Philips 2007 Annual Report Download - page 80

Philips Annual Report 200786 Philips Annual Report 200786
Sales per market cluster
in millions of euros
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
833
531
1,761
1,098
299
2003
4,522
845
564
1,773
1,051
293
2004
4,526
941
652
1,828
1,057
297
2005
4,775
1,072
835
2,022
1,194
343
2006
5,466
1,216
1,012
2,436
1,125
304
2007
6,093
Key emerging
Other emerging
Western Europe North America Other mature
we continue to develop and invest in new OLED
(Organic LED) and solid-state laser activities.
Talent
Under the heading Building competence, we have been
driving the quality of our leadership, training more than
half our marketing people in the past two years on using
end-user insights to drive innovation, the Value Proposition
House methodology and marketing planning and execution .
We have hired around 20 executive potentials per year
over the past four years.
Under the heading Building a strong culture of excellence,
we have been establishing a growth culture and have
seen
our progress reected in, for example, a considerable
advance in our Employee Engagement Survey score
towards the high-performance benchmark and over
40% employee participation in our annual Quality
Improvement Competition.
Simplicity
To bring ourselves closer to our customers, we have
shifted our focus from product management to market
segments. This move toward added value is reected
in the lighting solutions we offer in the various segments.
For example, in the home environment, we let people
create the atmosphere to suit their mood by choosing
the color of their light with LivingColors. And our exible
AmbiScene lighting concept lets retailers tailor the in-store
ambience at the touch of a button, to offer consumers
an inspiring shopping experience.
In line with this, we have organized our country sales
groups around the customer channels – wholesale,
projects, OEM and mass retail – and leveraged our
back-ofce activities across our businesses as shared
service departments.
We made signicant progress in 2007 in our drive for supply
chain excellence – specically in the area of organizing
the China supply chain, where volume doubled in the last
year – thanks to several initiatives to improve processes
and ways of working (e.g. direct shipments and planning).
2007 nancial performance
Lighting sales in 2007 grew 11% in nominal terms,
supported by the contribution of the acquired companies
PLI and Color Kinetics. Excluding these acquisitions and
the negative currency impact of 3%, comparable growth
reached 6%, led by robust growth of energy-efcient
lighting, primarily within Lamps and Luminaires. Sales of
Solid-State Lighting applications grew 281% year-on-year,
reaching EUR 160 million, helped by the acquisition
of Color Kinetics. Automotive Lighting and Lighting
Electronics also achieved further comparable growth.
However, the
remaining businesses showed comparable
declines, mainly due to the contracting rear-projection
TV market (Special Lighting Applications).
Geographically, the division showed strong growth
in all markets clusters except North America. Emerging
markets delivered particularly strong growth of 17%
in currency-comparable terms, attributable to solid
Key data
in millions of euros
2005 2006 2007
Sales 4,775 5,466 6,093
Sales growth
% increase, nominal 6 14 11
% increase, comparable 4 8 6
EBITA 508 608 722
as a % of sales 10.6 11.1 11.9
EBIT 499 577 675
as a % of sales 10.5 10.6 11.1
Net operating capital (NOC) 2,491 2,527 3,886
Cash ows before nancing activities (236) 451 (648)
Employees (FTEs) 45,649 47,739 54,323
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
Lighting