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Income from operations | 12 Months Ended
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Dec. 31, 2018
Income from operations [Abstract] |
Disclosure of income from operations [Text block] | #### Income from operations For information related to Sales on a segment and geographical basis, see Information by segment and main country. Philips Group Sales and costs by nature in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
Sales | 17,422 | 17,780 | 18,121
Costs of materials used | (5,030) | (4,918) | (4,826)
Employee benefit expenses | (5,298) | (5,824) | (5,827)
Depreciation and amortization | (976) | (1,025) | (1,089)
Shipping and handling | (545) | (602) | (605)
Advertising and promotion | (915) | (939) | (937)
Lease expense 1 | (223) | (227) | (225)
Other operational costs 2 | (2,963) | (2,804) | (2,948)
Other business income (expenses) | (6) | 76 | 55
Income from operations | 1,464 | 1,517 | 1,719
1 Lease expense includes EUR 32 million (2017: EUR 38 million, 2016: EUR 30 million) of other costs, such as fuel and electricity, and taxes to be paid and reimbursed to the lessor 2 Other operational costs contain items which are dissimilar in nature and individually insignificant in amount to disclose separately. These costs contain among others expenses for outsourcing services, mainly in IT and HR, 3rd party workers, consultants, warranty, patents, costs for travelling, external legal services and EUR 81 million government grants recognized in 2018 (2017: EUR 90 million, 2016: EUR 79 million). The grants mainly relate to research and development activities and business development. ##### Sales composition and disaggregation Philips Group Sales composition in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
Goods | 13,568 | 13,974 | 14,056
Services | 3,478 | 3,477 | 3,325
Royalties | 375 | 329 | 402
Total sales from contracts with customers |  |  | 17,784
Other sources 1 |  |  | 338
Sales | 17,422 | 17,780 | 18,121
1 Other sources mainly includes leases At 31 December 2018, the aggregate amount of the transaction price allocated to remaining performance obligations from a sale of goods and services was EUR 10,637 million. The company expects to recognize approximately 47% of the remaining performance obligations within 1 year. Revenue expected to be recognized beyond 1 year is mostly related to longer term customer service and software contracts. Philips Group Disaggregation of Sale per segment in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
| Total sales | Total sales | Sales at a point in time | Sales over time | Total sales from contracts with customers | Sales from other sources 1 | Total sales 2
Diagnosis & Treatment | 6,686 | 6,891 | 4,883 | 2,328 | 7,212 | 34 | 7,245
Connected Care & Health Informatics | 3,158 | 3,163 | 2,124 | 914 | 3,038 | 46 | 3,084
Personal Health | 7,099 | 7,310 | 6,952 | 18 | 6,969 | 258 | 7,228
Other | 479 | 416 | 310 | 254 | 564 | - | 564
Philips Group | 17,422 | 17,780 | 14,270 | 3,514 | 17,784 | 338 | 18,121
1 Sales from other sources mainly includes leases 2 Represents revenue from external customers as required by IFRS 8 Operating Segments. Philips Group Disaggregation of Sales per geographical cluster in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
| Total sales | Total sales | Sales at a point in time | Sales over time | Total sales from contracts with customers | Sales from other sources 1 | Total sales 2
Western Europe | 3,756 | 3,802 | 3,174 | 781 | 3,955 | 35 | 3,990
North America | 6,279 | 6,409 | 4,616 | 1,696 | 6,311 | 27 | 6,338
Other mature geographies | 1,792 | 1,707 | 1,280 | 339 | 1,619 | 273 | 1,892
Total mature geographies | 11,826 | 11,918 | 9,070 | 2,815 | 11,885 | 335 | 12,221
Growth geographies | 5,596 | 5,862 | 5,200 | 699 | 5,898 | 2 | 5,901
Sales | 17,422 | 17,780 | 14,270 | 3,514 | 17,784 | 338 | 18,121
1 Sales from other sources mainly includes leases 2 Represents revenue from external customers as required by IFRS 8 Operating Segments. ##### Costs of materials used Cost of materials used represents the inventory recognized in cost of sales. ##### Employee benefit expenses Philips Group Employee benefit expenses in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
Salaries and wages 1 | 4,422 | 4,856 | 4,849
Post-employment benefits costs | 279 | 347 | 351
Other social security and similar charges: |  |  |
- Required by law | 489 | 514 | 524
- Voluntary | 108 | 108 | 103
Employee benefit expenses | 5,298 | 5,824 | 5,827
1 Salaries and wages includes EUR 102 million (2017: EUR 122 million, 2016: EUR 95 million) of share-based compensation expenses. The employee benefit expenses relate to employees who are working on the payroll of Philips, both with permanent and temporary contracts. For further information on post-employment benefit costs, see Post-employment benefits. For details on the remuneration of the members of the Board of Management and the Supervisory Board, see Information on remuneration. ##### Employees The average number of employees by category is summarized as follows: Philips Group Employees in FTEs 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
Production | 27,899 | 27,697 | 30,774
Research & development | 9,087 | 9,787 | 10,700
Other | 24,565 | 26,314 | 26,175
Employees | 61,552 | 63,798 | 67,649
3rd party workers | 8,050 | 8,098 | 7,239
Continuing operations | 69,602 | 71,895 | 74,888
Discontinued operations | 43,971 | 43,497 |
Philips Group | 113,572 | 115,392 | 74,888
Employees consist of those persons working on the payroll of Philips and whose costs are reflected in the Employee benefit expenses table. 3rd party workers consist of personnel hired on a per-period basis, via external companies. Philips Group Employees per geographical location in FTEs 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
Netherlands | 11,199 | 11,308 | 11,427
Other countries | 58,403 | 60,587 | 63,460
Continuing operations | 69,602 | 71,895 | 74,888
Discontinued operations | 43,971 | 43,497 |
Philips Group | 113,572 | 115,392 | 74,888
##### Depreciation and amortization Depreciation of property, plant and equipment and amortization of intangible assets, including impairments, are as follows: Philips Group Depreciation and amortization 1 in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
Depreciation of property, plant and equipment | 458 | 437 | 438
Amortization of software | 49 | 50 | 64
Amortization of other intangible assets | 244 | 260 | 347
Amortization of development costs | 225 | 277 | 240
Depreciation and amortization | 976 | 1,025 | 1,089
1 Includes impairments; for impairment values please refer to Property, plant and equipment and Intangible assets excluding goodwill Depreciation of property, plant and equipment is primarily included in cost of sales. Amortization of the categories of other intangible assets are reported in selling expenses for brand names and customer relationships and are reported in cost of sales for technology based and other intangible assets. Amortization of development cost is included in research and development expenses. ##### Shipping and handling Shipping and handling costs are included in cost of sales and selling expenses in Consolidated statements of income. Further information on when costs are to be reported to cost of sales or selling expenses can be found in Significant accounting policies. ##### Advertising and promotion Advertising and promotion costs are included in selling expenses in Consolidated statements of income. ##### Audit fees The table below shows the fees attributable to the fiscal years 2016, 2017 and 2018 for services rendered by the respective Group auditors. Philips Group Agreed fees in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
| EY NL 1 | EY Network | Total | EY NL 1 | EY Network | Total | EY NL 1 | EY Network | Total
Audit fees | 8.8 | 9.6 | 18.4 | 9.0 | 8.9 | 17.9 | 6.5 | 4.9 | 11.3
-consolidated financial statements | 8.8 | 4.6 | 13.4 | 9.0 | 4.4 | 13.4 | 6.5 | 2.3 | 8.8
-statutory financial statements |  | 5 | 5.0 | 0.0 | 4.5 | 4.5 |  | 2.5 | 2.5
Audit-related fees 2 | 1.5 | 0.8 | 2.3 | 0.8 | 0.7 | 1.5 | 0.5 | 0.3 | 0.9
-Acquisitions and divestments | 0.8 | 0.1 | 0.9 | 0.0 | 0.0 | 0.0 |  |  |
-Sustainability assurance | 0.7 | 0.0 | 0.7 | 0.7 | 0.0 | 0.7 | 0.4 |  | 0.4
-Other |  | 0.7 | 0.7 | 0.1 | 0.7 | 0.8 | 0.1 | 0.3 | 0.5
Fees | 10.3 | 10.4 | 20.7 | 9.7 | 9.6 | 19.4 | 7.0 | 5.2 | 12.2
1 Ernst & Young Accountants LLP 2 Also known as Assurance fees ##### Other business income (expenses) Other business income (expenses) consists of the following: Philips Group Other business income (expenses) in millions of EUR 2016 - 2018
| 2016 | 2017 | 2018
--- | --- | --- | ---
Result on disposal of businesses: |  |  |
- income | 1 | 15 | 45
- expense | (4) | (5) | -
Result on disposal of fixed assets: |  |  |
- income | 4 | 96 | 20
- expense | (1) | (1) | (1)
Result on other remaining businesses: |  |  |
- income | 13 | 41 | 23
- expense | (17) | (62) | (32)
Impairment of goodwill 1 | (1) | (9) |
Other business income (expense) | (6) | 76 | 55
Total other business income | 17 | 152 | 88
Total other business expense | (23) | (76) | (33)
1 Further information on goodwill movement can be found in Goodwill The result on disposal of businesses was mainly due to divestment of non-strategic businesses. The result on disposal of fixed assets was mainly due to sale of real estate assets. The result on other remaining businesses mainly relates to non-core revenue and various legal matters.

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