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Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
October 23, 2023
(Exact name of registrant as specified in its charter)
(Translation of registrant’s name into English)
The Netherlands(Jurisdiction of incorporation or organization)
Breitner Center, Amstelplein 2, 1096 BC Amsterdam, The Netherlands(Address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.
Form 20-F ☒ Form 40-F ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(1): ☐
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule101(b)(7): ☐
Indicate by check mark whether the registrant by furnishing the information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
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Name and address of person authorized to receive notices and communications from the Securities and Exchange Commission:
M.J. van Ginneken Koninklijke Philips N.V. Amstelplein 2 1096 BC Amsterdam – The Netherlands This report comprises a copy of the following report:
“Philips’ Third Quarter Results 2023”, dated October 23, 2023.
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized at Amsterdam, on the 23rd day of October 2023.
KONINKLIJKE PHILIPS N.V.
/s/ M.J. van Ginneken
(Chief Legal Officer)
...
Quarterly report
Amsterdam, October 23, 2023
Third-quarter highlights“Our improved operational performance was driven by our focus on execution to enhance patient safety and quality, strengthen our supply chain reliability and establish a simplified operating model.
The order book remains strong, and we are taking the necessary actions to improve order intake by shortening lead times from order to delivery and building on the positive impact we are making with our innovations, for example in predictive data analytics and artificial intelligence across our portfolio, to help improve the quality and efficiency of care delivery.
Completing the Philips Respironics recall remains our highest priority, with the remediation of the sleep therapy devices almost complete and remediation of the ventilators ongoing.
Based on our improved performance, we are further raising the outlook for both sales and profitability for the full year 2023, although recognizing uncertainties remain in an increasingly volatile geopolitical environment. The progress we are making reinforces our confidence in delivering on the three-year plan to create value with sustainable impact.”
Group and segment performanceSales for the Group increased 11% on a comparable basis to EUR 4.5 billion, driven by growth in all segments and geographies. Adjusted EBITA increased to EUR 457 million, or 10.2% of sales, mainly driven by increased sales, pricing and productivity measures. Operating cash flow and free cash flow increased to EUR 489 million and EUR 333 million respectively in the quarter, driven by higher earnings and improved working capital management.
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.
ProductivitySupported 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.
OutlookBased 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.
Customer, innovation and ESG highlightsGlobally, over 99% of the sleep therapy device registrations that are complete and actionable have been remediated, while the remediation of the ventilator devices remains ongoing.
Based on the test results to date, Philips Respironics and third-party experts concluded that use of the sleep therapy devices is not expected to result in appreciable harm to health in patients. Following ongoing communications with the FDA, Philips Respironics has agreed with the agency to implement additional testing to supplement current test data.
In October 2023, Philips Respironics received preliminary court approval for the settlement agreement to resolve all economic loss claims in the US Multidistrict Litigation (MDL) related to the recall, for which Philips had recorded a provision of EUR 575 million in Q1 2023. The settlement does not include or constitute any admission of liability, wrongdoing, or fault by any of the Philips parties.
The previously disclosed litigation, including the personal injury and medical monitoring claims, and investigation by the US Department of Justice related to the Respironics field action are ongoing, as are the discussions on a proposed consent decree.
Capital allocationIn the third quarter, Philips issued EUR 500 million fixed-rate notes due 2031 under its European Medium Term Note (EMTN) program. The issue of the notes further strengthened the debt maturity profile and had a debt-neutral effect. See here for more information on Philips' current debt structure.
During the quarter, Philips settled a number of forward purchase transactions entered into under its EUR 1.5 billion share buyback program for capital reduction purposes announced on July 26, 2021, thereby acquiring a total of 4.2 million shares for a total amount of approximately EUR 154 million. Following further settlements in Q4 2023, Philips intends to cancel approximately 15.1 million shares acquired and to be acquired under this program, before year-end. See here for more information on the share buyback program.
Conference call and audio webcastRoy Jakobs, CEO, and Abhijit Bhattacharya, CFO, will host a conference call for investors and analysts at 10:00 am CET today to discuss the results. A live audio webcast of the conference call will be available on the Philips Investor Relations website and can be accessed here.
Key data
in millions of EUR unless otherwise stated
| Q3 2022 | Q3 2023 | |
| Sales | 4,310 | 4,471 |
| Nominal sales growth | 4% | 4% |
| Comparable sales growth1) | (5)% | 11% |
| Comparable order intake2) | (6)% | (9)% |
| Income from operations | (1,529) | 224 |
| as a % of sales | (35.5)% | 5.0% |
| Financial income (expenses), net | (46) | (75) |
| Investments in associates, net of income taxes | 91 | (19) |
| Income tax benefit (expense) | 156 | (32) |
| Income from continuing operations | (1,330) | 97 |
| Discontinued operations, net of income taxes | 1 | (7) |
| Net income | (1,329) | 90 |
| Earnings per common share (EPS) | ||
| Income from continuing operations attributable to shareholders3) (in EUR) - diluted | (1.44) | 0.10 |
| Adjusted income from continuing operations attributable to shareholders3) (in EUR) - diluted1) | 0.24 | 0.33 |
| Net income attributable to shareholders3) (in EUR) - diluted | (1.44) | 0.09 |
| EBITA1) | (94) | 295 |
| as a % of sales | (2.2)% | 6.6% |
| Adjusted EBITA1) | 209 | 457 |
| as a % of sales | 4.8% | 10.2% |
| Adjusted EBITDA1) | 466 | 693 |
| as a % of sales | 10.8% | 15.5% |
Sales1) per geographic cluster
in millions of EUR unless otherwise stated
| % change | ||||
| Q3 2022 | Q3 2023 | nominal | comparable2) | |
| Western Europe | 856 | 942 | 10% | 11% |
| North America | 1,799 | 1,856 | 3% | 10% |
| Other mature geographies | 373 | 373 | 0% | 11% |
| Total mature geographies | 3,028 | 3,171 | 5% | 11% |
| Growth geographies | 1,282 | 1,300 | 1% | 12% |
| Philips Group | 4,310 | 4,471 | 4% | 11% |
Amounts may not add up due to rounding
Cash and cash equivalents balance
in millions of EUR
| Q3 2022 | Q3 2023 | |
| Beginning cash balance | 1,258 | 960 |
| Free cash flow1) | (374) | 333 |
| Net cash flows from operating activities | (180) | 489 |
| Net capital expenditures | (195) | (156) |
| Other cash flows from investing activities | (203) | (3) |
| Treasury share transactions | - | (165) |
| Changes in debt | 118 | (48) |
| Withholding tax paid on dividend | (62) | - |
| Other cash flow items | 21 | (2) |
| Net cash flows from discontinued operations | 18 | 80 |
| Ending cash balance | 776 | 1,155 |
Composition of net debt to group equity1)
in millions of EUR unless otherwise stated
| June 30, 2023 | September 30, 2023 | |
| Long-term debt | 7,177 | 7,273 |
| Short-term debt | 1,039 | 888 |
| Total debt | 8,216 | 8,162 |
| Cash and cash equivalents | 960 | 1,155 |
| Net debt | 7,257 | 7,007 |
| Shareholders' equity | 12,126 | 12,675 |
| Non-controlling interests | 34 | 37 |
| Group equity | 12,160 | 12,712 |
| Net debt : group equity ratio1) | 37:63 | 36:64 |
Key data
in millions of EUR unless otherwise stated
| Q3 2022 | Q3 2023 | |
| Sales | 2,071 | 2,201 |
| Sales growth | ||
| Nominal sales growth | 6% | 6% |
| Comparable sales growth1) | (3)% | 14% |
| Income from operations | 125 | 251 |
| as a % of sales | 6.0% | 11.4% |
| EBITA1) | 144 | 272 |
| as a % of sales | 7.0% | 12.4% |
| Adjusted EBITA1) | 215 | 280 |
| as a % of sales | 10.4% | 12.7% |
| Adjusted EBITDA1) | 269 | 341 |
| as a % of sales | 13.0% | 15.5% |
Key data
in millions of EUR unless otherwise stated
| Q3 2022 | Q3 2023 | |
| Sales | 1,199 | 1,232 |
| Sales growth | ||
| Nominal sales growth | (3)% | 3% |
| Comparable sales growth1) | (12)% | 10% |
| Income from operations | (1,709) | (111) |
| as a % of sales | (142.5)% | (9.0)% |
| EBITA1) | (299) | (67) |
| as a % of sales | (24.9)% | (5.4)% |
| Adjusted EBITA1) | (90) | 45 |
| as a % of sales | (7.5)% | 3.7% |
| Adjusted EBITDA1) | (10) | 110 |
| as a % of sales | (0.8)% | 8.9% |
Key data
in millions of EUR unless otherwise stated
| Q3 2022 | Q3 2023 | |
| Sales | 902 | 898 |
| Sales growth | ||
| Nominal sales growth | 12% | 0% |
| Comparable sales growth1) | 4% | 7% |
| Income from operations | 120 | 142 |
| as a % of sales | 13.3% | 15.8% |
| EBITA1) | 124 | 145 |
| as a % of sales | 13.7% | 16.1% |
| Adjusted EBITA1) | 127 | 168 |
| as a % of sales | 14.1% | 18.7% |
| Adjusted EBITDA1) | 155 | 192 |
| as a % of sales | 17.2% | 21.4% |
Key data
in millions of EUR
| Q3 2022 | Q3 2023 | |
| Sales | 138 | 140 |
| Income from operations | (65) | (58) |
| EBITA1) | (64) | (55) |
| Adjusted EBITA1) of: | (43) | (36) |
| IP Royalties | 53 | 63 |
| Innovation | (38) | (28) |
| Central costs | (54) | (67) |
| Other | (5) | (4) |
| Adjusted EBITDA1) | 52 | 50 |
This document and the related oral presentation, including responses to questions following the presentation, contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future Adjusted EBITA *), future restructuring and acquisition related charges and other costs, future developments in Philips’ organic business and the completion of acquisitions and divestments. Forward-looking statements can be identified generally as those containing words such as “anticipates”, “assumes”, “believes”, “estimates”, “expects”, “should”, “will”, “will likely result”, “forecast”, “outlook”, “projects”, “may” or similar expressions. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.
These factors include but are not limited to: Philips’ ability to gain leadership in health informatics in response to developments in the health technology industry; Philips’ ability to transform its business model to health technology solutions and services; macroeconomic and geopolitical changes; integration of acquisitions and their delivery on business plans and value creation expectations; securing and maintaining Philips’ intellectual property rights, and unauthorized use of third-party intellectual property rights; Philips’ ability to meet expectations with respect to ESG-related matters; failure of products and services to meet quality or security standards, adversely affecting patient safety and customer operations; breaches of cybersecurity; challenges in connection with Philips’ strategy to improve execution and other business performance initiatives; the resilience of our supply chain; attracting and retaining personnel; challenges to drive operational excellence and speed in bringing innovations to market; compliance with regulations and standards including quality, product safety and (cyber) security; compliance with business conduct rules and regulations including privacy and upcoming ESG disclosure and due diligence requirements; treasury and financing risks; tax risks; reliability of internal controls, financial reporting and management process; global inflation. As a result, Philips’ actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see also the Risk management chapter included in the Annual Report 2022. Reference is also made to section Risk management in the Philips semi-annual report 2023.
IsraelThe risk factors discussed in Philips’ Annual Report 2022 (section 6.3) include the strategic risk that the company’s global operations are exposed to geopolitical and macroeconomic changes. The current situation in Israel further increases economic and political uncertainty and may affect the company’s results of operations, financial position and cash flows. Philips is present in Israel with several subsidiaries, mainly in Diagnosis & Treatment and Connected Care, that are primarily involved in manufacturing and research and development (R&D) activities. Please refer to our 2022 Country Activity and Tax Report (p. 37) for further information on our activities in Israel.
RespironicsPhilips has recognized a provision related to the voluntary recall notification in the US/field safety notice outside the US for certain sleep and respiratory care products, based on Philips’ best estimate for the expected field actions. Future developments are subject to significant uncertainties, which require management to make estimates and assumptions, about items such as quantities and the portion to be replaced or repaired. Actual outcomes in future periods may differ from these estimates and affect the company’s results of operations, financial position and cash flows. Furthermore, Philips is a defendant in several class-action lawsuits and individual personal injury claims, and is in ongoing discussions with the FDA regarding a proposed consent decree. Given the uncertain nature of the relevant events, and of their potential financial and operational impact and associated obligations, if any, the company has not made any provisions in the accounts for these matters, except for the following. In the first quarter of 2023, Philips Respironics recorded a provision in connection with an anticipated resolution of the economic loss class action pending in the US. The provision is subject to final court approval of the negotiated settlement agreement and is based on Philips’ best estimate for the expected settlement amounts, which is, in part, based on the expected number of claims ultimately filed pursuant the settlement once it is approved. Actual outcomes in future periods of the above matters may differ from these estimates and affect the company’s results of operations, financial positions and cash flows.
Third-party market share dataStatements regarding market share, contained in this document, including those regarding Philips’ competitive position, are based on outside sources such as specialized research institutes, industry and dealer panels in combination with management estimates. Where information is not yet available to Philips, market share statements may also be based on estimates and projections prepared by management and/or based on outside sources of information. Management’s estimates of rankings are based on order intake or sales, depending on the business.
Market Abuse RegulationThis press release contains inside information within the
meaning of Article 7(1) of the EU Market Abuse Regulation.
In presenting and discussing the Philips Group’s financial
position, operating results and cash flows, management uses
certain non-IFRS financial measures. These non-IFRS financial
measures should not be viewed in isolation as alternatives to
the equivalent IFRS measure and should be used in conjunction
with the most directly comparable IFRS measures. Non-IFRS
financial measures do not have standardized meaning under
IFRS and therefore may not be comparable to similar measures
presented by other issuers. A reconciliation of these non-IFRS
measures to the most directly comparable IFRS measures is
contained in this document. Further information on non-IFRS
measures can be found in the Annual Report 2022.
All amounts are in millions of euros unless otherwise stated.
Due to rounding, amounts may not add up precisely to totals
provided. All reported data is unaudited. Financial reporting is
in accordance with the accounting policies as stated in the
Annual Report 2022. Prior-period amounts have been
reclassified to conform to the current-period presentation.
Philips has realigned the composition of its reporting segments
effective from April 1, 2023. The most notable change is the
shift of the previous Enterprise Diagnostic Informatics business
from the Diagnosis & Treatment segment to the Connected
Care segment. This business, together with other informatics
solutions in the Connected Care segment, now forms the
Enterprise Informatics business. Accordingly, the comparative
figures for the affected segments have been restated. The
restatement has been published on the Philips Investor
Relations website and can be accessed here.
Per share calculations have been adjusted retrospectively for all
periods presented to reflect the issuance of shares for the share
dividend in respect of 2022.
In millions of EUR unless otherwise stated
| Q3 | January to September | |||
| 2022 | 2023 | 2022 | 2023 | |
| Sales | 4,310 | 4,471 | 12,405 | 13,107 |
| Cost of sales | (2,580) | (2,538) | (7,432) | (7,458) |
| Gross margin | 1,730 | 1,933 | 4,973 | 5,650 |
| Selling expenses | (1,157) | (1,114) | (3,338) | (3,304) |
| General and administrative expenses | (175) | (150) | (476) | (465) |
| Research and development expenses | (612) | (445) | (1,590) | (1,441) |
| Impairment of goodwill | (1,331) | (1,331) | ||
| Other business income | 19 | 38 | 101 | 61 |
| Other business expenses | (4) | (39) | (39) | (639) |
| Income from operations | (1,529) | 224 | (1,700) | (139) |
| Financial income | 23 | 15 | 60 | 46 |
| Financial expenses | (69) | (91) | (182) | (268) |
| Investment in associates, net of income taxes | 91 | (19) | 84 | (72) |
| Income before taxes | (1,485) | 130 | (1,738) | (432) |
| Income tax benefit (expense) | 156 | (32) | 233 | (59) |
| Income from continuing operations | (1,330) | 97 | (1,505) | (492) |
| Discontinued operations, net of income taxes | 1 | (7) | 5 | (9) |
| Net income | (1,329) | 90 | (1,500) | (501) |
| Attribution of net income | ||||
| Net income attributable to shareholders1) | (1,330) | 88 | (1,503) | (505) |
| Net income attributable to non-controlling interests | 1 | 2 | 3 | 4 |
| Income from continuing operations attributable to shareholders1) | (1,331) | 95 | (1,508) | (495) |
| Earnings per common share | ||||
| Weighted average number of common shares outstanding (after deduction of treasury shares) during the period (in thousands)2): | ||||
| - basic | 924,667 | 918,030 | 918,429 | 919,672 |
| - diluted | 924,667 | 940,362 | 918,429 | 919,672 |
| Income from continuing operations attributable to shareholders1) (in EUR)2) | ||||
| - basic | (1.44) | 0.10 | (1.64) | (0.54) |
| - diluted | (1.44) | 0.10 | (1.64) | (0.54) |
| Net income attributable to shareholders1) (in EUR)2) | ||||
| - basic | (1.44) | 0.10 | (1.64) | (0.55) |
| - diluted | (1.44) | 0.09 | (1.64) | (0.55) |
Amounts may not add up due to rounding
Certain non-IFRS financial measures are presented when discussing the Philips Group’s performance:
For the definitions of the non-IFRS financial measures listed above, refer to chapter 12, Reconciliation of non-IFRS information, of the Annual Report 2022 and to the Forward-looking statements and other important information.
Sales growth composition
in %
| Q3 2023 | January to September | |||||||
| nominal growth | consolidation changes | currency effects | comparable growth | nominal growth | consolidation changes | currency effects | comparable growth | |
| 2023 versus 2022 | ||||||||
| Diagnosis & Treatment | 6.3% | 0.0% | 7.5% | 13.8% | 10.1% | 0.3% | 3.4% | 13.9% |
| Connected Care | 2.8% | 0.1% | 6.9% | 9.8% | 3.8% | 0.1% | 2.5% | 6.4% |
| Personal Health | (0.4)% | 0.0% | 7.9% | 7.4% | (1.5)% | 0.0% | 3.2% | 1.7% |
| Philips Group | 3.7% | 0.1% | 7.2% | 11.0% | 5.7% | 0.1% | 3.0% | 8.8% |
Adjusted income from continuing operations attributable to shareholders1)
in millions of EUR unless otherwise stated
| Q3 | January to September | |||
| 2022 | 2023 | 2022 | 2023 | |
| Net income | (1,329) | 90 | (1,500) | (501) |
| Discontinued operations, net of income taxes | (1) | 7 | (5) | 9 |
| Income from continuing operations | (1,330) | 97 | (1,505) | (492) |
| Income from continuing operations attributable to non-controlling interests | (1) | (2) | (3) | (4) |
| Income from continuing operations attributable to shareholders | (1,331) | 95 | (1,508) | (495) |
| Adjustments for: | ||||
| Amortization and impairment of acquired intangible assets | 105 | 71 | 260 | 216 |
| Impairment of goodwill | 1,331 | - | 1,331 | - |
| Restructuring and acquisition-related charges | 47 | 42 | 85 | 331 |
| Other items: | 256 | 120 | 692 | 859 |
| Respironics litigation provision | 575 | |||
| Respironics field-action provision | 165 | |||
| Respironics field-action running remediation costs | 47 | 66 | 147 | 172 |
| Quality actions in Connected Care | 34 | 29 | 66 | 76 |
| Investment re-measurement loss | 23 | 23 | ||
| Portfolio realignment charges | 109 | |||
| R&D project impairments | 134 | 134 | ||
| Impairment of assets in S&RC | 30 | 30 | ||
| Remaining items | 10 | 2 | 39 | 14 |
| Net finance expenses | (7) | (1) | (4) | 14 |
| Tax impact of adjusted items and tax-only adjusting items | (180) | (15) | (369) | (157) |
| Adjusted income from continuing operations attributable to shareholders1) | 220 | 312 | 486 | 768 |
| Earnings per common share: | ||||
| Income from continuing operations attributable to shareholders2) per common share (in EUR) - diluted | (1.44) | 0.10 | (1.64) | (0.54) |
| Adjusted income from continuing operations attributable to shareholders2) per common share (EUR) - diluted | 0.24 | 0.33 | 0.53 | 0.83 |
Amounts may not add up due to rounding
Reconciliation of Net income to Adjusted EBITA and Adjusted EBITDA
in millions of EUR
| Philips Group | Diagnosis & Treatment | Connected Care | Personal Health | Other | |
| Q3 2023 | |||||
| Net income | 90 | ||||
| Discontinued operations, net of income taxes | 7 | ||||
| Income tax expense | 32 | ||||
| Investments in associates, net of income taxes | 19 | ||||
| Financial expenses | 91 | ||||
| Financial income | (15) | ||||
| Income from operations | 224 | 251 | (111) | 142 | (58) |
| Amortization and impairment of acquired intangible assets | 71 | 21 | 44 | 4 | 2 |
| EBITA | 295 | 272 | (67) | 145 | (55) |
| Restructuring and acquisition-related charges | 42 | 8 | 20 | - | 15 |
| Other items: | 120 | - | 92 | 23 | 5 |
| Respironics field-action running remediation costs | 66 | 66 | |||
| Quality actions in Connected Care | 29 | 29 | |||
| Investment re-measurement loss | 23 | 23 | |||
| Remaining items | 2 | - | (3) | 5 | |
| Adjusted EBITA | 457 | 280 | 45 | 168 | (36) |
| Depreciation, amortization and impairment of fixed assets and other intangible assets | 248 | 62 | 65 | 24 | 97 |
| Adding back impairment of fixed assets included in Restructuring and acquisition-related charges and Other items | (12) | (1) | (1) | (10) | |
| Adjusted EBITDA | 693 | 341 | 110 | 192 | 50 |
| January to September 2023 | |||||
| Net income | (501) | ||||
| Discontinued operations, net of income taxes | 9 | ||||
| Income tax expense | 59 | ||||
| Investments in associates, net of income taxes | 72 | ||||
| Financial expenses | 268 | ||||
| Financial income | (46) | ||||
| Income from operations | (139) | 588 | (867) | 344 | (204) |
| Amortization and impairment of acquired intangible assets | 216 | 65 | 133 | 11 | 7 |
| EBITA | 77 | 653 | (734) | 355 | (197) |
| Restructuring and acquisition-related charges | 331 | 102 | 78 | 7 | 144 |
| Other items: | 859 | 11 | 822 | 22 | 4 |
| Respironics litigation provision | 575 | 575 | |||
| Respironics field-action running remediation costs | 172 | 172 | |||
| Quality actions in Connected Care | 76 | 76 | |||
| Investment re-measurement loss | 23 | 23 | |||
| Remaining items | 14 | 11 | (1) | (1) | 4 |
| Adjusted EBITA | 1,268 | 767 | 166 | 384 | (49) |
| Depreciation, amortization and impairment of fixed assets and other intangible assets | 717 | 168 | 186 | 71 | 293 |
| Adding back impairment of fixed assets included in Restructuring and acquisition-related charges and Other items | (37) | (4) | (4) | (29) | |
| Adjusted EBITDA | 1,949 | 931 | 348 | 455 | 215 |
| Q3 2022 | |||||
| Net income | (1,329) | ||||
| Discontinued operations, net of income taxes | (1) | ||||
| Income tax benefit | (156) | ||||
| Investments in associates, net of income taxes | (91) | ||||
| Financial expenses | 69 | ||||
| Financial income | (23) | ||||
| Income from operations | (1,529) | 125 | (1,709) | 120 | (65) |
| Amortization and impairment of acquired intangible assets | 105 | 20 | 79 | 4 | 2 |
| Impairment of goodwill | 1,331 | 1,331 | |||
| EBITA | (94) | 144 | (299) | 124 | (64) |
| Restructuring and acquisition-related charges | 47 | (2) | 35 | - | 14 |
| Other items: | 256 | 72 | 174 | 3 | 7 |
| Respironics field-action running remediation costs | 47 | 47 | |||
| Impairment of assets in S&RC | 30 | 30 | |||
| Quality actions in Connected Care | 34 | 34 | |||
| R&D project impairments | 134 | 73 | 59 | 3 | |
| Remaining items | 10 | - | 4 | 7 | |
| Adjusted EBITA | 209 | 215 | (90) | 127 | (43) |
| Depreciation, amortization and impairment of fixed assets and other intangible assets | 421 | 125 | 170 | 30 | 95 |
| Adding back impairment of fixed assets included in Restructuring and acquisition-related charges and Other items | (163) | (71) | (90) | (3) | - |
| Adjusted EBITDA | 466 | 269 | (10) | 155 | 52 |
| January to September 2022 | |||||
| Net income | (1,500) | ||||
| Discontinued operations, net of income taxes | (5) | ||||
| Income tax benefit | (233) | ||||
| Investments in associates, net of income taxes | (84) | ||||
| Financial expenses | 182 | ||||
| Financial income | (60) | ||||
| Income from operations | (1,700) | 351 | (2,250) | 343 | (144) |
| Amortization and impairment of acquired intangible assets | 260 | 69 | 174 | 12 | 5 |
| Impairment of goodwill | 1,331 | 1,331 | |||
| EBITA | (109) | 420 | (745) | 354 | (139) |
| Restructuring and acquisition-related charges | 85 | (15) | 75 | 1 | 23 |
| Other items: | 692 | 73 | 592 | 3 | 24 |
| Respironics field-action provision | 165 | 165 | |||
| Respironics field-action running remediation costs | 147 | 147 | |||
| Impairments of assets in S&RC | 30 | 30 | |||
| Quality actions in Connected Care | 66 | 66 | |||
| Portfolio realignment charges | 109 | 109 | |||
| R&D project impairments | 134 | 73 | 59 | 3 | |
| Remaining items | 39 | 15 | 24 | ||
| Adjusted EBITA | 667 | 478 | (77) | 358 | (92) |
| Depreciation, amortization and impairment of fixed assets and other intangible assets | 962 | 241 | 349 | 89 | 283 |
| Adding back impairment of fixed assets included in Restructuring and acquisition-related charges and Other items | (215) | (83) | (123) | (3) | (6) |
| Adjusted EBITDA | 1,414 | 635 | 149 | 444 | 186 |
Composition of free cash flow
in millions of EUR
| Q3 | ||
| 2022 | 2023 | |
| Net cash flows from operating activities | (180) | 489 |
| Net capital expenditures | (195) | (156) |
| Purchase of intangible assets | (38) | (24) |
| Expenditures on development assets | (68) | (55) |
| Capital expenditures on property, plant and equipment | (90) | (79) |
| Proceeds from disposals of property, plant and equipment | 1 | 2 |
| Free cash flow | (374) | 333 |
In millions of EUR unless otherwise stated
| 2022 | 2023 | |||||||
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| Sales | 3,918 | 4,177 | 4,310 | 5,422 | 4,167 | 4,470 | 4,471 | |
| Comparable sales growth1) | (4)% | (7)% | (5)% | 3% | 6% | 9% | 11% | |
| Comparable order intake2) | 5% | 1% | (6)% | (8)% | 0% | (8)% | (9)% | |
| Gross margin | 1,511 | 1,731 | 1,730 | 2,221 | 1,755 | 1,961 | 1,933 | |
| as a % of sales | 38.6% | 41.4% | 40.1% | 41.0% | 42.1% | 43.9% | 43.2% | |
| Selling expenses | (1,066) | (1,115) | (1,157) | (1,283) | (1,079) | (1,112) | (1,114) | |
| as a % of sales | (27.2)% | (26.7)% | (26.8)% | (23.7)% | (25.9)% | (24.9)% | (24.9)% | |
| G&A expenses | (155) | (146) | (175) | (195) | (158) | (157) | (150) | |
| as a % of sales | (4.0)% | (3.5)% | (4.1)% | (3.6)% | (3.8)% | (3.5)% | (3.4)% | |
| R&D expenses | (493) | (486) | (612) | (501) | (528) | (468) | (445) | |
| as a % of sales | (12.6)% | (11.6)% | (14.2)% | (9.2)% | (12.7)% | (10.5)% | (10.0)% | |
| Income from operations | (181) | 11 | (1,529) | 171 | (583) | 221 | 224 | |
| as a % of sales | (4.6)% | 0.3% | (35.5)% | 3.2% | (14.0)% | 4.9% | 5.0% | |
| Net income | (151) | (20) | (1,329) | (105) | (665) | 74 | 90 | |
| Income from continuing operations attributable to shareholders3) per common share (in EUR) - diluted | (0.17) | (0.03) | (1.44) | (0.12) | (0.72) | 0.08 | 0.10 | |
| Adjusted income from continuing operations attributable to shareholders3) per common share (in EUR) - diluted1) | 0.15 | 0.14 | 0.24 | 0.39 | 0.21 | 0.28 | 0.33 | |
| EBITA1) | (107) | 92 | (94) | 301 | (510) | 292 | 295 | |
| as a % of sales | (2.7)% | 2.2% | (2.2)% | 5.6% | (12.2)% | 6.5% | 6.6% | |
| Adjusted EBITA1) | 243 | 216 | 209 | 651 | 358 | 453 | 457 | |
| as a % of sales | 6.2% | 5.2% | 4.8% | 12.0% | 8.6% | 10.1% | 10.2% | |
| Adjusted EBITDA1) | 488 | 461 | 466 | 891 | 575 | 681 | 693 | |
| as a % of sales | 12.5% | 11.0% | 10.8% | 16.4% | 13.8% | 15.2% | 15.5% | |
Philips statistics in millions of EUR unless otherwise stated
| 2022 | 2023 | |||||||
| January-March | January-June | January-September | January-December | January-March | January-June | January-September | January-December | |
| Sales | 3,918 | 8,095 | 12,405 | 17,827 | 4,167 | 8,636 | 13,107 | |
| Comparable sales growth1) | (4)% | (5)% | (5)% | (3)% | 6% | 8% | 9% | |
| Comparable order intake2) | 5% | 3% | (1)% | (3)% | 0% | (4)% | (6)% | |
| Gross margin | 1,511 | 3,243 | 4,973 | 7,194 | 1,755 | 3,717 | 5,650 | |
| as a % of sales | 38.6% | 40.1% | 40.1% | 40.4% | 42.1% | 43.0% | 43.1% | |
| Selling expenses | (1,066) | (2,181) | (3,338) | (4,621) | (1,079) | (2,191) | (3,304) | |
| as a % of sales | (27.2)% | (26.9)% | (26.9)% | (25.9)% | (25.9)% | (25.4)% | (25.2)% | |
| G&A expenses | (155) | (301) | (476) | (671) | (158) | (315) | (465) | |
| as a % of sales | (4.0)% | (3.7)% | (3.8)% | (3.8)% | (3.8)% | (3.6)% | (3.5)% | |
| R&D expenses | (493) | (979) | (1,590) | (2,091) | (528) | (996) | (1,441) | |
| as a % of sales | (12.6)% | (12.1)% | (12.8)% | (11.7)% | (12.7)% | (11.5)% | (11.0)% | |
| Income from operations | (181) | (170) | (1,700) | (1,529) | (583) | (362) | (139) | |
| as a % of sales | (4.6)% | (2.1)% | (13.7)% | (8.6)% | (14.0)% | (4.2)% | (1.1)% | |
| Net income | (151) | (171) | (1,500) | (1,605) | (665) | (591) | (501) | |
| Income from continuing operations attributable to shareholders3) per common share (in EUR) - diluted | (0.17) | (0.19) | (1.64) | (1.76) | (0.72) | (0.64) | (0.54) | |
| Adjusted income from continuing operations attributable to shareholders3) per common share (in EUR) - diluted1) | 0.15 | 0.29 | 0.53 | 0.92 | 0.21 | 0.50 | 0.83 | |
| EBITA1) | (107) | (15) | (109) | 192 | (510) | (218) | 77 | |
| as a % of sales | (2.7)% | (0.2)% | (0.9)% | 1.1% | (12.2)% | (2.5)% | 0.6% | |
| Adjusted EBITA1) | 243 | 459 | 667 | 1,318 | 358 | 811 | 1,268 | |
| as a % of sales | 6.2% | 5.7% | 5.4% | 7.4% | 8.6% | 9.4% | 9.7% | |
| Adjusted EBITDA1) | 488 | 948 | 1,414 | 2,305 | 575 | 1,256 | 1,949 | |
| as a % of sales | 12.5% | 11.7% | 11.4% | 12.9% | 13.8% | 14.5% | 14.9% | |
| Number of common shares outstanding (after deduction of treasury shares) at the end of period (in thousands) | 869,298 | 885,316 | 885,348 | 881,481 | 881,539 | 920,085 | 915,987 | |
| Shareholders' equity per common share in EUR | 16.64 | 16.63 | 16.31 | 15.03 | 13.99 | 13.18 | 13.84 | |
| Net debt : group equity ratio1) | 28:72 | 31:69 | 34:66 | 35:65 | 36:64 | 37:63 | 36:64 | |
| Total employees | 78,548 | 78,831 | 79,097 | 77,233 | 73,712 | 71,519 | 70,741 | |
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