Philips is to sell stakes in its flat screen television and semiconductor businesses to concentrate on more profitable lines.

Chief financial officer Pierre-Jean Sivignon said at the announcement of the firm's financial results, which showed profits up 22 per cent for the past quarter, that Philips is cutting its stake in its LG Philips flat screen joint venture with LG to below 20 per cent.

The firm is also aiming to sell off its semiconductor business, with its 8.1 per cent share in Taiwan Semiconductor Manufacturing, by 2010. In addition Philips is looking a buyer for its 19.9 per cent stake in NXP, Europe's third-largest chipmaker.

"We will be opportunistic. We have 19.9 per cent [of NXP], we have no lock-up clause, we're not in the driving seat on this particular one, but if there is an opportunity for the right price we might be interested in selling it," Sivignon told CNBC.

Instead the company will concentrate on its remaining consumer products businesses, the lighting market and expanding its medical equipment business.

It will also be amassing a war chest to go on an acquisition spree in the medical and lighting markets.

The firm has also spent over €500m filling up its pension scheme and will be buying back €400m of its own shares.