Philips Q1 Income, Comparable Orders Rise; Cuts FY25 Margin View On Tariffs, Backs Sales Forecast

Philips Electronics

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(RTTNews) - Dutch consumer electronics giant Koninklijke Philips N.V. (PHGFF.PK, PHG) reported Tuesday growth in first-quarter income from operations, while adjusted EBITA margin and comparable sales dropped from last year.

However, the comparable order intake increased 2 percent, primarily driven by strong performance in North America, offsetting a decline in China. Further, Philips trimmed its fiscal 2025 margin outlook to include the assumed impact of currently announced tariffs, but maintained sales forecast.

In the first quarter, the company reported that income from operations increased to 154 million euros.

Adjusted EBITA margin, meanwhile, decreased 80 basis points to 8.6 percent, mainly due to the decline in sales, partly offset by higher gross margins from innovations and productivity measures.

Group sales were 4.1 billion euros. Group comparable sales decreased 2 percent, reflecting double-digit declines across all segments in China and a high comparison base in Diagnosis & Treatment globally.

Looking ahead, for fiscal 2025, the company now expects adjusted EBITA margin range to be 10.8 percent to 11.3 percent, , a 100 basis points reduction from the previous outlook. The revised outlook includes an estimated net tariff impact of 250 million euros to 300 million euros after substantial tariff mitigations.

Free cash flow will be slightly positive for the full year, after the payout of 1.025 billion euros Philips Respironics recall-related medical monitoring and personal injury settlements in the US.

Further, Philips' outlook for comparable sales growth remains unchanged at 1 percent to 3 percent.

The company continues to anticipate 2025 performance will be skewed toward the latter part of the year, with Q2 showing modest improvement from Q1.

The company said the outlook excludes ongoing Philips Respironics-related proceedings, including the investigation by the US Department of Justice.

Philips added that the assumed impact of tariffs includes current bilateral US-China and rest of world tariffs, the resumption of the paused US tariffs on July 9 and excludes potential wider economic impact.

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