Home Healthcare SolutionsBrent Shafer, CEO Healthcare Home Healthcare Solutions

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Home Healthcare Solutions focus

Accelerating growth in:• Sleep• Respiratory Care• Home Monitoring

International expansion and growth geographies• Positioned to grow above

market rates

Hospital to Home differentiation

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Bringing health care home

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Global impact of chronic disease and aging

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€ 43BSpent on home health care

in the U.S.

€ 30BAnnual health care cost

for COPD in the U.S.

100M+Estimated number of COPD

patients in China

€ 8,400Average cost for a COPD exacerbation in the U.S.

3rdLeading cause of death worldwide

183 Seniors treated in ER each hour due to a fall

7.6MPatients receive home

health services per year

43MPeople in the U.S. suffer from sleep-disordered

breathing

15-20%Of individuals in the U.S. have an undiagnosed sleep disorder

40-70%Prevalence obstructive sleep apnea

in patients with heart failure€ 43B

Projected spending on fall-related injuries in 2020

Our markets continue to experience 6% – 8% growth

Strong market positions • Sleep and Respiratory Care

- Leadership in sleep therapy- Opportunity in patient interface- Leadership in ventilation

• Home Monitoring- North American leadership

International markets and growth geographies• Positioned to grow above

market rates

Current situation

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SleepWe improve the lives of sufferers of obstructive sleep apnea through:

• Diagnostics• Sleep therapy • Patient interface (masks)• Replenishment services

Home MonitoringWe provide valued remote monitoring and social care solutions that serve patients and at-risk seniors through:

• Telecare: Lifeline• Telehealth: Home monitoring• Remote cardiac services

Respiratory CareWe improve the lives of respiratory patients through:

• Ventilation • Oxygen• Drug delivery

Home Healthcare Solutions

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Advancing or maintaining strong positions in large, growing markets

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• #1 in sleep therapy• Many undiagnosed patients

worldwide• Significant co-morbidities• Patient interface market

opportunity• Replenishment services

Home MonitoringSleep Respiratory Care

Market size €1.8BMarket growth 6-8%

Market size (NA) €1.7BMarket growth (NA) 4-6%

Market size €1.5BMarket growth 6-8%

• #1 market position• Global ventilation leadership• Large patient populations• Innovation opportunities• Growth geography

opportunities

• #1 market position in NA• Growth in aging population• Global expansion underway• Hospital to home• PERS1, medication

dispensing, Telehealth

1PERS - personal emergency response systems

We have strengthened our global leadership in sleep therapy systems for obstructive sleep apnea

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System One 2012• Heated tubing• Platform enhancements

Complex sleep disorders• Proprietary AutoSV therapy system• Exceptional growth in all geographies

REMstar SE • Value segment therapy system• Accelerate in growth geographies

EncoreAnywhere• Connects physicians, providers and

patients to better manage compliance and improve outcomes

New products will secure high-end segment leadership positions and enable entry to

new segments

Our Patient Interface product and service portfolio – initial realization of investments

TrueBlue nasal mask launched• Strong customer acceptance• Validation of development direction

Full development pipeline – powered by customer insights• Targeted patient interface launches

in 2012• Leading edge seal, comfort, design

Market replenishment services• Enabling provider customers to realize

revenue and efficiencies

Go-To-Market alignment Q1 2012• NA sales reorganization enables

50% increase in customer touch points9

Oxygen therapy• #2 position• SimplyGo• EverFlo• Strong ambulatory

product portfolio

Home ventilation• #1 in NIV• Trilogy Series• BiPAP A-Series

Airway clearance • #1 position• CoughAssist• Neuromuscular

patient focus

Respiratory drug delivery• #1 position• Nebulizers• I-neb – proprietary

technology

New additions to broad respiratory portfolio will drive continued growth and improved margins

Philips Respiratory Care continues to grow faster than the market

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Home Monitoring – innovating for growth and market expansion

Mobile PERS1 and new communicator• Extends current service outside of the home • Reinforces leadership position• Expands Philips market potential

International expansion • Launch of Philips Telecare service in Japan

Telehealth• Accelerating with U.S. readmission penalties• Enabling care coordination and

patient engagement

Hospital to home• Integrated strategy and solution

development with PCCI

111PERS - personal emergency response systems

Global payer trends• Payment model and care delivery reform• Greater awareness of chronic sleep disorder and respiratory populations• Comparative Effectiveness Reviews (CER): CPAP continues as gold standard therapy for OSA• Evidence supporting telehealth emerging

U.S. market• Greater acceptance of home sleep testing• Competitive bidding expansion• Commercial payers adopting treatment compliance policies• Telehealth in integrated systems – significant impact on readmissions

EU mature geographies• Budget austerity; impacts single-payer health systems• Southern Europe – small impact to Philips Home Healthcare• France – payment categories for sleep and home respiratory undergo revision• UK government rolling out programs to accelerate telehealth adoption

Growth geographies• Most growth geographies (China, India, Russia) have no reimbursement

infrastructure for home medical devices• Brazil and other LATAM health systems developing more rapidly in home health;

home oxygen and ventilation gaining reimbursement

Reimbursement and payer trends

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• Strong growth overall: High single-digit • Strong growth: Mid-twenty percentMature geographies Growth geographies

Our performance outside the U.S. has been strong –delivering on our international expansion strategy

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Japan Market: Double-digit growth‒ We provide products to providers and

services to patients‒ Closely aligned with leading key

opinion leaders and universities‒ Entering market with our Philips

Telecare service

Greater China Market: Mid-twenty percent‒ Driving physician awareness and

education of OSA‒ Establishing sleep labs and patient

experience centers‒ Targeting large population of

respiratory patients‒ Investing in sales and marketing organization

Path to Value: Home Healthcare Solutions

• International expansion• Building platform for the Hospital to

Home opportunity• Increased levels of investment to

refresh product portfolio• Address patient interface portfolio• Commercial and structural

investments in growth geographies

Valu

e

1 as reported, i.e. including restructuring and acquisition related charges

Solid growth Accelerate!• Drive operational excellence through

Accelerate! to improve ROIC• Drive international expansion• Build on Hospital to Home opportunity• Improve patient interface market position• Innovative product and service introductions• Value delivery from past acquisitions

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…20132011 Midterm

PerformanceBox

EBITA 1

Current Performance

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EBITA 1

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• Robust innovation pipeline‒ 17 planned product and service

introductions in 2012

• Globalization/growth geographies‒ Positioned to grow above market rates

• Strong market positions driving value creation‒ Leadership in sleep therapy‒ Leadership in ventilation, nebulizers‒ Leadership in NA home monitoring

Key takeaways

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Executing on strategies