Koninklijke Philips N.v. · EURONEXT:PHIA
Koninklijke Philips — Koninklijke Philips N.V. NY Registry Shares — Q3 2024 Earnings Presentation
25 slides from Koninklijke Philips's earnings presentation, Oct 28, 2024
Slide 1: Third quarter 2024 results
Third quarter 2024 results October 28, 2024
Slide 2: Important information
Important information Forward-looking statements and other important information 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
Slide 3: Table of content
Table of content Third quarter highlights and financial performance 4 2024 outlook 15 Financial appendix 20 3 © Koninklijke Philips N.V.
Slide 4: Key takeaways
Key takeaways • Delivered strong margin improvement with flat comparable sales due to further deteriorated demand in China; solid growth in rest of world • Deterioration of demand in China leads to updated sales outlook for full-year 2024. Adjusted EBITA margin expected to be at the upper end of cur
Slide 5: Strong margin improvement with flat comparable sales; China demand deteriorated
Delivered strong margin improvement with flat comparable sales due to further deteriorated demand in China; solid growth in rest of world Financial performance Highlights In millions of EUR unless otherwise stated Q3 2023 Q3 2024 • Orders declined due to China; growth in Diagnosis & Sales 4,471 4,37
Slide 6: Preferred strategic and innovation partner for customers
Preferred strategic and innovation partner for customers Carilion Clinic (U.S.) Siloam Hospital Group (Indonesia) • Expanding access to cardiac care with latest innovations at • Signed an AI capability MoU1 to support Indonesia’s the new cardiovascular institute in Virginia healthcare transformation
Slide 7: Breakthrough launches demonstrating our innovation leadership in minimally invasive treatments and AI
Breakthrough launches demonstrating our innovation leadership in minimally invasive treatments and AI LumiGuide Navigation Wire AI-powered Avent baby monitor • Secured FDA approval for the industry’s first 3D human GPS • Reassures parents using scientifically proven technology powered by light techn
Slide 8: Diversified revenue streams driven by order book, recurring revenue and Personal Health
Diversified revenue streams driven by combination of healthy order book, growing recurring revenue and Personal Health Revenue split Order intake2 +1% Order book1 ~20% Personal Health -2% ~40% Software, services, ~40% consumables, and book-to-bill businesses Q3 2023 Q3 2024 YTD 2023 YTD 2024 • Order
Slide 9: Diagnosis & Treatment
Diagnosis & Treatment NOTE FROM ZOW: Option A Financial performance In millions of EUR unless otherwise stated Q3 2023 Q3 2024 Sales 2,202 2,150 Comparable sales growth 14% (1)% Adj. EBITA margin 12.7% 12.6% Adj. EBITDA margin 15.5% 14.9% Income from operations 251 232 Q3 2024 highlights • CSG decli
Slide 10: Connected Care
Connected Care Financial performance In millions of EUR unless otherwise stated Q3 2023 Q3 2024 Sales 1,232 1,211 Comparable sales growth 10% 0% Adj. EBITA margin 3.7% 7.3% Adj. EBITDA margin 8.9% 12.2% Income from operations (111) (17) Q3 2024 highlights • Flat CSG on the back of high comps, with g
Slide 11: Personal Health
Personal Health NOTE FROM ZOW: Option A Financial performance In millions of EUR unless otherwise stated Q3 2023 Q3 2024 Sales 898 835 Comparable sales growth 7% (5)% Adj. EBITA margin 18.7% 16.5% Adj. EBITDA margin 21.4% 19.2% Income from operations 142 132 Q3 2024 highlights • CSG declined due to
Slide 12: Adjusted EBITA margin improvement driven by gross margin step up and productivity
Adjusted EBITA margin improvement driven by strong step up in gross margin, productivity measures and higher royalty income Group Adj. EBITA margin1 in Q3 2024 (0.1)% 3.3% (1.6)% 11.8% 10.2% Adj. EBITA Volume Cost headwinds Productivity Adj. EBITA Q3 2023 and pricing Q3 2024 12 1. Excluding restruct
Slide 13: Productivity initiatives delivered EUR 188 million in the quarter
Productivity initiatives delivered EUR 188 million in the quarter and ~EUR 1.5 billion to date Productivity initiatives savings1 In millions of EUR unless otherwise stated Q3 2023 Q1 2023 – Q3 2024 • Simplified operating model with reduction of 10k roles Operating • R&D prioritization, reduction of
Slide 14: We have made solid progress on our execution priorities
We have made solid progress on our execution priorities Patient safety and quality End-to-end supply chain Simplified operating embedded in businesses, delivering better model driving accountability innovation and culture lead times and service and agility Full day time-out for all employees to Lead
Slide 15: 2024 outlook
2024 outlook © Koninklijke Philips N.V.
Slide 16: Updated growth outlook while margin expected at upper end of range
Deteriorated demand in China leads to an updated growth outlook while margin expected to be at the upper end of the current range Previous 2024 outlook Updated 2024 outlook 3 – 5% 0.5 – 1.5% • Diagnosis & Treatment: lower end of the range • Diagnosis & Treatment: slight growth Comparable sales growt
Slide 17: Restructuring, acquisition-related charges and other items
Restructuring, acquisition-related charges and other items Restructuring costs • Part of the 10K roles reduction program resulting from operating model simplification ~100 bps • Sleep & Respiratory Care rightsizing and assets impairment Full-year 2024 Acquisition-related charges • Post-merger integr
Slide 18: Latest FX, below the line items and segment Other outlook
Latest FX, below the line items and segment Other outlook Q4 2024 Full year 2024 FX translation1 Diagnosis & Treatment (3)% (2)% Connected Care (3)% (2)% Personal Health (3)% (3)% Philips Group (3)% (2)% Effective tax rate2 21-23% Financial income & expense (EUR million) ~(290) Segment Other (EUR mi
Slide 19: Key takeaways
Key takeaways • Delivered strong margin improvement with flat comparable sales due to further deteriorated demand in China; solid growth in rest of world • Deterioration of demand in China leads to updated sales outlook for full-year 2024. Adjusted EBITA margin expected to be at the upper end of cur
Slide 20: Financial appendix
Financial appendix © Koninklijke Philips N.V.
Slide 21: Working capital and inventories
Working capital and inventories Group working capital1 Group inventories In millions of EUR unless otherwise stated Excluding insurance In millions of EUR unless otherwise stated as % of LTM sales2 receivable* as % of LTM sales2 15.5% 4,500 22.1% 3,000 14.9% 14.5% 19.9% 12.2% 19.6% 2,500 10.0% 3,500
Slide 22: Debt maturity profile and liability management
Debt maturity profile and liability management Long-term debt profile and liability management Debt maturity profile as per 30 September 2024 in billions of EUR unless otherwise stated Long-term debt1 • Total net debt position of EUR 6.5 billion 1.8 Short-term debt2 Unutilized standby and • Net Debt
Slide 23: Net capital expenditures, depreciation and amortization
Net capital expenditures, depreciation and amortization In millions of EUR unless otherwise stated Q3 2023 Q3 2024 Net capital expenditures 156 170 Depreciation 180 157 Amortization 139 133 Amortization of acquired intangible assets 71 66 Amortization of other intangible assets 68 67 23 © Koninklijk
Slide 24: Restructuring, acquisition-related charges and Other items
Restructuring, acquisition-related charges and Other items In millions of EUR unless otherwise stated Q1 2023 Q2 2023 Q3 2023 Q4 2023 FY 2023 Q1 2024 Q2 2024 Q3 2024 Restructuring and acquisition- related charges Diagnosis & Treatment 65 30 8 15 118 19 25 16 Connected Care 49 10 20 37 115 17 18 19 P
Slide 25: PHILIPS
PHILIPS
Koninklijke Philips N.V. NY Registry Shares — Q3 2024 Earnings Presentation on 6ix