The chief executive of Philips has warned that the company will not shirk from implementing further cost-cutting measures in light of today’s modest second quarter results.

The company reported an improved EBITA margin before €148m (£128m) restructuring charges compared with quarter 1 in all business sectors.

Overall sales were down 19 per cent year-on-year, which Philips attributed to continuing weaknesses in consumer and professional markets. Healthcare sales showed a year-on-year decline but also an increase compared with quarter 1, supported by modest growth outside the US.

Ongoing asset management leaves the company with a strong free cash flow of €251m.

Gerard Kleisterlee, president and chief executive of Royal Philips Electronics, said: ‘In line with earlier guidance, we did not see a material improvement in consumer or professional markets in the past three months. However, while the pressure on our top line persisted, we are reporting a positive net income and improved underlying profitability over the quarter.

‘During the quarter we started to see the positive impact of our strict cost management on our results, while continuing to focus on making Philips more efficient. I’m especially pleased that our rigorous focus on cash is increasingly paying off, highlighted by the fact that cash inflow from operations in the second quarter more than doubled due to lower working capital requirements. At the same time we continued making strategic investments to strengthen our company for the medium and long term.

‘We remain cautious about the overall economy and the markets we’re operating in and will not shy away from implementing further cost measures where needed.’