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Electronics Production | April 14, 2009

Philips announces additional cost savings as company post loss in Q1

The Netherlands based electronics giant Philips Electronics has announced additional cost savings as the company has posted net loss in Q1.
Global downturn was in the consumer and lighting markets, while Healthcare is facing a very soft US hospital market; performance in emerging markets and Home Healthcare Solutions remains strong.

Philips reported a 17% decline in sales to EUR 5,1 billion in Q1, net loss of EUR 59 million. Reduction of fixed cost base progressing well and expected to exceed EUR 500 million annualized by the end of this year.

“In the first quarter of 2009 we have seen a significant further deterioration of our markets. While the effects were felt most strongly in our activities that cater to the consumer market and to the construction and automotive industries, our Healthcare sales are now impacted as well. We expect no material change to this situation in Q2.

As a consequence of the early action we took in 2008, the reduction of our fixed cost base has progressed well in Q1 and is now expected to exceed EUR 500 million on an annualized basis by the end of this year, with a further acceleration of restructuring in Q2, especially at Lighting.

At the same time we have continued to execute our strategy to further build leadership in Health and Well-being, maintaining investments in R&D, marketing and small acquisitions while divesting the remaining part of our holding in LG Display. We will continue to invest in our future, while dynamically managing our cost base in line with revenue and giving high priority to cash flow and strong liquidity”, said Mr. Gerard Kleisterlee, President and CEO of Royal Philips Electronics.

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