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    Ad Schevers Growth in Asia (0.4Mb) 15693

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    Philips Lighting is focusing its growth strategy on Asia, where the importance of the region to its portfolio is growing. Asia represented 21% of sales in 2000 but 27% currently, with China as the largest Asian market at 27% of regional sales. Philips aims to leverage opportunities in Asia for energy saving solutions, expanding distribution in China and India, pursuing niche opportunities in Japan, and capitalizing on rising automotive production and solid state lighting adoption. The presentation concludes that demand for energy savings and Philips' strong distribution networks provide a sound basis for continued rapid growth in Asia.

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    Ad Schevers Growth in Asia (0.4Mb) 15693

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    jaiswalshani_pibm
    172 views26 pages
    Philips Lighting is focusing its growth strategy on Asia, where the importance of the region to its portfolio is growing. Asia represented 21% of sales in 2000 but 27% currently, with China as the largest Asian market at 27% of regional sales. Philips aims to leverage opportunities in Asia for energy saving solutions, expanding distribution in China and India, pursuing niche opportunities in Japan, and capitalizing on rising automotive production and solid state lighting adoption. The presentation concludes that demand for energy savings and Philips' strong distribution networks provide a sound basis for continued rapid growth in Asia.

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    Philips Lighting is focusing its growth strategy on Asia, where the importance of the region to its portfolio is growing. Asia represented 21% of sales in 2000 but 27% currently, with China as the largest Asian market at 27% of regional sales. Philips aims to leverage opportunities in Asia for energy saving solutions, expanding distribution in China and India, pursuing niche opportunities in Japan, and capitalizing on rising automotive production and solid state lighting adoption. The presentation concludes that demand for energy savings and Philips' strong distribution networks provide a sound basis for continued rapid growth in Asia.

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    Attribution Non-Commercial (BY-NC)
    Download as PDF, TXT or read online from Scribd
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    172 views26 pages

    Ad Schevers Growth in Asia (0.4Mb) 15693

    Uploaded by

    jaiswalshani_pibm
    Philips Lighting is focusing its growth strategy on Asia, where the importance of the region to its portfolio is growing. Asia represented 21% of sales in 2000 but 27% currently, with China as the largest Asian market at 27% of regional sales. Philips aims to leverage opportunities in Asia for energy saving solutions, expanding distribution in China and India, pursuing niche opportunities in Japan, and capitalizing on rising automotive production and solid state lighting adoption. The presentation concludes that demand for energy savings and Philips' strong distribution networks provide a sound basis for continued rapid growth in Asia.

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    of 26

    Lighting Strategy: Building on strength

    Growth in Asia

    Ad Schevers CEO Philips Lighting Asia Pacific Lighting analysts day September 20, 2006

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    Philips Lighting
    Growing importance of Asia in regional portfolio

    2000
    Europe 54%

    2006 Q2YTD
    Europe 47%

    Asia 21% Asia 16% Latin America 5% Latin America 5%

    North America 25%

    North America 27%

    Lighting analysts day, Eindhoven, September 20th, 2006

    Philips Lighting: market position in Asia


    Regional sales distribution within Asia

    2006 Q2YTD
    China 27% Japan 13%

    Asean 18%

    Rest Asia Pacific 23%

    India/ Pakistan 19%


    Lighting analysts day, Eindhoven, September 20th, 2006

    Philips Lighting: market position in Asia


    Sales growth
    USD million
    1400 1200 1000 800 600 400 200 0 2000 2001 2002 2003 2004 2005
    5

    Sales to thirds: USD1.2 bio (2005) CAGR 15% (2000-2005) Market share: 24% (general lighting excluding Japan)

    Lighting analysts day, Eindhoven, September 20th, 2006

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting

    Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    Business opportunity
    Energy Saving: The Opportunity for Lighting in Asia Asian economic growth is boosting energy demands by 45% for global oil demand and 25% of natural gas Rising energy prices decreases consumer demand and drive inflation Economic growth requires energy savings Philips is the global leader in lighting industry with broad portfolio of energy efficient lighting solutions

    Lighting analysts day, Eindhoven, September 20th, 2006

    Building on strength
    Asia Pacific: untapped potential of existing lighting technology Todays potential savings 14 billion Euros in energy costs/year 112 million tons of CO2 emissions/year Equivalent of more than 5.6 billion trees More than 296 million barrels of oil/year Output of more than 70 power plants (@ 2 TWh/yr)

    Sources: International Energy Agency (IEA) World Resource Institute (WRI)


    Lighting analysts day, Eindhoven, September 20th, 2006

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting

    Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    Business opportunity
    China - expansion to rural areas
    Criteria
    Metro
    Population > 10M GDP > 30B

    # of cities
    4

    Class I Tier 1 cities Class II Tier 2 cities Class II Tier 3 cities

    Population 2- 8M GDP 10-30B

    30

    Population 0.5-2M GDP 0.2B-10B

    257 659

    Class II counties

    Population 0.2-0.5M GDP 10M-200M

    2560

    Rural counties

    Population <0.2M GDP < 10M

    Thousands

    Lighting analysts day, Eindhoven, September 20th, 2006

    10

    Business opportunity
    China - BEST Partner program introduced to develop distribution. Best Partner Program with selected key distributors shared marketing programs towards end-user segments & retailers dedicated portfolio addressed to local market needs knowledge sharing & satisfaction improvement programs development thru product & application training logistic support from both sides

    Lighting analysts day, Eindhoven, September 20th, 2006

    11

    Business opportunities
    China - Further expansion to 2nd/ 3rd tier cities
    Criteria
    Metro
    Population > 10M GDP > 30B

    # of cities
    4

    Class I Tier 1 cities Class II Tier 2 cities Class II Tier 3 cities

    Population 2- 8M GDP 10-30B

    30

    Population 0.5-2M GDP 0.2B-10B

    257 659

    Tier 2/3 city market size is large Fast growing needs of high quality lighting products. Build effective distribution coverage (quantity and quality of dealers) End-users marketing approach in professional & consumer segments
    Lighting analysts day, Eindhoven, September 20th, 2006

    12

    Business opportunity
    China; vast supply base for Philips world-wide Next to 8 own factories use of Chinese supply base
    USD million
    450 400 350 300 250 200 150 100 50 0 2004 2005
    Lighting analysts day, Eindhoven, September 20th, 2006

    Value of external sourcing

    2006E
    13

    Intensified R&D investment


    More than 180 lighting engineers Philips Innovation Campus, Shanghai opening December 8th, 2006

    Co-allocated with other Research Groups Philips; Linkages with universities & standardization federations; Launching platform for new technologies (SSL, .)
    Lighting analysts day, Eindhoven, September 20th, 2006

    14

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting

    Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    15

    Business opportunity
    India - SMILE: Sustainable Model In Lighting Everywhere
    Target Markets
    Total Households: 212 million

    Electrified: 118 million

    Not Electrified: 93 million

    Urban: 8 million Urban: 55 million Rural: 64 Mn ---SMILE Phase 1--

    Rural: 85 million

    Products developed

    Uday rechargeable portable unit for general illumination

    Kiran hand held, hand cranked LED flashlight


    16

    Lighting analysts day, Eindhoven, September 20th, 2006

    Business opportunity
    India: Rural Distribution Initiative in India
    GLS Market The typical rural retailer

    Semiurban+rural 63%
    2 million retail stores

    0.8 million retail stores > 920 towns

    Urban 37%
    > 2600 smaller towns, > 600 000 villages

    Lighting analysts day, Eindhoven, September 20th, 2006

    17

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting

    Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    18

    Business opportunity
    Japan: Niche approach We focus on niche opportunities in the professional market. Key Account Management is key. Our strength: Automotive Lamps, CDM and UHP CDM is fastest growing product line in OEM segment

    Lighting analysts day, Eindhoven, September 20th, 2006

    19

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting

    Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    20

    Business opportunity
    Automotive Lighting: Emerging Markets, car production

    14,000,000

    35,000,000 30,000,000 25,000,000 20,000,000

    16,000,000 14,000,000 12,000,000 10,000,000 8,000,000 6,000,000 4,000,000

    12,000,000

    10,000,000

    8,000,000
    15,000,000

    6,000,000
    10,000,000

    4,000,000
    5,000,000

    2,000,000

    2,000,000
    0
    00 01 04 02 03 05 06 07 08 09 2, 0 2, 0 2, 0 2, 0 2, 0 2, 0 2, 0 2, 0 2, 0 2, 0 2, 0 10

    0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

    ASIA

    WEST EUROPE SOUTH AMERICA

    NORTH AMERICA

    UNITED STATES

    JAPAN

    CHINA

    GERMANY

    EAST EUROPE

    2006: China taking over #3 position, after USA and Japan 2010: Asia car production nearly 2 times Europe or USA 2010: China+India+Thailand+Indonesia+Malaysia = 85% of total Europe production Philips Automotive Lighting is market leader in Japan, Korea, China Philips Market share in Emerging markets comparable to Japan and Korea
    Lighting analysts day, Eindhoven, September 20th, 2006

    2, 00 0 2, 00 1 2, 00 2 2, 00 3 2, 00 4 2, 00 5 2, 00 6 2, 00 7 2, 00 8 2, 00 9 2, 01 0
    CHINA INDIA THAILAND INDONESIA MALAYSIA

    Source: Global Insight

    21

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting

    Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    22

    Business opportunity
    Solid state lighting (SSL) Focus on Application Segments Fast growing market (40% / year) Asia is fruitful soil for Solid State Lighting Philips in Asia is present as LED supplier (Lumileds), as module supplier and as total solution provider Rapidly building capabilities in the region Sales growth for total solutions: sales doubled in 2005 and in 2006

    Lighting analysts day, Eindhoven, September 20th, 2006

    23

    SSL- Luminaires Focus Segments


    OUTDOOR
    City Beautification Signal & Signage Offices

    INDOOR
    Shops

    Road & Tunnel Residential Hospitality

    Lighting analysts day, Eindhoven, September 20th, 2006

    24

    Agenda
    Philips Lighting Market Position in Asia Business opportunities: Energy saving solutions China India Japan Automotive lighting Solid State Lighting

    Conclusions

    Lighting analysts day, Eindhoven, September 20th, 2006

    25

    Conclusions
    Growth in Asia The demand for energy saving solutions will accelerate market growth. The well structured distribution in India and the ASEAN countries (High market shares) is a sound basis for rapid growth in fast growing markets. Expansion of distribution in China will lead to further increase our market share. China is important as a supply base. Asia, an early adaptor for new technologies, offers great opportunities to enlarge our share in the professional Lighting business.
    Lighting analysts day, Eindhoven, September 20th, 2006

    26

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