Philips updates markets on Consumer Lifestyle businesses

Amsterdam, The Netherlands – In a meeting with investors and financial analysts today, Royal Philips Electronics (AEX: PHI, NYSE: PHG) will provide an update on how its consumer lifestyle businesses have and will continue to add value and sustainable growth to the company. Philips will also elaborate on the formation of the new Philips Consumer Lifestyle sector as per January 1, and this new, integrated sector will help Philips achieve the targets set as part of its “Vision 2010” strategic plan, which was communicated in September.



In separate presentations, the chief executives of both the Domestic Appliances & Personal Care (DAP) division as well as Consumer Electronics (CE) will highlight characteristics of the portfolios and business models of their respective businesses, elaborate on past business performance and detail why both businesses are in a strong position for the future. Rudy Provoost, Chief Executive Officer of CE, will focus on explaining how the business’ asset-light strategy and a focus on design and relevant innovation has allowed it to deliver consistent performance over the past twelve quarters and will confirm that the division is on track to achieve an EBITA target of around 3% for 2007. Mr. Provoost will also confirm that all businesses within CE continue to show year-on-year improvement, except for Connected Displays, where margin pressure remains high, particularly in North-America.



Andrea Ragnetti, Chief Executive Officer of DAP, will focus on the fundamentals of the strong performance of its businesses and the key drivers of the sustainable growth in sales and margins DAP has achieved. Mr. Ragnetti, who will become CEO of Philips Consumer Lifestyle sector effective January 1, will also elaborate on the strong prospects of Consumer Lifestyle going forward. Combining key competencies of DAP and CE in one consumer lifestyle powerhouse and addressing a more sizeable overall market than before by entering new value spaces, the Consumer Lifestyle sector is excellently positioned to grow above market levels and deliver overall EBITA improvement. Mr. Ragnetti will confirm that the formation of Consumer Lifestyle will lead to cost synergies of around EUR 150 million to EUR 200 million a year by 2010.



Presentations will begin at 10:00 AM (CET), and can also be followed via webcast. Please click here to listen to this webcast. Please click here to go the Philips News Center “Vision 2010” announcement page to see more details about the plan.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a global leader in healthcare, lighting and consumer lifestyle, delivering products, services and solutions through the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 128,100 employees in more than 60 countries worldwide. With sales of EUR 27 billion in 2006, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics. News from Philips is located at www.philips.com/newscenter.

Forward-looking statements

This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially form those expressed or implied by these forward-looking statements. Any forward-looking statements in this announcement are based upon information known to Philips on the date of this announcement. Philips undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.