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Koninklijke Philips Electronics NV Management Discusses Q2 2012 Results - Earnings Call Transcript

Stocks in this article: PHG

All of this work is beginning to result in improved operational financial results. In Healthcare, sales and order intake are growing well. The growth businesses in Consumer Lifestyle are performing solidly. And in Lighting, LED-based sales continued its strong growth momentum.

In Healthcare, order intake grew 4% year-on-year and, very importantly, orders were up 13% in growth geographies. As we noted last quarter, we do see headwinds in Europe, where order intake actually declined by 6%. North America order intake declined by 3% in the quarter, as we saw a decrease in order intake for our government business.

Healthcare comparable sales were 7% higher year-on-year, with solid sales increases in all businesses and notably, double-digit growth in Patient Care & Clinical Informatics, high single-digit growth at Imaging Systems and mid single-digit growth in Home Healthcare Solutions. This growth has resulted in improved earnings, with the adjusted EBITA for the quarter being 14.1% of sales compared to 13.2% of sales in the second quarter of last year.

From an operational point of view, we've continued to strengthen the Healthcare industrial footprint in growth geographies, most recently with our strategic development and manufacturing facility in Pune in India starting commercial operations. The site will drive global innovations in imaging and improved access to healthcare for India and other growth markets. This will add to the capabilities of our manufacturing site in Suzhou in China, which produces a portfolio of imaging solutions for China and the rest of the world.

The Consumer Lifestyle business continues to respond positively to the changes that we are making across the organization. On a comparable basis, sales in Consumer Lifestyle increased 3%, driven by a high single-digit revenue increase in our growth categories: Personal Care, Health & Wellness and Domestic Appliances. This has resulted in the adjusted EBITA improving from 3.1% to 7.1%.

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