Philips planning €250m cost savings in 2004

Royal Philips Electronics NV expects to achieve additional cost savings of €250m in 2004, chief executive Gerard Kleisterlee said at a news conference on annual results.

The savings come on the heels of cost reductions totalling €1.1bn in 2003.

Kleisterlee said the cost savings in 2004 should come through the implementation of shared services and other ongoing programmes to cut out indirect costs.

Chief financial officer Jan Hommen said the company has allocated €100m for restructuring charges in 2004, plus €150m for the planned reorganisation of the Consumer Electronics division.

The consumer electronics business in the US, which posted a small operating profit of €1m the fourth quarter, is targeting a profit over the full year 2004 Hommen said.

Kleisterlee did not comment on the timing of an expected IPO for the group's joint venture with LG Electronics, LG.Philips LCD.

The book value of the group's holdings rose by €1.8 bn in 2003 to €8.12bn at year-end.

The company's brands include Marantz, Norelco, and Magnavox.