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Week-end Edition - Day 2 & Day 3 - IFA International

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at w w kEyNOTE REvIEW Download Podcast Download Video at w w FINDING THE UPSIDE TO THE DOWNTURN RaGNETTI callS FOR 'vISION, valUE aND OPTImISm' By Mark Dezzani "We have seen doubledigit growth in some homeappliance sectors" Crisis accelerates transformation, and vision and optimism will help companies to survive the "economic jolts" of the past year, said Andrea Ragnetti, Executive Vice- President and CEO of Philips Consumer Lifestyle in his keynote speech yesterday. "There has been a major shift in consumer lifestyle towards health and wellbeing," Ragnetti said "and Philips' early recognition of these changes has given the company a head start on its competitors." He added: "The world has changed in the past year and the forecasts for the consumer electronics market are still unclear, although there are some small indicators of improvement in the second quarter of this year in some markets. We expect the situation to stabilise, maybe a touch earlier than expected. But we need vision and optimism to deliver value to consumers. Walking around IFA yesterday, I saw both vision and optimism." Ragnetti also believes that, when the world finally emerges from the crisis, the consumer market will have been transformed. "People are already shopping differently," he said. "More are purchasing on the internet. People are cocooning, staying at home to cook and watch movies. With less purchasing power, people are focusing on essentials. That's why we have seen double-digit growth in some homeappliance sectors, such as coffee machines. And this shows there is some opportunity in this crisis." Philips has identified four categories as being the future for consumer lifestyle: health, personal care, home living and interactive living. "Health is seen by consumers as a rational need, while wellbeing is an emotional need," Ragnetti said. "A deep understanding of the changing lifestyles of consumers has allowed us to consolidate a strategy into a detailed roadmap." Ragnetti is referring to a recent Philipscommissioned survey, in which 8,000 consumers worldwide were interviewed in what is believed to be one of the largest-ever consumer research initiatives in the field of health and wellbeing. "We began our transformation 10 years ago and launched our Consumer Lifestyle division two years ago," Ragnetti said. With many of Philips' competitors being forced to undergo crisis-led transformations, he added that Philips is in a better position than most to emerge strongly from the present downturn. According to Ragnetti, one of the most fundamental changes in consumer lifestyle will result from the world's rapidly greying population: "With an ageing population, healthcare costs will become unsustainable. In 40 years time, one in four of the global population will be over 60 — and that figure will be even higher in North America and Europe." Philips has traditionally been strong in lighting — another area that Ragnetti said has been transformed by the new company philosophy. "Lighting has a tremendous impact on quality of life," he added. "It affects our moods and can be used in the healing therapies. Lighting is vital to make life safer and brighter. There is also a demand for energy efficiency and sustainability, and our lighting division can do much towards satisfying this. We have seen doubledigit growth in some home-appliance sectors. Lighting accounts for 20% of all energy consumed. Energy-saving bulbs can reduce this by 50%." Ragnetti concluded that "being close to consumers and understanding their dynamics creates opportunities to grow — even during a crisis". Hall 22 / Stand 101 IFA International • Saturday, 5 th & Sunday, 6 th September 2009 11

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