Koninklijke Philips N.V.

What they do

Philips operates through three main segments: Diagnosis & Treatment, Connected Care, and Personal Health. The company develops and sells medical imaging systems, ultrasound, image-guided therapy devices, patient monitoring, respiratory care (including ventilators), and consumer health products like oral care and personal grooming. It also provides software and services for hospitals and healthcare providers.

Revenue drivers

• Diagnosis & Treatment — Largest segment, includes imaging systems (MRI, CT, ultrasound) and image-guided therapy; generates the majority of revenue.
• Connected Care — Includes patient monitoring, respiratory care, and emergency care; revenue supported by recurring software and services.
• Personal Health — Consumer products such as oral care, grooming, and mother & child care; segment contributes steady cash flow.

Recent performance

In 2025, group sales amounted to EUR 18.1 billion, an increase of 1% compared to 2024. Comparable sales grew 1% in 2025, with Diagnosis & Treatment growing low-single-digit and Connected Care declining low-single-digit. Adjusted EBITA margin improved to 11.5% in 2025 from 10.5% in 2024, driven by productivity and mix. Free cash flow improved to EUR 0.9 billion from EUR 0.4 billion in 2024.

Strategy

Philips is focused on executing its multi-year productivity program to improve margins and reduce costs. The company continues to invest in innovation across its core segments, particularly in image-guided therapy and patient monitoring. Philips is also driving recurring revenue through software and services, and has been actively divesting non-core assets. Management emphasizes safety and quality, particularly in the ongoing Respironics field action.

Risks

• Respironics litigation and remediation — Ongoing consent decree, field action, and litigation costs continue to weigh on results and cash flow; further charges possible.
• China demand slowdown — Uncertainty in the Chinese healthcare market could pressure sales in both Diagnosis & Treatment and Connected Care.
• Supply chain and inflation — Persistent cost inflation and component shortages may impact margins if not fully offset by pricing or productivity.
• Competitive pressure — Intense competition from GE HealthCare and Siemens Healthineers could affect market share and pricing power.

Outlook

Management expects 2026 comparable sales growth of 1-3%, with adjusted EBITA margin expansion to 12-13%. They project free cash flow of around EUR 1 billion for 2026. The company anticipates continued improvement in the Respironics field action and expects to benefit from new product launches and productivity savings.