Philips To Implement New Management Structure To Improve Performance

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Royal Philips (NYSE: PHG, AEX: PHIA) has just announced that it will be implementing a new management structure in its healthcare sector to improve perf...

Royal Philips (NYSE: PHG, AEX: PHIA) has just announced that it will be implementing a new management structure in its healthcare sector to improve performance and better respond to evolving customer demands in a changing healthcare landscape.

The new model will have healthcare business groups report directly to Frans Van Houten, Philips chief executive officer, thereby removing one management layer. Deborah DiSanzo, previous CEO of Philips Healthcare, has decide to leave the company to pursue other opportunities.

“The performance in our Healthcare sector is disappointing, with second-quarter EBITA expected to be approximately EUR 220 million, while expected Group EBITA of approximately EUR 400 million in the second quarter is in line with current market expectations,” said Frans van Houten.

“We anticipate, however, EBITA performance in Healthcare to improve in the second half compared to the same period in 2013 as, among others, Cleveland gradually resumes production in the course of the third quarter. Our Healthcare business represents more than 40% of the revenue of Philips and is at the heart of Philips’ mission to deliver meaningful innovation to improve people’s lives. Today’s announcement is an example of how we are taking decisive action to improve our performance and competitiveness, and demonstrates our relentless commitment to quality and meaningful innovation that meet the needs of our customers,” added Frans van Houten. 

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