<PAGE> 1
2000 - 7
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
20549
-------
FORM 6-K
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the
Securities Exchange Act of 1934
For the period commencing June 7, 2000 through July 18, 2000
-------
KONINKLIJKE PHILIPS ELECTRONICS N.V.
--------------------
(Name of registrant)
Rembrandt Tower, Amstelplein 1, 1096 HA Amsterdam, The Netherlands
-------------------------------------
(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F:
Form 20-F X Form 40-F
___ ___
Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information
to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act
of 1934:
Yes No X
___ ___
If "Yes" is marked, indicate below the file number assigned to the
registrant in connection with Rule 12g3-2(b); 82-______________.
Name and address of person authorized to receive
notices and communications from the Securities and
Exchange Commission:
Richard C. Morrissey, Esq.
Sullivan & Cromwell
St. Olave's House
9a Ironmonger Lane
London EC2V 8EY, UNITED KINGDOM
<PAGE> 2
This report comprises a copy of the Quarterly Report of the Philips Group for
the six months ended June 30, 2000, dated July 18, 2000.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrants have duly caused this report to be signed on their behalf, by the
undersigned, thereunto duly authorized at Amsterdam, on the 18th day of July,
2000.
KONINKLIJKE PHILIPS ELECTRONICS N.V.
/s/ C. Boonstra
C. Boonstra
(President,
Chairman of the Board of Management)
/s/ J.H.M.Hommen
J.H.M. Hommen
(Executive Vice-President,
Member of the Board of Management
and Chief Financial Officer)
<PAGE> 3
REPORT ON THE PERFORMANCE OF THE PHILIPS GROUP
KEY PERFORMANCE DATA FOR THE PERIOD ENDING JUNE 30
in millions of euros (EUR) unless otherwise stated the data included in this
report are unaudited
2nd QUARTERLY REPORT JULY 18, 2000
<TABLE>
<CAPTION>
2nd quarter January to June
2000 1999 2000 1999
<S> <C> <C> <C> <C>
Sales 9,155 7,298 17,484 14,135
% nominal growth 25 (2) 24 (3)
% comparable growth 15 1 13 2
Ebitda 1,225 780 2,372 1,695
Income from operations 724 319 1,387 868
as a % of sales 7.9 4.4 7.9 6.1
Income from continuing operations 3,604 274 4,744 743
per common share (in EUR) 1) 2.71 0.20 3.57 0.52
Cash flows before financing activities 2,176 (1,380) 2,711 (1,096)
Income from operations
as a % of net oper. cap. (RONA) 25.3 18.3
Income from continuing operations
as a % of stockh. equity (ROE) 62.1 12.6
Net debt: group equity ratio 2) 2)
Number of employees 232,433 227,618
</TABLE>
1) Per share data in this report are based on the average number of shares
outstanding after the 4-for-1 stock split which was effected on April 14,
2000; prior-year data have been restated accordingly.
2) Not meaningful: net cash exceeded the debt level.
THE SECOND QUARTER
- INCOME FROM CONTINUING OPERATIONS EUR 3,604 MILLION (EUR 2.71 PER SHARE),
INCLUDING EUR 2,905 MILLION (EUR 2.19 PER SHARE) GAIN FROM ONE-OFF EVENTS
- NOMINAL SALES GROWTH: 25% / COMPARABLE SALES GROWTH: 15%
- INCOME FROM OPERATIONS A RECORD EUR 724 MILLION, 7.9% OF SALES
- RONA AT 25.3%
- VERY STRONG SEMICONDUCTORS PERFORMANCE, AND MUCH IMPROVED RESULTS AT
COMPONENTS
- GOOD PERFORMANCE ACROSS ALL SECTORS EXCEPT ORIGIN
<PAGE> 4
THE SECOND QUARTER (continued)
INCOME FROM CONTINUING OPERATIONS in the second quarter amounted to EUR 3,604
million (EUR 2.71 per share) compared to EUR 274 million (EUR 0.20 per share) in
the corresponding period of 1999. Included in income is a gain of EUR 2,595
million related to the sale of approximately 70% of Philips' shares in ASM
Lithography (ASML); a gain of EUR 189 million related to Philips' share of the
increased equity value of Taiwan Semiconductor Manufacturing Corporation (TSMC),
resulting from the paid-in capital surplus following the issuance of new TSMC
shares; and a gain of EUR 121 million resulting from the swap of Philips' equity
interest in Beltone Electronics Inc. into shares of GN Great Nordic A/S.
Excluding these items, the improvement in income was largely the result of
better operating performance in most product sectors, good cost controls, and
higher results at unconsolidated companies. Currency developments were also
favorable.
SALES in the second quarter came to EUR 9,155 million, a 25% nominal increase
over the same quarter last year. Adjusted for exchange rate fluctuations (9%),
and consolidation changes (1%), comparable sales growth came to 15%, compared to
1% a year earlier. Consumer Electronics, Components, and Semiconductors
contributed in particular to the acceleration in sales growth. Origin
experienced lower sales. Geographically, sales were extremely strong in Europe
and Asia Pacific. Price erosion in the second quarter was 5% versus 8% in the
corresponding quarter last year. Volume growth more than doubled from 9% a year
ago to 20% in the second quarter of this year.
INCOME FROM OPERATIONS reached a record high level of EUR 724 million compared
with EUR 319 million last year. As in the first quarter, income included a
reduction in pension costs of approximately EUR 120 million. Income in
Miscellaneous was adversely affected by charges of approximately EUR 80 million
as a result of the sale of Philips Projects, and restructuring charges at the
Research Center.
FINANCIAL INCOME AND EXPENSES in the second quarter came to a negative of EUR 43
million compared to a positive EUR 17 million in the same period of 1999. Lower
interest income and last year's gain of EUR 30 million from the sale of
marketable securities accounted for most of the difference.
Philips' RESULTS RELATING TO UNCONSOLIDATED COMPANIES amounted to EUR 3,073
million, versus EUR 16 million last year, primarily relating to the previously
mentioned sale of ASML shares, Philips' share of the increased equity value of
TSMC, and the swap of equity interest in Beltone into GN Great Nordic.
Disregarding these non-recurring items, results from unconsolidated companies
rose to EUR 168 million, compared to EUR 16 million last year, mainly coming
from continued strong performance in LG.Philips LCD and TSMC.
MINORITY INTERESTS were marginally up on last year.
NET INCOME amounted to EUR 3,604 million, compared to EUR 271 million a year
ago.
<PAGE> 5
THE FIRST SIX MONTHS
INCOME FROM CONTINUING OPERATIONS in the first six months amounted to EUR 4,744
million (EUR 3.57 per share) compared to EUR 743 million (EUR 0.52 per share) in
the same period of 1999. Excluding the aforementioned incidental gains (EUR
2,905 million) and the gain on the sale of the shares of JDS Uniphase in the
first quarter (EUR 526 million), income improved by EUR 570 million as a result
of higher income from operations, in part due to improved cost controls and
favorable currency developments, and increased results at unconsolidated
companies, partly offset by higher financing costs (excluding the JDS Uniphase
gain) and higher income taxes.
SALES in the first half amounted to EUR 17,484 million, nominally 24% higher
than in 1999. Adjusted for exchange rate fluctuations (9%), and consolidation
changes (2%), comparable sales growth came to 13% compared to 2% a year earlier.
Consumer Electronics, Components, Semiconductors, and Miscellaneous achieved
above average sales growth, whilst Origin saw a decrease in sales.
Price erosion was at 5%, considerably lower than the 8% incurred in the same
period in 1999. In spite of an industry-wide shortage of key components, volume
growth came to 19%, compared to 10% a year ago.
INCOME FROM OPERATIONS amounted to a record EUR 1,387 million (7.9% of sales)
compared to EUR 868 million (6.1% of sales) in 1999. The improvement was largely
due to the higher volume of activities, improved cost controls and efficiency,
and the positive impact of reduced pension costs of EUR 245 million. Income from
operations in the first half of 1999 included the EUR 169 million gain from the
sale of Conventional Passive Components. The RONA ratio amounted to 25.3%
compared to 18.3% in the year-earlier period. Positive income developments were
seen in almost all product sectors.
FINANCIAL INCOME AND EXPENSES came to a positive balance of EUR 437 million,
including the EUR 526 million gain from the sale of a portion of the shares of
JDS Uniphase, compared to EUR 38 million in 1999. This positive effect was
partly offset by higher net interest expense and other financial expense.
The TAX burden has been determined at a tentative rate of 20%. The gain on the
sale of JDS Uniphase shares is not taxable, which brings the overall tax burden
to 14.3%, compared to 20% in the same period of last year.
Philips' RESULTS FROM UNCONSOLIDATED COMPANIES rose to EUR 3,208 million
compared to EUR 41 million a year earlier due to the previously mentioned sale
of ASML shares, Philips' share of the increased equity value of TSMC, and swap
of equity interest in Beltone into GN Great Nordic. Excluding these items,
improvement primarily came from the joint venture LG.Philips LCD Co.,
established mid-1999, and higher results at TSMC. TSMC's merger with Taiwan ACER
Semiconductor Manufacturing Corporation (TASMC) and Taiwan Worldwide
Semiconductor Manufacturing Corporation (TWSMC) will have a net positive
financial effect, which will be accounted for in the third quarter.
MINORITY INTERESTS were marginally up on last year. Net income came to EUR 4,744
million (EUR 3.57 per share) compared to EUR 740 million (EUR 0.52 per share)
last year.
<PAGE> 6
TREND PER PRODUCT SECTOR (SIX MONTHS)
In the LIGHTING sector, the nominal increase in sales was 11%. Comparable growth
came to 2%. Strong growth occurred in Asia Pacific and Eastern Europe.
Income from operations increased by EUR 51 million to EUR 367 million. Lamps in
particular contributed to the income increase, as did Automotive.
SALES in the CONSUMER ELECTRONICS sector rose nominally by 21% (14% comparable
growth). Volume growth was 23%, partly offset by 9% price erosion. All product
groups recorded strong sales growth.
Income from operations improved from EUR 63 million to EUR 203 million. The
turnaround at Philips Consumer Communications and higher license income were the
main drivers of the growth in income. Income of Mainstream CE was affected by
higher costs of components. Income in the second quarter, however, was up
slightly. Income in Digital Networks continued to reflect the cost of
investments in new high-growth digital business opportunities, which should lead
to future improved sales and earnings.
The DOMESTIC APPLIANCES AND PERSONAL CARE sector saw sales grow by 17% on a
nominal basis (10% comparable growth), mainly led by Male shaving and grooming
which clearly outpaced the market. Strongest growth of the division was seen in
North America and Asia Pacific.
Income from operations increased by 47% to EUR 100 million, driven by successful
product launches and favorable currency influences.
The COMPONENTS sector delivered strong nominal sales growth of 36% (22%
comparable growth), primarily attributable to Display Components and Optical
Storage. Flat Display Systems and Optical Storage increased their market share.
Income from operations came to EUR 227 million compared to EUR 175 million last
year. Included in last year's income was a gain of the EUR 169 million on the
sale of Conventional Passive Components. Optical Storage continued to drive the
strong performance of the sector.
Sales in the SEMICONDUCTORS sector increased by 60% on a nominal basis, with all
businesses contributing, including VLSI. Comparable sales growth was 30%. Price
erosion decreased from 9% to 3%. Order intake continues to be very strong.
Income from operations almost doubled to EUR 565 million or 18.5% of segment
revenues (16.8% in the first quarter, 19.9% in the second quarter), from EUR 293
million or 14.8% of segment revenues last year.
Sales of the MEDICAL SYSTEMS sector nominally grew by 16% (6% comparable growth)
with North America and Latin America the main contributors.
Income from operations increased from EUR 36 million to EUR 64 million, largely
due to strict cost controls.
<PAGE> 7
Sales at ORIGIN were 10% lower than the same period last year, both on a nominal
and comparable basis, as the market remained slow across the IT industry, and
customers are hesitating in defining their future IT plans, especially in the
field of e-business.
Income from operations came to a loss of EUR 3 million compared to last year's
profit of EUR 65 million, resulting from the lower sales level, a restructuring
charge for the alignment of workforce and facilities costs, and higher goodwill
charges.
The MISCELLANEOUS sector experienced both nominal and comparable sales growth of
16%, mainly driven by FEI/Micrion, Machinefabrieken, and Electronic
Manufacturing Technology (EMT).
Income from operations fell to a loss of EUR 91 million from a loss of EUR 1
million, primarily due to charges in connection with the sale of Philips
Projects and restructuring charges at the Research Center.
In the segment UNALLOCATED, income was positively impacted by reduced pension
costs of approximately EUR 150 million.
TREND PER GEOGRAPHIC AREA (SIX MONTHS)
SALES in Europe accelerated in the second quarter, resulting in nominal sales
growth of 19% (17% comparable) in the first half. Consumer Electronics, in
particular Mainstream CE and Consumer Communications, and Semiconductors
accounted for much of the sales growth. The upturn in Eastern Europe continued,
with a 60% nominal increase in sales over last year (58% comparable).
Sales in North America increased nominally by 21% (4% comparable), with strong
growth in Components and Medical Systems, partly offset by flat sales in
Consumer Electronics and Lighting.
Latin America experienced 26% nominal growth in sales (16% comparable), driven
by Consumer Electronics and Components, stemming from the economic recovery in
Brazil.
In Asia Pacific, sales increased nominally by 37% (17% comparable), with steep
acceleration in the second quarter, mainly attributable to Semiconductors,
Components, and Lighting.
INCOME FROM OPERATIONS improved in almost all regions. Income in North America
was below last year's level, but improved markedly in the second quarter. Europe
showed a very strong increase in income, even including last year's gain on the
sale of Conventional Passive Components. Consumer Communications, Components,
Semiconductors, and license income all contributed to this increase. A strong
improvement in income was recorded in Asia Pacific, due to the performance of
Semiconductors and Components, and despite a restructuring charge for Consumer
Electronics' Singapore operations.
<PAGE> 8
BALANCE SHEET RATIOS AND CASH FLOWS
Inventories at the end of June 2000 were 14.7% of sales, significantly lower
than the 16.4% a year earlier. The average collection period of outstanding
trade receivables was the equivalent of 1.6 months of sales, unchanged from one
year ago.
Cash flow from operating activities in the first half was EUR 713 million,
compared with EUR 166 million last year, mainly as a result of much higher
operating performance, partly offset by an increase in working capital.
Cash provided by investing activities was EUR 1,998 million, primarily resulting
from the sale of the ASML shares. Last year, cash used for investing activities
was EUR 1,262 million, mainly the result of acquisitions. The resulting cash
flow surplus of EUR 2,711 million compared with a deficit of EUR 1,096 million
in the same period of last year.
EMPLOYEES
The number of employees at the end of June 2000 was 232,433, an increase of
4,140 over the comparable position on January 1, 2000.
SUBSEQUENT EVENTS
On May 29, 2000, the Extraordinary General Meeting of Shareholders adopted
Philips' Share Reduction Program, which will become effective August 1, 2000,
and will reduce the number of outstanding shares by approximately 40 million or
3%. As part of the Program, shareholders will receive an amount of EUR 1.7
billion in cash.
Philips Medical Systems announced in the second quarter the acquisition of 60%
of the common stock of MedQuist Inc., the leading US provider of outsourced
medical record transcription services, for approximately USD 1.2 billion. The
transaction was completed in July.
OUTLOOK
The year 2000 is shaping up to be a record year in every aspect: sales, income
from operations and income from continuing operations. We will meet all our
financial objectives this year: RONA at 24% or better, double-digit earnings
growth, and a positive cash flow.
July 18, 2000
Royal Philips Electronics
BOARD OF MANAGEMENT
The accompanying financial statements are an integral
part of this quarterly report.
<PAGE> 9
STATEMENTS OF INCOME
in millions of euros (EUR) unless otherwise stated
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
---------------- ------------------
2nd quarter January to June
2000 1999 2000 1999
------ ------ ------- -------
<S> <C> <C> <C> <C>
Sales 9,155 7,298 17,484 14,135
Ebitda 1,225 780 2,372 1,695
Income from operations (Ebit) 724 319 1,387 868
Financial income and expenses (43) 17 437 38
------ ------ ------- -------
Income before taxes 681 336 1,824 906
Income taxes (136) (67) (260) (181)
------ ------ ------- -------
Income after taxes 545 269 1,564 725
Results relating to
unconsolidated companies 3,073 16 3,208 41
Minority interests (14) (11) (28) (23)
------ ------ ------- -------
Income from continuing operations 3,604 274 4,744 743
Extraordinary items -- net -- (3) -- (3)
--------------------------------- ------ ------ ------- -------
NET INCOME 3,604 271 4,744 740
Basic earnings per common share in EUR (after stock split):
-- income from continuing operations 2.71 0.20 3.57 0.52
-- net income 2.71 0.20 3.57 0.52
</TABLE>
'SAFE HARBOR' STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
OCTOBER 1995
This document contains certain forward-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.
By their nature, forward-looking statements involve risk and uncertainty because
they relate to events and depend on circumstances that will occur in the future.
There are a number of factors that could cause actual results and developments
to differ materially from those expressed or implied by these forward-looking
statements. These factors include, but are not limited to, levels of consumer
and business spending in major economies, changes in consumer tastes and
preferences, the levels of marketing and promotional expenditures by Philips and
its competitors, raw materials and employee costs, changes in future exchange
and interest rates, changes in tax rates and future business combinations,
acquisitions or dispositions and the rate of technical changes. Market share
estimates contained in this report are based on outside sources such as
specialized research institutes, industry and dealer panels, etc. in combination
with management estimates.
<PAGE> 10
BALANCE SHEETS AND ADDITIONAL RATIOS
in millions of euros (EUR) unless otherwise stated
--------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
2000 1999 1999
JUNE 30, Dec. 31, June 30,
--------- --------- ---------
<S> <C> <C> <C>
Cash and cash equivalents 4,173 2,331 3,648
Securities 1,499 1,523 --
Receivables 6,935 6,453 5,997
Inventories 5,126 4,566 4,950
Unconsolidated companies 2,715 2,091 1,035
Other non-current financial assets 503 340 1,733
Non-current receivables 2,195 2,038 1,500
Property, plant and equipment 8,216 7,332 7,203
Intangible assets 2,737 2,822 1,398
------------------------------------------------ --------- --------- ---------
TOTAL ASSETS 34,099 29,496 27,464
Accounts payable and other liabilities 8,372 7,974 6,885
Debt 3,429 3,314 3,486
Provisions 3,268 3,118 3,123
Minority interests 385 333 268
Stockholders' equity 18,645 14,757 13,702
------------------------------------------------ --------- --------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY 34,099 29,496 27,464
RATIOS
Stockholders' equity:
Per common share in EUR (after stock split) 14.09 11.08 10.27
Inventories as a % of sales 14.7 14.5 16.4
Outstanding trade receivables, in months' sales 1.6 1.4 1.6
NUMBER OF COMMON SHARES OUTSTANDING
(after stock split)
Shares in thousands 1,323,515 1,331,601 1,333,857
</TABLE>
<PAGE> 11
STATEMENTS OF CASH FLOWS
in millions of euros (EUR) unless otherwise stated
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS*
<TABLE>
<CAPTION>
---------------- ----------------
2nd quarter January to June
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income 3,604 271 4,744 740
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 523 461 1,025 827
Net gain on sale of investments (2,728) (69) (3,273) (309)
Income unconsolidated companies (327) (16) (480) (2)
Minority interests 10 6 24 14
Increase in working capital (768) (232) (1,243) (682)
Increase (decrease) in provisions 7 (140) 77 (97)
Other items (13) (186) (161) (325)
------ ------ ------ ------
Net cash provided by
operating activities 308 95 713 166
CASH FLOWS FROM INVESTING
ACTIVITIES:
Proceeds from the sale of securities -- -- 550 --
Net capital expenditures (599) (387) (1,055) (623)
Proceeds (purchase) other
non-current financial assets 17 (11) (28) (17)
Proceeds from sale of business/
(purchase of business) 2,450 (1,077) 2,531 (622)
------------------------------------- ------ ------ ------ ------
Net cash provided by (used for)
investing activities 1,868 (1,475) 1,998 (1,262)
CASH FLOWS BEFORE FINANCING
ACTIVITIES 2,176 (1,380) 2,711 (1,096)
</TABLE>
* For a number of reasons, principally the effects of translation differences
and consolidation changes, certain items in the statements of cash flows do
not correspond to the differences between the balance sheet amounts for the
respective items.
<PAGE> 12
PRODUCT SECTORS
in millions of euros (EUR) unless otherwise stated
--------------------------------------------------------------------------------
SEGMENT REVENUES AND INCOME FROM OPERATIONS
<TABLE>
<CAPTION>
2nd quarter
2000 1999
-------------------------------------------- --------------------------------------------
segment Ebitda income as % of segment Ebitda income as % of
revenues (loss) from segment revenues (loss) from segment
operations revenues operations revenues
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lighting 1,217 210 162 13.3 1,093 178 138 12.6
Consumer Electronics* 3,452 203 131 3.8 2,864 87 23 0.8
DAP 466 72 55 11.8 403 59 43 10.7
Components 1,649 221 132 8.0 1,195 82 (26) (2.2)
Semiconductors 1,625 507 324 19.9 1,037 284 126 12.2
Medical Systems 689 66 44 6.4 606 56 36 5.9
Origin 424 22 (4) (0.9) 451 63 40 8.9
Miscellaneous 466 (61) (85) (18.2) 443 24 2 0.5
Unallocated (15) (35) (53) (63)
----- ----- ----- ----- ----- -----
Total 9,988 1,225 724 8,092 780 319
Intersegment revenues (833) (794)
----- -----
SALES 9,155 7,298
Income from operations
as a % of sales 7.9 4.4
* of which:
Mainstream CE 2,124 62 22 1.0 1,803 48 16 0.9
Consumer
Communications 502 23 10 2.0 415 (12) (21) (5.1)
Digital Networks 172 (28) (29) (16.9) 157 (33) (35) (22.3)
Specialty Products 618 38 20 3.2 498 31 11 2.2
Licenses 131 108 108 82.4 65 53 52 80.0
Intrasegment revenues (95) -- -- . (74) -- -- .
----- ----- ----- ----- ----- ----- ----- -----
Consumer Electronics 3,452 203 131 3.8 2,864 87 23 0.8
</TABLE>
<PAGE> 13
PRODUCT SECTORS (CONTINUED)
in millions of euros (EUR) unless otherwise stated
--------------------------------------------------------------------------------
SEGMENT REVENUES AND INCOME FROM OPERATIONS
<TABLE>
<CAPTION>
January to June
2000 1999
-------------------------------------------- --------------------------------------------
segment Ebitda income as % of segment Ebitda income as % of
revenues (loss) from segment revenues (loss) from segment
operations revenues operations revenues
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Lighting 2,454 459 367 15.0 2,215 397 316 14.3
Consumer Electronics* 6,630 346 203 3.1 5,626 180 63 1.1
DAP 853 135 100 11.7 730 99 68 9.3
Components 3,140 403 227 7.2 2,405 367 175 7.3
Semiconductors 3,060 916 565 18.5 1,983 550 293 14.8
Medical Systems 1,263 106 64 5.1 1,092 75 36 3.3
Origin 824 50 (3) (0.4) 865 106 65 7.5
Miscellaneous 896 (37) (91) (10.2) 840 49 (1) (0.1)
Unallocated (6) (45) (128) (147)
------- ------ ------ ------- ------- ------
Total 19,120 2,372 1,387 15,756 1,695 868
Intersegment revenues (1,636) (1,621)
------- -------
SALES 17,484 14,135
Income from operations
as a % of sales 7.9 6.1
* of which:
Mainstream CE 3,992 84 5 0.1 3,566 91 28 0.8
Consumer
Communications 1,023 59 34 3.3 808 (41) (58) (7.2)
Digital Networks 369 (47) (50) (13.6) 326 (45) (49) (15.0)
Specialty Products 1,170 59 23 2.0 931 51 19 2.0
Licenses 225 191 191 84.9 140 124 123 87.9
Intrasegment revenues (149) -- -- -- (145) -- -- --
------- ------ ------ ------- ------- ------- ------ -------
Consumer Electronics 6,630 346 203 3.1 5,626 180 63 1.1
</TABLE>
<PAGE> 14
PRODUCT SECTORS AND MAIN COUNTRIES
in millions of euros (EUR) unless otherwise stated
SALES AND TOTAL ASSETS
<TABLE>
<CAPTION>
SALES (TO THIRD PARTIES) TOTAL ASSETS
----------------------------------- ---------------------------------
January to June 2000 2000 1999 1999
-----------------------------------
% growth JUNE 30, Dec. 31, June 30,
------------------------
amount nominal comparable*
------ ------- ----------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Lighting 2,430 11 2 2,984 2,849 2,814
Consumer Electronics 6,637 21 14 5,146 4,683 4,390
DAP 841 17 10 810 777 782
Components 2,330 36 22 5,648 5,179 3,227
Semiconductors 2,613 60 30 6,663 5,188 4,716
Medical Systems 1,261 16 6 1,916 1,840 1,815
Origin 507 (10) (10) 667 683 650
Miscellaneous 865 16 16 1,275 1,545 1,383
Unallocated 8,990 6,752 7,687
--------------------- ------ ------ ------ -------
TOTAL 17,484 24 13 34,099 29,496 27,464
</TABLE>
SALES AND FIXED ASSETS
<TABLE>
<CAPTION>
SALES (TO THIRD PARTIES) (IN) TANGIBLE FIXED ASSETS
--------------------------------- ---------------------------------
January to June 2000 2000 1999 1999
---------------------------------
% growth JUNE 30, Dec. 31, June 30,
-----------------------
amount nominal comparable*
------ ------- ----------- ------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Netherlands 892 10 11 1,852 1,811 1,733
United States 3,986 22 4 2,941 2,476 2,418
Germany 1,577 25 26 625 632 637
France 1,073 24 20 430 392 403
United Kingdom 987 9 (1) 310 321 308
China (incl. Hong Kong) 1,239 36 20 727 635 619
Other countries 7,730 27 16 4,068 3,887 2,483
---------------------- ------ ------ ------ -----
TOTAL 17,484 24 13 10,953 10,154 8,601
</TABLE>
* Adjusted for the effects of changes in consolidations and exchange rate
movements
Information also available on Internet, address: http://www.philips.com
Printed in the Netherlands
<PAGE> 15
PHILIPS QUARTERLY STATISTICS
in millions of euros (EUR) unless otherwise stated; percentage increases always
in relation to the corresponding period of previous year
<TABLE>
<CAPTION>
1999 2000
-------------------------------------------------- --------------------------------------------------
1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER 1ST QUARTER 2ND QUARTER 3RD QUARTER 4TH QUARTER
----------- ----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales 6,837 7,298 7,744 9,580 8,329 9,155
% increase (3) (2) 6 11 22 25
Ebitda 915 780 801 1,059 1,147 1,225
as % of sales 13.4 10.7 10.3 11.1 13.8 13.4
% increase 23 (8) 29 193 25 57
Income from operations
(Ebit) 549 319 352 531 663 724
as % of sales 8.0 4.4 4.5 5.5 8.0 7.9
% increase 47 (32) 52 -- 21 127
Income from continuing
operations 469 274 374 687 1,140 3,604
% increase 46 (28) 154 -- 143 1,215
per common share (in EUR)
(after stock split) 0.32 0.20 0.28 0.51 0.86 2.71
Net income 469 271 372 687 1,140 3,604
% increase (34) (42) 93 (85) 143 1,230
per common share (in EUR)
(after stock split) 0.32 0.20 0.28 0.51 0.86 2.71
</TABLE>
<TABLE>
<CAPTION>
JANUARY- JANUARY- JANUARY- JANUARY- JANUARY- JANUARY- JANUARY- JANUARY-
MARCH JUNE SEPTEMBER DECEMBER MARCH JUNE SEPTEMBER DECEMBER
----- ---- --------- -------- -------- -------- --------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Sales 6,837 14,135 21,879 31,459 8,329 17,484
% increase (3) (3) 0 3 22 24
Ebitda 915 1,695 2,496 3,555 1,147 2,372
as % of sales 13.4 12.0 11.4 11.3 13.8 13.6
% increase 23 7 13 38 25 40
Income from operations
(Ebit) 549 868 1,220 1,751 663 1,387
as % of sales 8.0 6.1 5.6 5.6 8.0 7.9
% increase 47 3 14 156 21 60
as a % of net operating
capital (RONA) 24.1 18.3 16.4 17.5 25.1 25.3
Income from continuing
operations 469 743 1,117 1,804 1,140 4,744
as a % of stockholders'
equity (ROE) 17.7 12.6 11.7 12.6 31.2 62.1
per common share (in EUR)
(after stock split) 0.32 0.52 0.80 1.31 0.86 3.57
Net income 469 740 1,112 1,799 1,140 4,744
% increase (34) (37) (19) (70) 143 541
per common share (in EUR)
(after stock split 0.32 0.52 0.80 1.31 0.86 3.57
</TABLE>
<TABLE>
<CAPTION>
PERIOD ENDING 1999 PERIOD ENDING 2000
-------------------------------------- ----------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Inventories as % of sales 15.6 16.4 16.6 14.5 14.5 14.7
Average collection period of trade
receivables in months' sales 1.6 1.6 1.6 1.4 1.6 1.6
Net debt: group equity ratio * * 10:90 6:94 4:96 *
Total employees (in thousands) 229 228 231 227 229 232
</TABLE>
* NOT MEANINGFUL: NET CASH EXCEEDED THE DEBT LEVEL.
