Philips 2007 Annual Report Download - page 88

Philips Annual Report 200794
8 Financial highlights 10 Message from the President 16 The Philips Group 62 The Philips sectors
Group Management
& Services
In 2007, Lifeline continued to realize double-digit
organic growth of its subscriber base. With the purchase
of Health Watch, Lifeline now monitors over 700,000
subscribers. The Senior Living division, which serves
the independent and assisted living market, now services
nearly 150,000 residents in senior living facilities.
In 2008, Lifeline will continue to develop its core
business by leveraging healthcare channels in local
communities, as well as investing in innovation to
stimulate further market development and deploying
new marketing tools, such as customer relationship
management software for more touch points with
potential subscribers. The consolidation of the Health
Watch platform into Lifeline is well under way and will
be completed in 2008.
In 2007, Philips Remote Patient Management – with
some 400 employees – focused on building awareness
within the home health industry of its comprehensive
offering of telehealth products and services for post-
hospital discharge monitoring of chronically ill patients.
This offering includes wireless home telemonitoring
devices and web-based clinical review software, as well
as a suite of services such as data review, program
development and deployment support designed to help
customers build or improve their telehealth programs.
In 2008, Philips Remote Patient Management will continue
to focus on the home care market. By implementing
initiatives designed to leverage Lifeline’s relationships
with home health agencies, and by developing strategic
relationships with home care associations and technology
partners, Philips expects patient enrollment to increase
gradually and consistently throughout the year.
The recent acquisition of Raytel Cardiac Services,
a provider of solutions for pacemaker, implanted
debrillator, holter, event and anticoagulation monitoring,
complements Philips’ portfolio of home healthcare
solutions. By adding home cardiac monitoring services
and clinical call center competencies, the acquisition
allows Philips to better serve the home healthcare
market and exploit potential synergies with its cardiology
competency. Over the next several years, Philips will
leverage Raytel’s clinical call center infrastructure,
referral base and experience in out-of-hospital services
to enhance its home healthcare business.
Our proposed acquisition of Respironics – a leading
US-based global provider of innovative respiratory
and sleep therapy solutions for hospital and home use
– is part of Philips’ strategy to create a global leadership
position in the fast-growing home healthcare market,
where we can leverage our Philips brand and our
understanding of people’s needs. Building upon the prior
2007 acquisitions of Health Watch and Raytel Cardiac
Services, the acquisition of Respironics will establish
us as the market leader in home healthcare solutions.
2007 nancial performance
Consumer Healthcare Solutions’ sales grew by 47%
on a nominal basis, reaching EUR 168 million in 2007,
partly due to the acquisition of Health Watch in
the second quarter and Raytel Cardiac in the fourth.
On a comparable basis, sales growth of 10% was largely
driven by Lifeline.
EBITA was in line with 2006, at a loss of EUR 2 million.
The improved performance at Lifeline was offset by post-
merger integration costs of EUR 6 million, mainly related
to Health Watch.
EBIT showed a loss of EUR 19 million, in line with the
2006 loss of EUR 18 million.
The positive cash ow generated by operating activities
was more than offset by cash outows for the acquisitions
of Health Watch and Raytel Cardiac. In 2006, the
acquisition of Lifeline Systems resulted in a cash
outow of EUR 583 million.
With regard to sourcing, please refer to the business
description of Philips Supply Management that begins
on page 96 of this Annual Report.
With regard to regulatory requirements, please refer
to regulatory requirements in the business description
of Medical Systems that begins on page 69 of this
Annual Report.
With regard to strategy and 2008 objectives, please refer
to the Philips Healthcare strategy and 2008 objectives
that begins on page 69 of this Annual Report.