PHILIPS REPORTS FOURTH-QUARTER SALES OF EUR 7.3 BILLION AND EBITA OF 662 MILLION

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• Strongly improved performance across all sectors


• Comparable sales on par with Q4 2008; sales in emerging markets up 8%


• EBITA improves to 9.1% of sales; adjusted EBITA of 12.3% at record level


• Operating cash flow of EUR 1.4 billion, once adjusted for legal settlement in North America


•  Net income of EUR 260 million, driven by strong improvement in operational earnings and significantly lower charges


• Proposed dividend maintained at EUR 0.70 per share

 
Gerard Kleisterlee, President and CEO of Royal Philips Electronics:
 
“Thanks to the increased resilience of our company, we ended the year with a strong fourth quarter. Comparable sales came in at last year’s level, delivering a record adjusted profitability of 12.3%. This reflects our strengthened fundamentals and the successful manner in which we have been managing through the downturn.
 
I am particularly pleased as our improved performance is visible across all three operating sectors:
 
• Despite continuing weakness in the US market, our Healthcare sector managed to deliver another bumper quarter with sales broadly on par with the strong performance of last year and with significantly higher earnings;
 
• Our Consumer Lifestyle sector managed to show sales growth, with Television turning a profit and virtually all other businesses posting significantly higher earnings despite the absence of a material recovery in consumer confidence;
 
• The Lighting sector continued on its road to recovery with strongly improved earnings and rebounding sales even though the commercial construction market continued to be in decline; and for the first time, LED-based products exceeded 10% of total sector sales.
 
Philips today is a simpler company that is both agile and more resilient to market fluctuations. We faced the economic recession in 2009 head-on, but without sacrificing our longer-term ambitions: we sustained our investments in marketing and innovation, while continuing with responsible acquisitions to fill gaps in our portfolio, such as with Saeco, establishing ourselves as a leader in the high-growth, high-margin espresso machine market.
 
While today’s economic circumstances do not allow for a reliable prediction of future developments, I am confident that based on our Q4 performance, the strength of our portfolio of globally leading businesses and our engaged workforce, 2010 will be a year of further progress towards becoming the leading company in Health & Well-being. And as a sign of our confidence in our future, we propose to maintain, despite the high pay-out ratio, our dividend at EUR 0.70 a share, on par with last year; with an eye on maintaining our financial prudence, we will offer our shareholders a choice of cash or stock.”
 
A video with our business highlights of 2009 can be downloaded this link: http://www.newscenter.philips.com/main/resources/corporate/quarterly_results/Business_Highlights_Hi_Res_16x9_1PCB.wmv
More information about the results can be found on: www.newscenter.philips.com
 
Please note that on February 22, Philips will publish its integrated Financial Report and Sustainability Report 2009. For environmental reasons, publication will be online only, at www.philips.com/annualreport2009.

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