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Philips resumes shipments from Cleveland facility and provides update on EBITA performance in Q4 2014

Amsterdam, the Netherlands – Royal Philips (NYSE: PHG, AEX: PHIA) today announced that, after having gradually started to resume production in the fourth quarter, it has now also  resumed shipments of its Brilliance iCT systems from its Cleveland facility following the recent external certification of its updated quality management system.

Due to the slower than anticipated ramp up of production and shipment in Cleveland, the impact on full year 2014 EBITA will be approximately EUR 225 million instead of the previously estimated EUR 180 million.

“Although these delays have impacted our broader healthcare performance, we are very pleased to now build further momentum in delivering strong imaging innovations to our customers,” said Philips Chief Executive Officer Frans van Houten.

As Philips progresses in attracting external investors for the combined Lumileds/Automotive business, Philips Lighting and Group Financials will be restated as of the fourth quarter of 2014 and for prior-periods to show the results of the combined Lumileds/Automotive business as discontinued operations.

Philips expects adjusted EBITA to be approximately EUR 735 million in the fourth quarter of 2014. This includes the aforementioned items and reflects ongoing softness in certain markets and stronger than anticipated foreign exchange headwinds in emerging markets. Philips expects reported EBITA to be approximately EUR 255 million. This is mainly due to an increase in a legacy legal provision in IG&S of approximately EUR 200 million, and restructuring and other incidental items of EUR 290 million as already indicated in the third quarter 2014 results release.

Philips will report its fourth quarter 2014 and full year 2014 results on January 27, 2015.

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