Global Sales and Service International. Kevin Haydon EVP and CEO Global Sales and Service International May 31st 2007

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1 Global Sales and Service International Kevin Haydon EVP and CEO Global Sales and Service International May 31st 2007

2 Agenda Global Sales and Service International Business overview Opportunities in mature and emerging markets Conclusions 2

3 Global Sales and Service International GSSI drives growth in 11 key markets Key markets are entrepreneurial entities GSSI Head Office is small and focused GSSI is characterized by two distinct markets 3

4 Emerging Markets in GSSI MCR EMEA, LATAM, Asia Pacific and China 4

5 Mature Markets in GSSI DACH, Adria, Iberia, France, Japan, UK&Ireland and Benelux 5

6 Characteristics APAC, LATAM and EMEA market Total GSSI medical equipment market is 11B This is 50% of global market EMEA 50% of GSSI market Asia 43% of GSSI market Latin America 7% of GSSI market 2006 market growth in these regions: 5% compared to 2005 Mature: 60% of GSSI, with a 4% growth in 2006 compared to 2005 Emerging: 40% of GSSI, with an 8% growth in 2006 compared to 2005 EMERGING APAC EMEA MATURE LATAM 6

7 Agenda Global Sales and Service International Business overview Opportunities in mature and emerging markets Conclusions 7

8 Highlights: spectacular growth in Japan In 2006 Philips Medical Systems Japan achieved 27% sales growth A package deal with 17 Magnetic Resonance Imaging Systems to a public hospital group 3Tesla Achieva with an order intake of 23 systems and 56% market share AED sales in Japan increased by 200% exceeding 24,000 unit sales 8

9 Highlights: large deals in Asia Thailand: Phyathai Hospitals Group purchasing cross modality equipment valued at 12.4 million Euro Phyathai Hospital Korea: Samsung Medical Center purchased 9.4 million Euro for their cancer center Greater China: Ascent Profit to bring 200 high-end radiography systems to hospitals in China. The 27 million Euro contract will provide improved care to millions of patients 9

10 Highlights: cardiology in Singapore Philips strengthens its position as cardiology leader in Asia Collaboration with the National Heart Centre (NHC) Singapore Yearly premier cardiology conference which attracts over 1,000 medical professionals from across Asia Pacific 10

11 Highlights: partnership deal in India Philips Medical Systems and Artemis Health Institute signed our largest healthcare research partnership in India Philips won this 5.4 million euro strategic deal due to our research capabilities This strategic technology partnership will help Artemis deliver international quality, best in class healthcare services to its patients. Dr. Kushagra Katariya, Executive Director and Chief Executive, Artemis Health Sciences 11

12 On track with ambition in Asia to grow to 1.3 billion in 2008 PMS Sales to third 1,300 Mln Euro > 1,000 Mln Euro ~ 700 Mln Euro Mature - Japan, Australasia, Korea Emerging - China, India, ASEAN 12

13 Highlights: strong growth in emerging markets We combined forces in Eastern Europe, Middle-East and Africa We invested in people creating a dedicated group of highly talented people We replaced the traditional regional and G2M structure with a hub structure Result was a sales growth of 15% in 2006 compared to

14 Highlights: patient focus e.g. in Italy Parma University Hospital, Philips and Walt Disney Company built an ambient experience solution with Disney figures Disney's contribution came through their "hospital of colors" project, decorating the children's waiting room with characters from "The Little Mermaid" Disney and Philips introduced this solution during a press conference held on January 25 th in Parma 14

15 Highlights: Philips Medical Capital drives growth The Philips Medical Capital (PMC) program started in 2005 and now delivers a substantial amount of business for GSSI. A few examples: PMC France financed 33% of all CT and MRI deals In Q1 PMC Germany financed 40% of equipment deals PMC Asia started its activities in the summer of 2006 and has build a healthy funnel of $ 79M worth of deals since After only 6 weeks of the PMC launch in China, the program secured its first financing deal in the country PMC Spain has financed 20% of the PMS business and outperformed all expectations Philips Medical Capital enables customers to use technology without owning it and enables us to build long term relationships. 15

16 Agenda Global Sales and Service International Business overview Opportunities in mature and emerging markets Conclusions 16

17 Mature Markets Analysis Demographics and lifestyle Professionalisation Politics Accessibility, Quality Related value drivers/root causes Change in healthcare structure Privatization and specialization Patient acts as consumer Change in business models Disease related funding Partnerships & outsourcing Change in clinical applications Oncology Cardiology Profitable Growth Strengthen Partnership Models Move to integral care cycle solutions Build on our strong installed base 17

18 Emerging Markets Analysis Economic development and stability Availability of Funds Politics Accessibility, Quality Related value drivers/root causes Change in healthcare structure Top private layer is growing Emerging middle class Change in business models Large scale public projects Low and mid end solutions Change in clinical applications Tuberculosis and Aids Oncology and Cardiology Aggressive Growth Local solutions Expand low and mid end portfolio Channel expansion 18

19 Agenda Global Sales and Service International Business overview Opportunities in mature and emerging markets Conclusions 19

20 Mature and emerging market mix drives growth Shared structure increases speed and efficiency Portfolio integration via care cycle approach helps to grow long term strategic relationships in all markets Partnership models help customers focus on patient Mid and low end solutions will expand market share and drive growth in both emerging and mature markets Local solutions approach in emerging markets helps increase market share Global Sales and Service International is a strong organization leveraging knowledge and expertise in both developed and emerging markets 20

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