Philips delivers strong margin improvement; flat comparable sales due to further deteriorated demand in China; growth in rest of world

Core Insights - The company reported third-quarter sales of EUR 4.4 billion, with flat comparable sales growth and a decrease in order intake by 2% primarily due to declining demand in China [1][4][8] - Adjusted EBITA margin improved by 160 basis points to 11.8%, driven by enhanced gross margins from innovations and productivity measures [1][4][9] - The full-year 2024 outlook has been revised, projecting comparable sales growth between 0.5% and 1.5%, with an adjusted EBITA margin around 11.5% and free cash flow expected at EUR 0.9 billion [1][8][9] Group and Segment Performance - Group comparable sales remained flat, contrasting with an 11% growth in Q3 2023, with solid growth in all regions except China [3][4] - Diagnosis & Treatment segment saw a 1% decrease in comparable sales, while Connected Care sales were flat, and Personal Health sales decreased by 5% due to significant declines in China [5][6] Profitability and Cash Flow - Operating income was reported at EUR 337 million, with operating cash flow of EUR 192 million and free cash flow of EUR 22 million [1][4] - Productivity initiatives yielded savings of EUR 188 million in Q3, contributing to a total of over EUR 1.5 billion in savings since 2023 [7] Market Outlook - The company anticipates continued challenges in the Chinese market, impacting overall demand and sales outlook [2][9] - Despite the difficulties in China, the company remains focused on executing its three-year plan to capture growth and improve margins [3][9] Innovation and Customer Engagement - The company has expanded its cardiovascular ultrasound platform and secured FDA approvals for new technologies aimed at enhancing patient care [11] - Partnerships with healthcare providers globally aim to improve access to care and clinical outcomes, particularly in emerging markets like Indonesia and China [11]