A sustainable strategy for the Turkish market Willem Rozenberg CEO Philips Turkey

1. A sustainable strategy for the Turkish marketWillem RozenbergCEO Philips Turkey

2. Introduction Recent visit to Bodrum Common feeling with all expatriates in Turkey Extremely welcome Business is not easy 58 years old Married Exploding family 33 years in Philips 25 years expatriate (Riyadh, Dubai, Johannesburg and Istanbul) 6 years in Turkey Always in Healthcare 4 girls 5 grandchildren

3. A strong diversified industrial group leading in health and well-being Founded in 1891 Headquartered in Amsterdam, the Netherlands Sales over EUR 22.2 billion in 2010 Growth geographies 32% of sales generated in growth geographies Globally recognized brand (world top 50)Our brand value doubled to $8.7bn since 2004 117,000 employees Sales and service outlets in over 100 countries €1.5 billion investment in R&D, 7% of sales Note - All figures from the year 2010 onwards exclude Television as it is treated as discontinued operation

4. 0 The four global trends that are becoming increasingly relevant Aging population The rise of growth geographies Climate change and sustainable development Increased consumer empowerment and sustainable lifestyles

5. Our focus on Health and Well-beingOur portfolio leverages critical global trends Aging population Increased consumer empowerment and sustainable lifestyles Climate change and sustainable development Rise of growth geographies 5

6. 0 We expect our markets to grow Most growth expected to come in lighting and healthcare markets …translating into expected market growth per sector… Growth1 of markets in which Philips participates vs. GDP growth 100% CAGR5 % 2010-2015 ~ 30% ~ 20% ~ 50% ~ 2% Healthcare 4 World Consumer Lifestyle Market size growth2 Lighting GDP3 1. Excluding TV 2. Based on internal analysis 3. EIU estimates 4. Brazil, India, China 5. CAGR: Compound Annual Growth Rate

7. 0 Growth geographies are a key growth opportunity driven by rapid expansion of the middle class • Philips sales show a strong correlation with middle class • The number of middle class households in key growth geographies will more than double until 2015 • The total middle class income pool in growth geographies will almost double until 2015 • Our sectors will benefit strongly from the rise of the middle class in growth geographies : • Increasingly affordable healthcare which will drive demand • Building of new and better housing and other infrastructure increasing demand for lighting • Increasing demand for a higher quality, and healthier lifestyle Middle class households growth in key growth geographies Millions of households1 419 +17% CAGR* 2009 2015 Source: Internal analysis * CAGR: Compound Annual Growth Rate

8. Sustainability as a driver for growth • Success of EcoVision4 • Our Green Product sales represented around 30% of sales in 2009, 3 years ahead of our 2012 target. And we have completed our 2012 goal of cumulative EUR 1 billion of Green Investment in 2010. • Launch of our EcoVision5 program • A clear example of how we continue to drive business growth through Sustainability is the launch of our EcoVision5 program in 2010. • Targets for the period 2010 – 2015 • To bring care to 500 million people • To improve the energy efficiency of our overall portfolio by 50% • To double the amount of recycled materials in our products as well as to double the collection and recycling of Philips products

9. A sustainable strategy for Turkey 9

10. The market • Characteristics: • 76 m people with large young population • Increasing awareness • Developing fastGDPgrowth / in 2010: 7,1% • High growth potential, Expected to become the 3rd largest European economy by 2050 (Goldman Sachs) • Diverse public and private market • Upcoming PPP, PFI, BOT models • Centralization and e-tendering • Privatisation – investments • Competition: • Almost everybody • Large number of local players • Turkey the 17th largest economy in the world • Annual GDP growth: • 2003 - 20076.4% annual average • 2008 0.7% • 20094.7% • 2010 forecast 7.1%.

11. Testing global trends in Turkey – Aging and Health The age structure of Turkey is relatively younger compared to others, an increase of the elderly population in “absolutenumbers” is noticeable though: Population over age 65 will be: 4.8 million in 2010 7.9 million in 2025 17 million in 2050 (Source TURKSTAT) Health Indicators: Life expectancy at birth:M/F 71/75 Turkey Healthy life expectancy at birth M/F: 61/63 Life expectancy at birth M/F 76 / 82 EU Average Healthy life expectancy at birth M/F: 61 / 62 Total expenditure on health 6.7% of GDP (2009) vs. NL 9.9% (2008)

12. Testing global trends in Turkey – Energy & Climate Turkey’s demand for electricity grows at a rate of 8% per year. Current energy import: 60% 2010-1570% 202080% Since 1923, every 10 years Turkey’s temperature hasincreased by 0.20C * Source ENO Climate

13. Testing global trends in Turkey – Increased consumer empowerment & key growth area’s • Increased consumer empowerment, growing of middle and upper income segments • Doubled R&D expendituresin the past decade*Source Worldbank.org • Construction industry may achieve a growth of >20% in 2010 with a regional focus*SourceHürriyet Daily • Strong governmental and private vision and commitment to health sectormodernization*Source Worldbank.org All in line with the Philips Market Stategy, which helps to reach a strong growth for us in Turkey.

14. Philipsin Turkey • Founded in 1930 • Headquartered in Istanbul. • Regional offices in Ankara, İzmir, Adana • Employees • 300 people in sales and service outlets all over Turkey • Leading market positions • - LED lighting, energy saving lamps, ambient solutions • Medical Imaging (Cardiology, PETCT, MR) • Fruit-Juicer , Irons, MP3 player and docking stations, high-end TV, shavers, hair-care • Brand Image in Turkey • 7th position (brand equity index Turkey) • Long term commitment • Reliable, innovative, outstanding quality 14

15. Philips Index for Health and Well-beingA global initiative - 31000 people across 23 countries Philips is a pioneer in developing and bringing to market innovations that shape our healthcare, our lifestyle, and who we are as a society. Doing so means we need to understand the mega-trends in society. These include: • What is the state of our health and well-being? • What aspects of health and well-being are most important, and how satisfied are people with each of these aspects of our lives? • What role does technology play in helping society maintain better health and well-being? • How does people vary in terms of their attitudes and behaviors toward health and well-being? • If we were to assign a particular index as an overall measure of health and well-being, what would it be and would it vary among different sub-groups of people

16. Philips Index for Health and Well-beingSome first results • 1000 interviews in 12 cities conducted between Aug- Sept 2010 • Turkey’s total index score is 46% • The majority of Turkish people (66%) rate their health and well-being as very good or good. • 65% of Turkish people experience some level of stress • The economy is top of the reasons Turkish people are feeling stress(76%). • Healthcare costs are ranked as the third reason (66%). • 15% of the Turkish people are sleep deprived • Technological equipment being update, improved and state-of-art technology is effective in Turkish people’s hospital preference (89%) • 78% of Turkish people believe that Lighting can have a significant effect on their sense of health and wellbeing • Cancer, heart and vascular diseases and contagious diseases should receive more attention from the government. • Spending time with family and children (37%), spending time with friends (31%) and relaxing at home (30%) are the most popular ways to improve the feeling of well-being of Turkish people

17. A granular approach Hi-end / Sophisticated Specifications Brand image Segmentation Local insight Low-end & economical solutions Price focused

18. Specific market requirements Price setting Product specifications Local insight Brand image Visibility Logistics

19. The LEDBridge between Europe & Asia

20. Thank you very much for this opportunity