Philips 2015 Annual Report Download - page 8

Message from the CEO 2
8 Annual Report 2015
Innovating for a healthier, more sustainable world
In 2015, our innovative solutions and services improved
the lives of 2 billion people around the world.
Underlining our strength in the creation and protection
of intellectual property we led 1,750 new patents
during the year and were named the world’s second-
largest patent applicant for patents led at the
European Patent Oce.
We also entered into a ve-year research alliance with
Massachusetts Institute of Technology (MIT) to develop
breakthrough innovations in health technology and
connected lighting. And our North American research
organization moved to the Cambridge, Mass. area to
facilitate collaboration with MIT, academic hospitals,
and business partners.
In 2015, we again delivered on our sustainability
commitments, with Green Products accounting for 54%
of total sales. Philips was recognized as a world leader
for corporate action on climate change, achieving a
perfect score (100A) in the Carbon Disclosure Project
(CDP) Climate Change survey for the 3rd year in a row,
and being named Leader in the Industrial
Conglomerates category in the Dow Jones
Sustainability Index. Keeping up the momentum, we
committed to making Philips’ operations carbon-
neutral by 2020 at the 2015 Paris climate conference.
Underlining the importance we attach to ‘doing good
while doing well’, the Philips Foundation entered into
global innovation partnerships with the Red Cross and
UNICEF, as well as supporting a host of innovation
projects designed to make a dierence in the
communities and lives of those most in need.
Strategic priorities for 2016
In light of the global trends and opportunities outlined
above and the innovative competencies we can bring
to bear, both our health technology and lighting
businesses are well placed to thrive as markets drive
greater demand for our solutions and services.
Both companies are deeply committed to delivering on
their strategic opportunities. For Philips, serving the
health technology markets, this means building strong
consultative customer relationships, selling value-
added solutions and winning more large-scale, multi-
year projects with healthcare providers. It also means
delivering growth from innovation investments,
establishing the Philips HealthSuite digital platform as
a leading cloud-based enabling solution, and boosting
scale in its existing businesses.
For Lighting, as a stand-alone company, it means:
optimizing returns from conventional products to fund
innovation in LED, to outpace the market; leading the
shift to LED systems, building the largest IoT connected
installed base; capturing adjacent value through new
Services business models; and being its customers’ best
business partner locally, leveraging its global scale.
Both companies will remain strongly committed to
improve performance and capture higher growth,
focusing ever more closely on customers’ needs, driving
new ways to innovate and leveraging partnerships,
embracing digital technology in their ways of working,
and relentlessly driving a mindset of continuous
improvement and operational excellence.
It is my deepest conviction that both Philips and
Lighting stand to benet from the separation, as it will
enable greater focus on their respective attractive
markets and allow them to capture higher growth and
deliver higher protability.
In conclusion
For 2016, we continue to expect modest comparable
sales growth and we will build on our 2015 operational
performance improvement. Taking into account
ongoing macro-economic headwinds and the phasing
of costs and sales, we expect improvements in the year
to be back-end loaded.
We are proposing to the upcoming Annual General
Meeting of Shareholders to maintain this year’s
distribution at EUR 0.80 per share, in cash or shares.
Philips Group
Dividend per common share in EUR
2010-2016
0.70
‘10
0.75
‘11
0.75
‘12
0.75
‘13
0.80
‘14
0.80
‘15
0.80
‘161)
1) Subject to approval by the 2016 Annual General Meeting of
Shareholders
I would like to thank our customers, shareholders and
other stakeholders for their continued support. I also
want to thank all our employees for their dedication and
eort this past year.
In 2016, Philips celebrates 125 years in business. That’s
a tremendous feat for an innovation company,
especially in such a fast-changing world. And I’m
convinced that there is much more to come, as we
continue to improve people’s lives through meaningful
innovation.
Frans van Houten
Chief Executive Ocer