Philips 2007 Annual Report Download - page 69

Philips Annual Report 2007 75Philips Annual Report 2007 75
Sales and net operating capital
in billions of euros
Sales NOC
4
3
2
1
0
2.1
0.5
2003
2.0
0.4
2004
2.2
0.4
2005
2.5
1.1
2006
3.0
1.1
2007
EBIT and EBITA
in millions of euros
EBITA in valueEBIT in value EBITA as a % of sales
0
150
300
450
600
2003
2004
2005
328
324
2006
378
370
2007
523
510
373
368
306
15.0
14.9
17.6
17.5
15.0
301
Compared to 2006, EBITA increased by EUR 145 million
to EUR 523 million, corresponding to a pro tability
improvement of 2.7% of sales, reaching 17.6% of sales
in 2007, well above the targeted 15%. The year-on-year
earnings rise was largely driven by higher sales and tight
cost management. EBITA improvements were visible – both
in absolute amounts and relative to sales – in all businesses.
EBIT increased by EUR 140 million to EUR 510 million
in 2007, compared to EUR 370 million in 2006.
DAP generated EUR 415 million cash  ows before
 nancing activities, broadly in line with last year,
excluding the EUR 689 million net cash payment
for the acquisition of Avent. Higher earnings were
largely offset by increased working capital needs.
Strategy and 2008 objectives
Following the announcement of Vision 2010 in September
2007, the former Consumer Electronics and Domestic
Appliances and Personal Care divisions have been
integrated effective January 1, 2008, and going
forward
will be reported as the Consumer Lifestyle sector.
Philips Consumer Lifestyle will play an important role
in the realization of Philips’ Vision 2010 ambition.
For 2008 and beyond, Consumer Lifestyle has put
in place a number of speci c value-creating initiatives
which it will drive through a framework of Growth,
Talent and Simplicity:
Leverage post-integration synergies, particularly •
with regard to customers, markets and key account
management, as well as in supply chain optimization
and the sector’s relationships with third-party suppliers
and partners; synergies will also be realized across
all operational processes, through the organizational
blueprint and way-of-working design
Open up new value spaces in the consumer lifestyle •
 eld to further strengthen our business portfolio
and to deliver upon our growth ambition
Create a uni ed, engaged and high-performance •
organization in which growth and diversity can
be nurtured within our leadership community
and talent pipeline
Maximize our structure to be fully market-driven, •
in terms of our customer relationships and our
business portfolio.
98 Risk management 112 Our leadership 116 Report of the Supervisory Board 126 Financial Statements