Philips 2007 Annual Report Download - page 68

Philips Annual Report 200774 Philips Annual Report 200774
Sales per market cluster
in millions of euros
Key emerging
Other emerging
Western Europe North America Other mature
3,000
2,000
1,000
0233
289
983
524
102
2003
2,131
250
301
945
456
92
2004
2,044
307
352
978
460
97
2005
2,194
367
424
1,107
523
111
2006
2,532
479
541
1,256
564
128
2007
2,968
Diversity is vital. To reect DAP’s global business,
our leaders need to have broad, multifunctional
and international experience. For teams with global/
regional reach, DAP requires that a minimum of 50%
of the employees on each team originate from the
markets in question.
Simplify the organization by creating a direct
link between markets and the business
As of January 1, 2007, DAP removed the regional
management layer between its global business units
and country sales organizations, simplifying its organization
and processes to facilitate maximum growth and realize
untapped potential.
Redesign and simplify the innovation process
towards Open Innovation
Building on the increasing application of the Value
Proposition House methodology for arriving at a
unique and discriminating positioning for a product,
the marketing and R&D communities simplied the
process to translate a Value Proposition House into
a technical product specication. In addition, dedicated
research was done on returned products to better
understand consumer requirements, thereby augmenting
the consumer insight knowledge base from which new
products will be developed.
2007 nancial performance
2007 was a very successful year for DAP. Full-year sales
increased by EUR 436 million, or 17% on a nominal basis.
Adjusted for the 5% positive effect from the integration
of Avent (acquired in September 2006) and adverse
currency developments (3%), comparable sales grew
by 15%, signicantly ahead of the 7% growth target
set at the beginning of the year.
Double-digit comparable sales growth was achieved
by all businesses and market clusters. From a business
perspective, growth was led by excellent performance
at Domestic Appliances, mainly driven by the Kitchen
Appliances business, beneting from our investments
in innovation and the brand. Shaving & Beauty beneted
from the successful introduction of two new shavers
(Arcitec and the Moisturizing Shaving System) and the
continued acceptance and further roll-out of Bodygroom
products. At Health & Wellness, sales increased largely
as a result of the good market acceptance of Oral
Healthcare products, supported by the launch of the
new FlexCare toothbrush and the successful market
introduction of the Wake-up Light.
From a geographical perspective, comparable sales
growth was evident in all countries, with double-digit
increases in all market clusters. Emerging markets
including China, India, Brazil and Russia – representing
about one third of DAP’s sales – contributed 28%
comparable sales growth in 2007.
Key data
in millions of euros
2005 2006 2007
Sales 2,194 2,532 2,968
Sales growth
% increase, nominal 7 15 17
% increase, comparable 6 11 15
EBITA 328 378 523
as a % of sales 14.9 14.9 17.6
EBIT 324 370 510
as a % of sales 14.8 14.6 17.2
Net operating capital (NOC) 370 1,138 1,136
Cash ows before nancing activities 384 (287) 415
Employees (FTEs) 8,203 9,933 9,881
For a reconciliation to the most directly comparable US GAAP measures,
see the chapter Reconciliation of non-US GAAP information
8 Financial highlights 10 Message from the President 16 The Philips Group 62 The Philips sectors
Domestic Appliances
and Personal Care