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Apr. 14. 2008 / 4:00AM, PHG - Q1 2008 Royal Philips Electronics Earnings Conference Call

There is a portion of the inventory of Healthcare which we need to bring down, which is in the domain of Imaging Systems where we had finished Q4 with a higher inventory. We've corrected that to some extent, but not quite. So the portion of the inventory of Healthcare which we will have to address in those coming quarters is more on the Imaging side of the Healthcare portfolio.

Operator Your next question comes from Mr. Andreas Willi from JP Morgan. Please go ahead sir.

Andreas Willi - JP Morgan - Analyst

Yes, I just have one follow-up question on your regional growth. You showed 4% underlying sales growth in Asia Pacific. Could you give a bit more information in terms of which countries pulled down the overall growth rate?

Pierre-Jean Sivignon - Royal Philips Electronics - CFO

Yes. I think it's basically we are double-digit China, India, I think Russia and the whole of LatAm; that's all double-digit. The one country which is basically bringing down the Asia number which you see in the press release is Japan, essentially because of Healthcare, where Japan last year was quite strong, especially in one modality, which is MR. And it's down as well for Automotive Lighting, for the reason I just mentioned before.

Other element is that some of the licensing revenue that we've talked about comes via Asia. This is why Asia is the geographic area which is the most impacted by the drop of the optical license income that we have alluded to earlier on in this call. But to give you a bit more, China was up 21%, India was up 22%. I think those are the larger countries, so I would say the key countries are up; the one which kind of ruined the party a little bit was Japan.

Operator Your next question and final question comes from Mr. Martin Wilkie from Deutche Bank. Please go ahead sir.

Martin Wilkie - Deutsche Bank - Analyst

Hi, it's one final question on Europe, capital deployment. Could you let us know just how close you think you are to getting your double EBITA per share by 2010 with your existing portfolio? And if there is some more capital to be deployed there, are you thinking of further acquisitions and if so, are there particular divisions, particularly between Healthcare and Lighting, that you still think need some acquisitions and are more likely to be a focus?

Pierre-Jean Sivignon - Royal Philips Electronics - CFO

Yes, no, I think the doubling of the EBITA per share, we plan to achieve it with the portfolio as we speak, so that's the first answer. The second answer, could we need more acquisitions? I think that this year should be a quiet year. I'm not saying we won't do any M&A; we might do a small M&A. You've seen us doing some M&A in emerging markets. You particularly saw a very important transaction for us in China where we have acquired a monitor company in China, which for us is a very, very important tactical acquisition. You might see one or two small moves of that nature in the emerging markets, which are essential for our Healthcare portfolio. Beside that, we might do, as I say, small things. At worse, small, medium, but not much all-in-all, this year. That's certainly the plan for this year.


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