Philips joins new venture capital fund to foster innovation in healthcare

* Philips has made anchor investment in healthcare technology fund Gilde Healthcare III, which has a target size of EUR 200 million (USD 250 million).

* Investment will complement Philips’ existing innovation efforts in healthcare.

Amsterdam, The Netherlands – Royal Philips Electronics (NYSE: PHG, AEX: PHI) today announced that it has joined Gilde Healthcare III – a new venture capital fund focusing on innovative early and growth stage healthcare technology companies in Europe and the USA that are active in developing and commercializing new patient-centric healthcare solutions, medical technologies and therapeutics.

As a global leader in health and well-being, Philips is investing in Gilde Healthcare III in order to foster innovation in areas of strategic interest to its Healthcare business. Philips’ anchor investment in Gilde Healthcare III is in line with its policy of open innovation and its belief that the most effective way to deploy venture capital is via an independent fund that can leverage the expertise of a professional fund manager and the other investors in the fund. Gilde Healthcare III will be fully independent of, and complementary to Philips’ existing innovation efforts, including the Philips Healthcare Incubator.

“Over the past years the venturing community has been instrumental in bringing breakthrough healthcare innovations to the market,” said Steve Rusckowski, CEO of Philips Healthcare. “Through our participation in the Gilde Healthcare III venture capital fund, we are taking another step forward in driving innovation in areas of strategic interest to Philips in healthcare. At the same time we will become even more connected to the venturing community, which is an important element of Philips’ open innovation approach.”

As one of the fund’s anchor investors, Philips has contributed to shaping part of the fund’s innovative scope. Patient-centric healthcare is an emerging approach to healthcare delivery that focuses on the patient experience as well as on improved clinical outcomes. Within this value space, the Gilde Healthcare III fund will focus on home healthcare solutions, sleep improvement techniques, image-guided interventions/therapies and clinical decision support, with particular emphasis on cardiology, oncology and women’s health.

Philips holds a minority share in the fund and it is being joined by additional institutional financial investors. The Gilde Healthcare III fund has a target size of EUR 200 million (USD 250 million). It will be managed by Gilde Healthcare Partners – a Dutch venture and growth capital firm that currently has more than EUR 300 million under management.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is a diversified health and well-being company, focused on improving people’s lives through timely innovations. As a world leader in healthcare, lifestyle and lighting, Philips integrates technologies and design into people-centric solutions, based on fundamental customer insights and the brand promise of “sense and simplicity”. Headquartered in the Netherlands, Philips employs more than 116,000 employees in more than 60 countries worldwide. With sales of EUR 23 billion in 2009, the company is a market leader in cardiac care, acute care and home healthcare, energy efficient lighting solutions and new lighting applications, as well as lifestyle products for personal well-being and pleasure with strong leadership positions in flat TV, male shaving and grooming, portable entertainment and oral healthcare. News from Philips is located at www.philips.com/newscenter.

Forward-looking statements

This release may contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. By their nature, forward-looking statements involve risk and uncertainty because they relate to events and depend on circumstances that will occur in the future and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these forward-looking statements.