2015-11-19 Presentation Societe Generale SRI Conference

Creating value through
Sustainability
We strive to make the world healthier and more
sustainable through innovation
We will be the best
place to work for people
who share our passion
1.8 billion lives
improved in 2013
Together we will deliver
superior value for our
customers and shareholders
Improving people’s lives through meaningful innovation
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A healthier and more sustainable world
UN Human Development Index = life expectancy + education level + purchasing power
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Source: Ecological Footprint Atlas 2009
The program elements of our Sustainability approach
We take a dual approach, social and ecological, to the way we operate and innovate
Green operations
(includes supplier
sustainability)
Green products
Circular economy
Access to care
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Healthy living
Energy efficient
lighting
Philips’ mission
and vision
Access to care
• We believe in providing holistic healthcare
solutions, and in bringing the benefits of
healthcare provision effectively and
affordably to as many people as possible.
• We provide professional and technical
healthcare education to achieve a better
diagnosis and patient outcomes when
using our products.
828 million people
live in urban slums around
the world. Despite their tremendous
need, many people cannot access
healthcare services.
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Well-being
Philips is dedicated to responding to
consumers’ aspirations all over the world,
inspiring and enabling them to:
• be healthy
• live well
• enjoy life
We deliver experiences, tailored to the
variable local needs around the world that
improves their lives – every day.
Health spend to double
Western governments’ spending on
healthcare is expected to double as a
result of aging populations, medical
advances and lifestyle trends.
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Energy-efficient lighting
Philips is leading a global switch to LED Lighting
that will bring multiple benefits - economic and
environment.
LED lighting applies EcoDesign principles in several
ways such as waste reduction, recyclability, up to
80% less energy consumption and CO2 emissions.
LED bulbs can be housed in special luminaires
designed for easier disassembly and recycling.
640 power stations
A global switch to LED lighting would
reduce energy consumption by 40%.
This equals to cutting back the need for
new electricity generation with the
capacity of some 640 power plants.
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The versality of LED lighting contributes to making
cities more livebale, safe and inviting for tourism
and productivity in workplaces.
Green operations
Efficient management of chemical substances, energy, waste and water
Roll-out of new chemicals policy, monitoring and auditing procedures to address the large
and growing product chemicals legislation across the globe, including suppliers via EICC1.
Ongoing Energy (CO2), waste and water-reduction programs.
Supplier involvement program targeting Supply Chain risks
Supplier sustainability involvement program proactively targets issues in the supply chain
that can have a negative impact on brand value, ratings, customer relations, etc.
Active engagement with NGOs
Stakeholder engagement program (topic-driven) to handle increasingly active and vocal
NGO’s, especially in China (e.g. China labor watch) and social media.
Broadening program scope to include supply chain.
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1 The
Electronic Industry Citizenship Coalition (EICC) was established in 2004 to promote a common code of conduct for the electronics and information and
communications technology (ICT) industry.
Green products
We offer products that have a better
environmental performance through
applying EcoDesign procedures in all
aspects of product creation.
• Green products sales reached 52%
(2014) of total sales.
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Green products – Healthcare example
Tenders and consultancy
Tenders
Healthcare
# of projects
Value
10
EUR 445 M
Markets
Sweden,
France, UK
Offering phase
Won
5
EUR 235 M
3
EUR 200 M
• Sustainability questions are being asked in ~500 tenders annually in EMEA alone in Healthcare
Example:
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“Green” is increasingly relevant for hospitals,
especially at c-suite level. It‘s a space where Philips
has a strong reputation, capabilities and ambitions to
differentiate itself. Providing paid green consulting
services at c-suite, linked to improved people
experience, can open the doors for expanded scope of
collaboration.
Circular economy
Reduces material throughout by maximizing value creation
Mining/materials
manufacturing
Building Blocks
Reverse
Supply
Chain
Parts supply
Design
Collaboration
New
business
model
Manufacturing
Recycle
Distribution
Parts harvesting
Refurbish
Service
User
Waste
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Source: Ellen MacArthur Foundation, McKinsey
From highest to lowest
value retention:
1. Service & Upgrade
2. Refurbishment
3. Parts harvesting
4. Recycling
Circular economy
Business opportunities gaining traction
Circular Economy
Markets
# of
projects
Remarks
HealthTech
USA,
Netherlands
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•
Focus on refurbishment, parts harvesting
and reverse logistics
Lighting
Netherlands,
USA, UK
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•
•
Focus on Light-as-a-service
Schiphol deal has been signed
• The above business opportunities are created to experiment with
circular business models and currently represent ~ EUR 10 M sales
• The Healthcare refurbishment activities reach ~ EUR 200 M in 2014,
for which we opened a new factory in Best, The Netherlands
Example:
Schiphol Lounge 2:
Offering a 2 x 5 year light-as-a-service deal, with clear
end-of-contract options.
Overall margin over 10 years higher than normal sale
margin.
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Philips General Business Principles (GBP)
Our Code of Conduct – Always act with integrity
Q1-4: Internal roll-out
Q2: Revised GBP
Q4: e-learning
• New look & feel
• Thousands of dialogues
•
•
•
•
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32 languages
Accessible & value-based
Content & context
Employee certification
Sustainability as a brand recognition and growth
driver
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Thought leaders at Rio+20,
launch of LED revolution
Partner of the year with over
500 ENERGY STAR products
Recognized leader - Carbon
Disclosure Project
Sourced conflict-free tin
from Congo
Opening of the HealthTech
refurbished systems factory
in The Netherlands
One of the top risers in
Interbrand’s BGGB 2014