Philips 2006 Annual Report Download - page 41

Philips Annual Report 2006 41
of Oral Healthcare products. Sales of CE and Medical
Systems improved by 7% and 6% respectively, while
Lighting posted 2% growth in comparable terms. Other
Activities’ sales declined, both nominally and comparably,
with divestments having an 11% downward impact.
Asia Pacifi c posted 2% comparable sales growth in 2006.
Strong increases in DAP (15%), Medical Systems (14%)
and Lighting (13%) were partly offset by an 11% comparable
decline in CE sales, largely attributable to the performance
of Mobile Phones, and lower sales of Other Activities,
mainly due to Optical Storage.
Sales in Latin America grew by 8% comparably, with strong
double-digit sales growth in most of the countries, and a
5% sales increase in Brazil. All sectors reported increased
sales, led by 14% comparable sales growth in DAP and
10% in Lighting, followed by CE (8%) and Medical
Systems (3%).
Earnings in Europe slightly declined as 2005 results
benefi ted from a release of the postretirement medical
benefi ts provision, due to the termination of the SFAS
No. 106 plan in the Netherlands and the TPV transaction
gain. EBIT in North America was impacted by the EUR 256
million asbestos-related charge in 2006. The result in
Latin
America declined, largely due to diffi cult market
conditions for CE. The EBIT increase in Asia Pacifi c
was mainly due to the increased share of high-margin
businesses (Medical Systems, DAP) in this region in 2006.
Research and development
Research and developmentexpenditur
e
s
1)
i
n milli
o
n
s
o
f
eu
r
os
R&D ex
p
enditures as a
%
of sale
s
2,
5
00
2,00
0
1,50
0
1
,
00
0
500
0
1,834
6.8 1,668
6.9 1,615
6.5
1,602
6.2
1
,
66
8
6.2
2002 2003 2004 2005 2006
1) Restated to present the Semiconductors division as a discontinued operation
Philips’ research and development expenditures totaled
EUR 1.7 billion, or 6.2% of sales, the same percentage
as in 2005.
54 The Philips sectors 86 Risk management 100 Report of the Supervisory Board 110 Financial Statements
“By working together with many
industrial, academic and clinical partners,
we offer challenging opportunities
for creative, innovative people with
an entrepreneurial spirit who enjoy
pre-clinical research and translate it
into advanced medical applications
that improve people’s lives.”
Anne Riesewijk, manager of the Life Sciences Facilities,
Philips Research
The Life Sciences Facilities at the High Tech Campus Eindhoven,
Netherlands, provide biological, chemical and technical infrastructure
and expertise for multidisciplinary R&D in the fi eld of molecular
medicine. This new approach to healthcare endeavors to identify
diseases in an early stage at cellular and molecular level, even before
the patient suffers from the symptoms. In this way, personalized
treatment can be started more rapidly and therefore more
effectively, and with less risk of side effects.