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Philips Lighting Reports Fourth Quarter and Annual Results 2017

Philips Lighting reports 0.5% full year comparable sales growth, 10% operational profitability and EUR $500 million free cash flow.

EINDHOVEN, the Netherlands – Philips Lighting, the world leader in lighting, today announced the company’s fourth quarter and full year results 2017. “In line with our objectives, Philips Lighting returned to comparable sales growth in 2017 driven by the growth of LED and connected lighting Systems & Services, which demonstrates the successful execution of our strategy,” said CEO Eric Rondolat. “We also further increased our operational profitability with significant improvements in LED, Professional and Home and we delivered a solid free cash flow. This will enable us to continue to invest in growth opportunities, provide a return to shareholders and optimize our balance sheet. Our team remains focused on achieving our medium-term outlook.”

Full year 2017 highlights

  • Sales of $8,644 million, with an increase in comparable sales of 0.5% (2016: -2.4%)
  • Total LED-based comparable sales growth of 19%, representing 65% of total sales (2016: 55%)
  • Adjusted EBITA of $867 million (2016: $800 million)
  • Adjusted EBITA margin improvement of 90 basis points to 10.0% (2016: 9.1%)
  • Net income of $348 million (2016: $229 million)
  • Free cash flow of $500 million (2016: $518 million)

Fourth quarter 2017 highlights

  • Sales of $2348 million, with an increase in comparable sales of 3.0% (2016: -3.2%)
  • Total LED-based comparable sales growth of 19%, now representing 68% of total sales (Q4 2016: 59%)
  • Adjusted EBITA of $256 million (Q4 2016: $233 million)
  • Adjusted EBITA margin improvement of 120 basis points to 10.9% (Q4 2016: 9.7%)
  • Net income of $47 million (Q4 2016: $78 million)
  • Free cash flow of $538 million (Q4 2016: $337 million)

Shareholder return

  • In 2017, $532 million was used for share repurchases and to pay dividend related to 2016
  • Propose to pay a cash dividend of $1.55 per share in 2018, representing an increase of 14% and a pay-out ratio of 45%
  • Intention to repurchase shares for an amount of up to $186 million in 2018, by participating in share disposals by its main shareholder

Outlook

In 2018, Philips aims to improve their Adjusted EBITA margin to 10.0-10.5%, in line with their medium-term outlook. They will continue to focus on their cost reduction initiatives, and expect to benefit from higher savings as of the second half of 2018. We also aim to deliver positive comparable sales growth for the full year, with a soft start in the first quarter. We expect to generate solid free cash flow in 2018, which is, however, expected to be somewhat lower than the level in 2017 due to higher restructuring payments.

For the full and original version of the press release click here

For the presentation click here

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