Philips Electronics said yesterday it expected to more than double earnings before interest, taxes and amortisation per share by 2010 from 2007, after reorganising into three divisions.
Philips, which added it was on track with its current EBITA margin target of 7.5 per cent for 2007, said itplanned to reorganise into three units focusing on healthcare, lighting and consumer lifestyle, which would cut costs by €150 million to €200 million ($300-$400 million).
Philips chief executive Gerard Kleisterlee said, "By aligning our organisation within three core sectors under strong and experienced management, I am confident that the business structure now optimally reflects our strategy."
Philips has all but completed a shift to more stable and higher-margin businesses with the sale last year of a majority stake in its semiconductor unit, now named NXP. The reorganisation, acquisitions and improved margin would result in more than 10 per cent EBITA margin growth by 2010, aiming for a minimum of 6 per cent comparable annual average sales growth for the period 2008-10, said Philips.
"With the above revenue and EBITA margin targets, and with our continued drive towards a more efficient capital structure, Philips expects EBITA per common share to more than double by 2010 from the level expected in 2007," Philips said. "The company intends to arrive at an efficient balance sheet by the end of 2009 through a combination of value-creating acquisitions as well as continued return of capital to shareholders," said Philips.
