Philips 2007 Annual Report Download - page 63

Philips Annual Report 2007 69
Sales and net operating capital
in billions of euros
Sales NOC
8
6
4
2
0
5.6
2.8
20031)
5.5
2.6
20041)
6.0
3.2
20051)
6.4
4.1
20061)
6.5
4.1
2007
0
250
500
750
1,000
EBIT and EBITA
in millions of euros
EBITA in valueEBIT in value EBITA as a % of sales
2007
875
743
454
2003
1)
768
688
2005
1)
861
734
2006
1)
2004
1)
539
538
616
9.7
11.2
12.8
13.4
13.5
1) Restated to present the MedQuist business as a discontinued operation 1) Restated to present the MedQuist business as a discontinued operation
Philips Annual Report 2007 69
For 2008, strong sales growth is anticipated in Patient
Monitoring, Cardiac Care, Home Healthcare Solutions
and Customer Services, tempered by limited growth in
Imaging Systems.
Regulatory requirements
Medical Systems is subject to extensive regulation.
It strives for full compliance with regulatory product
approval and quality system requirements in every
market it serves by addressing speci c terms and
conditions of local ministry of health or federal
regulatory authorities, including agencies like the US
FDA, EU Competent Authorities and Japanese MLHW.
Environmental and sustainability requirements like the
European Union’s Waste from Electrical and Electronic
Equipment (WEEE) and the Restriction of Hazardous
Substances (RoHS) directives are met with comprehensive
EcoDesign and manufacturing programs to reduce the
use of hazardous materials.
Continuous clinical innovation and breakthroughs,
in combination with collaborative customer relationships,
drive growth and pro tability. However, the success of
clinical innovation is often dependent upon appropriate
reimbursement. In the US, concern over rapid and
sustained growth in imaging services has attracted
increased scrutiny by the Federal government and
commercial payers. This has resulted in the adoption
of new strategies designed to curb growth that could
continue to impact Philips Healthcare in 2008 and
beyond. The De cit Reduction Act of 2005 came into
effect in February 2006 and included substantial reductions
in Medicare payments for imaging services performed
in non-hospital settings. Commercial payers are also
implementing several types of utilization management
strategies designed to curb growth. Philips will continue to
work closely with legislators, payers and providers to avoid
further unwarranted reimbursement reductions and to
ensure a more rational approach to payment for innovative
technologies, particularly advanced imaging services.
Strategy and 2008 objectives
Following the announcement of Vision 2010 in
September 2007, the former Medical Systems division
and Consumer Healthcare Solutions business – now
renamed Home Healthcare Solutions – have been
integrated effective January 1, 2008, and going forward
will be reported as the Healthcare sector.
Philips Healthcare will play an important role in the
realization of Philips’ Vision 2010 ambition. For 2008
and beyond, Healthcare has put in place a number
of speci c value-creating initiatives which it will drive
through a framework of Growth, Talent and Simplicity:
Extract value from acquisitions through successful •
integration
Expand presence in emerging markets•
Cultivate leadership talent and recognize and reward •
top talent
Deliver on care cycle solutions from the hospital •
to the home.
98 Risk management 112 Our leadership 116 Report of the Supervisory Board 126 Financial Statements