Philips lifts FY outlook as Q3 profit jumps

The Dutch health technology firm said adjusted earnings before interest, tax and amortisation rose to €457m from €209m in the same period a year earlier. Meanwhile, group sales increased 11% on a comparable basis to €4.5bn, driven by growth in all segments and geographies.

However, comparable order intake - which covers around 40% of group sales - was down 9%. Philips said this was mainly due to a high comparison base related to the exceptionally high levels in 2021, lower orders in China, and longer order lead times.

Based on the company’s improved performance year-to-date, the "strong" order book, and ongoing actions it is taking, Philips raised its outlook for the full year 2023. It now expects to deliver 6% to 7% comparable sales growth and an adjusted EBITA margin of 10% to 11% for the full year 2023, with free cash flow at the upper end of the target range of €0.7-0.9bn.

Previously, Philips had guided to mid-single digit sales growth and a high single digit profit margin.

Chief executive Roy Jakobs said: "Our improved operational performance was driven by our focus on execution to enhance patient safety and quality, strengthen our supply chain reliability and establish a simplified operating model. The order book remains strong, and we are taking the necessary actions to improve order intake by shortening lead times from order to delivery and building on the positive impact we are making with our innovations, for example in predictive data analytics and artificial intelligence across our portfolio, to help improve the quality and efficiency of care delivery.

"Based on our improved performance, we are further raising the outlook for both sales and profitability for the full year 2023, although recognizing uncertainties remain in an increasingly volatile geopolitical environment. The progress we are making reinforces our confidence in delivering on the three-year plan to create value with sustainable impact."