Philips 2014 Annual Report Download - page 133

Group nancial statements 12.9
Annual Report 2014 133
Sales composition
Philips Group
Sales composition in millions of EUR
2012 - 2014
2012 2013 2014
Goods 18,715 18,398 17,972
Services 3,121 3,130 2,948
Royalties 398 462 471
Sales 22,234 21,990 21,391
Philips has no single external customer that represents
10% or more of sales.
Costs of materials used
Cost of materials used represents the inventory
recognized in cost of sales.
Employee benet expenses
Philips Group
Employee benet expenses in millions of EUR
2012 - 2014
2012 2013 2014
Salaries and wages 5,221 4,722 5,018
Post-employment benets costs 334 354 326
Other social security and similar
charges:
- Required by law 639 621 623
- Voluntary 167 117 113
Employee benet expenses 6,361 5,814 6,080
The employee benet expense relate to employees
who are working on the payroll of Philips, both with
permanent and temporary contracts.
For further information on post-employment benet
costs, see note 20, Post-employment benets.
For details on the remuneration of the members of the
Board of Management and the Supervisory Board, see
note 29, Information on remuneration.
Employees
The average number of employees by category is
summarized as follows:
Philips Group
Employees in FTEs
2012 - 2014
2012 2013 2014
Production 52,055 50,628 48,110
Research and development 12,470 11,757 11,714
Other 32,134 31,673 32,684
Employees 96,659 94,058 92,508
3rd party workers 13,968 12,194 12,562
Continuing operations 110,627 106,252 105,070
Discontinued operations 11,507 10,792 9,222
Employees consist of those persons working on the
payroll of Philips and whose costs are reected in the
Employee benet expenses table. 3rd party workers
consist of personnel hired on a per-period basis, via
external companies.
Depreciation and amortization
Depreciation of property, plant and equipment and
amortization of intangible assets, including
impairments, are as follows:
Philips Group
Depreciation and amortization in millions of EUR
2012 - 2014
2012 2013 2014
Depreciation of property, plant and
equipment 588 521 592
Amortization of internal-use software 45 39 32
Amortization of other intangible assets 411 393 332
Amortization of development costs 198 224 231
Depreciation and amortization 1,242 1,177 1,187
Depreciation of property, plant and equipment is
primarily included in cost of sales. Amortization of the
categories of other intangible assets are reported in
selling expenses for brand names and customer
relationships and are reported in cost of sales for
technology based and other intangible assets.
Amortization of development cost is included in
research and development expenses.
Shipping and handling
Shipping and handling costs are included in cost of
sales and selling expenses.
Advertising and promotion
Advertising and promotion costs are included in selling
expenses.
Audit fees
Philips Group
Fees KPMG in millions of EUR
2012 - 2014
2012 2013 2014
Audit fees 14.7 15.6 14.9
- consolidated nancial statements 9.7 10.1 9.6
- statutory nancial statements 5.0 5.5 5.3
Audit-related fees 1) 5.6 2.2 3.9
- acquisitions and divestments 2.9 0.4 2.4
- sustainability assurance 0.8 0.7 0.6
- other 1.9 1.1 0.9
Tax fees 2) 1.3 0.8 0.2
- tax compliance services 1.3 0.8 0.2
Other fees 0.7 1.3 0.0
- royalty investigation 0.1 0.0 0.0
- other 0.6 1.3 0.0
Fees KPMG 22.3 19.9 19.0
1) The percentage of audit-related fees in 2014 is 20.5% of the total fees
2) The percentage of tax fees in 2014 is 1.1% of the total fees
This table ’Fees KPMG’ forms an integral part of the
Company Financial Statements, please refer to note B,
Audit fees.
Impairment of goodwill
In 2014, goodwill impairment charges amount to EUR 3
million consisting of impairments on divested
businesses in Healthcare and Lighting. In 2013, goodwill