Presentation is loading. Please wait.

Presentation is loading. Please wait.

Gerard Kleisterlee President and CEO Royal Philips Electronics Creating value: Blending growth and capital management.

Similar presentations


Presentation on theme: "Gerard Kleisterlee President and CEO Royal Philips Electronics Creating value: Blending growth and capital management."— Presentation transcript:

1 Gerard Kleisterlee President and CEO Royal Philips Electronics Creating value: Blending growth and capital management

2 2 Philips Group Objectives IFO margins of 7-10% in the course of 2006 Consistent returns in excess of the cost of capital Reduce earnings volatility of cyclical businesses Improve stability / predictability across the portfolio

3 3 Philips’ changing portfolio – growth Medical Systems Lighting Domestic Appliances cash shareholders Consumer Electronics Semiconductors Financial stakes grow lower risks reduce Current IFO margins between 13-16% Target IFO margin of 4-4.5% Target IFO margin of 5-15% (over the cycle)

4 4 Summary of Transaction Acquisition price: Source of financing: Post-deal status of Lumileds: Headquarters: Conditions to closing: Anticipated transaction close : US$ 950 (EUR 765) million Cash on hand Fully consolidated business unit within Philips Lighting San Jose, California Receipt of required government approvals and other customary conditions government Q4 of 2005

5 5 Why acquire Agilent’s stake in Lumileds? Builds on Philips’ leading global position in lighting Gives Philips a controlling share in a leading LED (light emitting diode) company Extends Philips’ involvement to all segments of the LED value chain Gives Philips access to strong portfolio of over 200 LED patents Deepens Philips’ presence in the higher-growth, higher- margin segments of the LED market

6 6 Lighting Number 1 market position globally with strong margins and cash flows End-user-driven innovation, marketing and supply excellence Accelerated growth from emerging markets in UHP, automotive and LEDs Investments in R&D and capital expenditures to propel innovation and growth EUR billion Sales IFO as % of sales EUR million

7 7 Philips’ changing portfolio – capital management Medical Systems Lighting Domestic Appliances cash shareholders Consumer Electronics Semiconductors Financial stakes grow lower risks reduce Current IFO margins between 13-16% Target IFO margin of 4-4.5% Target IFO margin of 5-15% (over the cycle)

8 8 Philips’ changing portfolio – capital management Medical Systems Lighting Domestic Appliances cash shareholders Consumer Electronics Semiconductors Financial stakes grow lower risks reduce Current IFO margins between 13-16% Target IFO margin of 4-4.5% Target IFO margin of 5-15% (over the cycle)

9 9 Share repurchase programs in 2005 First program: Start date: January 27 Size: EUR 750 million Use of funds: Capital reduction (EUR 500 million) and hedging (EUR 250 million) Duration: 6 months

10 10 Share repurchase programs in 2005 First program: Start date: January 27 Size: EUR 750 million Use of funds: Capital reduction (EUR 500 million) and hedging (EUR 250 million) Duration: 6 months Second program: Start date: August 15 Size: EUR 1.5 billion Use of funds: Capital reduction Duration: Up to 12 months

11 11 Impact on net debt : group equity ratio EUR billion Net debt / group equity ratio Group equity Net debt 8:9213:87 * Reflecting impact of Lumileds and Stentor acquisitions, new share buyback program, and lowering of holdings in TSMC, LG.Philips LCD and Atos Origin.

12 12 Conclusion Blending growth and capital management will help us: Grow more stably and predictably Maintain our strong financial position Become a simpler organization to understand Continue to demonstrate financial discipline Create value for shareholders

13


Download ppt "Gerard Kleisterlee President and CEO Royal Philips Electronics Creating value: Blending growth and capital management."

Similar presentations


Ads by Google