Philips and Future Electronics sign pan-European distribution agreement

Future Electronics added as global distributor to broaden market reach

Royal Philips Electronics (NYSE: PHG, AEX: PHI) and Future Electronics have announced that Future will be the franchised distributor for all Philips' semiconductor products in Europe. The new agreement should be complete by June 1, 2005 and will give customers another channel for purchasing Philips products and obtaining design support. Future has already been a partner of Philips in the Americas and Asia for many years.

Future Electronics will now have the opportunity to design in and sell Philips' broad portfolio of semiconductors including microcontrollers, discretes, logic, analog and communication products. Also, Future will benefit from being able to offer its customers a wide range of products complementing Lumileds Lighting's Luxeon solid-state light sources, including general lighting products, automotive lighting, cellphone camera flashes, computer monitors, televisions, flashlights, and other applications. Future's strong marketing, engineering, and supply chain programs will provide Philips with a differentiated partner to continue to grow in Europe. Future will put significant emphasis on major growth areas such as lighting, metering, and telecom technologies while expanding its coverage into mass markets and into Eastern Europe and the Baltic States.

"We are delighted at the potential surrounding this opportunity and excited about the enhanced level of design support that we can offer our customers," says Gerry Duggan, President and COO of Future Electronics. "Philips' industry leading product portfolio provides an excellent fit for our customer base."

Future's focus on a broad customer base and a strong engineering alignment with its customer base makes this expanded relationship attractive to Philips. "Philips is continuously evaluating the best way to serve its distribution customers as well as meet its business growth objectives. We believe the strategy of Future Electronics towards design-in and value add services fully supports these ambitions," Pascal Langlois, senior vice president Channel Management and MultiMarket Semiconductors at Philips Semiconductors, commented. "With the appointment of Future Electronics as a global distributor we have a very strong partner to ensure the continued growth of our business across a wide customer base."

About Future Electronics

Future Electronics is a privately held company, with over 5,000 employees worldwide and is firmly positioned as one of the world's top three electronic component distributors. Its European customers are serviced via a highly automated and efficient centralised distribution centre located in Hayes, Middlesex, U.K. This facility is a vital part of the company's logistics, enabling same day despatch for next day delivery across Europe. The company's product inventory, of which approximately 60% is available to sell, comprises over 65,000 line items worth close to $1 billion globally and represents an unrivaled investment in customer service. A global IT system enables stock interrogation to be undertaken from anywhere in the world. Future also offers strong engineering support as well as a host of value added services, including JIT logistics, buffer stocks, e-commerce and all value added services as required. Many design kits are available from Future, together with CD ROM based text, graphics and video data access with hot links to both Future's and suppliers' web sites. Future is committed to building long term partnerships with customers on behalf of Philips worldwide.
www.futureelectronics.com

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE: PHG, AEX: PHI) is one of the world's biggest electronics companies and Europe's largest, with sales of EUR 30.3 billion in 2004. With activities in the three interlocking domains of healthcare, lifestyle and technology and 160,900 employees in more than 60 countries, it has market leadership positions in medical diagnostic imaging and patient monitoring, color television sets, electric shavers, lighting and silicon system solutions. News from Philips is located at www.semiconductors.philips.com.