Philips delivers strong sales growth, profitability and cash flow; raises full-year outlook - Seite 2

Comparable order intake (the order book covers around 40% of Group sales) was 9% lower than in Q3 2022. This was mainly due to a high comparison base related to the exceptionally high levels in 2021, lower orders in China, and longer order lead times. The necessary actions are being implemented to enhance supply chain reliability, reduce order lead times, and leverage our innovations to improve comparable order intake. The order book remains around 20% higher than in the period before the global supply chain challenges and will continue to support growth.

Diagnosis & Treatment comparable sales increased 14% in the quarter, with double-digit growth in all businesses. The Adjusted EBITA margin increased to 12.7% from 10.4% in Q3 2022, mainly driven by increased sales, pricing and productivity measures. Comparable order intake was double-digit lower than in Q3 2022 due to long order lead times, a high comparison base related to the high order intake in Q3 2022, and lower orders in China.

Connected Care comparable sales increased 10% in the quarter, with double-digit growth in Monitoring and mid-single-digit growth in Enterprise Informatics. The Adjusted EBITA margin improved to 3.7% compared to -7.5% in Q3 2022, mainly driven by increased sales and productivity measures. Connected Care comparable order intake was mid-single-digit lower than in Q3 2022 due to a high comparison base in Hospital Patient Monitoring related to the expansion and renewal of the installed base in the last few years.

Personal Health delivered quarter-on-quarter performance improvement, with comparable sales increasing by 7%, driven by high- single-digit growth in Personal Care and Oral Healthcare. The Adjusted EBITA margin increased to 18.7%, compared to 14.1% in Q3 2022, due to increased sales, pricing and productivity measures.


Productivity

Supported by significant change management efforts, to date Philips has reduced the workforce by around 7,500 roles, out of 10,000 roles in total planned by 2025. Operating model productivity savings amounted to EUR 142 million in the quarter. Procurement savings amounted to EUR 59 million, and other productivity programs delivered savings of EUR 57 million, resulting in total savings of EUR 258 million in the quarter.

Outlook


Based on Philips’ improved performance year-to-date, the strong order book, and the ongoing actions, the company is further raising the outlook for the full year 2023, although recognizing uncertainties remain in an increasingly volatile geopolitical environment. Philips now expects to deliver 6-7% comparable sales growth and an Adjusted EBITA margin of 10-11% for the full year 2023, with free cash flow at the upper end of the target range of EUR 0.7-0.9 billion. This reinforces Philips’ confidence in delivering on its three-year plan to create value with sustainable impact.