Building the leading company in health and well-being

An introduction to Philips

Philips: a strong diversified industrial group

Founded in 1891Headquartered in Amsterdam, The Netherlands

Sales of €22.6 billion in 20111

-33% in Growth Markets-65% in B2B-EBITA 7.4% of sales

Globally recognized brand (world top 50)Our brand value doubled to $8.7bn since 20042

122,000 employeesSales and service outlets in over 100 countries

€1.6 billion investment in R&D, 7% of sales

Who we are Our businesses Operating in >100 countries

2011

Healthcare

Lighting

Consumer Lifestyle

2Source: Interbrand1Note - All figures exclude discontinued operations

26%

40%

34%

Growth Markets

Western Europe

North America

Other

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3

Mature 67%

Operating in the right marketsAddressing key societal issues

Demand for affordable healthcare

Need for energy efficient solutions

Desire for increased personal well-being

67% Mature Geographies 33% Growth Geographies Group Sales:

• Philips received Food and Drug Administration (FDA) clearance to market its whole-body PET-MR imaging system in the US

• Ultrasound ClearVue manufactured in China and sold locally and globally

2011Imaging Systems

Customer Service

Patient Care and Clinical Informatics

Home Healthcare Solutions

Highlights 2011:

Healthcare

€8.9Billion sales in 2011

37,000+People employed worldwide in 100 countries

450+Products & services offered in over 100 countries

1 Full year 2011

8%of sales invested in R&D in 2011

Philips Healthcare

Businesses1 Sales & services geographies1

Imaging Systems

Home Healthcare Solutions

Patient Care and Clinical Informatics

Customer Services

North America International

45% 34% 21%

Growth Geographies

38% 14% 22% 26%

Healthcare

Domestic Appliances

Personal Care

Health & Wellness

Lifestyle Entertainment

Other incl. Licenses

2011

• Since launch of Sonicare AirFloss in key geographies, Philips increased market share

• The new mixer grinder co-developed with Preethi for local Indian market launched in record time

Highlights 2011:

Consumer Lifestyle

Consumer Lifestyle

€5.8Billion sales in 2011

18,000+People employed worldwide

5%of sales invested in R&D in 2011

1 Full year 20112 Other category (6%) is mainly license income and is omitted from this overview Note - All figures exclude discontinued operations

27%of green product sales in 2011

Philips Consumer Lifestyle

Businesses1 2 Geographies1

Personal Care

Health &Wellness

Domestic Appliances

Lifestyle Entertainment

MatureGeographies

58% 42%

Growth Geographies

22% 13% 28% 31%

Lamps/Lighting Systems & Controls

Professional Luminaires

Consumer Luminaires

Automotive

Packaged LEDs

2011

• Philips won the ‘L-Prize’ for LED replacement of 60W light bulb in a competition by the US Department of Energy

• Philips InstantTrust: innovative water solution based on cutting-edge UV disinfection technology

Highlights 2011:

Lighting

Philips Lighting

Customer Segments1

23% 17% 15% 9% 15% 5% 3% 4% 9%

Retail Entertainment Healthcare AutomotiveHomes Offices Outdoor Industry Hospitality

Lighting

€7.6Billion sales in 2011

53,000+People employed worldwide in 60 countries

5%of sales invested in R&D in 2011

80,000+Products & services offered in 2011

1 Indicative split

Sustainability as a driver for growth

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Accelerating sustainable business• Green Products represented 39% of total sales

in 2011, up from 30% in 2009

• By 2015 Philips aims to invest EUR 2 billion in Green Innovation

EcoVision 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

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

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Creating meaningful innovationsImproving lives in new ways

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Gain deep insights into people’s 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 innovation

Customer intimacy and speedEssentials for successful innovation

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• Understanding local relevance and customer insights

• Increasing entrepreneurial power in the markets

• Innovating in regional hubs in both mature and growth geographies

• Partnering with (local) customers, companies, universities, governments…

GlobalCardiovascular

X-ray

Unique leadership positions in many markets

RegionalUltrasound

GlobalPatient

Monitoring

GlobalCardiac

resuscitation

GlobalMale electric

shaving

GlobalLamps

Healthcare

ConsumerLifestyle

Lighting

GlobalSleep Therapy

Systems

GlobalGarment Care

Global Rechargeable Toothbrushes

RegionalKitchen

Appliances

RegionalElectric Hair

Care

GlobalLED Lamps

GlobalAutomotive

Lighting

GlobalProfessional Luminaires

GlobalHigh Power LEDs

4.4

5.96.7

7.78.3 8.1

8.7 8.7

2004 2005 2006 2007 2008 2009 2010 2011

The world’s 41st most valuable brand in 2011Philips increased brand value by 29% in the last five years

A strong brand drives salesA significant amount of sales is attributable to the brand alone:• Healthcare 42%• Consumer Lifestyle 42%• Lighting 16%

Brand ranking improves in 2011Moving up one rank in top 100 global brands list, Philips has reached the highest position ever. Brand value doubled since 2004

Strong internal brand2

84% of employees are “proud to work for Philips”

Value of the Philips brand1

USD billions

1 Source: Interbrand Brand Valuation 20112 Employee Engagement Survey 2011

Philips peopleUnlocking full potential: driving market-oriented entrepreneurship

High performance benchmark

Employee Engagement Index

Philips at high performance normThe 2011 ‘employee engagement index’ polling over 90,000 of the Philips workforce showed we are amongst the world’s top-ranking companies

2010

77

72

66

6362

2005 2006 2007 2008

71

2009

76

2011

• In the times of change, remaining on par with high-performing companies

• Customer centricity and strive for excellence strongly embedded in performance culture

• Making employees accountable for results

Saeco (2009)

Discus (2010)

Dynalite (2009)

Selecon (2009)

Ilti Luce (2009)

Genlyte (2008)

Lighting Technologies (2007)

Burton (2010)

NSW (2010)

Luceplan

(2010)InnerCool Therapies (2009)

Traxtal (2009)

Respironics (2008)

VMI-Sistemas Medico (2007)

Visicu (2008)

Emergin (2007)

Raytel

(2007)

Tecso Informatica (2010)

Somnolyzer (2010)

CDP Medical Ltd. (2010)

Apex (2010)

Wheb Sistemas

(2010)

Dixtal Biomedica e Technologia (2008)

Meditronics (2008)Alpha X-Ray (2008)

Medel (2008)

Interactive Medical Developments (2008)

Lighting Consumer LifestyleHealthcare

Optimum (2011)

MedSage (2011)

Preethi (2011)

Growth geographies

Our global reachFocused portfolio through strategic acquisitions*

* Strategic acquisitions since mid-September 2007 until May 2012

Tomcat (2008)

Sectra (2011)

AllPartsMedical (2011)

Street Controls (2010)

Dameca (2011)

Povos(2011)

Shenzhen Goldway (2008)

Indal (2011)

Teletrol (2009)

Healthcare Consumer Lifestyle Lighting Semiconductors

Our portfolio now consists of ~65% B2B businesses

2011

16%22%

30%26%

40%

34%

20082005

17%

43%

45%27%

HealthcareLightingConsumer LifestyleSemiconductors

HealthcareLightingConsumer Lifestyle excl. TV

HealthcareLightingConsumer Lifestyle

1 Consumer Lifestyle in 2005 includes the former DAP and Consumer Electronics divisions2 2005 figures are based on US GAAP3 Figures exclude Television as it is treated as discontinued operation

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1

• World’s 41st most valuable brand 2011: USD 8.7 billion

Building on our strong fundamentals

Innovation capabilities

Philips brand

Global footprint

People

Domain leadership

Solid balance sheet

• Employee Engagement Index1 exceeds high performance benchmark value of 70%

• Culturally diverse top-200 leadership team

• Global market leader in Lighting; Top 3 Healthcare player; Leading Consumer Lifestyle brands (e.g. Philips Sonicare, Avent, Saeco)

1 Based on annual Philips’ Employee Engagement Survey

• Technology, know-how, strong IP positions (53,000 registered patents)

• A3 rating by Moody’s and A- by Standard & Poor’s

• Loyal customer base in 100+ countries• 1/3 of group revenues from growth geographies

Clear vision to make the world healthier and more sustainable through innovation

Building upon a focused portfolio, with strong potential in growth and mature markets

Driving investments and results in innovation and markets to deliver improved profitable growth

Delivered by 120,000 engaged employees

Looking ahead

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