Philips sells off its audio unit
Published 30/01/2013 | 05:00
ELECTRONICS giant Philips is selling its audio and video business to focus on lighting, shavers, kettles and healthcare.
Philips' decision to sell its DVD and audio system unit to Funai Electric for €150m to concentrate on higher-margin shavers and kitchen appliances comes almost a year after it completed the spin-off of its loss-making television arm.
Analysts said the disposal would focus Philips' consumer lifestyle unit on "health and wellbeing" and "put the portfolio back to a growth trajectory".
Shares rose 3pc to €22.58, adding to a 45pc surge over the past year.
Philips has struggled to compete with lower-cost Asian manufacturers, including Samsung and LG Electronics, and has had to cut costs and sell assets over the past two years. It had already hived off its ailing television business by setting up a joint venture with Hong Kong-based TPV last year.
With more consumers going online for music, films and games rather than buying CDs and DVDs, Philips decided to get out of home entertainment even though it was profitable last year, chief executive Frans van Houten said, adding that the business was shrinking and "margin dilutive".
It will, instead, focus on the profitable shavers and electric toothbrushes market, he said.