Our investment proposition

We strive to make the world healthier and more sustainable through innovation.

 

Our vision and mission

At Philips, we strive to make the world healthier and more sustainable through innovation. Our goal is to improve the lives of 3 billion people a year by 2025. We will be the best place to work for people who share our passion. Together we will deliver superior value for our customers and shareholders.

Our strategy

As a focused leader in health technology, we are determined to build upon our rich heritage by touching billions of lives each year with our innovative technology solutions and services.

 

In 2011 we set out on our Accelerate! journey of change and performance improvement. Designed to transform Philips into an agile and entrepreneurial company, Accelerate! is all about delivering meaningful innovation to our customers in local markets – and doing so in a fast and efficient way. 

 

The program has three main thrusts:

 

  • Transform to address underperformance
  • Expand global leadership positions
  • Initiate new growth engines

 

We are now in the sixth year of this transformation process, and our Roadmap to Win is clearly defined:

To ensure that success is repeatable, i.e. that we create value for our stakeholders time and time again and deliver on our mission and vision, we have adopted the Philips Business System. Having a single business system reduces complexity, increases speed and, crucially, allows us to spend more time with customers and driving improvement across the company.
Creating two focused companies to captur highly attractive market opportunities

We see a growing need for better health and better care at lower cost
Global resource constraints on health systems are driving a shift to value-based healthcare to reduce cost, increase access and improve outcomes. At the same time, aging populations across the globe and the rise of chronic conditions are driving a shift of care to lower-cost settings and the home.

 

In parallel, more and more people are looking for new ways to proactively monitor and manage their health. And the digitalization of healthcare is shifting value from devices to software and services.

 

These challenges can only be met through new, more integrated forms of care delivery across the health continuum, with a shift away from today’s focus on acute care and late-stage interventions. 

 

In an increasingly connected world, the convergence of Philips’ consumer technologies that facilitate healthy living, medical technologies that help clinicians to deliver better diagnosis and treatment, and cloud-based technologies that enable data sharing and analysis, will be a key enabler of more effective, lower-cost integrated health solutions. This fits very well with our core strengths in professional healthcare and in consumer health and well-being.

Health continuum
Health continuum
In a total addressable market estimated at over EUR 140 billion, we are well positioned to leverage advanced technology and our deep clinical and consumer insights to deliver integrated solutions that improve people’s health and enable better outcomes across the health continuum.

Progress on our Path to Value

Key initiatives have been launched to step up resourcing for growth, granular strategy execution, value delivery to customers, and to adapt the culture and reward system. During Capital Markets Day, in November 2016, we have announced a EUR 1.2 billion productivity initiative program consisting out of overhead, procurement and other productivity savings, to be completed over the next 3 years starting 2017.

 

Our operational improvements and strategic initiatives aim to realize mid-single-digit organic growth (4-6%) and an average of 100bps Adj. EBITA margin improvement annually over the mid-term (3-4 years starting 2017).

Ebita Step-up Drivers
In August 2017, we have launched EUR 1.5 billion share buy-back program, to be completed over the next two years. Over last 6 years we have completed EUR 3.5 billion share buy-back programs.

Sustainability

At Philips, we strive to make the world healthier and more sustainable through innovation. Our goal is to improve the lives of 3 billion people a year by 2025. To guide our efforts and measure our progress, we take a two-dimensional approach – social and ecological – to improving people’s lives. Solutions from our portfolio that directly support the curative or preventive side of people’s health determine the contribution to the social dimension. This is also our contribution to the UN Sustainable Development Goal 3 (“to ensure healthy lives and promote well-being for all at all ages”). As healthy ecosystems are also needed for people to live a healthy life, the contribution to the ecological dimension is determined by means of our steadily growing Green Solutions portfolio, such as our energy efficient products in our Personal Health businesses. This is our contribution to Sustainable Development Goal 12 (“to ensure sustainable consumption and production patterns”). In 2016, we improved the lives of 2.1 billion people, an increase of approximately 100 million compared to 2015.

 

Healthy people, sustainable planet

On June 20, 2016, we launched the next 5-year sustainability program named Healthy people, sustainable planet. In this new program, we have set ambitious targets in order to retain our leadership in sustainability. The key targets for 2020 are:

 

  • Increase Lives Improved to 2.5 billion people per year
  • 70% of turnover from green revenues / 15% from circular revenues
  • Carbon neutral operations, 100% renewable electricity
  • 90% of operational waste recycled / zero waste to landfill
  • Striving for a zero injuries and zero illness work environment
  • Supplier sustainability program with all supplier