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UPDATE 3-Philips names Asia background cost-cutter new CFO

Published 11/29/2010, 12:09 PM

* Healthcare CFO Ron Wirahadiraksa takes over on March 31

* Healthcare unit cut jobs in 2008-2009 under Wirahadiraksa

* LG.Philips fined for price fixing when Wirahadiraksa CFO

* Current CFO going, new appointment surprises analysts

* Shares down 3.9 percent vs 2 percent fall of AEX index

(Adds LG.Philips price fixing; Philips, analyst comment; updates shares)

By Gilbert Kreijger

AMSTERDAM, Nov 29 (Reuters) - Philips named a healthcare executive with extensive Asian and restructuring experience as its new chief financial officer in a surprise move that gives Philips a new top duo to revamp its consumer unit.

Ron Wirahadiraksa, 50, a Dutch-Indonesian who spent several years working at a Philips' business in South Korea, has been CFO at Philips' healthcare unit since 2008.

During that time, healthcare and other Philips' divisions cut several thousand jobs in response to the global economic downturn in 2008-2009, and analysts expect further restructuring, including the sale of television and other consumer businesses.

Wirahadiraksa's appointment marks the second senior management change in the company in recent months and highlights the growing emphasis on the healthcare division at Philips, which is the world's third-largest hospital equipment maker after U.S.-listed General Electric and Germany's Siemens. Restructuring expert Frans van Houten will take over as chief executive at Philips on April 1.

Wirahadiraksa, a Dutch citizen with Indonesian roots, will take on the job as group CFO from March 31.

South Korea's LG.Philips LCD, now LG Display and where Wirahadiraksa was CFO from 1999-2008 plead guilty two years ago to a global price fixing scheme between 2001 and 2006 in a U.S. Justice Department case and paid $400 million in fines.

The European Commission also started an investigation in 2006 into suspected price-fixing on LCD panels.

"This case involves LG.Philips LCD and not Philips. The appointment of Mr. Wirahadiraksa as CFO is clearly a signal of the company's confidence in him," a Philips spokesman said.

Philips shares ended down 3.9 percent at 21.175 euros by 1616 GMT, lagging an Amsterdam blue chip index which was down 2 percent.

CONSUMER ELECTRONICS

The Dutch company has been struggling with sluggish sales at its consumer electronics unit, which sells toasters, shavers and TVs, and there has been talk it may have to abandon its three-pillar strategy -- of healthcare, consumer electronics and lighting -- given the limited synergies.

"The shortfall in revenue growth that Philips had to report in the second half of this year is an eye opener, as it shows that consumer electronics is still a problem area," SNS Securities analyst Victor Bareno said in a note ahead of Philips' investor day on consumer products on Dec. 1. "We expect this will trigger Philips to accelerate the exit strategy for these activities," Bareno said.

ING analyst Sjoerd Ummels said he expected Philips, which has already been outsourcing some TV production operations, to focus its consumer products on healthcare and personal care but did not think Philips would be breaking up soon.

"There is investor pressure for operational improvement and growth. This is what new management will have to realise. If this does not materialise in two years' time, shareholder pressure will rise," Ummels said.

Wirahadiraksa, who started at Philips in 1987, could help Philips grow in Asia thanks to his experience in the region and his Indonesian background, Ummels said.

Wirahadiraksa helped lead the initial public offering of LG.Philips LCD on the Korean and New York Stock exchanges in 2004, Philips said in a statement.

Philips said the resignation of current CFO, Pierre-Jean Sivignon, whose term was until 2013, was for personal reasons and he would pursue his career outside the firm.

The news surprised outsiders.

"As a company you don't want your CEO and CFO to leave at the same time. That is bad planning," Jos Versteeg, analyst at Theodoor Gilissen, said. (Reporting by Gilbert Kreijger; Editing by Matthew Jones and Karen Foster)

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