Earnings Release • Jan 23, 2017
Earnings Release
Open in ViewerOpens in native device viewer
Press release January 23, 2017
Eindhoven, the Netherlands – Philips Lighting (Euronext Amsterdam: LIGHT) today announced the company's fourth quarter and full year results 2016. "In 2016, our businesses performed in accordance with their strategic objectives, despite challenging conditions in some markets. We are pleased with the significant increase in profitability and solid free cash flow in our first year as a standalone company. These results mark a continued progression to achieve our strategic goals and medium term financial objectives," said CEO Eric Rondolat. "Our team remains focused on the opportunities ahead and is committed to meeting the needs of our customers through innovation, while executing concrete actions to continue improving our growth profile."
| Fourth quarter | Twelve months | |||||
|---|---|---|---|---|---|---|
| 2015 | 2016 | Change | in € million, unless otherwise indicated | 2015 | 2016 | change |
| 2,045 | 1,934 | -5.4% | Sales | 7,465 | 7,115 | -4.7% |
| -3.2% | Comparable sales growth | -2.4% | ||||
| 753 | 744 | -1.2% | Adjusted gross margin | 2,731 | 2,763 | 1.2% |
| 159 | 188 | 18.2% | Adjusted EBITA | 547 | 645 | 17.9% |
| 105 | 136 | 29.5% | EBITA | 438 | 479 | 9.4% |
| 79 | 109 | 38.0% | Income from operations (EBIT) | 331 | 369 | 11.5% |
| 42 | 63 | 50.0% | Net income | 240 | 185 | -22.9% |
| % of sales | ||||||
| 36.8% | 38.5% | Adjusted gross margin | 36.6% | 38.8% | ||
| 7.8% | 9.7% | Adjusted EBITA margin | 7.3% | 9.1% | ||
| 478 | 272 | Free cash flow | 632 | 418 | ||
| 0.43 | Basic EPS (€) | 1.26 | ||||
| 37,399 | 34,256 | Employees (FTE) | 37,399 | 34,256 |
In 2017, we expect further improvement in our Adjusted EBITA margin by approximately 50-100 basis points, in line with our medium term outlook to gradually improve the Adjusted EBITA margin to 11-13%. We also remain committed to delivering solid free cash flow. While we are cautious given global economic uncertainty, we remain committed to our ambition to return to positive comparable sales growth in the course of this year.
We propose a dividend of EUR 1.10 per share in cash, which represents a pay-out ratio of 52% of continuing net income. The dividend payment is subject to approval by the Annual General Meeting of Shareholders (AGM) to be held on 9 May 2017. Further details will be given in the agenda for the AGM.
Given our capital position whilst maintaining a compatible investment-grade profile, and in line with our capital allocation policy, we will return additional capital to our shareholders. Over the period 2017-2018, we will return up to EUR 300 million, by participating in share disposals by our main shareholder.
| Fourth quarter | Twelve months | |||||
|---|---|---|---|---|---|---|
| 2015 | 2016 | change | in € million, except percentages | 2015 | 2016 | change |
| 2,045 | 1,934 | -5.4% | Sales | 7,465 | 7,115 | -4.7% |
| -3.2% | Comparable sales growth | -2.4% | ||||
| -1.4% | Effects of currency movements | -2.0% | ||||
| 753 | 744 | -1.2% | Adjusted gross margin | 2,731 | 2,763 | 1.2% |
| -535 | -507 | Adjusted SG&A expenses | -1,952 | -1,917 | ||
| -95 | -86 | Adjusted R&D expenses | -365 | -340 | ||
| -630 | -593 | 5.9% | Adjusted indirect costs | -2,317 | -2,257 | 2.6% |
| 159 | 188 | 18.2% | Adjusted EBITA | 547 | 645 | 17.9% |
| -54 | -52 | Adjusted items | -109 | -166 | ||
| 105 | 136 | 29.5% | EBITA | 438 | 479 | 9.4% |
| 79 | 109 | 38.0% | Income from operations (EBIT) | 331 | 369 | 11.5% |
| -4 | -12 | Net financial income/expense | -8 | -67 | ||
| -33 | -35 | Income tax expense | -83 | -119 | ||
| 42 | 63 | 50.0% | Net income | 240 | 185 | -22.9% |
| 36.8% | 38.5% | Adjusted gross margin (%) | 36.6% | 38.8% | ||
| 30.8% | 30.7% | Adjusted indirect costs (%) | 31.0% | 31.7% | ||
| 7.8% | 9.7% | Adjusted EBITA margin (%) | 7.3% | 9.1% |
Overall fourth quarter results showed continued steady progress. Sales amounted to EUR 1,934 million, a decline of 3.2% on a comparable basis. The decrease was mainly due to Lamps and remaining macro-economic challenges in some markets. We saw sustained sales growth in LED and Home and stable sales in Professional.
Adjusted gross margin amounted to EUR 744 million. As a percentage of sales, adjusted gross margin improved by 170 basis points to 38.5%, largely driven by procurement savings and increased productivity, partly offset by price erosion. Adjusted indirect costs decreased by EUR 37 million, to EUR 593 million, driven by our cost
reduction program, despite a EUR 10 million charge for the brand license fee. Adjusted EBITA increased to EUR 188 million, resulting in a 190 basis point improvement of Adjusted EBITA margin at 9.7%.
Restructuring and incidental items amounted to EUR 52 million. Restructuring costs were EUR 25 million, while incidental items included a charge of EUR 25 million in separation costs.
Net income of EUR 63 million included EUR 41 million in charges which were not applicable in 2015 for the brand license fee, separation costs and financial expenses. Financial expenses were related to the financing structure of the company following its separation from Royal Philips.
We delivered a solid financial performance in our first year as a standalone company. Sales amounted to EUR 7,115 million, a decline of 2.4% on a comparable basis, showing an improved trend compared to 2015, despite challenging macro-economic conditions in some markets.
Adjusted gross margin increased to EUR 2,763 million, driven by footprint rationalization, operational leverage and procurement savings, partly offset by price reductions. Adjusted indirect costs decreased by EUR 60 million, to EUR 2,257 million, driven by cost reduction programs, despite an additional charge of EUR 36 million for the brand license fee. Adjusted EBITA reached EUR 645 million and adjusted EBITA margin increased by 180 basis
points, to 9.1%, in line with our medium term path of gradual improvement, with each business group contributing to the increase.
Restructuring and incidental items amounted to EUR 166 million. Restructuring costs were EUR 115 million, while incidental items included a charge of EUR 62 million in separation costs. As a percentage of sales restructuring costs were 1.6%. Restructuring charges for 2017 are expected to remain in line with our medium term outlook of 1.5-2.0% of sales per year.
Net income of EUR 185 million included EUR 143 million in charges which were not applicable in 2015 for the brand license fee, separation costs and financial expenses. Financial expenses were related to the new financing structure of the company following its separation from Royal Philips. Income tax expense increased mainly due to non-recurring tax charges related to the separation, recognized in the first half year of 2016.
| Fourth quarter | Twelve months | |||||
|---|---|---|---|---|---|---|
| 2015 | 2016 | change | in € million, unless otherwise indicated | 2015 | 2016 | change |
| 725 | 576 | -20.6% | Sales | 2,850 | 2,333 | -18.1% |
| -18.5% | Comparable sales growth (%) | -15.8% | ||||
| 107 | 110 | 2.8% | Adjusted EBITA | 463 | 472 | 1.9% |
| 14.8% | 19.1% | Adjusted EBITA margin (%) | 16.2% | 20.2% | ||
| 85 | 93 | 9.4% | EBITA | 405 | 435 | 7.4% |
Sales amounted to EUR 576 million, a decline of 18.5% on a comparable basis. All regions experienced a decline in sales. Adjusted EBITA increased to EUR 110 million, mainly driven by manufacturing footprint rationalization, procurement and productivity savings. Adjusted EBITA margin improved by 430 basis points to 19.1%. Restructuring costs amounted to EUR 17 million, primarily related to ongoing rationalization of our manufacturing footprint. Active management of our business portfolio led to the successful divestment of the cinema business in North America.
Sales amounted to EUR 2,333 million, a decline of 15.8% on a comparable basis, due to the transition from conventional to LED lighting. Adjusted EBITA increased to EUR 472 million. Adjusted EBITA margin improved by 400 basis points to 20.2%, mainly driven by a lower than anticipated sales decline combined with efficient manufacturing footprint rationalization, productivity and procurement savings. Restructuring costs amounted to EUR 37 million, mainly related to ongoing rationalization of our manufacturing footprint.
As part of the business strategy, active management of our business portfolio led to three successful divestments during the year.
This performance reflects the successful implementation of our "last man standing" strategy to continue to extract value from the conventional business, supporting our medium term guidance to maintain our Adjusted EBITA margin at least at the level of 2015.
LED
| Fourth quarter | Twelve months | |||||
|---|---|---|---|---|---|---|
| 2015 | 2016 | change | in € million, unless otherwise indicated | 2015 | 2016 | change |
| 400 | 440 | 9.9% | Sales | 1,334 | 1,518 | 13.8% |
| 11.3% | Comparable sales growth (%) | 16.1% | ||||
| 35 | 53 | 51.4% | Adjusted EBITA | 74 | 142 | 91.9% |
| 8.8% | 12.0% | Adjusted EBITA margin (%) | 5.5% | 9.4% | ||
| 33 | 52 | 57.6% | EBITA | 70 | 140 | 100.0% |
Sales were EUR 440 million, resulting in comparable sales growth of 11.3%. Volume growth was robust, while sales grew less rapidly due to price erosion and mix impact. The comparable sales trend in the Americas continued to be soft in the fourth quarter. Accordingly, we have taken measures, including expanding and diversifying our distribution coverage, intensifying our pull marketing activities and increasing our market based product innovation.
Adjusted EBITA increased to EUR 53 million, driven by procurement savings and operational leverage, off-setting price reductions. This led to a significant increase of adjusted EBITA margin by 320 basis points to 12.0%.
Sales amounted to EUR 1,518 million, resulting in comparable sales growth of 16.1% due to robust volume growth, while sales grew less rapidly due to price erosion and mix impact. Comparable sales trends in the Americas started softening in the second quarter. Some countries in Europe showed slower sales growth due to high LED penetration rates. The Rest of the World continued to deliver robust growth.
Adjusted EBITA increased to EUR 142 million, driven by continued operational leverage, material procurement savings and innovation. The Adjusted EBITA margin showed a significant increase of 390 basis points to 9.4%.
This performance illustrates the benefit of our strategy focused on innovation and operational leverage, demonstrating we are on track for a gradual improvement of our Adjusted EBITA margin to 10-12% in the medium term.
| Fourth quarter | Twelve months | |||||
|---|---|---|---|---|---|---|
| 2015 | 2016 | change | in € million, unless otherwise indicated | 2015 | 2016 | change |
| 752 | 734 | -2.3% | Sales | 2,757 | 2,683 | -2.7% |
| 0.1% | Comparable sales growth (%) | -0.5% | ||||
| 50 | 51 | 2.0% | Adjusted EBITA | 150 | 145 | -3.3% |
| 6.6% | 6.9% | Adjusted EBITA margin (%) | 5.4% | 5.4% | ||
| 28 | 46 | 64.3% | EBITA | 114 | 93 | -18.4% |
Sales amounted to EUR 734 million and remained stable on a comparable basis, despite continued difficult market conditions in Saudi Arabia. Europe showed growth, while on a comparable basis the Americas was stable.
Adjusted EBITA amounted to EUR 51 million. Procurement savings, production efficiency improvements and mix improvement were partly offset by write-downs on bad debt in Saudi Arabia. The Adjusted EBITA margin increased by 30 basis points to 6.9%. Restructuring charges amounted to EUR 4 million, mainly related to a simplification of business structures, reduction of indirect costs and footprint rationalization.
Sales were EUR 2,683 million and showed a 0.5 % decline on a comparable basis. Worsened market conditions in Saudi Arabia had a EUR 107 million negative impact and a 410 basis points negative contribution on comparable sales growth. Sales in Europe were affected by softness in some markets, while the Americas showed growth and other geographies posted robust growth. The Systems & Services business continued to grow rapidly, with comparable sales increasing by 51%.
Adjusted EBITA amounted to EUR 145 million. The benefits from operational optimization and mix improvement with a further increase of our LED share were offset by lower sales and write-downs on bad debt in Saudi Arabia, which negatively impacted Adjusted EBITA by EUR 47 million. Adjusted EBITA margin remained stable at 5.4%. Restructuring charges amounted to EUR 49 million, mainly related to a simplification of business structures, reduction of indirect costs and footprint rationalization.
The group continues to implement its strategy focused on the development of LED luminaire sales, fast growth of Systems & Services and the continued rationalization of its cost structure, supporting our ambition to increase the Adjusted EBITA margin to 11-14% in the medium term.
| Fourth quarter | Twelve months | |||||
|---|---|---|---|---|---|---|
| 2015 | 2016 | change | in € million, unless otherwise indicated | 2015 | 2016 | change |
| 167 | 178 | 6.7% | Sales | 515 | 559 | 8.7% |
| 8.8% | Comparable sales growth (%) | 11.0% | ||||
| -7 | 3 | 142.9% | Adjusted EBITA | -57 | -20 | 64.9% |
| -4.2% | 1.7% | Adjusted EBITA margin (%) | -11.1% | -3.6% | ||
| -17 | -1 | 94.1% | EBITA | -72 | -46 | 36.1% |
Sales in the fourth quarter increased to EUR 178 million as comparable sales grew by 8.8%, primarily supported by the Home Systems business. All markets contributed to growth.
Adjusted EBITA turned positive at EUR 3 million due to operational efficiency gains, procurement savings and operational leverage.
Sales increased to EUR 559 million, resulting in comparable sales growth of 11%, driven by growth in both Home Systems and Home Luminaires due to continued focus on innovation. Adjusted EBITA loss narrowed to EUR 20 million, resulting in an improvement of EUR 37 million compared to 2015. In the second half of the year, Adjusted EBITA became positive, showing the benefits of sales growth and restructuring efforts. Restructuring and incidental charges amounted to EUR 26 million, mainly related to footprint rationalization in Belgium and China.
This performance supports our strategy to focus on consumer experience, leveraging our strengths in connected lighting systems for the home. Home is on track to become profitable in 2017.
Adjusted EBITA amounted to EUR -29 million in the quarter (Q4 2015: EUR -26 million) consisting primarily of group enabling function costs. Incidental items that were not part of Adjusted EBITA included a charge of EUR 25 million for separation costs.
Adjusted EBITA amounted to EUR -94 million for the full year (FY 2015: EUR -83 million). Incidental items that were not part of Adjusted EBITA included a charge of EUR 62 million for separation costs and a gain of EUR 14 million related to a release of provisions by Royal Philips, originating from the separation.
| Fourth quarter | Twelve months | |||||||
|---|---|---|---|---|---|---|---|---|
| 2015 | 2016 | Change | CSG* | in € million, except percentages | 2015 | 2016 | change | CSG* |
| 652 | 633 | -3.0% | -0.8% | Europe | 2,290 | 2,208 | -3.6% | -2.0% |
| 629 | 581 | -7.7% | -6.0% | Americas | 2,352 | 2,245 | -4.6% | -1.9% |
| 626 | 600 | -4.1% | -2.8% | Rest of the World | 2,299 | 2,156 | -6.2% | -3.2% |
| 138 | 120 | -12.7% | -4.2% | Global businesses | 524 | 506 | -3.3% | -2.2% |
| 2,045 | 1,934 | -5.4% | -3.2% | Total | 7,465 | 7,115 | -4.7% | -2.4% |
* CSG: Comparable Sales Growth
Salesin Europe declined 0.8% on a comparable basis, with country-level variations. Sales in France and the United Kingdom were lower, while Benelux and the Nordics realized solid growth. In the Americas, sales declined 6.0% on a comparable basis, primarily due to conventional lighting, while comparable sales trend in LED continued to be soft. Sales on a comparable basis for the Rest of the World declined 2.8%, affected by continued macroeconomic challenges in some markets, partly offset by growth in ASEAN & Pacific and Greater China.
The decline in overall sales for the year reflects the ongoing transformation from conventional to LED lighting in all markets. In 2016, we were affected by challenging macro-economic conditions in some markets. Total LED based sales saw a robust growth of 20%, which was offset by the decline in conventional lighting. The ongoing transformation from conventional to LED lighting is reflected in all markets globally. In 2016, we were affected by increased macro-economic uncertainty and volatility in some markets. Sales in Europe declined 2.0% on a comparable basis. In the Americas, sales declined 1.9% on a comparable basis, primarily due to conventional lighting, while comparable sales trend in LED started softening in the second quarter. Sales on a comparable basis for the Rest of the World declined 3.2%, mainly driven by Saudi Arabia, partly offset by growth in ASEAN & Pacific and improved growth trend in China.
| in € million, unless otherwise indicated | 31 Dec '15 | 30 Sep '16 | 31 Dec '16 |
|---|---|---|---|
| Inventories | 988 | 999 | 886 |
| Receivables | 1,599 | 1,485 | 1,600 |
| Accounts and notes payable | -1,051 | -935 | -1,024 |
| Accrued liabilities | -459 | -471 | -502 |
| Other | -245 | -269 | -298 |
| Working capital | 832 | 809 | 662 |
| As % of LTM* sales | 11.1% | 11.2% | 9.3% |
* LTM: Last Twelve Months
In the fourth quarter working capital decreased by EUR 147 million to EUR 662 million, representing 9.3% of sales, mainly driven by reduced inventories.
Full year working capital performance confirmed the structural improvements achieved in 2016 in comparison to 2015. Working capital decreased by EUR 170 million to EUR 662 million, or 9.3% of sales. This improvement was mainly driven by an ongoing focus on inventories.
| Fourth quarter | Twelve months | |||
|---|---|---|---|---|
| 2015 | 2016 | in € million | 2015 | 2016 |
| 79 | 109 | Income from operations (EBIT) | 331 | 369 |
| 85 | 75 | Depreciation and amortization | 315 | 293 |
| 311 | 170 | Change in working capital | 209 | 119 |
| 5 | -26 | Net capex | -85 | -87 |
| 3 | -20 | Change in provisions | -79 | -71 |
| -2 | -8 | Interest paid | -2 | -29 |
| -1 | -23 | Income taxes paid | -26 | -96 |
| -2 | -5 | Other | -31 | -80 |
| 478 | 272 | Free cash flow | 632 | 418 |
Free cash flow of EUR 272 million was primarily attributable to improved profitability and robust working capital performance, partly offset by higher cash out flows following the separation, in particular interest payments and taxes. Free cash flow also includes separation costs of EUR 25 million.
Free cash flow of EUR 418 million was the result of improved profitability and strict working capital management, offset by higher cash out flows following the separation, in particular interest payments and taxes. Free cash flow for 2016 also includes separation costs of EUR 62 million.
| in € million | 31 Dec '15 | 30 Sep '16 | 31 Dec '16 |
|---|---|---|---|
| Short-term debt | 86 | 151 | 155 |
| Short-term loans payable to Royal Philips | - | - | 2 |
| Long-term debt | 2 | 1,194 | 1,224 |
| Gross debt | 88 | 1,345 | 1,381 |
| Short-term loans receivable from Royal Philips | - | 30 | 0 |
| Cash and cash equivalents | 83 | 701 | 1,040 |
| Net debt | 5 | 614 | 341 |
The net debt amounted to EUR 341 million, a reduction of EUR 273 million, which was mainly driven by free cash flow. The cash position increased to EUR 1,040 million. Group equity increased to EUR 2,808 million at the end the fourth quarter (Q3 2016: EUR 2,583 million), primarily in connection with net income and currency translation adjustments. Group equity minus net debt amounted to EUR 2,467 million.
Following the separation from Royal Philips and the Initial Public Offering (IPO) in May 2016, the company raised USD 500 million and EUR 740 million through external debt facilities, replacing short-term funding from Royal Philips. Net debt at that time amounted to EUR 950 million.
At the end of the year, net debt amounted to EUR 341 million. The reduction of net debt since the IPO was mainly driven by the robust free cash flow. Group equity amounted to EUR 2,808 million at year end.
Appendix A – Financial statement information
Appendix B – Reconciliation of non-IFRS Financial Measures
Appendix C – Financial Glossary
Eric Rondolat (CEO) and Stéphane Rougeot (CFO) will host a conference call for investors and analysts at 9:00 a.m. CET to discuss full year and fourth quarter results.
For the audio webcast click here
| 21 April 2017 |
|---|
| 9 May 2017 |
| 21 July 2017 |
| 19 October 2017 |
21 April 2017 First quarter results 2017 9 May 2017 Annual General Meeting of Shareholders 21 July 2017 Half year results 2017 19 October 2017 Third quarter results 2017
Philips Lighting Investor Relations Jeroen Leenaers Tel: +31 6 2542 5909 E-mail: [email protected]
Philips Lighting (Euronext Amsterdam ticker: LIGHT), a global leader in lighting products, systems and services, delivers innovations that unlock business value, providing rich user experiences that help improve lives. Serving professional and consumer markets, we lead the industry in leveraging the Internet of Things to transform homes, buildings and urban spaces. With 2016 sales of EUR 7.1 billion, we have approximately 34,000 employees in over 70 countries. News from Philips Lighting is located at http://www.newsroom.lighting.philips.com
This document and the related oral presentation contain, and responses to questions following the presentation may contain, forward-looking statements that reflect the intentions, beliefs or current expectations and projections of Philips Lighting N.V. (the "Company", and together with its subsidiaries, the "Group"), including statements regarding strategy, estimates of sales growth and future operational results.
By their nature, these statements involve risks and uncertainties facing the Company and its Group Companies and a number of important factors could cause actual results or outcomes to differ materially from those expressed in any forward-looking statement as a result of risks and uncertainties. Such risks, uncertainties and other important factors include but are not limited to: adverse economic and political developments, the impacts of rapid technological change, competition in the general lighting market, development of lighting systems and services, successful implementation of business transformation programs, impact of acquisitions and other transactions, impact of the Group's operation as a separate publicly listed company, pension liabilities and costs, establishment of corporate and brand identity, adverse tax consequences from the separation from Royal Philips and exposure to international tax laws. Please see "Risk Factors" in the Group's prospectus, dated 16 May 2016 (the "Prospectus") for discussion of material risks, uncertainties and other important factors which may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group. Such risks, uncertainties and other important factors should be read in conjunction with the information included in the Company's semi-annual report for the first six months ended 30 June 2016.
Additional risks currently not known to the Group or that the Group has not considered material as of the date of this document could also prove to be important and may have a material adverse effect on the business, results of operations, financial condition and prospects of the Group or could cause the forward-looking events discussed in this document not to occur. The Group undertakes no duty to and will not necessarily update any of the forward-looking statements in light of new information or future events, except to the extent required by applicable law.
All references to market share, market data, industry statistics and industry forecasts in this document consist of estimates compiled by industry professionals, competitors, organizations or analysts, of publicly available information or of the Group's own assessment of its sales and markets. Rankings are based on sales unless otherwise stated.
Certain parts of this document contain non-IFRS financial measures and ratios, such as comparable sales growth, adjusted gross margin, EBITA, adjusted EBITA, EBITDA, adjusted EBITDA and free cash flow, and other related ratios, which are not recognized measures of financial performance or liquidity under IFRS. The non-IFRS financial measures presented are measures used by management to monitor the underlying performance of the Group's business and operations and, accordingly, they have not been audited or reviewed. Not all companies calculate non-IFRS financial measures in the same manner or on a consistent basis and these measures and ratios may not be comparable to measures used by other companies under the same or similar names. A reconciliation of these non-IFRS financial measures to the most directly comparable IFRS financial measures is contained in this document. For further information on non-IFRS financial measures, see "Operating and Financial Review—Non-IFRS Financial Measures" in the Prospectus.
All amounts are in millions of euros unless otherwise stated. All reported data is unaudited. Unless otherwise indicated, financial information has been prepared in accordance with the accounting policies as stated in the Combined Financial Statements for the year ended 31 December 2015 included in the Prospectus.
This press release contains information within the meaning of Article 7(1) of the EU Market Abuse Regulation.
in millions of EUR unless otherwise stated
| Q4 | January to December | |||
|---|---|---|---|---|
| 2015 unaudited |
2016 unaudited |
2015 unaudited |
2016 unaudited |
|
| Sales | 2,045 | 1,934 | 7,465 | 7,115 |
| Cost of sales | (1,335) | (1,211) | (4,810) | (4,438) |
| Gross margin | 710 | 723 | 2,655 | 2,677 |
| Selling expenses | (477) | (468) | (1,751) | (1,750) |
| Research and development expenses | (96) | (87) | (366) | (353) |
| General and administrative expenses | (68) | (70) | (233) | (248) |
| Impairment of goodwill | 1 | - | - | (2) |
| Other business income | 20 | 15 | 48 | 60 |
| Other business expenses | (11) | (4) | (22) | (15) |
| Income from operations | 79 | 109 | 331 | 369 |
| Financial income | 1 | 5 | 3 | 11 |
| Financial expenses | (5) | (17) | (11) | (78) |
| Income before taxes | 75 | 97 | 323 | 302 |
| Income tax expense | (33) | (35) | (83) | (119) |
| Income after taxes | 42 | 62 | 240 | 183 |
| Results relating to investments in associates | - | 1 | - | 2 |
| Net income | 42 | 63 | 240 | 185 |
| Attribution of net income for the period: | ||||
| Net income attributable to shareholders of Philips Lighting | 38 | 64 | 226 | 189 |
| Net income attributable to non-controlling interests | 4 | (1) | 14 | (4) |
| Earnings per common share attributable to shareholders Weighted average number of common shares outstanding used for calculation (in thousands): |
||||
| - basic | - | 150,000 | - | 150,000 |
| - diluted | - | 150,000 | - | 150,000 |
| Net income attributable to shareholders per common share in EUR: |
||||
| - basic | - | 0.43 | - | 1.26 |
| - diluted | - | 0.43 | - | 1.26 |
in millions of EUR unless otherwise stated
| Q4 | January to December | |||||
|---|---|---|---|---|---|---|
| 2015 unaudited |
2016 unaudited |
2015 unaudited |
2016 unaudited |
|||
| Net income for the period | 42 | 63 | 240 | 185 | ||
| Pensions and other post-employment plans: | - | - | ||||
| Remeasurements | - | (6) | - | (8) | ||
| Income tax effect on remeasurements | - | 1 | - | 1 | ||
| Total of items that are or may be reclassified to profit or loss |
(5) | - | (7) | |||
| Currency translation differences: | ||||||
| Net current period change, before tax | 42 | 135 | 58 | 66 | ||
| Income tax effect | - | - | - | - | ||
| Total currency translation differences: | 42 | 135 | 58 | 66 | ||
| Cash flow hedges: | ||||||
| Net current period change, before tax | 5 | 1 | 4 | 2 | ||
| Income tax effect | (1) | - | (1) | - | ||
| Total cash flow hedges: | 4 | 1 | 3 | 2 | ||
| Other comprehensive (loss) income for the period | 46 | 131 | 61 | 61 | ||
| Total comprehensive income for the period | 88 | 194 | 301 | 246 | ||
| Total comprehensive income (loss) attributable to: | ||||||
| Shareholders of Philips Lighting | 83 | 189 | 278 | 247 | ||
| Non-controlling interests | 5 | 5 | 23 | (1) |
in millions of EUR unless otherwise stated
| 31 December | 31 December | |
|---|---|---|
| 2015 | 2016 | |
| Non-current assets | ||
| Property, plant and equipment | 634 | 566 |
| Goodwill | 1,844 | 1,899 |
| Intangible assets, excluding goodwill | 856 | 768 |
| Non-current receivables | 20 | 25 |
| Investments in associates | 23 | 26 |
| Other non-current financial assets | 8 | 11 |
| Deferred tax assets | 259 | 472 |
| Other non-current assets | 15 | 28 |
| Total non-current assets | 3,659 | 3,795 |
| Current assets | ||
| Inventories | 988 | 886 |
| Other current assets | 46 | 52 |
| Derivative financial assets | 9 | 29 |
| Income tax receivable | 25 | 50 |
| Receivables | 1,599 | 1,600 |
| Assets classified as held for sale | 34 | 3 |
| Cash and cash equivalents | 83 | 1,040 |
| Total current assets | 2,784 | 3,660 |
| Total assets | 6,443 | 7,455 |
| Equity | ||
| Shareholders' equity | 3,513 | 2,704 |
| Non-controlling interest | 103 | 104 |
| Group equity | 3,616 | 2,808 |
| Non-current liabilities | ||
| Long-term debt | 2 | 1,224 |
| Long-term provisions | 350 | 881 |
| Deferred tax liabilities | 126 | 35 |
| Other non-current liabilities | 159 | 150 |
| Total non-current liabilities | 637 | 2,290 |
| Current liabilities | ||
| Short-term debt | 86 | 157 |
| Derivative financial liabilities | 7 | 26 |
| Income tax payable | 6 | 57 |
| Account and notes payable | 1,051 | 1,024 |
| Accrued liabilities | 459 | 502 |
| Short-term provisions | 263 | 244 |
| Liabilities associated with assets classified held for sale | 6 | 1 |
| Other current liabilities | 312 | 346 |
| Total current liabilities | 2,190 | 2,357 |
| Total liabilities and group equity | 6,443 | 7,455 |
In millions of EUR unless otherwise stated
| Q4 | January to December | ||||
|---|---|---|---|---|---|
| 2015 unaudited |
2016 unaudited |
2015 unaudited |
2016 unaudited |
||
| Cash flows from operating activities | |||||
| Net income (loss) Adjustments to reconcile net income (loss) to net cash provided |
42 | 63 | 240 | 185 | |
| by operating activities Depreciation, amortization and impairments of non-financial assets |
111 85 |
108 75 |
380 315 |
446 293 |
|
| Impairment of non-current financial assets | - | - | 4 | 4 | |
| Net gain on sale of assets | (11) | (8) | (26) | (12) | |
| Interest income | - | (1) | (3) | (6) | |
| Interest expense on debt, borrowings and other liabilities | 4 | 7 | 7 | 48 | |
| Income tax expense | 33 | 35 | 83 | 119 | |
| Decrease (increase) in working capital | 311 | 170 | 209 | 119 | |
| Decrease (increase) in receivables and other current assets | 80 | (82) | - | (27) | |
| Decrease (increase) in inventories Increase (decrease) in accounts payable, accrued and other |
196 | 139 | 29 | 104 | |
| current liabilities Increase (decrease) in non-current receivables, other assets |
35 | 113 | 180 | 42 | |
| and other liabilities | 13 | 6 | (29) | (66) | |
| Increase (decrease) in provisions | 3 | (20) | (79) | (71) | |
| Interest paid | (2) | (8) | (2) | (29) | |
| Income taxes paid | (1) | (23) | (26) | (96) | |
| Other items | (4) | 2 | 24 | 17 | |
| Net cash provided by operating activities | 473 | 298 | 717 | 505 | |
| Cash flows from investing activities | |||||
| Net capital expenditures | 5 | (26) | (85) | (87) | |
| Additions of intangible assets | (8) | (11) | (38) | (30) | |
| Capital expenditures on property, plant and equipment | (25) | (28) | (98) | (79) | |
| Proceeds from disposal of property, plant and equipment | 38 | 13 | 51 | 22 | |
| Cash used for derivatives and current financial assets | (5) | (5) | |||
| Proceeds from other non-current financial assets | 10 | 3 | 31 | 3 | |
| Purchases of other non-current financial assets | (8) | - | (11) | (7) | |
| Proceeds from sale of interests in businesses, net of cash disposed of |
5 | 29 | - | 34 | |
| Net cash used for investing activities | 12 | 1 | (65) | (62) | |
| Cash flows from financing activities | |||||
| Funding by (distribution to) Royal Philips | (494) | 43 | (626) | (1,400) | |
| Dividend paid | - | - | - | (10) | |
| Capital contribution from Royal Philips Proceeds from issuance (payments) of debt |
- 12 |
- (6) |
- (12) |
692 1,225 |
|
| Net cash (used for) provided by financing activities | (482) | 37 | (638) | 506 | |
| Net cash provided by (used in) operations | 3 | 336 | 14 | 949 | |
| Effect of changes in exchange rates on cash and cash equivalents |
(2) | 3 | (6) | 8 | |
| Cash and cash equivalents at the beginning of the period | 82 | 701 | 75 | 83 | |
| Cash and cash equivalents at the end of the period | 83 | 1,040 | 83 | 1,040 |
| Q4 | ||||
|---|---|---|---|---|
| comparable growth | currency effects | consolidation changes |
nominal growth | |
| 2016 vs 2015 | ||||
| Lamps | -18.5 | -0.6 | -1.5 | -20.6 |
| LED | 11.3 | -1.4 | 0.0 | 9.9 |
| Professional | 0.1 | -2.0 | -0.4 | -2.3 |
| Home | 8.8 | -1.6 | -0.5 | 6.7 |
| Others | - | - | - | - |
| Total | -3.2 | -1.4 | -0.8 | -5.4 |
| January to December | ||||
|---|---|---|---|---|
| comparable growth | currency effects | consolidation changes |
nominal growth | |
| 2016 vs 2015 | ||||
| Lamps | -15.8 | -1.9 | -0.4 | -18.1 |
| LED | 16.1 | -2.3 | 0.0 | 13.8 |
| Professional | -0.5 | -2.0 | -0.2 | -2.7 |
| Home | 11.0 | -2.1 | -0.2 | 8.7 |
| Others | - | - | - | - |
| Total | -2.4 | -2.0 | -0.3 | -4.7 |
| Q4 | ||||
|---|---|---|---|---|
| comparable growth |
currency effects | consolidation changes |
nominal growth | |
| 2016 vs 2015 | ||||
| Europe | -0.8 | -1.8 | -0.4 | -3.0 |
| Americas | -6.0 | -1.6 | -0.1 | -7.7 |
| Rest of the World | -2.8 | -1.0 | -0.3 | -4.1 |
| Global businesses | -4.2 | -0.8 | -7.7 | -12.7 |
| Total | -3.2 | -1.4 | -0.8 | -5.4 |
| January to December | ||||
|---|---|---|---|---|
| comparable growth |
currency effects | consolidation changes |
nominal growth | |
| 2016 vs 2015 | ||||
| Europe | -2.0 | -1.1 | -0.5 | -3.6 |
| Americas | -1.9 | -2.6 | -0.1 | -4.6 |
| Rest of the World | -3.2 | -2.9 | -0.1 | -6.2 |
| Global businesses | -2.2 | -0.1 | -1.0 | -3.3 |
| Total | -2.4 | -2.0 | -0.3 | -4.7 |
| Philips Lighting |
Lamps | LED | Professional | Home | Others | |
|---|---|---|---|---|---|---|
| October to December 2016 | ||||||
| Adjusted EBITA | 188 | 110 | 53 | 51 | 3 | (29) |
| Restructuring | (25) | (17) | (1) | (4) | (4) | 1 |
| Acquisition-related Charges | (2) | - | - | (1) | - | (1) |
| Incidental items | (25) | - | - | - | - | (25) |
| EBITA | 136 | 93 | 52 | 46 | (1) | (54) |
| Amortization | (27) | - | (1) | (27) | 1 | - |
| Income from operations (or EBIT) | 109 | 93 | 51 | 19 | - | (54) |
| October to December 2015 | ||||||
| Adjusted EBITA | 159 | 107 | 35 | 50 | (7) | (26) |
| Restructuring | (38) | (15) | - | (16) | (9) | 2 |
| Acquisition-related Charges | (2) | - | - | (2) | - | - |
| Incidental items | (14) | (7) | (2) | (4) | (1) | - |
| EBITA | 105 | 85 | 33 | 28 | (17) | (24) |
| Amortization | (26) | (1) | (1) | (26) | 1 | 1 |
| Income from operations (or EBIT) | 79 | 84 | 32 | 2 | (16) | (23) |
| Philips Lighting |
Lamps | LED | Professional | Home | Others | |
|---|---|---|---|---|---|---|
| January to December 2016 | ||||||
| Adjusted EBITA | 645 | 472 | 142 | 145 | (20) | (94) |
| Restructuring | (115) | (37) | (2) | (49) | (26) | (1) |
| Acquisition-related Charges | (3) | - | - | (3) | - | - |
| Incidental items | (48) | - | - | - | - | (48) |
| EBITA | 479 | 435 | 140 | 93 | (46) | (143) |
| Amortization | (110) | (2) | (4) | (102) | (2) | - |
| Income from operations (or EBIT) | 369 | 433 | 136 | (9) | (48) | (143) |
| January to December 2015 | ||||||
| Adjusted EBITA | 547 | 463 | 74 | 150 | (57) | (83) |
| Restructuring | (90) | (52) | (2) | (26) | (14) | 4 |
| Acquisition-related Charges | (5) | - | - | (5) | - | - |
| Incidental items | (14) | (6) | (2) | (5) | (1) | - |
| EBITA | 438 | 405 | 70 | 114 | (72) | (79) |
| Amortization | (107) | (2) | (4) | (100) | (1) | - |
| Income from operations (or EBIT) | 331 | 403 | 66 | 14 | (73) | (79) |
| October to December 2015 |
October to December 2016 |
January to December 2015 |
January to December 2016 |
|
|---|---|---|---|---|
| Sales | 2,045 | 1,934 | 7,465 | 7,115 |
| Cost of Sales | (1,335) | (1,211) | (4,810) | (4,438) |
| Gross Margin | 710 | 723 | 2,655 | 2,677 |
| Restructuring | 29 | 20 | 62 | 85 |
| Acquisition-related Charges | - | - | - | - |
| Incidental items | 14 | 1 | 14 | 1 |
| Adjusted Gross Margin | 753 | 744 | 2,731 | 2,763 |
| Adjusted Gross Margin % | 36.8% | 38.5% | 36.6% | 38.8% |
| October to December 2015 |
October to December 2016 |
January to December 2015 |
January to December 2016 |
|
|---|---|---|---|---|
| Selling expenses | (477) | (468) | (1,751) | (1,750) |
| G&A expenses | (68) | (70) | (233) | (248) |
| SG&A expenses | (545) | (538) | (1,984) | (1,998) |
| Restructuring | 8 | 4 | 27 | 17 |
| Acquisition-related Charges | 2 | 2 | 5 | 3 |
| Incidental items | - | 25 | - | 61 |
| Adjusted SG&A expenses | (535) | (507) | (1,952) | (1,917) |
| Adjusted SG&A expenses % | -26.2% | -26.2% | -26.1% | -26.9% |
| October to December 2015 |
October to December 2016 |
January to December 2015 |
January to December 2016 |
|
|---|---|---|---|---|
| R&D expenses | (96) | (87) | (366) | (353) |
| Restructuring | 1 | 1 | 1 | 13 |
| Acquisition-related Charges | - | - | - | - |
| Incidental items | - | - | - | - |
| Adjusted R&D expenses | (95) | (86) | (365) | (340) |
| Adjusted R&D expenses % | -4.6% | -4.4% | -4.9% | -4.8% |
| Acquisition-related charges | Costs that are directly triggered by the acquisition of a company, such as transaction costs, purchase accounting related costs and integration related expenses |
|---|---|
| Adjusted EBITA | EBITA excluding restructuring costs, acquisition related charges and other incidental charges |
| Adjusted EBITA margin (%) | Adjusted EBITA divided by Sales to third parties (excluding intersegment) |
| Adjusted gross margin | Gross margin, excluding restructuring costs, acquisition-related charges and other incidental |
| Adjusted indirect costs | items attributable to cost of sales Indirect costs, excluding restructuring costs, acquisition-related charges and other incidental items attributable to indirect costs |
| Adjusted R&D expenses | Research and development expenses, excluding restructuring costs, acquisition-related charges and other incidental items attributable to research and |
| Adjusted SG&A expenses | development expenses Selling, general and administrative expenses, excluding restructuring costs, acquisition-related charges and other incidental items attributable to selling, general and administrative expenses |
| Comparable sales growth | The period-on-period growth in sales excluding the effects of currency movements and changes in consolidation |
| EBIT | Income from operations |
| EBITA | Income from operations excluding amortization and impairments of acquisition related intangible assets and goodwill |
| EBITDA | Income from operations excluding depreciation, amortization and impairments of non-financial assets |
| Effects of changes in consolidation | In the event a business is acquired (or divested), the impact of the consolidation (or de-consolidation) on the Group's figures are included (or excluded) in the comparable figures |
| Effects of currency movements | Calculated by translating previous periods' foreign currency amounts into euro at the following periods' exchange rates in comparison to the euro as historically reported |
| Employees | Employees of Philips Lighting at period end expressed on a full-time equivalent (FTE) basis |
| Free cash flow | Net cash provided by operations minus net capital expenditures. Free cash flow includes interest paid and income taxes paid |
| Gross margin | Sales minus cost of sales |
| Indirect costs | The sum of Selling, R&D and General and |
| Net capital expenditures | administrative expenses Additions of intangible assets, capital expenditures |
| Incidental charges | on property, plant and equipment and proceeds from disposal of property, plant and equipment, and intangible assets Any item with an income statement impact (loss or gain) that is deemed to be both significant and not |
| part of normal business activity. Other incidental | |
|---|---|
| items may extend over several quarters within the | |
| same financial year | |
| Net debt | Short-term debt, short-term loans payable |
| (receivable) to Royal Philips, long-term debt minus | |
| cash and cash equivalents | |
| Net leverage ratio | The ratio of consolidated total net debt to adjusted |
| consolidated EBITDA for the purpose of calculating | |
| the facility covenant for the term loan and revolving | |
| credit facility | |
| R&D expenses | Research and development expenses |
| Restructuring costs | The estimated costs of initiated reorganizations, the |
| most significant of which have been approved by the | |
| Group, and which generally involve the realignment | |
| of certain parts of the industrial and commercial | |
| organization | |
| SG&A expenses | Selling, General and Administrative expenses |
| Working capital | The sum of Inventories, Receivables, Other current |
| assets, Derivative financial assets, Income tax | |
| receivable minus the sum of Accounts and notes | |
| payable, Accrued liabilities, Derivative financial | |
| liabilities, Income tax payable and Other current |
liabilities
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.