Netherlands Philips Second Tender

Philips delivers Q2 sales of EUR 4.2 billion with 9 comparable sales growth net income amounts to EUR 153 million and Adjusted EBITA margin improves 280 basis points to 12.6 company announces EUR 1.5 billion share buyback program Second-quarter highlightsGroup sales increased to EUR 4.2 billion with 9 comparable sales growthComparable order intake decreased 15 with strong double-digit growth in the Diagnosis Treatment businesses and a decline in the Connected Care businesses on the back of COVID-19-related 167 growth in Q2 2020Income from continuing operations decreased to EUR 65 million due to a EUR 250 million provision related to field actions to address a component quality issue. Income from continuing operations was EUR 195 million in Q2 2020.Adjusted EBITA increased to EUR 532 million or 12.6 of sales compared to EUR 390 million or 9.8 of sales in Q2 2020Operating cash flow amounted to EUR 332 million compared to EUR 446 million in Q2 2020Free cash flow was EUR 167 million compared to EUR 212 million in Q2 2020 Frans van Houten CEOWe have mobilized the necessary resources across the company to address the component quality issue in certain of our sleep and respiratory care products. We fully understand the impact that this is having on patients as their well-being is at the heart of everything we do at Philips. We are in discussions with the relevant regulatory authorities to obtain authorization to start deploying the repair kits and replacement devices that we are producing.I am pleased with the good performance momentum in all our businesses except the Sleep Respiratory Care business as we delivered a strong 9 comparable sales growth and 280 basis points profitability improvement for the Group in the quarter. I am particularly encouraged by the 29 order intake growth in our Diagnosis Treatment businesses as well as the strong growth of our Personal Health businesses.In the quarter we introduced exciting innovations such as the new Spectral CT 7500 to help improve disease characterization and reduce rescans and follow-ups. The integration of BioTelemetry and Capsule Technologies is proceeding well and our customers appreciate the expanded portfolio of end-to-end patient care management solutions from the hospital to the home. We entered 12 new long-term strategic partnerships building on the strength of our portfolio and demonstrating the trust hospital leaders have in our ability to enhance health outcomes and lower the cost of care while improving patient and staff experience.Confident in our strategy and financial trajectory we are launching a new share buyback program of EUR 1.5 billion in line with our balanced capital allocation policy.Looking ahead while we continue to see uncertainty related to the impact of COVID-19 across the world and electronic component shortages our financial outlook remains within our guided range with low-to-mid-single-digit comparable sales growth and an Adjusted EBITA margin improvement of 60 basis points expected for the Group in 2021. Business segment performanceThe Diagnosis Treatment businesses recorded 16 comparable sales growth with double-digit growth in all businesses. Comparable order intake increased 29 with strong double-digit growth in Image-Guided Therapy Ultrasound and Diagnostic Imaging. The Adjusted EBITA margin increased to 13.2 mainly driven by sales growth and productivity measures. Comparable sales in the Connected Care businesses decreased 16 as mid-single-digit growth in Hospital Patient Monitoring was more than offset by a double-digit decline in Sleep Respiratory Care. Comparable order intake decreased significantly following the steep COVID-19-related increase in Q2 2020. The Hospital Patient Monitoring business continues to perform well above 2019 levels. The newly acquired BioTelemetry and Capsule Technologies businesses continue to deliver strong sales growth with increasing profitability. The Adjusted EBITA margin amounted to 11.3 mainly due to the impact in the Sleep Respiratory Care business.The Personal Health businesses recorded a strong comparable sales growth of 33 driven by double-digit growth across all businesses. The Adjusted EBITA margin increased to 17.0 mainly driven by sales growth and productivity measures partly offset by investments in advertising promotion.Philips ongoing focus on innovation and partnerships resulted in the following highlights in the quarterIn China Philips signed a contract with Gansu Provincial Maternity and Child Care Hospital to streamline and advance the delivery of critical care across multiple departments of the hospital. Philips will provide its advanced critical care information system patient monitoring solutions and diagnostic cardiology solutions.Building on their successful cooperation in MR-guided adaptive radiation therapy Philips and Elekta deepened the partnership to advance personalized cancer care through precision oncology solutions to deliver more precise therapy shorter treatment times and lower cost of care.Philips introduced the Spectral CT 7500 system which delivers high-quality spectral images for a broad patient base including cardiac pediatric and bariatric patients further expanding the companys comprehensive CT portfolio which comprises spectral and conventional CT systems as well as radiation oncology CT systems and advanced informatics and services.Philips launched IntraSight Mobile which offers users in hospitals and office-based labs the integration flexibility and affordability of a single mobile system for intravascular imaging physiology measurements and co-registration for seamless workflows and enhanced patient care. Building on the success of IntraSight the launch will further reinforce Philips leading position in image- guided therapy.