A sustainablehealthtechleader

Transcription

1 A sustainablehealthtechleader Our ambition for 2020 Integrated Reporting VBA event Amsterdam, June 27, 2017 Simon Braaksma, Royal Philips 1

2 Important information Forward-looking statements and other important information This document and the related oral presentation, including responses to questions following the presentation, contain certainforward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future EBITA and future developments in our organic business. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements. These factors include, but are not limited to, domestic and global economic and business conditions, developments within the euro zone, the successful implementation of our strategy and our ability to realize the benefits of this strategy, our ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interestrates, changes in tax rates, pension costs and actuarial assumptions, raw materials and employee costs, our ability to identify and complete successful acquisitions and to integrate those acquisitions into our business, our ability to successfully exit certain businesses or restructure our operations, the rate of technological changes, political, economic and other developments in countries where Philips operates, industry consolidation and competition.as a result, Philips actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differfrom such forward-looking statements, see the Risk management chapter included in the Annual Report Third-party market share data Statements regarding market share, including those regarding Philips competitive position, contained in this document are basedon outside sources such as specialized research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Philips, those statements may also be based on estimates and projections prepared by outside sources or management. Rankings are based on sales unless otherwise stated. Use of non-gaap Information In presenting and discussing the Philips financial position, operating results and cash flows, management uses certain non-gaapfinancial measures. These non-gaap financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures. A reconciliation of such measures to the most directly comparable IFRS measures is contained in our Annual Report Further information on non-gaap measures can be found in our Annual Report Use of fair-value measurements In presenting the Philips financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that are deemed to be reliable. Readers are cautioned that these values are subject to changes overtime and are only valid at the balance sheet date. When quoted prices or observable market data are not readily available, fair values are estimated using valuation models, which we believe are appropriate for their purpose.such fair value estimates require management to make significant assumptions with respect to future developments, which are inherently uncertain and may therefore deviate from actual developments. Critical assumptions used are disclosed in our Annual Report Independent valuations may have been obtained to support management s determination of fair values. All amounts are in millions of Euro s unless otherwise stated. Due to rounding, amounts may not add up precisely to totals provided. All reported data is unaudited. Financial reporting is in accordance with the accounting policies as stated in the Annual Report 2016, unless otherwise stated. The presentation of certain prior-year information has been reclassified to conform to the current-year presentation. 2

3 Our markets have sustained growth and attractive profit pools HealthTech market size 1 Growth drivers EUR billion ~ Population growth, ageing and rise in chronic diseases Diagnosis & Treatment Connected Care & Health Informatics Personal Health ~ Market Growth ( ) Mid-single-digit growth Market EBITA (2015) Mid-teens EBITA United Nations SDG 3 boosting access to care Shift to outcome based reimbursement / accountable care Data enabled healthcare delivery with higher productivity Care shifting to ambulatory and home care settings with consumers increasingly engaged in their health Convergence of professional healthcare and consumer health 3 1 Source: Philips internal analysis, McKinsey analysis; Philips-defined addressable markets including adjacencies

4 We apply the health continuum approach to guide our solutions Healthy living Prevention Diagnosis Treatment Home care Monitoring, informatics and connected care 4 4

5 Sustainability is at the core of our company vision At Philips, we strive to make the world healthier and more sustainable through innovation. Our goal is to improve the lives of 3 billion people per year by billion Lives Improved per year in

6 Healthy people, sustainable planet Human Development Index > 0.8 (High) Meaningful innovation Sustainable planet Within 1 planet resources Meaningful innovation A healthier and more sustainable world 6 6 Healthy people inspired by WWF Living Planet Report

7 Focusing where we can have the most impact

8 SDG 3 Good health and well-being

9 SDG 12 We will need the resources of 3 planets by 2050

10 An overview of our most ambitious objectives for 2020 Strive for a zero injury and illness work environment 70% of our turnover coming from Green solutions 95% of Philips revenue linked to the UN Sustainable Development Goals 90% of operational waste recycled 100% renewable electricity 15% of our turnover coming from circular economy solutions 10

11 Three pillars Healthy people, sustainable planet Sustainable solutions Create value for our customers Sustainable operations Lead by example Sustainable supply chain Multiply our impact 11

12 Integrated Reporting? Integrated reporting is a way of reporting in which an organization communicates to it s stakeholders on how the organization s strategy, performanceand prospect lead to value creation over time. Two essential concepts of integrated reporting are capitals and the value creation process. Integrated reporting provides inside in the connectivity and interdependencies between a range of factors that affect an organization s ability to create value over time, including: How the organization tailors its business model and strategy to respond to its external environment and the risks and opportunities it faces Capitalsthat the organization uses or affects (e.g. intellectual and social capital as well financial), and the critical interdependencies between them Capacity of the organization to respond to key stakeholders legitimate needs and interests 12

13 Why apply Integrated Reporting? Addresses the material topics for a company Integrated reporting supports in creating a strategy, which creates value by making therelationbetweeninput, business model/strategyandoutput relations explicit and enlarge the understanding of their interdependencies. Improve the quality of decision making process as both financial and nonfinancial information is taken into consideration. Promote a more cohesive and efficientapproach to inform the companies stakeholders 13

14 Integrated Reporting at Philips Philips decided to start Integrated Reporting in 2008 and since 2014 the IIRC framework is used to structure information. The main reasons for Philips to use integrated reporting are: Added value of determining and executing the strategy based on financial and non-financial information Inform our stakeholderson financial, social and environmental performance and our future commitments in one document Providing stakeholders one document to inform them on Philips performance and support their decision making Communicate on the impact of Philips on the societyand support our visionto make the world healthier and more sustainable. 14

15 15 It allstarts with.

16 Twominutes demo ( 16

17 Sustainability as a brand recognition and growth driver Philips commits to become carbon neutralin its operations by 2020 Champion for Change award from Practice GreenHealth, third consecutive year Philips becomes Industry Group Leader (Capital Goods) in the DJSI 2016 Recognized leader Carbon Disclosure Project

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