Tuesday, February 10, 2004
Philips recorded a net income of EUR 598 million (a profit of EUR 0.46 per share) versus a loss of EUR 1,530 million (a loss of EUR 1.20 per share) in the same period last year.
Nominal sales increased by 1% over the same period last year, being impacted by the weakening of the US dollar and related currencies (8%) and various divestments that were carried out in 2002 (1%). Comparable sales increased by 10%, predominantly driven by stronger sales at Semiconductors, Consumer Electronics and Medical Systems.
Income from operations was a profit of EUR 608 million, an improvement compared to Q4 2002 of EUR 561 million, despite higher pension cost of EUR 66 million. Focus on cost control and operational efficiencies, coupled with increased sales and the benefits of earlier restructuring programs, resulted in improved profit margins in almost all divisions. Income from operations included a non-cash impairment charge of EUR 139 million relating to the MedQuist business at Medical Systems.
Over the last two years overhead cost reductions achieved savings of EUR 425 million to date and Medical Systems delivered savings of EUR 342 million. Including savings in R&D and other projects, the overall cost reduction program surpassed the target of EUR 1 billion savings by the end of 2003.
Cash flow from operating activities in Q4 was an inflow of EUR 1,673 million. Inventories as a percentage of sales were 11.0% compared to 11.1% last year, and were at another record low for the fourth quarter. During the quarter, the net debt position decreased by EUR 2.4 billion to EUR 2.8 billion, due to a strong cash flow from operations and the sale of securities.
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