Slide 1: Annual General Meeting of Shareholders
Annual General Meeting of Shareholders
Slide 2: 1. Presentation by CEO Eric Rondolat
1. Presentation by CEO Eric Rondolat
Slide 3: Full year 2017
Galata Tower, Turkey Full year 2017 Return to comparable sales growth • Comparable sales increased 0.5%, continuing improved trend since 2015 • Operational profitability increased to 10.0% • Solid free cash flow of EUR 403 million • Sound balance sheet, allowing us to support the business, return mo
Slide 4: Substantial progress made on our strategic priorities
Substantial progress made on our strategic priorities Strategic priorities Proof points in 2017 Optimize cash from conventional products to fund our growth Free cash flow as % of sales for Lamps improved by 400 bps Innovate in LED products commercially and technologically to LED lighting share incre
Slide 5: We are leading the industry worldwide
We are leading the industry worldwide Light sources Luminaires Systems and Services Philips deco LED Smart Volume pendant Allianz Arena, Munich €7 32,000 4.8% #1 Conventional #1 LED #1 Connected billion sales people employed of sales superior lighting 65% of lighting lighting systems & in 2017 in 70
Slide 6: We are transforming our business
We are transforming our business Development of Conventional- and LED-based sales (in % of total sales) 86% 74% 66% 57% 45% 35% Conventional 55% 65% 43%65% 55% 43% 65% LED 34% 26% 14% 14% 2012 2013 2014 2015 2016 2017 6
Slide 7: Our strategy is working
Our strategy is working Comparable Sales Growth Adjusted EBITA (in EURm and % of sales) +0.5% 10.0% 9.1% -0.8% 6.8% 7.3% -2.4% -3.5% 476 547 645 699 2014 2015 2016 2017 2014 2015 2016 2017 7
Slide 8: First quarter 2018
First quarter 2018 • Comparable sales decreased by 3.5% • Operational profitability of 7.0% • Free cash flow of EUR -6 million • Indirect costs decreased by 13% as a result of rigorous cost reduction initiatives 8 Depeche Mode, Global Spirit Tour
Slide 9: Outlook 2018
Outlook 2018 • Aim to deliver positive comparable sales growth for the full year, on the basis of a strong second half • Aim to improve our Adjusted EBITA margin from 9.6% to 10.0-10.5%; we will continue to focus on cost reduction initiatives, and expect to benefit from higher savings as of the seco
Slide 10: Five transitions of lighting industry
Five transitions of lighting industry Services Systems Light as a language LED Conventional 10
Slide 11: Our global brand remains
Our global brand remains PHILIPS
Slide 12: Light that's easy on the eyes
EyeComfort Light that’s easy on the eyes
Slide 13: Philips GreenPower LED
Philips GreenPower LED Largest horticultural lighting project at Agro-Invest
Slide 14: Philips SunStay
Philips SunStay The street light that harnesses the power of sunlight
Slide 15: Interact City
Interact City Building on more than 1,000 connected street light management systems
Slide 16: Interact
Interact Internet of Things (IoT) platform
Slide 17: Philips LiFi Systems
Philips LiFi Systems Broadband data through light
Slide 18: Unparalleled passion for sustainability
Unparalleled passion for sustainability Only lighting company committed to be 100% carbon neutral in 2020 77% sustainable revenues (2020 target 80%) 80% renewable electricity, carbon neutral in 7 markets 87% of industrial waste recycled 2017 #1 Industry leader, ‘Electrical Components and Equipment’
Slide 19: Thank you
Thank you
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Slide 21: 2. Implementation of the remuneration policy in 2017
2. Implementation of the remuneration policy in 2017
Slide 22: Remuneration 2017
Remuneration 2017 Base Salary Annual (Cash) Incentive Long Term Equity-based 2017 (1) (% of Base Salary) Incentive at target (% of Base Salary) (2) Min. Target Max. Rondolat € 850,000 0 80 160 100 Rougeot € 556,000 0 60 120 80 Van Schooten € 555,000 0 60 120 80 1) Base Salary unchanged for 2018 2) S
Slide 23: Annual Incentive Plan 2017 Components
Annual Incentive Plan 2017 Components The Annual Incentive Plan 2017 consists of two major components 1 CSG% - Comparable Sales Growth (ext. reported) Financial Component Three performance Adj. EBITA% - Adjusted Earnings Before Interest & Tax (ext. reported) measures (80%) FCF - Free Cash Flow (ext.
Slide 24: Annual Incentive Realization 2017
Annual Incentive Realization 2017 Remuneration Policy Implementation of Policy % of Base Salary Pay-out Realization % of Base Salary % of Target Rondolat 0 – 80 – 160 88.6 110.8 Rougeot 0 – 60 – 120 66.5 110.8 Van Schooten 0 – 60 – 120 66.5 110.8
Slide 25: 3. Explanation of the policy on additions to reserves and dividends
3. Explanation of the policy on additions to reserves and dividends
Slide 26: Capital structure
Capital structure Characteristics at the end of 2017 Net debt development in 2017 (in EURm) • Total cash of EUR 942 million 35 • Debt of EUR 740 million and USD 500 million 307 as per IPO financing with 5 year maturity 341 403 367 • Total net debt position of EUR 367 million 157 • Net leverage of 0.
Slide 27: Capital allocation
Capital allocation Cash available Cash uses • Free cash flow generation • Annual regular cash dividend pay-out ratio of 40- 50% of continuing net income* • Financial ratios to maintain a financing • Additional capital return to shareholders structure compatible with an investment- grade profile • No
Slide 28: Attractive shareholder return
Attractive shareholder return 2017 dividend EUR 1.25; return additional capital up to EUR 150 million in 2018 Dividend 2017 (in EUR m) Additional capital return 1.25 • Up to EUR 150 million in 2018 by participating in 14% share disposals by our main shareholder 1.10 – In February 2018 we participate
Slide 29: 4. Implementation of the new Dutch Corporate Governance Code
4. Implementation of the new Dutch Corporate Governance Code in the company’s governance structure
Slide 30: 5. Financial statements 2017
5. Financial statements 2017
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Slide 32: 5. Financial statements 2017
5. Financial statements 2017
Slide 33: 6. Dividend
6. Dividend Lighting
Slide 34: 7. Discharge members of the Board of Management and the Supervisory Board
7. Discharge members of the Board of Management and the Supervisory Board
Slide 35: 8. Composition of the Supervisory Board
8. Composition of the Supervisory Board
Slide 36: 9. Amendment of articles of association
9. Amendment of articles of association
Slide 37: 10. Authorizations of the Board of Management to issue shares
10. Authorizations of the Board of Management to (a) issue shares or grant rights to acquire shares, and (b) restrict or exclude pre-emptive rights
Slide 38: 11. Authorization of the Board of Management to acquire shares
11. Authorization of the Board of Management to acquire shares in the company
Slide 39: 12. Cancellation of shares
12. Cancellation of shares Lighting
Slide 40: 13. Any other business
13. Any other business Lighting
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