
137
(19
)
3,166
(704
)
(546
)
(1,391
)
(1,266
)
(937
)
(514
)
(1,938
)
1,426
(729
)
(132
)
(504
)
(243
)
(795
)
(807
)
(1,202
)
(1,471
)
(523
)
(639
)
(1,524
)
(939
)
(2,229
)
(2,353
)
(1,827
)
(1,065
)
(4,565
)
(769
)
(158
)
191
(87
)
6,900
6,635
47
6,742
6,826
(40
)
4,915
(1,065
)
2,261
(809
)
(181
)
(37
)
(282
)
(55
)
2,538
6,261
5,293
6,023
7,272
5,159
7,272
5,159
* For a number of reasons, principally the effects of translation differences, certain items in the statements of cash flows do not correspond to the differences between the balance
sheet amounts for the respective items.
(303
)
(126
)
(2,336
)
1,584
January to September 2007
accumulated other comprehensive income (loss)
capital
unrealized gain
changes in
in excess
currency
(loss) on
fair value of
treasury
total
common
of par
retained
translation
available-for-
pensions
cash flow
shares at
stockholders
stock
value
earnings
differences
sale securities
(FAS 158)
hedges
total
cost
equity
228
22,085
(1,874
)
4,281
(808
)
8
1,607
(923
)
22,997
2,775
2,775
(507
)
(486
)
66
(7
)
(934
)
(934
)
11
(2,002
)
6
(1,985
)
(1,985
)
2,775
(496
)
(2,488
)
66
(1
)
(2,919
)
(144
)
(659
)
(659
)
(1,632
)
(1,632
)
(79
)
(65
)
309
165
79
79
228
24,136
(2,370
)
1,793
(742
)
7
(1,312
)
(2,246
)
20,806
3rd quarter
2006
2007
sales
income from operations
sales
income from operations
amount
as % of sales
amount
as % of sales
1,575
166
10.5
1,600
151
9.4
577
94
16.3
718
132
18.4
2,407
27
1.1
2,520
34
1.3
1,370
126
9.2
1,496
178
11.9
355
(51
)
(14.4
)
146
(38
)
(26.0
)
29
(337
)
44
(72
)
6,313
25
0.4
6,524
385
5.9
January-September
2006
2007
sales
income from operations
sales
income from operations
amount
as a %
amount
as a %
of sales
of sales
4,674
425
9.1
4,706
358
7.6
1,605
206
12.8
1,964
316
16.1
7,314
80
1.1
6,876
89
1.3
4,011
450
11.2
4,434
505
11.4
1,152
(96
)
(8.3
)
494
(111
)
(22.5
)
92
(547
)
141
(178
)
18,848
518
2.7
18,615
979
5.3
sales
total assets
January to September
September 30,
2006
2007
2006
2007
4,674
4,706
5,316
6,249
1,605
1,964
1,856
1,953
7,314
6,876
2,881
2,869
4,011
4,434
3,885
5,342
1,152
494
1,557
1,337
92
141
23,880
17,679
18,848
18,615
39,375
35,429
sales
long-lived assets*
January to September
September 30,
2006
2007
2006
2007
5,254
5,035
4,506
5,423
1,370
1,320
339
294
1,311
1,247
183
167
1,063
1,128
119
97
828
841
741
758
787
748
1,136
1,177
8,235
8,296
960
1,866
18,848
18,615
7,984
9,782
*
Includes property, plant and equipment and intangible assets
(excl. settlement costs for discontinued business)
3rd quarter 2007
January-September 2007
Netherlands
other
Netherlands
other
37
24
111
76
130
101
389
303
(204
)
(96
)
(613
)
(290
)
(1
)
21
(3
)
60
(10
)
1
(32
)
11
4
4
(48
)
55
(148
)
164
The net periodic pension costs in the third quarter of 2007 amounted to EUR 32 million, of which EUR 7 million related to defined-benefit (DB) plans (the Netherlands income of
EUR 48 million, other countries cost of EUR 55 million) and EUR 25 million related to defined-contribution (DC) plans (the Netherlands cost of EUR 3 million, other countries
cost of EUR 22 million).
3rd quarter 2007
January-September 2007
Netherlands
other
Netherlands
other
3
5
6
19
1
3
1
2
11
29
in accordance with IFRS
3rd quarter
January to September
2006
2007
2006
2007
6,313
6,524
18,848
18,615
(4,597
)
(4,369
)
(13,300
)
(12,381
)
1,716
2,155
5,548
6,234
(1,061
)
(1,187
)
(3,249
)
(3,493
)
(293
)
(289
)
(859
)
(834
)
(390
)
(401
)
(1,175
)
(1,208
)
(47
)
11
34
91
74
(17
)
312
356
726
32
18
136
2,212
15
330
492
2,938
37
(149
)
(39
)
(313
)
52
181
453
2,625
(82
)
128
(193
)
118
(1
)
(9
)
(31
)
309
251
2,743
3,659
(3
)
3,820
26
3,628
306
4,071
2,769
1,181,769
1,081,120
1,188,121
1,093,496
1,188,469
1,092,701
1,197,021
1,107,499
3.07
0.28
3.43
2.53
3.05
0.28
3.40
2.50
27.2
33.0
29.4
33.4
(16.8
)
(18.2
)
(17.2
)
(18.8
)
(4.6
)
(4.4
)
(4.6
)
(4.5
)
(6.2
)
(6.1
)
(6.2
)
(6.5
)
(17
)
312
356
726
(0.3
)
4.8
1.9
3.9
42
379
512
856
0.7
5.8
2.7
4.6
September 30,
December 31,
September 30,
2006
2006
2007
7,272
6,023
5,159
4,732
4,773
4,595
3,435
2,880
3,759
806
777
833
16,245
14,453
14,346
3,022
2,873
2,783
7,505
8,056
4,337
204
206
136
355
390
451
1,770
1,475
1,275
3,164
3,117
3,198
2,332
2,660
3,012
2,874
3,500
3,972
37,471
36,730
33,510
3,311
3,450
3,216
3,380
3,319
3,159
735
755
610
581
605
524
863
871
2,427
8,870
9,000
9,936
3,041
3,007
1,212
1,915
1,800
1,757
455
283
276
646
595
677
14,927
14,685
13,858
159
135
130
22,385
21,910
19,522
37,471
36,730
33,510
December 31,
September 30,
2006
2007
228
228
17,524
19,628
167
138
4,914
1,774
(923
)
(2,246
)
21,910
19,522
1)
As of December 31, 2006, the item other reserves mainly relates to
unrealized gains on available-for-sale securities, of which EUR 4,670 million
relates to our interest in TSMC. As of September 30, 2007, the unrealized gains
relating to our TSMC shares have been reduced to EUR 1,984 million amongst
others due to a further reduction of our stake in TSMC in 2007.
3rd quarter
January to September
2006
2007
2006
2007
4,242
331
4,703
2,775
82
82
208
157
(69
)
(66
)
(156
)
(130
)
(53
)
(67
)
(164
)
(209
)
(23
)
(9
)
(48
)
(21
)
(19
)
(11
)
181
(2
)
(2
)
(6
)
(20
)
11
53
50
91
(582
)
(1
)
(515
)
4
22
4
(1
)
(48
)
3,628
306
4,071
2,769
*
related cumulative translation differences have been released upon sale
Sept. 30,
Sept. 30,
2006
2007
23,803
20,806
508
518
(2,295
)
(1,962
)
(298
)
(282
)
(44
)
(24
)
242
176
(104
)
(119
)
43
75
42
499
319
(1
)
5
22,385
19,522
January to September
comparable
currency
consolidation
nominal
growth
effects
changes
growth
3.1
(4.7
)
2.3
0.7
17.2
(2.7
)
7.8
22.3
(3.0
)
(2.0
)
(1.0
)
(6.0
)
5.3
(2.9
)
8.1
10.5
32.1
(3.9
)
(85.3
)
(57.1
)
75.9
(3.2
)
(19.0
)
53.7
3.3
(2.9
)
(1.6
)
(1.2
)
Philips
Medical
Consumer
Innovation &
Group Management
Group
Systems
DAP
Electronics
Lighting
Emerging Businesses
& Services
1,180
501
326
92
537
(98
)
(178
)
(156
)
(99
)
(10
)
(3
)
(31
)
(13
)
(10
)
(9
)
(1
)
(35
)
(35
)
979
358
316
89
505
(111
)
(178
)
640
504
211
81
473
(82
)
(547
)
(118
)
(75
)
(5
)
(1
)
(23
)
(14
)
(4
)
(4
)
518
425
206
80
450
(96
)
(547
)
September 30,
September 30,
2006
2007
3,039
1,211
870
2,421
3,909
3,632
(7,272
)
(5,159
)
(3,363
)
(1,527
)
140
125
23,803
20,806
23,943
20,931
20,580
19,404
(16
)
(8
)
116
108
Philips
Medical
Consumer
Innovation &
Group
Group
Systems
DAP
Electronics
Lighting
Emerging
Management &
Businesses
Services
11,469
4,193
1,326
181
4,116
925
728
7,701
1,756
558
2,409
1,051
280
1,647
22
15
43
28
(23
)
(85
)
2,495
224
54
236
140
37
1,804
2,901
54
7
118
2,722
18
18
4,337
4,337
1,349
1,349
5,159
5,159
35,429
6,249
1,953
2,869
5,342
1,337
17,679
8,960
3,330
1,276
192
2,697
799
666
8,052
1,665
505
2,329
993
493
2,067
28
15
72
31
(9
)
(137
)
2,610
245
60
279
180
94
1,782
3,126
48
9
14
180
2,875
173
173
7,505
7,505
1,677
1,677
7,272
7,272
39,375
5,316
1,856
2,881
3,885
1,557
23,880
2) provisions on balance sheet EUR 3,471 million excluding deferred tax liabilities of EUR 861 million
3rd quarter
January to September
2006
2007
2006
2007
634
388
(398
)
158
(937
)
(514
)
(1,938
)
1,426
(303
)
(126
)
(2,336
)
1,584
% increase always in relation to the corresponding period of previous year
2006
2007
1st quarter
2nd quarter
3rd quarter
4th quarter
1st quarter
2nd quarter
3rd quarter
4th quarter
6,155
6,380
6,313
8,128
5,991
6,100
6,524
12
9
1
(1
)
(3
)
(4
)
3
279
290
71
742
353
389
438
4.5
4.5
1.1
9.1
5.9
6.4
6.7
246
247
25
665
292
302
385
4.0
3.9
0.4
8.2
4.9
5.0
5.9
160
301
4,242
680
875
1,569
331
0.13
0.25
3.59
0.60
0.80
1.43
0.31
January-
January-
January-
January-
January-
January-
January-
January-
March
June
September
December
March
June
September
December
6,155
12,535
18,848
26,976
5,991
12,091
18,615
12
11
7
5
(3
)
(4
)
(1
)
279
569
640
1,382
353
742
1,180
4.5
4.5
3.4
5.1
5.9
6.1
6.3
246
493
518
1,183
292
594
979
4.0
3.9
2.7
4.4
4.9
4.9
5.3
160
461
4,703
5,383
875
2,444
2,775
0.13
0.39
3.96
4.58
0.80
2.22
2.54
3.8
4.6
2.7
4.4
17.3
24.0
17.8
period ended 2006
period ended 2007
11.9
11.9
12.7
10.7
11.6
12.7
14.1
6:94
9:91
(16):116
(10):110
(10):110
(12):112
(8):108
161
158
126
122
124
126
128
37
37
Printed in the Netherlands
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Philips launches fourth EcoVision program, further increasing energy efficiency of
products and operations
Philips CEO Gerard Kleisterlee: every one of us should contribute to saving our
planet
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The rapidly growing demand for green lighting solutions. Today, 75% of all lighting
currently in use are legacy systems, and growing awareness about existing energy-efficient
lighting solutions is expected to lead to significant potential for replacement sales.
Increasing demand for advanced lighting solutions in emerging markets such as China.
Philips expects to continue to tap into the potential of this market, notably in second
and third tier cities, by further speeding up the expansion of its distribution network
going forward, after having already secured a leading position in Chinas largest cities,
with sales concentrating in the largest cities.
Continued build-up of Philips presence in selected lighting markets and expansion of
Philips distribution channels for solid state lighting solutions to unlock the potential
of this market.
Ongoing innovation within Philips Lighting will continue to lead to breakthrough
products such as Philips Xenon automotive lighting. According to independent research,
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