Philips lays off the field of winter lighting to maintain expansion
On November 22nd, Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI, Philips for short) announced the first layoff plan after the financial turmoil: 5% of the global medical equipment sector layoffs, or 1,600. Philips spokesperson Arent Jan Hesselink said the move was prepared to cope with slowing or even slowing economic growth.
Philips' October 3rd financial report released on October 13th shows that in the economic downturn, Philips is hard to be independent of its company's consumer products, lighting and medical device sales are affected, the total sales in the third quarter fell 2%, from The same period last year, 6.47 billion euros fell slightly to 6.33 billion euros. However, compared with the heavy losses suffered when the high-tech bubble burst in 2001, Philips faced more calm in the face of the global economic crisis.
This is thanks to a transformation campaign initiated by Philips Global CEO Ke Cilei over the past two years: drastically cutting down businesses that are more affected by cyclical fluctuations (such as semiconductors, mobile phones, etc.), while at the same time, through mass acquisitions, in lighting, medical equipment Rapid expansion in the vertical business area.
Layoffs, acquisitions and
Philips' third-quarter earnings report showed that Philips' sales revenue for the quarter was 6.33 billion euros, a decrease of 2% from 6.47 billion euros in the same period last year. Due to the sharp drop in user demand, the company's sales revenue in the quality of life sectors including small household appliances and consumer electronics products decreased by 8% year-on-year, while sales revenue in Europe decreased by 9% year-on-year. Although sales revenue in emerging markets increased by 6% compared to the same period last year, it was down 16% from the second quarter. The medical business, once considered a key growth driver for Philips, was also hit by weak imaging system demand.
In the press release, Philips CEO Ke Cilei said that the Quality Life Division, which is most vulnerable to fluctuations in consumer demand, excluding the business restructuring factors, the profit margin before interest, taxes, depreciation and amortization increased to 5.9% of sales. This is the result of the division's commitment to improving profit margins.
He said that although some of the healthcare and lighting businesses were also negatively affected by reduced demand, the two divisions continued to grow steadily in a tough market environment, with sales increasing by 5% and 6 respectively. %, especially in core business areas such as patient monitoring, clinical monitoring, home healthcare, and green lighting solutions and solid-state lighting.
As we have limited predictive impact on the current world economic downturn, we have taken some steps to ensure our profitability. Ke Cilei said that Philips will strictly control the cost and price, and will carry out unscheduled layoffs in certain sectors. It is expected to generate 230 million euros (about 308.5 million US dollars) in related expenses in the fourth quarter.
At the same time, Philips will further shift its investment to emerging markets and areas with significant growth trends.
In fact, in the field of medical equipment, in September and November this year, Philips has bought two of India's leading X-ray system equipment manufacturers Alpha and Meditronics, and earlier in Brazil, the acquisition of Brazilian personal care Product equipment manufacturer Dixtal Biomdicae Tecnologia is in the bag. In April of this year, Philips acquired Shenzhen Jinkewei Industrial Co., Ltd., and completed the preliminary layout of the healthcare business.
At the same time, a plan to occupy the office lighting highlands was also launched by the Philips Lighting Group. The reporter learned from inside the Philips company that the main content of this plan is that by 2012, Philips Lighting Group will invest 1 billion euros to complete the layout of LED lighting in the field of energy-saving products. The main means of completing this plan is to adopt strategic long-term cooperation and mergers and acquisitions.
Philips' growth is mainly from two parts, one is the organic growth of its own business, and the other is mergers and acquisitions. Zhang Yuhua, communications director of Philips China Group, said in an interview with this reporter that Philips will continue to promote the company's business growth by shifting more resources to emerging markets.
Increasing investment in emerging markets is a continuation of Philips' M&A growth logic. In the past two years, Philips has launched large-scale acquisitions around the world in the field of medical equipment and lighting equipment. In 2006 alone, Philips successively threw seven large acquisitions with a total amount of 4.5 billion euros. Even after the US subprime mortgage crisis in 2007, Philips continued to announce $5.1 billion in acquisitions of US medical device manufacturer Respironics, $2.7 billion in acquisitions of US lighting manufacturer Genlyte, and $430 million in medical equipment and services in the final weeks. Trading Visicu and other three big deals.
Since 2005, we have invested more than 20 billion euros in completed acquisitions, acquisitions and share buybacks. Ke Cilei said at an analyst conference call in late 2007.
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