Koninklijke Philips N.v. · EURONEXT:PHIA

Koninklijke Philips — Koninklijke Philips N.V. NY Registry Shares — Q2 2024 Earnings Presentation

24 slides from Koninklijke Philips's earnings presentation, Jul 29, 2024

1. Slide 1: Second quarter 2024 results

   Second quarter 2024 results July 29, 2024

2. 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

3. Slide 3: Table of content

   Table of content Second quarter highlights and financial performance 4 2024 outlook 15 Financial appendix 19 3 © Koninklijke Philips N.V.

4. Slide 4: Key takeaways

   Key takeaways • Delivered strong order growth and margin improvement, solid sales and cash flow within a challenging macro environment • Improvements across all businesses driven by innovation and progress on our execution priorities: – Enhance patient safety & quality – Strengthen supply chain reli

5. Slide 5: Delivered strong order growth and margin improvement, solid sales growth and cash flow

   Delivered strong order growth and margin improvement, solid sales growth and cash flow Financial performance Highlights in millions of EUR unless otherwise stated Q2 2023 Q2 2024 • Strong OIT driven by growth outside of China, whilst within China Sales 4,470 4,462 anti-corruption measures are still

6. Slide 6: Preferred strategic and innovation partner for customers

   Preferred strategic and innovation partner for customers Bon Secours Mercy Health (USA) Multi-year partnerships in Europe • Agreement with Amsterdam UMC to provide Azurion systems, • 10-year partnership with one of the largest health systems in the helium-free MRIs, monitoring systems and 10 years o

7. Slide 7: Launched a series of leading AI-driven innovations across the portfolio

   Launched a series of leading AI-driven innovations across the portfolio AI-enabled cardiovascular ultrasound Duo Venous Stent System Zenition 90 Motorized • FDA-cleared AI applications integrated into • Used for treatment of deep venous disease • State-of-the-art image quality for complex EPIQ CVx a

8. Slide 8: Diagnosis & Treatment

   Diagnosis & Treatment Financial performance in millions of EUR unless otherwise stated Q2 2023 Q2 2024 Sales 2,115 2,174 Comparable Sales Growth 12% 4% Adj. EBITA margin 10.6% 12.2% Adj. EBITDA margin 13.2% 14.4% Income from operations 163 211 Q2 2024 highlights • Growth across Image Guided Therapy

9. Slide 9: Connected Care

   Connected Care Financial performance in millions of EUR unless otherwise stated Q2 2023 Q2 2024 Sales 1,327 1,332 Comparable Sales Growth 6% 2% Adj. EBITA margin 7.5% 8.8% Adj. EBITDA margin 12.1% 14.3% Income from operations (39) 5581 Q2 2024 highlights • Strong growth in Enterprise Informatics; Mo

10. Slide 10: Personal Health

    Personal Health Financial performance in millions of EUR unless otherwise stated Q2 2023 Q2 2024 Sales 836 834 Comparable Sales Growth 3% 2% Adj. EBITA margin 13.4% 16.9% Adj. EBITDA margin 16.1% 19.5% Income from operations 107 120 Q2 2024 highlights • CSG driven by mid-single-digit growth outside

11. Slide 11: Productivity initiatives delivered EUR 195 million in the quarter

    Productivity initiatives delivered EUR 195 million in the quarter and ~EUR 1.4 billion to date Q2 2024 Q1 2023 – Q2 2024 Productivity initiatives savings1 in millions of EUR unless otherwise stated • Simplified operating model with reduction of 10k roles Operating • R&D prioritization, reduction of

12. Slide 12: Adjusted EBITA margin improved across all businesses

    Adjusted EBITA margin improved across all businesses as productivity and pricing more than offset cost inflation Group Adj. EBITA margin1 in Q2 2024 (0.3)% 0.1% 3.2% (2.0)% 11.1% 10.1% Adj. EBITA Volume Cost headwinds Productivity Other Adj. EBITA Q2 2023 and pricing Q2 2024 12 1. Excluding restruct

13. Slide 13: Strong order intake growth, particularly in North America

    Strong order intake growth, particularly in North America Order intake1 Indexed order book2 development +3% +10% +9% Q2 2023 Q2 2024 H1 2023 H1 2024 Pre-supply chain crisis Q2 2024 • OIT growth of 9%, with market dynamics improving, • Order book accounts for ~40% of Group sales particularly in North

14. Slide 14: Execution with decisive action as key value driver

    Execution with decisive action as key value driver Examples of progress in Q2 2024 Patient safety and quality Reliable end-to-end Simplified as highest priority supply chain operating model >90% improvement in CAPA1 closure Lead times improved for all modalities Reduced workforce by close to 9K role

15. Slide 15: 2024 outlook

    2024 outlook © Koninklijke Philips N.V.

16. Slide 16: Continued improvement in operational performance in 2024

    Continued improvement in operational performance in 2024, whilst acknowledging that uncertainties remain • All segments within the range: Connected Care closer to the upper end of the range, Comparable Sales Growth Diagnosis & Treatment and Personal Health closer to the lower end of the range 3 – 5%

17. Slide 17: Restructuring, acquisition-related charges and other items

    Restructuring, acquisition-related charges and other items • 1K roles reduction part of the 10K roles reduction program resulting from operating Restructuring costs model simplification, of which 8k implemented in 2023 ~100 bps • S&RC rightsizing and assets impairment Acquisition-related charges • P

18. Slide 18: Key takeaways

    Key takeaways • Delivered strong order growth and margin improvement, solid sales and cash flow within a challenging macro environment • Improvements across all businesses driven by innovation and progress on our execution priorities: – Enhance patient safety & quality – Strengthen supply chain reli

19. Slide 19: Financial appendix

    Financial appendix © Koninklijke Philips N.V.

20. Slide 20: Working capital and inventories

    Working capital and inventories Group working capital1 Group inventories in millions of EUR unless otherwise stated Excluding EUR 388 million in millions of EUR unless otherwise stated as % of LTM sales2 as % of LTM sales2 insurance receivable * 3,000 15.7% 14.9% 14.5% 4,500 22.3% 20.0% 22.1% 24% 12

21. Slide 21: 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 June 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 1.6 Unutilized standby and • Average t

22. Slide 22: Capital expenditures, Depreciation and Amortization

    Capital expenditures, Depreciation and Amortization in millions of EUR unless otherwise stated Q2 2023 Q2 2024 Capital expenditures on property, plant and equipment 88 76 Capitalization of development costs 71 73 Depreciation 157 211 Amortization of acquired intangible assets 72 60 Amortization of s

23. Slide 23: Restructuring, acquisition-related charges and Other items

    Restructuring, acquisition-related charges and Other items in millions of EUR unless otherwise stated 1. Quality actions | 2. Respironics running costs | 3. Provision in connection with Respironics litigation. | 4. Provision related to Respironics field-action; Provision connected to the consent dec

24. Slide 24: Slide 24

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