Koninklijke Philips (PHIA) Q1 2026 earnings summary

Executive summary

• Q1 2026 saw 6% order intake growth and 4% comparable sales growth, with all segments contributing and Personal Health leading; group sales reached EUR 3.9 billion.

• Adjusted EBITA/EBITDA margin improved by 40 basis points to 9.0%, marking the sixth consecutive quarter of margin expansion, supported by innovations and productivity gains despite higher tariffs and cost inflation.

• Strategy execution focused on value creation, innovation-driven growth, and disciplined execution, with North America as a key growth engine.

• Free cash flow reached EUR 28 million, with leverage ratio improving from 2.2x to 1.8x year-over-year.

• Full-year guidance reiterated despite macroeconomic volatility and ongoing geopolitical risks.

Financial highlights

• Q1 2026 sales were EUR 3,905 million, up 4% on a comparable basis from Q1 2025.

• Adjusted EBITA was EUR 353 million, with margin at 9.0%, up 40 bps year-over-year.

• Net income reached EUR 146 million, mainly due to operational improvements and lower restructuring charges.

• Free cash flow was EUR 28 million, up EUR 94 million excluding last year’s settlement payout.

• Earnings per share (diluted) from continuing operations was EUR 0.16, up from EUR 0.09 year-over-year.

Outlook and guidance

• Full-year 2026 outlook reiterated: comparable sales growth of 3%-4.5%, adjusted EBITA margin of 12.5%-13.0%, and free cash flow of EUR 1.3-1.5 billion.

• All business segments expected to grow within the range, with Diagnosis & Treatment at the lower end and Connected Care and Personal Health at the upper end.

• Guidance excludes potential IEEPA tariff refunds and ongoing Respironics-related proceedings.

• Margin pressure anticipated in Q2 due to tariffs and inflation, with mitigation actions back-end loaded.

• China sales expected to be stable, with Personal Health growth offsetting a slight decline in health systems.