Philips in brand license agreement with TPV Technology

Under the terms of this agreement, TPV will assume responsibility for sourcing, distribution, marketing and sales of all Philips’ IT Displays activities worldwide. As part of the intended brand licensing agreement, TPV can exclusively use the Philips brand name for PC monitors worldwide, in exchange for which Philips will receive revenue-based royalty payments. Philips IT Displays sales amounted to approximately €600 million in 2007. Completion of this intended transaction, which is expected in the course of 2008, is subject to applicable regulatory approvals and the fulfillment of specific closing conditions. The intended agreement with TPV represents a further step by Philips to reposition itself in the digital display business and accelerates Philips’ efforts to address the unsatisfactory performance of its television business. In April of this year, Philips already announced it would transfer its consumer television operations in North America, while at the same time it said it would take steps to further optimize its global supply base in TV. Philips remains ahead-of-plan in optimizing its TV operations and will book approximately €66 million in charges in Q2/08, which are largely related to these efforts.