NEW YORK - LIGHTFAIR INTERNATIONAL 2009 - May 5, 2009 - Philips today staked its claim as the world's largest lighting solutions provider by introducing a wide range of new technologies, products and services that address both current and new uses of light.

These innovations reflect a vastly expanded portfolio, the breadth of which is unique to the lighting industry. Ranging from components, electronics and fixtures to complete solid-state lighting systems with advanced controls, these latest introductions showcase Philips' holistic, energy-efficient and high-quality approach to lighting.

Fueled by a series of valuable acquisitions, investment in green technologies and focus on the customer, Philips is shifting away from a "bulb" and "fixture" heritage to one of integrated lighting solutions. These enable building owners and consumers alike to transform their spaces with light like never before be it for cost-saving purposes, energy efficiency or to customize their surroundings. A majority of today's buildings use dated lighting, lacking both the efficiency and transformative capabilities made possible by new technologies including light emitting diodes (LEDs) and higher-efficiency fluorescent systems.

"In recent years Philips has made substantial investments to grow into the world's largest integrated lighting solutions provider, bringing together all of the elements that help our customers use light in new and transformative ways," said Rudy Provoost, Chief Executive Officer, Philips Lighting.

"Lighting is no longer a mere utility, it has been shown to affect the way we live, work and feel. It's also a considerable drain on our energy resources, accounting for 22% of electricity use in America. In today's economic climate it's imperative that we assemble the right technologies and services for our customers to create experiences, inspire new applications, and mitigate strain on energy resources."

Lighting has taken center stage in recent months as the "green" design movement continues to gain momentum. This includes the U.S. administration's goal to improve new building efficiency by 50% and existing building efficiency by 25% over the next decade. In addition, the February stimulus package and recently-signed omnibus appropriations bill carved out a direct opportunity for lighting, the latter setting aside $25 million for LED-related research and development in 2009.

At Lightfair, Philips is showcasing the powerful range of its lighting solutions, made possible by innovations at every level of the lighting value chain. Highlights include:

• Energy Services: A new comprehensive lighting audit and upgrade program in conjunction with strategic partners. This program guarantees economic payback, reduced carbon footprint and increased light quality for today's overwhelmingly inefficient buildings.
• Professional Solid-State Lighting: Highly-efficient LED luminaires for wide-ranging interior and exterior uses - leveraging the company's expanded in-house technology, expertise and intellectual property across all system layers.
• Residential Solid-State Lighting: An advance preview of a forthcoming 600-lumen A-shape LED bulb that will effectively replace inefficient 40-watt incandescent alternatives.
• Components: The industry's first power LED that offers specific lumens per watt efficacy, helping manufacturers develop energy-saving luminaires. The new high-performing modules have also been launched for downlight luminaires.
• Professional Lamps: Advanced, higher-efficiency conventional lamps for outdoor, commercial, retail, and industrial use, including fluorescent and ceramic metal halide technology, which easily replace existing sources to deliver industry low wattage and significant cost savings.
• Electronics: Optimized ballasts and LED drivers that provide enhanced energy efficiency and promote sustainability in integrated lighting systems, used in a range of outdoor, retail, sign, commercial and emergency applications.

Rudy Provoost
Executive Vice-President and CEO Philips Lighting
Member of the Board of Management, Royal Philips Electronics
Chairman of the Philips Sustainability Board

Lightfair Press Briefing, Tuesday, May 5, 2009, New York

Few modern industries are undertaking the transformation taking place today in lighting. And Philips, as I will outline, is a driving force in shaping that change. No other company has the breadth and depth in all aspects of the industry. We offer complete solutions, addressing the real needs of the people we serve.

From architects to lighting designers, city planners to public authorities, and consumers in their homes - we are in a tremendous position to maximize our innovation and understanding built up over 118 years.

As a leader, we are helping to maximize the opportunities for lighting to achieve lasting change in many aspects of life. The application of energy-efficiency and environmental health are key areas where a difference is being made. Yet there is so much more lighting can do to enhance people’s wellbeing and the quality of their lives – where they live, where they work and where they seek enjoyment.

New York presents the perfect backdrop for us to outline these profound changes and the issues surrounding them. The United States itself is at the forefront of both climate change and the global economic challenge, and both issues are interlinked.

Economic stimulus packages, such as the $787 billion signed into law by President Obama, constructively approach rebuilding the world’s economies to be environmentally sustainable through infrastructure and renovation.

Indeed, the new US administration has pledged to make the public sector an example - aiming to improve new building efficiency by 50% and existing buildings by 25% over the next decade.

This forms part of a ‘perfect storm’ of opportunity, with highly efficient lighting technology available here and now. All stakeholders – manufacturers, public administrators and even consumers - should seize the momentum being created through these initiatives.

The speed with which innovation is enabling change should serve as its driving force: however, innovation and speed alone won’t necessarily secure that change. The collective will of all players in the game is required.

Fittingly, the city we are in today encapsulates the challenge and the opportunity. It’s “the city that never sleeps”: an area where public buildings alone account for $15 billion in energy costs every year. Mayor Bloomberg has introduced a bold plan which other cities could follow, combining new building codes – including lighting – while presenting a clear roadmap for self-funded and incentivized renovation. We applaud his efforts.

Adopting new lighting technologies in a country like the US would save the economy $18 billion every year and would eliminate over 158 million tons of CO2. In fact, a third of the total potential energy saving from lighting could be found in North America alone.

Lighting is the low-hanging fruit of reducing energy consumption: it accounts for 19% of the world’s energy use – and in the United States, 22%; public and commercial buildings represent 60% of the power used for lighting; and up to 80% of offices are lit by outdated and inefficient systems. If you think about it, there are 4.4 billion traditional light sockets in the United States alone. These are all ready to accept upgraded, energy-saving lamps. Today.

Even if you’re not worried about the environmental benefits of energy-efficiency, the financial savings — now more than ever— have great relevance in the current economic downturn. In February, the United Nations called upon governments to seize the momentum of economic stimulus, not only to ‘jump-start’ the global economy, but even reprogram it to be sustainable.

Last month the G20 nations committed one trillion dollars to the world economy. The ‘win-win’ is that investing in energy-efficiency will reduce consumption, lower public and private electicity costs, and stimulate employment in construction and renovation. This is an incredible opportunity to invest in a sustainable future.

Never before has such momentum existed to undertake these projects, and we fully endorse calls for stimulus and long-term investments that will launch a new green global economy. Stimulus alone is not the solution, however. Everyone - public authorities, enterprise and consumers alike can realize measurable benefits by adopting energy-saving lighting. Acceleration is required: we need to engage everyone to take responsibility to lower energy consumption.

Philips strongly supports legislative efforts to end society’s reliance on outdated lighting technologies, and believes the industry as a whole should do so too. Globally, the phase-out of incandescent lighting is on track. The lighting component of the 2007 US Energy Bill will be implemented in California in 2011, nationwide in 2012, and fully realized in 2014. We have advocated for this, and are pleased that legislation is in place in the US, along with measures being introduced in Europe and many other countries.

Tackling the existence of inefficient technologies isn’t just restricted to lightbulbs you have at home. While we’re here today in New York, Congress in Washington is debating the importance of energy-efficient standards in outdoor lighting as part of the Climate Change bill.

Removing the most inefficient outdoor lighting could save 800 million dollars per year - at a minimum. Philips has provided input for the consideration of new efficiency minimums to be introduced in 2011, increasing in stages by 2015.

Switching older incandescent and mercury vapor lamps to high efficiency ceramic metal halide or solid-state lighting solutions – without compromising on safety - could reduce energy consumption by 10%. Add in other system improvements, such as sensors and lighting controls, and the total savings could go up to around 30% annually.

Central to our interest is our status as a global company of leading businesses, focused on value creation via innovations that improve people’s health and well-being. To achieve this aim, we ensure Energy efficiency while balancing Economic prosperity with Environmental health and social Equity – achieved through meaningful innovation.

These four ‘Es’ don’t just require products, but new ideas, new approaches, new business models and new solutions that simplify life, make it more enjoyable and productive in professional as well as personal environments. These innovations also deliver on our brand promise of “sense and simplicity”: designed around the needs of people and easy to experience.

This brings me specifically to our lighting business. We’re the world leader in lighting, and have undergone change as transformative as our industry to maintain that leadership.

We’re enabling people to experience of light in a whole new way, providing total systems to control light, manage energy consumption, provide functional and decorative environments and to enhance safety. We are managing the move from components and bulbs to solutions and applications. But perhaps, most importantly, we are at the epicenter of the solid state lighting revolution.

Solid-state is arguably the most profound change the industry has witnessed since the invention of electric light itself. LEDs are transforming the nature of lighting - how and where, artificial light is used to enhance the human experience.

Conventional lighting is, for the most part, either on, off or dimmed. LEDs, on the other hand, create new experiences and enable entirely new paradigms of creativity. LEDs provide a palette of millions of colors and dynamic effects that conventional lighting cannot match in dynamic design, scene-setting and ambience.

LEDs can be embedded in furniture, walls, ceilings - almost everywhere. And being digital, LEDs are programmable, presenting infinite possibilities for creative use and efficient management. This segment of the market is growing by approximately 30% each year, and could reach $30 billion in value terms within the next 15 years.

LEDs are shaping the future of lighting and Philips is in a tremendous position to maximize that future. We hold leadership positions at every link of the chain: from processors and components to light engines and modules; lamps, fixtures and luminaires to complete lighting systems. The LED itself sits at the heart of this dynamic, intelligent environment and has the potential to pervade most existing application areas of lighting, as well as many new ones.

Philips seeks to be the global leader of open and collaborative innovation in the lighting industry. Throughout our history we have found partnerships to turn ideas into reality. In particular, we see industry-wide adoption of standards as the sound base for establishing and maintaining healthy, vibrant businesses.

Yes, we possess a strong IP portfolio. But in solid-state, for example we are licensing our technology to open up the full potential of LED solutions to the entire industry. This will help fuel the growth of the solid-state market. Today, in fact, we have announced a cross-licensing program with Zumtobel for LED-enabled luminaires. This agreement builds on the licensing program we commenced last year, and I’m delighted that Philips and Zumtobel will now be able to further leverage the outstanding technology position we both occupy in the LED space.

Our strong presence across the solid-state chain is deliberate. As the world’s number one lighting company, we have completed a number of strategic acquisitions here in North America and Europe to solidify our leadership. The US is home to many of these businesses including Lumileds, Color Kinetics and the Genlyte group. These acquisitions have laid the foundation for a holistic approach, especially in solid-state.

Our brand portfolio underpins our total solutions offer. It’s an incredible array of knowledge, strengths and product lines derived from over 30 brands. Many of these you will see at Lightfair, some for the first time under the Philips umbrella.

So, why have we taken this approach? We want to offer an improved and simplified experience for professionals such as architects, lighting designers and installers - wherever the power and reach of our offer can create value for everybody in the chain.

We haven’t acquired these businesses simply to make Philips Lighting bigger. We have set out to capture value in specific market segments – outdoor and industrial lighting, retail and entertainment – by offering total solutions.

We combine all the assets in our portfolio: from end-user insight, to innovation and R&D. This is where the richness of our collective knowledge and expertise can cement our leadership, and make a genuine difference in the segments that we serve.

How we have combined the strengths of acquired businesses can be demonstrated by the new Calculite LED downlight from Philips Lightolier. It draws on competencies from throughout our portfolio, including Philips Lumileds and Philips Color Kinetics. The result is a product which will last about 50,000 hours - compared with about 1,000 hours for an incandescent bulb – and is over 75% more energy efficient.

In the hospitality segment, Philips LED solutions are turning hotel rooms into havens of relaxation, creating just the right mood to suit every individual taste, and in the entertainment segment our portfolio encompasses industry-standard products from leaders like Vari-Lite and Strand.

Just last month, we added Selecon of New Zealand to the family. Add Color Kinetics to that mix and it’s safe to say that Philips now touches everything from Hollywood studios to world tours by the biggest rock groups on the planet. And, as many of you will experience tonight, some of the most spectacular shows on Broadway!

Vari-Lite, in particular, has been a leading innovator in the music industry for almost 30 years. That leadership is set to continue with the new VLX Wash luminaire – a solid-state system which benefits the artist with enhanced color creativity and ease-of-installation, and benefits the concert–goer with an even more spectacular experience.

It’s also worth noting that the performance side of the music industry is a relatively healthy business. At a time of dwindling sales of recorded music, live performance is actually growing, and has even overtaken recorded music in terms of value.

Let me turn to the indoor market, where LED lighting is making a difference in many areas, for example transforming human behavior.

We know that natural light can affect human performance, even enhancing productivity. Philips’ DayWave LED-based office luminaire applies intelligent Dynamic Lighting technology to create ‘natural’ lighting ambience. It enables subtle variations of white light intensity and temperature throughout the day, creating an effect which contributes positively to office workers’ feeling of well-being.

We have even found Dynamic Lighting can help with learning: in a unique German pilot, Dynamic Lighting has been found to improve students’ reading speeds by 35%, and their accuracy in tests by 45%. The study even found that this technology had a calming effect on students - especially the wild ones!

At Lightfair this week we will introduce a number of products and solutions to extend our leadership in LED. Amongst them is this new ‘A-shape’ LED bulb. Delivering 600 lumens it will be a compelling replacement for 40 Watt incandescent bulbs in general usage, delivering more than five times the efficacy of an equivalent incandescent bulb.

Outdoors, our solid state capabilities are contributing to safer, sustainable and more attractive environments. LED systems enable facility owners and municipalities to apply lighting creatively, without compromising on light quality. This helps reduce energy consumption and maintenance requirements at the same time.

With this in mind, I’m delighted to announce today that we have signed a $1 million deal to supply LED lamps for a ‘green’ project just across the Hudson River, in New Jersey’s Overpeck County Park.

The system specified for this project forms part of a newly-launched LED product line by Philips Hadco, one of the former Genlyte companies we acquired in 2008. Hadco has been a long-standing leader in commercial and landscape lighting: in joining the Philips family, it gained access to unrivalled expertise to accelerate their presence in the solid-state market.

The Overpeck Park application, for example, makes use of LUXEON LEDs from Philips Lumileds, and a light engine co-developed with Philips Advance. This perfectly demonstrates the integrated approach we’ve built in North America in particular: timely products brought to market faster through shared know-how from the world’s most respected lighting specialists.

This know-how doesn’t just deliver new hardware: today, I can also announce a comprehensive audit and upgrade program by the Philips Lightolier Energy Services Group. This program offers guaranteed results for North American building owners, including measurable energy cost reduction, defined projected-return-on-investment, and itemized economic payback. This unique program will address the converging needs of building owners to cut expenses and curb energy use – all while improving the quality of light in, on, and around their facilities.

What makes this program unique is the holistic Philips responsibility of the entire upgrade process: from the initial site analysis, Philips will assist in selecting and installing sustainable lighting solutions, even taking care of the tax and utility paperwork. It’s also differentiated by a contractually-guaranteed economic payback and an unrivalled portfolio of high-quality options to fit virtually every application.

At the start of this presentation I talked about the changes taking place in the lighting industry. Energy legislation has been a useful enabler of those changes; however, we shouldn’t wait for legislation to change the lighting business. Philips has evolved its business - and so should everyone else- but to realize the full potential, the industry as a whole must step up. The energy-efficiency opportunity will create better value for society. At the same time it will enable the industry to offer customers exciting, competitive propositions in new and still-to-be developed applications.

Around the corner is another solid-state innovation - organic LED. OLED technology presents incredible possibilities for experiencing and interacting with light in creative new applications. Two weeks ago, at Euroluce in Milan, we unveiled the first-ever OLED interactive lighting concepts for consumer and professional use. These concepts combine interactivity, an ultra-flat profile with new and creative design potential never before seen in lighting products.

Our OLED concepts culminate years of research at the cutting edge of solid-state lighting. We are now unlocking OLED’s great potential, exploring light ambiance, novel design possibilities and event the interactivity of light and human gesture, which is a very new concept in lighting. We’re taking lighting beyond mere illumination – becoming an experience in itself.

The lighting revolution is an opportunity we are pursuing aggressively. We have moved with speed and agility to answer the call. We can do more with the new technologies and we can – and should – do much, much more with energy-efficiency.

I know I have bombarded you this morning with a lot of facts and figures, but when you add them all up, I hope you’ll agree that lighting captures innovation at its most meaningful. It is Philips innovation at its most effective – meeting real needs of real people, our customers and consumers.

For further information, please contact:
Felicia Spagnoli
Philips Professional Luminaires North America
781-418-9292
felicia.spagnoli@philips.com

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a diversified Health and Well-being company, focused on improving people’s lives through timely innovations. As a world leader in healthcare, lifestyle and lighting, Philips integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs approximately 116,000 employees in more than 60 countries worldwide. With sales of $38 billion in 2008, the company is a market leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as lifestyle products for personal well-being and pleasure with strong leadership positions in flat TV, male shaving and grooming, portable entertainment and oral healthcare. News from Philips is located at www.philips.com/newscenter.