Recently, Philips Lighting announced the fourth quarter of 2017 and the full year 2017 financial report. In the fourth quarter of last year, the company achieved sales of 1.892 billion euros (equivalent to approximately RMB 14.85 billion), a year-on-year increase of 3%; net income of 38 million euros (equivalent to approximately RMB 298 million), a year-on-year decrease.
In terms of market segments, the European, US and Chinese markets contributed revenue growth, while the Middle East and Turkey markets, especially Saudi Arabia, remained challenging. In terms of products, Philips Lighting achieved Lamps sales of 442 million euros in the fourth quarter of last year, LED sales of 440 million euros, sales of special products business of 786 million euros, sales of household products business of 232 million euros.
The fourth quarter of 2017 financial report focus
Sales amounted to 1.892 billion euros, a year-on-year increase of 3% in sales, while Q4 sales in 2016 decreased by 3.2% year-on-year.
Overall LED sales increased by 19%, accounting for 68% of total sales, while Q4 accounted for 59% in 2016; adjusted earnings before interest, taxes, depreciation and amortization were 207 million euros, compared to 188 million euros in 2016 Q4; The profit margin before interest, taxes, depreciation and amortization increased by 120 basis points to 10.9%, compared with 9.7% in Q4 2016; net income reached 38 million euros, compared to 63 million euros in Q4 2016; free cash flow was 434 million euros. And in 2016 Q4 was 272 million euros.
In addition, Philips Lighting achieved sales of 6.965 billion euros (equivalent to approximately RMB 54.67 billion) in 2017, representing a year-on-year increase of 0.5%; net income for the year was 281 million euros (equivalent to approximately RMB 2.2 billion), representing a year-on-year increase.
From a product perspective, Philips Lighting achieved a total of 1.82 billion euros of Lamps sales in 2017, LED sales of 1.703 billion euros, sales of special products business of 2.755 billion euros, and sales of household products business of 684 million euros.
2017 annual financial report focus
Sales amounted to 6.965 billion euros, a year-on-year increase of 0.5%, while full-year sales in 2016 decreased by 2.4% year-on-year; overall LED sales increased 19%, accounting for 65% of total sales, while the full year 2016 55%; adjusted profit before interest, taxes, depreciation and amortization was 699 million euros, compared with 645 million euros in 2016; adjusted profit margin before interest, taxes, depreciation and amortization increased by 90 basis points to 10%, and 2016 The annual total was 9.1%; net income reached 281 million euros, compared with 185 million euros in 2016; free cash flow was 403 million euros, compared with 418 million euros in 2016.
Outlook
In 2018, Philips Lighting expects the adjusted profit margin before interest, tax, depreciation and amortization to achieve a 10%-10.5% growth, in line with the company's medium-term outlook. The company will continue to work to reduce costs and expects to achieve higher cost savings and profit from the second half of 2018. At the same time, with the steady start of the first quarter, it is expected to achieve positive year-on-year sales growth throughout the year. In addition, due to higher restructuring costs, the free cash flow in 2018 will be slightly lower than the 2017 level, but the company will provide solid free cash flow.
In addition to the release of its results, Philips Lighting recently announced that it has been accredited by the non-profit organization Global Environmental Information Research Center (CDP) and became the "Supplier Participation Leadership" company in 2018, including the "Supplier Participation Leadership Committee". Philips Lighting is actively collaborating with its supplier partners to focus on carbon emissions and work together to address climate issues in all aspects of the supply chain. Based on the positive impact of Philips Lighting on reducing environmental impact, the Center for Environmental Information Research rated it as “Climate Change Level Aâ€.
“We are very proud to join the Global Suppliers Leadership Council of the Global Environmental Information Research Center. Reducing carbon emissions from the supply chain is a very important part of the Philips Lighting Sustainability Program's Shining Life, A Better World. Sub-certification is undoubtedly our recognition and support for our unremitting efforts.†Anna Spinellii, Vice President of Global Purchasing for Philips Lighting, said, “Philips Lighting has teamed up with the Global Environmental Information Research Center to develop a set of products that can help companies measure their energy consumption and carbon emissions. Tools and motivate suppliers to be environmentally conscious by training in China and around the world."
“Congratulations to Philips Lighting's participation in the Global Environmental Information Research Center's Supplier Participation Leadership Council, its efforts in supply chain reduction have served as a model for the industry.†Dexter Galvin, Global Corporate and Supply Chain Director, Global Environmental Information Research Center “Environmental protection is the current global concern, and fulfilling the Paris Agreement is an unshirkable responsibility of every company. Philips Lighting's initiatives in the field of environmental protection have pointed out the direction of action for other companies. This year is the first independent direction of Philips Lighting. It’s really gratifying that the Global Environmental Information Research Center has disclosed such information.
In 2017, there were 29 companies selected by the Global Environmental Information Research Center “Supplier Participation Leadership Committeeâ€. In 2018, the list has expanded to 58. The 58 companies selected from more than 3,300 applicant companies stand out according to the league rating criteria, with a selection rate of only 2%. According to the Center's report, only 23% of the participating companies are actively working with suppliers to address environmental issues, highlighting the urgency of integrating sustainable development into supply chain management.
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