Philips 2009 Annual Report Download - page 91

that gives true cinematic viewing in the home) plus
lifestyle television
• Shaving & Beauty – electric shavers, female depilation
appliances, haircare and male grooming products,
vitality solutions and skincare
• Audio & Video Multimedia – home and portable audio
and video entertainment, including Blu-ray Disc
playback, MP3 and MP4 players, and docking stations for
portable entertainment devices
• Domestic Appliances – kitchen appliances, floor care,
garment care, water and air purifiers, beverage
appliances. In 2009 this area of business was
considerably strengthened through the acquisition of
Saeco International Group S.p.A. of Italy, making Philips
a global leader in coffee machines
• Health & Wellness – oral healthcare, mother and
childcare, relationship care
• Peripherals & Accessories – mobility accessories
(including headphones, portable audio accessories),
remote controls, PC peripherals, digital picture frames,
audio and video communications (including DECT and
VoIP digital cordless phones).
Total sales by business 2009
as a %
Health & Wellness
6
Television
37
Audio & Video Multimedia
14
Peripherals &
Accessories
11
Other incl.
Licenses
4
Domestic
Appliances
15
Shaving & Beauty
13
We also partner with leading companies from other fields,
such as Sara Lee/Douwe Egberts and Nivea Beiersdorf, in
order to deliver customer-focused appliance/consumable
combinations. Consumer Lifestyle has continued its
business with international key accounts, particularly in
emerging markets. The introduction of more ‘flagship’
online stores for our products has added further key
touch-points to the consumer brand experience.
We offer a broad range of products from high to low
price/value quartiles, necessitating a diverse distribution
model that includes mass merchants, retail chains,
independents and small specialty stores often represented
by buying groups, as well as online retailers and
distributors/wholesalers.
Under normal economic conditions, the Consumer
Lifestyle business experiences seasonality, with higher
sales in the fourth quarter resulting from the holiday sales.
Consumer Lifestyle employs approximately 18,400
people worldwide. This increase on the 2008 level of
17,000 was mainly due to the acquisition of Saeco, which
brought around 2,000 new employees – and a lot of
valuable experience and expertise – to our sector. Our
global sales and service organization covers more than 50
mature and emerging markets. In addition, we operate
manufacturing and business creation organizations in the
Netherlands, France, Belgium, Austria, Hungary,
Singapore, Argentina, Brazil and China.
Consumer Lifestyle strives for full compliance with
relevant regulatory requirements.
With regard to sourcing, please refer to the section
Supply management under section 4.1.14, Performance by
key function, of this Annual Report.
5.3.5 Progress against targets
The Annual Report 2008 set out a number of key targets
for Philips Consumer Lifestyle in 2009. The advances
made in addressing these are outlined below.
Further optimize the business portfolio to focus on higher
growth, higher-margin product categories and to build on
global and regional leadership positions
In 2009, Consumer Lifestyle placed particular emphasis on
ensuring the right product/market combinations exist
across its portfolio, as it progressively shifts focus to
consolidate global and regional leadership positions. For
example, the Television business has achieved market co-
leadership positions in selected product-market
combinations in Europe primarily due to its focus on
higher-margin categories. Audio & Video Multimedia
implemented portfolio choices to shift from traditional
lower-margin propositions to emerging value spaces in
home cinema and home audio & video.
Consumer Lifestyle is also making bold choices in many
markets regarding which categories to pursue and grow.
For example, Television has evolved from a business
based on scale to one driven by differentiation, especially
in its channel/market mix. Traditional world-class
competencies in areas like picture quality and technical
performance have been maintained, while additional focus
has been placed on differentiated design and experiences.
As part of this strategic shift, Philips and TPV Technology
concluded a brand licensing agreement for Philips’ PC
monitors business that came into effect in the second
quarter of 2009.
5 Our sector performance 5.3.4 - 5.3.5
Philips Annual Report 2009 91