Ad Schevers Growth in Asia (0.4Mb) 15693

8/6/2019 Ad Schevers Growth in Asia (0.4Mb) 15693

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Lighting analysts day, Eindhoven, September 20th, 2006 2

Agenda

Philips Lighting Market Position in Asia

Business opportunities:

Energy saving solutions

China

India Japan

Automotive lighting

Solid State Lighting

Conclusions


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Asia21%

LatinAmerica

5%North

America

27%

Europe

47%

Asia

16%

LatinAmerica

5%North

America

25%

Europe

54%

2000 2006 Q2YTD

Philips Lighting

Growing importance of Asia in regional portfolio


4/26Lighting analysts day, Eindhoven, September 20th, 2006 4

Japan

13%

Rest Asia

Pacific

23% India/

Pakistan19%

Asean

18%

China

27%

2006 Q2YTD

Philips Lighting: market position in Asia

Regional sales distribution within Asia



Philips Lighting: market position in Asia

Sales growth

0

200

400

600

800

1000

1200

1400

2000 2001 2002 2003 2004 2005

USD million Sales to thirds: USD1.2 bio (2005)CAGR 15% (2000-2005)

Market share: 24% (general lighting excluding Japan)



Agenda




China India

Japan

Automotive lighting


Conclusions



Business opportunity

Energy Saving: The Opportunity for Lighting in Asia

Asian economic growth is boosting energy demands by 45% for global

oil demand and 25% of natural gas

Rising energy prices decreases consumer demand and drive inflation

Economic growth requires energy savings

Philips is the global leader in lighting industry with broad portfolio of

energy efficient lighting solutions



Building on strength

Asia Pacific: untapped potential of existing lighting technology

Todays potential savings

14 billion Euros in energy costs/year

112 million tons of CO2 emissions/year

Equivalent of more than5.6 billion trees

More than 296 million barrels of oil/year

Output of more than 70 power plants (@ 2 TWh/yr)

Sources: International Energy Agency (IEA)World Resource Institute (WRI)


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Agenda




China India

Japan

Automotive lighting


Conclusions


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China - expansion to rural areas

Rural counties

Class II counties

Class II Tier 2 cities

Class I Tier 1cities

Metro


Criteria # of cities

Population > 10M

GDP > 30B

Population 2- 8M

GDP 10-30B

Population 0.2-0.5M

GDP 10M-200M

Population


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China - BEST Partner program introduced to develop distribution.

Best Partner Program with selected key distributors

shared marketing programs towards end-user segments & retailers

dedicated portfolio addressed to local market needs

knowledge sharing & satisfaction improvement programs

development thru product & application training

logistic support from both sides


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Business opportunities

China - Further expansion to 2nd

/ 3rd

tier cities

Tier 2/3 city market size is large

Fast growing needs of high quality lighting products.

Build effective distribution coverage (quantity and quality of dealers) End-users marketing approach in professional & consumer segments


Class I Tier 1cities

Metro


Criteria # of cities

Population > 10M

GDP > 30B

Population 2- 8M

GDP 10-30B

Population 0.5-2M

GDP 0.2B-10B

4

30

257

659


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China; vast supply base for Philips world-wide

0

50

100

150

200

250

300

350

400

450

2004 2005 2006E

USD million

Value of external sourcing

Next to 8 own factories use of Chinese supply base


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Intensified R&D investment

More than 180 lighting engineers Philips Innovation Campus, Shanghaiopening December 8th, 2006

Co-allocated with other Research Groups Philips; Linkages with

universities & standardization federations; Launching platform for newtechnologies (SSL, .)


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Agenda




China

India

Japan

Automotive lighting


Conclusions


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India - SMILE: Sustainable Model In Lighting Everywhere

Uday rechargeable portable unitfor general illumination

Kiran hand held, hand crankedLED flashlight

Total Households:212 million

Electrified: 118 million Not Electrified: 93 million

Urban: 55 million Rural: 64 Mn---SMILEPhase 1--

Urban: 8 million Rural: 85 million

Target Markets

Products developed


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India: Rural Distribution Initiative in India

Semi-

urban+rural

63%

Urban37%

GLS Market

2 million

retail stores

0.8 million

retail stores

> 920 towns

> 2600 smaller towns,

> 600 000 villages

The typical rural retailer


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Agenda




China

India

Japan

Automotive lighting


Conclusions


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Japan: Niche approach

We focus on niche opportunities

in the professional market.

Key Account Management is key.

Our strength: Automotive Lamps,

CDM and UHP

CDM is fastest growing product

line in OEM segment


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Agenda




China

India

Japan

Automotive lighting


Conclusions


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Automotive Lighting: Emerging Markets, car production

2006: China taking over #3 position, after USA and Japan 2010: Asia car production nearly 2 times Europe or USA

2010: China+India+Thailand+Indonesia+Malaysia = 85% of total Europe production

Philips Automotive Lighting is market leader in Japan, Korea, China

Philips Market share in Emerging markets comparable to Japan and Korea

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

UNITED STATES JAPAN CHINA GERMANY

0

5,000,000

10,000,000

15,000,000

20,000,000

25,000,000

30,000,000

35,000,000

2,00

0

2,00

1

2,00

2

2,00

3

2,00

4

2,00

5

2,00

6

2,00

7

2,00

8

2,00

9

2,01

0

ASIA WEST EUROPE NORTH AMERICA

EAST EUROPE SOUTH AMERICA

0

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

2,00

0

2,00

1

2,00

2

2,00

3

2,00

4

2,00

5

2,00

6

2,00

7

2,00

8

2,00

9

2,01

0

CHINA INDIA THAILAND INDONESIA MALAYSIA

Source: Global Insight


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Agenda




China

India

Japan

Automotive lighting


Conclusions


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Solid state lighting (SSL) Focus on Application Segments

Fast growing market (40% / year)

Asia is fruitful soil for Solid State Lighting

Philips in Asia is present as LED supplier (Lumileds),

as module supplier and as total solution provider

Rapidly building capabilities in the region

Sales growth for total solutions: sales doubled in 2005 and in 2006


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SSL- Luminaires Focus Segments

Hospitality

Offices Shops

INDOOR

City Beautification

OUTDOOR

Road & Tunnel

Signal & Signage

Residential


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Agenda




China

India

Japan

Automotive lighting


Conclusions


26/26


Conclusions

Growth in Asia

The demand for energy saving solutions will accelerate market growth.

The well structured distribution in India and the ASEAN countries

(High market shares) is a sound basis for rapid growth in fast

growing markets.

Expansion of distribution in China will lead to further increase

our market share.

China is important as a supply base.

Asia, an early adaptor for new technologies, offers great opportunities

to enlarge our share in the professional Lighting business.

Documents

Ad Schevers Growth in Asia (0.4Mb) 15693