Overview

Royal Philips is a global leader in health technology, headquartered in the Netherlands. With a legacy of innovation, Philips is dedicated to improving people’s health and well-being through meaningful innovation in healthcare, personal health, and connected care solutions. The company focuses on delivering integrated products and services that advance patient outcomes, enhance experiences, and improve operational efficiency. By leveraging technology and deep clinical expertise, Philips empowers healthcare providers and individuals to achieve better health outcomes and a more sustainable future.

The Challenge

Philips faced mounting pressure to improve the efficiency and performance of its global manufacturing footprint, which included over 50 facilities and €4.5 billion in annual spend. In response to shifting market conditions and strategic realignment goals, the company needed to identify underperforming assets, unlock trapped value, and optimise its industrial base. The challenge was compounded by legacy operations with high OpEx, redundant site capabilities, and limited scalability in key regions. Philips required expert support to assess closure, outsourcing, and divestment options, while also evaluating opportunities for strategic reinvestment and industrial partnerships—all without disrupting core operations.

Partner Approach

To help Philips optimise its global industrial footprint and unlock trapped value across its manufacturing operations, a structured, data-driven approach was applied. The strategy focused on three core pillars: comprehensive diagnostics, asset monetisation, and strategic partnership development.

1. Comprehensive Industrial Diagnostics

   A full-scale review was conducted across 50 global manufacturing sites, representing €4.5 billion in annual spend. Cross-functional collaboration enabled the collection and analysis of site-level operational and financial data. Feasibility studies, valuation models, and site audits were developed to assess each asset’s performance, strategic fit, and future potential. This diagnostic phase informed value-creation planning and established clear business cases for site-level actions.

   
   

2. Asset Monetisation & Strategic Execution

   Assets identified for carve-out or closure were brought to market through structured divestment processes. Competitive auctions were organised with global private equity and strategic industrial buyers. The end-to-end transaction process—from data room preparation and site visits to bid analysis and leadership recommendations—was managed to ensure maximum value capture and seamless execution. This resulted in significant capital inflows and recurring OpEx savings.

   
   

3. Strategic Partnerships & Site Transformation

   Where operations remained core, value was unlocked through targeted reinvestment or outsourcing to trusted partners. Strategic partnerships with leading contract manufacturers—including FLEX, Jabil, and Sanmina—were deepened to enable more efficient and scalable operations. Select sites were repositioned or consolidated to streamline Philips’ industrial base and align it with long-term strategic goals.

Results

The transformation of Philips’ industrial footprint delivered significant financial, operational, and strategic outcomes:

• Major Capital Gains Realised:

  Successfully raised several billion euros through the divestment of non-core assets, including the landmark €3BN sale of the Domestic Appliances business to Hillhouse Investment. These transactions enabled Philips to reallocate capital toward growth areas and streamline its portfolio.

  
  

• Recurring Cost Reductions:

  Achieved substantial and sustainable OpEx savings through site closures, consolidations, and outsourcing. For example, a €70M UK OpEx site was integrated into an existing Dutch facility, while a €50M U.S. site was transitioned into Philips’ Dutch MedTech operations.

  
  

• Industrial Growth Through Strategic Reinvestment:

  Facilitated a €20M capital investment into an Indonesia-based manufacturing site, which scaled to a €270M annual run rate—demonstrating the success of targeted reinvestment in strategic geographies.

  
  

• Expanded Global Manufacturing Partnerships:

  Elevated FLEX to become Philips’ lead global industrial partner with over €200M in annual business. Grew strategic partnerships with Jabil and Sanmina to €100M annually, enhancing supply chain agility and cost efficiency.

  
  

• Seamless Deal Execution:

  Led competitive M&A processes from end to end—managing data rooms, stakeholder coordination, bid evaluations, and post-close integration support—ensuring value capture and business continuity across transactions.