Philips 2004 Annual Report Download - page 52

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New products* as a % of sales
0%
20%
40%
60%
200420032002
40
45
58
* Started to generate sales a maximum of 2 years ago
Medical Systems was negatively affected by impairment charges for
MedQuist (EUR 590 million) and the Volumetrics litigation
settlement (EUR 133 million, net of recoveries from insurance).
The improved underlying performance was driven by higher sales,
a favorable product mix (gross margin improved by 2% from 2003)
and lower costs. Customer Service, Cardiac & Monitoring
Systems, Computed Tomography and Ultrasound were the main
contributors to this income improvement. The growing installed
base is driving the increase in customer service.
The Philips-Neusoft venture, of which Philips holds 51%, has been
consolidated; a total cash investment of EUR 49 million was made.
In 2004, a 16% increase in orders compared to 2003 gives Medical
Systems a strong starting point for 2005.
51Philips Annual Report 2004