lighting: building on strength - thinking the...
Post on 19-Aug-2020
0 Views
Preview:
TRANSCRIPT
Lighting:Building on Strength - Thinking the Future
Theo van DeursenCEO Philips Lighting
November 23, 2004
Lighting 2
Agenda
• Mission, Vision & Strategy
• We improve people’s lives
• Building on Strength - securing financial results
• Thinking the Future - profitable growth
• Conclusion
Lighting 3
……and improve their lives with lighting
Philips Lighting: Mission statement
We understand peopleLight is a visible form of energy
It pushes back the night
Welcomes the weary
Protects those you love
Banishes monsters from under beds
Makes eyes sparkle
Lighting 4
Philips Lighting: Vision statement
To be recognized by all our stakeholders as
The Clear Leader; Setting the pace in the lighting industry
• the best partner to do business with
• the best company to work for
• the best company to invest in
• a responsible citizen contributing to the sustainability of society at large
Lighting 5
Profitable Growth:– In developing markets– With leading global customers – In existing markets– In new segments Recognized by our stakeholders as“The Clear Leader:Setting the pace in the industry”
– End user driven Innovation– Marketing Excellence– Supply Excellence– Committed and competent people, living our values
Building on Strength:– China– Key Account Management – Business to BusinessThink the Future:– Consumer Electr. Applications– Solid State Lighting
Lighting Strategy Overview
On the basis of:– A learning organization (Continuous improvement)– Control of costs and assets
Ambition Strategic Challenges
Key Business Drivers
Lighting 6
Agenda
• Mission, Vision & Strategy
• We improve people’s lives– Marketing Excellence: Brand foundation– End user driven innovation
• Building on Strength - securing financial results
• Thinking the Future - profitable growth
• Conclusion
Lighting 7
Philips Lighting: Sense and simplicity
Upgrade light-system
without interruption of the light effect
and save 30% energy
Lighting 8
Product
Process
Purpose
Experiences
Designed around you:End User Driven Innovation
Lighting 9
Easy to Experience: 2 in 1 Nightlight
Unique combination of energy saver and LED
One click: night lightTwo clicks: normal light
Lighting 10
International Space Station (April 2004):to improve High Intensity Discharge Lamps
together with Technical University Eindhoven
Advanced: Based on Leading edge R&DEven experimenting in non-gravity environments
Parabolic flights to test filament of halogen bulb
Lighting 11
# of
Pat
ent F
amilie
s
Patent Portfolio Increase 1999 – 2004: 58%
17411604
1480
130311551101
0
200
400
600
800
1000
1200
1400
1600
1800
2000
1999 2000 2001 2002 2003 E2004
4.3%3.9%
3.3%3.0%2.8%
0.0%
0.5%
1.0%
1.5%
2.0%
2.5%
3.0%
3.5%
4.0%
4.5%
5.0%
2001 2002 2003 E2004 T2005
Increasing R&D effort
Development R&D % and Size Patent Portfolio
Lighting 12
Philips Lighting - Recent Innovations
1994 CDM MasterColour (high efficacy and “white light”colour)1995 Low mercury fluorescent lamp
TL5 (narrow diameter fluorescent)Xenon Automotive Head LampUHP (Ultra High Power light system for projectors)
1997 Fully recyclable fluorescent lamp1999 HiPerVision (High performance car signalling lamp)2001 Luxeon LEDs2002 Improved and smaller UHP2003 Night-light (hybrid LED-Compact Fluorescent)2004 Mini CDM MasterColour (white light mini-spots)
LED-modules (building blocks for luminaires)Night-guide car light (more-non-blinding-light, better reflection)Mercury free Xenon Automotive Head Lamp12 watt Extreme Ultraviolet source (for Lithography)
Lighting 13
Agenda
• Mission, Vision & Strategy
• We improve people’s lives
• Building on Strength – securing financial results– Financial results– China– Key account management– Business to Business– Supply excellence
• Thinking the Future - profitable growth
• Conclusion
Lighting 14
Philips Lighting
2003 Q1-Q3 2004Revenues: EUR 4.5 billion 5% comparable growthEBIT: EUR 577 million,
or 12.8% of sales 13.5%Net operating capital (NOC): EUR 1.5 billionReturn on NOC 34% 37%Employees: 43,800Capital expenditure: EUR 164 million
Lighting 15
Philips Lighting: EBIT margin and RONA%
RONAEBIT/SALES
0
2
4
6
8
10
12
14
16
'90 '92 '94 '96 '98 '00 '02 '04Q3
0
5
10
15
20
25
30
35
40
'90 '92 '94 '96 '98 '00 '02 '04Q3
(RONA= Return on Net Operating Capital)
Lighting 16
Philips Lighting 2003 Sales by Region
Europe46%
Asia23%
Americas31%
Lighting 17
Lamps50%
Automotive & Special Lighting
16%
Lighting Electronics
16%
Luminaires18%
Philips Lighting – Sales per Business Group
2003
Direction of allocation of
Capital Expenditures
30%
60%
Total Sales to thirds: EUR 4.5 billlion
Lighting 18
Not served
Not served
W. Europe L. America Japan
Lamps
Luminaires
Light. Elec.
Automotive
Asia/PacificN. America TotalE. Europe
Not Applicable
SpL.
46%
29%
15%
7%
Size of market as % of world 38% 22% 7% 32%
3%
100%
2003 Market Position # 1
Philips position
# 2 or 3 < # 3
Lighting 19
Lamps2004 vs. 2003 (Q1-Q3) Market shareComparable growth 2003
Brazil 5% 32%
C & E Europe 12% 27%
China 8% 14%
India 13% 36%
PD LightingComparable sales growth in Emerging markets
Lighting 20
China: a fast expanding market
• Large market potential• Philips #1 player in China • We create and extend distribution
– with 100+ preferred partners– Internet enabled: supplies, inventories, cash
• We extend into Mid-end of the market with dedicated products• Track record of profitability
Lighting 21
Continuous profitable sales growth in China
0
100
200
300
400
500
600
'96 '97 '98 '99 '00 '01 '02 '03 Exp'04
Total LightingIndex based on USD
Lighting 22
China: a vast supply base
• Access to vast supply base via fast growing China Sourcing Group(From USD 100 mln in 2004 to over USD 600 mln in 2007)
• Business Groups have 8 factories
our leading edge assembly of UHP projection systems
Lighting 23
China: Increasingly innovative
• Increasing local innovation resources: from 110 engineers in 2003 to 250 in 2007
• Today: Shanghai Global Competence center for Compact Fluorescent
Lighting 24
Growth partnerships with leading (global) Key Accounts
Lighting 25
660
850
1090
1250
0
200
400
600
800
1000
1200
1400
1990 1995 2000 Exp.2004
EU
R m
lnInternational Key Account Management drives sales top Key Accounts Philips Lighting
Lighting 26
Strength in Business to Business:Olympic Games 2004 Athens
28 out of 33 venues (85%) with Philips Lighting
Partnering with:• Government & Municipality• Olympic Committee• TV Broadcasters• International Sport Federations
Lighting 27
The change
Today 5% penetration in shops
Miniaturization:Lead to increasing # of light points
Resulting in acceleration of growth: 10% pa in value
Mini-Master Colour
Strength in Business to Business:Philips market leader with MasterColour CDM
Lighting 28
Supply Excellence
• Impeccable quality: – Towards “0” ppm level
• Integrated demand and supply planning– suppliers customers
• High delivery reliability - Quick response
Lighting 29
%
80.0
85.0
90.0
95.0
2001 2002Q1
2002Q2
2002Q3
2002Q4
2003Q1
2003Q2
2003Q3
2003Q4
2004Q1
2004Q2
2004Q3
2005 2006 2007
Target
Supply ExcellenceDelivery Reliability: complete & on time Lighting Total
Lighting 30
Lighting IT Costs: ERP systems installed
50
60
70
80
90
100
110
120
'99 '00 '01 '02 '03 Exp'04
Index based on EUR mln
Further investment in IT to include supplier and customer in supply chain management, and to support account management and global R&D
Lighting 31
10
12
14
16
18
20
22
'95 '96 '97 '98 '99 '00 '01 '02 '03
Continuing Inventory Reduction as % of Sales
Lighting 32
in mln EUR Turnover rate
PD LightingWorking Capital 1996 - 2004
500
550
600
650
700
750
800
850
900
950
1,000
4
4.5
5
5.5
6
6.5
7
7.5
8
8.5
9Average Working Capital Turnover rate
1996 1997 1998 1999 2000 2001 2002 exp ‘042003
Lighting 33
Continuous Improvement:Business Excellence in Philips Lighting
All metrics show ample room for improvement
• Applying model from European Foundation for Quality Management we measure our progress: from 600 points today towards 700 in next two years
• Business Balanced Scorecards: focus on essentials
• Improve Business processes through:– Systematic deployment of breakthrough plans– Black Belts – Green Belts– Process Survey Tools
• Quality Improvement Competition: from 30 towards 40 % participation
Lighting 34
Conclusion
We improve people’s lives• Marketing Excellence: Brand foundation• End user driven innovation
Building on strength – securing financial results• China• Key account management• Business to Business• Supply excellence
Room for improvement• In all our business processes• In Margin and NOC turns• But especially in accelerating profitable growth
Lighting 35
-9.0
-6.0
-3.0
0.0
3.0
6.0
9.0
12.0
15.0
Nominal
Comparable
1996 1997 1998 1999 2000 2001 2002 2003 Q32004
Average GrowthNominal 1.8%Comparable 2.2%
Philips Lighting Sales growth %
We will accelerate profitable growth, breaking away from historic pattern
Lighting 36
Agenda
• Mission, Vision & Strategy
• We improve people’s lives
• Building on Strength - securing financial results
• Thinking the Future - profitable growth– Automotive, Special Lighting & UHP – Solid State Lighting
• Conclusion
top related