Philips 2014 Annual Report Download - page 14
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Our strategic focus 4.2
14 Annual Report 2014
4.3 Accelerate! journey continues
Path to Value
In 2011 we embarked upon our multi-year Accelerate! journey of change and performance improvement. This program
is made up of ve streams intended to:
• make us more customer-focused
• resource our business/market combinations to win
• create lean end-to-end customer value chains
• implement a simpler, standardized operating model
• drive a growth and performance culture
Designed to transform Philips into a truly agile and entrepreneurial company, Accelerate! is all about delivering
meaningful innovation to our customers in local markets – and doing so in a fast and ecient way.
We are now in the fourth year of this transformation process, and our Path to Value is clearly mapped out:
Philips Group
Path to Value
2011 2016
Transform to address underperformance
• Turnaround or exit underperforming businesses
• Productivity and margin improvements
• Rebuild culture, processes, systems and capabilities
• Implement the Philips Business System
Expand global leadership positions
• Invest to strengthen our core businesses
• Resource allocation to right businesses and geographies
Initiate new growth engines
• Invest in adjacencies
• Seed emerging business areas
Accelerate!
To achieve our value creation goal, we have set ourselves targets to be realized by the end of 2016. These indicate the
value we create, as measured by sales growth, protability and our use of capital.
Group nancial targets for 2016
•Comparable sales growth 4-6%
•Reported EBITA margin 11-12%
•Return on invested capital >14%
As of year-end 2014 we are tracking 1 percentage point behind on the path to achieving each of these targets. We are
convinced that this does not change our longer-term performance potential, considering the attractiveness of the
Lighting Solutions and HealthTech markets and our competitive position. Later in 2015, as we progress with the
separation of the Lighting business from the Philips Group and the re-allocation of IG&S, we will update the market
about the integral performance targets for each of the two operating companies.