Philips to acquire Lumileds Theo van Deursen CEO Philips Lighting 15 August 2005

Philips’ acquisition of Agilent’s shares in Lumileds Philips acquires all shares of Agilent (47%) Philips stake increases to 96.5% Transaction approximately US$ 950 (Euro 765) An important step to expand the PD Lighting business and ensures a leading position in the emerging, high growth LED market

Lumileds’ leadership in high power LEDs Industry leader in high power LED’s (LUXEON platform) JV established in 1999 Approx 1760 employees

Lumileds facilities Headquarters, San Jose, California Penang, Malaysia

Lumileds performance August 04 / July 05 Sales: US$ 324 million EBIT: US$ 83 million Annual Growth: 28% Operating margin: 25.6% Employees: 1760

The Solid State Lighting value chain Lumileds Philips Die Single Package or Chip-on-submount Source, optics, driver and controls Systems / Luminaires End- user

The strategic relevance Philips ensures its leading position in the emerging, high growth LED market Building on Lumileds proven expertise and leadership Involvement in all stages of the LED business value chain Leveraging Philips technology, manufacturing and commercial capabilities Reaping cost synergies and additional revenues

LED product features small size long life & robust low voltage efficient (rapid improvements) colors: saturation + dynamics easily dimmable quick response / instant start environmental friendly: no mercury

High brightness packaged LEDs Revenues in $ million, ww CAGR 25% 6,000 5,000 4,000 3,000 2,000 1,000 2003 ‘04 ‘05 ‘06 ‘07 2008 Other Illumination Signals Automotive Signs/displays Mobile Appliances Source: Strategies Unlimited; PennWell

LumiLeds is well positioned to continue it’s past (above market average) growth “Focus on / active in the high growth market segments” Illumination + automotive front lighting LCD Backlighting Mobile Flash Automotive exterior Automotive interior Mobile displays Signs = LumiLeds key player

Philips Lighting 2004 - 2005 LED Product range Equinox Ledline2 LEDFlood Origami Minicolour LEDAmazon iParm

Exploiting Solid State features and benefits….. Light experiences & effects Dynamic colors Embedded Robust & long life Total Cost of Ownership reduction Low energy & maintenance …….resulting in “increased number of light points and new applications”

Target applications in the professional market are decorative outdoor and shop lighting…

..creating new lighting possibilities …..

…bringing dynamic colour …..

…..creating atmosphere in shops…. Winter Spring User interface

…..and ambient experiences in hospitals

Linköping Universtity Hospital Medical Systems and Lighting For example: 2 in 1 night light developed for families with childeren, 1 click night sight, 2 click normal light. Unique combination of energy saving CFLi and LED.

Leading to profitable growth Today’s installed luminaire base will continue to drive conventional lamp replacement Luminaire sales will convert gradually to Solid State Solid State creates new lighting possibilities with more initial light points per application

We shape the future in Solid State Lighting For example: 2 in 1 night light developed for families with childeren, 1 click night sight, 2 click normal light. Unique combination of energy saving CFLi and LED.