Koninklijke Philips N.V. - ADR

Top-line & profitability (solid, “in line” with expectations): - Q2 comparable sales: +4% YoY (growth across all segments). - Adjusted EBITA margin: 16.4%, including a tariff refund benefit. - Underlying (ex tariff refund) EBITA margin: 12.2%; management cited higher tariffs/cost inflation as headwind, partially offset by productivity. - Free cash flow (FCF): EUR 222m inflow, also including tariff refund.

Full-year outlook reiterated + lifted for FCF/reported metrics via tariff refund: - Comparable sales growth outlook (FY 2026): reiterated 3%–4.5% (mid-term confidence; first half on track). - Underlying adjusted EBITA margin outlook (FY 2026): unchanged at 12.5%–13% ex tariff refund. - Including tariff refund: implies 13.5%–14%. - Q3 margin expectation: below prior year, mainly due to cost inflation and unfavorable mix; benefits from productivity/mitigation expected to increase later in the year. - FCF guidance: reported EUR 1.5bn–1.7bn including tariff refund; underlying EUR 1.3bn–1.5bn excluding it.

Orders & demand signals (good momentum, but timing noise in Q2): - Rolling 12-month order intake: +5% (resilience; customer demand for innovations described as healthy). - Q2 order intake: -1% mainly due to Monitoring orders shifting to Q3 (did not indicate demand deterioration). - Equipment order book: record level → supports visibility. - Segment/order highlights: - D&T orders: low single digit growth (after double-digit in prior year). - Connected Care: Monitoring down (timing), but underlying demand said not deteriorating. - China remains a pressure point: Health systems weakness continues; Personal Health offsetting.