Philips 2005 Annual Report Download - page 31

Philips Annual Report 2005 31
built an alliance with Schering to research, develop and
commercialize a new optical imaging modality, consisting
of optical equipment and imaging agent, initially for breast
cancer diagnosis.
Customer services: driving growth in revenues
Growth in service revenues is being pursued vigorously,
with service contract sales continuing to increase.
Agreements are tailored to customers’ needs. Options
include system implementation, integration and service,
education, information technology and healthcare consulting.
The innovative Remote Services Network, enabling fast
problem diagnosis and resolution as well as preventive
maintenance, is being rolled out globally.
MedicalSystemsisexpandingitscustomernancing
business. In the USA, Philips Medical Capital, a venture
with the Rabobank Group’s subsidiary De Lage Landen
International, has been in place since 2002 and has posted
an increase in comparable growth each year since its
inception. In Europe the division has partnered with
Société Générale to establish Philips Medical Capital in
Germany, the United Kingdom, France, Italy, Spain and
the Netherlands. In export and emerging markets, Medical
Systemshassignicantrelationshipswithmajorexport
credit agencies, particularly Atradius in the Netherlands,
tonanceexportandprojectnanceactivity.
MedQuist, a provider of medical transcription services,
is conducting a review of its billing practices and related
matters as described in detail on page 117 to 119.
Markets
Medical Systems’ sales to third parties on a geographic basis:
in millions of euros 2003 2004 2005
Europe and Africa 1,772 1,840 1,904
North America 3,235 3,025 3,140
Latin America 141 164 252
AsiaPacic 842 855 1,047
5,990 5,884 6,343
The market has a partial seasonality as a relatively large
proportion of revenue is recognized in the fourth quarter.
Sourcing
Medical Systems approaches the supply market with one
face and sources sub-assembly units with added value from
a limited number of suppliers. The division intends to
procure 80% of its bill of materials from fewer than 100
preferred suppliers. It is also optimizing supplies from
suppliers based in low-cost countries who support Philips’
Sustainability Policy.
Distribution
The marketing and sales channels used are mainly direct
sales and service as well as third-party specialized system
integrators and distributors in certain geographical areas.
Regulatory requirements
In most countries, Medical Systems’ processes, products
andservicesneedtobeconsistentwithspecicdemands
of ministries of health and regulatory authorities (e.g. FDA
in USA, TüV in Germany). Medical Systems seeks to be
fully compliant with regulatory requirements in all markets
it serves. This includes the EU WEEE (Waste from Electrical
and Electronic Equipment) Directive and the RoHS
(Restriction of Hazardous Substances) Directive.
Growthandprotabilityaredrivenbycontinuousclinical
innovations and breakthroughs in combination with
collaborative customer relationships. The success of clinical
Early detection of aneurysms
Medical Systems is developing a new state-of-the-art
Allura Flat Detector X-ray system for early detection of,
for example, life-threatening aneurysms. The integrated
3D concept enables real-time reconstructions of
complex vascular structures with a single rotational
scan, making it ideal for intricate neurovascular procedures.