Philips Continues Momentum; Delivers Strong Order Intake, Step-up in Sales Growth and Margin Expansion

Q3 2025 Group Highlights

• Comparable order intake growth 8%
• Group sales amounted to EUR 4.3 billion, reflecting 3% increase in comparable sales
• Income from operations was EUR 330 million
• Adjusted EBITA margin increased by 50 basis points to 12.3% of sales
• Operating cash flow of EUR 327 million, with a free cash flow of EUR 172 million
• Philips reiterates full-year 2025 outlook, with margin now expected at the upper end of the range

Roy Jakobs, CEO of Royal Philips:
“In this quarter we maintained our momentum, with AI-powered innovations and long-term partnerships making a real difference for patients and consumers. We drove strong order intake and accelerated sales growth, with sustained strength in North America. We expanded margin through innovation, focused execution and cost discipline, remaining firmly on-track as we navigate an uncertain macro environment including tariffs.

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We are taking disciplined action to achieve the highest standards in patient safety and quality, which remains our number one priority.

Following our landmark agreement with Indonesia’s Ministry of Health, the first Azurion system is being installed this week in East Java. This milestone marks the start of expanded access to advanced, minimally invasive care across Indonesia and demonstrates progress on our fundamentals, including supply chain agility and simplification.

Our passionate team remains fully focused on driving performance and sustaining momentum through the end of the year.”

Group and segment performance

Comparable order intake grew 8% in the third quarter, supported by continued strong performance in North America. Comparable sales grew 3.3% with growth in all segments. Margin expansion was driven by increased sales, favorable mix effects and productivity that more than offset the impact of increased tariffs. Free cash flow increased to EUR 172 million.

Diagnosis & Treatment comparable sales grew 1.3%. Adjusted EBITA margin was 11.8%, down 80 bps, mainly due to tariffs and partly offset by gross margin from recently launched innovations and productivity.

Connected Care comparable sales grew 5.1%. Adjusted EBITA margin improved 410 bps to 11.4%, driven by increased sales and productivity, partly offset by tariffs. Adjusted EBITA includes a non-recurring gain related to a minority investment.

Personal Health comparable sales grew 10.9%. Adjusted EBITA margin increased 60 bps to 17.1%, driven by increased sales and productivity, partly offset by tariffs.

Innovation highlights

• Philips launched Lumea IPL in the US, bringing the world’s No. 1 Intense Pulsed Light hair removal brand to the market. The launch has seen an encouraging start with strong consumer interest.
• Philips unveiled radiation therapy (RT) breakthroughs, including the advanced Rembra RT and Areta RT CT scanners, delivering clearer and more consistent images, supported by the launch of helium-free BlueSeal RT MR in North America.
• Philips launched Transcend Plus, the next generation EPIQ CVx and Affiniti CVx cardiovascular ultrasound systems, including 26 FDA-cleared cardiovascular ultrasound AI applications, the most in the industry.
• Philips signed long-term Enterprise Monitoring as a Service (EMaaS) partnerships with leading US health systems in California, including Hoag in Orange County and Rady Children’s Hospital in San Diego. Philips’ EMaaS solutions help hospitals enhance clinical efficiency and patient safety through advanced monitoring, strengthened cybersecurity, and scalable digital capabilities.
• Three-year results of iMODERN, a randomized, controlled clinical study involving 1,146 patients, provide evidence to widen minimally invasive treatment options for patients with acute myocardial infarctions. Philips sponsored the trial and enabled both the invasive and non-invasive approaches evaluated within it.
• Philips’ net-zero science-based target by 2045 has been officially validated by the Science Based Targets initiative (SBTi). This underlines the company’s commitment to healthcare decarbonization, sustainable healthcare leadership and long-term value creation.

Productivity

Disciplined cost management and robust productivity initiatives delivered savings of EUR 222 million in the quarter. Philips will deliver its three-year, EUR 2.5 billion productivity program, including EUR 800 million of productivity savings in 2025.

Outlook

Philips reiterates its confidence in delivering the full-year 2025 outlook:

• Comparable sales growth: 1%-3%
• Adjusted EBITA margin: 11.3%-11.8%, now expected toward the upper end of the range.
• Free cash flow: EUR 0.2-0.4 billion (including the payout in the first quarter of 2025 of EUR 1,025 million Philips Respironics recall-related medical monitoring and personal injury settlements in the US.)

This outlook excludes ongoing Philips Respironics-related proceedings, including the investigation by the US Department of Justice.

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