Philips 2013 Annual Report Download - page 79

5 Sector performance 5.2.2 - 5.2.4
Annual Report 2013 79
A new innovation site in Shanghai is fully equipped to
target specific market needs. Innovating directly in the
market allows us to increase the annual number of
locally relevant introductions and to implement
product and packaging updates faster.
Regulatory requirements
Consumer Lifestyle is subject to significant regulatory
requirements in the markets where it operates. This
includes the European Union’s Waste from Electrical
and Electronic Equipment (WEEE), Restriction of
Hazardous Substances (RoHS), Registration,
Evaluation, Authorization and Restriction of Chemicals
(REACH), Energy-use of Products (EuP) requirements
and Product Safety Regulations. Consumer Lifestyle
has a growing portfolio of medically regulated products
in its Health & Wellness and Personal Care businesses.
For these products we are subject to the applicable
requirements of the US FDA, the European Medical
Device Directive, the SFDA in China, the regulations
stipulated by Health Authorities in India and
comparable regulations in other countries. Through our
growing beauty, oral healthcare and mother and
childcare product portfolio the range of applicable
regulations has been extended to include requirements
relating to cosmetics and, on a very small scale,
pharmaceuticals.
With regard to sourcing, please refer to sub-section
13.2.2, Supplier indicators, of this Annual Report.
5.2.3 2013 highlights
• Building our leadership in digital innovation, we
unveiled a range of connected consumer
propositions at this year’s IFA trade show in Berlin.
Highlights included a smart air purifier, baby monitor
and a digital grooming guide.
• The extended Philips AVENT Natural infant feeding
range was showcased at the Kind + Jugend fair in
Germany. The Natural baby bottle is proven to be
more easily accepted by babies, thanks to its unique
teat design.
• Further strengthening our global leadership, the
latest introductions in Oral Healthcare, including the
Philips Sonicare PowerUp and Sonicare FlexCare
Platinum, have been well received by consumers and
are driving strong growth in North America and China.
• Continuing the geographical expansion and
localization of proven product innovations, we
introduced the Airfryer in Japan and the SoupMaker
in markets across Europe, the Middle East and Latin
America. Additionally, following major success in
Russia, the MultiCooker was launched in several
European markets, with initial market response
exceeding expectations.
• Innovative, precision tools are driving market share
and brand preference in male grooming. Following
the successful launch of the Click & Style range, we
further expanded our portfolio with the introduction
of the world’s first laser-guided beard trimmer: the
Philips Beard Trimmer 9000.
• Demonstrating our ability to respond quickly to local
market opportunities, we recorded strong sales
growth in our air purifier business in China on the back
of heightened awareness of outdoor air quality in the
country.
5.2.4 2013 financial performance
Key data
in millions of euros unless otherwise stated
2011 2012 2013
Sales 3,771 4,319 4,605
Sales growth
% increase (decrease), nominal 14 15 7
% increase (decrease), comparable1) 11 9 10
EBITA 1) 153 456 483
as a % of sales 4.1 10.6 10.5
EBIT 109 400 429
as a % of sales 2.9 9.3 9.3
Net operating capital (NOC)1) 874 1,205 1,261
Cash flows before financing activities1) (271) 422 472
Employees (FTEs) 15,471 16,542 17,854
1) For a reconciliation to the most directly comparable GAAP measures, see
chapter 14, Reconciliation of non-GAAP information, of this Annual Report
Sales amounted to EUR 4,605 million, a nominal
increase of 7% compared to 2012. Excluding a 3%
negative currency impact, comparable sales were 10%
higher year-on-year. Domestic Appliances achieved
strong double-digit growth, while Health & Wellness
and Personal Care recorded high-single-digit growth.
From a geographical perspective, comparable sales
showed a 17% increase in growth geographies and 4%
growth in mature geographies. In growth geographies,
the year-on-year sales increase was driven by Russia
and China, primarily in our Domestic Appliances and
Personal Care businesses. Growth geographies’ share
of sector sales increased from 45% in 2012 to 47% in
2013.
EBITA increased from EUR 456 million, or 10.6% of
sales, in 2012 to EUR 483 million, or 10.5% of sales, in
2013. Restructuring and acquisition-related charges