Amsterdam, the Netherlands – Following weaker market demand, mainly in Western Europe, Royal Philips Electronics (NYSE: PHG, AEX: PHI) today updates the market on the financial performance of the company.
Reflecting weaker than expected market conditions, especially in the consumer sector in Western Europe and construction activity in mature markets, Lighting is expected to report low single-digit comparable sales growth in the second quarter of 2011. Next to tempered sales growth and pressure on margins, incremental investments in innovation and marketing will adversely impact EBITA, which is estimated to be around EUR 85 million in the quarter.
In Consumer Lifestyle, the traditional consumer electronics market, in particular in Western Europe, is facing ongoing weak demand, declining license revenues and the impact of the TV disentanglement. This will more than offset double-digit growth in Personal Care and Health & Wellness, resulting in an expected low-single digit sales decline. Combined with the decline in license income and the increased spend in advertising and promotion, the EBITA is estimated to be around EUR 50 million in the quarter.
Additionally, the company will announce further decisive actions shortly, including a company-wide cost reduction program as part of the already launched ‘Accelerate’ performance improvement program.
Following the announced departure of Rudy Provoost, Lighting will be led by Frans van Houten and Ron Wirahadiraksa per 1st of July until the appointment of a new Lighting CEO and CFO respectively. This will avoid a leadership vacuum in a critical phase for our business. Mr. Provoost will remain available for ongoing support and advice as a member of the Board of Management until September 30, 2011.
The company will report second-quarter earnings on July 18, 2011.