Philips is reportedly moving ahead with plans to Sell Combined Lumileds and
Automotive Lighting Businesses, according to a recent earnings
conference call. The company also gave an update on the progress of the
sale and the plans to split the company into one business that focuses on
health technology and another that focuses on lighting solutions.
During Koninklijke Philips NV (Philips) recent earnings conference call,
Frans van Houten, the company’s CEO said that the LED lighting business
continues to grow. He stated, “In Lighting, we saw continued strong
double-digit growth and improving gross margins in our LED-based portfolio,
especially in LED lamps, despite the strong price erosion.”
He noted that the company’s 20% revenue increase in LED lighting partially
offset the company’s 14% decline in conventional lighting.
Frans van Houten said that the company’s Professional Lighting Solutions
business was not as profitable as the company had hoped.He said, “As you
know, we had expected the turnaround of our Professional Lighting Solutions
business in North America to deliver profitable growth in the fourth quarter on
the back of good order book coverage. However, despite sequential improvement
in quoting and pipeline activity across segments, we were not yet able to
return to sustainable growth in Q4 yet, as a number of projects shifted out
into 2015.”
He reiterated the company’s previously announced plans to sell the combined
Lumileds and Automotive Lighting businesses saying, “We are actively
discussing the sale of the combined Lumileds and Automotive Lighting businesses
with potential buyers. We received a number of non-binding bids in December,
and expect to receive binding bids before the end of Q1. As such, we are
confident that we will complete a transaction in the first half of 2015.
“
He also explained the direction that the company was taking in the future,
and he reemphasized the company’s plans to separate into two business
entities.“We are determined in our plan to separate Philips into two
standalone companies, each one better positioned to capitalize on the
highly-attractive opportunities in both HealthTech and Lighting Solutions
markets. As indicated already, the separation process is expected to take
approximately 12 to 18 months. We have now informed that we currently estimate
total separation cost in 2015 to be in the range of EUR300 million to EUR400
million.”
