Philips 2014 Annual Report Download - page 44

Sector performance 6
44 Annual Report 2014
6Sector performance
Philips Group
Our structure
2014
Healthcare
Imaging Systems
Customer Services
Healthcare Informatics,
Solutions & Services
Patient Care &
Monitoring Solutions
Consumer
Lifestyle
Personal Care
Domestic Appliances
Health & Wellness
Lighting
Light Sources &
Electronics
Consumer Luminaires
Professional Lighting
Solutions
Automotive Lighting1)
Lumileds1)
Innovation,
Group & Services
Group Innovation
Intellectual Property &
Royalties
Group and regional
costs
Koninklijke Philips N.V.
1) On June 30, 2014, Philips announced the start of the process to combine the Lumileds and Automotive Lighting businesses into a stand-alone company and
explore strategic options to attract capital from third-party investors for this combined business. The results of the combined Lumileds/Automotive Lighting
components business are reported as discontinued operations.
Our structure in 2014
Koninklijke Philips N.V. (the ‘Company’) is the parent
company of the Philips Group (‘Philips’ or the ‘Group’).
The Company is managed by the members of the Board
of Management and Executive Committee under the
supervision of the Supervisory Board. The Executive
Committee operates under the chairmanship of the
Chief Executive Ocer and shares responsibility for the
deployment of Philips’ strategy and policies, and the
achievement of its objectives and results.
In 2014, Philips’ activities in the eld of health and well-
being were organized on a sector basis, with each
operating sector – Healthcare, Consumer Lifestyle and
Lighting – being responsible for the management of its
businesses worldwide.
The Innovation, Group & Services sector includes the
activities of Group Innovation and Group and regional
management organizations. Additionally, the global
shared business services for procurement, nance,
human resources, IT and real estate are reported in this
sector, as well as certain pension costs.
At the end of 2014, Philips had 93 production sites in 25
countries, sales and service outlets in approximately
100 countries, and 113,678 employees.
2015 and beyond
In September 2014 Philips announced its plan to
sharpen its strategic focus by establishing two stand-
alone companies focused on the HealthTech and
Lighting Solutions opportunities.
To achieve this transformation, from January 1, 2015,
Philips started to integrate the sectors Consumer
Lifestyle and Healthcare into one operating company
focused on our HealthTech businesses. At the same
time Philips is taking the next step in the
implementation of its new operating model which will
give the company a dedicated, focused and lean
management structure, as a result of the planned
integration of the relevant sector and group layers.
Philips also started the process to carve out its Lighting
business into a separate legal structure and will
consider various options for ownership structures with
direct access to capital markets.
The establishment of the two stand-alone companies
will also involve the split and allocation of the current
Innovation, Group & Services sector to each company
in 2015. This means that in the course of 2015 the IG&S
sector as currently described in this Annual Report will
disappear and no longer be presented as a separate
segment for reporting purposes.