1. Transformation a 24/7 reality Richard Wergan Royal Philips and Mark Mortell OneVoice New Delhi October 2014 ICCO Global Summit

2. IF YOU ARE IN BUSINESS YOUVE GOT PROBLEMS David Burk 3. GLOBAL TRENDS The Re-imagination of Everything 4. EVERYTHING THAT CAN BE DIGITAL WILL BE DIGITAL EVERYTHING THAT CAN BE CONNECTED WILL BE CONNECTED 5. Everyone will be hyper-connected Africa (6%) Aisa (44%) Europe (23%) Middle East (3%) North America (13%) Latin America/Carib. (10%) Oceania/Australia (1%) In just over 10 years, 528% increase in online users now dominated by Asia but wherever you are the trend is a steep, upward curve. Africa (6%) Asia (44%) Europe (23%) Middle East (3%) North America (13%) Latin America/Carib. (10%) Oceania/Australia (1%) 6. Everywhere 1.1 BILLION 3G SUBSCRIBERS 37% GROWTH 7. There are now more connected devices than human beings To everything 8. THE RE-IMAGINATION OF NEARLY EVERYTHING* *Following material adapted from KPCBs Presentation: Internet Trends 2012 9. Computing escapes the desktop 10. Objects become intelligent 11. All points become a point of sale 12. Entertainment leaves the building 13. Navigation goes off the map 14. Workforce replaces workplace 15. Music enters the cloud 16. Books are everywhere 17. Photography becomes ubiquitous 18. Journalism is a by product of ubiquitous connectivity 19. Press Release REIMAGINING COMMUNICATIONS Television THEN 20. Press Release REIMAGINING COMMUNICATIONS Television NOW 21. Brands now have tremendous direct reach 22. Some brands out-reach major publishers Brands are now media companies 12,530,474 25,164,485 63,378,241 124,679,586 145,866,966 Estimated Reach* Estimated Reach* Estimated Reach* Fans on social Estimated Reach* 23. Digital is the centre of human attention 23 24. CCS EU BIG5, 2012 63% OF 24-54 HOUSEHOLDS OWN 3+ CONNECTED DEVICES 7.5 HRS PER DAY INFRONT OF CONNECTED DEVICES ALL ADULTS We are Hyper-connected and Always-Addressable 25. Social is the dominant mode of communication 25 26. Commodities Goods Services Experiences Transformation Shift availability to desirability 27. Markets Consumer needs, behaviours and expectations Attention is now in new places New content creators .everyday Transformation 24/7 All Change 28. VT: 1. Global brand video 29. In 2013, Philips improved 1.8 billion lives with our innovation 30. A Transforming Business 31. We see a growing need for healthcare 2000 2050 The worlds population aged 60 and older 32. We see increased focus on personal well-being Only 62% of people around the globe rate their current state of health and well-being as good or very good. Well-being of people around the world 33. We see rising demand for energy-efficient solutions Lighting The worlds energy consumption Average saving we can make by switching to energy-efficient lighting solutions 40% 34. We manage a dynamic portfolio and we turn unexpected possibilities into great innovations +40 59,000 7% of sales businesses patents in R&D 35. Accelerate! delivering meaningful innovation to our customers in local markets faster and better than the competition. 36. Continuous Transformation Accelerate! change and performance improvement program making Philips a more agile and entrepreneurial innovator. resource business/market combinations to win end-to-end customer value chains simpler, standardized operating model growth and performance culture more customer focused 37. Philips leverages strengths across businesses and markets Philips Group Portfolio Deep Market Insights Technology Innovation Global Footprint The Philips Brand Our People Supported by a strong balance sheet Global market leader in Lighting Top 3 Healthcare player Leadership positions in over half of Group revenues Technology and know-how Strong IP Regional R&D centers Loyal customer base in 100+ countries 36% of group revenues from growth geographies Worlds 40th most valuable brand Brand value of $10 billion Content driven communications Employee Engagement Index exceeds high performance benchmark Culturally diverse top-200 leadership team 38. Global Communications Partnership 39. A Transforming Business Digital is core to everything we do 40. Philips Smart Air Purifier 41. Meaningful digital value propositions 42. Create lighting that matches your activity, or mood 43. VT: 9. Google glass edit video 44. Accelerate! Journey continues 45. Headlines Outlet Philips Plans to Split into Two Companies WSJ Philips Business to Keep Cooperating on New Products Bloomberg Breaking with Tradition, Philips Splits off Lighting Reuters Uit elkaar is voor Philips Beter (Splitting is better for Philips) NRC (Netherlands) Philips Outlines Plans to slip into Healthtech, Lighting Solutions The Hindu Business Line Proactive media outreach: Capital Markets Day 2014 46. Focused on the EUR 100+ billion HealthTech opportunity Serving the Health Continuum Leveraging strengths of Healthcare and Consumer Lifestyle Royal Philips Focused on the EUR 60+ billion Lighting solutions opportunity Establishing stand-alone Lighting structure Philips Lighting Transforming into two focused companies Higher growth and profitability Improved customer focus in attractive markets Faster decision making Lean overhead structure Considering options for capital market access for Philips Lighting Release capital for investments in growth 47. How Communications can make the difference Transformation 24/7 48. 1. Brand Relevance Transformation 24/7 49. 1. Brand Relevance 2. Aligned Organisation Transformation 24/7 50. VT: 4. Time delay video 51. Centres of Excellence replace Operational Teams Government & Public Affairs InnovationFinancial Comms Issues & Crisis Comms SustainabilityBusiness Transform. Strategic & Management Comms Integrated Activation & Campaign Planning Conversations & Campaigning Content Optimization & Management (Curation) New Operating Model 52. 1. Brand Relevance 2. Aligned Organisation 3. Being Prepared - for what you know Transformation 24/7 53. There are now more connected devices than human beings In the always on world 54. EPIC: Big, bold, strategic activations that seek mass reach and involve long lead times and multi-channel planning (e.g. Brand refresh ) TENTPOLE: mid-range activities that draft on a cultural agenda or seasonal cycles (e.g. WEF, IFA etc.) DRUMBEAT: Always-on blend of social and press office content that builds reach, relevance and buzz and helps win the newsfeed Content is managed at 3 speeds 55. Headlines Outlet Visiq, nouveau systme d chographie mobile de Philips LEcho (Belgium) Hightech Business in de Kankerzorg (hightech business in cancer therapy) Financieele Dagblad (Netherlands) Affordable Innovative Product Harian Metro (Malaysia) Philips showcases innovations for HealthCare, Lighting The Nation (Thailand) Hospital in your Hands Maariv (Israel) RTL Z 56. Headlines Outlet Connectivity creates value for Consumers : Philips CNBC Philips goes all-in on the connected home USA Today The Top 5 Hottest Tech Products from IFA 2014 Forbes Philips Wants to Cure Aches With Wireless Drug-Free Pain Relievers Gizmodo (Australia) Low-Fat Fryer, this is Smart Living JoongAng Ilbo (Korea) 57. 1. Brand Relevance 2. Aligned Organisation 3. Being Prepared - for what you know 4. .and what you dont Transformation 24/7 58. the unexpected happens! 59. 1. Brand Relevance 2. Aligned Organisation 3. Being Prepared - for what you know 4. .and what you dont 5. Organise around Content Transformation 24/7 60. A Great Story- will capture our curiosity 61. Provoke Questions 62. Transport us to another place and time 63. Surprise! 64. Move and Inspire 65. Stories are old The environment is new 66. Importance of Rhythm 67. Annual report Microsite security breach Hue launch Aluminium issue Q1 financial results Rijksmuseum Prolonging the length of time and shape of the news cycle 68. Modern News Cycle: Tactics Lengthening the conversation cycle Develop responsive newsroom capabilities Segment audience into communities of interest Optimise for multiple platforms Search Engine Optimisation Raising the Conversation cycle Influencer Outreach Advocacy programmes Celebrity Endorsements Content partnerships Native advertising Network coordination Heightening the reach of the news cycle 69. The World is a NewsFeed 70. Winning the newsfeed ATTENTION Friends: a growing source of attention, distribution and loyalty. Editors: Influence still matters. Having an influencer relations programme is critical Robots: Algorithms increasingly stand between ourselves and our audience. Ignore them at your peril 71. 1. Brand Relevance 2. Aligned Organisation 3. Being Prepared - for what you know 4. .and what you dont 5. Organise around Content 6. Measure, Monitor and Adapt Transformation 24/7 72. MEASUREMENT & ROI Possible Financial Impact - ROI ACTION What actions if any has the target audience taken? INFLUENCE How we influenced perceptions & attitudes of the target audience ENGAGEMENTEXPOSURE Who is interacting & engaging with our content? How and where? To what degree have we created exposure to content and message? Non-Financial Impact Value 73. The Online Portal Interactive online dashboard Historical data available Data viewable by business unit and by market Data available on the type of coverage generated by journalists. Evaluation Winner 74. Reporting Snap-shot of KPIs: Traditional media Key blogs Month-on-month perspective Performance by market and business unit Competitor analysis Contextual analysis of KPI drivers and implications/insights 75. 1. Brand Relevance 2. Aligned Organisation 3. Being Prepared - for what you know 4. .and what you dont 5. Organise around Content 6. Measure, Monitor and Adapt Transformation 24/7 76. Transformation a 24/7 reality Richard Wergan Royal Philips and Mark Mortell OneVoice New Delhi October 2014 ICCO Global Summit