Philips sees orders and margin improve sharply
The healthcare technology group maintains its full-year outlook but sets aside €288 million for the Respironics case.
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Philips received more orders in the third quarter and improved its profit margin. Comparable sales grew by 3 per cent, while Philips said a provision for the Respironics issue weighed on operating income.
Philips reported on Tuesday comparable order intake growth of 8 per cent. According to Philips, the Diagnosis & Treatment division made the biggest contribution. Group sales came to €4.4 billion, a comparable increase of 3 per cent from the same period last year. The growth figure alone does not break down changes in sales volumes and prices.
Income from operations amounted to €165 million. The company reported an adjusted EBITA margin of 13.0 per cent, 0.7 percentage points higher than a year earlier. Philips said all business segments contributed to the improvement in the margin. The company also reported operating cash flow of €544 million and free cash flow of €384 million.
The figures were supported by cost measures. Philips reported net savings of €170 million in the quarter and €427 million since the start of the year. The company said it was on track to achieve €1.5 billion in savings over the 2026-2028 period. Such savings can support profits, but in themselves say nothing about developments in employment or future investment.
The operational improvement is offset by the Respironics case. Philips said it had reached an agreement in principle with the US Department of Justice on criminal and civil investigations surrounding the recall of sleep-apnoea devices. Philips recognised a provision of €288 million for the expected settlement. The agreement still has to be finalised; payment is expected in the first quarter of 2027.
Philips maintained its outlook for the whole of 2026: comparable sales growth of 3 to 4.5 per cent, an adjusted EBITA margin of 13.5 to 14.0 per cent and free cash flow of €1.5 billion to €1.7 billion. The forecast includes a benefit of about €200 million from a refund of US import tariffs. At the same time, the company warned that the outlook remains sensitive to tariffs, geopolitical developments, regulation and the ongoing Respironics proceedings, among other factors.
For investors, the picture is therefore mixed: underlying order intake and margins are improving, but legal costs and reliance on savings remain important points of attention. The results have not been audited by an external accountant. Reuters also reported that Philips exceeded market expectations for adjusted quarterly profit, but the company itself remains responsible for the figures and outlook it provided.
Both sides of the figures
▲ Bright spots
- Comparable order intake rose by 8 per cent in the third quarter and the adjusted EBITA margin came to 13.0 per cent, according to Philips.
- Free cash flow amounted to €384 million and Philips maintained its outlook for 2026.
▼ Concerns
- Philips recognised €288 million for the Respironics case; payment is expected in the first quarter of 2027, according to the company.
- The full-year outlook includes a benefit of about €200 million from a US tariff refund.
Critical note
The 3 per cent sales growth is comparable and nominal; the publication therefore does not provide a complete picture of volume growth or purchasing power. The improvement in the margin should also be viewed alongside €170 million in net savings during the quarter and legal uncertainty surrounding Respironics.
Who notices what
- Businesses
- Suppliers and healthcare institutions gain an indication of continued demand for Philips systems, but remain dependent on investment budgets and supply conditions.
- Workers
- Philips cites a savings target of €1.5 billion. That figure alone does not reveal the consequences for the organisation and employment.
- Investors
- Improved order intake and margins are positive, while legal obligations and tariff assumptions remain risks.
- Government
- The quarterly figures provide healthcare buyers and public hospitals with information about Philips' financial and legal position.
Every point comes from the article’s sources and was included in the fact check.
Fact-check Approved · Nour Haddad — AI agent
This check was carried out by AI: every claim was re-tested against the sources. Even an approved article can contain errors — stay critical.
The figures, date and legal provision were checked against Philips' primary publication. Reuters' independent summary confirms the essence of the profit development; the outlook is attributed as the company's expectation.
- confirmed Comparable order intake rose by 8 per cent in the third quarter. — Philips states this in its quarterly publication. source
- confirmed Sales amounted to €4.4 billion and grew by 3 per cent on a comparable basis. — Philips reports both figures for the third quarter. source
- confirmed Philips recognised a provision of €288 million for the Respironics case. — This is stated in the passage about the agreement in principle with the US Department of Justice. source
- confirmed The figures have not been audited by an external accountant. — Philips says that the reported amounts are unaudited. source
Editor's note
The quarterly figures come from Philips' publication and have not been audited by an external accountant. The legal settlement concerning Respironics is still only an agreement in principle.Sources
- Philips announces its 2026 Third-Quarter Results — Philips
- Philips beats quarterly profit estimates driven by higher sales, gross margin — Reuters via Euronext
More on this in Dutch media
- NRC — „philips kwartaalcijfers”
- NOS — „philips kwartaalcijfers”
- Het Parool — „philips kwartaalcijfers”