Philips to Spin-off OLED Lighting Business

Philips is reported to be planning to spin-off its OLED lighting business so that it can focus on LED-based connected systems and services.

The news came as Philips reported disappointing results for both Q4 and the year, saying that 2014 had been a challenging year for the company. As a result, Philips said it is unlikely to reach its financial targets for the next two years. The company had originally aimed for sales growth of 4-6% between 2014 and 2016 and EBITA of 11-12% by 2016.

Philips announced last September that it planned to separate into two standalone companies, healthcare technology and lighting. Costs related to the separation of the businesses are in the range of €300-400 million in 2015. The company also said that it is in discussion with external investors for the combined Lumileds and automotive lighting businesses and expects to complete a transaction in the first half of 2015.

Net profit in Q4 fell to €134 million from €412 million in the previous year, while turnover for the quarter improved slightly to €6.5 billion from €6.4 billion. For the year, Philips posted a net profit of €411 million on turnover of €21.4 billion, which compares with a net profit in 2013 of €1.2 billion on turnover of €22 billion.