Philips 2005 Annual Report Download - page 80

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Philips Annual Report 200580
Utilization rate for Semiconductors
in %
100
90
80
70
60
90
Q1
99
Q2
98
Q3
81
Q4
2004
75
Q1
77
Q2
81
Q3
83
Q4
2005
Semiconductors’ EBIT in 2005 of EUR 307 million ended
below the level of 2004 (EUR 430 million) due to higher
research and development expenditures (EUR 57 million),
a lower average utilization rate and a prior-year gain of
EUR 51 million resulting from an insurance settlement.
The utilization rate was low at the beginning of 2005 as a
result of a cyclical dip in the market. During the year the
utilization rate improved steadily, driven by increasing sales
and, consequently, manufacturing loading.
Cash fl ow before fi nancing activities improved from
EUR 658 million in 2004 to EUR 675 million in 2005 as
the lower cash infl ow from EBIT and higher working capital
requirements were compensated by a decrease in capital
expenditures.
Management discussion and analysis