Philips(US:PHG)2025-05-06 11:58Financial Performance - Group sales for Q1 2025 were EUR 4.1 billion, reflecting a 2% decline in comparable sales growth primarily due to a double-digit decline in China[17]. - Comparable order intake increased by 2%, driven by strong performance in North America, offsetting the decline in China[12]. - Adjusted EBITA margin decreased by 80 basis points to 8.6%, mainly due to the decline in sales, with income from operations increasing to EUR 154 million[14]. - Free cash flow was an outflow of EUR 1,091 million, primarily due to a EUR 1,025 million payment related to Philips Respironics recall settlements[14]. - Personal Health segment saw a 1% increase in comparable sales, while Diagnosis & Treatment experienced a 4% decline[27]. - The overall sales for the Philips Group decreased slightly from EUR 4,138 million in Q1 2024 to EUR 4,097 million in Q1 2025[44]. - Income from operations for the Philips Group turned positive at EUR 154 million in Q1 2025, compared to a loss of EUR 824 million in Q1 2024[44]. - Net income attributable to shareholders improved from a loss of EUR 999 million in Q1 2024 to a profit of EUR 76 million in Q1 2025[45]. - The total comprehensive income for the period improved from a loss of EUR 693 million in Q1 2024 to a loss of EUR 362 million in Q1 2025[46]. - Net income for Q1 2025 was €72 million, a significant recovery from a net loss of €998 million in Q1 2024[54]. - Adjusted income from continuing operations attributable to shareholders for Q1 2025 was €237 million, compared to €235 million in Q1 2024[54]. - Free cash flow for Q1 2025 was negative €1,091 million, worsening from negative €336 million in Q1 2024[57]. - Comparable sales growth for the Philips Group in Q1 2025 was negative 2.3%, with Diagnosis & Treatment segment declining by 4.3%[53]. - The company reported a decrease in working capital, with a reduction of €216 million in Q1 2025 compared to a decrease of €526 million in Q1 2024[54]. - Total comprehensive loss for Q1 2024 was €695 million, while for Q1 2025, it was a loss of €358 million[50]. - The company incurred restructuring and acquisition-related charges of €67 million in Q1 2025, up from €51 million in Q1 2024[54]. - Cash flows from operating activities were negative €933 million in Q1 2025, compared to negative €171 million in Q1 2024[57]. Sales and Market Performance - Connected Care sales increased from EUR 1,164 million in Q1 2024 to EUR 1,182 million in Q1 2025, showing a nominal sales growth of 2%[32]. - Personal Health sales rose from EUR 790 million in Q1 2024 to EUR 811 million in Q1 2025, reflecting a nominal sales growth of 3%[33]. - Comparable sales growth for Q1 2024 was 2%, while comparable order intake decreased by 4%[59]. - Philips reported Q1 2024 sales of €4,138 million, reflecting a nominal sales decline of 1% compared to the previous year[59]. Cost Management and Productivity - Productivity initiatives delivered savings of EUR 147 million in Q1 2025, contributing to a total of over EUR 1.9 billion in savings since 2023[19]. - Other segment's adjusted EBITA improved to EUR 187 million with a margin of 9.5% despite lower sales, driven by productivity measures[34]. Future Outlook - Philips' outlook for full year 2025 includes an estimated net tariff impact of EUR 250-300 million, with an adjusted EBITA margin range of 10.8%-11.3%[24]. - The company anticipates that 2025 performance will be skewed toward the latter part of the year, with Q2 showing modest improvement from Q1[24]. - The company anticipates future sales growth and improvements in adjusted EBITA, while facing risks from macro-economic and geopolitical changes[37][38]. Innovation and Technology - Philips was recognized as the leading applicant in medical technology at the European Patent Office in 2024, highlighting its commitment to innovation[23]. - New AI technologies were introduced to enhance imaging and patient outcomes, including advanced algorithms in MRI systems and ultrasound[23]. Balance Sheet and Financial Ratios - Total current assets decreased from EUR 10,022 million at the end of 2024 to EUR 8,669 million by March 31, 2025[48]. - Total liabilities for the Philips Group decreased from EUR 16,933 million at the end of 2024 to EUR 15,439 million by March 31, 2025[48]. - The net debt to group equity ratio increased from 30:70 as of December 31, 2024, to 35:65 as of March 31, 2025[58]. - Total cash and cash equivalents decreased from €2,401 million at the beginning of Q1 2025 to €1,193 million by the end of the period[58]. - The net debt to group equity ratio improved to 36:64 by Q1 2024[59]. - Total employees at Philips decreased to 69,062 by the end of Q1 2024[59].