Koninklijke Philips N.V. - ADR

Sales and Order Growth: Philips reported a 1% increase in comparable sales and orders for both Q4 and the full year 2024. The performance was primarily driven by a 5% growth in the rest of the world, which was partially offset by a double-digit decline in China. The company anticipates comparable sales growth of 1% to 3% for 2025, with continued challenges in China leading to a mid- to high single-digit sales decline in that region.

Respironics Recall Resolution: Philips has made significant progress to address the consequences of the Respironics recall, which has impacted its financials. The company obtained final approval for medical monitoring and personal injury settlements, providing a clearer path moving forward. While challenges remain, the company is focused on improving operational execution and enhancing patient safety and quality.

Adjusted EBITA Margin Improvement: The adjusted EBITA margin improved to 13.5% in Q4 2024 and 11.5% for the full year, indicating a 90 basis points improvement year-on-year. Philips expects margin expansion of 30 to 80 basis points in 2025, driven by productivity improvements and strong investment in innovation, although Q1 is expected to see some margin pressure due to continued challenges in China.