Koninklijke Philips NV 6-K, filed Oct 19, 2020

Koninklijke Philips NV (PHG)

6-K 2020-10-19 For: 2020-10-19

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Added on April 11, 2026

About this 6-K

Koninklijke Philips NV filed this 6-K on October 19, 2020.

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	Q3 2019	Q3 2020
Sales	4,702	4,980
Nominal sales growth	9%	6%
Comparable sales growth¹⁾	6%	10%
Comparable order intake¹⁾²⁾	3%	(18)%
Income from operations	320	476
as a % of sales	6.8%	9.6%
Financial expenses, net	(32)	(26)
Investments in associates, net of income taxes	(3)	(5)
Income tax expense	(75)	(104)
Income from continuing operations	211	341
Discontinued operations, net of income taxes	(3)	(2)
Net income	208	340
Income from continuing operations attributable to shareholders³⁾ per common share (in EUR) - diluted	0.22	0.37
Adjusted income from continuing operations attributable to shareholders³⁾ per common share (in EUR) - diluted¹⁾	0.46	0.60
Net income attributable to shareholders³⁾ per common share (in EUR) - diluted	0.22	0.37
EBITA¹⁾	469	536
as a % of sales	10.0%	10.8%
Adjusted EBITA¹⁾	583	769
as a % of sales	12.4%	15.4%
Adjusted EBITDA¹⁾	816	1,022
as a % of sales	17.4%	20.5%

			% change
	Q3 2019	Q3 2020	nominal	comparable¹⁾
Western Europe	973	1,207	24%	23%
North America	1,659	1,781	7%	12%
Other mature geographies	498	454	(9)%	(7)%
Total mature geographies	3,131	3,442	10%	12%
Growth geographies	1,571	1,538	(2)%	6%
Philips Group	4,702	4,980	6%	10%

	Q3 2019	Q3 2020
Beginning cash and cash equivalents balance	1,077	2,294
Free cash flow¹⁾	126	543
Net cash flows from operating activities	356	770
Net capital expenditures	(231)	(227)
Other cash flows from investing activities	298	(277)
Treasury share transactions	(184)	(22)
Changes in debt	(156)	(36)
Dividend paid to shareholders	(64)	(1)
Other cash flow items	7	(12)
Ending cash and cash equivalents balance	1,103	2,490

	June 30, 2020	September 30, 2020
Long-term debt	6,705	6,553
Short-term debt	591	673
Total debt	7,296	7,226
Cash and cash equivalents	2,294	2,490
Net debt	5,002	4,736
Shareholders' equity	10,952	11,722
Non-controlling interests	29	29
Group equity	10,981	11,751
Net debt : group equity ratio¹⁾	31:69	29:71

	Q3 2019	Q3 2020
Sales	2,117	1,971
Sales growth
Nominal sales growth	13%	(7)%
Comparable sales growth¹⁾	9%	(3)%
Income from operations	222	98
as a % of sales	10.5%	5.0%
EBITA¹⁾	250	125
as a % of sales	11.8%	6.3%
Adjusted EBITA¹⁾	297	191
as a % of sales	14.0%	9.7%
Adjusted EBITDA¹⁾	368	264
as a % of sales	17.4%	13.4%

Koninklijke Philips NV 6-K, filed Oct 19, 2020

About this 6-K

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 6-K

REPORT OF FOREIGN ISSUER

KONINKLIJKE PHILIPS N.V.

Royal Philips

The Netherlands

Breitner Center, Amstelplein 2, 1096 BC Amsterdam, The Netherlands

Q3 2020

Philips delivers Q3 sales of EUR 5.0 billion, with 10% comparable sales growth; income from continuing operations increases to EUR 341 million, Adjusted EBITA margin improves 300 basis points to 15.4%, and operating cash flow increases to EUR 770 million

Philips provides new financial targets for the 2021–2025 period

Third-quarter highlights

Frans van Houten, CEO

Business segment performance

Cost savings

Philips provides new financial targets for the 2021–2025 period

Conference call and audio webcast

Philips performance

Performance per segment

Diagnosis & Treatment businesses

Connected Care businesses

Personal Health businesses

Other

Forward-looking statements and other important information

Forward-looking statements

Third-party market share data

Use of non-IFRS information

Use of fair value information

Presentation

Market Abuse Regulation

Condensed consolidated statements of income

Reconciliation of non-IFRS information

Philips statistics

© 2020 Koninklijke Philips N.V.

	Q3		January to September
	2019	2020	2019	2020
Sales	4,702	4,980	13,524	13,534
Cost of sales	(2,547)	(2,742)	(7,356)	(7,620)
Gross margin	2,155	2,238	6,168	5,915
Selling expenses	(1,132)	(1,112)	(3,389)	(3,336)
General and administrative expenses	(175)	(168)	(492)	(496)
Research and development expenses	(457)	(477)	(1,339)	(1,422)
Other business income	21	1	117	111
Other business expenses	(90)	(6)	(149)	(24)
Income from operations	320	476	915	748
Financial income	24	27	112	137
Financial expenses	(56)	(53)	(172)	(161)
Investment in associates, net of income taxes	(3)	(5)	2	(9)
Income before taxes	285	445	857	715
Income tax expense	(75)	(104)	(215)	(118)
Income from continuing operations	211	341	641	597
Discontinued operations, net of income taxes	(3)	(2)	(25)	(9)
Net income	208	340	616	588
Attribution of net income
Income from continuing operations attributable to shareholders¹⁾	208	340	637	593
Net income attributable to shareholders¹⁾	205	338	612	584
Net income attributable to non-controlling interests	3	2	5	4
Earnings per common share
Weighted average number of common shares outstanding (after deduction of treasury shares) during the period (in thousands):¹⁾
- basic	917,648	903,329	923,814	893,804
- diluted	925,849	910,920	933,891	902,815
Income from continuing operations attributable to shareholders¹⁾
- basic	0.23	0.38	0.69	0.66
- diluted	0.22	0.37	0.68	0.66
Net income attributable to shareholders¹⁾
- basic	0.22	0.37	0.66	0.65
- diluted	0.22	0.37	0.66	0.65

	Q3 2020				January to September
	nominal growth	consolidation changes	currency effects	comparable growth	nominal growth	consolidation changes	currency effects	comparable growth
2020 versus 2019
Diagnosis & Treatment	(6.9)%	(0.4)%	4.0%	(3.3)%	(3.1)%	(1.5)%	1.0%	(3.7)%
Connected Care	35.9%	1.0%	4.9%	41.8%	20.0%	0.7%	0.6%	21.3%
Personal Health	1.3%	0.0%	5.2%	6.5%	(10.5)%	0.0%	2.2%	(8.3)%
Philips Group	5.9%	(0.2)%	4.5%	10.3%	0.1%	(0.6)%	1.3%	0.8%

	Philips Group	Diagnosis & Treatment	Connected Care	Personal Health	Other
Q3 2020
Net income	340
Discontinued operations, net of income taxes	2
Income tax expense	104
Investments in associates, net of income taxes	5
Financial expenses	53
Financial income	(27)
Income from operations	476	98	279	180	(81)
Amortization of acquired intangible assets	60	27	27	5	1
EBITA	536	125	307	184	(80)
Restructuring and acquisition-related charges	85	23	29	14	19
Other items	148	44	86	-	19
Adjusted EBITA	769	191	422	199	(43)

January to September 2020
Net income	588
Discontinued operations, net of income taxes	9
Income tax expense	118
Investments in associates, net of income taxes	9
Financial expenses	161
Financial income	(137)
Income from operations	748	211	494	264	(221)
Amortization of acquired intangible assets	304	179	94	15	16
EBITA	1,052	389	588	279	(204)
Restructuring and acquisition-related charges	118	4	54	35	24
Other items	262	80	123	26	34
Adjusted EBITA	1,432	473	765	340	(146)

Q3 2019
Net income	208
Discontinued operations, net of income taxes	3
Income tax expense	75
Investments in associates, net of income taxes	3
Financial expenses	56
Financial income	(24)
Income from operations	320	222	(11)	171	(62)
Amortization of acquired intangible assets	71	28	36	5	2
Impairment of goodwill	78		78
EBITA	469	250	102	177	(60)
Restructuring and acquisition-related charges	47	20	12	3	12
Other items	67	27	15	20	5
Adjusted EBITA	583	297	129	200	(43)

January to September 2019
Net income	616
Discontinued operations, net of income taxes	25
Income tax expense	215
Investments in associates, net of income taxes	(2)
Financial expenses	172
Financial income	(112)
Income from operations	915	441	83	504	(115)
Amortization of acquired intangible assets	231	100	105	20	6
Impairment of goodwill	78		78
EBITA	1,224	541	267	524	(109)
Restructuring and acquisition-related charges	200	84	46	27	44
Other items	73	34	42	20	(22)
Adjusted EBITA	1,497	658	355	571	(87)

	Q3
	2019	2020
Net cash provided by operating activities	356	770
Net capital expenditures	(231)	(227)
Purchase of intangible assets	(33)	(31)
Expenditures on development assets	(84)	(69)
Capital expenditures on property, plant and equipment	(116)	(129)
Proceeds from disposals of property, plant and equipment	2	2
Free cash flow	126	543

	2019				2020
	January-March	January-June	January-September	January-December	January-March	January-June	January-September	January-December
Sales	4,151	8,822	13,524	19,482	4,159	8,554	13,534
Comparable sales growth¹⁾	2%	4%	5%	4%	(2)%	(4)%	1%
Comparable order intake¹⁾²⁾	2%	7%	6%	6%	24%	26%	10%
Gross margin	1,888	4,013	6,168	8,875	1,845	3,676	5,915
as a % of sales	45.5%	45.5%	45.6%	45.6%	44.4%	43.0%	43.7%
Selling expenses	(1,084)	(2,257)	(3,389)	(4,682)	(1,144)	(2,224)	(3,336)
as a % of sales	(26.1)%	(25.6)%	(25.1)%	(24.0)%	(27.5)%	(26.0)%	(24.6)%
G&A expenses	(152)	(317)	(492)	(631)	(161)	(328)	(496)
as a % of sales	(3.7)%	(3.6)%	(3.6)%	(3.2)%	(3.9)%	(3.8)%	(3.7)%
R&D expenses	(439)	(882)	(1,339)	(1,884)	(489)	(944)	(1,422)
as a % of sales	(10.6)%	(10.0)%	(9.9)%	(9.7)%	(11.8)%	(11.0)%	(10.5)%
Income from operations	245	594	915	1,644	43	272	748
as a % of sales	5.9%	6.7%	6.8%	8.4%	1.0%	3.2%	5.5%
Net income	162	409	616	1,173	39	249	588
Income from continuing operations attributable to shareholders³⁾ per common share in EUR - diluted	0.18	0.46	0.68	1.27	0.05	0.28	0.66
Adjusted income from continuing operations attributable to shareholders³⁾ per common share in EUR - diluted¹⁾	0.29	0.71	1.16	1.98	0.18	0.53	1.14
EBITA¹⁾	314	754	1,224	2,091	127	516	1,052
as a % of sales	7.6%	8.5%	9.1%	10.7%	3.1%	6.0%	7.8%
Adjusted EBITA¹⁾	364	914	1,497	2,563	244	662	1,432
as a % of sales	8.8%	10.4%	11.1%	13.2%	5.9%	7.7%	10.6%
Adjusted EBITDA¹⁾	576	1,352	2,169	3,503	495	1,166	2,188
as a % of sales	13.9%	15.3%	16.0%	18.0%	11.9%	13.6%	16.2%
Number of common shares outstanding (after deduction of treasury shares) at the end of period (in thousands)	910,810	902,417	898,029	890,974	887,579	891,301	909,472
Shareholders' equity per common share in EUR	13.54	13.19	13.76	14.14	13.66	12.29	12.89
Net debt : group equity ratio¹⁾	25:75	28:72	27:73	24:76	28:72	31:69	29:71
Total employees of continuing operations	77,340	77,748	79,613	80,495	80,718	80,520	80,666