Q1 2018 results

Amsterdam, April 23, 2018

Philips reports Q1 sales of EUR 3.9 billion, with 5% comparable sales growth; net income from continuing operations of EUR 94 million, and Adjusted EBITA margin increased 130 basis points to 8.7%

Financial summary

• Sales in the quarter were EUR 3.9 billion, with comparable sales growth of 5%
• Comparable order intake increased 10% compared to Q1 2017
• Net income from continuing operations was EUR 94 million, which includes higher restructuring and acquisition-related charges and bond redemption costs of EUR 52 million, compared to EUR 128 million in Q1 2017
• Adjusted EBITA margin improved by 130 basis points to 8.7% of sales, compared to 7.4% of sales in Q1 2017
• Operating cash inflow totaled EUR 92 million

Sustainability highlights

• At the World Economic Forum Annual Meeting in Davos, Switzerland, CEO Frans van Houten cemented Philips’ 2020 commitment to the Circular Economy by pledging to take back and repurpose all large medical systems that its customers are prepared to return to Philips.
• Lives Improved increased to 2.21 billion, driven by all segments, with strong growth in China, India and North America.
• Green Revenues increased to 58.2% of sales (56.4% in Q1 2017), Circular Revenues to 11.3% (9% in Q1 2017).
• Philips started receiving power from the Dutch wind farm Bouwdokken – a landmark achievement resulting from a unique green energy purchasing consortium established together with AkzoNobel Specialty Chemicals, DSM and Google.

Business highlights

Diagnostic Imaging launches

As part of Philips’ new introductions to drive growth in Diagnostic Imaging, the company launched the Ingenia Elition, a new 3.0T MRI solution which offers superb image quality while performing exams up to 50% faster. In the US, Philips received FDA 510(k) clearance to market ProxiDiagnost N90, its latest digital X-ray system designed for low dose, high image quality and fast workflows.

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Expansion of Ultrasound business

The expansion of the Ultrasound business beyond its core strength in cardiac ultrasound into attractive adjacencies continues to be successful. For example, the new OB/GYN ultrasound innovations that Philips introduced in 2017 for its EPIQ and Affiniti ultrasound systems drove the strong double-digit growth in comparable order intake for the business in the quarter.

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Solutions deals in Canada

Leveraging its expertise in cardiology, Philips provided the University of Ottawa Heart Institute, the largest heart center in Canada, with image-guided therapy and patient monitoring solutions. Also in Canada, Philips provided image-guided therapy solutions to Royal Victoria Regional Health Centre.

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Trial supports benefits of iFR-guided strategy

Philips’ Image-Guided Therapy Devices continued its strong momentum, supported by a growing amount of clinical data. The recent results of the DEFINE FLAIR trial demonstrated that an iFR-guided strategy reduces costs, improves patient comfort compared to an FFR-guided strategy, and delivers consistent patient outcomes.

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FocusPoint application for patient monitoring solutions

To expand its leadership in patient monitoring solutions, Philips launched FocusPoint, a web-based operational performance management application for its patient monitoring solutions. The application aggregates, processes and stores statistical and alert information, which are presented on a dashboard for optimal management of the technology.

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IntelliSpace Portal: 2018 Best in KLAS

Highlighting Philips’ leadership in Healthcare Informatics, IntelliSpace Portal, Philips’ advanced data integration, visualization and analysis platform, has been named 2018 Category Leader in the Advanced Visualization category in the 2018 Best in KLAS: Software & Services report.

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Driving growth through innovations

In line with Philips’ focus on innovations, the company launched the new Philips Sonicare ProtectiveClean power toothbrush in North America, with further roll-out planned in the coming quarters. Furthermore, Philips introduced the Philips OneBlade Face + Body, its latest innovation in male grooming technology, in the US, UK, France and Canada.

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New developments in sleep and respiratory care

Building on the success of Philips’ integrated Dream Family, the company introduced the DreamWear Full Face mask, the third option available for its award-winning DreamWear mask system. Helping drive clinical education in its growth geographies, Philips opened South-East Asia’s first Sleep and Respiratory Education Center in Singapore to train healthcare professionals from across the region to better diagnose and treat sleep and respiratory disorders.

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