Koninklijke Philips N.V. Q1 FY2026 earnings call

1. Strong partnerships with Massimo are seen as net neutral and expected to continue. 2. Q1 had solid performance with margin expansion ahead of expectations. 3. Mitigation actions for cost inflation include doubling down on bill of material productivity, AI - enabled efficiencies, and selective pricing. 4. In EI, continued order uptake, healthy demand from cloud migration and integrated diagnostics, but sales are patchy due to order - sales lag and SaaS model impact. 5. Europe is performing well, with MR, D&T, PD showing good trends, Vrida launch has strong interest and first order, and ultrasound has good momentum. 6. China has distinct strategies with some segments where they have a right to play and win like MR, IGT, and others where they are deprioritizing due to competition.

1. Expect Q2 margins to be lower year - on - year due to tough tariff comparable and cost inflation mitigation timing. 2. Reiterate full - year guidance of 12.5% to 13% for adjusted EBITDA margin. 3. Confident in getting mitigation factors in the back end of the year to support margin. 4. Confident in reaching mid - teens adjusted EBITDA margin by end of 2028 based on current knowledge, though world is turbulent.

Q: About the mitigation initiative on pricing, which segments have more leeway and speed of pricing initiatives contributing to margin?

A: Focus on segments with leading positions like image - guided therapy, hospital patient monitoring, some service contracts, and some timing materials. Some price increases will flow through in 2026 and some in 2027.

Q: On EI, why sales were down low single digits in Q1 and expectations for the rest of the year and mid - term?

A: Sales thrills orders in EI, customers migrating in or out cause hiccups due to business lumpiness, and orders going into SaaS model lead to patchy sales. But there's healthy demand from cloud migration, integrated diagnostics, and funnel is growing.

Q: On Q2 margin, is there a scenario where margin is within full - year guidance range?

A: Q2 margins are expected to be lower year - on - year, but confident in back - end mitigation to support margin.

Q: On long - term margin outlook and buffer for input cost, level of confidence?

A: Confident in getting to mid - teens adjusted EBITDA margin by end of 2028 based on current knowledge, with buffer taken into account.

Q: On BNT competitive outlook in Europe after United Imaging's ultrasound launch and Vrida's progress?

A: Europe is performing well, MR, D&T, PD have good trends, Vrida launch has strong interest and first order, ultrasound has good momentum in Europe.

Q: On inflation, how meaningful is incremental headwind and mitigation?

A: Incremental headwind in plastics, freight, but energy hedged for 2026. Q1 better than expected, tariff tailwinds, and additional mitigation activities like bill of material price reductions, freight optimization, and cost discipline. Reiterate full - year guidance.

Q: On China, areas where they can't win and deprioritizing?

A: Deprioritized DXR, value play in lowest price segment in China due to strong local competition.