Outlook

We expect the upward trend in emerging markets to continue, supporting all three operating sectors. In the US we anticipate that the market headwind caused by the uncertainty around potential healthcare reform will ease off. A significant part of our Lighting business – particularly Professional Luminaires – is highly correlated to commercial construction, a market we have yet to see recover. 

This said, visibility beyond the short term remains low and so we will continue our focus on cost (we expect limited restructuring in the range of EUR 150-250 million for the year 2010, predominantly in Lighting) and on cash. At the same time we will ensure that our businesses are well placed to capture growth when it comes, not least by maintaining investments in innovation, marketing and emerging markets. 

We remain very much committed to delivering an EBITA profitability of 10% or better. We were encouraged by our performance in the fourth quarter of 2009 – in what was still a tough economic climate – and are confident that 2010 will represent another solid step towards this target. Naturally, the magnitude of the improvement over the full year is dependent – in part at least – on the developments in the global economy.

Amsterdam, February 22, 2010

Board of Management