Philips Faces Challenging Year in 2014 despite Growth in Lighting Business

The year started off challenging for Philips, with currency impact from China and Russia and voluntary suspension of their healthcare production facility in Cleveland which resulted in flat comparable sales growth and decline in EBITA. Hoever, Lighting continued to deliver a YoY operational margin improvement. 

"For Lighting, LED-based sales grew by 37 percent, and we are encouraged by the positive reception given by our customers to our broad range of new connected lighting solutions demonstrated at the Light + Building trade fair in Germany, " said CEO Frans van Houten. "Looking ahead, 2014 will be a challenging year, but we remain very confident of achieving our 2016 mid-term financial targets."

Lighting comparable sales were flat YoY. Lumileds and Automotive achieved double-digit growth, while Light Sources & Electronics and Professional Lighting Solutions posted a low-single-digit decline and Consumer Luminaires recorded a high-single-digit decline. LED-based sales grew by 37 percent compared to 1Q13 and now represent 33 percent of total Lighting sales. In growth geographies, comparable sales (excluding OEM Lumileds) showed a low-single-digit increase. EBITA margin excluding restructuring and acquisition-related charges was 9.0 percent, a YoY improvement of 0.6 percentage points.

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