 Ladies and Gentlemen
I’m delighted to be in Frankfurt for this exciting Light+Building Exhibition.
I will share with you our vision and plans for building the future in lighting. And of course, we’ll be showing what you came for – our complete line-up of innovations for 2008.
As you know, we recently reconfigured Philips around three people-centric sectors: Healthcare, Consumer Lifestyle and Lighting. Our mission is to improve people’s life and well-being with meaningful innovations. Our drive at Lighting is to improve the quality of people’s life with lighting.
Philips Lighting is the global leader. One in every four sources of light around the world is Philips-made. That makes us number one. Our products are being used everywhere. You will find our products in one out of three cars, in one-third of all offices, and hospitals, in two-thirds of the world’s top airports, in the majority of football stadiums. Actually, we lit up 8 out of the 12 football stadiums at last year’s World Cup here in Germany.
Based on the official Lighting figures of 2007, and the impact of our recent acquisitions, our Lighting business represents almost 25% of the total Philips sales. We had sales of more than EUR 7 billion, employ over 60.000 people, and have almost 100 factories around the world.
As far as my personal background is concerned, it started at Procter & Gamble, and from there I moved on to Canon and Whirlpool before I joined Philips 7 years ago. In 2004 I became the CEO of what used to be the Consumer Electronics division at Philips, and was appointed a Member of the Board of Management.
I’m excited to be the CEO of the world leader in lighting, in particular for three reasons.
Firstly, 2008 is the moment of truth as solid state lighting will transform this market. With LEDs, we’ll be able to do more with lighting than switching on light. This simple act can also brighten moods or emotions, enhance productivity, improve safety – and of course, save energy through efficiency. Secondly, while Philips Lighting might in the past have concentrated on lamps and tubes, we’re now moving strongly into the high-growth field of luminaires, integrated systems and lighting solutions. And thirdly, the message we’ve been spreading about sustainable and energy efficient lighting helping with climate change, is really catching on. As you know, energy saving is the key theme of Light+Building 2008.
Today, Philips has all building blocks in place to become the undisputed leader in solid-state lighting and lighting solutions. At this fair we will show you that we are leading the industry in LED innovations for general lighting. This is new, and exciting. It will accelerate the growth of solid state lighting. So 2008 is the year, and this is the moment, that LED ceases to be a future trend and becomes a firm market reality -- in public spaces, in the workplace, and in the home.
Thanks to our acquisitions of Lumileds, TIR and Color Kinetics, we are very strongly positioned right across the value chain for solid state lighting.
So we have full expertise at every stage of LED value chain from the basic semiconductor die, to packages, to modules, and finally through to the end-products offered as luminaires.
LumiLeds provides the power; TIR provides the controls and modules, while Color Kinetics delivers the entire ecosystem: hardware and software, as well as dynamic control, based on unique intellectual property and intelligence. And don’t forget you must add the application knowledge which Philips brings to the table thanks to our 117 year heritage and number One market position. A global market presence, application expertise, contacts everywhere, a strong brand. Our strategy, of course, is to realize synergies by sharing expertise across these new businesses. It’s a cliché to say 1+1+1 =5, but in this case it really is true. It provides us with a competitive edge: being better, smarter, bigger and faster.
And there’s more. Our recent acquisition of Genlyte complements the earlier purchase of Partners in Lighting, and means we are strongly positioned in the fast growing luminaire market. A luminaire is the end product, a fixture with a lamp and ballast inside. With Genlyte we are doubling our professional luminaire presence, and PLI enables us to enter the consumer luminaire segment. We are strengthening our position in luminaires for a couple of reasons. Though the majority of these systems still use conventional lighting, their real future lies with LEDs. So both Genlyte – for professional applications - and PLI for the consumer segment serve as a springboard into the world of LED luminaires. It provides us with new channels, and positions us closer to the architects, lighting designers and the end-user.
To enable a fast growth of solid state lighting solutions, Philips will introduce a licensing program in the course of 2008. We plan to license our IP for solid state lighting solutions under the Philips, TIR and CK portfolio (PSSLS) focused on control technology. Existing CK luminaire licensees will be able to switch to the new program. More information will follow in the second quarter of this year.
Until now, the market figures we have given relate to the LED dies. We are now seeing the market for LED Luminaires growing rapidly, by more than 30% per year driven by the entrance of LEDs in functional general lighting. Last year the size was around 700 mln euros, and we expect this to grow to 1.5 bn euros in 2010.
Unlocking the potential of solid-state lighting isn’t just about having the technology. We’re a market-driven company, so every innovation must be driven by the needs of end-users. That’s all part of the wider push to demystify technology that’s embodied in our brand promise of Sense and Simplicity and our mission to improve people’s lives with lighting.
All our ideas start by considering the benefits for the end-user, by understanding what people want from lighting technologies and then fulfilling their needs. And our advance into luminaires brings us closer to those insights that customers share with us. We capture these opportunities, research them, test and validate them. This ensures that our innovations will bring the right solution and experience. We call it “scene setting” – using the quality of light to create spaces that delight, and help evoke moods or atmospheres that simply make life better.
For healthcare, for example, our Ambient Experience concept has been installed in more than 50 hospitals. It uses solid state lighting to help soothe patients’ nerves. The first system was installed in a children hospital in Chicago. Children can personalize the environment through the lighting system and images. Tests show that the patients feel more at ease, making it for the doctors easier, faster and better to process the diagnose procedure.
You may have experienced the tension and anxiety yourself when waiting in a hospital’s waiting room. With this lighting wall we create an atmosphere that will lessen the tension and make you feel more relaxed. It is an interactive lighting wall. Children can play with it and paint by just touching the wall. It is installed in the new Mercy Medical Center in Rogers, USA.
Lighting also finds its way into the consumer lifestyle space. Last year we introduced Aurea, where lighting enhances to viewing experience. The Aurea experience is like stepping through a window into a different world as scenes radiate an aura of light and color beyond the frame. The result, as you can see, creates an immersive ambient viewing experience, drawing you into the content in a way a TV set has never done before.
Our insights into the needs of people go further. For urban lighting we have addressed the challenge of urbanization by working closely together with world famous city architects and lighting designers. City authorities worldwide have recognized the need to re-humanize urban environments. They see a pressing need to tackle crime and vandalism, promote tourism, develop local business and foster local identity and pride, and lighting can help out here.
Our expertise in lighting up landmark buildings around the world will give you an impression how LEDs could help to makes cities more livable and enjoyable.
Renovation
First and most obvious, LEDs can simply be used to replace conventional lighting. A great example is Buckingham Palace in London. It is energy efficient, has low maintenance cost – since LEDs shine for a long time – and the light can be ‘projected’ more precisely Previously, a certain very important resident didn’t want stray light disturbing anyone’s sleep in the Palace bedrooms. Our LEDs took care of that for her.
Designers’ Delight
LED is not only about replacement and functional lighting. It is about scene setting: turning dreams into reality through dynamic design. LED provides a palette of millions of colors and dynamic effects that conventional lighting cannot match. We refer to this as the ‘designer’s delight’ . We see a strong growth in lighting architectural objects to enhance their appearance at night. A great examples is the London Eye and the Bangkok Bridge in Thailand. This bridge changes color every night to match devotional colors of the Buddhist religion.
Embedded Lighting
LEDs can even be embedded in furniture, in walls, in ceilings, almost everywhere. The low heat emissions of LEDs have special advantages with embedding. For instance, two years ago we used LEDs to light up the ice sculptures at the Kemi ShowCastle in Finland. It gives an unforgettable experience and the LEDs help ensure that the sculptures remain ‘cool’.
Added Intelligence
LEDs are digital, so LEDs can be programmed via intelligent software. Here you can see an example of the Technology & Art center in Suzhou, China, and a building with fast-changing communications on the walls.
In fact the entire façade of a building can broadcast discounts and offers to shoppers. The possibilities are numerous.
But Light+Building is about showing new things for the first time – our new product range. These are all part of our main theme: scene setting and energy efficient lighting solutions. We now unveil solid state lighting solutions making the inroad to general lighting applications. I want to walk you through a number of our most important innovations in the Home, on the Street, at Work, in Shops and Hospitality.
Let’s start in the living room and have a chat with Allard. Allard is heading our consumer luminaires business, formerly known as Partners in Lighting. Allard, what new products have you got to show us?
Allard: “Until now the new LED solutions for the home were mainly for decorative purposes. We now have a broad range of LED luminaires which are designed to replace the incandescent lamp. We call them Ledino. You can see they are decorative and functional.
Rudy: Philips acquired Partners in Lighting as a springboard to enter the field of home luminaires, and these are the first fruits.
Allard: Yes, we are very proud – but what’s more, it also shows the synergy between the expertise we have in solid state lighting. These lamps are powered by Luxeon Rebel from Lumileds, and all luminaires provide the same uniform bright light. This is not a given yet in our industry. The important thing, Rudy, is that these LEDinos are perfectly suited to the same modern interiors that are traditionally lit with halogen lamps.”
Rudy: “What about something that can set the mood, but doesn’t necessarily replace conventional lighting right away?”
Allard: “Well Rudy, it’s easy to create the right atmosphere for any occasion with this LivingColors mood lamp that can wash a wall or a corner with any color. It is an entire new way of using light. It follows your mood. Your mood on a Sunday evening may be different than after a hard day work, or at a romantic dinner for two. It’s an experience that’s completely new in the market, and as a result of its success, the range is expanding. LivingColors Mini with 256 different colours, is the fashionable little sister of the original LivingColors. These are for the young and trendy ones. And LivingColors Black is the first product to be launched and a nice addition to the range.”
Rudy: “Thanks Allard. But now let’s go on to see what’s happening on the street.
On the street, we want a safer environment, whether it’s on the sidewalk, in the park, or wherever cars are on the move. And we want to offer innovations that are sustainable energy efficient. Working closely together with our customers gives us many insights to offer solutions that match the different requirements of municipalities.
Our new range is a LED-powered system for pedestrian streets and functional street lighting. The Urbanline is an environmentally friendly sustainable solution. It offers up to 30% lower energy consumption compared to traditional lighting. And precision control of the light beam means that it does not create any unnecessary light nuisance and enhance the city branding.
We have installed the system as a test in Eindhoven the Netherlands, and here you can see the result.
In addition, we are implementing solid state lighting in our regular ranges. The recently CitySpirit is an example, which you can see at our booth.
Another innovation is the upgraded Starsense telemanagement system. We have already installed it on the road to Kuala Lumpur airport in Malaysia. With this system you can remotely manage the outdoor light points. You can program them, or remotely switch them on or off at any given time, or set them to a dimming level, for example during the night, when traffic levels are low. The benefits are multiple: it improves safety for drivers and pedestrians, saves energy and costs, and minimizes light nuisance.
Let’s move on to the work environment.
In the workplace or office, we know that light can enhance productivity, by subtle changes to the light that match the change of sunlight during the day. That’s the principle behind Dynamic Lighting. It is a dynamic and intelligent system that creates a stimulating, ‘natural’ lighting ambience. Dynamic Lighting enhances people’s sense of well-being and therefore their motivation and performance. Studies show people become 10% more productive under this lighting.
The news here is we’re introducing the first high power LED luminaire range for the office. This is DayWave, a powerful solution that is fully compliant with the current norms for office lighting. DayWave represents a milestone in the design of office luminaires. It creates inspiring workplaces. It gives architects and lighting designers a uniquely shaped luminaire, and the users can tune the light to their tastes from cool to warm white and it works with the Dynamic Lighting concept to adjust the level according the daylight coming in. The LEDs make it a future-proof, flexible and sustainable solution.
It’s time to go shopping. We study how people shop – and how lighting can be adapted to help them reach purchasing decisions. Our insights show that the basic shop motivations change constantly – so why should the lighting be static? These shop motivations can switch at different times of day, so our solution allows retailers to adapt the lighting very quickly and easily, to match to certain collections, target customers, shopping moods, promotional themes – even the weather outside. All with just a touch on a button.
That’s the promise of AmbiScene, which uses LED technology to meet both the decorative and functional lighting needs of retailers. It’s a whole system including color wash, luminaires for coves, spots, and control systems. And its controls are easy to operate.
I want to end with the topic which is at the centrepiece of Light+Building: sustainability and energy efficiency. Global warming is one the most important issues we face as a global community, and energy consumption presents a major challenge. Politicians, businesses and individuals, we all have to take up our responsibility.
At Philips we lead by example. We have demanding targets for sustainable business practices laid down in our EcoVision IV program.
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Double investment in Green Innovations to € 1 billion in the next 5 years
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We aim for 30% of total revenues to come from Green Products by 2012
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We will further increase its operational energy efficiency by 25% by 2012.
In Lighting we can contribute significantly. We are spending about 100 mln euros on energy efficient lighting innovations per year, and more than 50% of our sales is from Green products.
To tell you about our innovations in this field, will you please welcome Robert Pfarrwaller, the Chairman of Philips Lighting here in Germany.
Rudy: “Robert, what new solutions do we have to reduce energy consumption and carbon emissions?”
Robert: “Also here we have solutions for all market segments, let’s start at home.
Our sales of energy savers are rising 37% a year. Consumers do switch, and we are offering them a range of solutions so they can choose which solution best matches their needs. This can differ per room. We are introducing the world’s most energy efficient halogen saver. It saves 50% energy (much more than any other halogen saver out there), it offers the crisp halogen light quality, is dimmable, and does not contain mercury.
What more can you wish for?
And of course, energy saving is hugely important for retail. In Europe alone, the sector could save over EUR 1.35 billion, or 29% of its energy bills. That’s especially true in the food sector, where supermarkets can get big savings by switching to the TL-D Eco fluorescent tube, the PL-R Eco energy saving luminaire system. Brand new is the Fortimo downlight LED module.
It is a real breakthrough in functional lighting saving up to 50 % of energy compared to CFL downlights. Also new are the Fugato luminaire and the spotLED range, which saves up to 65% energy and has an extreme long lifetime.
A tour of the commercial scene wouldn’t be complete without a visit to the hospitality sector. There are 18 million hotel rooms in the world – over 6 million in Europe. Everywhere, hotels have a huge requirement to update and modernize their look and feel -- as well as saving energy. Everywhere the concern is to drive down cost. We estimate this is a EUR 500 million a year opportunity in replacement lamps and spot LED luminaires.
But …. nice though it would be for Philips, not all hotels are going to install new systems. Some want energy efficient bulbs like our MasterClassic halogen sets, while others will retrofit MasterLED bulbs and spot LED solutions. It is an efficient plug-and-play solution that lasts for years and years and alternative for incandescent or even CFLis. Ideal for 24/7 applications like lobbies.
Robert: “Another area where we offer solutions to make significant savings in energy is on the road. Two thirds of our public roads still use old fashioned lighting technology dating back to the 1960s or earlier.
Rudy: “Interesting. Can you tell us what Philips is offering”
“Our Cosmopolis system brings warm white light and cuts energy bills by up to 50% compared to other white light sources. It is being installed in many cities in Europe and Asia. With the addition of sensors, we make them dimmable and reduce even more energy consumption and carbon emissions.
Rudy: “Looking forward a couple of years, how do you see the energy efficient lighting market”?
Robert: “We will see a steady reduction in the barriers to adoption of energy saving solutions. More people will become aware of the benefits of our solutions, which not only reduces energy and carbon emission, but also save cost, while improving the quality of light, and our well being.”
Rudy: Thanks Robert.
So this concludes our tour of what you can expect to see in the ‘Light Years Ahead.’ That’s what I call this coming period in which lighting takes a quantum leap forward. We are setting the pace in the industry with a full range of new LED innovations, based on consumer insights, complemented with our energy efficient solutions.
Ladies and gentlemen, I hope that explains to you that we will delight by light, with the new range of innovations today, and in the future, from Philips Lighting.”
So, thank you very much.
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