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Philips’ First Quarter Results 2007


Philips reports 27% growth in Q1 EBITA

Net income increases to EUR 875 million

* EBITA amounted to EUR 353 million, or 5.9% of sales, compared with EUR 279 million, or 4.5% of sales, in Q1 2006.
* Including a gain on the sale of TSMC shares, net income increased to EUR 875 million from EUR160million in Q1 2006.
* Sales totaled EUR 5,991 million, up 3% on a comparable basis compared to the same period last year, driven by a very strong performance at DAP and Lighting.
* So far this year, announcement of three strategically aligned acquisitions that will add to growth.

Gerard Kleisterlee,

President and CEO of Royal Philips Electronics:

"Philips had an excellent start to 2007, with our EBITA growing by 27% to EUR 353 million in the first quarter. This significant growth reflects the strong market position of our more sharply focused portfolio of businesses, and validates the strategic choices we have made in the past.

In the first quarter, our businesses showed significant - and in parts of Consumer Retail exceptional - growth driven by innovation and the leveraging of investments we are making to deliver on our “sense and simplicity” brand promise. The integration of recent acquisitions such as Partners in Lighting will further add to this.

It is encouraging to see that the acquisitions we have made are contributing quickly to value creation. At Medical Systems the important integration of Intermagnetics is well on track, once completed, to deliver the expected benefits to our MR business. Our recent announcement on Health Watch will further strengthen our leadership position in the fast growing market for Emergency Response Services.

Our Lighting division is well positioned to benefit from the increasing awareness of the need for lower energy consumption, and we are already seeing the impact. In the first quarter, the strong top-line growth at Lighting was partly attributable to our eco-friendly, energy-efficient solutions.
In the first months of this year, Philips continued efforts to forge alliances with governments, industry partners and other organizations around the world to accelerate the replacement of inefficient lighting with newer, more efficient lighting solutions in the years to come.

We feel confident Philips will continue establishing a track record as a successful acquirer and operator of businesses that create sustainable value and drive increased growth and profitability for the group"


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