Philips Q3 reported sales growth of 5% year-on-year

"Accelerated Growth" program continues to achieve results Long-term plans for Philips to achieve change and performance improvement - "Accelerated Growth" program continues to achieve results. We see that Philips' global employees are more entrepreneurial and the company has achieved more robust growth, which is particularly encouraging in such a depressed global economic environment. In the third quarter of this year, we continued to increase the "end-to-end" industrial chain reform pilot project, laying the foundation for the further implementation of a more streamlined and efficient IT platform across the company. In addition, the company has started a program to improve the efficiency of procurement, which will help reduce procurement costs and increase the future gross profit margin for 2013 and beyond.

The throttling plan for reducing indirect costs is also progressing in an orderly manner. As of the third quarter of 2012, the cumulative cost savings were 306 million euros. Recently, we announced that we will increase the throttling target to 1.1 billion euros, which requires further structural adjustment related costs to be controlled this year. It is expected that in the fourth quarter of 2012, the company's restructuring and acquisition-related costs will reach 300 million euros.

Mr. Wan Dun, CEO of Royal Philips Electronics of the Netherlands, said that under the “Accelerated Growth” transformation plan, Philips’ operating and financial performance in the third quarter of 2012 was encouraging, which indicates that we are going to achieve the 2013 interim financial year. The goal has taken another important step. Our ability to develop meaningful and innovative solutions to meet the needs of customers in different markets is playing a positive role in the growth and performance of the company. The company's progress in operating efficiency and flexibility has laid a good foundation for better performance in the coming years. The recently announced additional throttling plan and actions to reduce procurement costs will further increase the company's profit potential.

The Group's sales increased by 5% in the quarter, coupled with the increase in cost efficiency. The non-operating expenses were then eliminated, and the profit margin before interest-tax amortization reached 9.2%.

The Healthcare Division continued to maintain a good performance with sales up 7% year-on-year and order volume up 6%. The growth business portfolio of the Quality Life Division achieved another success, achieving double-digit revenue growth. Sales of the LED business of the Lighting Division continued to show strong growth momentum, with sales up 50% year-on-year, which required us to accelerate the optimization of traditional lighting factories.

The current global economic environment is continuing to slump and will create resistance to further growth of the company. The "Accelerated Growth" program is helping companies to reduce the external resistance caused by the global economic retrograde. We are confident that we will continue to improve our operations and financial performance. ·Sales increased by 5% year-on-year, and all three divisions achieved growth. Growth in growth market sales increased by 10% year-on-year, accounting for 36% of total revenue

· Earnings before interest and taxes (EBITA) 450 million euros, 7.3% of sales

· Net income of 170 million euros · Free cash flow of 395 million euros. Third quarter financial situation: Growth business and health care division of Quality Life Division have achieved significant growth. The positive growth momentum of healthcare and quality of life has increased the operating profitability of the entire group.

Compared with the same period of last year, the overall sales of the healthcare division increased by 7%, thanks to double-digit growth in imaging systems and nearly 10% increase in home healthcare. Health care sales in the growth market increased by 14%. Excluding the impact of exchange rate changes, equipment orders increased 6% year-on-year, and the division’s profit margin before interest-tax amortization reached 13.5% in the third quarter.

Sales of Quality Life Solutions increased by 3% year-on-year, thanks to double-digit growth in its growth portfolio, including Personal Care, Health & Wellness, and Home & Kitchen Appliances. However, the sales growth of these businesses was partially offset by the decline in sales of audio and video and accessories. The division’s profit margin before interest-tax amortization reached 8.5% in the third quarter.

Sales of the lighting division increased by 4% year-on-year, mainly due to the double-digit growth of LumiLEDs LED chips and automotive lighting business, and also benefited from the single-digit growth in light source and lighting electronics business. LED lighting business sales increased by 51% year-on-year, currently accounting for 24% of lighting business. Taking into account the impact of further structural adjustments, acquisition-related expenses, and losses from the sale of industrial assets, the division’s third-quarter EBITDA margin was 2.2%. Excluding the above factors, the division’s third quarter EBITDA was 7.0%.

Since starting the €2 billion stock repurchase program in July 2011, the company has completed 63% of the plan.