LEDs forecast to make up 50% of Philips Lighting’s sales in 2015

Posted by tED magazine on Thursday, February 23, 2012

By Joe Salimando

Philips Lighting is an industry leader. Of course, three major companies make light bulbs, so one can (if need be) “qualify” that statement.

Certainly, Philips enthusiastically embraced “green” before most in industry. And when the DoE offered the “L Prize” for LED lighting, Philips submitted (for a long time it was the ONLY submittal) – and won!

On the LED front: As tedmag.com reported earlier, in Q4/2011, LED sales accounted for 18% of lighting revenues (!!!). AND: Plans are ambitious. According to Digitimes Research, “Philips plans to invest [$2.6B] through 2015 on green products…The firm also hopes by 2015 that sales of LED lighting will reach 50% of total revenues.”

Further: In a transcript of Jan. 30 appearance on BloombergTV, Frans Van Houten, CEO of the whole company, said: “The market share that Philips has in LED is actually higher than in our traditional lighting.”

Lighting as leader…or laggard?

Philips’ activities transcend lighting and include healthcare. On TVs: Despite Van Houten’s “trying to ditch the business since April,” according to an Associate Press report, the company still makes ‘em. Also: Toothbrushes, coffee machines – etc.

Lighting accounted for 30.9% of Q4 company-wide revenues. As it turned out, this wasn’t necessarily good, as the company showed:  

Above: Q4 EBITA in the Philips Lighting operation. EBITA = earnings before interest, taxes, and amortization.

Philips’ Q4 document (find it here) attributed the EBITA fall to “continued operational issues at Consumer Luminaires and Lumileds, as well as macro factors which impacted pricing in our consumer lighting business.” The company took a $167.5M write-down in Lighting (attributed to rebranding some product lines).

Another angle on LEDs

Keep in mind that the Internet is a wild place, where anyone can write anything. Then: See a negative Investopedia.com write-up (posted before Q4 financials) on Philips. Why? Read this slice:

“The LED/lighting business is really just not working out for anybody right now. The aforementioned Cree is off its lows, but the stock is just a shadow of its 2009/2010 self when LED was all the rage. Likewise General Electric and Siemens NYSE:GE) aren't making much money in lighting either, and both would like to be rid of these businesses.

“Granted, construction activity has been really weak, but if neither GE or Siemens think they can make significant returns over the long haul in lighting, why will Philips be successful?”

Other info

Some not-necessarily essential stuff I found on Philips – too good to omit:

How about a transparent OLED (organic LED) roof for your car? Philips and BASF recently

Introduces healthy hospital lighting

Philips added a 40-story wind turbine to its plant in Fall River MA (no link b/c the Boston Globe wants you to pay to see article). No, the company isn’t in the wind biz.

Solar-powered street light – THE solution for folks living without electricity (reportedly, 1.8 billion of 7 billion Earth-bound homo sapiens are in the dark daily, except for fire, when the Sun disappears).