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Welcome & Intro

12.02.2015

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2 Markus Laubscher

Philips

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Rethinking the future Our transition towards a circular economy

Markus Laubscher Group Sustainability

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CE team within Philips:

Driving circular thinking through…

• Generating proof points & metrics • Thought leadership and collaborations • Driving internal engagement • Embedding in Philips processes

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Circular Economy Vision, ambition, potential

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Our vision is to make the world healthier and more sustainable through meaningful innovation

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A healthier and more sustainable world

Source: Ecological Footprint Atlas 2009

UN Human Development Index = life expectancy + education level + purchasing power

7 Access to Care Well-Being Supporting

Society

Green Innovation

Green Operations

Circular Economy

Low ecological footprint

High human development

Our future growth depends on decoupling of development and footprint

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• Preserve embedded labor, capital costs and materials of hardware

• Monetize them as long as possible at highest value, ideally as service

• Enabling future growth by decoupling from resource use

• Big data makes it efficient

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Towards economic and ecological value creation

Circular models have cost saving potential of EUR 250-500 Billion annually for European economy Source: Ellen MacArthur Foundation, 2013, Towards the Circular Economy

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Experience to date Proof points

11 Light as a Service

Refurbished MRI

Modular Ultrasound

Recycled content

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• Lighting upgrade to 25 parking garages in WMATA (Washington DC, USA) transit system

• Over 15.000 LED fixtures with wireless controls

• Ownership of the installation remains with Philips

• 11 year initial contract for managed services

• Improved modular product design to support maintenance and upgradeability

Light-as-a-service

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Refurbishing solutions for MRI systems

• Systems rebuilt and tested according to manufacturers specifications

• New vacuum components

• Customized configuration

• Latest software upgrades

• Latest hardware upgrades

• Original parts

• 60-85% of new price

• Same guarantee as new

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Philips Healthcare Parts Harvesting • Avoid value leakage throughout the value

chain

• Ensure maximum usage of parts

• Parts and installation accessories collected after any installation, de-installation, repair or maintenance service

• Parts harvested cleaned and tested to ensure quality as new parts

• Strong infrastructure for trade-in equipment, planning and logistics in place

• Collaboration across functional organizations and businesses

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SENSEO Up built from recycled plastics

Baseplate 90% recycled ABS from Post Consumer

E-waste

Inner frame (not visible) 40% Post Industrial Recycled glass fiber

reinforced polypropylene

Total: 13% recycled plastics / 20% cost savings

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Lighting Solutions Strategies and activities

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Strategy and activities: Lighting Solutions

service Value will be created by offering Light as a Service including lifecycle extension opportunities, upgrades and repairs.

refurbish The possibilities for a refurbished product business will be analyzed.

parts harvesting A pre-owned market for used parts and luminaires reuse will be explored and developed.

recycle The cooperation with the established local Collection and Recycling Service Organizations will be continued and enhanced.

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Strategy and activities: Lighting Solutions

business models • Scale up service business • Develop sales tools for circular value propositions

design • Expand the portfolio of circular products • Implement a circular economy scorecard

collaboration • Co-create and cooperate with like-minded companies • Enhance customer relationships with customized solutions

reverse logistics • Extend possibilities for take back and recycling • Enhance collaboration with recyclers and distributors

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Circular economy scorecard to guide design

Business models

Design Collaboration Reverse logistics

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