Philips 2011 Annual Report Download - page 9

Message from the CEO
Annual Report 2011 9
Looking forward
Our mission remains to improve people’s lives through
meaningful innovation. And we have now tightened the
vision that guides us:
At Philips, we strive to make the world healthier and more
sustainable through innovation. Our goal is to improve the lives
of 3 billion people a year by 2025. We will be the best place
to work for people who share our passion. Together we will
deliver superior value for our customers and shareholders.
In light of key global trends and challenges – e.g. the
demand for affordable healthcare, the energy efficiency
imperative, and people’s desire for personal well-being –
we are confident in our chosen strategic direction.
We have a focused portfolio, with strong potential in both
mature and growth geographies such as China and India.
The large majority of our businesses have the right
fundamentals for profitable growth, and we are seeing
growth in our core businesses. And where there are
pressing operational issues, we are working tirelessly to
turn things round and increase productivity.
The value potential in our portfolio is underpinned by
talent and strong assets. As demonstrated at our
Innovation Experience event, held in September 2011 to
mark 120 years of Philips, our innovation and design
capabilities are rightly world-renowned, and we hold
strong technology and intellectual property positions. In
2011 we also secured our highest-ever placing (41st) on
the annual Interbrand ranking of the world’s most valuable
brands, as well as being named one of China’s top ten
consumer brands by Superbrands. And, crucially, we have
capable and motivated people and leadership: our 2011
Employee Engagement Survey showed an Employee
Engagement Index of 76%, down one percentage point,
and a People Leadership Index of 78%, up two percentage
points. And all of this is supported by a solid balance sheet.
We are still in the early stages of a multi-year
transformation of our company, and I am delighted that
the organization is responding well to the Accelerate!
initiatives. Accelerate! will drive granular execution of our
plans and enable the necessary investments in innovation,
people, systems, and markets to deliver profitable growth
and return on invested capital. And we will reap the
benefits of our new culture of entrepreneurship and
accountability, and commitment to business excellence.
We are cautious about 2012, given the uncertainty in the
global economy, and Europe in particular. In addition, we
expect our 2012 results to be affected by the previously
communicated restructuring charges and one-time
investments aimed at improving our business
performance trajectory, as part of Accelerate! Excluding
these additional charges, we anticipate that underlying
operating margins and capital efficiency in the sectors will
improve in the latter part of 2012. While we are
concerned about the economic environment, all of us at
Philips are fully committed to improve our operational
performance to achieve our mid-term (2013) financial
targets.
On behalf of the Executive Committee, I would like to
thank our customers for their loyalty to Philips over this
past year. I would also like to thank all our employees for
their hard work – as well as for their willingness to
embrace change. And finally I would like to thank our
other stakeholders, in particular our shareholders, for
their continued support in these challenging times. We
have set out on a demanding and exciting journey. More
than ever, we are resolved to accelerate, unlock Philips’
full potential, and grow the value of your investment.
Frans van Houten,
Chief Executive Officer