Koninklijke Philips (PHIA) Q2 2026 earnings summary

Executive summary

• Comparable sales grew 4% year-over-year in Q2 2026, with all business segments contributing and Personal Health leading; nominal sales reached EUR 4.4 billion.

• Adjusted EBITA/EBITDA margin rose to 16.4% in Q2, driven by a US tariff refund; underlying margin was 12.2% due to cost inflation and higher tariffs.

• Free cash flow for Q2 was EUR 222 million, supported by the tariff refund; leverage ratio improved to 1.8x.

• Productivity initiatives delivered EUR 132 million in Q2 savings, EUR 258 million year-to-date.

• Order intake declined 1% in Q2 due to timing of large Monitoring orders, but the order book remains at record levels.

Financial highlights

• Q2 2026 sales: EUR 4,360 million, up 4% year-over-year on a comparable basis.

• Adjusted EBITA: EUR 717 million (16.4% margin, +400 bps); excluding US tariff refund: EUR 530 million (12.2% margin, -20 bps).

• Free cash flow: EUR 222 million in Q2; net debt at EUR 5.7 billion, leverage ratio improved to 1.8x.

• Net income: EUR 386 million, up from EUR 240 million in Q2 2025.

• EUR 132 million in productivity savings delivered in Q2; EUR 258 million year-to-date.

Outlook and guidance

• Full-year 2026 comparable sales growth outlook reiterated at 3%-4.5%.

• Adjusted EBITA margin guidance raised to 13.5%-14.0% (including US tariff refund); underlying margin expected at 12.5%-13.0%.

• Free cash flow guidance raised to EUR 1.5-1.7 billion (including tariff refund); underlying FCF EUR 1.3-1.5 billion.

• Q3 sales growth expected at the lower end of the range due to China and ultrasound.

• Outlook excludes ongoing Respironics-related legal proceedings.