Koninklijke Philips N.V. - ADR

Tariff Impact and Mitigation Efforts: Philips is forecasting a net impact of €250 million to €300 million from tariffs in 2025, primarily affecting the Personal Health and Diagnosis & Treatment segments due to high US-China trade flows. The company is implementing several mitigation strategies including inventory management, pursuing exemptions, and leveraging productivity savings to offset these costs.

Sales Growth Outlook: The company has maintained its full-year sales growth outlook at 1% to 3%. Q1 performance exceeding expectations was driven by strong Personal Health growth and an increase in order intake in North America, despite a double-digit decline in China. The outlook for Q2 remains modestly improved compared to Q1, with continued strength anticipated in the international markets.

Segment Performance: Personal Health returned to growth with a 1% increase in sales, primarily in Europe and other growth markets, while China continued to see a double-digit decline as expected. Diagnosis & Treatment experienced a 4% decrease in comparable sales, mainly due to a high comparison base from the previous year and lower demand in China.