CONFIDENTIAL 1Philips Lighting

Agenda CDM growth workshop

1. Country/Region view on current CDM business situation

• Current overall market situation (including competition)• Business development per channel (OEM / Whs)• Business development per key account (OEM / Whs)• Business development per key end-user• Growth per CDM product type per channel (CDM-T, CDM-T

Elite, CDM-TC, CDM-TC Elite, CDM-TD, CDM-Tm, CDM-R)

2. CDM value proposition and strategy

• MASTERColour CDM and MASTERColour CDM Elite• Competitor benchmark• CDM innovations 2009• CDM future strategy

3. Workshop: top-3 actions to get CDM growth back on track

• Top-3 actions per country• Top-3 actions HQ/SG

Preparation proposal

• Country Marketing mgr• Country channel mgrs• Country channel mgrs• Country segment mgr• Country channel mgrs

• Corné• Bob / Grace• Bob / Grace• Dominiek

• all

CDM growth workshopsOctober/November 2008

MASTERColour CDM value propositions

CONFIDENTIAL 3Philips Lighting

Contents

• MASTERColour CDM– History of meaningful innovations– Strengths and design choices

• MASTERColour CDM value proposition

• MASTERColour CDM Elite value proposition

• MASTERColour CDM-Tm value proposition

• MASTERColour CDM-Rm value proposition

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MASTERColour CDM

CONFIDENTIAL 5Philips Lighting

MASTER Colour CDMPhilips has demonstrated continuous innovations in MASTER Colour CDM:1994 Breakthrough in CHID retail lighting: First ceramic CHID with CDM-T1994 Uplamping with CDM-TD1995 Easy to use with CDM-R1995 Open luminaires possible with CDM-TP1996 First 4200K with CDM-T1997 Miniaturisation with CDM-Tc1998 Outdoor with CDM-TT2000 Outdoor/Indoor high bay with CDM-ET2001 Optical lighting with CDM-SA/R2003 Reflector design with CDM R1112003 Outdoor with MASTER City White, CDO ET/TT2003 Hot restrike for special lighting with Ceramic-ST2004 Miniaturisation with CDM-Tm2005 Most compact medium wattage with CDM-T 250W2005 Breakthrough in light technical properties with CDM Elite2008 Breakthrough in light technical properties with CDM Elite MW

Philips has vital patents on ceramic lamp technology

CONFIDENTIAL 6Philips Lighting

MASTERColour CDM strengths & design choicesAll Philips MASTERColour propositions have 3 core values that we willnever compromise in new lamp design:

– Color stability during life – Lifetime reliability– Safety (EOL)

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Philips CDM 70W Other lamp supplier 70W

CONFIDENTIAL 7Philips Lighting

Philips MASTERColour CDM: 14 years of experience

Philips publishes differentiated survival curves per type. Experience matters for lifetime reliability improvement• Increasing manufacturing control: salt dosing, mechanical positioning of components, in-line quality inspection systems• Gaining fundamental knowledge on failure mechanisms and resolving them: salt chemistry, ceramic technology, electrode optimisation, etc. 50,0%

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survivals

survivals improved

CDM-T 70W

2006 increase in lifetime reliability

MASTERColour CDM Lifetime reliability

CONFIDENTIAL 8Philips Lighting

System strength

Development of CDM lamps and gear is in one hand. Every product is tested extensively, requiring a million burning hoursbefore a system can be released. The result is an optimal light performance with Philips MASTERColour CDM lamps.

Testing is done at strict performance regulations, which go beyond any formal IEC/ANSI norms, the strict Philips test and performance norms for system release lead to the excellent and guaranteed Philips MASTERColour CDM performance.

For optimal system performance we recommend to use Philips HID PrimaVision Gear.

CONFIDENTIAL 9Philips Lighting

Excellent light quality with proven track record

• 60% saving versus Halogen

• Excellent lifetime reliability

Sustainability

• Very efficient light source for shop lighting

• Versus halogen long life and low energy use

•

Low cost of ownership

• White crisp light with excellent colour stability • Ra > 80 in 3000K, >90 in 4000K

• High lumen output

MASTERColour CDM value Proposition summary

CONFIDENTIAL 10Philips Lighting

MASTERColour CDM testimonials

CONFIDENTIAL 11Philips Lighting

MASTERColour CDM Elite

CONFIDENTIAL 12Philips Lighting

MASTERColour CDM Elite value proposition at a glance

MASTERColour CDM Elite has two value angles:

1. Quality of light: make your shop irresistible, season after season!• CRI of 90• Higher lumen output• Excellent lumen maintenance

What does this mean? The color representation of the Retailers merchandize (clothing, shoes, leather, furniture) as well as the ambience of the shop strongly improve (due to the improved CRI and lumen output). Not only at initial installation, but also after 1, 2 or 3 years, really until the moment of re-lamping as a result of the excellent lumen maintenance and consistent color performance during lifetime.

2. Total Cost of Ownership: lowest TCO with CDM lamps possible• Higher lumen output and thus better Lumen/Watt ratio• Excellent lumen maintenance• Excellent lifetime reliability

What does this mean? Less luminaires required to arrive at the same average lux levels during lifetime of the lamp (due to the higher lumen output and improved lumen maintenance). Lower maintenance cost due to the excellent lifetime reliability and excellent lumen maintenance (longer lamp replacement period cycles)

CONFIDENTIAL 13Philips Lighting

Premium solution for Fashion Retail, best offer to:

- enhance merchandize- create ambience in the shop- maintain these during life

MASTERColour CDM Elite specification

** Universal burning under development (release October 2008)MASTERColour CDM Elite is for Electronic gear only

CDM Elite 35W 70W 150W

T/TC T/TC TLuminous flux (lm) 3500 7300 15000Efficacy (lm/W) 90 100 100CRI 90 90 90Survival 50%, kh 12 12 12Survival 90%, kh 9 10 / 8 10Maintenance at 12kh 80%

2800lm80%

5800lm80%

12000lm90% Maintenance point 4khrs

3200lm4khrs

6600lm4 khrs

13500 lm

burning position VBU/VBD +/- 60DEG ** universal universal

CONFIDENTIAL 14Philips Lighting

MASTERColour CDM – MASTERColour CDM Elite

70W/3000K MASTERColourCDM T/TC

MASTERColour CDM Elite T/TC

Lumen Output 6600 7300Efficacy 93 100CRI 84 / 83 90Life 50% 12 / 10 12Maintenance 12k 61% 80%Maintenance 90% 1 kh 4 khService life 80% 3 kh 9 / 7 kh

CONFIDENTIAL 15Philips Lighting

Breakthrough in lumen maintenance

40%

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0 2000 4000 6000 8000 10000 12000

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CDM-T/TC 35W/70W/150W 930Elite CDM-T/TC 35W/830 CDM-T/TC 70W/830 CDM-T 150W/830

CONFIDENTIAL 16Philips Lighting

What do you see?

CONFIDENTIAL 17Philips Lighting

MASTERColour CDM lumen maintenance

new8k burned

CONFIDENTIAL 18Philips Lighting

What do you see?

CONFIDENTIAL 19Philips Lighting

MASTERColour CDM Elite lumen maintenance

new8k burned

CONFIDENTIAL 20Philips Lighting

The visual impact of MASTERColour CDM Elite superior lumen maintenance

MASTERColour CDM MASTERColour CDM Elite

new new8k burned8k burned

CONFIDENTIAL 21Philips Lighting

Strong cost of ownership initial market

2 COO Comparison End-user INITIAL MARKET; Less luminaires

Lamp type CDM-T CDM-T EliteDesign Lumens 6600 7300Nr of luminairs in installation 100 90 piecesNr of lamps per luminair 1 1Nr of gear per luminair 1 1Energy Consumption 70 70 WattOperation hours / year 4000 4000 hrsEnergy costs Euro/kWhr € 0.15 € 0.15 EuroService life 70% 7000 10000 hrsGear Price end-user € 42.00 € 42.00 EuroLamp Price end-user € 18.00 € 22.00Luminaires Price end-user € 250.00 € 250.00Lamp replacement costs € 4.00 € 4.00 Euro

TOT INSTALATION COSTS :a. Energy costs per year € 4,200.00 € 3,780.00 Eurob. Lamp costs per year € 1,028.57 € 792.00 Euroc. Lamp replacement costs per year € 228.57 € 144.00 Eurod. Costs for airco (consump.) € 1,260.00 € 1,134.00e. Cost for airco investment / 10 Yearsf. Lums cost per year € 25,000.00 € 22,500.00

TOTAL COST OF INSTALLATION € 31,717.14 € 28,350.00Total costs per lamp per year € 317.17 € 315.00 EuroTotal costs per lamp per year vs. CDM-T -€ 2.17 EuroTotal Savings vs. CDM-T -€ 3,367.14 Euro

INITIAL COSTS PER LUMINAIR:a. Lamp costs per luminair € 1,800.00 € 1,980.00 Eurob. Gear costs per luminair € 4,200.00 € 3,780.00 EuroAdditional costs for remplaceTotal initial costs € 6,000.00 € 5,760.00 Euro

-€ 240.00

Pay-back time vs. CDM-T 0.1 Year Payback in less than 6 months (10% less luminaires)

• TCO story based upon 10% less lums and energy saving• TCO story based upon slightly more lums and move from 70W CDM 35W Elite: energy saving• TCO story replacement market; payback 2 yrs based upon postponed relamping due to strong maintenance

CONFIDENTIAL 22Philips Lighting

MASTERColour CDM Elite; external endorsement

5 stars rating Lighting Equipment NewsFebruary 2008 issue

CONFIDENTIAL 23Philips Lighting

Many retailers invest in MASTERColour CDM Elite-C&A in Germany

-Adidas Moscow Russia

-Catimini France

-Edeka Germany

-Deichman Germany

-Mama’s&Papa’s UK

-Pimkie Germany

-Didi Netherlands

-House of Fraser UK

-DM Drug Stores Germany

-Brice France

-Benetton Germany

-Magazin Z France

- Diesel global contract

- RLFD Amsterdam

-…and many more

CONFIDENTIAL 24Philips Lighting

Superior quality of light: make the shop irresistible and keep it that way

• Up to 100 lm/W

• Superior lumen maintenance

• Excellent lifetime reliability

Sustainability

• Most efficient light source for shop lighting

• longer service lifetime

• Save energy, save money, save the environment

Lowest cost of ownership

• Superior ambience creation • Ra > 90 in 3000K

• Highest lumen output and lumen maintenance

MASTERColour CDM Elite Value Proposition summary

Philips MASTERColour CDM MiniDoubling your options for thinking small

CONFIDENTIAL 26Philips Lighting

Moving forward to make things smaller

Philips MASTERColour Mini

20W & 35W

Philips MASTER ColourSparkling light

Energy efficient Less heat, long life

Miniaturisation50% Smaller system

Less clutter in the ceilingSmaller Fixture design

CONFIDENTIAL 27Philips Lighting

More possibilities across more applications

• 20W & 35W- Display lighting- Spot and track lighting- Down lighting- Mini floodlighting- Indoor / Outdoor

• Lighting differentiation- Miniaturization with CDM based accent lighting- Save up to 70% on energy consumption compared with halogen

CONFIDENTIAL 28Philips Lighting

Making the choice easy

Easy: Lamps and Gear have same sizes

CONFIDENTIAL 29Philips Lighting

Making the choice easy

Ø 140 mm

-50%

Ø 90 mm

Easy: Smallest Lamps and Gear of their category

CONFIDENTIAL 30Philips Lighting

Making the choice easy

• Quick installation & re-lamping• Accurate positioning in reflector

Easy: Twist and Lock

CONFIDENTIAL 31Philips Lighting

Proven reliability: realized projects

CONFIDENTIAL 32Philips Lighting

Lamp Technical Specifications

20W/830

Light Output 1650lmColour Temperature 3000KColour rendering: Ra85Proven lifetime: 12,000hrs

35W/930

Light Output 3000lmColour Temperature 3000KColour Rendering Ra90Lifetime (launch) 6,000*hrsDesign lifetime >9000hrs

* Proven lifetime at launch (May 2007)

CONFIDENTIAL 33Philips Lighting

Miniaturization and ease of use

• Miniaturized CDM lamp

• For miniaturized new luminaire developments

• Easy to use and replace

Excellent light quality

• Crisp white light• Superior output and colour stability

• Excellent merchandise representation

Sustainable choice

•Up to 60% energy saving per light point versus Halogen

Philips MASTERColour CDM-R Mini summary

Philips MASTERColour CDM-R MiniAdd a sparkle to your lighting options

CONFIDENTIAL 35Philips Lighting

Philips MASTERColour

CDM-R Mini50mm reflector lampSuperior output and

Colour stability

CDM performance Miniaturised reflector

Add a sparkle to your lighting options

Philips MASTERColourSparkling light Energy efficient Less heat, long life

ReflectorOpen luminaireEasy to use and replace

CONFIDENTIAL 36Philips Lighting

• 20W and 35W– Display lighting– Spot and track lighting– Downlighting– Mini floodlighting– Indoor / Outdoor

• Lighting differentiation– Miniaturisation with CDM

based accent lighting– Save up to 60% on energy

consumption compared to halogen

Applications

CONFIDENTIAL 37Philips Lighting

• Quick installation and re-lamping• Suitable for open luminaire• Well accepted standard GX10 twist and lock system

Making the choice easy

CONFIDENTIAL 38Philips Lighting

Lamp Technical Specification CDM-R Mini

20W/830

I max 10° 13500 cdI max 25° 3900 cdI max 40° 1750 cdColour temperature 3000KColour rendering 85Lifetime (50%) 9000 h

35W/930

I max 10° 16500 cdI max 25° 6500 cdI max 40° 2800 cdColour temperature 3000KColour rendering 90Lifetime (launch) 6000 h

CONFIDENTIAL 39Philips Lighting

MASTERColour Mini CDM-Tm burner 20W/830 and 35W/930

High light output, low cost of ownership, less heat, sparkling white light, excellent colour rendering

Front lens

protected

Suitable for open luminaires

GX10 twist and lock lamp cap

Easy to install, easy to replace

100% compatible with existing GX10 compact HID systems

Pressed glass reflector, aluminium coating

No additional reflector needed.Possibility to change beam angle by simply replacing the lamp

Easy and fast development of luminaire

Features and benefits

CONFIDENTIAL 40Philips Lighting

Miniaturisation and ease of use

• Miniaturised CDM reflector lamp

• Simple solution for new luminaire developments

• Easy to use and replace

Excellent light quality

• Crisp white light• Superior output and colour stability

• Excellent merchandise representation (Ra>85 for 20W, Ra=90 for 35W)

Highest performance in a 50 mm reflector lamp

• Highest beam intensity • Unique range of 20 and 35W

• Up to 60% energy saving per light point versus Halogen

Philips MASTERColour CDM-R Mini