Key Highlights

  • Order intake grew 8% and comparable sales grew 3%, led by Personal Health at 8% and Connected Care at 5%.
  • Adjusted EBITA Margin increased by 70 basis points to 13%, with margin expansion across all three segments.
  • Free Cash Flow was an inflow of EUR 384 million versus EUR 172 million, and adjusted EPS was EUR 0.40.
  • Adjusting items were EUR 353 million, including a EUR 288 million provision related to a Respironics DOJ settlement.

Group Results

Koninklijke Philips N.V. (NYSE:PHG), a health technology company, held its third quarter 2026 earnings call, hosted by Chief Executive Officer Roy Jakobs and the Chief Financial Officer. Order intake grew 8%, and equipment order intake grew 8%, building on an 8% increase in the prior-year quarter. Comparable sales grew 3% with growth across all regions.

Group adjusted EBITA margin increased by 70 basis points year over year to 13%, driven by higher sales, improved gross margin, a growing contribution from higher-margin innovations and productivity delivery, with a modest benefit from more favorable Tariff rates. Adjusted EPS increased more than 10% year over year to EUR 0.40.

Free cash flow was an inflow of EUR 384 million compared with EUR 172 million in the third quarter of 2025, driven by higher cash earnings and lower Working Capital outflows. Net financial expenses were EUR 42 million versus EUR 57 million. Adjusting items were EUR 353 million versus EUR 122 million, including the EUR 288 million Respironics provision; excluding it, adjusting items were EUR 65 million.

Segment Performance

In Diagnosis & Treatment, comparable sales were broadly flat, as mid-single-digit growth in Image-Guided Therapy offset a mid-single-digit decline in Precision Diagnosis, reflecting ultrasound shipment phasing and lower sales in China. Adjusted EBITA margin increased 50 basis points to 12.3%.

In Connected Care, comparable sales grew 5% and the adjusted EBITA margin increased 190 basis points to 13.3%. The prior-year margin included a 150 basis point gain from the remeasurement of a minority investment. Connected Care order intake declined at a mid-single-digit rate against a prior-year comparison of more than 20%.

In Personal Health, comparable sales grew 8% and the adjusted EBITA margin increased 60 basis points to 17.7%. Sales in the Other segment were EUR 179 million, up EUR 39 million, with an adjusted EBITA loss of EUR 12 million versus a loss of EUR 3 million.

Balance Sheet and Outlook

The productivity program delivered EUR 170 million of savings in the quarter and EUR 427 million year to date, against a EUR 1.5 billion target by the end of 2028. Philips closed the quarter with EUR 2.8 billion in cash and net Debt of EUR 5.4 billion, and the ratio of net debt to adjusted EBITA declined to 1.7x from 2.2x a year ago. In August it issued a EUR 650 million EU Green Bond.

Year to date, order intake is up 4% and comparable sales growth is 3.5%. The company reiterated its full-year outlook for comparable sales growth, adjusted EBITDA margin and free cash flow, and now projects full-year net financial expenses of EUR 230 million, down from EUR 240 million to EUR 260 million.

Items to Follow

Investors can follow the phasing of ultrasound sales into the fourth quarter and early 2027 after production ramped from late in the third quarter, along with the Respironics agreement in principle with the U.S. Department of Justice.

Management also pointed to the planned contribution of the BlueSeal Horizon helium-free MR platform to order intake from 2027, subject to regulatory approvals.