Philips 2012 Annual Report Download - page 82

6 Sector performance 6.4.1 - 6.4.2
82 Annual Report 2012
Clinical Informatics. While PIC originally started as a
software center, it has since developed into a product
development center (including mechanical, electronics,
and supply chain capabilities). Several Healthcare
businesses have also located business organizations
focusing on growth geographies at PIC.
New Venture Integration
The New Venture Integration group focuses on the
integration of newly acquired companies across all
sectors.
Philips Design
Philips Design partners with the Philips businesses, Group
Innovation and functions to ensure that our innovations
are meaningful and locally relevant, and that the Philips
brand experience is preferable and consistent across all
its touch-points.
Philips Design is a global function within the company,
comprised of a Group Design team that drives the
function and develops new competences, and fully
integrated sector Design teams ensuring close alignment
with the Philips businesses. The organization is made up
of designers across various disciplines, as well as
psychologists, ergonomists, sociologists and
anthropologists – all working together to understand
people’s needs and desires and to translate these into
relevant solutions and experiences that create value for
people and business. Design’s forward-looking
exploration projects deliver vital insights for new business
development.
Philips Design is widely recognized as a leader in people-
centric design. In 2012, it won over 120 key design awards
in the areas of product, communication and innovation
design.
Philips Healthcare Incubator
The Philips Healthcare Incubator is a dedicated corporate
venturing organization within Philips. Its mission is to
identify novel business opportunities based on the unmet
needs of patients and their care providers, and to
transform these into successful business ventures. It
focuses on breakaway solutions to these unmet needs in
areas that are of strategic interest to Philips. The ultimate
goal is to create breakthrough businesses for Philips in
health care.
6.4.2 2012 financial performance
Key data
in millions of euros unless otherwise stated
2010 2011 2012
Sales 630 474 410
Sales growth
% increase (decrease), nominal 14 (25) (14)
% increase (decrease), comparable1) 14 (11) (7)
EBITA of:
Group Innovation (84) (51) (122)
IP Royalties 258 198 179
Group and Regional costs (142) (134) (154)
Accelerate! investment − (28) (128)
Pensions 100 (23) 48
Service Units and other (112) (169) (494)
EBITA1) 20 (207) (671)
EBIT 14 (217) (679)
Net operating capital (NOC)1) (3,399) (3,895) (4,521)
Cash flows before financing activities1) (542) (1,295) (1,044)
Employees (FTEs) 11,929 12,474 11,492
1) For a reconciliation to the most directly comparable GAAP measures, see
chapter 15, Reconciliation of non-GAAP information, of this Annual Report
In 2012, sales amounted to EUR 410 million, EUR 64
million lower than in 2011, attributable to the divestment
of Assembléon in 2011 as well as lower royalty income.
EBITA in 2012 amounted to a loss of EUR 671 million,
compared to a loss of EUR 207 million in 2011. The year-
on-year decrease in EBITA was largely attributable to a
EUR 313 million fine issued by the European Commission
in relation to the alleged violation of competition rules in
the Cathode-Ray Tube (CRT) industry and provisions
related to various legal matters totaling EUR 132 million.
Restructuring and acquisition-related charges amounted
to EUR 56 million in 2012, compared to EUR 23 million
in 2011.
EBITA at Group Innovation was EUR 71 million lower
than in 2011, attributable to new innovation and design
initiatives, as well as higher investments in new value
spaces.
Group & Regional Overhead costs were EUR 20 million
higher than in 2011, mainly due to increased costs related
to strengthening the market access and growth initiatives.
Accelerate! investments amounted to EUR 128 million in
2012, and include investments in IT infrastructure,
internal departments and external consultancy dedicated
to the Accelerate! program.