Philips updates market on its Domestic Appliances and Personal Care (DAP) and its Lighting businesses

Amsterdam, The Netherlands, In a meeting with investors and financial analysts today, Royal Philips Electronics (AEX: PHI, NYSE: PHG) will discuss how the company's Domestic Appliances and Personal Care (DAP) and Lighting businesses are expected to build on their ongoing solid contribution to profitable growth and value creation at Philips.

"Over the next five years, we expect DAP to become a substantially bigger and more valuable division at Philips, with a long-term average annual organic growth rate of roughly 7%," Mr. Andrea Ragnetti, CEO of Philips Domestic Appliances and Personal Care, said. "Contributing to this growth is our ongoing expansion into emerging markets as well as innovative products, like the PerfectDraft home beer tap and the Senseo coffeemaker. We also anticipate that future activities in the consumer health & wellness market will add to growth," Mr. Ragnetti explained.

At the meeting, Philips will reiterate the company is on track to maintaining a target margin on income from operations of 15 to 16%. Ongoing investments in R&D, strategic partnerships, plus innovative marketing concepts - such as the recently announced partnership deal to become Male Shaving Partner of the WilliamsF1 (Formula One) team in 2006 - are all contributing to solid profitability in this business.

Lighting building on global leadership position to shape future of industry
Lighting will also continue to fuel profitable growth at Philips for the foreseeable future. "We'll continue to build on our number one position in the global lighting market by boosting our presence in emerging markets and shaping the future direction of the industry through our innovations in LCD backlighting and presence in solid state lighting," Mr. Theo van Deursen, CEO of Philips Lighting explained.

With the completion of the acquisition of Agilent's stake in Lumileds, Philips will focus on growing the Lumileds business and developing wider applications for high-power LED lighting. The company will also aim to exploit the untapped environmental potential of new lighting technologies - such as the recently launched CosmoPolis white light system for outdoor lighting, which is more energy efficient than traditional products and provides for greater safety on roads.

Overview of 2005/2006 accounting matters
The Analyst Day meeting will conclude with an overview by Gerard Ruizendaal, Philips' Group Controller, of specific accounting matters in 2005/2006 and their impact on Philips. These include a further insight into "Other Activities", the impact of changes in the accounting treatment of Philips' holding in Taiwan Semiconductor Manufacturing Corporation (TSMC), and an explanation of the European Union Directive on Waste Electrical and Electronic Equipment (WEEE), which went into effect on August 13