Philips 2005 Annual Report Download - page 123
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Philips Annual Report 2005 123
Outlook
Growing the Company’s top and bottom line and creating shareholder value have been the
highest priorities of the Board in recent years. In 2006 we expect all divisions will continue
to show growth, driven by both innovation and increased focus on emerging markets.
Selected acquisitions will complement this organic growth, especially at Medical Systems and
Consumer Health & Wellness. We will complete the set-up of a separate legal structure for
our Semiconductors activities to allow the pursuit of strategic options to further strengthen
the long-term performance of this business.
We will continue our drive to simplify Philips, lower our cost structure and improve our
operational excellence. Our ongoing R&D and extended incubator program promise a strong
innovation pipeline which – together with our marketing investments – will help us meet our
targeted 7-10% annual EBIT margin from the end of 2006 and to continue to achieve an average
annual sales growth of 5-6%, with returns in excess of our cost of capital.
Overall, our fi nancial position remains excellent, offering signifi cant strategic fl exibility.
February 13, 2006
Board of Management