Algemene Vergadering van AandeelhoudersAlgemene Vergadering van AandeelhoudersKoninklijke Philips Electronics N.V.

31 maart 2011

Confidential Working Draft 1 13-01-2011

Annual General Meeting of ShareholdersAnnual General Meeting of ShareholdersRoyal Philips Electronics

March 31, 2011

Confidential Working Draft 1 13-01-2011

Important informationpForward-looking statements This document and the related oral presentation, including responses to questions following the presentation contain certain forward-looking statements withrespect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items, in particular the sections “Looking ahead” and “Outlook”. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future EBITA and future developments in our organic business. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements. These factors include but are not limited to domestic and global economic and business conditions, the successful implementation of our strategy and our ability to realize the benefits of this strategy, our ability to develop and market new products, changes in legislation, legal claims, changes in exchange and interest rates, changes in tax rates, pension costs and actuarial assumptions, raw materials and employee costs, our ability to identify and complete successful acquisitions and to integrate those acquisitions into our business, our ability to successfully exit certain businesses or restructure our operations, th t f t h l i l h liti l i d th d l t i t i h Phili t i d t lid ti d titi Athe rate of technological changes, political, economic and other developments in countries where Philips operates, industry consolidation and competition. As a result, Philips’ actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see the Risk management chapter included in our Annual Report 2010 and our Annual Report on Form 20-F filed with the U.S. Securities and Exchange Commission (the “SEC”), which is available on the SEC’s website at www.sec.gov.

Third-party market share dataStatements regarding market share including those regarding Philips’ competitive position contained in this document are based on outside sources such asStatements regarding market share, including those regarding Philips competitive position, contained in this document are based on outside sources such as research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Philips, those statements may also be based on estimates and projections prepared by outside sources or management. Rankings are based on sales unless otherwise stated.

Use of non-GAAP InformationIn presenting and discussing the Philips Group’s financial position, operating results and cash flows, management uses certain non-GAAP financial measures. These non-GAAP financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measures and should be used in conjunction with the most directly comparable IFRS measures A reconciliation of such measures to the most directly comparable IFRS measures isconjunction with the most directly comparable IFRS measures. A reconciliation of such measures to the most directly comparable IFRS measures is contained in this document. Further information on non-GAAP measures can be found in our Annual Report 2010.

Use of fair-value measurementsIn presenting the Philips Group’s financial position, fair values are used for the measurement of various items in accordance with the applicable accounting standards. These fair values are based on market prices, where available, and are obtained from sources that are deemed to be reliable. Readers are cautioned that these values are subject to changes over time and are only valid at the balance sheet date. When quoted prices do not exist, we estimated the fair values using appropriate valuation models and when observable market data are not available we used unobservable inputs They require managementfair values using appropriate valuation models, and when observable market data are not available, we used unobservable inputs. They require management to make significant assumptions with respect to future developments, which are inherently uncertain and may therefore deviate from actual developments. Critical assumptions used are disclosed in our 2010 financial statements. Independent valuations may have been obtained to support management’s determination of fair values.

All amounts in millions of euro’s unless otherwise stated; data included are unaudited. Financial reporting is in accordance with IFRS, unless otherwise stated. This document comprises regulated information within the meaning of the Dutch Financial Markets Supervision Act ‘Wet op het Financieel Toezicht’.

2010: Ready for a successful future y

• Building on our legacy: Philips in its 120th year

• Vision 2015 strategic plan launched

• Philips is well positioned to respond to fast-changing market conditions

• Seamless transition to new management

Balanced portfoliopProfound shift towards health and well-being

2%

We have fundamentally simplified our business portfolio, investing proceeds from disposals in our Healthcare, Consumer Lifestyle and Lighting businesses

8%

13%16%

5% Healthcare

Lighting

Consumer Lifestyle1 34%36%

12%Components

Semiconductors

2000actual

sales split

Last 12 months

Sept ’102010actual

sales split

44%Origin IT Services

Other 30%

1 Consumer Lifestyle in 2000 includes the former DAP and Consumer Electronics divisions 6

Leveraging global trends

The rise of emerging markets

Aging population

7

Increased consumer empowerment and

sustainable lifestyles

Climate change and sustainable development

Strength in brand and emerging markets

Emerging markets 33% of sales Vision 2015 target of at least 40% by 2015

Worldwide leaderWorldwide leader in nearly two-thirds of our product-market combinations (measured by NPS)1

Brand value doubled since 2004Brand value doubled since 2004• 7% increase in 2010 ($ 8.7billion)• nearly 60% of brand value generated by

professional businesses and brand strength in consumer health and wellness businesses

High corporate brand equity in fast growing markets2

Consistently among the top-ranking players:

888Placeholder image

India: top 10%, China: top 10%, Brazil: top 10%

1 (Co)Leadership is defined as outperforming (>5%) or on par with best competitor, globally or regionally2 Source: Consumer Heart BEAT brand equity study 2010

8

Sustainability as a driver for growthy g

Accelerating sustainable business• Green Product sales represented around 38%

of sales in 2010, up from 31% in 2009• Investment of EUR 2 billion on Green

Innovation across three sectors by 2015

EcoVision5 targets for 2010 – 2015EcoVision5 targets for 2010 2015• Bringing care to more than 500 million people• Improving the energy efficiency of Philips

overall portfolio by 50%• Doubling the global collection and recycling g g y g

amounts of our products, as well as double the amount of recycled materials in our products

999

Philips peoplep p pHigh engagement driving productivity

Phili b fit fE l E t I dHigh performance benchmark

Philips benefits from:

A strong leadership team

Employee Engagement Index

75

69A highly engaged workforce

Productivity per employee increased by 20% year on year

69

64

61

68

increased by 20% year on year6159

20102005 2006 2007 2008 2009

Philips at high performance normTh 2010 ‘ l t i d ’ lli

10

The 2010 ‘employee engagement index’ polling over 90,000 of the Philips workforce showed we are amongst the world’s top-ranking companies

2010 PerformanceGroup summary results

Amounts in EUR millions 2009 2010

Sales1 23,189 25,419

EBITA 1,050 2,552, ,

EBITA % 4.5% 10.0%

Adjusted EBITA 1,474 2,666Adjusted EBITA 1,474 2,666

Adjusted EBITA % 6.4% 10.5%

Net income 424 1 452Net income 424 1,452

Return on Invested Capital 4.0% 11.7%

Free Cash Flow 863 1 333Free Cash Flow 863 1,333

111 Indicates nominal sales

The power of Healthcarep

26%

Total sales EUR 2.5 billion

8%66%

1999 Total sales EUR 8.6 billion

26%

39%

2010

21%

14%

Imaging

Customer Service

Patient Care andPatient Care and Clinical Informatics

Home Healthcare Solutions

The power of Consumer Lifestylep y

1% 8%10%

1%Total sales EUR 11.3 billion1

51%

27%

2%1%

7%

Total sales EUR 8.9 billion2000

36%13%

Domestic appliances

Personal Care 2010

13%10%4%

17%Health & wellness

Television

Audio & video multimediaAudio & video multimedia

Accessories

Other incl. Licenses1 DAP and Mainstream part of Consumer Electronics only

The power of Lightingp g g

19%

8%

Total sales EUR 4.9 billion1

73%

19%

8%

Total sales EUR 7.6 billion2000

51%28%

6%

2010

7%

28%Lamps & lighting electronics

Professional luminaires

Consumer luminaires

Automotive

Packaged LEDs1 Excluding batteries EUR 0.2 billion

Management agenda 2010g gThe leading company in health and well-being

Implement strategy

Increase our market position

Drive performance

Drive top line growth and

Accelerate change

Increase customer centricity Increase our market position in emerging markets

Drive key strategy initiatives for each sector

Drive top-line growth and market share

Continue to reduce costs and improve cost agility

Increase customer centricity by empowering local markets and customer facing staff

Increase number of Move towards leadership position in imagingGrow Home HealthcareGrow Health and WellnessManage TV to profitability

Further increase cash flow by managing cash aggressively

businesses with NPS co/leadership positions

Increase employee engagement to high Manage TV to profitability

Become lighting solutions leader in outdoorGrow consumer luminairesOptimize lamps lifecycle

engagement to high performance level

Leverage Sustainability as an integral part of our strategy

15

Dividend more than doubled in the last decade

0 7511

EUR cents per share 1

0.60

0.70 0.70 0.700.75

0.300.36 0.36 0.36 0.36

0.400.44

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

“Our aim is to sustainably grow our dividend over time. Philips’ present dividend policy is based on an annual pay-out ratio of 40% to 50% of continuing net income.”

1 Elective dividend, proposal subject to approval in the General Shareholders Meeting on March 31st 2011 16

Total Return to Shareholders

3 year: 2007- 2010 1 year: 2010

ELECTROLUX

SCHNEIDER

HITACHI

SIEMENS

3 year: 2007- 2010 1 year: 2010

EMERSON

3M

JOHNSON & JOHNSON

ELECTROLUX

SCHNEIDER

HONEYWELL

HONEYWELL

SIEMENS

PHILIPS

EMERSON

GENERAL ELECTRIC

PHILIPS

HITACHIMOTOROLAERICSSONNEC CORPSANYO

TOSHIBA

HITACHI

PANASONIC

3M

JOHNSON & JOHNSON

PANASONIC

17

-50% 0% 50% 100%

GENERAL ELECTRIC

-50% 0% 50% 100%

TOSHIBA

Vision 2015Our ambition

Philips wants to be a global leader inhealth and well-being, g,

becoming the preferred brandin the majority of our chosen markets. j y

We believe Philips is uniquely positioned forgrowth through its ability to simply make ag g y p y

difference to people’s lives with meaningful, sustainable innovations.

Vision 2015Outlining four key priorities

• Expand leadership positions while benefiting from markets growing faster than GDP

• Be the preferred brand in the majority of our chosen markets

• Lead in sustainability

• Be seen by all stakeholders as making a positive diff i l ’ lidifference in people’s lives

19

We expect our markets to grow faster than GDP3p gMost growth expected to come in lighting and healthcare markets

We expect our markets to grow faster than GDP… …translating into expected market growth per sector…

Growth1 of markets in which Philips participates vs. nominal GDP growth

30%

100%

market growth per sector…

CAGR5 % 2010-2015

10%

12%

14%

~ 20%

~ 30%

4%

6%

8%

~ 50%

Market size growth2

0%

2%

Western Europe

North America

BIC World Consumer Lifestyle

Healthcare4

1. Excluding TV/AVM2. Based on internal analysis

gNominal GDP3

Lighting

20

3. Nominal GDP growth, EIU estimates4. Brazil, India, China5. CAGR: Compound Annual Growth Rate

Management agenda 2011g gAccelerate growth to achieve Vision 2015

Drive performance

• Make the turn to faster

Improve capabilities

• Champion customer

Implement strategy

• Strengthen and grow inMake the turn to faster growth and gain market share

• Deliver on financial

Champion customer responsiveness and adopt culture of growth

• Improve speed and

Strengthen and grow in all emerging markets -make China a “home” market

Deliver on financial returns

• Deliver on our Ecovisionsustainability

Improve speed and execution to market

• “Resource to win” now to ensure to achieve Vision

• Execute “must win” strategic battles in key business-market combinationssustainability

commitmentsensure to achieve Vision 2015

combinations

• Pursue value-creating acquisitions and invest in growth to strengthen our

21

growth to strengthen our portfolio

Becoming a global leader in health and well-beingHealthcare Lighting &

g g g

2010

Healthcare, Lighting & Consumer Lifestyle

Leading in health and well-being

Leading in health and well-being

Vision 2015

2007 Healthcare, Lifestyle

g gVision 2010

T d O Phili

y& Technology

2001

Towards One Philips

High Volume

22

High Volume Electronics

23