Core Insights - Philips (PHG.US) shares rose by 3% to $28.05 following the release of its Q3 financial results [1] Financial Performance - Q3 sales decreased by 2% year-on-year to €4.302 billion, aligning with market expectations [1] - Comparable sales increased by 3%, with North America showing a 5% growth in comparable sales [1] - Adjusted EBITA was €531 million, surpassing market expectations of €484 million [1] - Adjusted earnings per share were €0.36 [1] Future Guidance - Philips reaffirmed its full-year 2025 performance guidance, expecting comparable sales growth of 1%-3% [1] - The company anticipates an adjusted EBITA margin of 11.3%-11.8% for the year [1]

Core Viewpoint - Philips (PHG.US) shares rose by 3% to $28.05 following the release of its Q3 financial results, which showed a 2% year-over-year decline in sales to €4.302 billion, aligning with market expectations [1] Financial Performance - Q3 sales decreased by 2% year-over-year to €4.302 billion, meeting market expectations [1] - Comparable sales increased by 3%, with North America showing a 5% growth in comparable sales [1] - Adjusted EBITA was €531 million, surpassing market expectations of €484 million [1] - Adjusted earnings per share were €0.36 [1] Future Guidance - Philips reaffirmed its full-year 2025 performance guidance, expecting comparable sales growth of 1%-3% [1] - The company anticipates an adjusted EBITA margin of 11.3%-11.8% for the year [1]

Market Overview - US stock index futures are all down, with Dow futures down 0.63%, S&P 500 futures down 0.99%, and Nasdaq futures down 1.28% [1] - European indices also show declines, with Germany's DAX down 1.25%, UK's FTSE 100 down 0.59%, France's CAC40 down 1.19%, and the Euro Stoxx 50 down 1.07% [2][3] - WTI crude oil is down 1.46% at $60.16 per barrel, while Brent crude is down 1.26% at $64.07 per barrel [4] Investment Insights - Wall Street executives warn that the stock market is "between fair and expensive," suggesting a potential healthy correction of over 10% within the next 12 to 24 months [5] - Capital Group's CEO Mike Gitlin notes that while corporate earnings are strong, valuations are too high, indicating a possible significant sell-off in the near future [5] Federal Reserve Commentary - Federal Reserve Governor Milan calls for more aggressive rate cuts, stating that current monetary policy is too restrictive [6] - Milan has previously advocated for larger rate cuts, suggesting a 50 basis point reduction instead of the 25 basis points decided in recent meetings [6] Commodity Market Trends - Goldman Sachs' Ole Hansen indicates that the long-term outlook for gold remains positive despite a nearly 8% drop since reaching a record high of $4,359.40 per ounce on October 20 [7] - The recent decline in gold prices is attributed to seasonal demand weakness and a stronger dollar, but these factors do not alter the long-term positive trend [7] Individual Company Performance - Tesla's October sales in China fell nearly 10% year-over-year, raising concerns about global sales challenges in the final quarter [8][9] - Palantir reported a 63% year-over-year revenue increase to $1.18 billion, exceeding analyst expectations, and net profit surged over twofold to $475.6 million [10] - Pfizer's Q3 revenue was $16.65 billion, surpassing market expectations, and the company raised its full-year earnings guidance [11] - Philips reported a 3% comparable sales growth in Q3, driven by strong performance in North America, and reaffirmed its 2025 guidance [12] - BP's Q3 adjusted net profit was $2.21 billion, exceeding analyst expectations, supported by strong refining margins [13] - Yum China reported an 8% increase in operating profit and a 4% increase in same-store sales, marking the 11th consecutive quarter of growth [14]

Financial Data and Key Metrics Changes - Order intake grew by 8%, marking the fourth consecutive quarter of improvement, reflecting robust demand and disciplined execution [4] - Comparable sales growth increased to 3% year-on-year, with all businesses contributing to growth [4] - Adjusted EBITDA margin expanded by 50 basis points to 12.3%, despite the impact of tariffs [4][24] - Free cash flow for the quarter was EUR 172 million, representing a EUR 150 million improvement year-over-year [28] Business Line Data and Key Metrics Changes - Personal Health saw a strong performance with an 11% increase in comparable sales, driven by robust demand across all regions [22] - Diagnosis & Treatment (D&T) experienced a 1% year-over-year increase in comparable sales, with image-guided therapy showing solid growth [19][20] - Connected Care's comparable sales grew by 5%, supported by strong growth in monitoring solutions [21] Market Data and Key Metrics Changes - North America was a key growth driver, with strong demand for hospital patient monitoring solutions [8][16] - In China, tender activity has been gradually increasing, but market growth remains subdued due to centralized procurement challenges [17][59] - Capital spending in Europe and Latin America remains stable, while India and Saudi Arabia continue to invest in healthcare and digitization [17] Company Strategy and Development Direction - The company aims to maintain momentum with disciplined execution into the fourth quarter to achieve full-year plans [5] - Continued focus on innovation and productivity improvements, leveraging AI to enhance operational efficiency [26] - The company is actively engaging with industry associations and authorities to advocate for patients and ensure access to care [18] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year commitments, with expectations for comparable sales growth in the range of 1%-3% [29] - The company anticipates a net impact of EUR 150 million-EUR 200 million from tariffs after substantial mitigation efforts [24] - Management remains cautious about the near-term outlook for China but is optimistic about long-term growth potential [17][59] Other Important Information - The company passed six out of nine FDA inspections with no observations, reflecting progress in quality systems [12] - A recent FDA warning letter is being addressed with full remediation efforts, with no expected impact on commercial operations [14][58] Q&A Session Summary Question: Future Price Increases - Management indicated that price increases may occur due to inflation and the inherent value of innovations, but growth remains a priority [35][37] Question: Personal Health Performance - Personal Health's strong sales were partially aided by a low comparable base in China, with no restocking observed [39] Question: Maintaining Productivity Momentum - Management is focused on delivering strong performance in 2025, with confidence in mitigating tariff impacts [43][44] Question: Order Timing in D&T - Management noted uneven order timing, with expectations for D&T to step up in Q4 [49][50] Question: Impact of GE's Decision - Management sees potential for competitive positioning improvement due to GE's decision to sell its Chinese business [67][69] Question: Tariff Impact on Margins - Management acknowledged that tariffs will have a larger impact next year but remains focused on improving margins [76] Question: VBP Impact in China - Management confirmed that the procurement rollout affects their business, contributing to slower market growth [78]

Financial Data and Key Metrics Changes - Order intake grew by 8%, marking the fourth consecutive quarter of improvement, reflecting robust demand and disciplined execution [4] - Comparable sales growth increased to 3% year-on-year, with all businesses contributing to growth [4] - Adjusted EBITDA margin expanded by 50 basis points to 12.3%, despite the impact of tariffs [4][5] - Free cash flow for the quarter was EUR 172 million, representing a EUR 150 million improvement year-over-year [29] - Net income rose to EUR 187 million, driven by higher earnings [28] Business Line Data and Key Metrics Changes - Personal Health segment saw an 11% increase in comparable sales, with strong demand across all regions [22] - Diagnosis and Treatment (D&T) segment had a 1% year-over-year sales increase, with Image-Guided Therapy showing solid growth [18][19] - Connected Care segment experienced a 5% growth in comparable sales, driven by strong monitoring solutions [21] - Adjusted EBITDA margin for Connected Care improved by 410 basis points to 11.4% [21] Market Data and Key Metrics Changes - North America was a key growth driver, with double-digit order growth and strong demand for hospital patient monitoring solutions [6][15] - China showed subdued demand amid cautious consumer sentiment, although tender activity has been gradually increasing [16] - Capital spending remained stable in Europe and Latin America, while India and Saudi Arabia continued investing in healthcare [16] Company Strategy and Development Direction - The company aims to maintain momentum with disciplined execution into the fourth quarter to achieve full-year plans [5] - Continued focus on innovation and productivity improvements, leveraging AI to enhance operational efficiency [26] - The company is committed to mitigating tariff impacts through inventory management and cost discipline [24][25] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year commitments, with expectations for comparable sales growth in the range of 1%-3% [30] - The company anticipates an adjusted EBITDA margin at the upper end of the 11.3%-11.8% range for 2025 [30] - Management remains cautious about the near-term outlook for China but is optimistic about long-term growth potential [16] Other Important Information - The company passed six out of nine FDA inspections with no observations, reflecting progress in quality systems [12] - A warning letter from the FDA was acknowledged, but management does not expect it to impact commercial operations [58][90] Q&A Session Summary Question: Future price hikes and contribution from China - Management indicated that pricing opportunities exist but will not impede growth, emphasizing margin expansion through innovation and productivity [39] - Personal Health sales were strong, with no restocking effect in China, and broad-based growth across all businesses [41] Question: Maintaining productivity momentum into 2026 - Management expressed confidence in continuing to offset tariff impacts and improving margins, with more details expected at the capital markets day [46] Question: Order timing in D&T and impact of VBP in China - Management noted that order timing is uneven, with expectations for D&T to step up in Q4, while VBP is affecting the market dynamics in China [50][81] Question: Impact of GE's decision to sell its Chinese business - Management highlighted competitive positioning and innovation as key differentiators, with a focus on customer preference for their platforms [72] Question: Currency headwinds for next year - Management expects some currency headwinds in Q4, but has successfully offset impacts in Q3 [76] Question: Downgrade in D&T guidance - Management confirmed that the downgrade is primarily related to China, with longer conversion cycles also contributing [88]

Financial Data and Key Metrics Changes - Order intake grew by 8%, marking the fourth consecutive quarter of improvement, reflecting robust demand and disciplined execution [4][5] - Comparable sales growth increased to 3% year-on-year, with adjusted EBITDA margin expanding by 50 basis points to 12.3% despite tariff impacts [4][5][24] - Year-to-date order book is up 6% compared to last year, with free cash flow expected to be between EUR 0.2 billion and EUR 0.4 billion for the full year [5][30] Business Line Data and Key Metrics Changes - Personal Health segment saw an 11% increase in comparable sales, driven by strong demand across grooming, oral healthcare, and childcare [21][22] - Connected Care achieved 5% comparable sales growth, supported by strong monitoring solutions, while Diagnostic Imaging experienced a modest decline [20][21] - Diagnosis and Treatment (D&T) comparable sales improved by 1% year-over-year, with Image-Guided Therapy showing solid growth [18][19] Market Data and Key Metrics Changes - North America remains a key growth driver, with strong demand for hospital patient monitoring solutions and a double-digit order intake growth [6][16] - In China, tender activity is gradually increasing, but centralized procurement is causing longer processing times and tougher competition [17][44] - Capital spending remains stable in Europe and Latin America, while India and Saudi Arabia continue to invest in healthcare and digitization [17] Company Strategy and Development Direction - The company is focused on driving measurable improvements in collaboration with global regulators and reinforcing trust among stakeholders [14] - Continued investment in innovation is expected to fuel growth, with a strong emphasis on AI to enhance productivity across various segments [26] - The company plans to showcase progress under its 2023 to 2025 plan at the upcoming capital markets day in February 2026 [31] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full-year commitments, with expectations for comparable sales growth in the range of 1%-3% [30][31] - The impact of tariffs is anticipated to be between EUR 150 million and EUR 200 million for the full year, with ongoing mitigation efforts [24][30] - Management remains cautious about the near-term outlook for China but is optimistic about long-term growth potential [17][44] Other Important Information - The company passed six out of nine FDA inspections with no observations, reflecting progress in quality systems [12][13] - Adjusted diluted EPS from continued operations rose to EUR 0.36, up 13% year-over-year, driven by higher earnings [27] - Free cash flow performance improved significantly, with EUR 172 million reported for the quarter [28] Q&A Session Summary Question: Future price hikes and inflation impact - Management indicated that price increases may occur due to inflationary pressures, but growth remains a critical focus [34] Question: Contribution of China to Personal Health sales - Management clarified that there was no restocking effect in China, and broad-based growth was observed across all businesses [35] Question: Maintaining productivity momentum into 2026 - Management expressed confidence in continuing productivity improvements, with a focus on mitigating tariff impacts [36] Question: Order timing in D&T and diagnostic imaging sales outlook - Management noted that order timing is uneven, with expectations for improvement in Q4 [38] Question: Impact of Section 232 on imaging and connected care - Management is actively engaging in discussions regarding tariffs and is preparing to mitigate any potential impacts [40][41] Question: GE's decision to sell its Chinese business - Management highlighted competitive positioning and innovation as key differentiators in the market [49] Question: Currency headwinds for next year - Management expects some currency headwinds in Q4, which will be factored into future guidance [50] Question: Downgrade of D&T sales guidance - Management confirmed that the downgrade is primarily related to China, with longer conversion cycles also impacting sales [54][56]

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2 Important information Forward-looking statements and other important information Third quarter 2025 results Roy Jakobs, Chief Executive Officer Charlotte Hanneman, Chief Financial Officer November 4, 2025 Table of contents | Third quarter 2025 performance | 4 | | --- | --- | | 2025 outlook | 19 | | Financial appendix | 23 | © Koninklijke Philips N.V. This document and the related oral presentation, including responses to questions following the presentation, contain certain forward-looking statements with ...

Core Viewpoint - Philips reported a 2% year-over-year decline in Q3 sales to €4.302 billion, aligning with market expectations, while comparable sales grew by 3% [1][2]. Financial Performance - Adjusted EBITA for Q3 was €531 million, exceeding market expectations of €484 million [1]. - Adjusted earnings per share (EPS) increased to €0.36 [1][2]. - Net income rose to €187 million, with income from continuing operations at €188 million [2]. Business Segment Performance - Diagnostic and Treatment segment sales were €2.08 billion, with comparable sales growth of 1% [2]. - Connected Care segment sales reached €1.20 billion, showing a comparable sales growth of 5% [2]. - Personal Health segment sales amounted to €883 million, with a comparable sales growth of 11% [2]. Market and Strategic Insights - The U.S. remains Philips' largest market, and the company noted that the impact of tariffs would be less than expected due to a trade agreement between the EU and the U.S. [3]. - CEO Roy Jakobs emphasized the importance of investments in the supply chain to mitigate tariff impacts, stating that tariff costs detract from patient care investments [3]. - Philips reaffirmed its full-year guidance for 2025, expecting comparable sales growth of 1%-3% and an adjusted EBITA margin of 11.3%-11.8% [3].

Core Insights - The health-technology company experienced sales growth and improved productivity measures, which positively impacted earnings in the third quarter [1] Group 1: Sales Growth - The company reported significant sales growth in the third quarter, contributing to overall financial performance [1] Group 2: Productivity Measures - Enhanced productivity measures were implemented, leading to increased efficiency and profitability [1] Group 3: Earnings Impact - The combination of sales growth and productivity improvements resulted in a notable uplift in earnings for the quarter [1]