News Alerts
Headlines
Philips to spend nearly EUR 1 billion as World Cup near
World Cup 2006 - 08 May, 2006
Adjust font size:
Royal Philips Electronics NV, Europe's largest consumer electronics maker, will spend nearly EUR 1 billion before and during the World Cup.
“We see this as a good return on our investment,” said Rudy Provoost, who heads the company's consumer electronics unit.
Consumer electronics is the largest of the company’s five divisions, accounting for a third of first-quarter sales and 17 percent of operating profit.
Consumer electronics, the Amsterdam-based company's largest revenue-producing unit, is benefiting from consumers buying flat-screen TVs ahead of the event, which will start in Germany on June 9 and is expected to attract an audience of about 30 billion people. At the same time, Provoost said people buy flat-TVs as they switch from bulkier glass-tube television sets.
He said the consumer electronics unit will spend “considerably more” on marketing and advertising this quarter than in the previous period. Philips, which had sales of EUR 30.4 billion in 2005, invests about three percent of its annual sales on marketing.
The company paid FIFA, about EUR 30 million to be an official sponsor at the tournament. The company won't sponsor the 2010 and 2014 World Cup events, Provoost said, as it has decided to allocate its marketing budget differently.
“In the second quarter I expect to be able to continue the growth momentum in flat TVs from the first quarter,” he said, without providing specific numbers. The switch to flat-screen sets may point to “double-digit growth” in the longer term, Provoost added.
He also felt there would be a carry-over effect.
“Over the year it is likely we will see an effect from the World Cup in certain countries,” Provoost said. “Brazil will probably be one of them.”
At the World Cup, Philips lamps will light the fields in eight of the 12 venues and its RFID semiconductors will be used in all 3.2 million World Cup tickets. Radio frequency identification, or RFID, is a technology linking chips and miniature antennas that are used to grant visitors access to a stadium, allowing organizers to increase security and prevent fraud.
At the Bruges factory, the company has added a night shift to help meet demand for flat-TVs, said Baudewyn Meersseman, who works as a Philips quality manager for flat-screen televisions.
Philips is backing Ambilight flat-screens, which use backlighting that matches the colours seen on the screen, to spur growth. Sales of flat-screens using the Ambilight technology are forecast to double to about EUR 1 billion in 2006, said Marcel Godfroy, a product strategy and marketing manager at Philips consumer electronics.
“We're in an offensive mode, not defensive, and the role of Ambilight in the brand perception is significant,” Provoost said.
Chief Executive Officer Gerard Kleisterlee is focusing on units such as medical systems and appliances that are less susceptible to changes in consumer fashion.
“If CE wants to be a good member of the Philips family, CE will have to be structurally profitable,” Provoost said.
Consumer electronics, or CE, fits in the ``Philips family'' as it raises the brand awareness for the company as a whole.
Worldwide sales of consumer electronics will probably rise 8 percent to a record EUR 135.4 billion this year, aided by demand for televisions, a January report from trade group Consumer Electronics Association noted.
In the first quarter, sales at Philips consumer electronics, which also produces DVD players and MP3 players, rose 13 percent to EUR 2.42 billion, helped by flat-screen sales. Operating profit climbed to EUR 58 million from EUR 46 million euros the previous year.
The division has lowered expenses by out-sourcing production of items such as mobile phones and personal-computer monitors to companies in Asia. Competitors in consumer electronics include Samsung Electronics Co. and Sony Corp.
Provoost said, “We will remain in the bandwidth this year” for the operating profit margin forecast of 4 percent to 4.5 percent at the division, and from 4.2 percent last year. Sales of product licenses of 2 percentage points are included in the margin target.
“We see this as a good return on our investment,” said Rudy Provoost, who heads the company's consumer electronics unit.
Consumer electronics is the largest of the company’s five divisions, accounting for a third of first-quarter sales and 17 percent of operating profit.
Consumer electronics, the Amsterdam-based company's largest revenue-producing unit, is benefiting from consumers buying flat-screen TVs ahead of the event, which will start in Germany on June 9 and is expected to attract an audience of about 30 billion people. At the same time, Provoost said people buy flat-TVs as they switch from bulkier glass-tube television sets.
He said the consumer electronics unit will spend “considerably more” on marketing and advertising this quarter than in the previous period. Philips, which had sales of EUR 30.4 billion in 2005, invests about three percent of its annual sales on marketing.
The company paid FIFA, about EUR 30 million to be an official sponsor at the tournament. The company won't sponsor the 2010 and 2014 World Cup events, Provoost said, as it has decided to allocate its marketing budget differently.
“In the second quarter I expect to be able to continue the growth momentum in flat TVs from the first quarter,” he said, without providing specific numbers. The switch to flat-screen sets may point to “double-digit growth” in the longer term, Provoost added.
He also felt there would be a carry-over effect.
“Over the year it is likely we will see an effect from the World Cup in certain countries,” Provoost said. “Brazil will probably be one of them.”
At the World Cup, Philips lamps will light the fields in eight of the 12 venues and its RFID semiconductors will be used in all 3.2 million World Cup tickets. Radio frequency identification, or RFID, is a technology linking chips and miniature antennas that are used to grant visitors access to a stadium, allowing organizers to increase security and prevent fraud.
At the Bruges factory, the company has added a night shift to help meet demand for flat-TVs, said Baudewyn Meersseman, who works as a Philips quality manager for flat-screen televisions.
Philips is backing Ambilight flat-screens, which use backlighting that matches the colours seen on the screen, to spur growth. Sales of flat-screens using the Ambilight technology are forecast to double to about EUR 1 billion in 2006, said Marcel Godfroy, a product strategy and marketing manager at Philips consumer electronics.
“We're in an offensive mode, not defensive, and the role of Ambilight in the brand perception is significant,” Provoost said.
Chief Executive Officer Gerard Kleisterlee is focusing on units such as medical systems and appliances that are less susceptible to changes in consumer fashion.
“If CE wants to be a good member of the Philips family, CE will have to be structurally profitable,” Provoost said.
Consumer electronics, or CE, fits in the ``Philips family'' as it raises the brand awareness for the company as a whole.
Worldwide sales of consumer electronics will probably rise 8 percent to a record EUR 135.4 billion this year, aided by demand for televisions, a January report from trade group Consumer Electronics Association noted.
In the first quarter, sales at Philips consumer electronics, which also produces DVD players and MP3 players, rose 13 percent to EUR 2.42 billion, helped by flat-screen sales. Operating profit climbed to EUR 58 million from EUR 46 million euros the previous year.
The division has lowered expenses by out-sourcing production of items such as mobile phones and personal-computer monitors to companies in Asia. Competitors in consumer electronics include Samsung Electronics Co. and Sony Corp.
Provoost said, “We will remain in the bandwidth this year” for the operating profit margin forecast of 4 percent to 4.5 percent at the division, and from 4.2 percent last year. Sales of product licenses of 2 percentage points are included in the margin target.
Source: euFootball.BIZ © Copyright 2006 -
All rights reserved.
© Copyright message
The copying, republication, redistribution or web posting (including by framing or similar means) of this content is expressly prohibited without the prior written consent of euFootball.BIZ
-
Finance
Television
Sponsorship
Marketing
Technology
Competitions
Clubs
Stadia-Facilities
Legal
Administration
Events