February 22, 2010 2:00 am

Philips chief refuses to say whether he will stand down

Gerard Kleisterlee, one of Europe's leading business leaders, has pointedly refused to confirm widely held expectations that he plans to step down as chief executive of Philips next year.

The comments in an interview with the Financial Times raise the prospect that the 63-year-old manager could continue his hugely influential role at the large Dutch industrial company.

Mr Kleisterlee has run Philips since 2001, radically transforming it from a predominantly semiconductor business into a lighting, healthcare and consumer electronics group.

Asked whether he definitely planned to step down in 2011 when his contract expires at the shareholder meeting, Mr Kleisterlee said: "We have a nomination committee in the supervisory board that will decide what's next . . . That's where the conversations will take place."

Pressed to say if this was a hint he would stay on, he said: "I wouldn't like to give broad hints. I think the only thing you can conclude is that even 10 years into a job, it's great fun to run Philips."

He added: "Equally . . . there's a moment to pass on the baton."

Mr Kleisterlee garnered plaudits for his restructuring of Philips - including being named Fortune's European businessman of the year in 2007 - but was forced by the economic crisis to abandon profitability targets for this year.

He has shrunk Philips's business considerably by selling businesses such as semiconductors and moving away from TVs towards "wellness" products such as baby milk bottles and electric toothbrushes.

Investors were upset when Mr Kleisterlee's Vision 2010 programme - announced in 2007 - was abandoned in spite of heavy hints only months earlier that a goal of a 10 per cent operating profit margin would be reached ahead of schedule.

Philips produced a 9.1 per cent margin in the last quarter of 2009 but has refused to put a new time- frame for meeting the goals.

A target of doubling 2007's earnings per share was even more ambitious. "People know that the growth is not there, so the [margin] target is certainly further out," Mr Kleisterlee said.

Investors have expected him to step down next year when he will be 64. But there are no age limits for executives at Philips. When asked about his "final full year" at Philips, he replied: "I would approach it from a different perspective. I would say this is my 10th full year . . . which is something else than my last full year." He added: "There is still so much to do."

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