Profits rise, margins strengthen as Philips maintains guidance
By Josh White
Date: Tuesday 04 Nov 2025
(Sharecast News) - Royal Philips reported higher third-quarter profit and stronger-than-expected margins on Tuesday, as solid demand in North America and productivity gains helped offset the impact of tariffs and softer trading elsewhere.
The Dutch medical technology company said group sales rose 3% on a comparable basis to €4.3bn, while comparable order intake climbed 8%, driven by hospitals and health systems in the United States.
Adjusted EBITA increased to €531m from €516m a year earlier, with the margin expanding by 50 basis points to 12.3% of sales.
Income from operations was €330m.
Chief executive Roy Jakobs said the company was maintaining its "momentum" through AI-powered innovations and tighter cost control.
"We drove strong order intake and accelerated sales growth, with sustained strength in North America," he said.
"We expanded margin through innovation, focused execution and cost discipline, remaining firmly on-track as we navigate an uncertain macro environment including tariffs."
Philips said its improved profitability reflected both higher sales and efficiency measures under its three-year €2.5bn productivity programme, which remained on schedule to deliver €800m of savings in 2025.
Operating cash flow reached €327m, while free cash flow rose to €172m.
Segment-wise, the Connected Care division posted a 5.1% increase in comparable sales and a 410-basis-point rise in margin to 11.4%, helped by new hospital partnerships in California.
The Personal Health unit, which makes electric shavers and toothbrushes, grew sales by 10.9%, with its margin improving to 17.1%.
Diagnosis and Treatment rose 1.3% but was constrained by tariffs and slower scanner demand.
Jakobs said recent investments in the company's supply chain had helped cushion tariff effects in the US and China.
"Every dollar, euro or renminbi spent on tariffs is not spent on patients," he told reporters, warning that healthcare systems were "under enough pressure" already.
The CEO acknowledged that Philips was facing regulatory scrutiny in the US, where the Food and Drug Administration recently warned three manufacturing sites over quality standards.
The company said it was addressing the issues, adding that patient safety remains its top priority.
Philips reaffirmed its full-year 2025 guidance for 1% to 3% comparable sales growth and now expects its adjusted EBITA margin to come in at the upper end of the 11.3% to 11.8% range.
The outlook excluded any impact from ongoing proceedings linked to its Respironics sleep-device recall and related US Department of Justice investigation.
At 1025 CET (0925 GMT), shares in Koninklijke Philips were up 1.18% in Amsterdam at €23.99.
Reporting by Josh White for Sharecast.com.
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