Philips 2006 Annual Report Download - page 77

Philips Annual Report 2006 77
Distribution channels
Lighting’s customers are mainly in the professional
market. The Lamps business operates its sales and
marketing activities through the professional, OEM and
consumer channels. Luminaires is organized into a Trade
business (commodity products) and Projects business
(project luminaires); for the latter, the main focus is
on lighting designers, architects and urban planners.
Automotive Lighting is organized into two businesses:
OEM and After-market. Special Lighting, Applications and
Lumileds are OEM businesses, while Lighting Electronics’
sales and marketing are conducted through both the
OEM and wholesale channels.
Regulatory requirements
Lighting’s processes and products need to be consistent
with the relevant regional and national regulatory
requirements. Such legislation includes the EU WEEE
(Waste from Electrical and Electronic Equipment)
Directive and the RoHS (Restriction of Hazardous
Substances) Directives. In China, a similar regulatory
requirement – Administration of the Control of Pollution
of Electronic Information Products – will become
effective early 2007.
Strategy and 2007 objectives
For 2007 and beyond, Lighting has put in place a number
of specifi c value-creating initiatives which it will drive
through a framework of Growth, Talent and Simplicity:
Growth
Lighting intends to realize long-term comparable annual
sales growth of 6% with an EBITA margin of around
12%. Building on strength in its existing portfolio and
continuing innovations, it will seek to:
Expand further in the fast-growing economies
of emerging countries like China, India, Brazil, Russia
and the ASEAN countries, increasing distribution
coverage and making increased use of local suppliers
Build on its strong position in the value chain towards
professional end-users and consumers, especially with the
largely untapped potential of energy-saving lighting systems
Grow quickly in solid-state lighting components,
modules and systems, thus strengthening its leading
position in solid-state lighting.
Talent
Lighting will strengthen its leadership bench via proactive
talent recruitment and will continue to build on its
strong culture of excellence, while creating a learning
organization focused on continuous improvement.
Simplicity
Lighting will streamline its ways of working by
implementing segment marketing, strengthening its
customer focus and driving for supply excellence.
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Philips Annual Report 2006 77
Sales and net operating capita
l
i
n
b
illi
o
n
so
f
eu
r
os
Sa
l
es
NOC
6
4
2
0
4.8
1.7
2002
4.5
1.5
2003
4.5
1.5
2004
4.8
2.5
2005
5
.5
2.5
2006
Earnings before interest and tax (EBIT)
i
n milli
o
n
so
f
eu
r
os
EBIT
as a % of sale
s
800
600
400
200
0
602
12.4
2002
577
12.8
2003
593
13.1
2004
556
11.6
2005
635
11.6
2006
54 The Philips sectors
Lighting
86 Risk management 100 Report of the Supervisory Board 110 Financial Statements