Earnings Release • Jan 27, 2015
Earnings Release
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Group Financials have been restated as of the fourth quarter of 2014 and for prior periods to show the results of the combined businesses of Lumileds and Automotive as discontinued operations in connection with the process of attracting third-party investors.
"The fourth quarter underscored a challenging 2014 for Philips. Our transformation eorts continued to show good results, even as we addressed performance issues, ongoing softness in end-markets like China and Russia, and stronger than anticipated foreign exchange impacts, particularly in emerging markets.
Healthcare was down overall, mainly caused by operational issues and soft markets. We were encouraged by market share gains in image-guided therapy and recorded strong orders in Europe and the Middle East, where we signed four multi-year solution deals. Our Cleveland factory resumed shipments to customers in January, marking an important milestone. Consumer Lifestyle performed very well in the quarter, continuing its three-year market-outperformance trend. Our Health & Wellness business delivered double-digit growth and we saw overall strong growth in EBITA.
Lighting recorded 20% sales growth in LED and expanded its margins in LED despite strong price erosion. Performance was, however, negatively impacted by results in China, Professional Lighting Solutions North
America and conventional lighting. We took action to further restructure our manufacturing footprint in conventional lighting."
"Overall, 2014 was a setback in our performance trajectory. We have been taking clear actions to drive stronger operational performance across our businesses and expect sales growth and EBITA margin improvements in 2015 and beyond. However, looking ahead, we remain cautious regarding the macroeconomic outlook and expect ongoing volatility of some of our end-markets. We also anticipate further incidental costs in 2015 and 2016, mainly in relation to restructuring and the separation.
Due to these factors, we are tracking 1 percentage point behind on the path to achieving each of our 2016 comparable sales growth, EBITA and ROIC Group targets. We are convinced that this does not change our longer-term performance potential, considering the attractiveness of the Lighting Solutions and HealthTech markets and our competitive position. Later this year, as we progress with the separation of Philips and reallocation of IG&S, we will update the market about the integral performance targets for each of the two operating companies."
"Accelerate! continues to drive improvements across the organization, resulting in increased customer centricity, enhanced customer service levels, faster time-to-market for our innovations and better cost productivity.
In Healthcare Informatics, Solutions & Services (HISS ), a new Agile software development methodology was implemented that increases the number of new software releases by four times over the year, enabling us to introduce a record number of new clinical informatics solutions in the IntelliSpace family at the Radiology Society of North America (RSNA) trade show. In Consumer Lifestyle, our deep understanding of local shopper needs allowed us to successfully launch an optimized range of male grooming products in France, meeting key price points and customer needs. This locally relevant value proposition resulted in a 2 percentage-point market share gain since launch and a record number of Philips product listings at retailer Carrefour. In Lighting, Professional Lighting Solutions enhanced its product portfolio for the indirect channel in Europe, which drove more than 60% sales growth as a result of its strong price-performance ratio, locally relevant value proposition and delivery time commitment of 5 days."
Overhead cost savings amounted to EUR 35 million for the quarter, bringing the total overhead cost savings in 2014 to EUR 284 million. The Design for Excellence (DfX) program generated EUR 123 million of incremental savings in procurement in the fourth quarter, bringing total DfX savings for 2014 to EUR 284 million. The End2End productivity program achieved incremental savings of EUR 22 million in the quarter, which brings the total End2End productivity savings to EUR 79 million for full-year 2014. Philips expects restructuring costs in 2015 of approximately EUR 250 million.
In September of last year, Philips announced its plan to separate into two standalone companies, positioning each one to better capitalize on the highly attractive HealthTech and Lighting solutions opportunities. Philips is confident in its ability to deliver additional growth and create more value through enhanced focus and agility. As indicated previously, the separation process will take approximately 12-18 months and further updates will be provided over the course of the year. The company currently estimates separation costs to be in the range of EUR 300-400 million in 2015.
The company is in discussion with external investors for the combined Lumileds and Automotive lighting businesses and expects to complete a transaction in the first half of 2015.
As of December 31, 2014, Philips had completed 41% of the EUR 1.5 billion share buy-back program.
Healthcare comparable sales were 3% lower. The EBITA margin, excluding restructuring and acquisition-related charges and other items, was 14.8%, down from 19.0% year-on-year. Currency-comparable equipment order intake showed a mid-single-digit decline, although it improved in Western Europe. The impact of Cleveland on sales and order intake was approximately 4 percentage points, which will also impact growth performance in 2015.
"In Healthcare, our strategic focus on large-scale and multi-year partnerships continues to gain traction. Furthermore, our pending acquisition of Volcano, announced in December, will enable us to deepen customer relationships, gain share and accelerate revenue growth for Philips' leading image-guided therapy business.
The updated quality management system at our Cleveland facility recently passed the third-party audit and we have now resumed shipments of our Brilliance iCT systems. Due to the slower than anticipated ramp-up of production and shipments, the impact on 2014 EBITA was larger than previously anticipated. Passing the thirdparty audit for the production of the Brilliance iCT systems is an important milestone that enables us to focus on building further momentum as we deliver imaging innovations to our customers. We are also ramping up the production of CT systems in our facilities in Haifa and Suzhou, initially for customers outside of the United States. Our remediation work will continue to weigh on 2015 and we expect our global CT system production and shipment volume to only gradually return to 2013 levels by the end of the year."
Consumer Lifestyle comparable sales increased by 6%. The EBITA margin, excluding restructuring charges and other items, improved 260 basis points to 16.0%. The margin increase was largely attributable to higher volumes and improved gross margins.
"In Consumer Lifestyle, we were pleased to see that our focused approach continued to deliver strong results, resulting in an improved product mix and strong sales, in particular in Health & Wellness. Our Mother & Child Care line continued to deliver strong double-digit growth, through innovations supporting the healthy development of children. Notably, the new Philips Avent Classic+ bottle is clinically proven to reduce colic and over-eating by allowing newborns to control the milk flow. Our Beauty, Male Grooming, and Oral Healthcare products were successful through the holiday and gift-giving season, including the 'Double 11' shopping event in China."
Lighting (excluding the combined businesses of Lumileds and Automotive) comparable sales declined 3% yearon-year. LED-based sales grew 20%, oset by a decline of 14% in overall conventional lighting sales. LED sales now represent 37% of total Lighting sales, compared to 31% in Q4 2013. The EBITA margin, excluding restructuring and acquisition-related charges and other items, amounted to 9.0%, compared to 8.8% in the fourth quarter of 2013.
"As one of the leaders in providing lighting solutions for businesses, cities and consumers that deliver value beyond illumination, we signed a contract to provide the city of Madrid with what is the world's largest street lighting upgrade to date, involving the replacement of 225,000 luminaires. Our performance in North America was unsatisfactory and our business in China was aected by deteriorating market conditions. We have taken further steps, including the appointment of a new head of our Americas Lighting business, to significantly strengthen our ability to deliver new levels of business value. We've also launched exciting new oerings, such as the SlimSurface LED downlight, the thinnest luminaire on the market, which will prove very eective for commercial real-estate customers."
EBITA was a net cost of EUR 339 million, including a EUR 201 million provision for ongoing legal matters. Sales decreased from EUR 224 million in Q4 2013 to EUR 184 million in Q4 2014, mainly due to higher one-time settlements in IP royalties in Q4 2013.
"We were pleased to receive the CE mark for diagnostic use of our Philips Digital Pathology system and software in the fourth quarter. Pathologists will now be able to use the full digital solution as an aid in diagnosis for routine pathology, which will improve workflows and collaboration and, in turn, increase efficiency and productivity. In the quarter, it is exciting to see that sales in the Healthcare Incubator almost tripled. We also opened a new healthcare imaging systems refurbishment facility in the Netherlands, which marks the next step in bringing the financial and environmental benefits of 'circular economy' to the healthcare industry."
Frans van Houten, CEO, and Ron Wirahadiraksa, CFO, will host a conference call for investors and analysts at 10:00 am CET on January 27 to discuss the results. A live audio webcast of the conference call will be available on the Philips Investor Relations website.
This communication is neither an oer to purchase nor a solicitation of an oer to sell any shares of common stock of Volcano or any other securities. Philips has filed a tender oer statement on Schedule TO with the SEC and a Solicitation/Recommendation Statement on Schedule 14D-9 has been filed with the SEC by Volcano. The oer to purchase shares of Volcano common stock will only be made pursuant to the oer to purchase, the letter of transmittal and related documents filed as a part of the Schedule TO. INVESTORS AND SECURITY HOLDERS ARE URGED TO READ BOTH THE TENDER OFFER STATEMENT, AS FILED AND AS IT MAY BE AMENDED FROM TIME TO TIME, AND THE SOLICITATION/ RECOMMENDATION STATEMENT, AS FILED AND AS MAY BE AMENDED FROM TIME TO TIME, BECAUSE THEY CONTAIN IMPORTANT INFORMATION REGARDING THE OFFER. Investors and security holders may obtain a free copy of these statements and other documents filed with the SEC at the website maintained by the SEC at www.sec.gov or by directing such requests to Georgeson Inc., the Information Agent for the oer, at (866) 856-2826.
in millions of euros unless otherwise stated
| Q4 | Q4 |
|---|---|
| 2013 | 2014 |
| 6,401 | 6,536 |
| 789 | 262 |
| 12.3 | 4.0 |
| 627 | 162 |
| 9.8 | 2.5 |
| (77) | (78) |
| (161) | (16) |
| (46) | (1) |
| 343 | 67 |
| 69 | 67 |
| 412 | 134 |
| 0.44 | 0.15 |
in millions of euros unless otherwise stated
| Q4 | Q4 | % change | ||
|---|---|---|---|---|
| 2013 | 2014 | nominal | compar able |
|
| Healthcare | 2,828 | 2,849 | 1 | (3) |
| Consumer Lifestyle | 1,428 | 1,528 | 7 | 6 |
| Lighting | 1,921 | 1,975 | 3 | (3) |
| Innovation, Group & Services |
224 | 184 | (18) | (21) |
| Philips Group | 6,401 | 6,536 | 2 | (2) |
in millions of euros unless otherwise stated
| Q4 | Q4 | % change | ||
|---|---|---|---|---|
| 2013 | 2014 | nominal | compar able |
|
| Western Europe | 1,766 | 1,776 | 1 | 0 |
| North America | 1,855 | 1,981 | 7 | 0 |
| Other mature geographies |
509 | 451 | (11) | (12) |
| Total mature geographies | 4,130 | 4,208 | 2 | (2) |
| Growth geographies | 2,271 | 2,328 | 3 | (2) |
| Philips Group | 6,401 | 6,536 | 2 | (2) |
in millions of euros unless otherwise stated
| 4th quarter | ||||
|---|---|---|---|---|
| 2013 | 2014 | |||
| amount | as a % of sales |
amount | as a % of sales |
|
| Healthcare | 541 | 19.1 | 390 | 13.7 |
| Consumer Lifestyle | 187 | 13.1 | 251 | 16.4 |
| Lighting | 140 | 7.3 | (40) | (2.0) |
| Innovation, Group & Services |
(79) | – | (339) | – |
| Philips Group | 789 | 12.3 | 262 | 4.0 |
in millions of euros unless otherwise stated
| 4th quarter | ||||
|---|---|---|---|---|
| 2013 | 2014 | |||
| amount | as a % of sales |
amount | as a % of sales |
|
| Healthcare | 538 | 19.0 | 421 | 14.8 |
| Consumer Lifestyle | 192 | 13.4 | 244 | 16.0 |
| Lighting | 169 | 8.8 | 178 | 9.0 |
| Innovation, Group & Services |
(72) | – | (100) | – |
| Philips Group | 827 | 12.9 | 743 | 11.4 |
in millions of euros unless otherwise stated
| Q4 | Q4 |
|---|---|
| 2013 | 2014 |
| 477 | 351 |
| 174 | 237 |
| 55 | (83) |
| (79) | (343) |
| 627 | 162 |
| 9.8 | 2.5 |
| in millions of euros | ||
|---|---|---|
| Q4 | Q4 | |
| 2013 | 2014 | |
| Net interest expenses | (63) | (68) |
| Other | (14) | (10) |
| (77) | (78) |
in millions of euros
| Q4 | Q4 | |
|---|---|---|
| 2013 | 2014 | |
| Beginning cash balance | 2,034 | 1,716 |
| Free cash flow | 481 | 559 |
| Net cash flow from operating activities |
746 | 841 |
| Net capital expenditures | (265) | (282) |
| Acquisitions and divestments of businesses |
(12) | 26 |
| Other cash flow from investing activities | (16) | (5) |
| Treasury shares transactions | (57) | (134) |
| Changes in debt/other | (113) | (327) |
| Net cash flow discontinued operations | 148 | 38 |
| Ending balance | 2,465 | 1,873 |
• Net financial income and expenses were in line with Q4 2013.
• Operating activities resulted in a cash inflow of EUR 841 million, compared to an inflow of EUR 746 million in Q4 2013. Higher cash inflows from working capital reductions were partly oset by lower cash earnings.
in millions of euros
Inventories as a % of sales1)
1) Sales calculated over the preceding 12 months 2) Excludes inventories of discontinued operations
• Gross capital expenditures on property, plant and equipment were EUR 3 million below the level of Q4 2013, with decreases in the sectors partly oset by higher investments in R&D equipment at IG&S.
in FTEs
110,000
1) Number of employees excludes discontinued operations. Discontinued operations had 8,313 employees in Q4 2014 (Q3 2014: 8,489, Q4 2013: 10,445).
2) Number of employees includes 13,517 third-party workers in Q4 2014 (Q3 2014: 13,466, Q4 2013: 12,416).
in millions of euros unless otherwise stated
| Q4 | Q4 | |
|---|---|---|
| 2013 | 2014 | |
| Sales | 2,828 | 2,849 |
| Sales growth | ||
| % nominal | (3) | 1 |
| % comparable | 4 | (3) |
| EBITA | 541 | 390 |
| as a % of sales | 19.1 | 13.7 |
| EBIT | 477 | 351 |
| as a % of sales | 16.9 | 12.3 |
| Net operating capital (NOC) | 7,437 | 7,565 |
| Number of employees (FTEs)1) | 37,008 | 37,065 |
1) Number of employees includes 2,443 third-party workers in Q4 2014 (Q4 2013: 2,376).
in millions of euros
EBITA
in millions of euros unless otherwise stated
| Q4 | Q4 | |
|---|---|---|
| 2013 | 2014 | |
| Sales | 1,428 | 1,528 |
| Sales growth | ||
| % nominal | 3 | 7 |
| % comparable | 8 | 6 |
| EBITA | 187 | 251 |
| as a % of sales | 13.1 | 16.4 |
| EBIT | 174 | 237 |
| as a % of sales | 12.2 | 15.5 |
| Net operating capital (NOC) | 1,261 | 1,353 |
| Number of employees (FTEs)1) | 17,255 | 16,639 |
1) Number of employees includes 3,351 third-party workers in Q4 2014 (Q4 2013: 4,062).
in millions of euros
EBITA
• Comparable sales increased by 6%. Health & Wellness achieved double-digit growth, while Personal Care recorded mid-single-digit growth and Domestic Appliances posted low-single-digit growth.
• Restructuring and acquisition-related charges in Q1 2015 are expected to total approximately EUR 5 million.
*Excluding the combined businesses of Lumileds and Automotive
in millions of euros unless otherwise stated
| Q4 | Q4 | |
|---|---|---|
| 2013 | 2014 | |
| Sales | 1,921 | 1,975 |
| Sales growth | ||
| % nominal | (1) | 3 |
| % comparable | 5 | (3) |
| EBITA | 140 | (40) |
| as a % of sales | 7.3 | (2.0) |
| EBIT | 55 | (83) |
| as a % of sales | 2.9 | (4.2) |
| Net operating capital (NOC) | 4,462 | 3,638 |
| Number of employees (FTEs)1) | 38,671 | 37,808 |
1) Number of employees includes 5,463 third-party workers in Q4 2014 (Q4 2013: 4,974).
in millions of euros
• Restructuring and acquisition-related charges in Q1 2015 are expected to total approximately EUR 50 million, mainly driven by industrial footprint rationalization.
The combined businesses of Lumileds and Automotive are reported as discontinued operations in the Consolidated statements of income and cash flows. As a result, Lumileds and Automotive sales and EBITA are no longer included in the Lighting and Group results of continuing operations. The applicable assets and liabilities of the combined businesses are reported under Assets and Liabilities classified as held for sale in the Condensed consolidated balance sheets.
Philips is actively discussing the sale of the business with potential buyers and expects a transaction to be completed in the first half of 2015.
The net income of discontinued operations attributable to the combined businesses of Lumileds and Automotive decreased from a profit of EUR 77 million in Q4 2013 to a profit of EUR 28 million in Q4 2014. EBITA in Q4 2014 included disentanglement costs of EUR 9 million (Q4 2013: EUR 0 million).
Full-year net income amounted to EUR 141 million, compared to EUR 133 million in 2013. EBITA in 2014 included EUR 17 million of disentanglement costs (2013: EUR 0 million).
Overhead and other indirect costs of Philips that were previously allocated to Lumileds and Automotive and were not aected by the transfer to Discontinued operations have been allocated to Lighting and IG&S (Former net costs allocated to Lighting and IG&S).
in millions of euros unless otherwise stated
| Q4 | Q4 | |
|---|---|---|
| 2013 | 2014 | |
| EBITA as previously reported in Lighting | 78 | 60 |
| Disentanglement costs | – | (9) |
| Former net costs allocated to Lighting | – | – |
| Former net costs allocated to IG&S | 15 | 23 |
| Amortization of other intangibles added | ||
| back | (10) | (4) |
| EBIT discontinued operations | 83 | 70 |
| Income taxes | (6) | (42) |
| Net income of discontinued operations | 77 | 28 |
| Number of employees (FTEs) | 8,219 | 8,313 |
| January to December | ||
|---|---|---|
| 2013 | 2014 | |
| EBITA as previously reported in Lighting | 117 | 172 |
| Disentanglement costs | – | (17) |
| Former net costs allocated to Lighting | (2) | 1 |
| Former net costs allocated to IG&S | 59 | 82 |
| Amortization of other intangibles added | ||
| back | (40) | (24) |
| EBIT discontinued operations | 134 | 214 |
| Income taxes | (1) | (73) |
| Net income of discontinued operations | 133 | 141 |
| Number of employees (FTEs) | 8,219 | 8,313 |
in millions of euros unless otherwise stated
| Q4 | Q4 | |
|---|---|---|
| 2013 | 2014 | |
| Sales | 224 | 184 |
| Sales growth | ||
| % nominal | 26 | (18) |
| % comparable | 18 | (21) |
| EBITA of: | ||
| Group Innovation | (42) | (60) |
| IP Royalties | 122 | 95 |
| Group and Regional Costs | (72) | (86) |
| Accelerate! investments | (34) | (40) |
| Pensions | (4) | (5) |
| Service Units and Other | (49) | (243) |
| EBITA | (79) | (339) |
| EBIT | (79) | (343) |
| Net operating capital (NOC) | (2,922) | (3,718) |
| Number of employees (FTEs)1) | 12,703 | 13,853 |
1) Number of employees includes 1,610 third-party workers in Q4 2014 (Q4 2013: 1,122).
in millions of euros
in millions of euros
EBITA excluding restructuring and acquisition-related charges and other items
in millions of euros
• Restructuring and separation charges in Q1 2015 are expected to total approximately EUR 70 million.
A proposal will be submitted to the General Meeting of Shareholders to declare a distribution of EUR 0.80 per common share (up to EUR 735 million), in cash or shares at the option of the shareholder, against net income and retained earnings. Further details will be given in the agenda for the General Meeting of Shareholders, to be held on May 7, 2015.
in millions of euros unless otherwise stated
| January to December | ||||
|---|---|---|---|---|
| 2013 | 2014 | |||
| Sales | 21,990 | 21,391 | ||
| EBITA | 2,276 | 821 | ||
| as a % of sales | 10.4 | 3.8 | ||
| EBIT | 1,855 | 486 | ||
| as a % of sales | 8.4 | 2.3 | ||
| Financial income and expenses | (330) | (301) | ||
| Income taxes | (466) | (26) | ||
| Results investments in associates | (25) | 62 | ||
| Net income from continuing operations | 1,034 | 221 | ||
| Discontinued operations | 138 | 190 | ||
| Net income | 1,172 | 411 | ||
| Net income attributable to shareholders per common share (in |
||||
| euros) - diluted | 1.27 | 0.45 |
in millions of euros unless otherwise stated
| January to December | % change | |||||
|---|---|---|---|---|---|---|
| 2013 | 2014 | nominal | compar able |
|||
| Healthcare | 9,575 | 9,186 | (4) | (2) | ||
| Consumer Lifestyle |
4,605 | 4,731 | 3 | 6 | ||
| Lighting | 7,145 | 6,869 | (4) | (3) | ||
| Innovation, Group & |
||||||
| Services | 665 | 605 | (9) | (12) | ||
| Philips Group | 21,990 | 21,391 | (3) | (1) |
in millions of euros unless otherwise stated
| January to December | |||||||
|---|---|---|---|---|---|---|---|
| 2013 2014 |
|||||||
| amount | as a % of sales |
||||||
| Healthcare | 1,512 | 15.8 | 616 | 6.7 | |||
| Consumer Lifestyle | 483 | 10.5 | 573 | 12.1 | |||
| Lighting | 580 | 8.1 | 293 | 4.3 | |||
| Innovation, Group & Services |
(299) | – | (661) | – | |||
| Philips Group | 2,276 | 10.4 | 821 | 3.8 |
in millions of euros unless otherwise stated
| January to December | |||||||
|---|---|---|---|---|---|---|---|
| 2013 | 2014 | ||||||
| amount | as a % of sales |
amount | as a % of sales |
||||
| Healthcare | 1,430 | 14.9 | 1,085 | 11.8 | |||
| Consumer Lifestyle | 496 | 10.8 | 571 | 12.1 | |||
| Lighting | 653 | 9.1 | 593 | 8.6 | |||
| Innovation, Group & Services |
(271) | – | (334) | – | |||
| Philips Group | 2,308 | 10.5 | 1,915 | 9.0 |
• Sales amounted to EUR 4,731 million. Excluding currency eects and portfolio changes, comparable sales increased by 6% year-on-year. Health & Wellness achieved double-digit growth and Domestic Appliances posted high-single-digit growth, while Personal Care recorded low-singledigit growth. From a geographical perspective, growth geographies posted a high-single-digit increase and mature geographies registered lowsingle-digit growth.
• EBITA amounted to a net cost of EUR 661 million, a year-on year decrease of EUR 362 million. EBITA included EUR 110 million of restructuring and acquisition-related charges, EUR 244 million of charges related to ongoing legal matters, and a EUR 27 million past-service pension cost gain in the Netherlands. 2013 EBITA included EUR 3 million of restructuring and acquisition-related charges and a pension settlement loss of EUR 25 million.
• Excluding restructuring and acquisition-related charges and other items, EBITA amounted to a net cost of EUR 334 million, compared to a net cost of EUR 271 million in 2013. The decline in EBITA was largely due to higher investments in emerging business areas and lower IP income.
This document and the related oral presentation, including responses to questions following the presentation, contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about the strategy, estimates of sales growth, future EBITA, future developments in Philips' organic business and completion of the tender oer and merger of Volcano Corporation and its benefits. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to dier materially from those expressed or implied by these statements.
These factors include but are not limited to domestic and global economic and business conditions, developments within the euro zone, the successful implementation of Philips' strategy and the ability to realize the benefits of this strategy, the ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates, pension costs and actuarial assumptions, raw materials and employee costs, the ability to identify and complete successful acquisitions, including Volcano, and to integrate those acquisitions into the business, the ability to successfully exit certain businesses or restructure the operations, the rate of technological changes, political, economic and other developments in countries where Philips operates, industry consolidation and competition. As a result, Philips' actual future results may dier materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to dier from such forward-looking statements, see the Risk management chapter included in the Annual Report 2013 and the "Risk and uncertainties" section in the semi-annual financial report for the six months ended June 29, 2014.
Statements regarding market share, including those regarding Philips' competitive position, contained in this document are based on outside sources such as research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Philips, those
statements may also be based on estimates and projections prepared by outside sources or management. Rankings are based on sales unless otherwise stated.
In presenting and discussing the Philips Group financial position, operating results and cash flows, management uses certain non-GAAP financial measures. These non-GAAP financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures. Non-GAAP financial measures do not have standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. A reconciliation of these non-GAAP measures to the most directly comparable IFRS measures is contained in this document. Further information on non-GAAP measures can be found in the Annual Report 2013.
In presenting the Philips Group financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that are deemed to be reliable. Readers are cautioned that these values are subject to changes over time and are only valid at the balance sheet date. When quoted prices or observable market data are not readily available, fair values are estimated using appropriate valuation models and unobservable inputs. Such fair value estimates require management to make significant assumptions with respect to future developments, which are inherently uncertain and may therefore deviate from actual developments. Critical assumptions used are disclosed in the Annual Report 2013. Independent valuations may have been obtained to support management's determination of fair values.
All amounts are in millions of euros unless otherwise stated. All reported data is unaudited. Financial reporting is in accordance with the accounting policies as stated in the Annual Report 2013, unless otherwise stated.
Prior-period financials have been restated for the treatment of the combined businesses of Automotive and Lumileds as discontinued operations and for two voluntary accounting policy changes applied as of January 1, 2014. The first voluntary accounting policy change relates to a reclassification of cost by function in the income statement. Company-wide overhead and indirect Business function costs will be brought more in line with the actual activities performed in the markets. This change has no net eect on Income from operations. The second voluntary accounting policy change relates to a change in the presentation in the cash flow statement. Up and until 2013 the cash flows related to interest, tax and pensions were presented in a table separate from the primary consolidated statement of cash flows. The presentation change results in the separate presentation of the interest and tax cash flows in cash flow from operating activities. The pension cash flows are separately presented as part of the pension disclosures. The presentation change has no impact on the net cash flows from operating activities nor the total net cash balance as these cash flows previously used to be part of other aggregated sub lines of the primary consolidated statement of cash flows. An overview of the revised 2014 and 2013 figures per quarter is available on the Philips website, in the Investor Relations section.
in millions of euros unless otherwise stated
| 4th quarter | January to December | |||
|---|---|---|---|---|
| 2013 | 2014 | 2013 | 2014 | |
| Sales | 6,401 | 6,536 | 21,990 | 21,391 |
| Cost of sales | (3,654) | (4,007) | (12,653) | (13,185) |
| Gross margin | 2,747 | 2,529 | 9,337 | 8,206 |
| Selling expenses | (1,425) | (1,499) | (5,057) | (5,124) |
| General and administrative expenses | (224) | (213) | (825) | (747) |
| Research and development expenses | (449) | (467) | (1,659) | (1,635) |
| Impairment of goodwill | (28) | (28) | (3) | |
| Other business income | 21 | 23 | 122 | 63 |
| Other business expenses | (15) | (211) | (35) | (274) |
| Income from operations | 627 | 162 | 1,855 | 486 |
| Financial income | 19 | 19 | 70 | 114 |
| Financial expenses | (96) | (97) | (400) | (415) |
| Income before taxes | 550 | 84 | 1,525 | 185 |
| Income tax expense | (161) | (16) | (466) | (26) |
| Income after taxes | 389 | 68 | 1,059 | 159 |
| Results relating to investments in associates | (46) | (1) | (25) | 62 |
| Net income from continuing operations | 343 | 67 | 1,034 | 221 |
| Discontinued operations - net of income tax | 69 | 67 | 138 | 190 |
| Net income | 412 | 134 | 1,172 | 411 |
| Attribution of net income for the period | ||||
| Net income attributable to shareholders | 409 | 139 | 1,169 | 415 |
| Net income (loss) attributable to non-controlling interests | 3 | (5) | 3 | (4) |
| Earnings per common share attributable to shareholders | ||||
| Weighted average number of common shares outstanding (after deduction of treasury shares) during the period (in thousands): |
||||
| - basic | 914,385 | 916,767 | 911,072 | 915,193 |
| - diluted | 927,131 | 922,270 | 922,072 | 922,714 |
| Net income attributable to shareholders per common share in euros: | ||||
| - basic | 0.45 | 0.15 | 1.28 | 0.45 |
| - diluted | 0.44 | 0.15 | 1.27 | 0.45 |
in millions of euros unless otherwise stated
| December 31, | December 31, | |
|---|---|---|
| 2013 | 2014 | |
| Non-current assets: | ||
| Property, plant and equipment | 2,780 | 2,095 |
| Goodwill | 6,504 | 7,158 |
| Intangible assets excluding goodwill | 3,262 | 3,368 |
| Non-current receivables | 144 | 177 |
| Investments in associates | 161 | 157 |
| Other non-current financial assets | 496 | 462 |
| Deferred tax assets | 1,675 | 2,460 |
| Other non-current assets | 63 | 69 |
| Total non-current assets | 15,085 | 15,946 |
| Current assets: | ||
| Inventories | 3,240 | 3,314 |
| Other current financial assets | 10 | 125 |
| Other current assets | 354 | 411 |
| Derivative financial assets | 150 | 207 |
| Income tax receivable | 70 | 140 |
| Receivables | 4,678 | 4,723 |
| Assets classified as held for sale | 507 | 1,613 |
| Cash and cash equivalents | 2,465 | 1,873 |
| Total current assets | 11,474 | 12,406 |
| Total assets | 26,559 | 28,352 |
| Shareholders' equity | 11,214 | 10,867 |
| Non-controlling interests | 13 | 101 |
| Group equity | 11,227 | 10,968 |
| Non-current liabilities: | ||
| Long-term debt | 3,309 | 3,712 |
| Long-term provisions | 1,903 | 2,500 |
| Deferred tax liabilities | 76 | 107 |
| Other non-current liabilities | 1,568 | 1,838 |
| Total non-current liabilities | 6,856 | 8,157 |
| Current liabilities: | ||
| Short-term debt | 592 | 392 |
| Derivative financial liabilities | 368 | 857 |
| Income tax payable | 143 | 102 |
| Accounts and notes payable | 2,462 | 2,499 |
| Accrued liabilities | 2,830 | 2,692 |
| Short-term provisions | 651 | 945 |
| Liabilities directly associated with assets held for sale | 348 | 349 |
| Other current liabilities | 1,082 | 1,391 |
| Total current liabilities | 8,476 | 9,227 |
in millions of euros
| 4th quarter | January to December | |||
|---|---|---|---|---|
| 2013 | 2014 | 2013 | 2014 | |
| Cash flows from operating activities: | ||||
| Net income | 412 | 134 | 1,172 | 411 |
| Result of discontinued operations - net of income tax | (69) | (67) | (138) | (190) |
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||||
| Depreciation, amortization, and impairments of fixed assets | 366 | 393 | 1,177 | 1,187 |
| Impairment of goodwill and other non-current financial assets | 32 | 3 | 38 | 21 |
| Net gain on sale of assets | (5) | (9) | (54) | (83) |
| Interest income | (14) | (11) | (54) | (39) |
| Interest expense on debt, borrowings and other liabilities | 61 | 63 | 258 | 231 |
| Income tax expense | 161 | 16 | 466 | 26 |
| Results from investments in associates | 47 | 2 | 25 | (62) |
| (Increase) decrease in working capital: | (295) | 349 | (1,272) | 590 |
| (Increase) decrease in receivables and other current assets | (190) | 27 | (500) | (48) |
| (Increase) decrease in inventories | 466 | 399 | (165) | (77) |
| (Decrease) increase in accounts payable, accrued and other liabilities | (571) | (77) | (607) | 715 |
| Increase in non-current receivables, other assets and other liabilities | (36) | (114) | (159) | (690) |
| Increase (decrease) in provisions | 53 | 230 | (194) | 640 |
| Other items | 130 | (85) | 299 | (242) |
| Interest paid | (30) | (26) | (267) | (232) |
| Interest received | 14 | 11 | 52 | 38 |
| Dividends received from investments in associates | – | 8 | 6 | 41 |
| Dividends paid to non-controlling interests | (7) | – | (7) | – |
| Income taxes paid | (74) | (56) | (436) | (344) |
| Net cash provided by operating activities | 746 | 841 | 912 | 1,303 |
| Cash flows from investing activities: | ||||
| Net capital expenditures | (265) | (282) | (830) | (806) |
| Purchase of intangible assets | (32) | (56) | (49) | (114) |
| Expenditures on development assets | (81) | (88) | (326) | (295) |
| Capital expenditures on property, plant and equipment | (156) | (153) | (482) | (437) |
| Proceeds from sale of property, plant and equipment | 4 | 15 | 27 | 40 |
| Cash used for derivatives and current financial assets | (7) | (12) | (101) | (7) |
| Purchase of other non-current financial assets | (8) | (7) | (13) | (81) |
| Proceeds from other non-current financial assets | (1) | 14 | 14 | 107 |
| Purchase of businesses, net of cash acquired | (6) | (13) | (11) | (177) |
| Net proceeds from (used for) sale of interest in businesses | (6) | 39 | 79 | (20) |
| Net cash used for investing activities | (293) | (261) | (862) | (984) |
| Cash flows from financing activities: | ||||
| Proceeds from issuance (payments) of short-term debt | (82) | (371) | (285) | (37) |
| Principal payments on long-term debt | (19) | (19) | (186) | (333) |
| Proceeds from issuance of long-term debt | 16 | 24 | 64 | 69 |
| Treasury shares transactions | (57) | (134) | (562) | (596) |
| Dividend paid | – | – | (272) | (292) |
| Net cash used for financing activities | (142) | (500) | (1,241) | (1,189) |
| Net cash (used for) provided by continuing operations | 311 | 80 | (1,191) | (870) |
| 4th quarter | January to December | |||
|---|---|---|---|---|
| 2013 | 2014 | 2013 | 2014 | |
| Cash flows from discontinued operations: | ||||
| Net cash (used for) provided by operating activities | 145 | 49 | (68) | 105 |
| Net cash (used for) provided by investing activities | 3 | (11) | (47) | 88 |
| Net cash (used for) provided by discontinued operations | 148 | 38 | (115) | 193 |
| Net cash (used for) provided by continuing and discontinued operations | 459 | 118 | (1,306) | (677) |
| Eect of change in exchange rates on cash and cash equivalents | (28) | 39 | (63) | 85 |
| Cash and cash equivalents at the beginning of the period | 2,034 | 1,716 | 3,834 | 2,465 |
| Cash and cash equivalents at the end of the period | 2,465 | 1,873 | 2,465 | 1,873 |
For a number of reasons, principally the eects of translation dierences, certain items in the statements of cash flows do not correspond to the dierences between the balance sheet amounts for the respective items.
in millions of euros
| common shares |
capital in excess of par value |
retained earnings |
revaluation reserve |
currency translation dierences |
available for-sale financial assets |
cash flow hedges |
treasury shares at cost |
total share holders' equity |
non controlling interests |
total equity |
|
|---|---|---|---|---|---|---|---|---|---|---|---|
| January-December 2014 | |||||||||||
| Balance as of December 31, 2013 |
188 | 1,796 | 10,415 | 23 | (569) | 55 | 24 | (718) | 11,214 | 13 | 11,227 |
| Total comprehensive income |
(258) | (10) | 798 | (28) | (37) | 465 | (4) | 461 | |||
| Dividend distributed | 3 | 433 | (729) | (293) | (293) | ||||||
| Movement non-controlling interest |
– | 92 | 92 | ||||||||
| Purchase of treasury shares |
(26) | (688) | (714) | (714) | |||||||
| Re-issuance of treasury shares |
(127) | (83) | 326 | 116 | 116 | ||||||
| Cancellation of treasury shares |
(4) | (529) | 533 | – | – | ||||||
| Share-based compensation plans |
88 | 88 | 88 | ||||||||
| Income tax share-based compensation plans |
(9) | (9) | (9) | ||||||||
| Total other equity movements |
(1) | 385 | (1,367) | 171 | (812) | 92 | (720) | ||||
| Balance as of December 31, 2014 |
187 | 2,181 | 8,790 | 13 | 229 | 27 | (13) | (547) | 10,867 | 101 | 10,968 |
| 4th quarter | ||||||
|---|---|---|---|---|---|---|
| 2013 | 2014 | |||||
| Netherlands | other | total | Netherlands | other | total | |
| Defined-benefit plans | ||||||
| Pensions | ||||||
| Current service cost | 48 | 18 | 66 | 44 | 17 | 61 |
| Past service cost (incl. curtailments) | – | (3) | (3) | (68) | (1) | (69) |
| Settlements | – | 1 | 1 | – | (1) | (1) |
| Interest expense | – | 16 | 16 | – | 17 | 17 |
| Interest income | (1) | 0 | (1) | (3) | – | (3) |
| Total | 47 | 32 | 79 | (27) | 32 | 5 |
| of which discontinued operations | 1 | – | 1 | – | 1 | 1 |
| Retiree Medical | ||||||
| Current service cost | – | – | – | – | 1 | 1 |
| Interest expense | – | 2 | 2 | – | 2 | 2 |
| Total | – | 2 | 2 | – | 3 | 3 |
| Defined-contribution plans | ||||||
| Cost | 1 | 29 | 30 | 10 | 31 | 41 |
| of which discontinued operations | – | 2 | 2 | – | 1 | 1 |
| January to December | ||||||
|---|---|---|---|---|---|---|
| 2013 | 2014 | |||||
| Netherlands | other | total | Netherlands | other | total | |
| Defined-benefit plans | ||||||
| Pensions | ||||||
| Current service cost | 192 | 82 | 274 | 183 | 71 | 254 |
| Past service cost (incl. curtailments) | – | (81) | (81) | (68) | (1) | (69) |
| Settlements | – | 32 | 32 | 0 | (1) | (1) |
| Interest expense | – | 65 | 65 | 0 | 59 | 59 |
| Interest income | (4) | – | (4) | (11) | 0 | (11) |
| Total | 188 | 98 | 286 | 104 | 128 | 232 |
| of which discontinued operations | 4 | 2 | 6 | 1 | 3 | 4 |
| Retiree Medical | ||||||
| Current service cost | – | 1 | 1 | – | 2 | 2 |
| Interest expense | – | 10 | 10 | – | 11 | 11 |
| Total | – | 11 | 11 | – | 13 | 13 |
| Defined-contribution plans | ||||||
| Costs | 8 | 134 | 142 | 16 | 132 | 148 |
| of which discontinued operations | – | 8 | 8 | 1 | 3 | 4 |
| 4th quarter | January to December | ||||
|---|---|---|---|---|---|
| 2013 | 2014 | 2013 | 2014 | ||
| Contributions and benefits paid by the Company | 190 | 205 | 679 | 1,050 |
| 4th quarter | ||||||||
|---|---|---|---|---|---|---|---|---|
| 2014 | ||||||||
| sales | income from operations | income from operations | ||||||
| as a % of sales | as a % of sales | |||||||
| Healthcare | 2,828 | 477 | 16.9 | 2,849 | 351 | 12.3 | ||
| Consumer Lifestyle | 1,428 | 174 | 12.2 | 1,528 | 237 | 15.5 | ||
| Lighting | 1,921 | 55 | 2.9 | 1,975 | (83) | (4.2) | ||
| Innovation, Group & Services | 224 | (79) | – | 184 | (343) | – | ||
| Philips Group | 6,401 | 627 | 9.8 | 6,536 | 162 | 2.5 |
| January to December | |||||||
|---|---|---|---|---|---|---|---|
| 2013 | 2014 | ||||||
| sales | income from operations | income from operations | |||||
| as a % of sales | as a % of sales | ||||||
| Healthcare | 9,575 | 1,315 | 13.7 | 9,186 | 456 | 5.0 | |
| Consumer Lifestyle | 4,605 | 429 | 9.3 | 4,731 | 520 | 11.0 | |
| Lighting | 7,145 | 413 | 5.8 | 6,869 | 185 | 2.7 | |
| Innovation, Group & Services | 665 | (302) | – | 605 | (675) | – | |
| Philips Group | 21,990 | 1,855 | 8.4 | 21,391 | 486 | 2.3 |
| sales | total assets | total liabilities excluding debt | |||||
|---|---|---|---|---|---|---|---|
| January to December | December 31, | December 31, | December 31, | December 31, | |||
| 2013 2014 |
2013 | 2014 | 2013 | 2014 | |||
| Healthcare | 9,575 | 9,186 | 10,465 | 11,274 | 2,943 | 3,629 | |
| Consumer Lifestyle | 4,605 | 4,731 | 2,832 | 3,049 | 1,571 | 1,696 | |
| Lighting | 7,145 | 6,869 | 6,711 | 5,739 | 2,229 | 2,081 | |
| Innovation, Group & Services | 665 | 605 | 6,044 | 6,677 | 4,340 | 5,525 | |
| 26,052 | 26,739 | 11,083 | 12,931 | ||||
| Assets and liabilities classified as held for | |||||||
| sale | 507 | 1,613 | 348 | 349 | |||
| Philips Group | 21,990 | 21,391 | 26,559 | 28,352 | 11,431 | 13,280 |
| sales | tangible and intangible assets1) | ||||
|---|---|---|---|---|---|
| January to December | December 31, | December 31, | |||
| 2013 | 2014 | 2013 | 2014 | ||
| Netherlands | 649 | 594 | 915 | 937 | |
| United States | 6,325 | 6,160 | 7,384 | 7,649 | |
| China | 2,616 | 2,362 | 1,057 | 1,135 | |
| Germany | 1,316 | 1,351 | 288 | 153 | |
| Japan | 943 | 908 | 401 | 379 | |
| France | 890 | 839 | 80 | 52 | |
| United Kingdom | 677 | 722 | 573 | 594 | |
| Other countries | 8,574 | 8,455 | 1,848 | 1,722 | |
| Philips Group | 21,990 | 21,391 | 12,546 | 12,621 |
1) Includes property, plant and equipment, goodwill, and intangible assets excluding goodwill
Certain non-GAAP financial measures are presented when discussing the Philips Group's performance. In the following tables, reconciliations to the most directly comparable IFRS measures are presented.
| 4th quarter | January to December | |||||||
|---|---|---|---|---|---|---|---|---|
| comparable growth |
currency eects |
consolid ation changes |
nominal growth |
comparable growth |
currency eects |
consolid ation changes |
nominal growth |
|
| 2014 versus 2013 | ||||||||
| Healthcare | (2.9) | 3.8 | (0.2) | 0.7 | (2.0) | (1.6) | (0.5) | (4.1) |
| Consumer Lifestyle | 5.6 | 1.4 | 0.0 | 7.0 | 5.8 | (3.1) | 0.0 | 2.7 |
| Lighting | (2.7) | 2.9 | 2.6 | 2.8 | (2.6) | (2.3) | 1.0 | (3.9) |
| IG&S | (21.0) | 0.8 | 2.3 | (17.9) | (11.8) | (0.1) | 2.9 | (9.0) |
| Philips Group | (1.6) | 3.0 | 0.7 | 2.1 | (0.9) | (2.0) | 0.2 | (2.7) |
| 2014 | 4th quarter | January to December | ||||||||
|---|---|---|---|---|---|---|---|---|---|---|
| Philips Group |
Healthcare | Consumer Lifestyle |
Lighting | Innovation, Group & Services |
Philips Group |
Healthcare | Consumer Lifestyle |
Lighting | Innovation, Group & Services |
|
| EBITA excluding restructuring and acquisition-related charges and other items |
743 | 421 | 244 | 178 | (100) | 1,915 | 1,085 | 571 | 593 | (334) |
| Other items | (202) | 16 | 11 | (55) | (174) | (660) | (399) | 11 | (55) | (217) |
| Restructuring and acquisition-related charges |
(279) | (47) | (4) | (163) | (65) | (434) | (70) | (9) | (245) | (110) |
| EBITA (or Adjusted income from operations) |
262 | 390 | 251 | (40) | (339) | 821 | 616 | 573 | 293 | (661) |
| Amortization of intangibles1) |
(100) | (39) | (14) | (43) | (4) | (332) | (159) | (53) | (106) | (14) |
| Impairment of goodwill |
(3) | (1) | (2) | |||||||
| Income from operations (or EBIT) |
162 | 351 | 237 | (83) | (343) | 486 | 456 | 520 | 185 | (675) |
| 2013 | ||||||||||
| EBITA excluding restructuring and acquisition-related charges and other items |
827 | 538 | 192 | 169 | (72) | 2,308 | 1,430 | 496 | 653 | (271) |
| Other items | 68 | 82 | 1 | 10 | (25) | |||||
| Restructuring and acquisition-related charges |
(38) | 3 | (5) | (29) | (7) | (100) | (14) | (83) | (3) | |
| EBITA (or adjusted income from operations) |
789 | 541 | 187 | 140 | (79) | 2,276 | 1,512 | 483 | 580 | (299) |
| Amortization of intangibles1) |
(134) | (62) | (13) | (59) | (393) | (195) | (54) | (141) | (3) | |
| Impairment of goodwill |
(28) | (2) | (26) | (28) | (2) | (26) | ||||
| Income from operations (or EBIT) |
627 | 477 | 174 | 55 | (79) | 1,855 | 1,315 | 429 | 413 | (302) |
1) Excluding amortization of software and product development
| Consumer | |||||
|---|---|---|---|---|---|
| Philips Group | Healthcare | Lifestyle | Lighting | IG&S | |
| December 31, 2014 | |||||
| Net operating capital (NOC) | 8,838 | 7,565 | 1,353 | 3,638 | (3,718) |
| Exclude liabilities comprised in NOC: | |||||
| - payables/liabilities | 9,379 | 2,711 | 1,411 | 1,422 | 3,835 |
| - intercompany accounts | – | 125 | 65 | 129 | (319) |
| - provisions | 3,445 | 793 | 220 | 530 | 1,902 |
| Include assets not comprised in NOC: | |||||
| - investments in associates | 157 | 80 | – | 20 | 57 |
| - other current financial assets | 125 | 125 | |||
| - other non-current financial assets | 462 | 462 | |||
| - deferred tax assets | 2,460 | 2,460 | |||
| - cash and cash equivalents | 1,873 | 1,873 | |||
| 26,739 | 11,274 | 3,049 | 5,739 | 6,677 | |
| Assets classified as held for sale | 1,613 | ||||
| Total assets | 28,352 | ||||
| December 31, 2013 | |||||
| Net operating capital (NOC) | 10,238 | 7,437 | 1,261 | 4,462 | (2,922) |
| Exclude liabilities comprised in NOC: | |||||
| - payables/liabilities | 8,453 | 2,541 | 1,275 | 1,672 | 2,965 |
| - intercompany accounts | – | 124 | 75 | 105 | (304) |
| - provisions | 2,554 | 278 | 221 | 452 | 1,603 |
| Include assets not comprised in NOC: | |||||
| - investments in associates | 161 | 85 | – | 20 | 56 |
| - other current financial assets | 10 | 10 | |||
| - other non-current financial assets | 496 | 496 | |||
| - deferred tax assets | 1,675 | 1,675 | |||
| - cash and cash equivalents | 2,465 | 2,465 | |||
| 26,052 | 10,465 | 2,832 | 6,711 | 6,044 | |
| Assets classified as held for sale | 507 | ||||
| Total assets | 26,559 | ||||
all amounts in millions of euros unless otherwise stated
Composition of net debt to group equity
| December 31, | December 31, | |
|---|---|---|
| 2013 | 2014 | |
| Long-term debt | 3,309 | 3,712 |
| Short-term debt | 592 | 392 |
| Total debt | 3,901 | 4,104 |
| Cash and cash equivalents | 2,465 | 1,873 |
| Net debt (cash) (total debt less cash and cash equivalents) | 1,436 | 2,231 |
| Shareholders' equity | 11,214 | 10,867 |
| Non-controlling interests | 13 | 101 |
| Group equity | 11,227 | 10,968 |
| Net debt and group equity | 12,663 | 13,199 |
| Net debt divided by net debt and group equity (in %) | 11 | 17 |
| Group equity divided by net debt and group equity (in %) | 89 | 83 |
| 4th quarter | January to December | |||
|---|---|---|---|---|
| 2013 | 2014 | 2013 | 2014 | |
| Cash flows provided by operating activities | 746 | 841 | 912 | 1,303 |
| Cash flows used for investing activities | (293) | (261) | (862) | (984) |
| Cash flows before financing activities | 453 | 580 | 50 | 319 |
| Cash flows provided by operating activities | 746 | 841 | 912 | 1,303 |
| Net capital expenditures: | (265) | (282) | (830) | (806) |
| Purchase of intangible assets | (32) | (56) | (49) | (114) |
| Expenditures on development assets | (81) | (88) | (326) | (295) |
| Capital expenditures on property, plant and equipment | (156) | (153) | (482) | (437) |
| Proceeds from sale of property, plant and equipment | 4 | 15 | 27 | 40 |
| Free cash flows | 481 | 559 | 82 | 497 |
all amounts in millions of euros unless otherwise stated
| 2013 | 2014 | |||||||
|---|---|---|---|---|---|---|---|---|
| 1st quarter | 2nd quarter |
3rd quarter | 4th quarter | 1st quarter | 2nd quarter |
3rd quarter | 4th quarter | |
| Sales | 4,973 | 5,348 | 5,268 | 6,401 | 4,692 | 4,969 | 5,194 | 6,536 |
| comparable sales growth % | 1 | 2 | 2 | 6 | (1) | (1) | (2) | (2) |
| Gross margin | 2,040 | 2,287 | 2,263 | 2,747 | 1,900 | 2,075 | 1,702 | 2,529 |
| as a % of sales | 41.0 | 42.8 | 43.0 | 42.9 | 40.5 | 41.8 | 32.8 | 38.7 |
| Selling expenses | (1,183) | (1,237) | (1,212) | (1,425) | (1,166) | (1,214) | (1,245) | (1,499) |
| as a % of sales | (23.8) | (23.1) | (23.0) | (22.3) | (24.9) | (24.4) | (24.0) | (22.9) |
| G&A expenses | (182) | (203) | (216) | (224) | (167) | (176) | (191) | (213) |
| as a % of sales | (3.7) | (3.8) | (4.1) | (3.5) | (3.6) | (3.5) | (3.7) | (3.3) |
| R&D expenses | (406) | (399) | (405) | (449) | (396) | (400) | (372) | (467) |
| as a % of sales | (8.2) | (7.5) | (7.7) | (7.0) | (8.4) | (8.0) | (7.2) | (7.1) |
| EBIT | 286 | 500 | 442 | 627 | 172 | 291 | (139) | 162 |
| as a % of sales | 5.8 | 9.3 | 8.4 | 9.8 | 3.7 | 5.9 | (2.7) | 2.5 |
| EBITA | 373 | 584 | 530 | 789 | 253 | 368 | (62) | 262 |
| as a % of sales | 7.5 | 10.9 | 10.1 | 12.3 | 5.4 | 7.4 | (1.2) | 4.0 |
| Net income (loss) | 162 | 317 | 281 | 412 | 137 | 243 | (103) | 134 |
| Net income (loss) attributable to shareholders |
161 | 317 | 282 | 409 | 138 | 242 | (104) | 139 |
| Net income (loss) - shareholders per common share in euros - diluted |
0.17 | 0.35 | 0.31 | 0.44 | 0.15 | 0.26 | (0.11) | 0.15 |
all amounts in millions of euros unless otherwise stated
| 2013 | 2014 | |||||||
|---|---|---|---|---|---|---|---|---|
| January March |
January June |
January September |
January December |
January March |
January June |
January September |
January December |
|
| Sales comparable sales growth % |
4,973 1 |
10,321 1 |
15,589 2 |
21,990 3 |
4,692 (1) |
9,661 (1) |
14,855 0 |
21,391 (1) |
| Gross margin | 2,040 | 4,327 | 6,590 | 9,337 | 1,900 | 3,975 | 5,677 | 8,206 |
| as a % of sales | 41.0 | 41.9 | 42.3 | 42.5 | 40.5 | 41.1 | 38.2 | 38.4 |
| Selling expenses | (1,183) | (2,420) | (3,632) | (5,057) | (1,166) | (2,380) | (3,625) | (5,124) |
| as a % of sales | (23.8) | (23.4) | (23.3) | (23.0) | (24.9) | (24.6) | (24.4) | (24.0) |
| G&A expenses | (182) | (385) | (601) | (825) | (167) | (343) | (534) | (747) |
| as a % of sales | (3.7) | (3.7) | (3.9) | (3.8) | (3.6) | (3.6) | (3.6) | (3.5) |
| R&D expenses | (406) | (805) | (1,210) | (1,659) | (396) | (796) | (1,168) | (1,635) |
| as a % sales | (8.2) | (7.8) | (7.8) | (7.5) | (8.4) | (8.2) | (7.9) | (7.6) |
| EBIT | 286 | 786 | 1,228 | 1,855 | 172 | 463 | 324 | 486 |
| as a % of sales | 5.8 | 7.6 | 7.9 | 8.4 | 3.7 | 4.8 | 2.2 | 2.3 |
| EBITA | 373 | 957 | 1,487 | 2,276 | 253 | 621 | 559 | 821 |
| as a % of sales | 7.5 | 9.3 | 9.5 | 10.4 | 5.4 | 6.4 | 3.8 | 3.8 |
| Net income | 162 | 479 | 760 | 1,172 | 137 | 380 | 277 | 411 |
| Net income attributable to shareholders | 161 | 478 | 760 | 1,169 | 138 | 380 | 276 | 415 |
| Net income - shareholders per common | ||||||||
| share in euros - diluted | 0.17 | 0.52 | 0.83 | 1.27 | 0.15 | 0.41 | 0.30 | 0.45 |
| Net income from continuing operations | ||||||||
| as a % of shareholders' equity | 5.4 | 8.5 | 8.7 | 9.4 | 4.0 | 5.7 | 2.0 | 2.0 |
| period ended 2013 | period ended 2014 | |||||||
| Number of common shares outstanding | ||||||||
| (after deduction of treasury shares) at the end of period (in thousands) |
905,381 | 913,874 | 915,095 | 913,338 | 913,485 | 923,933 | 919,973 | 914,389 |
| Shareholders' equity per common share | ||||||||
| in euros | 12.33 | 11.78 | 11.93 | 12.28 | 12.06 | 11.63 | 11.86 | 11.88 |
| Inventories as a % of sales1) | 15.2 | 15.5 | 16.3 | 13.7 | 14.8 | 15.9 | 17.4 | 15.5 |
| Inventories excluding discontinued operations |
3,376 | 3,441 | 3,579 | 3,021 | 3,215 | 3,387 | 3,690 | 3,313 |
| Net debt : group equity ratio | 12:88 | 16:84 | 16:84 | 11:89 | 15:85 | 18:82 | 19:81 | 17:83 |
| Net operating capital | 9,969 | 10,184 | 10,249 | 10,238 | 10,381 | 10,500 | 10,841 | 8,838 |
| Total employees | 118,085 | 117,369 | 115,858 | 116,082 | 114,268 | 112,834 | 115,261 | 113,678 |
| of which discontinued operations | 10,812 | 10,764 | 10,499 | 10,445 | 9,957 | 8,256 | 8,489 | 8,313 |
1) sales is calculated over the preceding 12 months
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