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The return to profitability by Dutch electronics giant Philips is proof that the arduous “Operation Centurion” restructuring program is working, the company said last week.

At a press conference announcing a 140% jump in net profits last year to 2.05 billion guilders ($1.24 billion) from 856 million guilders ($519 million), Philips’ executive VP Dudley Eustace said the Centurion program begun in 1990 had succeeded in “cleaning house.”

The priority for the scaled-back company, now profitable in almost all its territories, was “to batten down the hatches and successfully manage growth…. We will proceed with caution, but without losing that flair and dynamism that’s required for marketing.”

Eustace praised the record net profits of Philips’ film and music division, Polygram, and predicted software would become “an increasingly important revenue stream” for the company. “Hardware margins are really not enough to grow as a company,” he said.

Eustace said much of Polygram’s success can be attributed to Philips’ belief in a “hands-off” management policy. “The management style within a software company is totally different to that of hardware. The only real interface with them is at the highest level,” he said.

Philips president Jan Timmer, who denied rumors that he is considering resigning during the next year, said that in 1994, “Virtually all divisions recorded growth in sales and improvement in income despite continuing downward price pressures and a slow recovery of the European economies.”

After a period of losses, the 1994 results “confirm Philips is once again a profitable company,” Timmer said.