Philips 2011 Annual Report Download - page 13

2 Our strategic focus 2 - 2
Annual Report 2011 13
sector focuses on innovative ways of using light to
enhance people’s lives where they live and work – at
home, at school, at work, in shops and public places, as
well as on the road. Recognizing how resource
conservation and climate protection will play an
increasingly significant part in human health and well-
being, we pay special attention to maximizing the effect of
lighting while minimizing the energy required to produce
it.
Consumer Lifestyle
Lighting Healthcare
Our market opportunity
Global trends and challenges
• Growing and aging populations
• Increase in patients managing chronic conditions
• Growth geographies wealth creating demand
• Lifestyle changes fueling cardiovascular illnesses and respiratory and sleeping disorders
• Consumer focus on health and well-being
• Rising middle class in growth geographies
• Back to basics: simple propositions
• Trusted brands combined with locally relevant portfolio
• Ongoing urbanization and globalization
• Increasing need for energy-efficient solutions
• Fast-growing global illumination market
• Expanding renovation market
• Rapid adoption of LED-based lighting solutions
Ongoing focus on growth geographies
Growth geographies are vitally important to Philips. As
the number of middle-class households in these markets
grows, we expect demand for our products to increase
as people have more money to spend on feeling and
staying healthy. Therefore, we will continue to make sure
we address local needs effectively and to invest in having
the right capabilities and resources in place to win in these
growth geographies.
We want to be seen as clear leaders in
sustainability
We are committed to being a leading company in matters
of sustainability. We look at sustainability through the
lenses of our sectors and define specific ambitions (to be
realized by the end of 2015) for each of them: bring care to
500 million people; improve the energy efficiency of our
overall portfolio by 50%; double the global collection and
recycling amounts of Philips products as well as the
amount of recycled materials in our products.
Our mid-term 2013 financial targets
We measure value through a balanced combination of
sales growth and return on invested capital (driven by
EBITA, capital turns and free cash flow) in conjunction
with other financial, operational and strategic key
performance indicators.
Our mid-term financial targets (to be realized by the end
of 2013):
• Comparable sales growth CAGR of 4-6%, assuming real
GDP growth of 3-4% per annum
• Reported EBITA margins of 10-12% for the Group;
15-17% for Healthcare; 8-10% for Consumer Lifestyle
(excluding unrelated licenses); 8-10% for Lighting
• Return on invested capital of 12-14%