Philips to acquire Lumileds

Theo van DeursenCEO Philips Lighting 15 August 2005

Lighting 2

Philips’ acquisition of Agilent’s shares inLumileds

• Philips acquires all shares of Agilent (47%)• Philips stake increases to 96.5%• Transaction approximately US$ 950 (Euro 765)

• An important step to expand the PD Lighting business and ensures a leading position in the emerging, high growth LED market

Lighting 3

Lumileds’ leadership in high power LEDs

• Industry leader in high power LED’s(LUXEON platform)

• JV established in 1999• Approx 1760 employees

Lighting 4

Lumileds facilities

Penang, Malaysia

Headquarters, San Jose, California

Lighting 5

Lumileds performance

August 04 / July 05

Sales: US$ 324 million

EBIT: US$ 83 million

Annual Growth: 28%

Operating margin: 25.6%

Employees: 1760

Lighting 6

Systems /Luminaires

Source, optics,driver and

controls

Single Packageor

Chip-on-submount

DieEnd-userEnd-user

Lumileds Philips

The Solid State Lighting value chain

Lighting 7

The strategic relevance

Philips ensures its leading position in the emerging, high growth LED market

• Building on Lumileds proven expertise and leadership• Involvement in all stages of the LED business value chain• Leveraging Philips technology, manufacturing and

commercial capabilities• Reaping cost synergies and additional revenues

Lighting 8

LED product features

• small size• long life & robust• low voltage• efficient (rapid improvements) • colors: saturation + dynamics • easily dimmable• quick response / instant start• environmental friendly: no mercury

Lighting 9

6,000

5,000

4,000

3,000

2,000

1,000

02003 ‘04 ‘05 ‘06 ‘07 2008

Other

Source: Strategies Unlimited; PennWell

High brightness packaged LEDsRevenues in $ million, ww CAGR 25%

Illumination Signals Automotive Signs/displays Mobile Appliances

Lighting 10

LumiLeds is well positioned to continue it’s past (above market average) growth

“Focus on / active in the high growth market segments”

Illumination + automotive front lighting

LCD Backlighting

Mobile Flash

Automotive exterior

Automotive interior

Mobile displays

Signs

= LumiLeds key player

Lighting 11

Philips Lighting2004 - 2005 LED Product range

Equinox Ledline2

OrigamiLEDFlood

Minicolour

LEDAmazon

iParm

Lighting 12

…….resulting in“increased number of light points and new applications”

Exploiting Solid State features and benefits…..

Light experiences & effects• Dynamic colors

Embedded • Robust & long life

Total Cost of Ownership reduction• Low energy & maintenance

Lighting 13

Target applications in the professional market are decorative outdoor and shop lighting…

Lighting 14

..creating new lighting possibilities …..

Lighting 15

…bringing dynamic colour …..

Lighting 16

…..creating atmosphere in shops….

Winter Spring

User interface

Lighting 17

…..and ambient experiences in hospitals

Lighting 18

Linköping Universtity HospitalMedical Systems and Lighting

Lighting 19

Leading to profitable growth

• Today’s installed luminaire base will continue to drive conventional lamp replacement

• Luminaire sales will convert gradually to Solid State

• Solid State creates new lighting possibilities with more initial light points per application

Lighting 20

We shape the future in Solid State Lighting