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Exclusive Interview

Exclusive Interview Maarten Jan de Vries Maarten de Vries is an experienced manager with broad business knowledge in finance & accounting, IT and supply chain management. De Vries joined Philips in 1986 and held various roles in finance and controlling before he moved to Taiwan. He spent 10 years there working for Philips Semiconductors and Philips Consumer Electronics in the Monitors business unit. From 2005 until 2010, Maarten de Vries was a member of TPV’s Board of Directors. During his time as Executive Vice President and CFO at Philips Consumer Electronics in Amsterdam, he led the divestment of the PC Monitors activity and sourcing of Flat TV products to TPV, and also the divestment of the Mobile Phone business to CEC (China Electronics Company). From 2007-2011 he was a member of the Philips Group Management Committee. Prior to his appointment as CEO of TP Vision, Maarten de Vries served as CEO of the Television Business Unit at Philips. He was responsible for the transfer of Philips’ TV Business to the standalone joint venture TP Vision. Maarten de Vries graduated in Business Economics at the University of Groningen and gained a post-graduate qualification in Controllership at Vrije University of Amsterdam. TP VISION WHAT'S UP... Royal Philips Electronics has created a Television joint venture with TPV Technology Limited. The joint venture is called TP Vision and is 70% owned by TPV and 30% by Philips. TP Vision develops, manufactures and markets Philips branded TV sets. The completion of the agreement came after the necessary merger clearance, governmental and TPV shareholder approvals were obtained. TP Vision, with headquarters in Amsterdam, is led by Maarten de Vries. TP Vision combines the design expertise and innovative Philips TV heritage with the manufacturing scale, and operational excellence of TPV. Full Focus on TVs TP Vision intends to regain market share and regain profits The aim of Maarten de Vries, Chief Executive Officer of TP Vision – the new TV manufacturing Joint Venture between TPV and Philips – is to regain a leading position in key markets. He told IFA International editor-inchief Richard Barnes how the company’s new structure is going to help to achieve this goal. [ Interview by Richard Barnes ] We needed to proactively respond to the dynamics of the television market. To do this, we are leveraging the strengths of Philips’ heritage, brand equity, innovation power, and very strong trade and distribution relationships, as well as the quality of our products. We are then combining this with the skill, flexibility and manufacturing power of TPV. And we feel we constitute a very powerful combination that, moving forward, will create newfound success. What are your focus points in the TV market? We will be bringing a full range of products to the market from high-end, through to medium range and competitively priced low-end sets as well. We think of ourselves as a top three player, and we are ambitious about regaining that place in the markets where we are no longer top three, plus we fully intend to leverage our position in some of the strongest markets where we are the number two player. We will also clearly articulate our innovation priorities, which are design, Smart TV and user interaction. Has the joint venture changed the way you work with your retail partners? From the Philips side, we are bringing with us a very strong and long history of retail relationships, but by creating this partnership we are repositioning ourselves to reinvigorate the brand. “We have very strong brand recognition, which is one of our strengths.” And our customers will see that, because we know that both our end customers and our retail partners want the brand to succeed. We have very strong brand recognition, which is one of our strengths. Will you be spending more on R&D or marketing? Although I mentioned earlier our three main focus points, that doesn’t mean that we are not investing in picture quality, and in concepts like Ambilight. But we have teamed up with TPV to create greater effectiveness in our innovation spend and therefore better ROI. I believe that the combined innovative capacity of the two companies will be very effective. And in terms of marketing, we are upping our efforts online, specifically in search, but we will be investing locally to take into account the differences in consumer behavior. The TV market is currently not an easy place to make a profit, how do you intend to get around that? It is pretty challenging, and we are looking at leveraging the scale of TPV to drive costs down in the purchasing area. We are currently creating one panel team for the two companies, as well as leveraging our total skill, which is substantial. For example, one of TPV’s investors is the China Electronics Corporation, which has considerable panel resources and it is an area into which we will be tapping. Plus internally we are looking at every possible area in order to make the company leaner, meaner and more streamlined, as well as how we can get a better ROI on innovation and marketing, a tighter supply chain, and also how we can improve our time to market for new products. So there are a number of leverage points where we are driving improvements, which will collectively improve our total profitability. And we’re confident we can do so given the track record of TPV in previous deals. The company acquired Philips’ computer monitor business, and made it very successful. So for TP Vision it’s a combination of improving profitability and growing our 16

Exclusive Interview Maarten de Vries Chief Executive Officer TP Vision top line, plus strengthening our market position. What do consumers look for today in a TV? We believe that design remains extremely important, and it is one of our key priorities. Secondly the television is becoming an important display unit in the home ecosystem, and that is where Smart TV and user interaction are increasingly important. A TV is more and more a device that is running software, content and services, and that also needs to interact with tablets and Smart Phones. The ways in which we enjoy content and interact with the TV are changing profoundly. Are there other drivers as well, such as price? We believe that Smart TV is a very important driver, and price will always be a consideration when customers are in the shop. But what is really important is the brand and what it stands for. If the brand stands for quality and design, and has the right ‘future-proof’ feature set, then I think these are critical elements in terms of what people will want to buy. How does 3D fit into your plans? We don’t see 3D as a decisive factor when people are choosing which set to buy at the moment. However, we do believe that 3D will become more and more important, and the turning point will be when glasses-free sets are widely available at the right price. At that point I believe that 3D will become a mainstream phenomenon, and then we need to make sure that there is plenty of content so that people can really get the benefits. But currently that fact of having to wear glasses to watch it at home is just unthinkable for most consumers. How important is IFA to TP Vision? IFA is the most important event that we take part in throughout the year, so we spend a lot of resources on it, and we spend months preparing for it. It’s where we position ourselves with new product launches and new ranges, but also an extremely valuable event where we meet and interact with our customers and with the consumers. Hall 22 Stand 101 “We have teamed up with TPV to create greater effectiveness in our innovation spend and therefore better ROI.” IFA International • Monday 27 th August 2012 17

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