Energy Saving For Future

Sustainability in Industry

Tan Lee Cheong 24th May 2012

introduction

A global company of leading businesses creating value with meaningful innovations that improve peoples health and well-being

Our businesses

Who we are

Sales over EUR 26 billion (USD 33 billion) Over 30% in emerging economies
35% 35% 35% 35%

116,000 employees Sales and service outlets in 100 countries

30% 30%

Globally recognized brand (world top 50) Our brand value has doubled to $8.3bn since 2004 1.6 billion investment in R&D, over 6% of sales 55,000 patent rights 33,000 registered trademarks 49,000 design rights

Healthcare Lighting Consumer Lifestyle

Our Focus
Homes A relaxing atmosphere Offices

The distribution of Our Business

Offices Outdoor

Healthier more productive workplaces 17% Retail Hospitality Enhanced shopping experiences 13%

Livable secure cities 17%

24% Industry Improving safety, reliability and operational costs 11% Entertainment Breathtaking shows 2% Healthcare

Clear hotel identity & atmosphere 5%

Automotive Automotive

Faster healing 3%

Improve efficiency 8%

Philips is the global leader in lighting, offering a wide and balanced portfolio
We are the largest lighting company Indexed sales of Philips lighting and top 5 competitors1 with a strong and balanced portfolio Total sales EUR 7.6 Bln

* * * * * * * * * * *

*
11% 6%

8%

Last 12 months

41%

June 11
28% 6%

*
1 2

*2

Lamps Packaged LEDs

Consumer Luminaires Drivers and modules Automotive

Sales for competitors based on the latest fiscal year information Includes backlighting, display / flash, projector lighting and other non-general illumination categories

Professional Luminaires and Controls

the world today

The world needs meaningful innovations to respond to todays global changes

*UNEP data

Industrial activity consumes 37% of global energy

The fact is...industry is the biggest energy consumer

Industry is continuously the biggest sector which consumes the majority of energy, around 45%. Especially in world coal consumption, industry sector accounts for 78%. This leads to the result that industry is also the biggest producer for CO2 emission. Total APR countries share 30% of CO2 Emission and China takes 19% out of it.
Other 0.3% Gas 19.7% Transport 0.5% Non Energy 4%

Oil 39%

Coal 41%

Industry 78%

Source: International Energy Agency (IEA)

Trends in Industry

Co-existing with the community

Automating process with technology

Popularity of Green Buildings & Factories

Governments encouraging green standards

Shifts of Industrial footprint

11

Asia Country Leaders Are Committed to Reduce Carbon Intensity Emission

Chinese prime minister Wen Jiabao is committed to pursuing a low-carbon economy in UN Climate Change Summit (COP15) reduce carbon intensity per unit of GDP by 40% to 45% by 2020

Climate change gives rise to green consciousness and increased demand for energy saving solutions & Green building.

A leading example is Australia, which has legislated to ban low efficient technology. Government activism will increase to manage these effects.

What Industry Customers tell us:

Energy resource shortage, and increasing costs are on top of mind Energy shortage is becoming a key barrier for sustainable fast economic growth and improved quality of life. - Limited energy supply - Fast energy demand growth Industry lighting represents a significant opportunity for savings. More efficient factory lighting solutions are required.

Note: Data includes geotheral, solar, wind, wood and waste electric power and are adjusted to include electricity imports and exclude electricity exports.

Source: Economic Intelligence Unit, Synovate Analysis

What Industry Customers tell us:

Increasing costs endanger their regional competitiveness
Asia has, in the past, benefitted from a relatively low cost of labor.
Ireland Poland Hungary Czech

Cost of labor index

Madagascar

Senegal

Morocco

Ghana

China

Thailand

Romania

Russian

Recently though, these advantages are being threatened by newly emerging economies in Africa and Central Eastern Europe. As a result, Asian facilities must unlock new ways to protect margins in order to enhance competitiveness.

Kenya

Egypt

Industry need to sustain through means of energy saving

what is energy saving?

efforts made to reduce energy consumption also refers as energy conservation that can be achieved through increased efficient energy use

How lighting can contribute to establish Greener Factories?

Lighting is low hanging fruit for saving energy lowering carbon footprint and contributes to Green Building Certification Energy efficient lighting in new buildings only is not enough 80% of lighting in buildings is old technology Only 1% uses lighting controls: presence detection, daylight controls

How lighting can contribute to establish Greener Factories?

2. Lighting contributes to people wellbeing and performance Workers today face greater pace of change
- Ambiguous and complex roles - More emphasis on knowledge-intensive work - Focussed on service and customers - Use of new ICT technology - Workplace diversity The challenge for employers is to design work environments that can best meet the needs of 21st century workers and ensure maximum levels of well-being and performance. Lighting influences wellbeing and performance: - Cognitive performance and problem solving ability by interfering with
physiological factors like circadian rhythms (Juslen & Tenner, 2005); - Impact on mood and interpersonal relationships at work and therefore job satisfaction (Boyce, 2003). - Affect eye strain and visual comfort (van Bommel & van Beld, 2004; Boyce, 2003).

How lighting can contribute to establish Greener Factories?

3. Digital

lighting reduces waste, hazardous substances and environmental impact LED lighting has longer lifetime that fits the
building application lifetime Contrary to conventional solutions, LED lighting contains no hazardous substances like mercury

Why Philips?

Feel what lighting can do for your employees and industry

Philips lighting solutions focus on four things that matter most to your business: Improving energy efficiency Making production processes safer Enhancing productivity Helping your companys Corporate Responsibility ambitions

Comparing technologies
Many light sources are suitable for industry. Your optimum choice will depend on: Your building type The nature of your industry Energy bills and maintenance costs Light quality and uniformity Color temperatures and rendering Operating hours and temperatures Also, the trade off between initial investment and ongoing costs needs to be considered

Example of challenges for lighting design and solutions

Sacrificing light level for energy saving - 500 lux is office norm - When people grow older they need more light - Too less light negatively impacts people wellbeing and in due time productivity Glare in relation to EN12464-1 change on reflected glare - Reflected glare related to screen luminance - Several Lum suppliers struggle with good optics to meet 1500 cd/m2

How Philips can contribute to meeting environmental targets and reducing energy costs and emissions.

Sustainability is at the heart of Philips

By 2015 our entire organization aims to Bring care to more than 500 million people across the globe every year Improve the energy efficiency of our overall portfolio by 50% Double the global collection and recycling amounts of our products, as well as double the amount of recycled materials in our products

Philips BRIEF

Sustainability is a competitive advantage for Philips

Today more than 38% of Philips total sales come from Green Products. We know that on average these products grow faster and are more profitable than our non-green products, based on VIPP data for CL and Lighting. Philips have only just begun to translate this unique leadership position into commercial success and recognition among our customers. To capitalize on our unique position we have agreed in the Executive Committee to step-up our green marketing and sales efforts towards consumers, businesses, governments and NGOs in a granular approach that focuses on the locally relevant messages in our key markets.

Philips EcoDesign
Green Focal Areas to create green products & processes
What makes our product green? When compared to a reference product, the new product needs to be better by 10% in at least one of the six green focal areas and the overall lifecycle impact must be better.

Philips BRIEF

PROOF: Philips awarded sector & supersector leader in DJSI

Philips has regained its sector and super sector leadership in the Dow Jones Sustainability Index (DJSI), an important criterion used by mainstream investors to judge companies on their sustainability performance. In the latest ranking we achieved a score of 89 on a score from 1 100, our highest score ever and 4 points up from last year. In their report on Philips, SAM Research (who performs the analysis) states:
Philipss consistent efforts towards sustainable business practices and strong focus on offering sustainable products and services earned it the leading position in the leisure goods sector. Philips recognizes its environmental responsibility and has accelerated its research efforts in developing green products and solutions over the past year. In 2010, Green Products represented 38% of its global revenues, an increase of 18% over 2007, resulting from more than EUR 1 billion investment in Green Innovation. Philips has also set a target to increase the share of green products to 50% of group sales by 2015. Also, the company expects its suppliers to practice sound environmental and ethical standards in sync with its own sustainability vision.

Super Sector Leader Category Personal and Household Goods 2011/2012

Selected recent awards and recognitions

Best score for Supplier Sustainability out of five multinational finalists

Super Sector Leader Category Personal and Household Goods 2011/2012

Eight year in a row, included in 20 most Sustainable Stocks Best score for Carbon Disclosure Leadership Index and the Carbon Performance Leadership Index 2011

Significant advancement in LED lighting by US Department of Energy

Environment Excellence Award for Philips Lighting Pakistan

Global Top 10 of Newsweek 2011 ranking of greenest

Most Responsible Company Award for Philips China

30

Green upgrading / Energy saving solutions

Energy efficient solutions that work for you

Upgrading makes a difference

With the effects of climate change and CO2 emissions, saving energy is a priority for everyone. But increasing legislation concerning the use of lighting in industrial environments puts even more pressure on organizations to make the green switch. Philips can help you comply with highly efficient technologies that cut costs, not quality.

Creating Greener Possibilities

Strategies that reduce lighting energy consumption

Strategy 1: Lamp Upgrade The easiest way to save energy is to upgrade your light source. Switch from using a conventional light source to LED technology. Philips LED retrofit solutions allow you to save up to 80% on energy.

Strategy 2: Luminaire Upgrade To achieve significant energy savings, upgrade to LED technology and retrofit Philips luminaires in your facility. Philips LED products are RoHS compliant and offer a maintenance-free lifetime of up to 50,000 hours.

Strategy 3: Lighting Control Plus Cutting down on usage is the best way to save energy. This can now be achieved by using lighting controls that enables auto on and off switches depending on area occupancy or even sunlight.

Strategy 4: Ambient Setting Plus Integrate special controls into the workspace to maximize comfort while minimizing energy use. From mood or scene setting to personalized controls that help create a more pleasant environment conducive for productivity.

The Philips Lighting offer to support Green Building realization

providing a whole solution that helps the clients business objectives
Clients Business Drivers
Sustainability Achieving publically stated Social Responsibility commitments and meeting new legislations Financial Improving financial performance by increasing occupancy rate, rental income, and asset value Competitiveness creating an environment that meets the tenants demands

Lower CO2 footprint and energy consumption

Greener building that demands a higher value

Greener building that lowers utility bills and improves people wellbeing

Philips Solution
LampsUpgrading replace old, inefficient lamps with new more energy-efficient lamps Luminaire Upgrading energy-efficient, sustainable, longer-lasting, and aesthetically appealing luminaires Lighting control Plus occupancy sensors, daylight sensors, and time clocks Ambient Setting Plus optimize lighting settings and monitoring for better performance Turnkey services energy audit, design, installation, financing and project management services

Differentiator

Energy Saving Lighting

Lighting can do so much more than just illuminate and show the way. It can: enhance form and function, improve safety and security create flexible spaces that adapt to tasks

But more than anything, good lighting in the workplace, designed properly with the right level of lighting across the various factory areas, will reach a balance between optimized visual performance and energy saving. Significant energy savings can be achieved with a simple upgrade of your factory lamps, luminaires or by introducing a system of controls fitting your production cycle.

Case Studies Green Solutions

Industry lighting solutions

Saving energy that lasts a lifetime

A meaningful solution: Increased energy efficiency
ABBs new factory in Vietnam produces mediumand high-voltage power products for local and overseas markets. ABB was looking for a lighting solution that would save energy and protect the environment. Lighting designer DK Engineering and Philips Lias chose TL5 luminaires, a solution that saves ABB up to 28% in energy over the lamps long life.

ABB, Hanoi, Vietnam

28% saving

Indorama Indonesia
INDORAMA had TLEDS installed throughout a part of their factory, achieved an impressive energy saving with Philips lamp upgrading solution.

Philips Solution: 700 TLEDS installed

Unilever Oss, The Netherland

The processing plant aims to achieve the highest level of food safety and wants an innovative lighting installation to create a clean and light atmosphere within the factory. This was done by providing optimal visibility on the factory floor and on machines which in turn improved hygienic conditions. Using vertical lighting to improve people and vicinity recognition, high vertical luminance also contributed to the creation of a pleasant and stimulating work environment.

Grolsch Brewery Enshede, The Netherlands

The brewery wanted a lighting solution to preserve the maximum quality of beer by minimizing the amount of light being exposed to the beer during the production process . In areas where beer is bottled, SON bulbs were used to radiate light in the part of the spectrum which has no harmful effect on the beer. The storage room was fitted with motion sensors which only switches on the light if someone enters the room, this was necessary in order to maintain maximum darkness. The offices were also fitted with motion sensors and with daylight-dependent lighting controls, while the warehouses were fitting with light management systems. These allowed the brewery to achieve an exceptionally high level in total energy yield.

Contact: email: lee.cheong.tan@philips.com mobile: +6012 3789 732

If we go around clearing up our own mess and being positive about our own lifestyle, other people will start copying us and picking up their own carbon 'litter' too Dave Hampton, Carbon Coach