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FINAL TRANSCRIPT

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

Operator Your next question comes from Mr. Andreas Willi from JP Morgan. Please state your question sir.

Andreas Willi - JP Morgan - Analyst

Good morning, two questions please. The first one, you said you expect to make progress towards your 2010 Vision in 2008. Could you quantify that a bit, in terms of is that sale growth, EBIT margin? On EBIT margin, it looks like you're tracking below last year due to a number of specific issues. Does it mean you expect for the full year an EBIT margin ahead of last year when you say that you expect to make progress?

Pierre-Jean Sivignon - Royal Philips Electronics - CFO

Okay, on the EBITA margin, basically to we expect before incidentals, because of course, the EBITA margin of this year, you have to look at it on an ongoing basis. We have some incidentals, which are essentially the one which have been announced which are the acquisition related charges, as well as now the EUR125 million on Television. But we expect, like every year, to have as well some positive one-offs.

So if you do it excluding the one-offs, the positive and the negative, we expect indeed our EBITA margin of '08 to be north of the one of '07. And if you include the one-offs, which is basically the one I just described, we hope that, as usual, we will have positive one-off on the other side, which will help to offset the one-offs which are negative, which I just mentioned, which is integration charges and the Connected Display related special charge. So we expect very much along those two lines to have a progress in the EBITA margin.

On terms of growth, we've not guided you on growth for this year, but we expect to have positive growth for 2008. The caveat I will put on that is obviously on Television, certainly because of Funai and because of our constant attention to keep this business managed until basically we have absolutely reached a satisfactory level of margin, we plan to manage this business with complete focus on the margin. Certainly, no obsession for the growth of the Connect Display business either.

Andreas Willi - JP Morgan - Analyst

My follow-up question is on another subject. As far as I am aware, you were not able to register the trademark Sense and Simplicity in the US as a small lighting company is already using it there. What are your plans for the use of this trademark in Lighting in the US, also in relationship to your newly acquired companies?

Pierre-Jean Sivignon - Royal Philips Electronics - CFO

No I am not aware of this and I am not aware that this should have a significant impact on the communication of our brand promise in North America. That has not been communicated to me. I will follow up on it, but I am not aware of this. And certainly, it's not impacting the way we communicate Sense and Simplicity right now in North America, to my knowledge.

Andreas Willi - JP Morgan - Analyst Thank you.

Operator Your next question comes from Mr. Martin Wilkie from Deutsche Bank. Please go ahead sir.

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