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
April 24, 2017
KONINKLIJKE
PHILIPS N.V.
(Exact name of registrant as specified in its charter)
Royal Philips
(Translation of registrant’s name into English)
The Netherlands
(Jurisdiction of incorporation or organization)
Breitner Center, Amstelplein 2, 1096 BC Amsterdam, The Netherlands
(Address of principal executive offices)
Indicate by check mark whether
the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form
20-F ☒ Form 40-F ☐
Indicate by check mark if the
registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(1): ☐
Indicate by check mark if the registrant
is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(7): ☐
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 ☒
Name and address of person authorized to receive notices
and communications from the Securities and Exchange Commission:
M.J. van Ginneken
Koninklijke
Philips N.V.
Amstelplein 2
1096 BC Amsterdam – The Netherlands
This report comprises a copy of the following press release:
“Philips’ First Quarter Results 2017”, dated April 24, 2017.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf, by the
undersigned, thereunto duly authorized at Amsterdam, on the 24
th
of April, 2017.
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KONINKLIJKE PHILIPS N.V.
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/s/
M.J. van Ginneken
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(General Secretary)
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Philips reports sales of EUR 5.7 billion in Q1, with the HealthTech portfolio growing at 3% on a comparable basis;
net income improved to EUR 259 million, driven by an 18% increase in Adjusted EBITA to EUR 442 million
Amsterdam, April 24, 2017
First-quarter highlights
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•
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Sales increased to EUR 5.7 billion, with comparable sales growth of 3% in the HealthTech portfolio and 2% for the Group
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•
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Net income amounted to EUR 259 million, compared to EUR 37 million in Q1 2016
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•
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Income from operations (EBIT) amounted to EUR 348 million, compared to EUR 199 million in Q1 2016
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•
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EBITA improved to EUR 437 million, or 7.6% of sales, compared to EUR 290 million, or 5.3% of sales, in Q1 2016
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•
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Adjusted EBITA improved to EUR 442 million, or 7.7% of sales, compared to EUR 374 million, or 6.8% of sales, in Q1 2016
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•
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Operating cash flow totaled EUR 343 million, compared to EUR 10 million in Q1 2016; free cash flow of EUR 295 million, compared to an outflow of EUR 177 million in Q1 2016
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Frans van Houten, CEO:
“We had a solid start to
the year, with 2% Group comparable sales growth and a
90-basis-point
improvement in the Adjusted EBITA margin. Despite continued volatility in the markets in which we operate, our HealthTech portfolio grew 3%
and achieved further operational improvements, resulting in an
80-basis-point
increase in the Adjusted EBITA margin.
Our Diagnosis & Treatment businesses and our Personal Health businesses delivered strong margin improvements, while our Connected Care &
Health Informatics businesses reflected the unevenness of sales from large hospital informatics deals.
Comparable order intake growth was 2%,
driven by
mid-single-digit
growth in the Diagnosis & Treatment businesses.
During what was a very
active quarter, in line with our strategic plan we decreased our shareholding in Philips Lighting to 55%. We continued to strengthen our position as a leader in health technology by launching several breakthrough innovations, forging strategic
partnerships and winning various integrated solutions deals. The recent STOXX Europe 600 Index reclassification of Philips’ shares to ‘Health Care’ from ‘Industrial Goods & Services’ acknowledges our transformation
into a health technology company.
As we execute our strategy, we will further improve our underlying performance and target to deliver
4-6%
comparable sales growth and an improvement in Adjusted EBITA margin of around 100 basis points per year. Our outlook for 2017 remains unchanged as we expect further operational improvements and comparable sales
growth in the year to be
back-end
loaded.”
HealthTech
In the first quarter, the Personal Health businesses increased sales by 5% on a comparable basis, with growth across the portfolio as Health &
Wellness and Sleep & Respiratory Care recorded high-single-digit growth; the Adjusted EBITA margin improved by 150 basis points. The Diagnosis & Treatment businesses posted comparable sales growth of 2%, and the Adjusted EBITA
margin improved by 190 basis points, driven by Diagnostic Imaging. In the Connected Care & Health Informatics businesses, comparable sales increased 1%, while the Adjusted EBITA margin was 30 basis points lower than in the same period last
year, mainly reflecting lower growth and higher channel investments.
The continued focus and investments in R&D led to a number of breakthrough innovations and strategic
collaborations:
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Philips reinforced its leadership in image-guided therapy solutions with the global launch of Philips Azurion, the next-generation image-guided therapy platform that enables clinicians to perform a wide range of routine
and complex procedures, helping them to optimize interventional lab performance and provide superior care.
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•
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Philips Volcano continued its strong performance as the business reached an important milestone with the results of two large clinical trials demonstrating the benefits of Philips’ Instant Wave-Free Ratio (iFR)
technology compared to Fractional Flow Reserve (FFR), the current standard, removing a critical barrier for the use and adoption of iFR to decide, guide and confirm appropriate therapies.
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•
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B. Braun and Philips entered into a strategic alliance to innovate and accelerate growth in ultrasound-guided regional anesthesia and vascular access. The alliance launched Xperius, a new
co-branded
mobile ultrasound system specifically designed as the platform to support current and future integrated solutions in this fast-growing market.
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•
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Building on its strategy to deliver relevant solutions and business models, Philips signed an agreement to acquire Australian Pharmacy Sleep Services (APSS), a pioneer in pharmacy sleep testing. APSS will complement
Philips’ sleep and respiratory care portfolio and will help to accelerate the business’s home sleep testing offering through the pharmacy channel in Australia.
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•
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At the International Dental Show in Germany, the world’s leading trade fair for the dental sector, Philips revealed the Philips Sonicare DiamondClean Smart toothbrush and Philips Sonicare Breath care system with
breath analyzer, an
all-in-one
connected oral care platform. Philips also presented the results of a new clinical study demonstrating the effectiveness of Philips
Sonicare power toothbrushes and Philips AirFloss Ultra.
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Demonstrating the success of telehealth technologies, Emory Healthcare (US) achieved savings of USD 4.6 million over a period of 15 months by using Philips’ eICU platform. Similarly, with the help of
Philips’ Intensive Ambulatory Care program, Banner Health (US) reduced hospitalizations for chronically ill patients with multiple conditions by nearly 50%, reducing overall cost of care by more than one third.
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Expanding its health informatics portfolio, Philips launched its IntelliSpace Enterprise Edition, an industry-first managed service solution for hospital-wide clinical informatics and data management. The
high-performance, secure and scalable health informatics platform enables health systems to manage the growth and cost of their clinical enterprise with a
pay-per-use
model.
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•
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Further strengthening its portfolio of imaging solutions, Philips received FDA 510(k) clearance for its ElastQ ultrasound imaging technology for
non-invasive
assessment of liver
conditions. Philips also launched Access CT, a new CT system designed for healthcare organizations seeking to establish or enhance CT imaging capabilities at affordable cost.
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Cost savings
In the first quarter, procurement savings
amounted to EUR 41 million. Other productivity programs resulted in savings of EUR 54 million.
Philips Lighting
In the first quarter, the Adjusted EBITA margin improved by 130 basis points to 8.5% of sales, while comparable sales were flat, and free cash flow amounted to
EUR 2 million. Full details about the financial performance of Philips Lighting in the first quarter were published on April 21, 2017. The related report can be accessed here.
On February 8, 2017, Philips sold 26 million shares in Philips Lighting, of which 3.5 million shares were acquired by Philips Lighting (and will be
cancelled). Philips’ shareholding in Philips Lighting decreased to 55.18% of Philips Lighting’s issued and outstanding share capital, down from 71.225% prior to the transaction. Philips continues to consolidate the financial results of
Philips Lighting and maintains its aim of fully selling down over the coming years.
Philips Group other
As previously reported, Philips continues to be in discussions on a civil matter with the US Department of Justice representing the FDA, arising from past
inspections by the FDA in and prior to 2015, focusing primarily on the external defibrillator business in the US.
Financing
On January 20, 2017, Philips completed the redemption of the outstanding 5.750% Notes due 2018 with an aggregate principal amount of USD 1.250 billion.
The transaction resulted in a cash outflow in the first quarter of 2017 of EUR 1.247 billion excluding accrued interest. The transaction contributed to Philips’ plan to reduce its annual interest expenses by approximately EUR
100 million.
Conference call and audio webcast
Frans van Houten, CEO, and Abhijit Bhattacharya, CFO, will host a conference call for investors and analysts at 10:00 am CET today to discuss the results. A
live audio webcast of the conference call will be available on the Philips Investor Relations website and can be accessed here.
Philips Group performance
Key data
in millions of EUR unless otherwise stated
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Q1
2016
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Q1
2017
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Sales
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5,517
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|
|
|
5,724
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|
|
Nominal sales growth
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3
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%
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|
4
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%
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|
Comparable sales growth
*
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|
|
3
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%
|
|
|
2
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%
|
|
Income from operations (EBIT)
|
|
|
199
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|
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|
348
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|
as a % of sales
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3.6
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%
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|
6.1
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%
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|
EBITA
*
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290
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|
437
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as a % of sales
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5.3
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%
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7.6
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%
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Adjusted EBITA
*
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374
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442
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as a % of sales
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6.8
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%
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7.7
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%
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Financial expenses, net
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(114
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)
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(61
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)
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Investments in associates
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3
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(1
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)
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Income taxes
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(75
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)
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(91
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)
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Income from continuing operations
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13
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195
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Discontinued operations
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24
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64
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Net income
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37
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259
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Net income attributable to shareholders per common share (in EUR) - diluted
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0.03
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0.25
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Sales per geographic cluster
in millions of EUR unless otherwise stated
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Q1
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Q1
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% change
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2016
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2017
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nominal
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comparable*
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Western Europe
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1,334
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|
1,372
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3
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%
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5
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%
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NorthAmerica
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1,937
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|
1,958
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1
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%
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(2
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)%
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|
Other mature geographies
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|
459
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|
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|
474
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|
3
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%
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|
(3
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)%
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|
|
|
|
|
|
|
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|
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|
Total mature geographies
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|
3,730
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|
|
|
3,804
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2
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%
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|
0
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%
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|
Growth geographies
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|
1,787
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|
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|
1,920
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|
7
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%
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|
6
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%
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|
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|
Philips Group
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|
5,517
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|
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|
5,724
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|
4
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%
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2
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%
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•
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|
Sales increased by 4% on a nominal basis. Excluding currency impact and consolidation changes, the 2% comparable sales growth was driven by 3% growth in the HealthTech portfolio.
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•
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Comparable order intake
*
showed 2% growth, driven by mid- single-digit growth in the Diagnosis & Treatment businesses and a
low-single-digit
decline in the Connected Care & Health Informatics businesses.
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•
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EBITA improved by EUR 147 million and the margin improved by 230 basis points compared to Q1 2016.
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•
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|
Adjusted EBITA improved by EUR 68 million and the margin improved by 90 basis points compared to Q1 2016. The improvement was mainly attributable to higher volume, procurement savings and overhead cost reductions.
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•
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Restructuring and acquisition-related charges amounted to EUR 34 million, compared to EUR 32 million in Q1 2016. EBITA also included EUR 12 million of charges related to the separation of the Lighting
business, EUR 17 million of charges related to quality and regulatory actions, and a EUR 59 million net gain from the sale of real estate assets. EBITA in Q1 2016 included EUR 52 million of charges related to the separation of the
Lighting business.
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•
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Net financial expenses decreased by EUR 53 million
year-on-year,
mainly due to lower net interest expenses and the fair market value adjustment in Q1 2016 of Philips’
stake in Corindus Vascular Robotics.
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•
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Income tax expense increased by EUR 16 million mainly due to higher income; Q1 2016 included tax charges resulting from activities related to the separation of the Lighting business.
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•
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Net income from discontinued operations increased by EUR 40 million
year-on-year,
mainly due to improved operational performance in
the combined Lumileds and Automotive businesses.
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•
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Net income increased by EUR 222 million compared to Q1 2016, driven by improved income from operations and lower financial charges.
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•
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Sales in mature geographies increased by 2% on a nominal basis. Excluding currency impact and consolidation changes, comparable sales were flat
year-on-year
and reflected mid- single-digit growth in Western Europe, offset by a
low-single-
digit decline in North America
(due to Lighting) and other mature geographies. In growth geographies, sales increased by 7% on a nominal basis. Excluding currency impact and consolidation changes, the 6% growth on a comparable basis was largely driven by high-single-digit growth
in Latin America and
mid-single-digit
growth in China and India.
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•
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Comparable order intake
*
in mature geographies showed low- single-digit growth, reflecting double-digit growth in Western Europe and
low-single-digit
growth in North America and other mature geographies. In growth geographies, comparable order intake
*
was flat
year-on-year,
reflecting double-digit growth in China, offset by a double-digit decline in Latin America.
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|
|
|
Quarterly report Q1 2017
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3
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|
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|
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|
Cash balance
in millions of EUR
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|
|
|
|
|
|
|
|
|
|
Q1
2016
|
|
|
Q1
2017
|
|
|
|
|
|
|
Beginning cash balance
|
|
|
1,766
|
|
|
|
2,334
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|
|
Free cash flow
*
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|
(177
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)
|
|
|
295
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|
|
Net cash flows from operating activities
|
|
|
10
|
|
|
|
343
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|
|
Net capital expenditures
|
|
|
(187
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)
|
|
|
(48
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)
|
|
Other cash flows from investing activities
|
|
|
(97
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)
|
|
|
(104
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)
|
|
Treasury shares transactions
|
|
|
(157
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)
|
|
|
(57
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)
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Changes in debt
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|
75
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|
|
|
(268
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)
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|
Sale of shares of Philips Lighting, net
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|
|
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523
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Other cash flow items
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|
(40
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)
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|
|
(28
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)
|
|
Net cash flows from discontinued operations
|
|
|
15
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|
|
|
36
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|
|
|
|
|
|
|
|
|
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|
Ending cash balance
|
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|
1,385
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|
|
|
2,731
|
|
|
*
|
Non-GAAP
financial measure. Refer to Reconciliation of
non-GAAP
information, of this document.
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|
•
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|
Net cash flows from operating activities increased by EUR 333 million, mainly due to improvements in income from operations and the outflow of EUR 172 million in Q1 2016 related to pension liability
de-risking.
This was partly offset by a EUR 64 million premium payment related to the bond redemption completed on January 20, 2017.
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•
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|
Net capital expenditures decreased by EUR 139 million, mainly due to proceeds from the sale of real estate assets.
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|
•
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|
The change in debt reflects a new borrowing of EUR 949 million and a EUR 1,184 million cash outflow related to the bond redemption completed on January 20, 2017.
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•
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|
The cash balance includes EUR 523 million net cash proceeds from the sale of a stake in Philips Lighting N.V.
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4
|
|
Quarterly report Q1 2017
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Performance per segment
Personal Health businesses
Key data
in millions of EUR unless otherwise stated
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|
|
|
|
|
|
|
|
|
|
|
|
Q1
2016
|
|
|
Q1
2017
|
|
|
|
|
|
|
Sales
|
|
|
1,610
|
|
|
|
1,719
|
|
|
Sales growth
|
|
|
|
|
|
|
|
|
|
Nominal sales growth
|
|
|
6
|
%
|
|
|
7
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%
|
|
Comparable sales growth
*
|
|
|
6
|
%
|
|
|
5
|
%
|
|
Income from operations (EBIT)
|
|
|
190
|
|
|
|
231
|
|
|
as a % of sales
|
|
|
11.8
|
%
|
|
|
13.4
|
%
|
|
EBITA
*
|
|
|
225
|
|
|
|
266
|
|
|
as a % of sales
|
|
|
14.0
|
%
|
|
|
15.5
|
%
|
|
Adjusted EBITA
*
|
|
|
227
|
|
|
|
268
|
|
|
as a % of sales
|
|
|
14.1
|
%
|
|
|
15.6
|
%
|
Diagnosis & Treatment businesses
Key data
in millions of EUR unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2016
|
|
|
Q1
2017
|
|
|
|
|
|
|
Sales
|
|
|
1,419
|
|
|
|
1,491
|
|
|
Sales growth
|
|
|
|
|
|
|
|
|
|
Nominal sales growth
|
|
|
9
|
%
|
|
|
5
|
%
|
|
Comparable sales growth
*
|
|
|
5
|
%
|
|
|
2
|
%
|
|
Income from operations (EBIT)
|
|
|
10
|
|
|
|
43
|
|
|
as a % of sales
|
|
|
0.7
|
%
|
|
|
2.9
|
%
|
|
EBITA
*
|
|
|
23
|
|
|
|
52
|
|
|
as a % of sales
|
|
|
1.6
|
%
|
|
|
3.5
|
%
|
|
Adjusted EBITA
*
|
|
|
32
|
|
|
|
63
|
|
|
as a % of sales
|
|
|
2.3
|
%
|
|
|
4.2
|
%
|
|
•
|
|
Sales increased by 7% on a nominal basis. Excluding currency impact and consolidation changes, the 5% comparable sales growth was driven by high-single-digit growth in Sleep & Respiratory Care and
Health & Wellness and
mid-single-digit
growth in Domestic Appliances.
|
|
•
|
|
Comparable sales in growth geographies showed high-single- digit growth, reflecting double-digit growth in Middle East & Turkey, Latin America and Central & Eastern Europe and low-single-digit growth
in China. Mature geographies recorded
low-single-digit
growth, reflecting
mid-single-digit
growth in Western Europe and North America and a
mid-single-digit
decline in other mature geographies.
|
|
•
|
|
EBITA increased by EUR 41 million and the margin improved by 150 basis points compared to Q1 2016.
|
|
•
|
|
Adjusted EBITA increased by EUR 41 million and the margin improved by 150 basis points compared to Q1 2016. The increase was attributable to operational leverage from growth.
|
|
•
|
|
Restructuring and acquisition-related charges amounted to EUR 2 million and were in line with Q1 2016. In Q2 2017, restructuring and acquisition-related charges are expected to total approximately EUR
5 million.
|
|
•
|
|
Sales increased by 5% on a nominal basis. Excluding currency impact, the 2% comparable sales growth reflected
low-single-digit
growth in Diagnostic Imaging, Ultrasound and
Image-Guided Therapy.
|
|
•
|
|
Comparable sales in growth geographies showed
mid-single-digit
growth, largely driven by double-digit growth in China and Latin America, partly offset by a double-digit decline in
Central & Eastern Europe and a
mid-single-digit
decline in Middle East & Turkey. Mature geographies recorded
low-single-digit
growth, reflecting
mid-single-digit
growth in Western Europe,
low-single-digit
growth in other mature geographies and flat
year-on-year
comparable sales in North America.
|
|
•
|
|
EBITA increased by EUR 29 million and the margin improved by 190 basis points compared to Q1 2016.
|
|
•
|
|
Adjusted EBITA increased by EUR 31 million and the margin improved by 190 basis points
year-on-year,
mainly due to operational
improvements and positive currency impact.
|
|
•
|
|
Restructuring and acquisition-related charges were EUR 11 million, compared to EUR 9 million in Q1 2016. In Q2 2017, restructuring and acquisition-related charges are expected to total approximately EUR
40 million.
|
|
*
|
Non-GAAP
financial measure. Refer to Reconciliation of
non-GAAP
information, of this document.
|
|
|
|
|
|
|
|
|
|
Quarterly report Q1 2017
|
|
5
|
Connected Care & Health Informatics businesses
Key data
in millions of EUR unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
|
Q1
|
|
|
|
|
2016
|
|
|
2017
|
|
|
|
|
|
|
Sales
|
|
|
694
|
|
|
|
732
|
|
|
Sales growth
|
|
|
|
|
|
|
|
|
|
Nominal sales growth
|
|
|
11
|
%
|
|
|
5
|
%
|
|
Comparable sales growth
*
|
|
|
9
|
%
|
|
|
1
|
%
|
|
Income from operations (EBIT)
|
|
|
11
|
|
|
|
(12
|
)
|
|
as a % of sales
|
|
|
1.6
|
%
|
|
|
(1.6
|
)%
|
|
EBITA
*
|
|
|
23
|
|
|
|
0
|
|
|
as a % of sales
|
|
|
3.3
|
%
|
|
|
0.0
|
%
|
|
Adjusted EBITA
*
|
|
|
27
|
|
|
|
26
|
|
|
as a % of sales
|
|
|
3.9
|
%
|
|
|
3.6
|
%
|
HealthTech Other
Key
data
in millions of EUR
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2016
|
|
|
Q1
2017
|
|
|
|
|
|
|
Sales
|
|
|
103
|
|
|
|
92
|
|
|
Income from operations (EBIT)
|
|
|
(9
|
)
|
|
|
12
|
|
|
EBITA
*
|
|
|
(7
|
)
|
|
|
18
|
|
|
Adjusted EBITA
*
|
|
|
(9
|
)
|
|
|
(38
|
)
|
|
IP Royalties
|
|
|
57
|
|
|
|
50
|
|
|
Innovation
1)
|
|
|
(44
|
)
|
|
|
(54
|
)
|
|
Central costs
|
|
|
(21
|
)
|
|
|
(32
|
)
|
|
Other
|
|
|
(1
|
)
|
|
|
(2
|
)
|
|
1)
|
Innovation includes Emerging Businesses
|
Lighting
Key data
in millions of EUR unless otherwise stated
1)
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2016
|
|
|
Q1
2017
|
|
|
|
|
|
|
Sales
|
|
|
1,691
|
|
|
|
1,689
|
|
|
Sales growth
|
|
|
|
|
|
|
|
|
|
Nominal sales growth
|
|
|
(2
|
)%
|
|
|
0
|
%
|
|
Comparable sales growth
*
|
|
|
(2
|
)%
|
|
|
0
|
%
|
|
Income from operations (EBIT)
|
|
|
73
|
|
|
|
105
|
|
|
as a % of sales
|
|
|
4.3
|
%
|
|
|
6.2
|
%
|
|
EBITA
*
|
|
|
102
|
|
|
|
133
|
|
|
as a % of sales
|
|
|
6.0
|
%
|
|
|
7.9
|
%
|
|
Adjusted EBITA
*
|
|
|
121
|
|
|
|
144
|
|
|
as a % of sales
|
|
|
7.2
|
%
|
|
|
8.5
|
%
|
|
1)
|
The Lighting segment results differ from the stand-alone Philips Lighting reporting mainly due to the exclusion of intercompany sales and the reporting within Legacy Items of Philips Lighting separation costs incurred.
|
|
•
|
|
Sales increased by 5% on a nominal basis. Excluding currency impact and consolidation changes, the 1% comparable sales growth was driven by
low-single-digit
growth in Patient Care
& Monitoring Solutions, partly offset by a
low-single-digit
decline in Healthcare Informatics, Solutions & Services.
|
|
•
|
|
Comparable sales in growth geographies were in line with Q1 2016, reflecting double-digit growth in China, offset by a double-digit decline in India and Middle East & Turkey. Mature geographies posted
low-single-digit
growth, driven by high-single-digit growth in Western Europe and
low-single-digit
growth in North America, partly offset by a
mid-single-digit
decline in other mature geographies.
|
|
•
|
|
EBITA decreased by EUR 23 million and the margin declined by 330 basis points compared to Q1 2016.
|
|
•
|
|
The Adjusted EBITA margin decreased by 30 basis points year-
on-year,
mainly reflecting lower growth and higher channel investments.
|
|
•
|
|
Restructuring and acquisition-related charges amounted to EUR 8 million, compared to EUR 4 million in Q1 2016. EBITA also included EUR 17 million of charges related to quality and regulatory actions.
Restructuring and acquisition-related charges are expected to total approximately EUR 10 million in Q2 2017.
|
|
•
|
|
Sales reflected EUR 14 million lower royalty income due to the foreseen expiration of licenses.
|
|
•
|
|
EBITA increased by EUR 25 million
year-on-year.
|
|
•
|
|
The Adjusted EBITA decline was mainly attributable to lower royalty income, phasing of costs in Innovation and Central costs, as well as investments in rationalizing the IT landscape.
|
|
•
|
|
Restructuring and acquisition-related charges amounted to EUR 3 million. EBITA included a EUR 59 million gain on the sale of real estate assets. EBITA in Q1 2016 included a EUR 2 million net release of
restructuring charges. In Q2 2017, restructuring and acquisition-related charges are expected to total approximately EUR 5 million.
|
|
•
|
|
Sales were flat
year-on-year
on both a nominal and comparable basis, reflecting double-digit growth in LED and Home,
low-single-digit
growth in Professional and a double- digit decline in Lamps, in line with the industry trend.
|
|
•
|
|
Total LED lighting sales grew 19% and now represent 61% of total Lighting sales.
|
|
•
|
|
EBITA increased by EUR 31 million and the margin improved by 190 basis points compared to Q1 2016.
|
|
•
|
|
Adjusted EBITA continued to improve
year-on-year.
The EUR 23 million increase was largely driven by procurement savings and currency
impact, partly offset by price erosion.
|
|
•
|
|
Restructuring and acquisition-related charges were EUR 10 million, compared to EUR 19 million in Q1 2016. For information regarding the restructuring and acquisition-related charges guidance, please refer to the
Philips Lighting Q1 2017 press release.
|
|
*
|
Non-GAAP
financial measure. Refer to Reconciliation of
non-GAAP
information, of this document.
|
|
|
|
|
|
|
|
6
|
|
Quarterly report Q1 2017
|
|
|
Legacy Items
Income from operations (EBIT)
in millions of EUR
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2016
|
|
|
Q1
2017
|
|
|
|
|
|
|
Separation costs
|
|
|
(52
|
)
|
|
|
(12
|
)
|
|
Other
|
|
|
(24
|
)
|
|
|
(19
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations (EBIT)
|
|
|
(76
|
)
|
|
|
(31
|
)
|
Discontinued operations
Net income of discontinued operations
in millions of EUR
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2016
|
|
|
Q1
2017
|
|
|
|
|
|
|
The combined Lumileds and Automotive businesses
|
|
|
32
|
|
|
|
65
|
|
|
Other
|
|
|
(8
|
)
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net income of discontinued operations
|
|
|
24
|
|
|
|
64
|
|
|
|
•
|
|
Income from operations (EBIT) mainly included EUR 12 million of charges related to the separation of the Lighting business, EUR 9 million of stranded costs related to the combined Lumileds and Automotive
businesses, and EUR 3 million related to movements in environmental provisions.
|
|
|
•
|
|
Charges related to the separation of the Lighting business are expected to total approximately EUR 15 million in Q2 2017.
|
|
|
•
|
|
Net income of the combined businesses of Lumileds and Automotive increased by EUR 33 million, mainly due to higher sales and improvements in gross margins.
|
|
|
•
|
|
Philips has signed an agreement to sell an 80.1% interest in the combined Lumileds and Automotive businesses to certain funds managed by affiliates of Apollo Global Management, LLC. Philips will retain the remaining
19.9% interest. The transaction is expected to be completed in Q2 2017, subject to customary closing conditions, including the relevant regulatory approvals.
|
|
|
|
|
|
|
|
|
|
Quarterly report Q1 2017
|
|
7
|
EBITA
*
and Adjusted EBITA
*
- HealthTech portfolio segments
Personal Health businesses
EBITA
*
in millions of EUR unless otherwise stated
Adjusted EBITA
*
in millions of EUR unless otherwise stated
Diagnosis & Treatment
businesses
EBITA
*
in millions of EUR unless otherwise stated
Adjusted EBITA
*
in millions of EUR unless otherwise stated
Connected Care & Health Informatics businesses
EBITA
*
in millions of EUR unless otherwise stated
Adjusted EBITA
*
in millions of EUR unless otherwise stated
|
*
|
Non-GAAP
financial measure. Refer to Reconciliation of
non-GAAP
information, of this document.
|
|
|
|
|
|
|
|
8
|
|
Quarterly report Q1 2017
|
|
|
Forward-looking statements and other important information
Forward-looking statements
This document and the related
oral presentation, including responses to questions following the presentation, contain 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. Examples of forward-looking statements include statements made about the strategy, estimates of sales growth, future EBITA, future developments in Philips’ organic business and the completion of
acquisitions and divestments. 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;
developments within the euro zone; the successful implementation of Philips’ strategy and the ability to realize the benefits of this strategy; the 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; the ability to identify and complete successful acquisitions, and to integrate those acquisitions into the business; the
ability to successfully exit certain businesses or restructure the operations; the rate of technological changes; political, economic and other developments in countries where Philips operates; industry consolidation and competition; and the state
of international capital markets as they may affect the timing and nature of the dispositions by Philips of its interests in Philips Lighting and the combined Lumileds and Automotive businesses. 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 the Annual Report 2016.
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 financial position, 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.
Non-GAAP
financial measures do not have standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. A reconciliation of these
non-GAAP
measures
to the most directly comparable IFRS measures is contained in this document. Further information on
non-GAAP
measures can be found in the Annual Report 2016.
Use of fair-value measurements
In presenting the Philips Group 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 or observable market data are not readily available, fair values are estimated using appropriate valuation models and unobservable inputs. Such fair value estimates 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 the Annual Report 2016. Independent valuations may have been obtained to support
management’s determination of fair values.
Presentation
All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up precisely to totals provided. All reported data is
unaudited. Financial reporting is in accordance with the accounting policies as stated in the Annual Report 2016, unless otherwise stated.
As part of the
financial reporting improvement process, the presentation of the line item Investments in associates was moved into the subtotal Income before taxes in the Condensed consolidated statements of income. This change did not impact the results of
operations or financial position.
In addition, we have simplified our Q1 and Q3 reporting by excluding the cash flow statement, the statement of changes
in equity and certain other tables in the detailed financial information section not required to be disclosed. In our semi- annual and annual reporting we will continue to present these statements and tables. Summary cash flow information is
provided in the Philips performance section of this document.
Prior-period financial statements have been restated to reflect a reclassification of Net
defined-benefit post-employment plan obligations to Long-term provisions in accordance with the accounting policies as stated in the Annual Report 2016.
Accordingly, Q1 2016 has been restated and presented for the first time in this press release.
Market Abuse Regulation
This press release contains
inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
|
|
|
|
|
|
|
|
|
Quarterly report Q1 2017
|
|
9
|
Condensed consolidated statements of income
Condensed consolidated statements of income
in millions
of EUR unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
|
|
|
|
|
2016
|
|
|
2017
|
|
|
|
|
|
|
Sales
|
|
|
5,517
|
|
|
|
5,724
|
|
|
Cost of sales
|
|
|
(3,251
|
)
|
|
|
(3,280
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
2,266
|
|
|
|
2,444
|
|
|
Selling expenses
|
|
|
(1,418
|
)
|
|
|
(1,466
|
)
|
|
General and administrative expenses
|
|
|
(189
|
)
|
|
|
(199
|
)
|
|
Research and development expenses
|
|
|
(470
|
)
|
|
|
(518
|
)
|
|
Impairment of goodwill
|
|
|
(2
|
)
|
|
|
—
|
|
|
Other business income
|
|
|
21
|
|
|
|
91
|
|
|
Other business expenses
|
|
|
(9
|
)
|
|
|
(5
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations
|
|
|
199
|
|
|
|
348
|
|
|
Financial income
|
|
|
27
|
|
|
|
25
|
|
|
Financial expenses
|
|
|
(141
|
)
|
|
|
(86
|
)
|
|
Investments in associates
|
|
|
3
|
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income before taxes
|
|
|
88
|
|
|
|
286
|
|
|
Income taxes
|
|
|
(75
|
)
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Income from continuing operations
|
|
|
13
|
|
|
|
195
|
|
|
Discontinued operations - net of income taxes
|
|
|
24
|
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
37
|
|
|
|
259
|
|
|
Attribution of net income for the period
|
|
|
|
|
|
|
|
|
|
Net income attributable to Koninklijke Philips N.V. shareholders
|
|
|
32
|
|
|
|
232
|
|
|
|
|
|
|
Net income attributable to Non-controlling interests
|
|
|
5
|
|
|
|
27
|
|
|
Earnings per common share attributable to shareholders
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding (after deduction of treasury shares) during
the period (in thousands):
|
|
|
|
|
|
|
|
|
|
- basic
|
|
|
913,929
|
|
|
|
921,917
|
|
|
- diluted
|
|
|
924,706
|
|
|
|
937,102
|
|
|
Net income attributable to shareholders per common share in EUR:
|
|
|
|
|
|
|
|
|
|
- basic
|
|
|
0.04
|
|
|
|
0.25
|
|
|
- diluted
|
|
|
0.03
|
|
|
|
0.25
|
|
Amounts may not add up due to rounding.
|
|
|
|
|
|
|
10
|
|
Quarterly report Q1 2017
|
|
|
Condensed consolidated balance sheets
Condensed consolidated balance sheets
in millions of EUR
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2016
|
|
|
December 31,
2016
|
|
|
March 31,
2017
|
|
|
|
|
|
|
|
Non-current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment
|
|
|
2,218
|
|
|
|
2,155
|
|
|
|
2,122
|
|
|
Goodwill
|
|
|
8,265
|
|
|
|
8,898
|
|
|
|
8,751
|
|
|
Intangible assets excluding goodwill
|
|
|
3,526
|
|
|
|
3,552
|
|
|
|
3,441
|
|
|
Non-current receivables
|
|
|
166
|
|
|
|
155
|
|
|
|
167
|
|
|
Investments in associates
|
|
|
205
|
|
|
|
190
|
|
|
|
189
|
|
|
Other non-current financial assets
|
|
|
436
|
|
|
|
335
|
|
|
|
373
|
|
|
Non-current derivative financial assets
|
|
|
45
|
|
|
|
59
|
|
|
|
56
|
|
|
Deferred tax assets
|
|
|
2,689
|
|
|
|
2,792
|
|
|
|
2,766
|
|
|
Other non-current assets
|
|
|
70
|
|
|
|
92
|
|
|
|
92
|
|
|
Total non-current assets
|
|
|
17,620
|
|
|
|
18,228
|
|
|
|
17,956
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Inventories
|
|
|
3,601
|
|
|
|
3,392
|
|
|
|
3,629
|
|
|
Other current financial assets
|
|
|
12
|
|
|
|
101
|
|
|
|
97
|
|
|
Other current assets
|
|
|
523
|
|
|
|
486
|
|
|
|
541
|
|
|
Current derivative financial assets
|
|
|
87
|
|
|
|
101
|
|
|
|
54
|
|
|
Income tax receivable
|
|
|
120
|
|
|
|
154
|
|
|
|
157
|
|
|
Receivables
|
|
|
4,597
|
|
|
|
5,327
|
|
|
|
4,660
|
|
|
Assets classified as held for sale
|
|
|
1,812
|
|
|
|
2,180
|
|
|
|
2,038
|
|
|
Cash and cash equivalents
|
|
|
1,385
|
|
|
|
2,334
|
|
|
|
2,731
|
|
|
Total current assets
|
|
|
12,137
|
|
|
|
14,075
|
|
|
|
13,908
|
|
|
Total assets
|
|
|
29,757
|
|
|
|
32,303
|
|
|
|
31,864
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
11,279
|
|
|
|
12,601
|
|
|
|
12,698
|
|
|
Non-controlling interests
|
|
|
130
|
|
|
|
907
|
|
|
|
1,332
|
2)
|
|
Group equity
|
|
|
11,409
|
|
|
|
13,508
|
|
|
|
14,030
|
|
|
|
|
|
|
|
Non-current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
3,984
|
|
|
|
4,021
|
|
|
|
3,969
|
|
|
Non-current derivative financial liabilities
|
|
|
518
|
|
|
|
590
|
|
|
|
433
|
|
|
Long-term provisions
|
|
|
3,234
|
1)
|
|
|
2,926
|
|
|
|
2,888
|
|
|
Deferred tax liabilities
|
|
|
129
|
|
|
|
66
|
|
|
|
68
|
|
|
Other non-current liabilities
|
|
|
717
|
1)
|
|
|
719
|
|
|
|
675
|
|
|
Total non-current liabilities
|
|
|
8,582
|
|
|
|
8,322
|
|
|
|
8,032
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Short-term debt
|
|
|
1,705
|
|
|
|
1,585
|
|
|
|
1,375
|
|
|
Current derivative financial liabilities
|
|
|
268
|
|
|
|
283
|
|
|
|
269
|
|
|
Income tax payable
|
|
|
153
|
|
|
|
146
|
|
|
|
192
|
|
|
Accounts payable
|
|
|
2,434
|
|
|
|
2,848
|
|
|
|
2,900
|
|
|
Accrued liabilities
|
|
|
2,678
|
1)
|
|
|
3,034
|
|
|
|
2,629
|
|
|
Short-term provisions
|
|
|
730
|
1)
|
|
|
680
|
|
|
|
632
|
|
|
Liabilities directly associated with assets held for sale
|
|
|
430
|
|
|
|
525
|
|
|
|
490
|
|
|
Other current liabilities
|
|
|
1,368
|
|
|
|
1,372
|
|
|
|
1,315
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total current liabilities
|
|
|
9,766
|
|
|
|
10,473
|
|
|
|
9,802
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and group equity
|
|
|
29,757
|
|
|
|
32,303
|
|
|
|
31,864
|
|
|
1)
|
Adjusted to reflect a reclassification of net defined-benefit obligations into long-term provisions.
|
|
2)
|
The increase in Non-controlling interests is due to the sale of 26 million shares of Philips Lighting in February 2017 which increased the percentage of Non-controlling interests from 28.775% to 44.820%.
|
Amounts may not add up due to rounding.
|
|
|
|
|
|
|
|
|
Quarterly report Q1 2017
|
|
11
|
Segment information
Sales and income from operations
in millions of EUR
unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2016
|
|
|
Q1 2017
|
|
|
|
|
sales
|
|
|
Income from operations
|
|
|
sales
|
|
|
Income from operations
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
Personal Health
|
|
|
1,610
|
|
|
|
190
|
|
|
|
11.8
|
%
|
|
|
1,719
|
|
|
|
231
|
|
|
|
13.4
|
%
|
|
Diagnosis & Treatment
|
|
|
1,419
|
|
|
|
10
|
|
|
|
0.7
|
%
|
|
|
1,491
|
|
|
|
43
|
|
|
|
2.9
|
%
|
|
Connected Care & Health Informatics
|
|
|
694
|
|
|
|
11
|
|
|
|
1.6
|
%
|
|
|
732
|
|
|
|
(12
|
)
|
|
|
(1.6
|
)%
|
|
HealthTech Other
|
|
|
103
|
|
|
|
(9
|
)
|
|
|
|
|
|
|
92
|
|
|
|
12
|
|
|
|
|
|
|
Lighting
|
|
|
1,691
|
|
|
|
73
|
|
|
|
4.3
|
%
|
|
|
1,689
|
|
|
|
105
|
|
|
|
6.2
|
%
|
|
Legacy Items
|
|
|
|
|
|
|
(76
|
)
|
|
|
|
|
|
|
|
|
|
|
(31
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philips Group
|
|
|
5,517
|
|
|
|
199
|
|
|
|
3.6
|
%
|
|
|
5,724
|
|
|
|
348
|
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
12
|
|
Quarterly report Q1 2017
|
|
|
Reconciliation of non-GAAP information
Certain non-GAAP financial measures are presented when discussing the Philips Group’s performance:
|
•
|
|
Comparable sales growth
|
|
•
|
|
Net debt : group equity ratio
|
The term EBIT has the same meaning as Income from operations.
Adjusted EBITA is defined as Income from operations (EBIT) excluding amortization of intangible assets (excluding software and development expenses),
impairment of goodwill and other intangible assets, restructuring charges, acquisition-related costs and other significant items.
Free cash flow is
defined as Net cash from operating activities minus net capital expenditures. Net capital expenditures are comprised of the purchase of intangible assets, expenditures on development assets, capital expenditures on property, plant and equipment and
proceeds from disposal of property, plant and equipment.
Order intake is reported for equipment and software and is defined under our policy as the total
contractually committed amount to be delivered within a specified timeframe. Order intake does not derive from the financial statements and thus a quantitative reconciliation is not provided. Order intake is calculated on a comparable basis, which
excludes the effects of currency movements and changes in consolidation.
For the definitions of the remaining non-GAAP financial measures listed above,
refer to the Annual Report 2016. In the following tables, reconciliations to the most directly comparable IFRS measures are presented.
Sales growth
composition
in %
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2017
|
|
|
|
|
nominal
growth
|
|
|
consolidation
changes
|
|
|
currency
effects
|
|
|
comparable
growth
|
|
|
2017 versus 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Personal Health
|
|
|
6.8
|
%
|
|
|
0.5
|
%
|
|
|
(2.1
|
)%
|
|
|
5.2
|
%
|
|
Diagnosis & Treatment
|
|
|
5.1
|
%
|
|
|
0.0
|
%
|
|
|
(3.0
|
)%
|
|
|
2.1
|
%
|
|
Connected Care & Health Informatics
|
|
|
5.5
|
%
|
|
|
(0.7
|
)%
|
|
|
(3.3
|
)%
|
|
|
1.5
|
%
|
|
HealthTech Other
|
|
|
(10.7
|
)%
|
|
|
0.0
|
%
|
|
|
(0.1
|
)%
|
|
|
(10.8
|
)%
|
|
Lighting
1)
|
|
|
(0.1
|
)%
|
|
|
0.9
|
%
|
|
|
(1.2
|
)%
|
|
|
(0.4
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philips Group
|
|
|
3.8
|
%
|
|
|
0.3
|
%
|
|
|
(2.1
|
)%
|
|
|
2.0
|
%
|
|
1)
|
The Lighting segment results differ from the stand-alone Philips Lighting reporting mainly due to the exclusion of intercompany sales
|
|
|
|
|
|
|
|
|
|
Quarterly report Q1 2017
|
|
13
|
Net income to Adjusted EBITA
In millions of EUR unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Philips Group
|
|
|
Personal
Health
|
|
|
Diagnosis &
Treatment
|
|
|
Connected
Care & Health
Informatics
|
|
|
HealthTech
Other
|
|
|
Lighting
1)
|
|
|
Legacy Items
|
|
|
|
|
|
|
|
|
|
|
|
Q1 2017
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of income taxes
|
|
|
64
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
(91
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates
|
|
|
(1
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses
|
|
|
(86
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
|
|
|
25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations (EBIT)
|
|
|
348
|
|
|
|
231
|
|
|
|
43
|
|
|
|
(12
|
)
|
|
|
12
|
|
|
|
105
|
|
|
|
(31
|
)
|
|
Amortization of acquired intangible assets
|
|
|
90
|
|
|
|
35
|
|
|
|
9
|
|
|
|
12
|
|
|
|
6
|
|
|
|
28
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITA
|
|
|
437
|
|
|
|
266
|
|
|
|
52
|
|
|
|
0
|
|
|
|
18
|
|
|
|
133
|
|
|
|
(31
|
)
|
|
Restructuring and aquisition-related charges
|
|
|
34
|
|
|
|
2
|
|
|
|
11
|
|
|
|
8
|
|
|
|
3
|
|
|
|
10
|
|
|
|
|
|
|
Other items
|
|
|
(30
|
)
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
|
(59
|
)
|
|
|
1
|
|
|
|
11
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
|
|
|
442
|
|
|
|
268
|
|
|
|
63
|
|
|
|
26
|
|
|
|
(38
|
)
|
|
|
144
|
|
|
|
(20
|
)
|
|
|
|
|
|
|
|
|
|
|
Q1 2016
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
|
|
|
37
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Discontinued operations, net of income taxes
|
|
|
24
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
(75
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investments in associates
|
|
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial expenses
|
|
|
(141
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial income
|
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations (EBIT)
|
|
|
199
|
|
|
|
190
|
|
|
|
10
|
|
|
|
11
|
|
|
|
(9
|
)
|
|
|
73
|
|
|
|
(76
|
)
|
|
Amortization of acquired intangible assets
|
|
|
89
|
|
|
|
35
|
|
|
|
13
|
|
|
|
12
|
|
|
|
2
|
|
|
|
27
|
|
|
|
—
|
|
|
Impairment of goodwill
|
|
|
2
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITA
|
|
|
290
|
|
|
|
225
|
|
|
|
23
|
|
|
|
23
|
|
|
|
(7
|
)
|
|
|
102
|
|
|
|
(76
|
)
|
|
Restructuring and aquisition-related charges
|
|
|
32
|
|
|
|
2
|
|
|
|
9
|
|
|
|
4
|
|
|
|
(2
|
)
|
|
|
19
|
|
|
|
|
|
|
Other Items
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
52
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITA
|
|
|
374
|
|
|
|
227
|
|
|
|
32
|
|
|
|
27
|
|
|
|
(9
|
)
|
|
|
121
|
|
|
|
(24
|
)
|
|
1)
|
The Lighting segment results differ from the stand-alone Philips Lighting reporting mainly due to the reporting within Legacy Items of Philips Lighting separation costs incurred.
|
Composition of net debt and group equity
in millions of
EUR unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31,
2016
|
|
|
December 31,
2016
|
|
|
March 31,
2017
|
|
|
Long-term debt
|
|
|
3,984
|
|
|
|
4,021
|
|
|
|
3,969
|
|
|
Short-term debt
|
|
|
1,705
|
|
|
|
1,585
|
|
|
|
1,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total debt
|
|
|
5,689
|
|
|
|
5,606
|
|
|
|
5,344
|
|
|
Cash and cash equivalents
|
|
|
1,385
|
|
|
|
2,334
|
|
|
|
2,731
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt
1)
|
|
|
4,304
|
|
|
|
3,272
|
|
|
|
2,613
|
|
|
|
|
|
|
|
Shareholders’ equity
|
|
|
11,279
|
|
|
|
12,601
|
|
|
|
12,698
|
|
|
Non-controlling interests
|
|
|
130
|
|
|
|
907
|
|
|
|
1,332
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Group equity
|
|
|
11,409
|
|
|
|
13,508
|
|
|
|
14,030
|
|
|
|
|
|
|
|
Net debt and group equity
|
|
|
15,713
|
|
|
|
16,780
|
|
|
|
16,643
|
|
|
|
|
|
|
|
Net debt divided by net debt and group equity (in %)
|
|
|
27
|
%
|
|
|
19
|
%
|
|
|
16
|
%
|
|
Group equity divided by net debt and group equity (in %)
|
|
|
73
|
%
|
|
|
81
|
%
|
|
|
84
|
%
|
|
Net debt : group equity ratio
|
|
|
27:73
|
|
|
|
19:81
|
|
|
|
16:84
|
|
|
1)
|
Total debt less cash and cash equivalents
|
|
|
|
|
|
|
|
14
|
|
Quarterly report Q1 2017
|
|
|
Philips statistics
in millions of EUR unless otherwise stated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2017
|
|
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
Q1
|
|
|
Q2
|
|
|
Q3
|
|
|
Q4
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
5,517
|
|
|
|
5,861
|
|
|
|
5,898
|
|
|
|
7,240
|
|
|
|
5,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable sales growth
*
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
2,266
|
|
|
|
2,538
|
|
|
|
2,603
|
|
|
|
3,205
|
|
|
|
2,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
41.1
|
%
|
|
|
43.3
|
%
|
|
|
44.1
|
%
|
|
|
44.3
|
%
|
|
|
42.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
|
(1,418
|
)
|
|
|
(1,427
|
)
|
|
|
(1,411
|
)
|
|
|
(1,632
|
)
|
|
|
(1,466
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
(25.7
|
)%
|
|
|
(24.3
|
)%
|
|
|
(23.9
|
)%
|
|
|
(22.5
|
)%
|
|
|
(25.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G&A expenses
|
|
|
(189
|
)
|
|
|
(234
|
)
|
|
|
(203
|
)
|
|
|
(219
|
)
|
|
|
(199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
(3.4
|
)%
|
|
|
(4.0
|
)%
|
|
|
(3.4
|
)%
|
|
|
(3.0
|
)%
|
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R&D expenses
|
|
|
(470
|
)
|
|
|
(501
|
)
|
|
|
(514
|
)
|
|
|
(536
|
)
|
|
|
(518
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
(8.5
|
)%
|
|
|
(8.5
|
)%
|
|
|
(8.7
|
)%
|
|
|
(7.4
|
)%
|
|
|
(9.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations (EBIT)
|
|
|
199
|
|
|
|
376
|
|
|
|
481
|
|
|
|
826
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
3.6
|
%
|
|
|
6.4
|
%
|
|
|
8.2
|
%
|
|
|
11.4
|
%
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITA
*
|
|
|
290
|
|
|
|
464
|
|
|
|
567
|
|
|
|
914
|
|
|
|
437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
5.3
|
%
|
|
|
7.9
|
%
|
|
|
9.6
|
%
|
|
|
12.6
|
%
|
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
37
|
|
|
|
431
|
|
|
|
383
|
|
|
|
640
|
|
|
|
259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to shareholders
|
|
|
32
|
|
|
|
420
|
|
|
|
370
|
|
|
|
626
|
|
|
|
232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - shareholders per common share in EUR - diluted
|
|
|
0.03
|
|
|
|
0.46
|
|
|
|
0.40
|
|
|
|
0.67
|
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2017
|
|
|
|
|
January-
March
|
|
|
January-
June
|
|
|
January-
September
|
|
|
January-
December
|
|
|
January-
March
|
|
|
January-
June
|
|
|
January-
September
|
|
|
January-
December
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales
|
|
|
5,517
|
|
|
|
11,378
|
|
|
|
17,276
|
|
|
|
24,516
|
|
|
|
5,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comparable sales growth
*
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
3
|
%
|
|
|
2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin
|
|
|
2,266
|
|
|
|
4,804
|
|
|
|
7,407
|
|
|
|
10,612
|
|
|
|
2,444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
41.1
|
%
|
|
|
42.2
|
%
|
|
|
42.9
|
%
|
|
|
43.3
|
%
|
|
|
42.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
|
(1,418
|
)
|
|
|
(2,845
|
)
|
|
|
(4,256
|
)
|
|
|
(5,888
|
)
|
|
|
(1,466
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
(25.7
|
)%
|
|
|
(25.0
|
)%
|
|
|
(24.6
|
)%
|
|
|
(24.0
|
)%
|
|
|
(25.6
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
G&A expenses
|
|
|
(189
|
)
|
|
|
(423
|
)
|
|
|
(626
|
)
|
|
|
(845
|
)
|
|
|
(199
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
(3.4
|
)%
|
|
|
(3.7
|
)%
|
|
|
(3.6
|
)%
|
|
|
(3.4
|
)%
|
|
|
(3.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
R&D expenses
|
|
|
(470
|
)
|
|
|
(971
|
)
|
|
|
(1,485
|
)
|
|
|
(2,021
|
)
|
|
|
(518
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % sales
|
|
|
(8.5
|
)%
|
|
|
(8.5
|
)%
|
|
|
(8.6
|
)%
|
|
|
(8.2
|
)%
|
|
|
(9.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from operations (EBIT)
|
|
|
199
|
|
|
|
575
|
|
|
|
1,056
|
|
|
|
1,882
|
|
|
|
348
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
3.6
|
%
|
|
|
5.1
|
%
|
|
|
6.1
|
%
|
|
|
7.7
|
%
|
|
|
6.1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITA
*
|
|
|
290
|
|
|
|
754
|
|
|
|
1,321
|
|
|
|
2,235
|
|
|
|
437
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
as a % of sales
|
|
|
5.3
|
%
|
|
|
6.6
|
%
|
|
|
7.6
|
%
|
|
|
9.1
|
%
|
|
|
7.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
|
37
|
|
|
|
468
|
|
|
|
851
|
|
|
|
1,491
|
|
|
|
259
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to shareholders
|
|
|
32
|
|
|
|
452
|
|
|
|
822
|
|
|
|
1,448
|
|
|
|
232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income - shareholders per common share in EUR - diluted
|
|
|
0.03
|
|
|
|
0.49
|
|
|
|
0.89
|
|
|
|
1.56
|
|
|
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Number of common shares outstanding (after deduction of treasury shares) at the end of period (in
thousands)
|
|
|
913,011
|
|
|
|
927,316
|
|
|
|
924,271
|
|
|
|
922,437
|
|
|
|
920,276
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity per common share in EUR
|
|
|
12.35
|
|
|
|
12.39
|
|
|
|
12.57
|
|
|
|
13.66
|
|
|
|
13.80
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net debt : group equity
ratio
*
|
|
|
27:73
|
|
|
|
24:76
|
|
|
|
24:76
|
|
|
|
19:81
|
|
|
|
16:84
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total employees
|
|
|
114,021
|
|
|
|
113,356
|
|
|
|
113,627
|
|
|
|
114,731
|
|
|
|
114,188
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which discontinued operations
|
|
|
8,913
|
|
|
|
9,158
|
|
|
|
9,531
|
|
|
|
9,508
|
|
|
|
9,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
of which third-party workers
|
|
|
12,250
|
|
|
|
11,604
|
|
|
|
11,822
|
|
|
|
12,774
|
|
|
|
12,779
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Non-GAAP financial measure. Refer to Reconciliation of non-GAAP information, of this document.
|
|
|
|
|
|
|
|
|
|
Quarterly report Q1 2017
|
|
15
|
http://www.philips.com/investorrelations
©
2017 Koninklijke Philips N.V. All rights reserved.
Koninklijke Philips NV (NYSE:PHG)
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