At a recent meeting with investors and financial analysts, Royal Philips Electronics (NYSE: PHG, AEX: PHI) updated the market on its Medical Systems division -- the foundation of Philips' professional healthcare business. At the meeting, Philips explained that its approach to healthcare -- focused on making healthcare simpler, both for medical professionals and patients -- is setting the company apart from the competition, and is positioning the Medical Systems division for long-term, profitable growth.

On track with 2007 financial targets -- further EBITA improvement seen for 2008/2009

During the meeting, Mr. Steve Rusckowski, CEO of Philips Medical Systems, along with the Philips Medical Systems management team, detailed Philips' ongoing measures to fine-tune its professional healthcare business as an engine for long-term value creation. Management reconfirmed that the division is on track to achieve annual organic sales growth of 6% and an EBITA margin of 14-15% in 2007. Furthermore, the Medical Systems management team discussed how measures to improve the operational performance of the business can be expected to lead to a further improvement of approximately one additional percentage point in the EBITA margin of the Medical Systems division by 2008/2009.
To achieve these improvements, Philips will continue building its line of innovative products, such as the first PET/CT system to use 'time-of-flight' technology that captures sharper images faster, increasing the number of patients that can be examined. Philips will also take steps to further enhance the operational excellence of its Medical Systems business and build on the market share gains achieved over the past three years by focusing on high-value developed and high-growth emerging markets. Philips expects these measures will help the company continue gaining market share over the next three years.

Following the successful acquisition of Intermagnetics General Corporation, Witt Biomedical Inc. and Stentor Inc., Philips is continuing to explore opportunities for forming alliances and making further acquisitions that support its contribution to the care cycle, enhance the company's product offering and create long-term value.

Philips' focus on 'care cycle' is making healthcare simpler for patients and caregivers

"Both patients and caregivers struggle with a complex, fragmented healthcare system. We believe the best way to reduce this complexity is by addressing the needs of the healthcare industry from the perspective of patients and their health problems," explained Mr. Rusckowski, who was appointed CEO of Philips Medical Systems in November 2006, and brings over twenty years experience in the professional healthcare sector. "That means delivering solutions in the fields of cardiology, oncology and women's health that address what we call the 'care cycle' -- the cycle of prevention, screening, diagnosis, treatment and management of medical conditions with technologies and services both inside and outside the hospital," Mr. Rusckowski added.

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