Koninklijke Philips N.v. · EURONEXT:PHIA

Koninklijke Philips — Koninklijke Philips N.V. NY Registry Shares — Q1 2024 Earnings Presentation

25 slides from Koninklijke Philips's earnings presentation, Apr 29, 2024

  1. Slide 1: First quarter 2024 results

    First quarter 2024 results April 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 First quarter highlights and financial performance 4 2024 outlook 17 Financial appendix 20 3 © Koninklijke Philips N.V.

  4. Slide 4: Key takeaways

    Key takeaways • Results in line with the performance improvement plan driven by progress on three execution priorities • Significant progress in resolving the consequences of the Respironics recall: – Consent decree approved in court – Economic loss settlement approved in court – Reached an agreemen

  5. Slide 5: First quarter results in line with our performance improvement plan

    First quarter results in line with our performance improvement plan driven by strong focus on execution priorities Financial performance Highlights in millions of EUR unless otherwise stated Q1 2023 Q1 2024 • Sales growth against tough comparable base Sales 4,167 4,138 • OIT declined following excep

  6. Slide 6: Launched and expanded a range of leading AI-driven and sustainable innovations

    Launched and expanded a range of leading AI-driven and sustainable innovations Azurion neuro biplane AI-powered CT 5300 Helium-free MRI • Designed with leading interventionists to • Power of AI to enhance productivity and • Extended leadership with >1,100 systems accelerate stroke treatment clinical

  7. Slide 7: Delivering AI-enabled innovations to Nicklaus Children's Health System

    Delivering AI-enabled innovations to Nicklaus Children’s Health System to drive innovation in pediatric care • 10-year collaboration agreement with Nicklaus Children’s Health System in the US • Delivering AI-enabled technologies such as helium- free MRI, ultrasound, and monitoring solutions • Empowe

  8. Slide 8: Diagnosis & Treatment

    Diagnosis & Treatment Financial performance in millions of EUR unless otherwise stated Q1 2023 Q1 2024 Sales 2,010 2,026 Comparable Sales Growth 16% 3% Adj. EBITA margin 13.0% 9.2% Adj. EBITDA margin 15.4% 11.5% Income from operations 173 146 Q1 2024 highlights • Growth across Image Guided Therapy a

  9. Slide 9: Connected Care

    Connected Care Financial performance in millions of EUR unless otherwise stated Q1 2023 Q1 2024 Sales 1,226 1,164 Comparable Sales Growth 3% (1)% Adj. EBITA margin 1.7% 6.4% Adj. EBITDA margin 6.3% 11.5% Income from operations (717) (1,065) Q1 2024 highlights • Growth in Enterprise Informatics offse

  10. Slide 10: Personal Health

    Personal Health Financial performance in millions of EUR unless otherwise stated Q1 2023 Q1 2024 Sales 798 790 Comparable Sales Growth (6)% 3% Adj. EBITA margin 13.2% 15.2% Adj. EBITDA margin 16.0% 18.5% Income from operations 96 116 Q1 2024 highlights • CSG driven by growth in Personal Care • Mid-s

  11. Slide 11: Productivity initiatives to deliver EUR 2.0 billion in 2023-2025

    Productivity initiatives1 to deliver EUR 2.0 billion in the 2023-2025 period Q1 2024 To date Productivity initiatives savings1 in millions of EUR unless otherwise stated • Simplified operating model with reduction of 10k roles Operating • R&D prioritization, reduction of Corporate Research 55 551 Mo

  12. Slide 12: Adjusted EBITA margin improved as cost inflation was more than offset

    Adjusted EBITA margin improved as cost inflation was more than offset by productivity, pricing and higher royalty income Group Adj. EBITA margin1 in Q1 2024 (0.6)% 0.2% 3.2% (2.0)% 8.6% 9.4% 2 Adj. EBITA Volume Cost headwinds Productivity Other Adj. EBITA Q1 2023 and pricing Q1 2024 12 1. Excluding

  13. Slide 13: Absolute levels of order intake remain healthy

    Absolute levels of order intake remain healthy; growth outside China driven by North America Nominal Order intake1 Indexed order book2 development >10% Q1 2019 Q1 2021 Q1 2023 Q1 2024 Pre-supply chain crisis Q1 2024 Strong double- China anti- digit growth in corruption China campaign • OIT declined

  14. Slide 14: Philips Respironics Field Action

    Philips Respironics Field Action Progress to date Priorities ahead Remediation of sleep therapy devices almost complete; Finalize recall and testing ventilation ongoing FDA feedback received on testing and analysis for sleep therapy devices1 Reached agreement to resolve economic loss, personal DoJ i

  15. Slide 15: Execution with decisive action as key value driver

    Execution with decisive action as key value driver Examples of progress in Q1 2024 Patient safety and quality Reliable end-to-end Simplified as highest priority supply chain operating model Substantial improvement in CAPA Strengthened planning and delivery for Reduced workforce by >8.5K roles; closu

  16. Slide 16: 2024 outlook

    2024 outlook 16 © Koninklijke Philips N.V.

  17. Slide 17: Continued improvement in operational performance in 2024

    Continued improvement in operational performance in 2024, whilst acknowledging that uncertainties remain Comparable Sales Growth • All segments within the range 3 – 5% • Segment Other sales of EUR 550 – 580m Adj. EBITA margin • Margin improvement across all segments 11.0 – 11.5% • Segment Other Adj.

  18. Slide 18: Restructuring, acquisition-related charges and other charges

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

  19. Slide 19: Key takeaways

    Key takeaways • Results in line with the performance improvement plan driven by progress on three execution priorities • Significant progress in resolving the consequences of the Respironics recall: – Consent decree approved in court – Economic loss settlement approved in court – Reached an agreemen

  20. Slide 20: Financial appendix

    Financial appendix 20 © Koninklijke Philips N.V.

  21. Slide 21: Working capital and inventories

    Working capital and inventories Group working capital1 Group inventories in millions of EUR unless otherwise stated in millions of EUR unless otherwise stated as % of LTM sales2 as % of LTM sales2 23.1% 22.3% 22.1% 19.1% 3,000 15.7% 15.7% 14.9% 20.0% 4,500 20.1% 25% 12.2% 2,500 10.0% 15.0% 20% 3,500

  22. 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 31 March 2024 in billions of EUR unless otherwise stated Long-term debt1 • Total net debt position of EUR 6.3 billion 1.8 Short-term debt2 1.6 Unutilized standby & • Average te

  23. Slide 23: Capital expenditures, Depreciation and Amortization

    Capital expenditures, Depreciation and Amortization in millions of EUR unless otherwise stated Q1 2023 Q1 2024 Capital expenditures on property, plant and equipment 72 82 Capitalization of development costs 69 71 Depreciation 172 159 Amortization of acquired intangible assets 74 72 Amortization of s

  24. Slide 24: Restructuring, acquisition-related charges and Other items

    Restructuring, acquisition-related charges and Other items 1. Quality remediation actions | 2. Respironics running costs | 3. Provision in connection with Respironics litigation. | 4. Provision related to Respironics field-action; Provision connected to the consent decree| 5. Provision for a legal m

  25. Slide 25: Slide 25

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