Frans van Houten: "I would like to express my gratitude for Rob's considerable contribution to Philips since he joined the company in 2015. Under his leadership, the Diagnosis & Treatment businesses have achieved a major step-up on the quality front and pivoted to outcomes-driven solutions. Most recently, Rob established and led our Precision Diagnosis businesses and was jointly responsible for the Diagnosis & Treatment segment. I am pleased that Rob will lead Philips' strategic business development, and that Kees will be his successor. Kees will join the Executive Committee with a strong accomplishment record, having led the transformation of the Diagnostic Imaging business by increasing customer and employee engagement, renewing the product and solutions portfolio, and improving profitability. I am confident that he will further build out the Precision Diagnosis businesses through the transformation to solutions, continuing to drive robust growth and increased profitability. Kees and Rob will be working closely to ensure a seamless transition, with formal handover on May 1 of this year."
Capital allocation
Philips has a strong balance sheet and robust liquidity position. In view of the possible continued impact of the COVID-19 pandemic in 2020, Philips has taken the following measures to further enhance its liquidity position:
Share buyback program
As of the end of the first quarter of 2020, Philips has completed 50.3% of its EUR 1.5 billion share buyback program for capital reduction purposes that was announced on January 29, 2019. On March 23, 2020, Philips announced that the second half of the program will be executed through individual forward transactions, to be entered into in the course of 2020, with the settlement dates extending into the second half of 2021. Further details can be found here.
Euro Medium-Term Note
In the first quarter, Philips successfully placed EUR 500 million fixed-rate Sustainability Innovation notes due 2025 and EUR 500 million fixed-rate notes due 2030.
Dividend
Philips maintains its proposed dividend of EUR 0.85 per common share against the net income of 2019. The distribution of this dividend will be in shares only, instead of the currently proposed distribution in cash or in shares at the option of the shareholder. To that effect, Philips withdraws the dividend proposal that was already submitted to the Annual General Meeting of Shareholders to be held on April 30, 2020. Philips plans to convene an Extraordinary General Meeting of Shareholders expected to take place in the second half of June 2020, the agenda of which will include the revised proposal to declare a distribution of EUR 0.85 per common share, in shares only. The increase in issued share capital is expected to be offset by the share buyback program mentioned above.
