6-K
Koninklijke Philips NV (PHG)
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________________________________________________________________
FORM 6-K
____________________________________________________________________________
REPORT OF FOREIGN ISSUER
Pursuant to Rule 13a-16 or 15d-16 of the Securities Exchange Act of 1934
February 19, 2025
____________________________________________________________________________
KONINKLIJKE PHILIPS N.V.
(Exact name of registrant as specified in its charter)
____________________________________________________________________________
Royal Philips
(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.
Yes ☐No ☒
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
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This report comprises a copy of the following report:
“Philips’ Fourth Quarter Results 2024”, dated February 19, 2025.
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 19th day of February 2025.
KONINKLIJKE PHILIPS N.V.
/s/ M.J. van Ginneken
(Chief Legal Officer)
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Quarterly report
Q4 2024
Philips delivers growth, improved profitability, and strong cash flow in Q4 and 2024;
continues solid execution of its three-year plan
Amsterdam, February 19, 2025
Full Year and Q4 Group performance highlights
•Sales of EUR 18.0 billion in 2024, comparable sales growth 1%; EUR 5.0 billion in Q4, comparable sales growth 1%,
despite double-digit decline in China
•Comparable order intake increased 1% in 2024; up 2% in Q4, despite double-digit decline in China
•Income from operations was EUR 529 million in 2024; EUR 199 million in Q4
•Adjusted EBITA margin increased 90 basis points to 11.5% of sales in 2024; up 60 basis points to 13.5% in Q4
•Net cash flow from operating activities was EUR 1,569 million in 2024; EUR 1,459 million in Q4
•Free cash flow was EUR 906 million in 2024; EUR 1,285 million in Q4
•Finalized Philips Respironics recall-related medical monitoring and personal injury settlements in US
•Proposed dividend maintained at EUR 0.85 per share, in shares or cash
•Increased productivity savings target for 2023-2025 from EUR 2 billion to EUR 2.5 billion, EUR 800 million in 2025
•Outlook for 2025 published
Roy Jakobs, CEO of Royal Philips:
“We delivered better care for more people by enhancing execution and focusing on driving
improvements in profitability and cash flow, as well as order and sales growth. We strengthened our
fundamentals and resolved significant US litigation relating to the Respironics recall.
Despite double-digit declines in demand in both consumer and health systems in China, we returned
to positive order growth and continued to drive margin expansion and cash-flow generation. With our
strong balance sheet we are pleased to offer shareholders the option to receive the dividend in shares
or cash.
Within a persistently challenging macro environment, our focus remains on executing our value
creation plan, bringing industry-leading innovations to the market and driving a simplified, more agile
operating model. We strengthened our team and culture of impact with care, with patient safety and
quality as our number one priority.
Looking ahead, we remain confident in our long-term plan and will continue to work closely with
customers as we build on our strong innovation pipeline and focus on execution excellence to drive
profitable growth."
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Group and segment performance
Comparable order intake increased 2% in the quarter, with strong performance in the North America and Growth geographies, partly offset by a
double-digit decline in demand in China. Group comparable sales increased 1% in the quarter, with solid growth of 5% in the rest of the world,
largely offset by a double-digit decline in China, where market conditions are expected to remain uncertain.
Adjusted EBITA increased 60 basis points to 13.5% in Q4, driven by operational improvements and productivity measures. Free cash flow increased to
EUR 1.3 billion in the quarter, driven by Respironics insurance proceeds, partly offset by phasing in working capital.
For the full year, comparable order intake and sales increased 1%, up 4% excluding China. Adjusted EBITA increased 90 basis points to 11.5% and
free cash flow was EUR 0.9 billion.
Diagnosis & Treatment comparable sales decreased 1% in Q4, due to a double-digit decline in China, offsetting solid growth elsewhere. Adjusted
EBITA margin was 12.1% in Q4, driven by productivity, mix and pricing. For the full year, the Diagnosis & Treatment businesses recorded 1% comparable
sales growth, on the back of 11% growth in 2023, and an Adjusted EBITA margin of 11.6%.
Connected Care comparable sales increased 7% in Q4, on the back of a low comparison base. Adjusted EBITA margin was 15.0% in Q4, in line with last
year. For the full year, the Connected Care businesses recorded a 2% comparable sales increase and an Adjusted EBITA margin of 9.6%.
Personal Health comparable sales decreased 2% in Q4 due to a double-digit decline in China, more than offsetting a strong performance elsewhere.
Adjusted EBITA margin was 18.0% in Q4, including lower sales in China. For the full year, Personal Health comparable sales decreased 1% and the
Adjusted EBITA margin was 16.7%.
Innovation highlights
•FDA clearance of the Philips CT 5300, featuring AI-based reconstruction software to reduce radiation dose and improve image quality, and of the
Philips Spectral CT 7500 RT, enabling personalized radiation therapy planning.
•Expansion of Philips' strategic collaboration with Amazon Web Services to offer an integrated diagnostics portfolio in the cloud, such as AI advanced
visualization solutions that unify diagnostic workflows, improve access to critical insights, and drive better outcomes across clinical specialties, including
radiology, digital pathology and cardiology.
•Philips and Mayo Clinic will collaborate using their proprietary AI technologies to target breakthroughs in ease-of-use and efficiency to bring high-
quality diagnostic MRI and better care to patients with heart disease. Philips also announced partnerships with Hôpital Fondation Rothschild in Paris for
imaging platforms and health informatics and with Erasmus Medical Center in Rotterdam for ultrasound solutions and services.
•Together with its clinical partners, Philips continues to advance minimally invasive procedures to treat patients based on new technologies and
methods, enrolling the first patients in the THOR clinical trial, which integrates two critical peripheral artery disease treatments into a single device.
Achieving a significant milestone in the WE-TRUST clinical trial, Philips has now included one-third of the targeted 564 patients to evaluate how a new
imaging method could impact workflow and improve outcomes for stroke patients.
•Philips renewed its mid-range Sonicare electric toothbrushes, Series 5000-7000, in Europe and launched new localized products in China, including
the On-The-Go Compact Shaver, which earned a top ranking for new product sales from leading online retailer JD.com.
•Peer-reviewed life cycle assessment results were published in the leading sector publication Radiology, following close collaboration between the
Vanderbilt University Medical Center radiology department and Philips. The analysis underscores the importance of joining forces to tackle significant
operational and sustainability challenges, such as reducing the cost of care and reducing carbon footprint.
Leadership and culture
Philips is strengthening its culture of impact with care, acting with integrity with patient safety and quality as the number one priority. Philips continues to
simplify its operating model, with end-to-end Businesses holding single accountability, supported by leaner central Functions and strong customer-facing
organizations in the Regions and countries.
Since the start of the three-year plan, 75% of executive hires across the company have come from a health technology background. Recent appointments
to the Executive Committee include leaders for Precision Diagnosis, International Region, and Greater China Region, plus a new Chief Financial Officer on
the Board of Management.
Productivity
Productivity initiatives are ahead of plan and delivered savings of EUR 163 million in Q4: operating model savings of EUR 47 million, procurement savings
of EUR 56 million, and other programs savings of EUR 59 million. Since 2023, productivity initiatives have delivered savings of more than EUR 1.7 billion.
Philips is raising its productivity savings target for the 2023-2025 period from EUR 2 billion to EUR 2.5 billion, driven by cost efficiencies and further
simplification of its operating model, with EUR 800 million to be delivered in 2025.
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Outlook
Philips remains focused on successfully executing its three-year plan to drive operational improvements and create value with sustainable impact, within a
challenging macro environment. For 2025, Philips expects:
•1%-3% comparable sales growth, including a mid- to high-single-digit decline in China
•Adjusted EBITA margin increasing 30-80 bps to 11.8%-12.3%
•Free cash flow before payment of the USD 1.1 billion cash-out relating to the US medical monitoring and personal injury settlements will be at the
lower end of the range of EUR 1.4 billion to EUR 1.6 billion. Net of this cash-out, free cash flow will be EUR 0.4 billion to EUR 0.6 billion.
We anticipate comparable sales growth to be back-end-loaded in the year, with a mid-single-digit decline in Q1 mainly due to lower demand in China
and royalties phasing, with correspondingly lower Adjusted EBITA margin.
The outlook includes the impact of the recently announced US-China tariffs. It excludes ongoing Philips Respironics-related legal proceedings, including
the investigation by the US Department of Justice.
Respironics Recall
In December 2024, Philips Respironics obtained final approval for the recall-related medical monitoring settlement, and in February 2025, the personal
injury settlement became final following a successful registration process. The aggregate amount of the settlements is USD 1.1 billion; payment is
expected in the first half of 2025.
Capital allocation
Philips intends to submit to the 2025 Annual General Meeting of Shareholders a proposal to declare a dividend of EUR 0.85 per common share, in shares
or cash at the option of the shareholder, with a maximum of 50% of the total dividend distribution to all shareholders being available for payment in
cash. If more than 50% of the total dividend is requested by the shareholders to be paid out in cash, those shareholders who have chosen to receive their
dividend in cash will receive their cash dividend on a pro-rata basis, the remainder being paid out in shares.
Conference call and video webcast
Roy Jakobs, CEO, and Charlotte Hanneman, CFO, will host a conference call for investors and analysts at 9:00 am CET today to discuss the full year 2024
results. A live webcast of the conference call will be available on the Philips Investor Relations website and can be accessed here.
About Royal Philips
Royal Philips (NYSE: PHG, AEX: PHIA) is a leading health technology company focused on improving people’s health and well-being through meaningful
innovation. Philips’ patient- and people-centric innovation leverages advanced technology and deep clinical and consumer insights to deliver personal
health solutions for consumers and professional health solutions for healthcare providers and their patients in the hospital and the home.
Headquartered in the Netherlands, the company is a leader in diagnostic imaging, ultrasound, image-guided therapy, monitoring and enterprise
informatics, as well as in personal health. Philips generated 2024 sales of EUR 18 billion and employs approximately 67,800 employees with sales and
services in more than 100 countries. News about Philips can be found at www.philips.com/newscenter.
* Amounts may not add up due to rounding
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Fourth quarter highlights
Philips performance
Key data in millions of EUR unless otherwise stated*
| Q4 2023 | Q4 2024 | |
|---|---|---|
| Sales | 5,062 | 5,044 |
| Nominal sales growth | (7%) | 0% |
| Comparable sales growth¹ | (1%) | 1% |
| Comparable order intake² ³ | (4%) | 2% |
| Income from operations | 24 | 199 |
| as a % of sales | –% | 4% |
| Financial income (expenses), net | (92) | (75) |
| Investments in associates, net of income taxes | (26) | (9) |
| Income tax (expense) benefit | 132 | (449) |
| Income from continuing operations | 38 | (333) |
| Net income | 38 | (333) |
| Earnings per common share (EPS) | ||
| Income from continuing operations attributable to<br><br>shareholders³ (in EUR) - diluted | 0.04 | (0.36) |
| Adjusted income from continuing operations<br><br>attributable to shareholders⁴ (in EUR) - diluted¹ | 0.40 | 0.51 |
| Net income attributable to shareholders⁴ (in EUR) -<br><br>diluted | 0.04 | (0.36) |
| EBITA¹ | 106 | 393 |
| as a % of sales | 2.1% | 7.8% |
| Adjusted EBITA¹ | 653 | 679 |
| as a % of sales | 12.9% | 13.5% |
| Adjusted EBITDA¹ | 896 | 905 |
| as a % of sales | 17.7% | 17.9% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
2Effective Q1 2024, Philips has revised the order intake policy for the software
businesses. Refer to Forward-looking statements and other important
information.
3Comparable order intake is presented when discussing the Philips Group's
performance. For the definition of this measure, refer to chapter 13.6, Other
Key Performance indicators, of the Annual Report 2023.
4Shareholders refers to shareholders of Koninklijke Philips N.V. Per share
calculations have been adjusted retrospectively for all periods presented to
reflect the issuance of shares for the share dividend with respect to 2023
•Comparable sales increased by 1%, including a double-digit decline
in China. Growth was driven by Connected Care while the Diagnosis
& Treatment and Personal Health segments showed a decline, mainly
due to lower demand from consumers and health systems in China.
•Income from operations increased to EUR 199 million, mainly driven
by higher gross margin, operational improvements, lower Respironics
consent decree charges and field action running costs, partly offset
by higher impairment charges in relation to intangible assets.
•Adjusted EBITA increased to EUR 679 million and the margin
improved to 13.5%, mainly driven by operational improvements and
productivity measures.
•Restructuring, acquisition-related and other items amounted to
EUR 286 million, compared with EUR 548 million in Q4 2023. Q4
2024 includes EUR 118 million restructuring and acquisition-related
charges, EUR 92 million related to quality actions, EUR 48 million
Respironics consent decree charges, and EUR 26 million Respironics
field-action running costs.
•Income tax expense increased by EUR 581 million year-on-year, due
to de-recognition of deferred tax assets in the US and higher income
before tax in Q4 2024, as well as the recognition of historical tax
credits in Q4 2023.
•Net income decreased, mainly due to higher tax expenses, partly
offset by higher gross margin and lower restructuring, acquisition-
related charges and other items.
* Amounts may not add up due to rounding
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Sales per geographic area1 in millions of EUR unless otherwise stated*
| % change | ||||
|---|---|---|---|---|
| Q4 2023 | Q4 2024 | nominal | comparable² | |
| Western Europe | 1,163 | 1,223 | 5% | 6% |
| North America | 2,004 | 2,092 | 4% | 6% |
| Other mature<br><br>geographies | 408 | 427 | 5% | 6% |
| Mature geographies | 3,575 | 3,742 | 5% | 6% |
| Growth geographies | 1,486 | 1,302 | (12%) | (9%) |
| Philips Group | 5,062 | 5,044 | 0% | 1% |
1Sales per geographic area is reported based on country of destination.
2Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Comparable sales in Mature geographies showed mid-single-digit
growth with strong contributions from all Regions. Growth
geographies decreased by 9% as a result of the double-digit decline
in China, partly offset by an increase in other Growth geographies.
Cash and cash equivalents balance in millions of EUR
| Q4 2023 | Q4 2024 | |
|---|---|---|
| Beginning cash balance | 1,155 | 1,512 |
| Free cash flow¹ | 1,128 | 1,285 |
| Net cash flows from operating activities | 1,310 | 1,459 |
| Net capital expenditures | (182) | (174) |
| Other cash flows from investing activities | 64 | 75 |
| Treasury shares transactions | (408) | (143) |
| Changes in debt | (57) | (396) |
| Other cash flow items | (32) | 65 |
| Net cash flows from discontinued operations | 20 | 4 |
| Ending cash balance | 1,869 | 2,401 |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Net cash flows from operating activities increased, mainly driven by
the EUR 367 million Respironics insurance proceeds, partly offset by
lower working capital inflows.
•Treasury shares transactions includes share repurchases to cover
obligations arising from long-term incentive plans.
•Changes in debt in Q4 2024 mainly included a EUR 346 million bond
redemption.
•Other cash flow items reflects the foreign currency impact on the
cash balance.
Composition of net debt to group equity1 in millions of EUR unless otherwise
stated
| September 30,<br><br>2024 | December 31,<br><br>2024 | |
|---|---|---|
| Long-term debt | 7,110 | 7,113 |
| Short-term debt | 923 | 526 |
| Total debt | 8,032 | 7,639 |
| Cash and cash equivalents | 1,512 | 2,401 |
| Net debt | 6,520 | 5,238 |
| Shareholders’ equity | 11,437 | 12,006 |
| Non-controlling interests | 33 | 37 |
| Group equity | 11,470 | 12,043 |
| Net debt : group equity ratio¹ | 36:64 | 30:70 |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
| Quarterly Report 2024 - Q4 | 8 |
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Performance per segment
Diagnosis & Treatment
Key data in millions of EUR unless otherwise stated
| Q4 2023 | Q4 2024 | |
|---|---|---|
| Sales | 2,498 | 2,440 |
| Sales growth | ||
| Nominal sales growth | (2%) | (2%) |
| Comparable sales growth¹ | 5% | (1%) |
| Income from operations | 134 | 3 |
| as a % of sales | 5.4% | 0.1% |
| EBITA¹ | 166 | 159 |
| as a % of sales | 6.6% | 6.5% |
| Adjusted EBITA¹ | 262 | 295 |
| as a % of sales | 10.5% | 12.1% |
| Adjusted EBITDA¹ | 311 | 349 |
| as a % of sales | 12.4% | 14.3% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Comparable sales decreased by 1%, mainly due to a double-digit
decline in China, offsetting solid growth elsewhere. Growth in Image
Guided Therapy was offset by a decline in Precision Diagnosis.
•Mature geographies showed mid-single-digit growth, driven by
North America and Western Europe. Growth geographies decreased
mainly due to the decline in China.
•Income from operations was impacted by the impairment of
intangible assets amounting to EUR 132 million in Q4 2024.
•Adjusted EBITA increased to EUR 295 million and the margin
improved to 12.1%, mainly driven by productivity, mix and pricing.
•Restructuring, acquisition-related and other items amounted to EUR
136 million, compared with EUR 96 million in Q4 2023. Q4 2024
includes EUR 97 million restructuring and acquisition-related charges
and EUR 39 million related to quality actions.
Connected Care
Key data in millions of EUR unless otherwise stated
| Q4 2023 | Q4 2024 | |
|---|---|---|
| Sales | 1,353 | 1,426 |
| Sales growth | ||
| Nominal sales growth | (17%) | 5% |
| Comparable sales growth¹ | (11%) | 7% |
| Income from operations | (332) | 58 |
| as a % of sales | (24.5%) | 4.1% |
| EBITA¹ | (287) | 88 |
| as a % of sales | (21.2%) | 6.2% |
| Adjusted EBITA¹ | 203 | 214 |
| as a % of sales | 15.0% | 15.0% |
| Adjusted EBITDA¹ | 275 | 276 |
| as a % of sales | 20.3% | 19.3% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Comparable sales increased by 7%, on the back of a low comparison
base due to the impact of a provision against sales taken in Q4 2023
related to the Respironics recall remediation.
•Mature geographies showed high-single-digit growth. Growth
geographies showed a low-single-digit decline.
•Adjusted EBITA increased to EUR 214 million and the margin was in
line with last year.
•Restructuring, acquisition-related and other items amounted to EUR
126 million, compared with EUR 490 million in Q4 2023. Q4 2024
includes EUR 53 million related to quality actions, EUR 48 million
Respironics consent decree charges and EUR 26 million Respironics
field-action running costs.
| Quarterly Report 2024 - Q4 | 9 |
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Personal Health
Key data in millions of EUR unless otherwise stated
| Q4 2023 | Q4 2024 | |
|---|---|---|
| Sales | 1,069 | 1,027 |
| Sales growth | ||
| Nominal sales growth | 1% | (4%) |
| Comparable sales growth¹ | 7% | (2%) |
| Income from operations | 208 | 176 |
| as a % of sales | 19.5% | 17.1% |
| EBITA¹ | 211 | 180 |
| as a % of sales | 19.7% | 17.5% |
| Adjusted EBITA¹ | 213 | 185 |
| as a % of sales | 19.9% | 18.0% |
| Adjusted EBITDA¹ | 243 | 211 |
| as a % of sales | 22.7% | 20.5% |
1Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information
•Comparable sales decreased by 2%, mainly due to the double-digit
decline in China as a result of subdued consumer sentiment.
•Adjusted EBITA decreased to EUR 185 million and the margin
decreased to 18.0%, mainly due to lower sales in China.
•Restructuring, acquisition-related and other items amounted to
EUR 5 million in Q4 2024.
Other
Key data in millions of EUR
| Q4 2023 | Q4 2024 | |
|---|---|---|
| Sales | 141 | 151 |
| Income from operations | 13 | (38) |
| EBITA¹ | 15 | (34) |
| Adjusted EBITA¹ of: | (25) | (15) |
| IP Royalties | 67 | 78 |
| Innovation | (35) | (32) |
| Central costs | (69) | (63) |
| Other | 11 | 1 |
| Adjusted EBITDA¹ | 67 | 69 |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Sales increased by EUR 10 million, mainly driven by higher royalty
income.
•Adjusted EBITA improved by EUR 10 million, mainly driven by higher
royalty income.
•Restructuring, acquisition-related and other items amounted to
EUR 19 million, compared with EUR 40 million in Q4 2023.
| Quarterly Report 2024 - Q4 | 10 |
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Proposed dividend distribution
A proposal will be submitted to the Annual General Meeting of Shareholders, to be held on May 8, 2025, to declare a distribution of EUR 0.85 per
common share, in shares or cash at the option of the shareholder, against retained earnings.
If the above dividend proposal is adopted, the shares will be traded ex-dividend at the Euronext Amsterdam as of May 12, 2025, and at the New York
Stock Exchange as of May 13, 2025. In compliance with the listing requirements of Euronext Amsterdam and the New York Stock Exchange, the dividend
record date will be May 13, 2025.
Shareholders will be given the opportunity to make their choice between shares and cash between May 14 and June 2, 2025, for shares traded at the
New York Stock Exchange, and between May 14 and June 3, 2025, for shares traded at Euronext Amsterdam. If no choice is made during this election
period, the dividend will be distributed in shares.
Of the total dividend distribution to all shareholders (up to EUR 786 million), a maximum of 50% will be available for payment in cash. If shareholders in
total elect to receive an aggregate amount of cash dividend that exceeds the maximum percentage of the total dividend amount, those shareholders who
elected to receive their dividend in cash will receive their cash dividend on a pro-rata basis, the remainder being distributed in shares.
The number of share dividend rights entitled to one new common share will be determined based on the volume weighted average price of all traded
common shares of Koninklijke Philips N.V. at Euronext Amsterdam on May 30, June 2 and June 3, 2025. The company will calculate the number of share
dividend rights entitled to one new common share (the ratio), such that the gross dividend in shares will be approximately equal to EUR 0.85. The ratio
and the number of shares to be issued will be announced on June 5, 2025. Delivery of new common shares and payment of the dividend, with
settlement of fractions in cash, if required, will take place from June 6, 2025.
Further details will be given in the agenda with explanatory notes for the 2025 Annual General Meeting of Shareholders. All dates mentioned remain
provisional until then.
| Quarterly Report 2024 - Q4 | 11 |
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Full-year highlights
Philips performance
Key data in millions of EUR unless otherwise stated
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Sales | 18,169 | 18,021 |
| Nominal sales growth | 2% | (1%) |
| Comparable sales growth¹ | 6% | 1% |
| Comparable order intake² ³ | (6%) | 1% |
| Income from operations | (115) | 529 |
| as a % of sales | (1%) | 3% |
| Financial income (expenses), net | (314) | (282) |
| Investments in associates, net of income taxes | (98) | (124) |
| Income tax (expense) benefit | 73 | (963) |
| Income from continuing operations | (454) | (840) |
| Discontinued operations, net of income taxes | (10) | 142 |
| Net income | (463) | (698) |
| Earnings per common share (EPS) | ||
| Income from continuing operations attributable to<br><br>shareholders⁴ (in EUR) - diluted | (0.48) | (0.90) |
| Adjusted income from continuing operations<br><br>attributable to shareholders⁴ (in EUR) - diluted¹ | 1.21 | 1.39 |
| Net income attributable to shareholders⁴ (in EUR) -<br><br>diluted | (0.49) | (0.75) |
| EBITA¹ | 183 | 921 |
| as a % of sales | 1.0% | 5.1% |
| Adjusted EBITA¹ | 1,921 | 2,077 |
| as a % of sales | 10.6% | 11.5% |
| Adjusted EBITDA¹ | 2,845 | 2,982 |
| as a % of sales | 15.7% | 16.5% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
2Effective Q1 2024, Philips has revised the order intake policy for the software
businesses. Refer to Forward-looking statements and other important
information.
3Comparable order intake is presented when discussing the Philips Group's
performance. For the definition of this measure, refer to chapter 13.6, Other
Key Performance indicators, of the Annual Report 2023.
4Shareholders refers to shareholders of Koninklijke Philips N.V. Per share
calculations have been adjusted retrospectively for all periods presented to
reflect the issuance of shares for the share dividend with respect to 2023.
•Comparable sales increased by 1% on the back of mid-single-digit
growth in 2023. A double-digit decline in China due to the lower
demand from consumers and health systems was more than offset
by the solid growth in the rest of the world.
•Income from operations increased by EUR 644 million, mainly driven
by higher gross margin, and lower charges in restructuring,
acquisition-related and other items, partially offset by higher
impairment charges.
•Adjusted EBITA increased to EUR 2,077 million and the margin
improved to 11.5%, mainly driven by operational improvements and
productivity measures.
•Restructuring, acquisition-related and other items amounted to EUR
1,156 million, compared with EUR 1,738 million in 2023. 2024
includes EUR 984 million for the Respironics litigation provision, EUR
326 million restructuring and acquisition-related charges, EUR 133
million Respironics field-action running costs, EUR 123 million related
to quality actions, and EUR 113 million Respironics consent decree
charges, partially offset by EUR 538 million Respironics insurance
income related to the product liability claims.
•Investments in associates includes share of results of associates and
impairments, and it decreased by EUR 26 million, mainly due to
higher impairment losses.
•Income tax expense increased by EUR 1,036 million year-on-year,
mainly due to de-recognition of deferred tax assets in the US and
higher income before tax in 2024, as well as the recognition of
historical tax credits in 2023.
•Net income decreased in comparison with 2023, mainly due to
higher tax expenses, partly offset by higher gross margin and lower
restructuring, acquisition-related and other items.
Sales per geographic area1 in millions of EUR unless otherwise stated
| % change | ||||
|---|---|---|---|---|
| 2023 | 2024 | nominal | comparable² | |
| Western Europe | 3,819 | 3,978 | 4% | 5% |
| North America | 7,562 | 7,655 | 1% | 2% |
| Other mature geographies | 1,626 | 1,526 | (6%) | (1%) |
| Mature geographies | 13,007 | 13,159 | 1% | 2% |
| Growth geographies | 5,162 | 4,863 | (6%) | (2%) |
| Philips Group | 18,169 | 18,021 | (1%) | 1% |
1Sales per geographic area is reported based on country of destination.
2Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Comparable sales in Mature geographies showed low-single-digit
growth, mainly driven by Western Europe and North America, partly
offset by Other mature geographies. Growth geographies decreased
by 2% as a result of the decline in China, partly offset by an increase
in other Growth geographies.
| Quarterly Report 2024 - Q4 | 12 |
|---|
Cash and cash equivalents balance in millions of EUR
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Beginning cash balance | 1,172 | 1,869 |
| Free cash flow¹ | 1,582 | 906 |
| Net cash flows from operating activities | 2,136 | 1,569 |
| Net capital expenditures | (554) | (663) |
| Other cash flows from investing activities | (82) | 90 |
| Treasury shares transactions | (662) | (410) |
| Changes in debt | (181) | (83) |
| Dividend paid to shareholders | (2) | (1) |
| Other cash flow items | (81) | 43 |
| Net cash flows from discontinued operations | 123 | (13) |
| Ending cash balance | 1,869 | 2,401 |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Net cash flows from operating activities decreased, mainly due to the
payments in connection with the Respironics economic loss
settlement in the US and working capital outflows, partly offset by
the Respironics insurance proceeds.
•Net capital expenditures were higher in 2024 as cash proceeds from
the sale of real estate were favorably impacting 2023 results.
•Other cash flows from investing activities in 2024 mainly includes
proceeds from divested businesses. The cash outflows in 2023 were
mainly a result of a cash payment with respect to foreign exchange
derivative contracts.
•Treasury shares transactions includes share repurchases as part of the
EUR 1.5 billion share repurchase program for capital reduction
purposes that was announced on July 26, 2021, and completed on
April 12, 2024, and share repurchases for long-term incentive plans,
as well as related withholding tax.
•Changes in debt mainly included the new bond issuance of EUR 700
million, which was offset by a bond redemption of EUR 547 million
and other debt repayments.
•Other cash flow items reflects foreign currency impact on the cash
balance.
Composition of net debt to group equity in millions of EUR unless
otherwise stated
| December 31,<br><br>2023 | December 31,<br><br>2024 | |
|---|---|---|
| Long-term debt | 7,035 | 7,113 |
| Short-term debt | 654 | 526 |
| Total debt | 7,689 | 7,639 |
| Cash and cash equivalents | 1,869 | 2,401 |
| Net debt | 5,820 | 5,238 |
| Shareholders’ equity | 12,028 | 12,006 |
| Non-controlling interests | 33 | 37 |
| Group equity | 12,061 | 12,043 |
| Net debt : group equity ratio¹ | 33:67 | 30:70 |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•The net debt to group equity ratio decreased, mainly due to the
increase in cash and cash equivalents in 2024.
| Quarterly Report 2024 - Q4 | 13 |
|---|
Full-year highlights
Performance per segment
Diagnosis & Treatment
Key data in millions of EUR unless otherwise stated
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Sales | 8,825 | 8,790 |
| Sales growth | ||
| Nominal sales growth | 6% | 0% |
| Comparable sales growth¹ | 11% | 1% |
| Income from operations | 721 | 592 |
| as a % of sales | 8.2% | 6.7% |
| EBITA¹ | 818 | 817 |
| as a % of sales | 9.3% | 9.3% |
| Adjusted EBITA¹ | 1,028 | 1,018 |
| as a % of sales | 11.6% | 11.6% |
| Adjusted EBITDA¹ | 1,241 | 1,219 |
| as a % of sales | 14.1% | 13.9% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Comparable sales increased by 1% on the back of double-digit
growth in 2023. Growth in Image Guided Therapy was partly offset
by a decline in Precision Diagnosis.
•Comparable sales in Mature geographies showed mid-single-digit
growth, mainly driven by North America. Growth geographies
showed a low-single-digit decline, due to China, partly offset by an
increase in other Growth geographies.
•Adjusted EBITA decreased to EUR 1,018 million and the margin was
in line with last year.
•Restructuring, acquisition-related and other items amounted to EUR
202 million, compared with EUR 210 million in 2023. 2024 includes
EUR 157 million in restructuring and acquisition charges and EUR 45
million related to quality actions.
Connected Care
Key data in millions of EUR unless otherwise stated
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Sales | 5,138 | 5,134 |
| Sales growth | ||
| Nominal sales growth | (2%) | 0% |
| Comparable sales growth¹ | 1% | 2% |
| Income from operations | (1,199) | (466) |
| as a % of sales | (23.3%) | (9.1%) |
| EBITA¹ | (1,020) | (324) |
| as a % of sales | (19.9%) | (6.3%) |
| Adjusted EBITA¹ | 369 | 494 |
| as a % of sales | 7.2% | 9.6% |
| Adjusted EBITDA¹ | 623 | 747 |
| as a % of sales | 12.1% | 14.5% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Comparable sales increased by 2%, mainly driven by growth in
Enterprise Informatics and Sleep & Respiratory Care, which was
partially offset by a decline in Monitoring on the back of strong
double-digit growth in 2023.
•Mature geographies showed low-single-digit growth, driven by
double-digit growth in Western Europe and low-single-digit growth
in North America. Comparable sales in Growth geographies declined
due to China.
•Adjusted EBITA increased to EUR 494 million and the margin
improved to 9.6%, driven by productivity measures and pricing
actions.
•Restructuring, acquisition-related and other items were EUR 818
million, compared with EUR 1,390 million in 2023. 2024 includes
EUR 984 million for the Respironics litigation provision, EUR 133
million Respironics field-action running costs, EUR 113 million
Respironics consent decree charges, EUR 78 million related to quality
actions, and EUR 53 million restructuring and acquisition-related
charges, partly offset by EUR 538 million in insurance income related
to the Respironics product liability claims.
| Quarterly Report 2024 - Q4 | 14 |
|---|
Personal Health
Key data in millions of EUR unless otherwise stated
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Sales | 3,602 | 3,486 |
| Sales growth | ||
| Nominal sales growth | (1%) | (3%) |
| Comparable sales growth¹ | 3% | (1%) |
| Income from operations | 552 | 544 |
| as a % of sales | 15.3% | 15.6% |
| EBITA¹ | 567 | 559 |
| as a % of sales | 15.7% | 16.0% |
| Adjusted EBITA¹ | 597 | 584 |
| as a % of sales | 16.6% | 16.7% |
| Adjusted EBITDA¹ | 698 | 679 |
| as a % of sales | 19.4% | 19.5% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Comparable sales decreased by 1%, mainly due to a low-single-digit
decline in Growth geographies due to China, which was partially
offset by low-single-digit growth in Mature geographies.
•Adjusted EBITA was EUR 584 million and the margin increased to
16.7%, driven by operational improvements and productivity
measures, largely offset by lower sales in China.
•Restructuring, acquisition-related and other items amounted to EUR
25 million, compared with EUR 31 million in 2023.
Other
Key data in millions of EUR unless otherwise stated
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Sales | 604 | 611 |
| Income from operations | (190) | (142) |
| EBITA¹ | (181) | (130) |
| Adjusted EBITA¹ of: | (73) | (18) |
| IP Royalties | 309 | 328 |
| Innovation | (143) | (104) |
| Central costs | (240) | (238) |
| Other | (1) | (5) |
| Adjusted EBITDA¹ | 283 | 337 |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
•Sales increased by EUR 7 million, mainly driven by higher royalty
income.
•Adjusted EBITA increased by EUR 55 million, mainly driven by higher
royalty income and lower costs.
•Restructuring, acquisition-related and other items amounted to EUR
111 million, compared with EUR 108 million in 2023.
| Quarterly Report 2024 - Q4 | 15 |
|---|
Forward-looking statements
and other information
Forward-looking statements
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: macro-economic and
geopolitical changes, including protectionism measures such as
announced and proposed tariffs and retaliatory trade measures in
response thereto; Philips’ ability to keep pace with the changing health
technology environment; Philips’ ability to gain leadership in health
informatics and artificial intelligence in response to developments in the
health technology industry; integration of acquisitions and their delivery
on business plans and value creation expectations; ability to meet
expectations with respect to ESG-related matters; securing and
maintaining Philips’ intellectual property rights, and unauthorized use
of third-party intellectual property rights; failure of products and
services to meet quality or security standards, adversely affecting
patient safety and customer operations; the resilience of our supply
chain; challenges in simplifying our organization and our ways of
working; attracting and retaining personnel; breach of cybersecurity;
challenges in driving operational excellence and speed in bringing
innovations to market; treasury and financing risks; tax risks; reliability
of internal controls; compliance with regulations and standards
involving quality, product safety, (cyber) security and artificial
intelligence; and compliance with business conduct rules and
regulations including privacy, existing and upcoming ESG disclosure
and due diligence requirements. 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 2023. Reference is also made to section Risk
management in the Philips semi-annual report 2024.
Third-party market share data
Statements regarding market share contained in this document,
including those regarding Philips’ competitive position, are based on
outside sources such as specialized research institutes, as well as
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 Regulation
This press release contains inside information within the meaning of
Article 7(1) of the EU Market Abuse Regulation.
Use of non-IFRS information
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 2023.
Presentation
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 2023. Prior-
period amounts have been reclassified to conform to the current-period
presentation; this includes immaterial organizational changes.
Effective Q1 2024, Philips has revised the order intake policy to reflect
the full contract value for software contracts that start generating
revenue within an 18-month horizon, instead of only the next 18-
months-to-revenue horizon. This change has been implemented to
better align with the specific business model of our software
businesses, simplify the order intake process, and better align with
peers. Prior-period comparable order intake percentages have been
restated accordingly. This revision has not resulted in any material
changes to the order intake percentages for the periods presented.
Per share calculations have been adjusted retrospectively for all periods
presented to reflect the issuance of shares in the second quarter of
2024 in connection with the 2023 share dividend.
*Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS
information
* Amounts may not add up due to rounding
| Quarterly Report 2024 - Q4 | 16 |
|---|
Condensed consolidated statements of income
In millions of EUR unless otherwise stated*
| Q4 | January to December | |||
|---|---|---|---|---|
| 2023 | 2024 | 2023 | 2024 | |
| Sales | 5,062 | 5,044 | 18,169 | 18,021 |
| Cost of sales | (3,263) | (3,081) | (10,721) | (10,248) |
| Gross margin | 1,798 | 1,963 | 7,448 | 7,773 |
| Selling expenses | (1,220) | (1,188) | (4,524) | (4,486) |
| General and administrative expenses | (143) | (137) | (608) | (582) |
| Research and development expenses | (449) | (472) | (1,890) | (1,747) |
| Impairment of goodwill | (8) | (8) | ||
| Other business income | 50 | 36 | 112 | 590 |
| Other business expenses | (6) | (4) | (645) | (1,019) |
| Income from operations | 24 | 199 | (115) | 529 |
| Financial income | 17 | 32 | 63 | 105 |
| Financial expenses | (109) | (107) | (376) | (387) |
| Investments in associates, net of income taxes | (26) | (9) | (98) | (124) |
| Income before taxes | (94) | 115 | (526) | 123 |
| Income tax (expense) benefit | 132 | (449) | 73 | (963) |
| Income from continuing operations | 38 | (333) | (454) | (840) |
| Discontinued operations, net of income taxes | - | - | (10) | 142 |
| Net income | 38 | (333) | (463) | (698) |
| Attribution of net income | ||||
| Net income attributable to shareholders¹ | 39 | (334) | (466) | (702) |
| Net income attributable to non-controlling interests | (1) | 1 | 2 | 3 |
1Shareholders refers to shareholders of Koninklijke Philips N.V.
Philips Group
Earnings per common share attributable to shareholders of Koninklijke Philips N.V.
| January to December | |||
|---|---|---|---|
| 2024 | 2023 | 2024 | |
| Weighted average number of common shares outstanding (after deduction of treasury shares) during the period (in thousands)¹: | |||
| Basic | 929,378 | 948,301 | 933,371 |
| Diluted | 929,378 | 948,301 | 933,371 |
| Basic earnings per common share attributable to shareholders of Koninklijke Philips N.V (in )¹ | |||
| Income from continuing operations | (0.36) | (0.48) | (0.90) |
| Income from discontinued operations | - | (0.01) | 0.15 |
| Net income | (0.36) | (0.49) | (0.75) |
| Diluted earnings per common share attributable to shareholders of Koninklijke Philips N.V. (in )¹ | |||
| Income from continuing operations | (0.36) | (0.48) | (0.90) |
| Income from discontinued operations | - | (0.01) | 0.15 |
| Net income | (0.36) | (0.49) | (0.75) |
All values are in Euros.
1Per share calculations have been adjusted retrospectively for all periods presented to reflect the issuance of shares for the share dividend with respect to 2023.
* Amounts may not add up due to rounding
| Quarterly Report 2024 - Q4 | 17 |
|---|
Condensed consolidated statements of
comprehensive income
in millions of EUR*
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Net income for the period | (463) | (698) |
| Pensions and other post-employment plans: | ||
| Remeasurement, before tax | (26) | (18) |
| Income tax effect on remeasurements | 3 | 12 |
| Financial assets fair value through OCI: | ||
| Net current-period change, before tax | (20) | (21) |
| Income tax effect on net current-period change | 3 | 9 |
| Total of items that will not be reclassified to Income statement | (40) | (17) |
| Currency translation differences: | ||
| Net current-period change, before tax | (579) | 768 |
| Income tax effect on net current-period change | - | (8) |
| Reclassification adjustment for (gain) loss realized | (26) | (7) |
| Cash flow hedges: | ||
| Net current-period change, before tax | 29 | 21 |
| Income tax effect on net current-period change | (2) | 3 |
| Reclassification adjustment for (gain) loss realized | (19) | (29) |
| Total of items that are or may be reclassified to Income Statement | (597) | 748 |
| Other comprehensive income for the period | (637) | 731 |
| Total comprehensive income for the period | (1,100) | 33 |
| Total comprehensive income attributable to: | ||
| Shareholders of Koninklijke Philips N.V. | (1,101) | 27 |
| Non-controlling interests | 1 | 6 |
* Amounts may not add up due to rounding
| Quarterly Report 2024 - Q4 | 18 |
|---|
Condensed consolidated balance sheets
in millions of EUR*
| December 31, 2023 | December 31, 2024 | |
|---|---|---|
| Non-current assets: | ||
| Property, plant and equipment | 2,483 | 2,452 |
| Goodwill | 9,876 | 10,383 |
| Intangible assets excluding goodwill | 3,190 | 2,982 |
| Non-current receivables | 193 | 208 |
| Investments in associates | 381 | 257 |
| Other non-current financial assets | 619 | 631 |
| Non-current derivative financial assets | 3 | 8 |
| Deferred tax assets | 2,627 | 1,916 |
| Other non-current assets | 93 | 118 |
| Total non-current assets | 19,466 | 18,955 |
| Current assets: | ||
| Inventories | 3,491 | 3,198 |
| Other current financial assets | 3 | 2 |
| Other current assets | 500 | 586 |
| Current derivative financial assets | 45 | 69 |
| Income tax receivable | 220 | 94 |
| Current receivables | 3,733 | 3,672 |
| Assets classified as held for sale | 79 | - |
| Cash and cash equivalents | 1,869 | 2,401 |
| Total current assets | 9,940 | 10,022 |
| Total assets | 29,406 | 28,976 |
| Equity: | ||
| Shareholders’ equity | 12,028 | 12,006 |
| Common shares | 183 | 188 |
| Capital in excess of par value | 5,827 | 6,654 |
| Reserves | 879 | 1,925 |
| Other | 5,139 | 3,239 |
| Non-controlling interests | 33 | 37 |
| Group equity | 12,061 | 12,043 |
| Non-current liabilities: | ||
| Long-term debt | 7,035 | 7,113 |
| Non-current derivative financial liabilities | 3 | 4 |
| Long-term provisions | 1,035 | 996 |
| Deferred tax liabilities | 71 | 81 |
| Non-current contract liabilities | 469 | 431 |
| Non-current tax liabilities | 390 | 119 |
| Other non-current liabilities | 54 | 45 |
| Total non-current liabilities | 9,058 | 8,787 |
| Current liabilities: | ||
| Short-term debt | 654 | 526 |
| Current derivative financial liabilities | 40 | 59 |
| Income tax payable | 83 | 71 |
| Accounts payable | 1,917 | 1,830 |
| Accrued liabilities | 1,887 | 1,630 |
| Current contract liabilities | 1,809 | 1,699 |
| Short-term provisions | 1,463 | 1,977 |
| Dividend payable | 11 | |
| Liabilities directly associated with assets held for sale | 9 | - |
| Other current liabilities | 414 | 354 |
| Total current liabilities | 8,287 | 8,146 |
| Total liabilities | 17,345 | 16,933 |
| Total liabilities and group equity | 29,406 | 28,976 |
* Amounts may not add up due to rounding
| Quarterly Report 2024 - Q4 | 19 |
|---|
Condensed consolidated statements of cash flows
in millions of EUR*
| January to December | ||
|---|---|---|
| 2023 | 2024 | |
| Cash flows from operating activities: | ||
| Net income (loss) | (463) | (698) |
| Results of discontinued operations - net of income tax | 10 | (142) |
| Adjustments to reconcile net income to net cash provided by (used for) operating activities: | ||
| Depreciation, amortization and impairment of assets | 1,261 | 1,390 |
| Impairment of goodwill | 8 | - |
| Share-based compensation | 88 | 96 |
| Net loss (gain) on sale of assets | (71) | (19) |
| Interest income | (46) | (81) |
| Interest expense on debt, borrowings and other liabilities | 255 | 270 |
| Investments in associates, net of income taxes | 107 | 126 |
| Income tax expense (benefit) | (71) | 964 |
| Decrease (increase) in working capital: | 913 | (355) |
| Decrease (increase) in receivables and other current assets | 298 | (1) |
| Decrease (increase) in inventories | 257 | 230 |
| Increase (decrease) in accounts payable, accrued and other current liabilities | 358 | (583) |
| Decrease (increase) in non-current receivables and other assets | (33) | (5) |
| Increase (decrease) in other liabilities | (38) | (51) |
| Increase (decrease) in provisions | 422 | 316 |
| Other items | 129 | 101 |
| Interest received | 53 | 83 |
| Interest paid | (250) | (261) |
| Dividends received from investments in associates | 13 | 8 |
| Income taxes paid | (152) | (173) |
| Net cash provided by (used for) operating activities | 2,136 | 1,569 |
| Cash flows from investing activities: | ||
| Net capital expenditures | (554) | (663) |
| Purchase of intangible assets | (96) | (118) |
| Expenditures on development assets | (203) | (241) |
| Capital expenditures on property, plant and equipment | (345) | (317) |
| Proceeds from sales of property, plant and equipment | 90 | 13 |
| Net proceeds from (cash used for) derivatives and current financial assets | (46) | 38 |
| Purchase of other non-current financial assets | (92) | (123) |
| Proceeds from other non-current financial assets | 48 | 57 |
| Purchase of businesses, net of cash acquired | (73) | (8) |
| Net proceeds from sale of interests in businesses, net of cash disposed of | 80 | 126 |
| Net cash provided by (used for) investing activities | (636) | (573) |
| Cash flows from financing activities: | ||
| Proceeds from issuance of (payments on) short-term debt | 29 | (30) |
| Principal payments on short-term portion of long-term debt | (754) | (763) |
| Proceeds from issuance of long-term debt | 544 | 710 |
| Purchase of treasury shares | (662) | (411) |
| Dividends paid to shareholders of Koninklijke Philips N.V. | (2) | (1) |
| Dividends paid to shareholders of non-controlling interests | (3) | (2) |
| Net cash provided by (used for) financing activities | (848) | (496) |
| Net cash provided by (used for) continuing operations | 652 | 500 |
| Net cash provided by (used for) discontinued operations | 123 | (13) |
| Net cash provided by (used for) continuing and discontinued operations | 776 | 487 |
| Effect of change in exchange rates on cash and cash equivalents | (79) | 45 |
| Cash and cash equivalents at the beginning of the period | 1,172 | 1,869 |
| Cash and cash equivalents at the end of the period | 1,869 | 2,401 |
* Amounts may not add up due to rounding
| Quarterly Report 2024 - Q4 | 20 |
|---|
Condensed consolidated statements of
changes in equity
in millions of EUR*
| Common<br><br>shares | Capital in<br><br>excess of<br><br>par value | Fair value<br><br>through<br><br>OCI | Cash flow<br><br>hedges | Currency<br><br>translation<br><br>differences | Retained<br><br>earnings | Treasury<br><br>shares at<br><br>cost | Total<br><br>shareholders’<br><br>equity | Non-<br><br>controlling<br><br>interests | Group<br><br>equity | |
|---|---|---|---|---|---|---|---|---|---|---|
| reserves | other | |||||||||
| Balance as of December 31, 2022 | 178 | 5,025 | (376) | (2) | 1,866 | 6,832 | (275) | 13,249 | 34 | 13,283 |
| Total comprehensive income (loss) | - | - | (17) | 8 | (604) | (488) | - | (1,101) | 1 | (1,100) |
| Dividend distributed | 8 | 741 | - | - | - | (816) | - | (68) | (3) | (70) |
| Transfer of reserve for equity<br><br>investments at FVTOCI to retained<br><br>earnings | - | - | 4 | - | - | (4) | - | - | - | - |
| Re-issuance of treasury shares | - | (29) | - | - | - | (24) | 54 | - | - | - |
| Forward contracts | - | - | - | - | - | 465 | (608) | (143) | - | (143) |
| Cancellation of treasury shares | (3) | - | - | - | - | (563) | 566 | - | - | - |
| Share-based compensation plans | - | 88 | - | - | - | - | - | 88 | - | 88 |
| Income tax share-based compensation<br><br>plans | - | 2 | - | - | - | - | - | 2 | - | 2 |
| Balance as of December 31, 2023 | 183 | 5,827 | (390) | 6 | 1,263 | 5,402 | (262) | 12,028 | 33 | 12,061 |
| Total comprehensive income (loss) | - | - | (11) | (5) | 751 | (707) | - | 27 | 6 | 33 |
| Dividend distributed | 6 | 762 | - | - | - | (799) | - | (31) | (2) | (32) |
| Transfer of reserve for equity<br><br>investments at FVTOCI to retained<br><br>earnings | - | - | 311 | - | - | (313) | - | (2) | - | (2) |
| Purchase of treasury shares | - | - | - | - | - | - | (60) | (60) | - | (60) |
| Re-issuance of treasury shares | - | (36) | - | - | - | (18) | 54 | - | - | - |
| Forward contracts | - | - | - | - | - | 251 | (310) | (59) | - | (59) |
| Cancellation of treasury shares | (1) | - | - | - | - | (166) | 167 | - | - | - |
| Share-based compensation plans | - | 96 | - | - | - | - | - | 96 | - | 96 |
| Income tax share-based compensation<br><br>plans | - | 5 | - | - | - | - | - | 5 | - | 5 |
| Balance as of December 31, 2024 | 188 | 6,654 | (90) | 1 | 2,014 | 3,650 | (411) | 12,006 | 37 | 12,043 |
* Amounts may not add up due to rounding
| Quarterly Report 2024 - Q4 | 21 |
|---|
Reconciliation of non-IFRS information
Certain non-IFRS financial measures are presented when discussing the
Philips Group’s performance:
•Comparable sales growth
•Adjusted income from continuing operations attributable to
shareholders
•Adjusted income from continuing operations attributable to
shareholders per common share (in EUR) - diluted (Adjusted EPS)
•EBITA
•Adjusted EBITA
•Adjusted EBITDA
•Free cash flow
•Net debt : group equity ratio
For the definitions of the non-IFRS financial measures listed above, refer
to chapter 13.5, Reconciliation of non-IFRS information, of the Annual
Report 2023 and to the Forward-looking statements and other
important information.
Comparable order intake is not a financial measure, but is presented
when discussing the Philips Group’s performance. Effective Q1 2024,
Philips has revised the order intake policy for the software business.
Refer to Forward-looking statements and other important information.
Sales growth composition in %
| Q4 2024 | January to December | |||||||
|---|---|---|---|---|---|---|---|---|
| nominal<br><br>growth | consolidation<br><br>changes | currency<br><br>effects | comparable<br><br>growth | nominal<br><br>growth | consolidation<br><br>changes | currency<br><br>effects | comparable<br><br>growth | |
| 2024 versus 2023 | ||||||||
| Diagnosis & Treatment | (2.3%) | 0.4% | 1.3% | (0.6%) | (0.4%) | 0.0% | 1.7% | 1.3% |
| Connected Care | 5.4% | 0.2% | 1.2% | 6.8% | (0.1%) | 0.8% | 1.3% | 2.0% |
| Personal Health | (3.9%) | 0.0% | 2.1% | (1.9%) | (3.2%) | 0.0% | 2.5% | (0.7%) |
| Philips Group | (0.3%) | 0.3% | 1.4% | 1.4% | (0.8%) | 0.3% | 1.7% | 1.2% |
Adjusted income from continuing operations attributable to shareholders1 in millions of EUR unless otherwise stated*
| Q4 | January to December | |||
|---|---|---|---|---|
| 2023 | 2024 | 2023 | 2024 | |
| Net income | 38 | (333) | (463) | (698) |
| Discontinued operations, net of income taxes | - | - | 10 | (142) |
| Income from continuing operations | 38 | (333) | (454) | (840) |
| Income from continuing operations attributable to non-controlling interests | 1 | (1) | (2) | (3) |
| Income from continuing operations attributable to shareholders¹ | 39 | (334) | (456) | (843) |
| Adjustments for: | ||||
| Amortization and impairment of acquired intangible assets | 74 | 193 | 290 | 392 |
| Impairment of goodwill | 8 | 8 | ||
| Restructuring and acquisition-related charges | 49 | 118 | 381 | 326 |
| Other items: | 498 | 168 | 1,358 | 830 |
| Respironics litigation provision | 575 | 984 | ||
| Respironics insurance income | (538) | |||
| Respironics field-action running costs | 52 | 26 | 224 | 133 |
| Respironics consent decree charges | 363 | 48 | 363 | 113 |
| Investment re-measurement loss | 23 | |||
| Provision for a legal matter | 31 | 31 | ||
| Gain on divestment of business | (35) | (35) | ||
| Quality actions | 100 | 92 | 175 | 123 |
| Remaining items | (12) | 1 | 2 | 16 |
| Net finance expenses | 4 | 7 | 18 | 23 |
| Tax impact on adjusting items² | (293) | (123) | (450) | (370) |
| Tax effect of derecognition of US deferred tax asset | - | 445 | 941 | |
| Adjusted income from continuing operations attributable to shareholders¹ | 381 | 474 | 1,148 | 1,300 |
| Earnings per common share: | ||||
| Income from continuing operations attributable to shareholders³ per common share (in<br><br>EUR) - diluted | 0.04 | (0.36) | (0.48) | (0.90) |
| Adjusted income from continuing operations attributable to shareholders³ per common<br><br>share (in EUR) - diluted | 0.40 | 0.51 | 1.21 | 1.39 |
1Shareholders refers to shareholders of Koninklijke Philips N.V.
2Includes deferred tax assets derecognized in the line below.
3Shareholders refers to shareholders of Koninklijke Philips N.V. Per share calculations have been adjusted retrospectively for all periods presented to reflect the issuance of
shares for the share dividend with respect to 2023.
| Quarterly Report 2024 - Q4 | 22 |
|---|
Reconciliation of Net income to Adjusted EBITA and Adjusted EBITDA in millions of EUR
| Philips Group | Diagnosis &<br><br>Treatment | Connected Care | Personal Health | Other | |
|---|---|---|---|---|---|
| Q4 2024 | |||||
| Net income | (333) | ||||
| Discontinued operations, net of income taxes | - | ||||
| Income tax expense (benefit) | 449 | ||||
| Investments in associates, net of income taxes | 9 | ||||
| Financial expenses | 107 | ||||
| Financial income | (32) | ||||
| Income from operations | 199 | 3 | 58 | 176 | (38) |
| Amortization and impairment of acquired intangible assets | 193 | 156 | 30 | 4 | 4 |
| EBITA | 393 | 159 | 88 | 180 | (34) |
| Restructuring and acquisition-related charges | 118 | 97 | (1) | 5 | 17 |
| Other items: | 168 | 39 | 127 | - | 2 |
| Respironics field-action running costs | 26 | 26 | |||
| Respironics consent decree charges | 48 | 48 | |||
| Quality actions | 92 | 39 | 53 | ||
| Remaining items | 1 | (1) | — | 2 | |
| Adjusted EBITA | 679 | 295 | 214 | 185 | (15) |
| Depreciation, amortization and impairment of fixed assets and other<br><br>intangible assets | 268 | 90 | 70 | 28 | 81 |
| Adding back impairment of fixed assets included in Restructuring and<br><br>acquisition-related charges and Other items | (43) | (36) | (8) | (2) | 3 |
| Adjusted EBITDA | 905 | 349 | 276 | 211 | 69 |
| January to December 2024 | |||||
| Net income | (698) | ||||
| Discontinued operations, net of income taxes | (142) | ||||
| Income tax expense (benefit) | 963 | ||||
| Investments in associates, net of income taxes | 124 | ||||
| Financial expenses | 387 | ||||
| Financial income | (105) | ||||
| Income from operations | 529 | 592 | (466) | 544 | (142) |
| Amortization and impairment of acquired intangible assets | 392 | 225 | 141 | 15 | 12 |
| EBITA | 921 | 817 | (324) | 559 | (130) |
| Restructuring and acquisition-related charges | 326 | 157 | 53 | 25 | 92 |
| Other items: | 830 | 45 | 765 | - | 20 |
| Respironics litigation provision | 984 | 984 | |||
| Respironics insurance income | (538) | (538) | |||
| Respironics field-action running costs | 133 | 133 | - | ||
| Respironics consent decree charges | 113 | 113 | |||
| Quality actions | 123 | 45 | 78 | ||
| Remaining items | 16 | (4) | — | 20 | |
| Adjusted EBITA | 2,077 | 1,018 | 494 | 584 | (18) |
| Depreciation, amortization and impairment of fixed assets and other<br><br>intangible assets | 998 | 240 | 262 | 102 | 394 |
| Adding back impairment of fixed assets included in Restructuring and<br><br>acquisition-related charges and Other items | (93) | (39) | (8) | (7) | (39) |
| Adjusted EBITDA | 2,982 | 1,219 | 747 | 679 | 337 |
| Quarterly Report 2024 - Q4 | 23 | ||||
| --- | --- | ||||
| Philips Group | Diagnosis &<br><br>Treatment | Connected Care | Personal Health | Other | |
| --- | --- | --- | --- | --- | --- |
| Q4 2023 | |||||
| Net income | 38 | ||||
| Discontinued operations, net of income taxes | - | ||||
| Income tax expense (benefit) | (132) | ||||
| Investments in associates, net of income taxes | 26 | ||||
| Financial expenses | 109 | ||||
| Financial income | (17) | ||||
| Income from operations | 24 | 134 | (332) | 208 | 13 |
| Amortization and impairment of acquired intangible assets | 74 | 24 | 45 | 4 | 2 |
| Impairment of goodwill | 8 | 8 | - | ||
| EBITA | 106 | 166 | (287) | 211 | 15 |
| Restructuring and acquisition-related charges | 49 | 15 | 37 | 2 | (4) |
| Other items: | 498 | 81 | 453 | (36) | |
| Respironics consent decree charges | 363 | 363 | |||
| Respironics field-action running costs | 52 | 52 | |||
| Quality actions | 100 | 81 | 19 | ||
| Provision for a legal matter | 31 | 31 | |||
| Gain on divestment of business | (35) | (35) | |||
| Remaining items | (12) | - | (11) | (1) | |
| Adjusted EBITA | 653 | 262 | 203 | 213 | (25) |
| Depreciation, amortization and impairment of fixed assets and other<br><br>intangible assets | 253 | 50 | 82 | 30 | 92 |
| Adding back impairment of fixed assets included in Restructuring and<br><br>acquisition-related charges and Other items | (11) | - | (10) | (1) | |
| Adjusted EBITDA | 896 | 311 | 275 | 243 | 67 |
| January to December 2023 | |||||
| Net income | (463) | ||||
| Discontinued operations, net of income taxes | 10 | ||||
| Income tax expense (benefit) | (73) | ||||
| Investments in associates, net of income taxes | 98 | ||||
| Financial expenses | 376 | ||||
| Financial income | (63) | ||||
| Income from operations | (115) | 721 | (1,199) | 552 | (190) |
| Amortization and impairment of acquired intangible assets | 290 | 89 | 178 | 14 | 9 |
| Impairment of goodwill | 8 | 8 | - | - | - |
| EBITA | 183 | 818 | (1,020) | 567 | (181) |
| Restructuring and acquisition-related charges | 381 | 118 | 115 | 9 | 140 |
| Other items: | 1,358 | 92 | 1,275 | 22 | (32) |
| Respironics litigation provision | 575 | 575 | |||
| Respironics consent decree charges | 363 | 363 | |||
| Respironics field-action running costs | 224 | 224 | |||
| Quality actions | 175 | 81 | 94 | ||
| Provision for a legal matter | 31 | 31 | |||
| Investment re-measurement loss | 23 | 23 | |||
| Gain on divestment of business | (35) | (35) | |||
| Remaining items | 2 | 11 | (12) | (1) | 3 |
| Adjusted EBITA | 1,921 | 1,028 | 369 | 597 | (73) |
| Depreciation, amortization and impairment of fixed assets and other<br><br>intangible assets | 971 | 217 | 267 | 101 | 385 |
| Adding back impairment of fixed assets included in Restructuring and<br><br>acquisition-related charges and Other items | (47) | (4) | (14) | - | (30) |
| Adjusted EBITDA | 2,845 | 1,241 | 623 | 698 | 283 |
Composition of free cash flow in millions of EUR
| Q4 | January to December | |||
|---|---|---|---|---|
| 2023 | 2024 | 2023 | 2024 | |
| Net cash flows from operating activities | 1,310 | 1,459 | 2,136 | 1,569 |
| Net capital expenditures | (182) | (174) | (554) | (663) |
| Purchase of intangible assets | (20) | (25) | (96) | (118) |
| Expenditures on development assets | (50) | (64) | (203) | (241) |
| Capital expenditures on property, plant and equipment | (105) | (83) | (345) | (317) |
| Proceeds from sales of property, plant and equipment | (7) | (2) | 90 | 13 |
| Free cash flow | 1,128 | 1,285 | 1,582 | 906 |
| Quarterly Report 2024 - Q4 | 24 | |||
| --- | --- |
Philips statistics
Quarterly statistics in millions of EUR unless otherwise stated
| 2023 | 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| Q1 | Q2 | Q3 | Q4 | Q1 | Q2 | Q3 | Q4 | |
| Sales | 4,167 | 4,470 | 4,471 | 5,062 | 4,138 | 4,462 | 4,377 | 5,044 |
| Nominal sales growth | 6% | 7% | 4% | (7%) | (1%) | 0% | (2%) | 0% |
| Comparable sales growth¹ | 6% | 9% | 11% | (1%) | 2% | 2% | 0% | 1% |
| Comparable order intake² ³ | (5%) | (8%) | (7%) | (4%) | (4%) | 9% | (2%) | 2% |
| Gross margin | 1,755 | 1,961 | 1,933 | 1,798 | 1,815 | 1,989 | 2,006 | 1,963 |
| as a % of sales | 42% | 44% | 43% | 36% | 44% | 45% | 46% | 39% |
| Selling expenses | (1,079) | (1,112) | (1,114) | (1,220) | (1,096) | (1,127) | (1,075) | (1,188) |
| as a % of sales | (26%) | (25%) | (25%) | (24%) | (26%) | (25%) | (25%) | (24%) |
| G&A expenses | (158) | (157) | (150) | (143) | (136) | (158) | (151) | (137) |
| as a % of sales | (4%) | (4%) | (3%) | (3%) | (3%) | (4%) | (3%) | (3%) |
| R&D expenses | (528) | (468) | (445) | (449) | (419) | (424) | (433) | (472) |
| as a % of sales | (13%) | (10%) | (10%) | (9%) | (10%) | (9%) | (10%) | (9%) |
| Income from operations | (583) | 221 | 224 | 24 | (824) | 816 | 337 | 199 |
| as a % of sales | (14%) | 5% | 5% | 0% | (20%) | 18% | 8% | 4% |
| Net income | (665) | 74 | 90 | 38 | (998) | 452 | 181 | (333) |
| Income from continuing operations attributable to<br><br>shareholders⁴ per common share (in EUR) - diluted | (0.70) | 0.07 | 0.10 | 0.04 | (1.07) | 0.33 | 0.19 | (0.36) |
| Adjusted income from continuing operations<br><br>attributable to shareholders⁴ per common share (in<br><br>EUR) - diluted¹ | 0.20 | 0.27 | 0.32 | 0.40 | 0.25 | 0.30 | 0.32 | 0.51 |
| EBITA¹ | (510) | 292 | 294 | 106 | (751) | 876 | 404 | 393 |
| as a % of sales | (12.2%) | 6.5% | 6.6% | 2.1% | (18.1%) | 19.6% | 9.2% | 7.8% |
| Adjusted EBITA¹ | 359 | 453 | 456 | 653 | 388 | 495 | 516 | 679 |
| as a % of sales | 8.6% | 10.1% | 10.2% | 12.9% | 9.4% | 11.1% | 11.8% | 13.5% |
| Adjusted EBITDA¹ | 575 | 681 | 692 | 896 | 609 | 733 | 735 | 905 |
| as a % of sales | 13.8% | 15.2% | 15.5% | 17.7% | 14.7% | 16.4% | 16.8% | 17.9% |
| At the end of period: | ||||||||
| Number of common shares outstanding (after<br><br>deduction of treasury shares) in thousands | 881,539 | 920,085 | 915,987 | 906,403 | 904,257 | 934,117 | 931,986 | 925,009 |
| Shareholders’ equity per common share in EUR | 13.99 | 13.18 | 13.84 | 13.27 | 12.56 | 12.72 | 12.27 | 12.98 |
| Net debt : group equity ratio¹ | 36:64 | 37:63 | 36:64 | 33:67 | 36:64 | 35:65 | 36:64 | 30:70 |
| Total employees | 73,712 | 71,519 | 70,741 | 69,656 | 69,062 | 68,701 | 69,282 | 67,823 |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS information
2Effective Q1 2024, Philips has revised the order intake policy for the software businesses. Refer to Forward-looking statements and other important information.
3Comparable order intake is presented when discussing the Philips Group's performance. For the definition of this measure, refer to chapter 13.6, Other Key Performance
indicators, of the Annual Report 2023.
4Shareholders refers to shareholders of Koninklijke Philips N.V. Per share calculations have been adjusted retrospectively for all periods presented to reflect the issuance of
shares for the share dividend with respect to 2023.
| Quarterly Report 2024 - Q4 | 25 |
|---|
Year-to-date statistics in millions of EUR unless otherwise stated
| 2023 | 2024 | |||||||
|---|---|---|---|---|---|---|---|---|
| January-<br><br>March | January-<br><br>June | January-<br><br>September | January-<br><br>December | January-<br><br>March | January-<br><br>June | January-<br><br>September | January-<br><br>December | |
| Sales | 4,167 | 8,636 | 13,107 | 18,169 | 4,138 | 8,600 | 12,977 | 18,021 |
| Nominal sales growth | 6% | 7% | 6% | 2% | (1%) | 0% | (1%) | (1%) |
| Comparable sales growth¹ | 6% | 8% | 9% | 6% | 2% | 2% | 1% | 1% |
| Comparable order intake² ³ | (5%) | (7%) | (7%) | (6%) | (4%) | 3% | 1% | 1% |
| Gross margin | 1,755 | 3,717 | 5,650 | 7,448 | 1,815 | 3,804 | 5,810 | 7,773 |
| as a % of sales | 42% | 43% | 43% | 41% | 44% | 44% | 45% | 43% |
| Selling expenses | (1,079) | (2,191) | (3,304) | (4,524) | (1,096) | (2,223) | (3,298) | (4,486) |
| as a % of sales | (26%) | (25%) | (25%) | (25%) | (26%) | (26%) | (25%) | (25%) |
| G&A expenses | (158) | (315) | (465) | (608) | (136) | (294) | (445) | (582) |
| as a % of sales | (4%) | (4%) | (4%) | (3%) | (3%) | (3%) | (3%) | (3%) |
| R&D expenses | (528) | (996) | (1,441) | (1,890) | (419) | (843) | (1,275) | (1,747) |
| as a % of sales | (13%) | (12%) | (11%) | (10%) | (10%) | (10%) | (10%) | (10%) |
| Income from operations | (583) | (362) | (139) | (115) | (824) | (8) | 329 | 529 |
| as a % of sales | (14%) | (4%) | (1%) | (1%) | (20%) | 0% | 3% | 3% |
| Net income | (665) | (591) | (501) | (463) | (998) | (546) | (365) | (698) |
| Income from continuing operations attributable to<br><br>shareholders⁴ per common share (in EUR) - diluted | (0.70) | (0.62) | (0.52) | (0.48) | (1.07) | (0.74) | (0.54) | (0.90) |
| Adjusted income from continuing operations<br><br>attributable to shareholders⁴ per common share (in<br><br>EUR) - diluted¹ | 0.20 | 0.48 | 0.81 | 1.21 | 0.25 | 0.56 | 0.88 | 1.39 |
| EBITA¹ | (510) | (217) | 77 | 183 | (751) | 125 | 528 | 921 |
| as a % of sales | (12.2%) | (2.5%) | 0.6% | 1.0% | (18.1%) | 1.5% | 4.1% | 5.1% |
| Adjusted EBITA¹ | 359 | 812 | 1,268 | 1,921 | 388 | 882 | 1,399 | 2,077 |
| as a % of sales | 8.6% | 9.4% | 9.7% | 10.6% | 9.4% | 10.3% | 10.8% | 11.5% |
| Adjusted EBITDA¹ | 575 | 1,256 | 1,949 | 2,845 | 609 | 1,342 | 2,077 | 2,982 |
| as a % of sales | 13.8% | 14.5% | 14.9% | 15.7% | 14.7% | 15.6% | 16.0% | 16.5% |
1Non-IFRS financial measure. Refer to the Reconciliation of non-IFRS information
2Effective Q1 2024, Philips has revised the order intake policy for the software businesses. Refer to Forward-looking statements and other important information.
3Comparable order intake is presented when discussing the Philips Group's performance. For the definition of this measure, refer to chapter 13.6, Other Key Performance
indicators, of the Annual Report 2023.
4Shareholders refers to shareholders of Koninklijke Philips N.V. Per share calculations have been adjusted retrospectively for all periods presented to reflect the issuance of
shares for the share dividend with respect to 2023.
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