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Philips_ Business Presentation 2012
- 1. Building the leadingcompany in health and well-being An introduction to Philips
- 2. Philips: a strongdiversified industrial group Who we are Our businesses Operating in >100 countries Founded in 1891 Headquartered in Amsterdam, The Netherlands 26% Sales of €22.6 billion in 20111 -33% in Growth Markets 40% -65% in B2B 2011 -EBITA 7.4% of sales Globally recognized brand (world top 50) 34% Our brand value doubled to $8.7bn since 20042 122,000 employees Healthcare Growth Markets Sales and service outlets in over 100 countries Lighting Western Europe Consumer Lifestyle North America €1.6 billion investment in R&D, 7% of sales Other 2 Note - All figures exclude discontinued operations 1 2 Source: Interbrand
- 4. Operating in theright markets Addressing key societal issues Demand for Need for energy Desire for increased affordable healthcare efficient solutions personal well-being Mature 67% Group Sales: 67% Mature Geographies 33% Growth Geographies
- 5. Healthcare Business Highlights: • Philips opened its imaging systems manufacturing facilities in Pune, India and Suzhou, China – enhancing our innovation capabilities in growth geographies • Philips introduced the Amara full-face mask and strengthened its position in the obstructive sleep apnea market 2011 Imaging Systems Customer Service Patient Care and Clinical Informatics Home Healthcare Solutions
- 6. Healthcare Philips Healthcare Businesses1 Geographies1 Imaging Home Patient Care Customer North Growth All Other Systems Healthcare and Clinical Services America Geographies Geographies2 Solutions Informatics 38% 14% 23% 25% 45% 22% 33% €8.9 37,000+ 8% 450+ Billion sales People employed of sales invested in R&D Products & services in 2011 worldwide in 100 countries in 2011 offered in over 100 countries 1 Last twelve months June 2012 2 All other geographies include Western Europe, Australia, New-Zealand, South Korea, Japan and Israel
- 7. Consumer Lifestyle Business Highlights: • Philips AVENT, the most recommended brand by mothers worldwide, launched its innovative new Natural infant-feeding breast pump and bottle range in the UK and US • Philips Airfryer, an innovative kitchen appliance that creates meals with up to 80% less fat has rapidly expanded into more than 60 countries worldwide Domestic Appliances 2011 Personal Care Health & Wellness Lifestyle Entertainment Other incl. Licenses
- 8. Consumer Lifestyle Philips Consumer Lifestyle Businesses1, 2 Geographies1 Personal Health & Domestic Lifestyle Mature Growth Care Wellness Appliances Entertainmen Geographies Geographies t 24% 14% 31% 29% 56% 44% €5.6 19,000+ 5% 27% Billion sales People employed of sales invested of green product in 2011 worldwide in R&D in 2011 sales in 2011 Last twelve months June 2012 1 Other category (2%) is omitted from this overview 2 Note - All figures exclude discontinued operations
- 9. Lighting Business Highlights: • The Empire State Building in New York City chose Philips to create a state-of-the-art, dynamic lighting system that changes the building’s mast colors in real-time • The Belgian city of Mechelen selected Philips to renovate its entire center with Philips LED LunaVision, a custom-made and energy-efficient design luminaire Lamps/Lighting Systems & Controls 2011 Professional Luminaires Consumer Luminaires Automotive Packaged LEDs
- 10. Lighting Philips Lighting Customer Segments1 Homes Offices Outdoor Industry Retail Hospitality Entertainment Healthcare Automotive 25% 15% 15% 8% 15% 4% 4% 3% 11% €7.6 52,000+ 5% 80,000+ Billion sales People employed of sales invested Products & services in 2011 worldwide in 60 countries in R&D in 2011 offered in 2011 1 Indicative split based on last twelve months June 2012
- 11. Sustainability as adriver for growth Accelerating sustainable business • Green Products represented 39% of total sales in 2011, up from 30% in 2009 • By 2015 Philips aims to invest EUR 2 billion in Green Innovation EcoVision targets for 2010 – 2015 • Bringing care to more than 500 million people • Improving the energy efficiency of Philips overall portfolio by 50% • Doubling the global collection and recycling amounts of our products, as well as double the amount of recycled materials in our products 11
- 12. Creating meaningful innovations Improvinglives in new ways Gain deep insights into people’s needs and aspirations by following a process requiring end-user input at every stage Transform insights into innovations by combining the diverse perspectives of different disciplines “Learn fast, fail cheap” by applying a rigorous process to assess value potential early Lead in open innovation by working closely together with partners in a spirit of open innovation 12
- 13. Customer intimacy andspeed Essentials for successful innovation • Understanding local relevance and customer insights • Increasing entrepreneurial power in the markets • Innovating in regional hubs in both mature and growth geographies • Partnering with (local) customers, companies, universities, governments… 13
- 14. Unique leadership positionsin many markets Healthcare Global Global Global Global Regional Cardiovascular Patient Cardiac Sleep Therapy Ultrasound X-ray Monitoring resuscitation Systems Consumer Lifestyle Global Global Global Regional Regional Male electric Garment Care Rechargeable Kitchen Electric Hair shaving Toothbrushes Appliances Care Lighting Global Global Global Global Global Lamps LED Lamps Automotive Professional High Power LEDs Lighting Luminaires
- 15. The world’s 41stmost valuable brand in 2011 Philips increased brand value by 29% in the last five years Value of the Philips brand1 A strong brand drives sales USD billions A significant amount of sales is attributable to the brand alone: • Healthcare 42% • Consumer Lifestyle 42% • Lighting 16% Brand ranking improves in 2011 Moving up one rank in top 100 global brands list, Philips has reached the highest position ever. Brand value doubled since 2004 Strong internal brand2 84% of employees are “proud to work for Philips” 1 Source: Interbrand Brand Valuation 2011 2 Employee Engagement Survey 2011
- 16. Philips people Unlocking fullpotential: driving market-oriented entrepreneurship Employee Engagement Index • In the times of change, remaining on High performance 77 76 benchmark par with high-performing companies 72 71 • Customer centricity and strive for excellence strongly embedded in performance culture 66 63 • Making employees accountable for 62 results 2005 2006 2007 2008 2009 2010 2011 Philips at high performance norm The 2011 ‘employee engagement index’ polling over 90,000 of the Philips workforce showed we are amongst the world’s top-ranking companies
- 17. Our global reach Focused portfolio through strategic acquisitions* Tomcat (2008) Sectra (2011) Interactive Medical Developments (2008) Genlyte (2008) Dameca (2011) MedSage (2011) Traxtal (2009) Street Controls (2010) Raytel (2007) Povos(2011) Burton (2010) Saeco (2009) Somnolyzer (2010) Indal (2011) CDP Medical Ltd. (2010) Shenzhen Goldway (2008) Teletrol (2009) Lighting Technologies (2007) Optimum (2011) Discus (2010) NSW (2010) Ilti Luce (2009) Luceplan InnerCool Therapies (2009) Medel (2008) Apex (2010) Visicu (2008) (2010) Alpha X-Ray (2008) Respironics (2008) Meditronics (2008) AllPartsMedical (2011) Dynalite (2009) Wheb Sistemas Preethi (2011) (2010) Emergin (2007) VMI-Sistemas Medico (2007) Selecon (2009) Tecso Informatica (2010) Dixtal Biomedica e Technologia (2008) Healthcare Lighting Consumer Lifestyle Growth geographies * Strategic acquisitions since mid-September 2007 until May 2012
- 18. Our portfolio nowconsists of ~65% B2B businesses Healthcare Healthcare Healthcare Lighting Lighting Lighting Ju Consumer Lifestyle Consumer Lifestyle Consumer Lifestyle excl. TV Semiconductor 16% 22% 25% 30% 41% 2 43% Jun’12 2005 2008 last twelve months 17% 45% 34% 27% 1 Healthcare Consumer Lifestyle Lighting Semiconductors 1 Consumer Lifestyle in 2005 includes the former DAP and Consumer Electronics divisions 2 2005 figures are based on US GAAP
- 19. Building on ourstrong fundamentals • Technology, know-how, strong IP positions (53,000 registered patents) Innovation capabilities • World’s 41st most valuable brand 2011: USD 8.7 billion Philips brand • Loyal customer base in 100+ countries • 1/3 of group revenues from growth geographies Global footprint • Employee Engagement Index1 exceeds high performance benchmark value of 70% People • Culturally diverse top-200 leadership team • Global market leader in Lighting; Top 3 Healthcare player; Leading Consumer Lifestyle brands (e.g. Philips Sonicare, Avent, Saeco) Domain leadership • A3 rating by Moody’s and A- by Standard & Poor’s Solid balance sheet 1 Based on annual Philips’ Employee Engagement Survey
- 20. Looking ahead Clear visionto make the world healthier and more sustainable through innovation Building upon a focused portfolio, with strong potential in growth and mature markets Driving investments and results in innovation and markets to deliver improved profitable growth Delivered by 122,000 engaged employees
- 21.
Editor's Notes
- #12 2011 Sustainability Report key facts: Green Product 39% of total sales – well on track to reach the target of 50% in 2015 In 2011 investment of EUR 479 million in Green Innovation – dedicated to addressing global challenges related to care, materials, and energy efficiency (as detailed in EcoVision program) In 2011 we already touched over 465 million lives, mainly through our Healthcare solutions Recent accomplishments Philips regained its sector and super sector leadership in the Dow Jones Sustainability Index Philips reaches a joint first place in the Global Carbon Disclosure Leadership Index Top 10 position in Newsweek Green ranking 2011 Top 50 position in Best Global Green Brands 2012 Philips received the prestigious Giga Ton Award (known as the Green Oscar) for its long-standing business leadership to reduce carbon usage Philips received an overall global rating of 10.0 (“best in class”), the highest being assigned from GMI, an independent global company in Corporate Governance and ESG NOTES: From 2012 onwards, EcoVision4 and EcoVision5 are merged into a single program labeled as EcoVision Green Product sales figures of 2011 exclude discontinued operations (e.g. TV business) For more details on Philips’ Sustainability performance, please refer to www.philips.com/annualreport2011
- #13 While our product portfolio has changed profoundly, innovation remains a cornerstone of our business strategy. We improve people’s lives at many levels: We make cardiovascular surgery quicker, safer and less costly. Our smart lighting in schools helps students to achieve better results and lowers the schools’ electricity bill. And our innovative kitchen appliances help people prepare healthier and tastier food. Investing in innovation will help you to become more productive and more future proof. In June 2011 we announced that we are stepping up targeted investments in market penetration and innovation. In the challenging economic times, by investing in breakthrough innovation companies and governments could even invest themselves out of the crisis. For example: Investments in Home Healthcare and sophisticated Patient Monitoring can improve the quality of the full care cycle while at the same time reducing its overall costs significantly. Investments in technology have proven to bring down the costs of the overall healthcare system. And the same holds true for lighting. We recently upgraded highways in both Malaysia and the Netherlands with new energy efficient street lighting and built a system that actually is paid out of its savings. And upgrading and refurbishing existing buildings with new, energy efficient technologies will result in even more attractive office spaces in the future. Savings can reach tens of billions of Euros a year when switching to innovative, energy efficient lighting of our streets and buildings. [depicted proofpoint: Lumiblade Living Shapes, OLED installation – demonstrated at Innovation Experience, Eindhoven, September 2011’]
- #14 Innovation starts with a good idea, which comes from true understanding of your customers and markets. It means that we need to offer the right products and technologies people need. And bring it to market fast and effectively. If we get that whole chain right, a good idea will become a successful innovation, grow the business and will become relevant for our customers and the society in general. Customer intimacy is an essential part of innovation. That means you need to know what your customers need. To stimulate local entrepreneurship, we are going to devote much more attention to the specific needs of local markets. That can only be done by giving local people the scope to respond to those local needs and influence worldwide product policy. In Brazil they prepare coffee in a different way than in the Netherlands. And hospitals in China have different needs than those in the United States. One size does NOT fit all. Our Healthcare business in China, for example, increased 25% in sales per year, as a result from more local operational freedom. For example: We are now building China as our second global home. We innovate in and for China. We have developed the “Active Water” solution to tackle the problem of residual pesticides on fruit and vegetables, which is a serious problem in China and can cause health issues. We have also developed a solution for indoor air pollution in China, caused by chemical substances emanating from inner walls. Of course, our focus in emerging markets is not just on China. We are strong in Brazil and Russia and strong in India, where we are stepping up our investments to build up a stronger presence in the kitchens of the Indian households. [depicted proofpoint: The new mixer grinder co-developed by Philips and Preethi, which was launched in record time for the local Indian market in mid-October 2011]
- #15 HEALTHCARE Cardiovascular x-ray Global #1 position Seen as most exciting and interesting Brand by Cardiologists Patient monitoring Global #1 position Leader in Cardiology PACS and Critical Care Informatics in the United States and Germany Cardiac resuscitation Global #1 position Advanced Algorithms for enhanced gender-specific criteria to help recognize and interpret cardiac symptoms in women Sleep Therapy Global #1 position in sleep therapy systems for OSA 1 Full range of solutions with the quietest platform Ultrasound #1 position in North America NPS leader in Ultrasound globally Home monitoring [not pictured on the slide] #1 position in North America Leading innovation with AutoAlert automatic fall detection CONSUMER LIFESTYLE Male electric shaving Global #1 position Leading in most major markets, including #1 in the USA and China Garment care Global #1 ironing brand #1 position in China, India and Russia Rechargeable toothbrushes Global #2 position #1 position in the USA, Korea and Japan Kitchen appliances #1 positions in India, Brazil and Russia We strive to achieve global leadership through local relevance Electric haircare #1 position China and increasing our lead over the next best competitor #2 in Russia, closing gap with current market leader Filter coffee machines [not pictured on the slide] #1 position in Europe, and leading position in Brazil Strong edge over the next competitor in most European markets LIGHTING Lamps Global #1 position Widest portfolio of lamps NPS ‘Best partner’ used & recommended by customers LED lamps Global #1 position Won the L-Prize challenge (60W LED replacement); only company to meet the challenge Automotive lighting Global #1 position 1 out of 3 cars globally equipped with Philips bulbs NPS ‘Best partner’ used & recommended by customers Professional luminaires Global #1 position Largest LED luminaires company in the world High power LEDs Global #2 position #1 in flash and #2 in general Illumination NPS ‘Best partner’ used & recommended by customers Lighting systems & controls [not pictured on the slide] Global #1 position NPS ‘Best partner’ used & recommended by customers in Lamp Drivers
- #17 This year's results show an overall employee engagement of 76% (-1% vs. 2010). Our People Leadership Index - which reflects your perception of your line management - increased to 78%, up two points compared to last year. These results tell us that Philips employees are committed to our company which is a tremendous and crucial asset in our ongoing journey to Accelerate Philips to higher growth and performance. With this result we also remain on par with high-performing companies in the times of change. New in this year's survey, we asked our employees’ feedback on our performance culture.* We have learned that our employees experience our 'strive for excellence' and 'customer centricity to win in the market' as strong points (respectively 90% and 84% favorable scores). On the other hand, employees feel that can improve the speed of decision making and making people accountable for their results. In the coming year(s), operational excellence and customer centricity remain key areas we are addressing and one of the cornerstones for how our company will operate in the future. * INTERNAL NOTE: EES scoring system entails 4 items as of year 2011. Data from previous years has been recalculated [in the graph] to make a fair comparison of progress.
- #18 ACQUISITIONS IN 2011 HEALTHCARE Jun-2011 Sectra (Imaging Systems: Expand Women’s Healthcare portfolio with a unique digital mammography solution in terms of radiation dose) Jun-2011 AllParts Medical ( Customer Services: Expand capabilities in imaging equipment services, strengthening Philips’ Multi-Vendor Services business) Mar-2011 Dameca ( Patient Care and Clinical Informatics: Expand portfolio with integrated, advanced anesthesia care solutions) Jan-2011 medSage (Home Healthcare: Strengthen portfolio with by becoming a leading provider of patient interaction and management applications) CONSUMER LIFESTYLE Jul-2011 Povos (Domestic Appliances: Expanding product portfolio in China and continue to build business creation capabilities in growth geographies) Jan-2011 Preethi ( Domestic Appliances: Becoming a leading kitchen appliances company in India) LIGHTING Jan-2011 Optimum (Professional Luminaires: Expand portfolio with customized energy-efficient lighting solutions) Jun-2011 Indal (Professional Luminaires: Strengthen leading position in professional lighting within Europe)