As one of the work streams within the Accelerate! program we are reducing the overhead cost structure of the company and we made good progress and are on track with these plans. In the first quarter of this year, we reduced cost by about EUR37 million and that is on top of the EUR25 million which we reduced in the fourth quarter of last year. The Accelerate! program’s cost reduction initiative specifically targets the overhead cost structure of the company. That means that when these costs are removed they will not come back despite top-line growth. We are not cutting cost into core customer value chain of the company, as typically if you cut cost there you end up cutting R&D investments, which drive future growth of the company. So to make Philips a profitable growth company, we reduced overhead cost, while investing more into core customer value chain, especially in innovation and customer-phasing resources, and that drives higher value creation for Philips. Besides this, we are also executing on our plans to address the industrial footprint of, among others, our traditional Lighting business.On the portfolio front, the end of the first quarter marks a very important landmark for the future of Philips. We have successfully completed the Television joint venture deal with TPV, and the new company is TP Vision. TP Vision will be a strong player in the global TV market and it will ensure the continuity of the Philips TV brand. TP Vision will leverage the strengths of the Philips brand, innovation power and trade relationships with the additional scale and manufacturing strength of TPV from Taiwan. The TV partnership with TPV enables Philips to further focus on expanding market leadership positions across our Healthcare, Consumer Lifestyle and Lighting sectors.
Koninklijke Philips' CEO Discusses Q1 2012 Results - Earnings Call Transcript
Check Out Our Best Services for Investors
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Model portfolio
- Stocks trading below $10
- Intraday trade alerts
More than 30 investing pros with skin in the game give you actionable insight and investment ideas.