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Koninklijke Philips N.V. PHG reported earnings of €0.08 cents per share in the first quarter of 2025, which increased from the year-ago quarter’s loss of €1.07 per share.
The company’s sales decreased 1% on a year-over-year basis to €4.1 billion.
Comparable sales declined 2% year over year, including a double-digit decline in China. The 1% growth in Personal Health was more than offset by a 4% decline in Diagnosis & Treatment on the back of a high comparison base. Connected Care sales were in line with the prior year.
Further, Philips’ comparable order intake increased 2% year over year in the reported quarter despite a double-digit decline in China.
Koninklijke Philips N.V. Price, Consensus and EPS Surprise
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Sales declined 4% year over year on a comparable basis in growth geographies. Growth geographies primarily decreased as a result of a double-digit decline in China and a high comparison base in Diagnosis & Treatment. The decline was partly offset by an increase in other Growth geographies.
Comparable sales in Mature geographies declined 2% year over year, mainly due to a high comparison base in Diagnosis & Treatment.
PHG’s Segmental Update
Diagnosis & Treatment revenues declined 3% year over year from the year-ago quarter to €1.96 billion. Comparable sales declined 4% year over year, primarily due to a double-digit decline in China, which was offset by strong growth in other regions. While Image Guided Therapy saw solid growth, it was offset by a decline in Precision Diagnosis.
Connected Care revenues increased 1.5% year over year to €1.18 billion. Comparable sales were flat from the year-ago quarter.
Personal Health revenues grew 3% year over year to €811 million. Comparable sales increased 1%, despite a double-digit decline in China, mainly driven by strong growth across the International Region and slight growth in the United States.
Other segment sales amounted to €140 million, down 10.8% on a year-over-year basis.
PHG’s Operating Details
Gross margin expanded 130 basis points (bps) on a year-over-year basis to 45.1% in the reported quarter.
General & administrative expenses, as a percentage of sales, were 3.9%, which expanded 60 bps on a year-over-year basis. Moreover, selling expenses were flat year over year at 26.5%. Research & development expenses increased 100 bps to 11.2%.
Restructuring, acquisition-related and other items amounted to a net gain of €143 million compared with €1,139 million a year ago.
Operating model productivity, procurement and other productivity programs delivered savings of €42 million, €46 million and €59 million, respectively. This resulted in total savings of €147 million.
Phillips’ adjusted EBITA — the company’s preferred measure of operational performance — declined 8.8% year over year to €354 million. EBITA margin contracted 80 bps on a year-over-year basis to 8.6% in the reported quarter.
Diagnosis & Treatment’s adjusted EBITA margin expanded 30 bps on a year-over-year basis to 9.5%.
Connected Care’s adjusted EBITA margin was 3.5% in the reported quarter, which contracted 290 bps year over year.
Personal Health’s adjusted EBITA margin remained in line on a year-over-year basis at 15.2%.