May 21, 2001 Conference in Barcelona, Spain, Mr Jan Hommen, a member of the Board
of Management and Chief Financial Officer of Royal Philips
Electronics, today gave a presentation, in which he reiterated the
strategic process to transform Philips into a high growth technology
company. He also repeated the new financial targets for the medium
term, which were first published on February 8, 2001.
Mr Hommen referred to recent actions by the US Federal Reserve Bank
(FED) and the
European Central Bank (ECB) to further reduce interest rates and
remarked that Philips
is also seeing a further weakening of these economies resulting in
lower demand for its products in these regions.
Talking about Philips' businesses Mr Hommen reiterated that the Board
of Management is close to announcing its strategic decision concerning
the future of its mobile phone business of PCC. "It is clear that we
will not continue with the situation that we have now," he said.
"Today I cannot say anymore, but Philips will soon be making
announcements on this subject. Any consequences of those announcements
are not part of the pre-tax charge of EUR 350 million we plan to take
in the second quarter, as was previously indicated on April 17."
With respect to the loss-giving situation of Digital Networks in the
US market Mr Hommen said measures are being taken to scale down
Philips' ambitions and to contain its exposure.
"Recent Semiconductor industry statistics are showing that the slump
in the industry is deepening further. Industry analysts are calling it
the deepest and steepest decline they have observed over the last 30
years." Mr Hommen stated that the latest estimates he had
seen now point to an industry revenue level for 2001 about 20% below
last year's level.
"Of course Philips is being impacted by this trend and by the lower
demand for products in mobile displays and optical storage where we
have very strong market positions. We are determined to keep
inventories tightly controlled even at the expense of utilization
rates and current results."
Further information:
Ben Geerts, Philips Corporate Communications, tel. +31-20-59 77 215
