Philips 2012 Annual Report Download - page 77

6 Sector performance 6.3.3 - 6.3.4
Annual Report 2012 77
(project luminaires, systems and services). Automotive
Lighting is organized in two businesses: OEM and After-
market.
The conventional lamps industry is highly consolidated,
with GE and Siemens/Osram as key competitors. The LED
lighting market, on the other hand, features a wide variety
of competitors, ranging from start-ups to multinationals.
The luminaires industry is fragmented, with our
competition varying per region and per market segment.
Under normal economic conditions, Lighting’s sales are
generally not materially affected by seasonality.
Philips Lighting has manufacturing facilities in some 25
countries in all regions of the world, and sales
organizations in more than 60 countries. Commercial
activities in other countries are handled via distributors
working with our International Sales organization. Lighting
has 50,200 employees worldwide.
Regulatory requirements
Lighting is subject to significant regulatory requirements
in the markets where it operates. These include the
European Union’s Waste from Electrical and Electronic
Equipment (WEEE), Restriction of Hazardous Substances
(RoHS), Energy-using Products (EuP) and Energy
Performance of Buildings (EPBD) directives.
With regard to sourcing, please refer to section 14.5,
Supplier indicators, of this Annual Report.
Total sales by business 2012
as a %
Light Sources &
Electronics
52
Consumer Luminaires
5
Professional
Lighting Solutions
29
Automotive
9
Lumileds
5
6.3.4 Progress against targets
The Annual Report 2011 set out a number of key targets
for Philips Lighting in 2012 that are steps towards
achieving our Accelerate! mid-term 2013 goals. Our
progress is outlined below.
Implement Accelerate! transformation
We are speeding up implementation of the Accelerate!
program. We have adapted our processes to improve
deliveries in all our geographies. We are taking a granular
approach to investment choices through our Business
Market Combination (BMC) plans, which are based on
local customer insights. We have projects running to
increase revenue, expand margins and reduce time-to-
market and inventories, and we are aligning our processes
in order to better serve our customers. In addition, we
are strengthening accountability and simplifying our way
of working, leading to cost savings. Driving the whole
transformation is the deployment of culture
transformation programs across all levels of the
organization.
Accelerate transformation to LED,
applications and solutions
In 2012 we further strengthened our expertise in LED
development and application. Our LED-based sales grew
by 41% compared to 2011, representing some 22% of
total Lighting sales. Sales growth of LED-based
applications was approximately 58%. To strengthen our
leadership position, we established a cost-reduction
program for LED lamps and expanded our portfolio of
LED solutions in professional, automotive and home
segments.
We continued to invest in growing our solutions
(luminaires, controls, software and services) business, and
sales increased by 31% in 2012. We are creating value
through seamless integration of controls and management
software in our LED-based solutions.
With the journey from initial idea to marketable product
taking only nine months, the development of our hue
connected lighting system illustrates how our
organization has embraced the journey to accelerate.
Effective and efficient collaboration across multiple
disciplines significantly shortened time-to-market for this
ground-breaking solution.
Strengthen performance management and
execution
We are stepping up the pace of Accelerate! to prepare
our organization to take full advantage of LED-driven
future opportunities. We have now connected our
business and market teams through our BMC approach
to win customers in key markets. Projects are reducing
complexity, improving execution along our end-to-end
customer value chain, and increasing speed to market –
all with the aim of driving market leadership, accelerating
growth and boosting profitability.