Philips 2007 Annual Report Download - page 29

Philips Annual Report 2007 35
Management summary
The year 2007
2007 was a successful year for Philips.• We delivered
on our growth target, realizing 5% comparable sales
growth, and exceeded our prot target with EBITA
of 7.7%. Our strong innovation pipeline and balanced
portfolio proved their robustness in a weakening
economic environment.
In 2007 we accelerated the transformation of Philips •
into a market-focused, people-centric company capable
of delivering sustained prots.
We invested a total of EUR 1.5 billion in acquiring •
high-growth, high-margin businesses to strengthen our
leadership position in promising markets and to gain
access to new markets.
At the end of the year, we announced the two •
largest acquisitions in recent company history,
Genlyte and Respironics. The integration of these
highly protable companies is in line with our
Vision 2010 strategy.
In 2007 we further reduced our shareholdings in LG.•
Philips LCD and TSMC to 19.9% and 5.0% respectively,
generating cash inows of EUR 5.4 billion and a gain
of over EUR 3 billion.
We bought back shares for EUR 1.6 billion and returned •
EUR 0.6 billion cash to our shareholders via the annual
dividend payment.
At the end of 2007 we announced a further •
EUR 5 billion share buy-back program, which we
intend to largely complete by the end of 2008. In
addition, we are proposing a dividend of EUR 0.70
per share in 2008, a 17% increase compared to 2007.
Key data
in millions of euros unless otherwise stated
20051) 20061) 2007
Sales 25,445 26,682 26,793
EBITA 1,652 1,386 2,065
as a % of sales 6.5 5.2 7.7
EBIT 1,558 1,201 1,852
as a % of sales 6.1 4.5 6.9
Financial income and expenses 104 28 2,613
Income tax expense (526) (167) (622)
Results of equity-accounted
investees 1,754 (157) 763
Minority interests (11) (4) (5)
Income from continuing operations 2,879 901 4,601
Income (loss) from discontinued
operations (11) 4,482 (433)
Net income 2,868 5,383 4,168
Per common share (in euro) − basic 2.29 4.58 3.84
Per common share (in euro) − diluted 2.29 4.55 3.80
Net operating capital (NOC) 5,439 8,518 10,586
Cash ows before nancing activities 2,841 (2,472) 5,449
Employees (FTEs) 159,226 121,732 123,801
of which discontinued operations 44,174 6,640 5,703
1) Restated to present the MedQuist business as a discontinued operation
In 2007 the Philips Group achieved comparable sales
growth of 5%. However, because of a 3% negative
currency effect and the impact of acquisitions and
divestments, nominal sales remained stable compared
to 2006.
98 Risk management 112 Our leadership 116 Report of the Supervisory Board 126 Financial Statements