First-Quarter Highlights:
- Comparable sales growth driven by 5% growth in HealthTech portfolio
- Adjusted EBITA amounted to EUR 374 million, or 6.8% of sales, compared to 6.1% of sales in Q1 2015
- EBITA totaled EUR 290 million, or 5.3% of sales, compared to 4.3% of sales in Q1 2015
- Net income amounted to EUR 37 million, compared to EUR 100 million in Q1 2015, mainly impacted by tax charges related to the separation
- Free cash outflow of EUR 177 million, compared to an outflow of EUR 443 million in Q1 2015
- Philips Lighting separation process well on track
Franz van Houten, CEO: “Philips‘ first-quarter 2016 results reflect solid comparable sales growth across our HealthTech businesses and our LED Lighting business, bolstered by the successful launch of several new products. We also delivered continued operational improvements throughout the company, driven by higher volume and improved product mix. Our overall performance strengthened, supported by the ongoing benefits of our multi-year Accelerate! transformation program, despite challenging macro-economic conditions in several markets.
Our outlook for 2016 remains unchanged, as we continue to expect earnings improvements in the year to be back-end loaded, taking into account ongoing macro-economic headwinds and the phasing of costs and sales.”
Separation Update
As previously communicated, Philips continues to simultaneously prepare for an initial public offering (IPO) or a private sale of Philips Lighting. With equity markets’ sentiment improving compared to the first couple of months of the year, an IPO increasingly appears a more likely outcome, subject to further market developments and other relevant circumstances. However, the company has not yet concluded on all proposals in the private sale process and continues to assess the attractiveness of this route compared to the IPO, both in terms of value and conditions, while taking into account the best interests of Philips and its stakeholders. As such, Philips expects to update the market on conclusions and next steps shortly.
Costs related to the separation amounted to EUR 52 million in the first quarter of 2016. For 2016, Philips now expects separation costs to be in the range of EUR 200—225 million.
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