Philips is building the leading company in health and well-being. We need to define and articulate to the world, and our employees, exactly how we will compete and become a global leader in health and well-being.To articulate effectively, we need targeted and consistent messaging to our key stakeholder groups. This presentation is a key component of this communication effort. It is a general presentation intended to be given by members of Philips senior management and is targeted to a general audience.

It is created to be engaging and impactful. Speaker notes are included and should be utilized as they will enable the speaker to deliver the presentation in the most effective and engaging way possible. If you have questions please contact Philips Corporate Communications.

Key messages of the presentation are:

WhoPhilips a global company of leading businessesWhatWinning now and in the future by repeatedly developing meaningful innovations based on unique user insightsWhere In the space of health and well-beingHowBy putting our brand promise sense and simplicity into practicePhilips company general presentation*

*Building the leading company in health and well-being

An introduction to Philips

*

*A global company of leading businesses creating value with meaningful innovationsthat improve peopleshealth and well-being

*If I had to describe Philips in a single sentence, I would say it is a global company of leading businesses

creating value with meaningful innovations that improve peoples health and well-being.

Thats a very general description, but in the next 30 minutes or so, I hope to give you a taste of what this means in practice.

*Health and well-beingWhat do we mean by this?A commitment to: healthy, fulfilled livesour communities and societiesour world

*What do we actually mean by our scope of Health and Well-being ?We mean that we want to help people live a healthy, fulfilled life.

But our focus extends beyond the individual: it reflects our commitment to the sustainability of our communities, our societies, our world.

*Meaningful innovationsWhat do we mean by this?

improving peoples livesgoing beyond technologyintroduced at the right time

*A key phrase in this description is meaningful innovations. What do we mean by that? We mean new ideas, new approaches, new solutions that make lives simpler, more enjoyable, more productive in professional as well as personal environments.meaningful innovations are ones which deliver on our brand promise of sense and simplicity. With meaningful innovation we also mean that they are driven by user needs, not by technology per se. Innovation can also be a new experience, a new design, a new business model. Meaningful also means that innovations are well timed and introduced when they really make sense.

*The world needs meaningful innovations to respond to todays dramatic global changes

*We believe that these meaningful innovations are going to become increasingly important. They will help people meet the dramatic global challenges that were all going to be facing in the coming decades.

**Aging populationsWithout changes to the healthcare system, 25% of the working population would be needed to provide todays level of care by 2040* (*for a typical western healthcare system)

**Take for instance aging populations.

Its expected that within 40 years, one in every four people will be over 60; more us us are going to get ill: Without changes to the healthcare system, 25% of the working population would be needed to provide todays level of care by 2040* (*for a typical western healthcare system).

The number of people aged over 60 will double from 500m today to 1 billion by 2015.

**Globalization and the rise of emerging marketsEmerging markets already produce 28% of global GDP

**At the same time, globalization and urbanization will continue to change the places and communities we live and work in.

The world economic scene will also change, as the markets we currently describe as emerging take on an even more central role.

They already produce 28% of global GDP (gross domestic product).

99% of future population growth will be in emerging markets

Emerging economies are expected to account for 2/3rd of global GDP by 2016

**Empowered consumersCompanies need to find new ways of gaining business

**And as companies from all corners of the world compete ever more strongly for business, consumers will become increasingly empowered. Consumers are also increasingly focused on their Health and Well-being and look for products that fit their lifestyle.

Theyll be able to pick and choose.

So companies like Philips will have to work even harder for their business.

And the only way well be able to do this successfully is to give customers and consumers exactly what they want and need.

**Climate change and sustainable developmentAlmost one-fifth of global electricity consumption is used for lighting

**And then theres climate change, of course.

As we know, this is going to force us all to make changes if were to achieve sustainable development.

But we are already taking advantage of the opportunities that are out there.

For instance, almost one-fifth of global electricity consumption is used for commercial and domestic lighting.

But did you know that, right now, we could almost cut this figure in half* simply by replacing existing lamps with energy-saving ones and wed be improving the quality of the light, too! (*actual figure: 12%).

19% of global electricity consumption is used for lighting; Energy efficient lighting can save 40%...or 600 power stations worth of energy

an opportunity to work togetherto improve the quality of peoples lives and live our brand promise

Energy efficiency

Personalized experiences

Personal well-being

Homecare, independent living

Better healthcare for all, at lower cost

*The challenges we are facing are tough, but we see such challenges as an opportunity an opportunity to work together with others to improve the quality of peoples lives. We are already delivering on our brand promise of sense and simplicity in a range of areas covering professional, environmental as well as personal realms:

- Energy efficiency- Personalized experiences- Personal well-being- Home care, independent living - and better healthcare for all at lower cost

*sense and simplicityWhat do we mean by this?

advancedeasy to usedesigned around you

*Lets pause just a moment on our brand promise.

Weve mentioned it several times, but it really does drive what we do.Our brand promise of sense and simplicity is a promise we make to all our stakeholders. It encapsulates our commitment to deliver solutions that are

advancedeasy to useand designed around the needs of all our users.

*Putting sense and simplicity into practice in health and well-being

*OK, you say, thats good fighting talk. But actions speak louder than words. Show us what youve been doing so far. Show us how youve been putting this into practice. I want to show you now 3 examples of how our brand promise drives our activities.

What these examples all have in common is that theyre based on what people told us.

To find out what was meaningful to them, we listened carefully to their concerns, their wishes, their aspirations. And then we developed something that would give them what they wanted in a way that was easy for them. In other words, we took our brand promise sense and simplicity seriously.

Has anyone in your family ever died of a heart attack or stroke?

It wouldnt be surprising, because its the No. 1 cause of death in the world, for both men and women. And the best way of surviving an attack is to get treatment as fast as possible. *

*

From the onset of a heart attack to the start of treatment, speed is vital every second countsParamedic

**From the onset of a heart attack to the start of treatment, speed is vital every second counts.Many older people have told us that theyre worried that if their partner were to have a heart attack, they might die just because they didnt get treatment in time.

*

CardiologistHow can we shorten the time to treatment?

**And cardiologists and neurologists have told us that one of their main professional goals is to shorten the time between when a heart attack or stroke occurs and the moment they can start treatment.

*Meaningful innovationIts thanks to HeartStart that Im still here. I feel Ive been given a second chance to raise my kids

Most widely recognized and recommended cardiac emergency response device worldwide

Part of a complete discovery to treatment solution

Philips HeartStart MRx helps cut time to treatment by transmitting vital ECG data directly from the ambulance en route to the hospital.

**Insights like these led us to look at the whole emergency care cycle for cardiac patients from a new angle, looking not so much at how fast we can get the patient to hospital, but how fast we can, in effect, get the hospital to the patient.

What doctors need first is information about the patients condition.

So we came up with a highly portable defibrillator HeartStart MRx.

It cuts down time-to-treatment by transmitting vital ECG data directly from the ambulance en route to the hospital.

Today, HeartStart is the most widely recognized and recommended cardiac emergency response device in the world, and has helped make us the global No. 1 in patient monitoring.In the meantime, weve made HeartStart part of a total discovery to treatment solution.

.On a more everyday level, weve also been listening to people talk about a more common problem.

I wonder how many of you just love it when the alarm clock goes off on a cold, dark winter morning

Well, I can tell you, a lot of people told us they hate it! *

*

I hate waking up on dark winter mornings: I feel tired, lethargic and a bit downCommon complaint

**They feel tired, lethargic and even a bit down

*

Common complaintWhy cant I always wake up like I do in summer?

** so different from summer, when they wake up easily and with lots of energy.

*

ExpertsIts all to do with the intensity of light before we wake up

**Clinicians have told us that theres actually a scientific basis for that summertime feeling. Its all to do with the intensity of the light in the room before we wake up. Gradually increasing the level of light just 30 minutes before you wake up boosts energy levels and makes people more alert.

*Meaningful innovationBy emitting light that simulates the rising sun in your bedroom, Philips wake-up light gently prepares your body to wake up.I immediately noticed a difference it feels just like waking up naturally

9 out of 10 consumers say it wakes them up pleasantly

Sales exceeded expectations by 42%

Customers No. 1 preferred product in its category

**Well, we thought, thats worth knowing! And armed with that information, we set ourselves the task of creating a light that gradually gets brighter just like the rising sun. The result was the Wake-Up Light. This emits light in a way that simulates the rising sun in your bedroom, and gently prepares your body to wake up.

Its been a big success: 9 out of 10 people who have one say it wakes them up pleasantly,and sales have exceeded expectations by 42%.

Its also customers No. 1 preferred product in its category.

Our third example looks at how millions of people around the world spend most of their daylight hours working in offices lit by artificial light. *

*

Office workerMy office lighting is so harsh and cold. I wish I could change it

**If you ask them, many have told us they feel that their office lighting is harsh and cold.

Theyd love to be able to change it, depending on the light conditions outside and what theyre doing - focused light for reading documents or for detailed manual work,- or subdued lighting, for working at a computer screen or just relaxing.

*

ResearcherLight tone and intensity has profound effects on the energy levels of human-beings

**Our researchers told us the way natural light varies in intensity and color during the day affects how people feel, and can have a positive effect on mood.

*

Building ownerTo attract and retain good tenants I need flexible, high-quality spaces

**And we also talked to owners of office buildings. They told us that to attract and retain good tenants, they need office spaces to be flexible and of high quality.

*Meaningful innovationUsing the new possibilities offered by LED lighting, DayWave enables people to create an inspiring, enjoyable office environment by varying the color and intensity of lighting to suit their mood and activity.

**Taking all this on board, we looked at how we could create a more natural working environment, one in which the light can be infinitely varied.

The result was DayWave. This office lighting system uses the new possibilities offered by LED lighting: it enables you to create an inspiring, enjoyable office environment easily just by varying the color and intensity of the lighting to suit your how you feel or what you are doing.

DayWave is still very new, but its already turning out to be very successful. Its really popular with office staff, and its been acclaimed in the professional media for its innovative use of LED technology and its unique design.

Philips the business*

I hope Ive now given you a good idea of what we do, why we do it, and how we do it. As Ive mentioned earlier, we focus on Health and Well-being.But were also very clearly in business to create value for our shareholders.

Founded in 1891Headquartered in Amsterdam, the Netherlands

Sales over EUR 23 billion (USD 32 billion) 32% in emerging economies

118,000 employeesSales and service outlets in over 100 countries Globally recognized brand (world top 50)Our brand value doubled to $8.7bln since 2004

1.6 billion investment in R&D, 7% of sales48,000 patent rights 35,000 registered trademarks 56,000 design rightsA well-respected, blue-chip company for over 100 years

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6*Our focus on Health and Well-being Our portfolio leverages critical global trends

Rise of emerging marketsAging populationIncreased consumer empowerment and sustainable lifestylesClimate change and sustainable development

*

*

HealthcareOur health and well-being offer is powered by three sectorsConsumer LifestyleLighting

*Lets now look at how our health and well-being offer is powered by our three sectors:Healthcare, Consumer Lifestyle, Lighting

**HealthcareGiving people the best healthcare possible

**Id now like to take a closer look at todays innovations.

We aim to give people the best healthcare possible.

That means we put people the patient and the healthcare professional at the center of things.

Were dedicated to understanding the challenges people face and helping them overcome them every day.

We strive to improve the quality of peoples lives and continue raising the bar on clinical excellence at lower cost. Because healthcare simplified means improving healthcare for everyone.

People focused. Healthcare simplified.HealthcareGiving people the best healthcare possible

*

Of course, healthcare is a big field, and we obviously cant do everything. So we concentrate on combating some of todays most deadly and debilitating diseases, especially in the fields of cardiology, oncology, critical care and womens healthcare.

People focused. Healthcare simplified.Our approach, you will remember, is to try to simplify things for our customers in hospitals and clinics, as well as their patients: We are dedicated to understanding their challenges, and helping them overcome them.

At the same time, we know that healthcare professionals are always aiming to raise the bar on clinical excellence, while not raising and in fact preferably lowering the cost!Healthcare simplified means better healthcare for everyone.

Clinical care systemsGlobal market leadership for automated external defibrillators

Home healthcare solutionsNo.1 provider of personal emergency response services in the US

Patient monitoringLeadership position offering significant reduction in mortality and length of stay in ICUs equipped with VISICU eICU

Imaging systemsCardiovascular X-ray is no.1 in overall manufacturing satisfaction

Customer servicesNo.1 in service performance in patient monitoring systems and ultrasound

The power of HealthcareFurther strengthening our global leadership

*In Healthcare, for instance, weve further strengthening our leadership positions in a number of key areas across the care cycle essentially, from prevention to cure (or long-term disease management) youll find a leading Philips solution. We are the global market leader in automated external defibrillators.

We talked earlier about aging populations: well, in the US, under the name Lifeline, were the No. 1 provider of personal emergency response services, especially for older people.

Were also a leader in patient monitoring in intensive care units. Our VISICU eICU solution provides a sort of air-traffic-control service to guide hospital staff at a distance ideal when there are too few staff. This not only significantly cuts patient mortality rates in Intensive Care, it also substantially reduces costly stays in intensive care units.

Our cardiovascular X-ray solutions are ranked No. 1 in overall manufacturing satisfaction,

and were also number one in service performance for patient monitoring systems and ultrasound.

**Consumer Lifestyle Making a difference to the way people live their lives

**Lets now take a look at our latest work from Consumer Lifestyle.First of all, though, what do we mean by Lifestyle?

Living well, looking good and feeling great

Enhancing the home

Sharing life's experiences with family and friends

Enabling people to live healthier,more enjoyable and more rewarding lifestylesConsumer LifestyleMaking a difference to the way people live their lives

*

Well, to us lifestyle is about making a difference to the way people live their lives.

Its about living well, looking good and feeling great.

Its about enhancing the home, and sharing life's experiences with family and friends.

And it's about enabling people to live healthier, more enjoyable and more rewarding lifestyles.

The power of Consumer Lifestyle Focusing on differentiating leading businessesMother and childcarePhilips AVENT is market leader. Its feeding bottles have been clinically proven to reduce colic*

*At 2 weeks of age, babies fed with the AVENT bottle experienced less colic than babies fed with a conventional bottle

Male electric shavingNo.1, with every second shaver in the world being a Philips shaver

Power toothbrushesPhilips Sonicare is the no.1 recommended sonic toothbrush brand by dental professionals worldwide

Domestic appliancesOver one million healthy living aluminum Juicers sold since launch

TVsPhilips invented the successful ambilight flat TV concept

*Moving from life saving to life enhancing, our Consumer Lifestyle sector has also produced some top innovations over the past few years, as is continues its focus on differentiating profitable businesses.

In our Philips Avent Mother and Childcare business, for instance, weve developed the only feeding bottle to be clinically proven to reduce colic. (*At 2 weeks of age, babies fed with the AVENT bottle experienced less colic than babies fed with a conventional bottle

We continue to be the world leader in electric shaving, and have sold more than half a billion electric shavers so far making every 2nd shaver a Philips shaver!

Our Sonicare toothbrush has been impressing consumers worldwide. Today, its the No. 1 power toothbrush recommended by dentists.

We are also market leader in kitchen appliances take our healthy living aluminum Juicer, more than one million have been sold since its launch!

**LightingSimply enhancing life with light

**Light and lighting is extremely important to the quality of peoples lives.

It determines our mood, it extends our vision so that we can do things at times and in places that were once impossible and its important to our safety. But it also requires energy energy that we need to conserve as much as possible.

Innovating new lighting solutions based on proven consumer insights.

Global leader in sustainable lighting projects for cities, offices, workplaces and homes.

New business areas (e.g. solid-state lighting) provide energy-efficient solutions that reduce lightings environmental impact.LightingSimply enhancing life with light

*

We are innovating in new lighting solutions that are based on proven consumer insights.

At the same time, were continuously looking for advanced solutions that have minimal environmental cost, making us the global leader in sustainable lighting projects for cities, offices, workplaces and homes.

New solid-state lighting technologies are key to this.

LampsMarket leader: 1 out of every 4 lamps used worldwide is a Philips lamp Professional luminaires No.1 lighting 65% of worlds top airports and 30% of offices, hospitals and landmarks

Consumer luminairesMarket leader and front runner in driving the switch to energy efficient lighting

LED applicationsStrong presence across the complete solid state lighting chain

Automotive lighting Leads the market, with one-in-three cars worldwide using Philips automotive lightingThe power of LightingFurther strengthening our global leadership

*Finally, we have some equally impressive statistics in our Lighting sector. Did you know, for example, that: 1 in every 4 lamps worldwide is a Philips lamp?

65% of the worlds top airports and 30% of offices, hospitals and landmarks are lit by Philips?

Our energy-saving lamps use 80% less energy and last longer than ordinary lamps?

Philips Lumiled Lighting is the world leader in high-power LEDs?

And you probably dont know it, but a third of you sitting in this room are likely to have Philips lamps in your car headlights.

All these business sectors are No.1 in their markets!

Whats more, 31% of Philips Lightings sales come from emerging markets. Were No. 1 in lighting in China. Were extending our distribution network there by adding 35 outlets a day!

Sustainability*Innovation processWhat makes us differentDriven by our brand promise sense and simplicityPhilips peopleCustomer relationshipsLeadership positionsEmerging Markets

*Youve seen now something of what we do at Philips. But how do we do what we do?To answer that question, let me take you behind the scenes

...Id say it lies in three things, all of which are driven by our brand promise.

First, our repeatable, rigorous process to create meaningful innovations

Second, our relationships with our customers, which leads to customer loyalty, a key factor in promoting growth and profitability

And third, the quality of our people our highly engaged team.

Gain deep insights into peoples needs and aspirations by following a process requiring end-user input at every stage

Transform insights into innovations by combining the diverse perspectives of different disciplines

Learn fast, fail cheap by applying a rigorous process to assess value potential early

Lead in open innovation by working closely together with partners in a spirit of open innovationCreating meaningful innovationsImproving lives in new ways

*

We have established an innovation process which enables us to create meaningful innovation, time after time.

We do this by gaining deep insights into peoples needs and aspirations; end-user input is required at every stage of the process.

Our marketers, designers and R&D scientists then work together, sometimes with external specialists, to transform these insights into meaningful innovations - so that we can enrich lives in new ways.

The process has rigorous steps to assess value potential and enable early decision making - Learn fast, fail cheap - Over 30% of our solutions taken forward to the market are in the top 20% of industry benchmarks.

And by working closely together with partners, we can lead in a spirit of open innovation.

All this means that our meaningful innovations are not just plucked from the air; theyre not the product of an individual mind. Theyre the product of teamwork and a well-defined creative process.

That means theyre not one-off events, lucky hits. On the contrary: they can be generated one after the other, in a continuous stream and you have seen examples of this today.

Close customer relationshipsCreating promoters of our brand*

Customer loyalty is fundamental to growth and profitability

We win the trust of customers and partnersby understanding and anticipating their needsby sharing our insights by providing the right products and solutions

We monitor our effectiveness with the Net Promoter Score based on a simple question: would you recommend us to a friend or colleague?

Customer loyalty is fundamental to growth and profitability.

To win the trust of our customers and partners we follow processes to understand and anticipate their needsTo monitor our effectiveness we use a simple and highly effective method, the Net Promoter Score, to measure our success in building strong, customer-centric relationships.

Essentially, this involves asking customers one simple question: How likely is it you would you recommend this company/product to a friend or colleague?

You can follow this up with further questions or contact, which in turn can lead to key customer insights that will help us guide our business better and improve our relationships with our customers.

The end result, if we do it right, is that we win promoters for our company and our brand.

**Philips peopleStrong leadership, heading a highly engaged workforceA strong leadership teamformed by diverse top-60 leaders who focus on managing the current downturn while building the business for future wins

We live our company values Delight customers Develop people Deliver great results Depend on each other

A competitive advantagecreated by a proven, highly engaged workforce

An eye on the leaders of tomorrowby nurturing all talent in line with our strategies we optimize performance, and offer fast-track, stretch opportunities for top talent

**At Philips we view leadership as a catalystto achieve business ambitionsto drive organizational capabilities and to drive engagement

It is therefore key that we have our strong leadership team it is formed by diverse top-60 leaders. They focus on managing the current economic downturn while building the business for future wins.

We also believe living our Company values is key to helping accelerate Philips growth journey and to this effect we are judged by how we achieve, as well as what we achieve.

It is proven that an engaged workforce is a competitive advantage. We are currently successfully working towards high performance norms in our measurements of employee engagement this year.

And, by nurturing all talent in line with our strategies, we optimize individual performance, and offer fast-track, stretch opportunities for top talent as we prepare our leaders of tomorrow.

*

Emerging markets represent 32% of sales In Healthcare double-digit growth in sales and order intake

High corporate brand equity Consistently among the top-ranking players in India, China, Russia and Brazil

Championing growth with dedicated strategies Based on local market insights, supported by increased marketing investments

Increasing our footprintOpened more than 100 exclusively Philips branded lighting stores in China and IndiaEstablished an Imaging Systems Industrial Campus in Suzhou, China

A strong position in emerging markets

*

Sustainability as a driver for growthOur commitmentOne of the strategic drivers behind our targets is a commitment to sustainabilitySuccess of EcoVision4 program: Our Green Product sales represented around 30% of sales in 2009, 3 years ahead of our 2012 target

EcoVision5 program Focusing on areas where we believe we can have a significant impact on the health and well-being of individuals, communities and governments. Targets for the period 2010 2015Bringing care to more than 500 million peopleImproving the energy efficiency of Philips overall portfolio by 50%Doubling the global collection and recycling amounts of our products, as well as double the amount of recycled materials in our products

*

We are leaders in many marketsExamples of key leadership positionsMale shaving#1 Global, Arcitec and Nivea for menCardiovascular Market#1 Global,Cath LabsProfessional Lighting #1 Global, City Beautification; sports lighting Care and Resuscitation#1 Global, AEDs (Automated External Defibrillators)Coffee makers #1 Western Europe, SenseoConsumer Lighting #1 Global, LED-based luminaires Patient Monitoring#1 Global, Critical CareRechargeable toothbrushes #1 US # 2 Global, FlexcareLamps#1 Global, Energy-efficient lighting HealthcareConsumerLifestyleLighting*

*

Leading today, into tomorrow

Were a global company of leading businesses built on sense and simplicityStrengthened by a growing brand and significant investment in emerging markets

We provide solutions that improve peopleshealth and well-beingA sustainable area of business, driven byglobal trends

We do this with a relentless people-focus Highly engaged Philips people Strong relationships with customers Continued creation of meaningful innovations

*

*Thank-you for spending your time listening today.

*

*If I had to describe Philips in a single sentence, I would say it is a global company of leading businesses

creating value with meaningful innovations that improve peoples health and well-being.

Thats a very general description, but in the next 30 minutes or so, I hope to give you a taste of what this means in practice.*What do we actually mean by our scope of Health and Well-being ?We mean that we want to help people live a healthy, fulfilled life.

But our focus extends beyond the individual: it reflects our commitment to the sustainability of our communities, our societies, our world.*A key phrase in this description is meaningful innovations. What do we mean by that? We mean new ideas, new approaches, new solutions that make lives simpler, more enjoyable, more productive in professional as well as personal environments.meaningful innovations are ones which deliver on our brand promise of sense and simplicity. With meaningful innovation we also mean that they are driven by user needs, not by technology per se. Innovation can also be a new experience, a new design, a new business model. Meaningful also means that innovations are well timed and introduced when they really make sense.*We believe that these meaningful innovations are going to become increasingly important. They will help people meet the dramatic global challenges that were all going to be facing in the coming decades. **Take for instance aging populations.

Its expected that within 40 years, one in every four people will be over 60; more us us are going to get ill: Without changes to the healthcare system, 25% of the working population would be needed to provide todays level of care by 2040* (*for a typical western healthcare system).

The number of people aged over 60 will double from 500m today to 1 billion by 2015.**At the same time, globalization and urbanization will continue to change the places and communities we live and work in.

The world economic scene will also change, as the markets we currently describe as emerging take on an even more central role.

They already produce 28% of global GDP (gross domestic product).

99% of future population growth will be in emerging markets

Emerging economies are expected to account for 2/3rd of global GDP by 2016**And as companies from all corners of the world compete ever more strongly for business, consumers will become increasingly empowered. Consumers are also increasingly focused on their Health and Well-being and look for products that fit their lifestyle.

Theyll be able to pick and choose.

So companies like Philips will have to work even harder for their business.

And the only way well be able to do this successfully is to give customers and consumers exactly what they want and need.

**And then theres climate change, of course.

As we know, this is going to force us all to make changes if were to achieve sustainable development.

But we are already taking advantage of the opportunities that are out there.

For instance, almost one-fifth of global electricity consumption is used for commercial and domestic lighting.

But did you know that, right now, we could almost cut this figure in half* simply by replacing existing lamps with energy-saving ones and wed be improving the quality of the light, too! (*actual figure: 12%).

19% of global electricity consumption is used for lighting; Energy efficient lighting can save 40%...or 600 power stations worth of energy*The challenges we are facing are tough, but we see such challenges as an opportunity an opportunity to work together with others to improve the quality of peoples lives. We are already delivering on our brand promise of sense and simplicity in a range of areas covering professional, environmental as well as personal realms:

- Energy efficiency- Personalized experiences- Personal well-being- Home care, independent living - and better healthcare for all at lower cost *Lets pause just a moment on our brand promise.

Weve mentioned it several times, but it really does drive what we do.Our brand promise of sense and simplicity is a promise we make to all our stakeholders. It encapsulates our commitment to deliver solutions that are

advancedeasy to useand designed around the needs of all our users.*OK, you say, thats good fighting talk. But actions speak louder than words. Show us what youve been doing so far. Show us how youve been putting this into practice. I want to show you now 3 examples of how our brand promise drives our activities.

What these examples all have in common is that theyre based on what people told us.

To find out what was meaningful to them, we listened carefully to their concerns, their wishes, their aspirations. And then we developed something that would give them what they wanted in a way that was easy for them. In other words, we took our brand promise sense and simplicity seriously. Has anyone in your family ever died of a heart attack or stroke?

It wouldnt be surprising, because its the No. 1 cause of death in the world, for both men and women. And the best way of surviving an attack is to get treatment as fast as possible. ***From the onset of a heart attack to the start of treatment, speed is vital every second counts.Many older people have told us that theyre worried that if their partner were to have a heart attack, they might die just because they didnt get treatment in time.**And cardiologists and neurologists have told us that one of their main professional goals is to shorten the time between when a heart attack or stroke occurs and the moment they can start treatment. **Insights like these led us to look at the whole emergency care cycle for cardiac patients from a new angle, looking not so much at how fast we can get the patient to hospital, but how fast we can, in effect, get the hospital to the patient.

What doctors need first is information about the patients condition.

So we came up with a highly portable defibrillator HeartStart MRx.

It cuts down time-to-treatment by transmitting vital ECG data directly from the ambulance en route to the hospital.

Today, HeartStart is the most widely recognized and recommended cardiac emergency response device in the world, and has helped make us the global No. 1 in patient monitoring.In the meantime, weve made HeartStart part of a total discovery to treatment solution. .On a more everyday level, weve also been listening to people talk about a more common problem.

I wonder how many of you just love it when the alarm clock goes off on a cold, dark winter morning

Well, I can tell you, a lot of people told us they hate it! ***They feel tired, lethargic and even a bit down ** so different from summer, when they wake up easily and with lots of energy. **Clinicians have told us that theres actually a scientific basis for that summertime feeling. Its all to do with the intensity of the light in the room before we wake up. Gradually increasing the level of light just 30 minutes before you wake up boosts energy levels and makes people more alert.**Well, we thought, thats worth knowing! And armed with that information, we set ourselves the task of creating a light that gradually gets brighter just like the rising sun. The result was the Wake-Up Light. This emits light in a way that simulates the rising sun in your bedroom, and gently prepares your body to wake up.

Its been a big success: 9 out of 10 people who have one say it wakes them up pleasantly,and sales have exceeded expectations by 42%.

Its also customers No. 1 preferred product in its category.Our third example looks at how millions of people around the world spend most of their daylight hours working in offices lit by artificial light. ***If you ask them, many have told us they feel that their office lighting is harsh and cold.

Theyd love to be able to change it, depending on the light conditions outside and what theyre doing - focused light for reading documents or for detailed manual work,- or subdued lighting, for working at a computer screen or just relaxing. **Our researchers told us the way natural light varies in intensity and color during the day affects how people feel, and can have a positive effect on mood. **And we also talked to owners of office buildings. They told us that to attract and retain good tenants, they need office spaces to be flexible and of high quality. **Taking all this on board, we looked at how we could create a more natural working environment, one in which the light can be infinitely varied.

The result was DayWave. This office lighting system uses the new possibilities offered by LED lighting: it enables you to create an inspiring, enjoyable office environment easily just by varying the color and intensity of the lighting to suit your how you feel or what you are doing.

DayWave is still very new, but its already turning out to be very successful. Its really popular with office staff, and its been acclaimed in the professional media for its innovative use of LED technology and its unique design. I hope Ive now given you a good idea of what we do, why we do it, and how we do it. As Ive mentioned earlier, we focus on Health and Well-being.But were also very clearly in business to create value for our shareholders. *

**Lets now look at how our health and well-being offer is powered by our three sectors:Healthcare, Consumer Lifestyle, Lighting **Id now like to take a closer look at todays innovations.

We aim to give people the best healthcare possible.

That means we put people the patient and the healthcare professional at the center of things. Of course, healthcare is a big field, and we obviously cant do everything. So we concentrate on combating some of todays most deadly and debilitating diseases, especially in the fields of cardiology, oncology, critical care and womens healthcare.

People focused. Healthcare simplified.Our approach, you will remember, is to try to simplify things for our customers in hospitals and clinics, as well as their patients: We are dedicated to understanding their challenges, and helping them overcome them.

At the same time, we know that healthcare professionals are always aiming to raise the bar on clinical excellence, while not raising and in fact preferably lowering the cost!Healthcare simplified means better healthcare for everyone.

*In Healthcare, for instance, weve further strengthening our leadership positions in a number of key areas across the care cycle essentially, from prevention to cure (or long-term disease management) youll find a leading Philips solution. We are the global market leader in automated external defibrillators.

We talked earlier about aging populations: well, in the US, under the name Lifeline, were the No. 1 provider of personal emergency response services, especially for older people.

Were also a leader in patient monitoring in intensive care units. Our VISICU eICU solution provides a sort of air-traffic-control service to guide hospital staff at a distance ideal when there are too few staff. This not only significantly cuts patient mortality rates in Intensive Care, it also substantially reduces costly stays in intensive care units.

Our cardiovascular X-ray solutions are ranked No. 1 in overall manufacturing satisfaction,

and were also number one in service performance for patient monitoring systems and ultrasound. **Lets now take a look at our latest work from Consumer Lifestyle.First of all, though, what do we mean by Lifestyle? Well, to us lifestyle is about making a difference to the way people live their lives.

Its about living well, looking good and feeling great.

Its about enhancing the home, and sharing life's experiences with family and friends.

And it's about enabling people to live healthier, more enjoyable and more rewarding lifestyles.*Moving from life saving to life enhancing, our Consumer Lifestyle sector has also produced some top innovations over the past few years, as is continues its focus on differentiating profitable businesses.

In our Philips Avent Mother and Childcare business, for instance, weve developed the only feeding bottle to be clinically proven to reduce colic. (*At 2 weeks of age, babies fed with the AVENT bottle experienced less colic than babies fed with a conventional bottle

We continue to be the world leader in electric shaving, and have sold more than half a billion electric shavers so far making every 2nd shaver a Philips shaver!

Our Sonicare toothbrush has been impressing consumers worldwide. Today, its the No. 1 power toothbrush recommended by dentists.

We are also market leader in kitchen appliances take our healthy living aluminum Juicer, more than one million have been sold since its launch!**Light and lighting is extremely important to the quality of peoples lives.

It determines our mood, it extends our vision so that we can do things at times and in places that were once impossible and its important to our safety. But it also requires energy energy that we need to conserve as much as possible. We are innovating in new lighting solutions that are based on proven consumer insights.

At the same time, were continuously looking for advanced solutions that have minimal environmental cost, making us the global leader in sustainable lighting projects for cities, offices, workplaces and homes.

New solid-state lighting technologies are key to this. *Finally, we have some equally impressive statistics in our Lighting sector. Did you know, for example, that: 1 in every 4 lamps worldwide is a Philips lamp?

65% of the worlds top airports and 30% of offices, hospitals and landmarks are lit by Philips?

Our energy-saving lamps use 80% less energy and last longer than ordinary lamps?

Philips Lumiled Lighting is the world leader in high-power LEDs?

And you probably dont know it, but a third of you sitting in this room are likely to have Philips lamps in your car headlights.

All these business sectors are No.1 in their markets!

Whats more, 31% of Philips Lightings sales come from emerging markets. Were No. 1 in lighting in China. Were extending our distribution network there by adding 35 outlets a day! *Youve seen now something of what we do at Philips. But how do we do what we do?To answer that question, let me take you behind the scenes

...Id say it lies in three things, all of which are driven by our brand promise.

First, our repeatable, rigorous process to create meaningful innovations

Second, our relationships with our customers, which leads to customer loyalty, a key factor in promoting growth and profitability

And third, the quality of our people our highly engaged team.We have established an innovation process which enables us to create meaningful innovation, time after time.

We do this by gaining deep insights into peoples needs and aspirations; end-user input is required at every stage of the process.

Our marketers, designers and R&D scientists then work together, sometimes with external specialists, to transform these insights into meaningful innovations - so that we can enrich lives in new ways.

The process has rigorous steps to assess value potential and enable early decision making - Learn fast, fail cheap - Over 30% of our solutions taken forward to the market are in the top 20% of industry benchmarks.

And by working closely together with partners, we can lead in a spirit of open innovation.

All this means that our meaningful innovations are not just plucked from the air; theyre not the product of an individual mind. Theyre the product of teamwork and a well-defined creative process.

That means theyre not one-off events, lucky hits. On the contrary: they can be generated one after the other, in a continuous stream and you have seen examples of this today. Customer loyalty is fundamental to growth and profitability.

To win the trust of our customers and partners we follow processes to understand and anticipate their needsTo monitor our effectiveness we use a simple and highly effective method, the Net Promoter Score, to measure our success in building strong, customer-centric relationships.

Essentially, this involves asking customers one simple question: How likely is it you would you recommend this company/product to a friend or colleague?

You can follow this up with further questions or contact, which in turn can lead to key customer insights that will help us guide our business better and improve our relationships with our customers.

The end result, if we do it right, is that we win promoters for our company and our brand. **At Philips we view leadership as a catalystto achieve business ambitionsto drive organizational capabilities and to drive engagement

It is therefore key that we have our strong leadership team it is formed by diverse top-60 leaders. They focus on managing the current economic downturn while building the business for future wins.

We also believe living our Company values is key to helping accelerate Philips growth journey and to this effect we are judged by how we achieve, as well as what we achieve.

It is proven that an engaged workforce is a competitive advantage. We are currently successfully working towards high performance norms in our measurements of employee engagement this year.

And, by nurturing all talent in line with our strategies, we optimize individual performance, and offer fast-track, stretch opportunities for top talent as we prepare our leaders of tomorrow.

**

*Thank-you for spending your time listening today.