Comments by Philips� CFO Jan Hommen at CSFB Conference in Barcelona

During the annual Credit Suisse First Boston European Technology

Conference in Barcelona, Spain, Mr Jan Hommen, a member of the Board

of Management and Chief Financial Officer of Royal Philips

Electronics, today gave a presentation, in which he reiterated the

strategic process to transform Philips into a high growth technology

company. He also repeated the new financial targets for the medium

term, which were first published on February 8, 2001.

Mr Hommen referred to recent actions by the US Federal Reserve Bank

(FED) and the

European Central Bank (ECB) to further reduce interest rates and

remarked that Philips

is also seeing a further weakening of these economies resulting in

lower demand for its products in these regions.

Talking about Philips' businesses Mr Hommen reiterated that the Board

of Management is close to announcing its strategic decision concerning

the future of its mobile phone business of PCC. "It is clear that we

will not continue with the situation that we have now," he said.

"Today I cannot say anymore, but Philips will soon be making

announcements on this subject. Any consequences of those announcements

are not part of the pre-tax charge of EUR 350 million we plan to take

in the second quarter, as was previously indicated on April 17."

With respect to the loss-giving situation of Digital Networks in the

US market Mr Hommen said measures are being taken to scale down

Philips' ambitions and to contain its exposure.

"Recent Semiconductor industry statistics are showing that the slump

in the industry is deepening further. Industry analysts are calling it

the deepest and steepest decline they have observed over the last 30

years." Mr Hommen stated that the latest estimates he had

seen now point to an industry revenue level for 2001 about 20% below

last year's level.

"Of course Philips is being impacted by this trend and by the lower

demand for products in mobile displays and optical storage where we

have very strong market positions. We are determined to keep

inventories tightly controlled even at the expense of utilization

rates and current results."

Further information:

Ben Geerts, Philips Corporate Communications, tel. +31-20-59 77 215