Winning in India Nirupam Sahay, General Manager Indian Subcontinent, Philips Lighting 1 1
Key takeaways The Indian Lighting market is large, and offers significant growth opportunities Driving future growth through rural distribution and Lighting Solutions Philips is the clear market leader and we continue to Accelerate! by leveraging: Competitive advantages in distribution and local innovation capabilities End2End approach to win in Consumer Luminaires and LED Asset light model is driving high ROIC 2
The Indian Lighting market offers significant growth opportunities across businesses Double-digit growth in the EUR 1.5 billion Indian Lighting market, across businesses +11% The long-term Indian Lighting market growth story continues to be positive Increasing need for Lighting Increasing affluence: Middle class to grow from 33% (2011) to > 50% (2020) 28% of India still without electricity 1.2 billion population, growing at 1.6% per year, 2/3rd younger than 35 years Construction growing at 7% CAGR 2009 2010 2011 Automotive Consumer Luminaires 2012 Est. 2013 Est. Prof Solutions Lamps & Drivers Need for Energy Efficient Solutions Power deficit of 20GW: Strong demand outstripping supply Government driving energy efficiency Converting all lighting points in India to LED will deliver 30% savings Source: ELCOMA, Navigant Consulting, Feedback Consulting 3
Philips Lighting India growing well ahead of the market With clear leadership position in consumer & professional Philips growing 1.6x vs. market & > 2x vs. GDP, gaining share across businesses +17% A strong and unique set of assets that help us win in the market and grow Asset light business model with 90% revenues from Local for Local solutions driving high ROIC Platinum Award in the Readers Digest Most Trusted Brands Survey in 2010 & 2011 Top of mind awareness and preference 2x vs. next competitor Strong partnerships across the ecosystem of specifiers, channel partners and co-makers Strong growth and performance culture, highly engaged workforce 2009 2010 2011 Automotive Consumer Luminaires 2012E 2013E Prof Solutions Lamps & Drivers 4
The world needs more light Rural distribution & Lighting Solutions will be key to future growth Rural: Huge untapped opportunity, working on creating viable Go-to-Market & Solutions Large opportunity: 70% of population, with increasing income levels Working with Government Ministries to create locally relevant, affordable off-grid and on-grid solutions Piloting multiple models. Ambition to extend to 8 states by 2015 Drive Integrated Solutions & Services for the Indian market Solar LED Lighting Solutions: Off and on-grid applications. Executing single largest order in Tamil Nadu Aggressively build Controls - Network & Stand-alone Continue to deliver Integrated Lighting Solutions, designed around customer needs 5
Reach: Leadership in distribution across channels Deep consumer reach through strong Trade Retail distribution network More than 1 Million retail outlets across the country Present in 2993 cities and towns A 950 strong channel partner network, and growing at one partner every two weeks End-user driven approach for Professional businesses Leveraging an ecosystem leveraging Key Accounts, Lighting Specialists, Channel Partners, Specifiers and Contractors Directly engaging 900+ specifiers, resulting in winning 14 out of 16 Commonwealth Games stadia projects 6
Winning in the Golden tail Will continue to be significant for the next 10 years Incandescent Lamps: Consolidating and gaining market shares Addressing the need for light, in semi-urban markets, through a EUR 20 cts. offering Leverage short/medium term opportunity as less efficient manufacturers close Fluorescent Lamps: Driving energy efficiency through conversion to slim tubes Gaining share through customer connect programs and leveraging distribution reach Compelling value propositions driving leadership across segments 7
Winning in the Consumer market Through continued investment in Consumer Luminaires Creating branded retail as a differentiator Driving awareness and preference among consumers Building a locally relevant product portfolio First mover advantage in an unbranded market, growing at >70% CAGR Providing a differentiated customer experience through 77 Brand Stores Investing in creating consumer awareness across touch points: Print, Billboards, TV, Online & Exhibitions Creating compelling consumer propositions based on local needs Local portfolio contributes to about a third of sales 8
End-user driven localized solutions driving LED leadership Customer needs driving LED innovation in India Lamps: Energy savings and affordable price points Professional Solutions: Lowering maintenance costs and CAPEX with energy efficiency Consumer Luminaires: Improved aesthetics, with energy efficiency LED leadership with winning localized digital lighting solutions Lamps: Consumer 7W LED lamp at just USD 10 Professional Solutions: GreenLED down lighter with just 10 months payback; GreenLine Smart LED Street lighting LED growth (vs. 2011): Lamps 2X, Professional Solutions 3X, Consumer Luminaires 5X LED Contribution to businesses: >30% in Consumer Luminaires, >20% in Professional Solutions 9
Key takeaways The Indian Lighting market is large, and offers significant growth opportunities Driving future growth through rural distribution and Lighting Solutions Philips is the clear market leader and we continue to Accelerate! by leveraging: Competitive advantages in distribution and local innovation capabilities End2End approach to win in Consumer Luminaires and LED Asset light model is driving high ROIC 10
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