Koninklijke Philips N.v. · EURONEXT:PHIA
Koninklijke Philips — Koninklijke Philips N.V. NY Registry Shares — Q1 2023 Earnings Presentation
26 slides from Koninklijke Philips's earnings presentation, Apr 24, 2023
Slide 1: First quarter 2023 results
First quarter 2023 results April 24, 2023
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 First quarter highlights and financial performance 4 Delivering value with sustainable impact 15 Financial appendix 19 3 © Koninklijke Philips N.V.
Slide 4: Key takeaways
Key takeaways • We delivered a solid start to the year, with 6% comparable sales growth, improved margins and operating cash flow ‒ supply chain continued to improve and our actions to strengthen execution started to take effect • We are making good progress on our three priorities ‒ Enhance patient
Slide 5: Solid operational performance as supply chain improves and actions take effect
Solid operational performance as supply chain improves and actions to enhance execution start to take effect Financial performance Q1 2023 highlights in millions of EUR unless otherwise stated Q1 2022 Q1 2023 • Sales growth driven by Diagnosis & Treatment and Hospital Patient Monitoring Sales 3,918
Slide 6: Demonstrating the confidence hospital leaders have in our innovation
Demonstrating the confidence hospital leaders have in our innovation Signed multiple new partnerships Prisma Health (South Carolina, USA) Northwell Health (New York, USA) • 6-year multi-vendor services agreement • 7-year agreement to standardize and centralize monitoring across the hospital • To inc
Slide 7: Highlights by business segment in Q1 2023
Highlights by business segment in Q1 2023 Supply chain improvements enabled growth in Diagnosis & Treatment and Hospital Patient Monitoring Diagnosis and Treatment +15% CSG Connected Care +3% CSG Personal Health (6)% CSG • DD OIT growth; DD Image-Guided Therapy • DD CSG in Hospital Patient Monitorin
Slide 8: Order book and order book coverage remain strong
Order book1,2 and order book coverage remain strong Orderbook coverage of the next 12 months’ equipment sales +15% • Order book coverage is ~15% higher vs Q1 2021, driven by Magnetic Resonance Imaging, Enterprise Diagnostic Informatics and Hospital Patient Monitoring Indexed orderbook development •
Slide 9: Diagnosis & Treatment
Diagnosis & Treatment Financial performance in millions of EUR unless otherwise stated Q1 2022 Q1 2023 Sales 1,911 2,204 Comparable Sales Growth (2)% 15% Adj. EBITA margin 5.9% 11.3% Adj. EBITDA margin 9.5% 14.0% Q1 2023 highlights • DD CSG in Ultrasound and Image-Guided Therapy; MSD growth in Diagn
Slide 10: Connected Care
Connected Care Financial performance in millions of EUR unless otherwise stated Q1 2022 Q1 2023 Sales 933 1,033 Comparable Sales Growth (21)% 3% Adj. EBITA margin 0.4% 2.4% Adj. EBITDA margin 6.0% 7.0% Q1 2023 highlights • DD CSG in Hospital Patient Monitoring, largely offset by a decline in Sleep &
Slide 11: Personal Health
Personal Health Financial performance in millions of EUR unless otherwise stated Q1 2022 Q1 2023 Sales 838 798 Comparable Sales Growth 8% (6)% Adj. EBITA margin 15.3% 13.2% Adj. EBITDA margin 19.0% 16.0% Q1 2023 highlights • Sales and Adj. EBITA impacted by the anticipated lower consumer demand and
Slide 12: Adj. EBITA margin improvement driven by increased sales and productivity measures
Adj. EBITA margin improvement driven by increased sales and productivity measures, partly offset by cost inflation Group Adj. EBITA margin1 12 1. Excluding restructuring costs, acquisition-related charges and other one-time charges and gains © Koninklijke Philips N.V.
Slide 13: Productivity initiatives delivered EUR 190 million in the quarter
Productivity initiatives delivered EUR 190 million in the quarter; EUR 2.0 billion expected in the 2023-2025 period Productivity initiatives1 (in millions of EUR unless otherwise stated) 2023 -2025 target Q1 2023 actuals • Simplified operating model with reduction of 10k roles Operating • R&D priori
Slide 14: Resolving the recall for patients remains our highest priority
Resolving the recall for patients remains our highest priority 2023 Q1 2023 2023-2025 Finalize recall and testing >95% production of recall units1; vast Manage impact of proposed majority have been sent to patients and Consent Decree home care providers Recorded a EUR 575 million provision in Manage
Slide 15: Execution with decisive action as key value driver
Execution with decisive action as key value driver Enabled by culture of accountability and strong HealthTech capabilities Patient safety and quality Reliable end-to-end Simplified as highest priority supply chain operating model Culture, accountability, End-to-end value chain End-to-end, Competenci
Slide 16: Patient safety and quality as highest priority
Patient safety and quality as highest priority Examples of our progress in Q1 2023 Established a new Patient Safety Advisory Board to strengthen the voice of the patient Patient safety Added Design Controls capabilities and talent in Systems Engineering and Software Design teams and quality as highe
Slide 17: Towards a reliable end-to-end supply chain
Towards a reliable end-to-end supply chain Examples of our progress in Q1 2023 Moved to customer centric end-to-end supply chain teams aligned to the businesses Reliable end-to-end Majority of new leadership roles appointed1 supply chain 126 PCBAs redesigns completed vs 56 year-end 2022 800+ reduced
Slide 18: Simplified, more agile operating model
Simplified, more agile operating model Reinvigorating patient and people-centric culture Examples of our progress in Q1 2023 Established the new operating model with businesses with clear end-to-end accountability Simplified Established an end-to-end Enterprise Informatics organization operating mod
Slide 19: Financial appendix
Financial appendix © Koninklijke Philips N.V.
Slide 20: Working capital and inventories
Working capital and inventories Group working capital1 Group inventories (in millions of EUR unless otherwise stated) as % of LTM sales2 (in millions of EUR unless otherwise stated) as % of LTM sales2 Diagnosis & Treatment Connected Care Personal Health 2,000 19.1% 24% 16.9% 17.5% 15.1% 15.9% 1,500
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 31 March 2023 (in billions of EUR unless otherwise stated) Long-term debt 1 • Total net debt position of EUR 7.0 billion, flat quarter on quarter Short-term debt2 Unutilized st
Slide 22: Capital expenditures, Depreciation and Amortization
Capital expenditures, Depreciation and Amortization in millions of EUR unless otherwise stated Q1 2022 Q1 2023 FY 2021 FY 2022 Capital expenditures on property, plant and equipment 92 72 397 444 Capitalization of development costs 89 69 370 363 Depreciation 170 172 630 711 Amortization of acquired i
Slide 23: Restructuring, acquisition-related charges and other items
Restructuring, acquisition-related charges and other items in millions of EUR unless otherwise stated Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Q1 2023 Diagnosis & Treatment 1 7 (124) (85) (201) (68) Res tructuri ng & Acq.-rel a ted cha rges 1 7 (5) (25) (22) (67) 3 5 Other i tems - - (120) (60) (180) (1
Slide 24: 2023 financial outlook
2023 financial outlook Provided on January 30, 2023 • Mid-single-digit growth in Diagnosis & Treatment and Connected Care Comparable Sales Growth • Low-single-digit growth in Personal Health Low-single-digit • Guidance at Group level reflects uncertainties in external environment • Productivity and
Slide 25: Restructuring, acquisition-related charges and other items in 2023
Restructuring, acquisition-related charges and other items in 2023 • Driven by 10k roles reduction program resulting from operating model simplification, of which Restructuring costs ~70% implemented by end of 2023 ~300 bps • S&RC rightsizing Acquisition-related charges • Post-merger integration cos
Slide 26: PHILIPS
PHILIPS 714 +N a I, Ne
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