Royal Philips has today pledged to extend an efficiency drive to bolster margins.
The maker of scanners, toothbrushes and lighting set a target for cumulative annual sales growth of 4-6% from 2014 to 2016, with an earnings before interest, taxes and amortisation margin of 11-12%.
That compares with a previous target of 10-12%.
Frans Van Houten, who became CEO in 2011, is pushing Philips towards more profitable LED lighting as the industry moves away from traditional bulbs.
He is also phasing out the audio and video devices that are the Amsterdam-based company’s heritage.
“Philips is a diversified technology company,” said van Houten. “Together these businesses have significant unlocked potential, and we see substantial opportunities for profitable growth for 2016 and beyond.”
The 122-year-old company is in the midst of a programme to cut 6,700 jobs and trim €1.1 billion in costs by 2014. At an analyst and investor meeting today, van Houten will outline an investment strategy to enhance growth and harness more efficiency.
