Frans van Houten, President and CEO of Royal Philips Electronics
Commenting on Philips first-quarter net income, Frans van Houten, President and CEO of Royal Philips Electronics, said: “Finding a solution for our Television business was our top priority and we strongly believe that the intended 30% - 70% joint venture with TPV that was announced today will enable a return to profitability for the Television business, and an increased portfolio focus for Philips in health and well-being. Philips has been active in the TV industry for many decades and the long-term strategic partnership with TPV shows our commitment to the continuity of Philips televisions for our consumers and trade partners.
The joint venture leverages the innovation and brand strength of Philips with the scale and manufacturing strength of TPV. Philips will receive a deferred purchase price and brand license income as part of the agreement. We expect certain costs in relation to the separation which will impact short-term earnings.
In the first quarter of 2011, Healthcare showed mid-single-digit comparable sales growth, with particular strength in Patient Care and Clinical Informatics. In the same period, Lighting returned to mid-single-digit growth, driven by LED. In Consumer Lifestyle, our growth businesses grew by double digits. Comparable sales in our growth markets increased by a solid 11%. EBITA in the first quarter improved at Healthcare, while lower earnings at Lighting and Consumer Lifestyle meant that EBITA for the company as a whole was below the same quarter of 2010. The EBITA margin declined to 8.3%. Net income in the first quarter dropped to EUR 138 million from EUR 201 million in the year-earlier quarter.
We expect headwinds in 2011 due to the Japan tragedy, impacting our revenue and supply chain. We have a dedicated team working to mitigate the consequences and risks.
It is our priority to accelerate our mid-term growth and profitability trajectory. Investments will be required to achieve this. We will provide a further update in the second half of 2011.”