Philips 2015 Annual Report Download - page 52

Sector performance 6.2.2
52 Annual Report 2015
6.2.2 About Consumer Lifestyle in 2015
Through our various businesses, we aim to make a
dierence to people’s lives by enabling them to make
healthy choices every day based on locally relevant
innovation. In recent years we have been responding to
the need and desire of consumers to take charge of
their personal health journey. We service our customers
across the health continuum, delivering innovation in
healthy living and disease prevention. In doing so, we
target more attractive markets with better margins.
We are focused on value creation through category
leadership and operational excellence, driving global
leadership positions. We are increasing the quality and
local relevance of product innovation, the speed with
which we innovate, and expanding our distribution to
capture increasing spending power in growth
geographies.
Through 2015, Consumer Lifestyle has been built
around businesses and markets, enabling us to direct
investments to where the growth is, addressing locally
relevant consumer needs. We create global platforms
that can be adapted for local relevance.
Our end-to-end approach is accelerating specialist
capability development in mature markets, to enable
eective partnerships with customers and consumers,
and in growth geographies, to enable development of
go-to-market strategies.
In 2015, the Consumer Lifestyle sector consisted of the
following areas of business:
• Health & Wellness: mother and child care, oral
healthcare, pain management
• Personal Care: male grooming, beauty
• Domestic Appliances: kitchen appliances, coee, air
purication, garment care, oor care
Philips Consumer Lifestyle
Total sales by business as a %
2015
24Health & Wellness
33Personal Care
43Domestic Appliances
Through our personal health businesses, we offer a
broad range of products from high to low price/value
quartiles, necessitating a diverse distribution model. We
continue to expand our portfolio and increase its
accessibility, particularly in lower-tier cities in growth
geographies. We are well positioned to increasingly
capture growth in online sales and are building our
digital and e-commerce capabilities across the
company. We are adapting our web functionality to offer
consumers a better user experience via smaller screens,
driving improvements from conversion to sales.
We are leveraging connectivity to engage consumers in
new and impactful ways through social media and digital
innovation. For example, in 2015 we launched Philips
Avent uGrow, a new digital parenting platform which
supports the healthy development of babies, and also the
latest Philips Sonicare for Kids Connected toothbrush.
Under normal economic conditions, Philips’ personal
health businesses experience seasonality, with higher
sales in the fourth quarter.
In 2015, Consumer Lifestyle employed approximately
16,000 people worldwide. The global sales and service
organization covered more than 50 developed and
growth geographies. In addition, we operated
manufacturing and business creation organizations in
Argentina, Austria, Brazil, China, India, Indonesia, Italy,
the Netherlands, Romania, the UK and the US.
Commitment to quality
The implementation of the Philips Business System is
embedding a fundamental commitment to quality
across all our processes, products, systems and
services. Philips’ personal health businesses are subject
to 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. We have
a growing portfolio of medically regulated products in
our 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 CFDA in China and comparable
regulations in other countries. Through our growing
beauty, oral healthcare and mother and child care
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
14.2.8, Supplier indicators, of this Annual Report.
6.2.3 2015 business highlights
• The success of established propositions like the
Philips Sonicare DiamondClean and the Philips
Sonicare AirFloss Ultra, along with new innovations
like Philips Sonicare for Kids Connected, drove
continued growth across the world, in particular in
China, Japan, Germany and North America.
• Continuing the geographical expansion of Philips
product innovations, we reached the milestone of 5
million Philips Airfryers sold. Philips is the market
leader in the world’s low-fat fryer market.
• Delivering on its male grooming growth strategy to
drive loyalty and create more value among existing
users, Philips launched the Philips Smart Shaver
Series 7000.