Transcript presentation

A sustainable strategy for the Turkish
market
Willem Rozenberg
CEO Philips Turkey
Introduction
Recent visit to Bodrum
58 years old
Married
Exploding family
4 girls
5 grandchildren
Common feeling with all expatriates in
Turkey
Extremely welcome
Business is not easy
33 years in Philips
25 years expatriate (Riyadh, Dubai,
Johannesburg and Istanbul)
6 years in Turkey
Always in Healthcare
2
A strong diversified industrial group
leading in health and well-being
Founded in 1891
Headquartered in Amsterdam, the Netherlands
Sales over EUR 22.2 billion in 2010
Growth geographies
32% of sales generated in growth geographies
Globally recognized brand (world top 50)
Our brand value doubled to $8.7bn since 2004
117,000 employees
Sales and service outlets in over 100 countries
€1.5 billion investment in R&D, 7% of sales
Note - All figures from the year 2010 onwards exclude Television as it is treated as discontinued operation
The four global trends that are becoming
increasingly relevant
Aging population
The rise of
growth geographies
Increased consumer
empowerment and
sustainable lifestyles
Climate change and
sustainable development
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Our focus on Health and Well-being
Our portfolio leverages critical global trends
Aging population
Increased consumer
empowerment and
sustainable lifestyles
Climate change and
sustainable development
5
Rise of growth
geographies
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We expect our markets to grow
Most growth expected to come in lighting and healthcare markets
…translating into expected
market growth per sector…
Growth1 of markets in which Philips participates
vs. GDP growth
100%
CAGR5 % 2010-2015
~ 30%
~ 20%
~ 2%
~ 50%
Healthcare
Western North
Europe America
BIC
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World
Market size
GDP3
1. Excluding TV
2. Based on internal analysis
Consumer Lifestyle
growth2
Lighting
3. EIU estimates
4. Brazil, India, China
5. CAGR: Compound Annual Growth Rate
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Growth geographies are a key growth opportunity
driven by rapid expansion of the middle class
Middle class households
growth in key growth geographies
Millions of households1
419
• Philips sales show a strong correlation with middle
class
• The number of middle class households in key
growth geographies will more than double until
2015
• The total middle class income pool in growth
geographies will almost double until 2015
+17%
CAGR*
161
• Our sectors will benefit strongly from the rise of the
middle class in growth geographies :
• Increasingly affordable healthcare which will
drive demand
2009
7
Source: Internal analysis
* CAGR: Compound Annual Growth Rate
2015
• Building of new and better housing and other
infrastructure increasing demand for lighting
• Increasing demand for a higher quality, and
healthier lifestyle
Sustainability as a driver for growth
Success of EcoVision4
Our Green Product sales represented around 30%
of sales in 2009, 3 years ahead of our 2012 target.
And we have completed our 2012 goal of
cumulative EUR 1 billion of Green Investment in
2010.
Launch of our EcoVision5 program
A clear example of how we continue to drive
business growth through Sustainability is the
launch of our EcoVision5 program in 2010.
Targets for the period 2010 – 2015
• To bring care to 500 million people
• To improve the energy efficiency of our overall
portfolio by 50%
• To double the amount of recycled materials in
our products as well as to double the collection
and recycling of Philips products
A sustainable strategy
for Turkey
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The market
Characteristics:
• 76 m people with large young population
• Increasing awareness
• Developing fast GDP growth / in 2010: 7,1%
• High growth potential, Expected to become the
3rd largest European economy by 2050
(Goldman Sachs)
• Diverse public and private market
Turkey the 17th largest economy in the
world
Annual GDP growth:
2003 - 2007
2008
2009
2010 forecast
6.4% annual average
0.7%
4.7%
7.1%.
• Upcoming PPP, PFI, BOT models
• Centralization and e-tendering
• Privatisation – investments
Competition:
• Almost everybody
• Large number of local players
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Testing global trends in Turkey – Aging and Health
The age structure of Turkey is relatively younger compared to others, an
increase of the elderly population in “absolute numbers” is noticeable though:
Population over age 65 will be:
4.8 million in 2010
7.9 million in 2025
17 million in 2050 (Source TURKSTAT)
Health Indicators:
Life expectancy at birth: M/F 71 / 75
Turkey
Healthy life expectancy at birth M/F: 61 / 63
Life expectancy at birth M/F 76 / 82
EU Average
Healthy life expectancy at birth M/F: 61 / 62
Total expenditure on health 6.7% of GDP (2009) vs. NL 9.9% (2008)
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Testing global trends in Turkey – Energy & Climate
Turkey’s demand for electricity grows
at a rate of 8% per year.
Current energy import:
2010-15
2020
60%
70%
80%
Since 1923, every 10 years Turkey’s temperature has increased by 0.20C
* Source ENO Climate
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Testing global trends in Turkey – Increased
consumer empowerment & key growth area’s
• Increased consumer empowerment, growing of middle and upper income
segments
• Doubled R&D expenditures in the past decade *Source Worldbank.org
• Construction industry may achieve a growth of >20% in 2010 with a regional
focus *SourceHürriyet Daily
• Strong governmental and private vision and commitment to health sector
modernization *Source Worldbank.org
All in line with the Philips Market Stategy, which helps to reach a strong growth
for us in Turkey.
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Philips in Turkey
Founded in 1930
Headquartered in Istanbul.
Regional offices in Ankara, İzmir, Adana
Employees
300 people in sales and service outlets all over Turkey
Leading market positions
- LED lighting, energy saving lamps, ambient solutions
- Medical Imaging (Cardiology, PETCT, MR)
- Fruit-Juicer , Irons, MP3 player and docking
stations, high-end TV, shavers, hair-care
Brand Image in Turkey
- 7th position (brand equity index Turkey)
- Long term commitment
- Reliable, innovative, outstanding quality
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Philips Index for Health and Well-being
A global initiative - 31000 people across 23 countries
Philips is a pioneer in developing and bringing to market
innovations that shape our healthcare, our lifestyle, and who
we are as a society. Doing so means we need to understand
the mega-trends in society.
These include:
• What is the state of our health and well-being?
• What aspects of health and well-being are most important, and how satisfied are people
with each of these aspects of our lives?
• What role does technology play in helping society maintain better health and well-being?
• How does people vary in terms of their attitudes and behaviors toward health and
well-being?
• If we were to assign a particular index as an overall measure of health and well-being,
what would it be and would it vary among different sub-groups of people
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Philips Index for Health and Well-being
Some first results
• 1000 interviews in 12 cities conducted between Aug- Sept 2010
• Turkey’s total index score is 46%
• The majority of Turkish people (66%) rate their health and well-being as very good or good.
• 65% of Turkish people experience some level of stress
• The economy is top of the reasons Turkish people are feeling stress(76%).
• Healthcare costs are ranked as the third reason (66%).
• 15% of the Turkish people are sleep deprived
• Technological equipment being update, improved and state-of-art technology is effective in
Turkish people’s hospital preference (89%)
• 78% of Turkish people believe that Lighting can have a significant effect on their sense of
health and wellbeing
• Cancer, heart and vascular diseases and contagious diseases should receive more attention
from the government.
• Spending time with family and children (37%), spending time with friends (31%) and relaxing
at home (30%) are the most popular ways to improve the feeling of well-being of Turkish
people
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A granular approach
Hi-end / Sophisticated
Specifications
Segmentation
Brand
image
Local insight
Low-end & economical solutions
Price focused
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Specific market requirements
Price setting
Product specifications
Local
Brand
insight
image
Visibility
Logistics
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The LED Bridge between Europe & Asia
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Thank you very much for this opportunity