Barbara FrancioseCEO of Ultrasound & MonitoringMay 31st, 2007

Ultrasound and Monitoring

The Ultrasound and Monitoring Business

• Three fast moving, higher volume business units

• Care cycle and Emerging Market synergies

• Business goal to accelerate growth – all have strong market shares and high EBIT

UltrasoundBusiness

Patient MonitoringBusiness

Cardiac CareBusiness

Ultrasound and MonitoringBusiness Group

We ship >150,000 New Devices per year

Ultrasound and Monitoring at Philips Medical

• Markets and Share:– Ultrasound– Patient Monitoring– Cardiac Care

• Emerging Markets

• Care Cycle and Clinical Decision Support Expansions

• Summary

Monitoring - Total Market Opportunity of € 3.1B Equipment Revenue + Service Revenue (€M projected)

• 2010 projected market total approx. € 3.1B

• Growth in Emerging markets 6%, 2x rate of developed markets

• Expansion in SW systems and Clinical Decision Support

2140 2203 2274 2345 2422

642 661 682 703 727

0

500

1000

1500

2000

2500

3000

3500

4000

2006 2007 2008 2009 2010

Equipment ServicesSource: Philips Internal

3% CAGR

Monitoring – Slight Gain in 2006, more opportunity in EM

Source: Frost & Sullivan 2006 PM Market Update Study, Status: January 2007

Share of Developed Market

GE, 28%

Datascope, 6%

Spacelabs, 5%

Other, 17%

Drager (Siemens),

7%

Philips, 37%

Share of Emerging Market

Philips 15%

GE 18%

Spacelabs 2%

Drager (Siemens)

6%

Other 59%

Share of Total Market

Philips, 34%

GE, 26%

Other, 22%Sapcelabs,

5%

Datascope, 5%Drager (Siemens),

7%

3100 3255 3410 3590 3770

840 880 930 970 1020

0

1000

2000

3000

4000

5000

6000

2006 2007 2008 2009 2010Equipment Services

Ultrasound - Total Market Opportunity – € 4.8B Equipment Revenue + Service Revenue (€M projected)

• 2010 projected market approx. € 4.8B

• Includes Compact expansion

• Servicescontinues to be more profitable than equipment

4% CAGR

Source: Philips Internal

Philips 22%

GE 26%Toshiba 14%

Aloka, Hitachi, Medison etc.

22%

Siemens 16%

Philips 18%

GE 22%

Toshiba 17%

Aloka, Medison,

Mindray etc.30%

Siemens 13%

Philips 23%

GE 27%Toshiba 13%

Aloka, Hitachi, Medison etc.

20%

Siemens 17%

Source: Philips Internal

€ 3,100M

Share of Developed Market Share of Emerging Market

Share of Total Market

Gain in Radiology and Cardiology offset missing Compact Segment

Ultrasound – slight share increase in 2006

43%

42%

5% 3% 7%

GE SonoSite ZonareTerason Others

10%

90%

Cart Based Compact

Sonosite + GE control >85% of the market, pavingground for Philips future product introductions

Compact Market € 300M

Ultrasound - Compact Market grew to 10% in 2006

Source: Philips Internal

Technological Building Blocks completed

Live 3D uses Microbeamforming

ASICS

Cardiology19%

Radiology & Vascular

20%

SharedServices

8%

Women’sHealthcare

17%

EmergencyMedicine

19%

Anesthesiology6%

CriticalCare

4%

Other7% Cardiology

19%

Radiology & Vascular

20%

SharedServices

8%

Women’sHealthcare

17%

EmergencyMedicine

19%

Anesthesiology6%

CriticalCare

4%

Other7%

Projected Compact Ultrasound by DisciplineProjected CAGR 25% - € 800M total market in 2010

Ultrasound - Compact Adoption aligns with Philips Strengths

= Philips strengths

Source: Philips Internal

Supplies

ECG MgmtResuscitate

2731 2852 2995 3150 3322

456 532622

727850

0500

10001500200025003000350040004500

2006 2007 2008 2009 2010Equipment Services

Cardiac Care - Market Opportunity € 4.2B Equipment Revenue + Service Revenue (€M projected)

• 2010 projected market approx. € 4.2B

7% CAGR

Philips Supply Business addresses only 50% of market todaySource: Philips Internal

Philips27%

Zoll21%

Medtronic PhysioControl

35%

Cardiac Science

7%

Other10%

Philips26%

Zoll17%Medtronic

PhysioControl17%

Cardiac Science

1%

Other39%Philips

27%

Zoll22%

Cardiac Science

8%

Other8%

Medtronic PhysioControl

35%

Share of Emerging MarketShare of Developed Market

Share of Total Market

Cardiac Resuscitation – Gaining Market Share

Source: 2006 public earnings reports

Ultrasound and Monitoring at Philips Medical

• Markets and Share:– Ultrasound– Patient Monitoring– Cardiac Care

• Emerging Markets

• Care Cycle and Clinical Decision Support Expansion

• Summary

050

100150200250300350400450

2006 2007 2008 2009 2010

LatinIndiaChina

Source: Foster & Sullivan January 2007 report.Equipment only & includes Spot Check market

China alone will reach € 227M By 2010

Monitoring Emerging Market growing 6 – 7%

45%

26%

30%

19%

25%

55%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

China Global

System equipment: CT, MR, X-raySource:PMS MarketingWorking Group analysis

System Equipment - Market Segmentation

In China Mid/low End Products = 75% of MarketTypical for emerging markets

Low-end

Mid

High-end

Targeted R&Dfor

Low costGood Performance

Patient Centric

Inorganic growth thru Partnering and M&A in Brazil, China and India

UM - Organic expansion in Emerging Markets

HD3 – introduced late 2005,>3000 units to date

SureSigns and MP5, introduced in 2006, >4000 units to date

Ultrasound and Monitoring at Philips Medical

• Markets and Share:– Ultrasound– Patient Monitoring– Cardiac Care

• Emerging Markets

• Care Cycle and Clinical Decision Support Expansion

• Summary

Care Cycles within Ultrasound and Monitoring

• Preventative• Predictive• Diagnostic• Therapeutic

• Ubiquitous

Clinical Decision Support – Protocol Watch Clinical Goal: To Optimize the Care of Patients with Sepsis

• Early indication of the onset of sepsis

• Improve disease recognition and treatment

• Provide consistent clinical approach based on SSC driven protocols

Reducing the Door-to-Balloon time in Acute MI

Strategies for Reducing the Door-to-Balloon Time in Acute

Myocardial InfarctionNumber 22November 30, 2006Volume 355:2321-2329

New Campaign to ImproveDoor-To-Balloon Times Reflects a Rethinking of How Research IsTranslated Into Practice

Paramedics Activate Cath Lab for STEMI Patients in Some Areas

Only Philips Offers Complete Discovery-to-Balloon (D2B) Solution

EMS ED

Cath Lab

EMR/HISEmergencyDiagnosis

EmergencyTransportation

Diagnosis andTreatment

Treatment and Monitoring

Via Cell phone, Laptop or internet

Via Radio

Network

Prevention Diagnosis Treatment SurveillanceScreening Management

Patient Centric Care Cycles in Women’s Health

• Women’s healthcare needs change as they age

• Four opportunities relevant to “baby boomers”

– Heart disease– Breast cancer– Gynecology– Osteoporosis

Heart Disease is NOT just a Man’s Disease

• Heart disease - the # 1 killer in women (500,000 die each year of CVD versus 40,000 that die from breast cancer)

• Recent AHA survey - only 8% Primary-care Physicians knew heart disease kills more women than men each year, a fact since 1984

• Symptoms, tests and therapy are different for women; Philips will develop gender specific software and technology in this area

Philips strength in cardiologyis vital in Women’s Healthcare

Ultrasound and Monitoring at Philips Medical

• Markets and Share:– Ultrasound– Patient Monitoring– Cardiac Care

• Emerging Markets

• Care Cycle and Clinical Decision Support Expansion

• Summary

Summary – Ultrasound and Monitoring

• Strong Businesses Today –still taking market share

• Patient centric growth:– emerging markets– compact ultrasound– emergency medicine– women’s health care

• Saving lives, improving clinical care and adding new value to Philips