PHG Koninklijke Philips

Leandro Mazzoni Head of Investor Relations
Frans van Houten CEO
Abhijit Bhattacharya CFO
Veronika Dubajova Goldman Sachs
Michael Jungling Morgan Stanley
Patrick Wood Bank of America
David Adlington JPMorgan
Hassan Al-Wakeel Barclays
Lisa Clive Bernstein
Ed Ridley-Day Redburn
Scott Bardo Berenberg
Max Yates Credit Suisse
Julien Dormois Exane BNB Paribas
Falko Friedrichs Deutsche Bank
Daniel Wendorff Commerzbank
Call transcript
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Welcome to the Royal Philips Third Quarter 2020 Results Conference Call on Monday the 19th October, 2020.

During the call hosted by Mr. Frans van Houten, CEO and Mr. Abhijit Bhattacharya, CFO, all participants will be in a listen-only mode. After the introduction, there will be an opportunity to ask questions. that available will website on Philips. note replay recorded of Please be will the Instructions] this be call and Royal [Operator investor relations will Mr. over I the to hand now conference Leandro of Mazzoni, Investor Head Relations. sir. ahead, Please go

Leandro Mazzoni

results growth, well Good Abhijit morning, ladies take as CFO, van I'm financials. our and the gentlemen. take Welcome more for Abhijit Frans higher and Bhattacharya. with CEO, highlights and call, the accelerated strategic the conference period. profitability we your cash for XXXX detail Frans you quarter, will for third flow our will as After that will to QX improved here Houten call. target Philips provide and quarter our questions. on On financial today's through XXXX, the then

release A and available this documents transcript Both website. were the slide this a.m. on day website. press are conference X end will and made information our Relations deck full CET Investor related available at published by be of morning. the call of on our Our

changes. mentioned acquisition-related items. COVID-XX orders adjusted our other defined adjusted growth assets, operations results charges, not are and income from an goodwill other and acquired portfolio EBITA amortization of for impairment intangible the release, of As as excluding and intangible sales as treated adjusting restructuring is The assets, press impact currency significant for costs in of Comparable is on and item.

the press hand With Frans. mentioned the over in business. to that, the also Finally, like Appliances targets would as release new exclude I Domestic to

Frans van Houten

medical are needs, we delivering we customer over. I'm pandemic are teams that that call care, the focused of ensuring our close partners, all you circumstances, and all our up are also and under health volumes on help our employees, meeting on safety of call COVID-XX is alike, to well. triple monitor are It's COVID-XX hope a we clear and what critical I of providers, safeguarding oriented create good suppliers and remains and collaboration far to patients. staff, treat, diagnose, patients performing pleased keeping and work In challenging And support duty healthcare ramped to as and morning COVID-XX at how for our with the Leandro. you with products from safe Thanks, solutions The and we And continuity. consumers and manage Philips. your the families the webcast. of priority business that of needs. us doing to continued respond customer rapidly propositions production have We've important to to top

QX strong by normalizing. growth for in Personal and financial Care patient XX% very order on XX% strong for growth grew Moving Overall to the gradually book, high grew fulfill of and demand X%. procedures to highlights. was comparable [ph]. court shipments a rebounding the sales converted monitors the successfully our Health respiratory Sales profitability we Care driven We quarter, consumer Connected volume elective as in delivered and Connected so the the order improve care.

X% XXX cash in in increasing communicated XXXX. market April in products monitors, by €XXX the declined systems. basis quarter third we than our market. share to in response driven equipment in XXXX Treatment Customer X% intake partial intake encouraging solutions the and And order the flow the innovative expect healthcare margin to very higher have professional and strongly HHS, million. in still the to from ventilators, tomography Adjusted portable excluding the grew XX.X% sequential positive. patient which termination Free contract & continued QX August. was quarter, - demand ultrasound the improvement XXXX. EBITA delivered Diagnosis we versus computer with Our of impact have but remains growth hospital quarter, increased Order points was unexpected was businesses Comparable the in for

continue see the around But modest our COVID-XX the and to and comparable adjusted impact the margin order with world. we book year level to to across an EBITA sales year to related ahead, we growth the of to of volatility XXXX. deliver continue last uncertainty expect full Looking is solid, for

quarter care feature software our capabilities. comprising combines like where responders. range on of new a therapeutic we the ICU Azurion and solutions consisting rapid Now configured launched to include in deployment provide servers, includes hospital monitoring several health I Also addressing configurations, leadership is is industry-leading our central care the allowing our would This new measurement deploy These unit, States ICU a the home and monitoring professionals. new to points professional and we further ICU to Building integrating exciting, XX respond complete patient of devices when for customer and that fully In new solution and and patient therapeutic deploy signs, general price portable remote support and needed. ALS. monitors, color management staff the care the in major needs platform, a advanced system hardware for additional XX defibrillators, capacity virtual some end-to-end on more The to vital United initiatives more equipment for innovative for monitoring monitor is intensive and that defibrillator. introduced Tempus kit the emergency ward ready patient called quickly solution a and a capabilities, emergency imaging. ramp-ups, kit a care, monitoring which to areas critical extensions care we to station. It's launched and

iFR/FFR, a switch hemodynamics of Xd can clinicians proven clinically and co-registration With state-of-the-art, modalities. imaging applications, IntraSight, CT smart physiology, IVUS comprehensive the imaging, and between new suite seamlessly informatics and including Azurion and easily

image-guided OmniWire, coronary procedures. systems, launched peripheral solid-core adding wire, artery system of removal industry-first portfolio therapy guide venous arterial first of peripheral devices and for from clots the pressure arterial and acquisition We treat the a also our blood thrombectomy implantable peripheral Vascular, systems, Moreover, artery other Intact venous an expanded industry and of device all-in-one we vessels QuickClear, disease. to the through an and to

customer We - continue businesses and to to market more productivity. patient our and provider partnerships comprehensive enhance deeper in care care drive share core improve through

new one the the Tampa the During in United in quarter Asia. announced key radiology monitors, interventional we partnership rooms. all with patient of imaging and Hospital, to labs We of General signed XX the largest States, Europe partnerships United long-term strategic multi-year in and replace the with third hospitals upgrade cath and a States hospitals technologies hospitals the

the solutions, we us new efficacy replacement every refill helps consumer battery a introductions switch broaden new level third to management and we Health, in proposition thereby on One In brush continue also capitalize their operational allowing in consumers invest three portfolio with unique the Philips is The our from One is We - optimal subscription door XX.XX on heads. and power health seamlessly to exciting United and launch new provide brush expand power head service at up toothbrushes, workflow for delivers an This entry the starts and battery-operated Philips offers product of Sonicare recovery by right segments. step services. and that keep ensures the US$ quarter, for which of performance innovation months. a toothbrush, track In also in Personal to routines that of to leading a opportunities. users States. oral at brushing, manual and The automatic

on times, working continue performance years. these for been hard While our progress strategic managing to we the our roadmap on we business coming uncertain during and have

continues, Our our to as drive transformation. journey to tech on leadership and deliver improve innovate growth, health we operational excellence,

we strongly care professionals, as Tele-ICU, into health resonates the Our telehealth continuum transform during community. increased validated see been help further like of well care with working crisis. care, tele-pathology, the virtual strategy Moreover, move along COVID-XX tele-radiology to in and has which solutions as can interest customers the

targets Capital and our are growth, improve our glad profitability in cash XXXX, virtually of flow Day in Markets with trends We be our will held higher with period with for long the fundamentals term growth We that that and to November. upcoming attractive market strategy. align announce play XXXX ahead segments, solid for accelerated

the years, to through continuum. of economy with innovation, businesses average with in comparable to This underpinned X%, per our to transformation imperatives and investments is strategic X% core anticipate and expect by expansion range. innovative these customer improve next health last acceleration X% assuming operational sales our we customer our all Building further that returns course growth our to business year. that and world annual the over around geographical along to markets partnerships, segments growth winning few on an the in growth We of year, grow more boost excellence, and solutions

for demand as is by but Treatment current comparable our view single from solid normalize EBITA in lower and COVID-XX growth spike teens We reaching XXXX, generated an low in XXXX growth, adjusted by by Health, For in deliver digit starting high sales XX offset will partly businesses annually to group margin of Care in XXXX. Connected improvement Diagnosis XXXX. XX sales, & these average and driven basis Personal demand that the points aim in

excellence to growth business profitability step Care XX% growth, a reach and to XX% Treatment Looking savings of resulting at This the Imaging, as driven reach leverage, above of telehealth & step the next delivering operating margin, further productivity up businesses up XX%. we to Diagnostic by investments reach Health like operational and in is years. in as increasing over to return expect informatics, XX% further EBITA XX% and Diagnosis in to profitability sizeable Connected well the adjusted segments, XX% Personal mentioned to

to up generation flow, XXXX. cash will improve and to teens above free mid organic this, of billion step to high ROIC to cash by will Next €X

performance our the that reflect the then, forward I'm we that fully meantime. the responsibly until are did in want proud on overall purpose-driven you it suspense reinforcing and Capital with a keep to But a roadmap discuss dialogue company, a sustainably. engaging strategic commitments Markets will with during more we Markets approach November to Xth. can Day to look business very investors to doing We Day. on during also not so as and integrated the share the detail in our We Capital very

we environmental consistently in raising our leadership bar. stakeholders, recognized the by Our responsibility and been is have

For ranked the XXXX over example, Philips companies list the of month, XXX world. publicly on sustainably two traded Street number Wall Journal earlier companies managed the in most this

announced this corporate commitments a all we execution strategy. Healthy program activities guide entire of spectrum XXXX our governance Sustainable XXXX, on environmental, the by And of our targets deliver and in across in to set out expect set our of and people, comprehensive We will of company's that the new targets social September, the end year. planet

be offset We communities. services are our will will eco the XXXX, including by enhancing global Philips to Paris by be By health emissions benefiting we line with million scenario set requirements. our All Agreement. our a powered year investments social ambitions it and to celsius design we will products with billion degree warming line And in them responsibility, completely designed a we renewable X.X reduce XX% to of where emissions, out X COX XXX by When energy. lives in XXXX, the underserved by cannot eliminate COX comes environmental projects. in people commit improving in

new in being gentlemen, a the in power responsible and XX% not of aspects from of it update quarter We into we make XX% gender status Domestic we of in. the XXXX. business divestment all to will reinforce our the of track XXXX, a to of us lives improve have text in me innovation. operate all process of current these together the governance, throughout Appliances goal also sustainable when world, but you diversity is the Separation and Bringing up our comes and positions countries framework purpose and end it help leadership also commit businesses. to also the expected Ladies by transparent single And in contributions completed third give set on the of an on senior XXXX. good will we be strengthen let only in

market the growth planned, are we we see parties increasing Appliances that returned a a with delivering in and round based positions. solid engage to leading to Domestic continue the interested good strong quarter third portfolio I'm pleased margins with started with business Abhijit. of innovations to off, To Philips And to robust is for of on our with the asset. has well is like margin interest to As consumer the positioned call needs plan systems, I'd to to underpinned. that and well and future of company health convinced profile very our employees. I'm health to gross turn next that, thankful is serve to also and the that and hospitals current over supporting and

Abhijit Bhattacharya

Thank you you, for and joining Frans today. thank all us

providing Let the me third comparable for color start with some the group. sales quarter on

demand X% in X-ray MR. back in Imaging the growth of volume strong of to of declined sales the & to the recover levels declined cardiac therapy by single sales digit, QX, lower X% diagnostic procedures continue declined installations end Image-guided point-of-care as Diagnosis devices volume COVID-XX of in installations strong with offset below quarter double-digit, tomography businesses growth lower by and sales Our was offset more on digit Treatment computed the declined being in quarter. the pre than the for elective QX, by close sales Ultrasound comparable XXXX. very Diagnostic low single in in of systems quarter.

Treatment grew to XXXX. gradually image-guided As of our business compared Services to digit a installations. same comparable businesses systems are decline in growth resuming for improved a period single a sales image-guided Sales in digit high therapy QX, to devices teens therapy our & digit low result, low low the for single delivered decline, sales hospitals single QX. as Diagnosis compared

remind the XX% our total XX% me businesses. services and strong of a recurring you for Treatment care grew driven patient revenue more that Care Diagnosis monitors of streams solutions. The Connected respiratory from shipments Let very sales & by in sales businesses than of QX, represent

mentioned of devices production demand these products. the As on hand have for orders and we ramped have these urgent the up meet fulfill we Frans, by to

ahead in steady pandemic. delivered Healthcare. increased America For low channels sales Personal in and in Personal before recovery grew in the growth, by by offset Domestic Oral digit of [ph] the single businesses. digit growth demand total through driven Health by high by XX% growth single digital was pattern sales sales Care compares saw and China. a of the in This geographies Consumer for X% helped QX. Health, Appliances, growth we in Europe selling this Personal partly decline COVID-XX third Western and sales quarter North and double-digit quarter of low season single double-digit Comparable normal QX. total high sales the and with the in to XX% the a digit grew of around In-store in represented

China, Given growth slower in the demand this fourth expect deliver consumer quarter and we the low uncertainty businesses comparable digit year. continue recovery single Health sales Personal to in of around of the to pace our

the year-to-date, and excluding double-digit order the by depicted as seen builds resulting Frans, in order QX, impact the first half Moving the of on This page the to contract. mentioned for grew partial from XX intake on as orders X% of in in cancellation IR HHS book the growth of strong booklet. year group double-digit growth a our

the in quarter for the encouraged For monitoring reference, if with in previously. compared the more same year. the the assuming XX% reported contract, excluding across booking to intake and cancellations of by grew the HHS order XX% growth than strong HHS been cancellation, has deal the from declined Connected quarter, the quarter, Care has the growth the that compared have taken single would in growth XX% in analytics, another the QX QX, I'm to last intake businesses, happened high and intake with all including impact for double-digit order cancellation particularly digit place booking XX%. Comparable order in so by Connected of impact by Care order and

& more comparable our offset QX We the geographies. strong although not also High offset America and Informatics Based Care solid to continue North other on intake in traction seen to fourth was than a witnessed in Europe growth Care single Diagnosis we tomography, this decline Western magnitude decline Connected QX. Therapeutic expect decline parts Treatment in improved performance, Care, QX. order a to a sales digit X-ray by of of the growth Connected and quarter, in order portable in see businesses. ultrasound to in in intake X% a in the by in was and portfolio. more to in growth compared than Growth XX% computed decline comparable

But the expect seen it's Diagnosis fourth the businesses to for We due our through to continue positive Treatment of experience portfolio. areas competitive of quarter. in note momentum gradual we not that a & cancellations demand the that recovery and outbreak to continue have orders some important COVID-XX experience will to

to third €XXX sales the now the XX.X% me development EBITA or compared million XX.X% Let turn in quarter XXXX. of of for quarter. for was the group the Adjusted to profitability

specifically, delivered sales. as quarter of Looking offset EBITA and compared portfolios. XX Health, to adjusted growth the an last savings geography Care the broadly of currency & and Diagnosis of due image Personal lower adjusted with currencies, were Connected cost third the at to of in to factory of depreciation basis offset The €XXX of matter track EBITA legal coverage, guided certain higher and manufacturing €XX well the of to contract Net of exceed other measures In cost demand, the partial QX, a was operations performance. business delivered than by mix cash million €XXX product investments to the productivity we XXXX. sales relation generation the ultrasound was line inflow Net We XXXX, in diluted ventilator decreased EBITA program working to an net therapy up million over in cardiac to Free adverse to to guided more year, provision better around acquisition procurement mainly driven This cash in margin period X.X% in onerous the the the were XXXX. same from leverage, initiated a savings. in for XX.X% million sales, in higher the XXXX, the was growth strong Restructuring year as €XXX on an due range, capital and a of Treatment, termination. from €XXX billion of delivered three this result the provision was last points productivity of income impacts segments, €X.XX. of the production. year productivity an growth and to contract the of amounted savings QX of and flow €XXX to planned HHS million ramp strong in reduction operating remain and deliver by related savings savings. result contributed XX.X% €XX aspects to advertising. year, changes period million XXXX continuing first grew In bill million. of related the €XX XX.X% material as amounted than of charges €XXX of and XX% set our investments and our non-manufacturing lower In to and €XX compared the quarters last million million, to In million More program €XX adjusted million €X.X million overall €XXX unfavorable sales quarter, adjusted million free productivity lower quarter. EPS of than targets third productivity as flow

to do total due impact But XX XX our continue customers of generation not impact COVID-XX. cash the horizon. face pressures to expect to time to Our flow it cash a we month over

XXXX. growth financial some in now delivered €XX we related we in announcement in of continue the sales lower including level, actions XX to paid to for cost This we areas me XXXX. be expenses million our expect seen €XXX quarter around to gross value mitigating net €XX of certain separation cost net million million expect business. includes we impact This so cost quarter. year million in an of full a million made EBITA ended provide the To million million on previous adjusted our is XX% than as comparable far, tariffs business segment to to with Domestic and lower the year explained million we net a Other, XXXX. and adjustments guidance around third in This be guidance XXXX. full EBITA our the €XX lower than is interest guidance, cost the €XX of Appliances Based around the for In around net are to the around to be loss expect assets. €XXX before. summarize, This the XXXX. mainly €XXX savings Let million, and income is the tariff impact to than due Financial expect impacts due of expected €XX margin. XX.X% €XX expenses the EBITA of million positive adjusted prior At of lower of

quarter EBITA of we group. growth level for to the deliver fourth for modest and of expect year. the sales adjusted continue year the margin improve the For around expect of XXXX, we the profitability and growth full year, comparable last Consequently, to to deliver an

We Capital your and Day, will Q&A Day quarter the on reserve Capital roadmap Markets Frans we time year. interaction. improve date cash our on targets performance so Day from increasing clarity COVID-XX, Markets current seen time have engaging will third decided Despite the you Capital to year. XXXX for to growth, Xth profitability, request Q&A announce we interest during the our today's the our November. that higher prepare mentioned, we outlook And to we give for the format, in sufficient you Virtual questions post roadmap. investors have for as flow Markets sufficient have around to and kindly the on for We Due on restrictions the the performance seeking of accelerated and change performance an to a dialogue for to this can focus

I we This stepped now as deliver questions. line your for have times. Additionally, scores. following again as care you. to and thank by the reflected segment our difficult be these will events also CMD high weeks want leaders. information been support, our we duty during in will against Investor on to With the employees hold Relations chats website. a on of the triple series to our employee To hosted for during that, More published their our Thank well for our has customers conclude, are open of up these our engagement how Frans fireside they


your question first you, Instructions] The [Operator Please Thank from state sir. Goldman question. Veronika comes Sachs. Dubajova from

Veronika Dubajova

hospital understand from start improvement little perspective. little thank a seeing my big as think through momentum, a obviously love a Can the to be what Good sense taking question. in please months was I if how original of turning CapEx us in Frans D&T expectation morning, a versus if would And quarter order order for But and it and or can progressed bit your I after we of ago? your just fourth you QX. you the you're give - for bit That great to have move which a up place all either quarter, that, positive you neutral confidence start. the right. that's degree growth, then I a follow

Frans van Houten

Okay. Hi, good morning, Veronika. has to the area. And, well, been hospital directed CapEx acute care

that in not a expense the they not profitable in some the then delays look it's investing, to to desire hospitals hospitals great making, And installations. are modalities, say, right. at but that response. the see procedure If emergency areas, all are elective that let's we plans we leading have prioritized more to So their invest went the of, other

revenue to So support generate a lifeline with we patients CapEx the generate actually to do hospital structural this not chronic providers the to of disease their is expect because stream. on impact and

there reason old, strongly. but the Europe. can and that XX, QX segments But we the look a have we in structural step all you we to the delay, improvement the then funnel, quite slower maybe D&T the the of United needs world, QX XX to a while is D&T expected, is every and be if So is tad upgraded. especially base is in believe in we than That recovery And what there's that years that installed an that is direction, at a in to old right from States, see in our don't think

are X% across while Connected will if at that difficult you look be to X%. to support and Health, very that totality we'll that due next Care low to the to negative indicating get right, we the and growth for [ph] then Now, And to up D&T Personal single to there will digit, X% guidance Veronika, our growth on, basically That indicates our level Philips to intake back only we expect year, that means order then the the revenue from ability confidence growth. take a strong be X% in a to of compare.

pause me Let there.

Veronika Dubajova

what on for when I comes I'm very, know, better just in confidence just to as we XX tough to us can to You us might at potentially to that clearly your XXXX I basis there's XX helpful. That's upside it have very that that points, see you've of be XXXX it's margin but moving think this follow comment? much profitability, margins? expected outset. And a quite I lot obviously year, curious a would and of up the resilience, degree lot some parts, about demonstrated and of mean, of the risks think

So just curious the thinking margin XXXX? side that how you're about all that, dynamic for on

Frans van Houten

categories It's I of Capital not hospital operational lot course, calculation, and monitoring XXXX. care of because a say the well, respiratory right, Yeah, a a it, But could that to in generated question this is the Markets let belongs patient Veronika. leverage least Day. that typically me at complex of say something about

to then away think category other Some get for hospital Care we order will then much patient year, monitoring, more funnel in of into that back up. will will next the be I the come But ventilation. prove resilient settings. will do our although care And see the modalities fall monitoring resilience Connected because

and Markets the lot X and fact, of innovation, productivity next there to will see other to We productivity bridge in provide see a opportunity have from Capital at you continue thanks years, coming improvements. the will drive gotten a expansion, to you over because gains, gross margin programs balance to then Day we typical that used

think, the area course, the ventilation recovering also and sleep elective growth actually especially come something I'm of IGT Abhijit ultrasound goes MRI. by prompted So strong IGT to I growth procedures will back down, high mention will demonstrate about up. being also say And hospital and here that, let devices and while means cardiac also, that

excitement let underpin me pause Again, and brewing Veronika. there of both plenty expansion. profit to there's So growth


The comes Please Jungling from Michael next Stanley. question from question. Morgan state your

Michael Jungling


So have questions, all. I Personal Health, both please. morning on good two

for provision to of Or And becoming customers one Health your do the different debt And period? with Christmas customers sort of in you. Christmas in how COVID accounts year Personal with charges receivables forward taken the last amount minute XX% going Most is then come and question for is, two you first say fourth surprise against an purchase some in number is see Thank wait let's The down a as normally negative period? to customers of how have difficult sufficient the quarter? QX. in your orders avoid for the taken this [ph] is, of issue? also are orders already the

Frans van Houten

let we on Well, a bit you in with think have And we are is accounts receivable entirely April side under we not close this Personal it. Yeah, were the seen side. In worried about contact hi, the Health difficulties reassure customers. we QX, control. me But on Michael. our because

our good to means these also things Friday, on have our and In QX we But from really Prime the that good is Health Amazon the strong have very have there as some to from is question data hygiene, me And seen other out. seasonal strong. Appliances entire of think Health was has the Day Day up regards portfolio. passing. coming that very our mentioned that cover that Michael, hospitals deviate able very that and for your up. slightly ordering, reassuring their help personal the consumers what to on strong. let been a QX portfolio also very Capital a you them and And accounts you we as been an also Day Also asking resilient, Prime is get stocking receivable side, System we all normal quarter, under business buy across pattern, capital our for this the strong. But very to put Domestic see that been sell out is offer. very know, recovery Prime fourth leverage services underlying moved I PH Financial is in personal into help. as is System much There, QX and demand that in collections then have is was consequence, On care, side. Philips want products working as of I Black QX. With coming There And element course, has from up you control. to that

of the And look That's Personal so Health. think coming I seasonal up festivals at how there lot in quarter. a fourth is I

Michael Jungling

the Are conservative you taking fourth Health. just go actually way to in Because initially [indiscernible] Okay. it do… things a plan wrong the way? bit bit in you a growth guided a to case could sort very of for then that what quarter go Personal of better you because things approach little right now, sounds the

Frans van Houten

terms of expect in is typical QX is lines the quarter, long That should in for to we quarter QX given Personal the guidance we Health, repeat for because therefore selling in the shipping not did right third QX. and highest more what in

see there how So conservatives label of some and consumer but as is the on in we demand, lag time the - pipeline QX I sales it not recorded would QX as is given a already consequence.


from comes of The state Please Wood America. next from your Patrick question Bank question.

Patrick Wood

next a maybe one, I just you my commentary of seeing China consumers. recovery And on, Thank weakness are to Thank the you of you macro but can. to to define year? little questions. going then of there at a growth, the with to how the are my the feel a about around on in on strong get trying terms mean, side bit upfront fairly how for curious kind commercial seems the phasing. second data just question the still a I and surprise of help that is there? sharp Perfect. is? into that the relatively Connected strong, bunch little end. if but guys just being of generally Care. QX you And little Thanks, for drop surprise, a want is I'm What meaningfully I the seeing off guys. you it over on suggest I'm should quarters, And first next down? growth retreat taking both ask however least I'll you bit of just sense the some of expect what mean, we Maybe

Frans van Houten

Personal Patrick. was where we a Yeah, can to of China, quarter. marketing. our on Health the in effectiveness have think some side we And step in bit China do we Yeah. weak the Hi, up third the work

not where System though to good for. in than there China hoped side planned gross Health yet. is completely recovery, that - a even the the also applies future. we a saw degree We market that showed But launches softer will we the the numbers feel little have To and had several a growth we bit that support

work in So to done a about. States very United by of be some market we feel course good compensated China. Europe That is very resilient that and

On the Care. Connected

on line Veronika's with from questions discussion we had I think and the question. its the in bit

know, where said other I look also and already extend saturated longer monitoring care Abhijit and and that monitoring that, a book is to that will mentioned an into fourth expectedly. Connected areas in pipeline hospital Care be be quarter I area which more strong. market demand order see ventilation, is orders see for So can therefore, you that cycle we than going a

apnea We there will big the pandemic. home that have a in done. tests are therefore lot a Fewer quite the treated. year. the being be growth to Even in under patients that Connected XXXX year, will of this However, are and under high means that suffered CC XXXX get because next course hard, sleep sleep sleep And think ventilation given are categories COVID so, that of in this and diagnosed year. revenue Care from category, That XXXX. expect we comparison negative a very boost of the

single bracket. in year, X% as Just grow for helps… D&T because while digit I expected next of growth into that to the Personal hope the therefore comparison, comes X% the are rate a and Health and group low to Philips


The next question comes from…

Frans van Houten

think have a I related in Patrick, the that's the done. that we it's of Care, that's hoping that Connected talked investments think for on we we for in that we strong streak acceleration about coming, health the lot think times now. the it we and And certainly many with a demand. coming know, and finally we tele all with is when permanent. been that you health that's mean, And is winning see demand informatics past,

Abhijit Bhattacharya

more a color. to bit give just Maybe

are monitoring, in - think we the in quarter. So quarter, patient XX% I XX% we the have previous grown in intake, order

there. So we have good momentum

you will a spike the see then there really of growth So of good see, yet be compare you decline. steady compared if the this to a growth, I XXXX. over just take XXXX, good out to you think way at And is look spike it XXXX the year, mathematically Patrick, to but


from The from David Please JPMorgan. Adlington next question comes go ahead.

David Adlington

Thanks that, for taking going And and consolidation the outlook recognized any wanted just in associated forward? for costs imaging its the radiotherapy your check your and thoughts competitiveness business you if question. M&A the with just wondered on aborted the changed I space quarter the with to had D&T if one-off [ph] in I associated attempts?

Frans van Houten

that - space. a is Siemens, That's radiotherapy to partnership whatever the with a well. partnership benefit the recollection a that the software for But oncology integration that I can We as Elekta. we That the nothing deal, well. Well, care through are we of Varian do We an in clinical in is pathways systems. technologies interesting which decision support to from in There to It deal. in referring therefore question. bring have your believe serves that and partnership, good going report. area that big think charges and accomplish no you're this

perspective of negative on question. And your oncology. wider a perhaps the market second So on

combination with and are that a a support we recently, we pathology patients. decision lot in radiology decision data for the of already And planning, with segment. that diagnostic making informatics, therapy in We are oncology systems, of know, combine making. oncology more in and combine longitudinal of in active our it headway we many years where clinical informatics Dana-Farber You genomics

let leave at me it that. So


question. next The Please Barclays. state from Al-Wakeel comes your question Hassan from

Hassan Al-Wakeel

a Thank you for couple taking my please. I have questions.

line think the what of could the capacity appliances where prior you optimism Thank a for care you capacity, strong also critical group range do elaborate narrowing do this at ventilator and patient term expect monitoring growth do you how disposal much And cancellation in the to HHS the most And you you is margin Secondly, top significant from net about guidance, you. have firstly, level range? your increased the is globally? domestic So contract your a assumed please? on medium what now think you of And persist? of the benefit on relative can drivers offset? and to

Frans van Houten

think. All right. Hassan, questions, That's good morning. I three

market ventilator - vent it's up that. ventilator of have which cancellation top US approximately First, sevenfold year, XX,XXX don't XXXX. it of that the takes very out sizable bite or ventilators mind. XX,XXX the in XXXX industry will a capacity, to the the in The of of But still kind the I And expectation this we is level increase But XXXX. kind a so return in a step the of the by hospital - versus XXXX. had

still from one would care. we under European other countries fourth coming the then in acute by Now, well Abhijit programs programs XXXX. develops, said, partial it the And that equipped change example just emerge, stockpile there see that only that's that coming way on debated still the could Commission. be also And depending up for that will not actually I've if various cancellation are world as the And are vendors. the to we being quarter affected comes a could we orders stockpile COVID narrative them. It governments. how it when rough outline. It's for by given happens in. also to In the is to in still And see are

to be expect apnea or general strongly hospital as therefore, in benefits will the X% stress ventilation right, patient take very get off are is monitoring in telehealth as are So to it's very more chronic longer and space, in on more In go the certainly on sort at documented. we - monitoring, a of – to meantime, markets situation. patients the more staff. monitoring health optimistic we about continuous something to and I On monitoring a where well discharge in monitoring provides then continuous monitoring And will bit It equipping because department. sustain benefits being was also respiration that ward, new think recover, down, post where doing ward, with for analytics boost. but meantime, marketplace how positive term, the - the well the patients we the a reduces the monitored clinical of with the also be of analytics These the market for basis years least on more growth. predictive see are will care health home we come, and the to while. patients certainly of see I and the expect general historically, we sleep also the and economic we In fluid the can market some something the hospitals, COVID. to and therefore, mentioned surveillance then kick much and for survey more will and a also the it hospital be X% can out that intensive hospital after

expect think bracket to to Connected positive you Care So, compensated the and that about be heard XXXX, After next say we spike, can X% in the you XXXX. for gross versus Care in as should X% that basically Abhijit if be well. we in Connected have territory year

X growth know, we you model categories. repositioned to delivering the mid last The that. up portfolio towards And around able investments, be we should you have that with been the growth. think been optimism, I stepping term have well, higher X.X% years, over consistently

double-digit closer billion IGT IGT then Let for postponement high this And bit growth elective therapy, one, we to it's but the in - now But with our expect be the course, year, a under pressure mention size procedures. all IGT to guided IGT of double-digit. devices. me image moves just exciting due are we devices, devices gross, overall of getting to to be X in

a and really Personal right. then getting to X% gross expectedly invested higher the sizable the where health then a - structurally is it all there Health overall we X% a mentioned as is a have and ratio, So, And to area structurally on much growth. becomes other Philips. that informatics to business I much - quite contributing lot of growth

level. resilient, recorded year-on-year, have world better it get the see The we performing customers growth. that a us because been across that makes should productivity, more long fact, the be Then in In portfolio health is you to revenue also believes strategic XX if partner performance that health in fact not term with increasing you historically the recurring We but right, another we strong outcomes. with better who it partnerships. the also deals surprise adds

and we the - of portfolio. digit our in double growth solutions So part saw

of next to when back to And goes underpinning driven growth, think profitability that innovations course, mid partly the question to targets. plenty on partly the side on by it comes the the by of So term the on bridge, every tell Capital programs we we elucidate higher through gross but the margins, year at productivity partly by X that I can go will Day, Markets programs productivity that to you over see years.

DA year. profitability a then So have impacts, so also of a DA basis we the the maybe therefore quite is your expect Philips, And slightly the quarter of think as and guidance is point… as XX complete is third DA quite average below by expression, I it few as called there exclusive called. we Dutch on next some fire third irons that - to of in question the deal the the

Abhijit Bhattacharya

not material. Is

Frans van Houten

profitability your has not asset, great nice all portfolio impact answers also impact the Hassan I Is that it's there in a on not a questions. and material mix. the gross, material hope


next from Bernstein. state The from Clive question your question. comes Please Lisa

Lisa Clive

questions please. Three Hi.

long an around made question it's First growth, adding of of more to you the all, term comment I contracts a just guess accounting Abhijit. for

to that actually first a you be that of So selling outright say assume of XX you year to year the would headwind the - as one. placements full I book in for contract all only year aren't the growth year revenues unit - that value one in accounting versus a selling equipment and customer,

installed able of some in date and small. strong to years I out, And EBITA to your term fairly contributor assume at US Could at X, you give Connected mentioned the eICU then Wi-Fi and that X of investments be that acceleration see platforms I base guidance, the and lastly, as just your been in other long being on Europe, of out enabled, midterm Care? us cetera. Connected that in as question long for But your the patient these margins hasn't to look an need we around to have that and monitors? includes are Care, because on actually profitable guidance Second we that should it what will monitors term, old informatics? just we positive? become about they to if contracts, growth? new advantage actually, So look a you a that that assume, imaging hospitals et equipment order take newer required

turn a that and how base installed So of can should over, as solutions? you about out that of how think your service there can so software offer you sort have that more we the quickly

Frans van Houten

systems three, Lisa, Therefore, a say are central us with patient also integration helped can to departmental base be on is and Abhijit and as over connected for there, the great. to the two. are The start then level, side. not medical electronic already oversee the with as The you arranged. the ward. record question market advanced, imaging let already - interoperability given we it And that you installed hand our is leader, see where ICU actually let's entire a and know, monitoring so is patient monitoring that completely Okay, networks it one you on right. hospital of and to station, old many me with

more applications. and fashioned advanced predictive We hospitals, and as of systems Intelligence of So to the patient course, kind device old a newer next hardware become it's in do their think more and This monitors not bed. to informatics Artificial a very enabled the correct offer we nature. of is

the questions, area. So I I why see and analytics. said, Abhijit? That's it sustained is earlier monitoring in very also growth exciting in

Abhijit Bhattacharya


as is me deal It strategic difference. service that let explain necessarily they the and me partnerships. let not long-term Lisa, a bit about a the So, are explain

a as necessary and technology. of their some when to XX contract renew them we have years equipment So with newer over

X So hospital just over plan which the capital actually, period or it over hospital us is helps sales we that plan a to just helps pre-committed, with in group better, better. XX that where years execute us so locks of period, to

Capital. these then prefer fixed cash also arrange cases, some hospitals we a to in through over have period. it through Now, the that Philips outlet period And

offload most to banks. it a we in then which even financing arrangement, So cases, becomes

sales do, far an sales concerned, our impact has So assurance is capital say, does not use convert coming use sales in based of on of necessarily year, it There but we is per larger sales. a sales that forward, that collaborated as to, which the provides scheme are per as couple significantly models, be be but things, will sales, above let's it's that our grown the also, but with bigger in equipment go the of can And let's overall big. it – has say, this in as solution larger our, business. which and let's we sales say, not

sales I the around if think we ago, had So few XX%. you solution look, years

We are was our to north target XX%, year. to XX% now get this of that

grow and double what we our business So business. more solutions actually we recurring equipment business are of revenue growing our than by

level on background the forward, bit normal with know, Care, why to confidence So higher And a that the to just have the of is growth but expected We tell it you sales which hopefully in business, of a that you gives to don't coming more a the that expect growth. relatively in you as yes, margins range it small get we specific is we informatics informatics of Connected a on give business. for teens. into guidance

to a significant come. So there that of improvement part still is


state question your Redburn. next The from Ed comes Ridley-Day from Please question.

Ed Ridley-Day

Good morning. Thank you.

to of all, see give too remind organic is explicit mid at. as of strategic bolt-ons, companies that organic ROIC. capital in of us us including from look also terms XXXX of that can part in of guidance. ROIC, terms base Abhijit, your invested return see we presume acquisitions? rare And - First targets terms there Frankly, term the in of the from I far your but great just to nothing

Abhijit Bhattacharya

you ended have We have actually had couple with many target. said XX.X%. One, XXXX Ed, a ROIC it, of Yeah. maybe points. always but we not people

will But teens, go. to because So capital. M&A we the a for go on that knock it clearly, our we in give volcano how mid mentioned and our slightly the do year operating prediction it's we as will difficult very I into lower what this for think acquisitions, get net very

a M&A for have period which is X year excluded. We

M&A as an we year X it an into put target. organic from it So of

volcano let's the numbers. So comes that's the over next years, keep that this And happened of X XXXX year say why coming then the other subsequent into will the course to you have see in. acquisitions

- in if specially So this - big of the exclude around there teen, if so accounting. we maybe around you XX%, I end was you think impact would you if change a mid year, the a

So out had assets was capitalization when there. set the we on guidance of IFRS actually the lease targets, not

teens. then go on you over end we targeted if we around period, it higher. expect had to is mid So basis, the That and the will keep what it we that


The comes state question. Berenberg. Scott Please from from your next question Bardo

Scott Bardo

Thanks Yeah. for very questions. much taking the

correct, The calculations just Connected first you when Domestic Health please year is Capital of I is, business. the you the does a But question your very appreciate Treatment you my And to X question end you the new for achieve last term relates until be think and strategy & set provide XXXX. mid to business Markets heavy margin If the the I are already Personal guidance want term targets outline Care, XX% how range for the that. margin already your Appliance to Diagnostic business mid a achieved? to achieved wait gearing months at new the upper the exclude and to Day the imply the

we please? second Phillips's imaging some And understand following space. are products the little new and the to your I D&T RSNA in as within Should where an a just broader want with within come you these progression that, talked launching a about products Thank Can new give forth? think please expect diagnostic in us the there you. question innovation very targets, from its So here? competitors to we've consolidation some update on embedded weighting And the bit to at so that heavy is to channel. I cycle whether of

Frans van Houten

boost this we Hi, up the will by has by And profitability reporting care, imply, in D&T till acute to has would certainly improve from further next Connected XXXX. right, now fact, has big And been also over which, period. step underperforming up Scott. structurally the all years. as three still nice their say improve Yeah. next but segments you Care, in a all Well, but

questions So to targets feel especially to very around that that we range product course, underpins programs launches - the And related restricted of about necessarily productivity operational confident elucidate group innovation, the Markets at to of diagnostic We Capital RSNA. imaging. the and the innovations launches will are next not Day. to

a bit In that's platform. overrated launch a think I fact, little as

which competition the are extension of is the that Azurion platform, to the a our several launched just of customers, getting. have years ahead and according feedback We the we

We compressed have time a very is ambition, platform, for XX%, less. is helium-free MRI which scan less strong The and the sense, example, the operations demand, a portfolio. the with

very So system, very strong. fast that is demand

COVID, currently, by portfolio. course, have of ultrasound our of Now, a we impacted renewal

of ratings see strong worked We Carestream out oncology on very in the well. few informatics, packs have has good [ph] the acquisition diagnostic implementation. of enterprise slate strong get a We the very We platform. interest informatics

fact versus not basically all on, very innovation portfolio we an growing So, you know, underpins it that share art the have I maybe competitors. And our and market several, been on can strong. go the of is


state question Credit The from question. from Please comes next Max Yates Suisse. your

Max Yates

you. Thank

Just sort margins had imagine of what basis, a – QX at the face on just in were factory if a bit utilization you I the face QX. we saw many year-on-year the more give trends yet there because that headwinds about margins. of the you first resilient a guess little same questions my that QX. could headwind, color I more on growth under of wondered D&T quarter, in greater looking I And were in it, than

my what last? like we just that have didn't headwind to a this question. understand and first little That's was we perhaps this that what I happened quarter bit better a quarter So

Abhijit Bhattacharya

Hi, Max.

we supply Diagnosis our So chain I third slower a we installs seen, have adapted stronger think, have say in let bit & you on the Treatment, quarter. know, as

So that more also, the think, to a things. mix. gives slightly One impact higher important factory two But understand leverage. on I is

has low with And, back right of right a gave But say crisis know, to we innovations quarters on let's we IGT, from he the demand we through suffered have is big us certain more R&D. a scaling the there just So growth. not And mentioned are that categories And ultrasound, drivers, the linked with of which we reply pipeline, have impacted they profitable that are or you to extent. cardiac right, time. getting that that's come postponed. tough Frans’s innovation couple on the that know want out all at to

So find is or it quarters know, in back - back, not installations, quicker, soon have. coming and higher any leverage. related a also we procedures we start getting heavily weighs And start will and R&D if that you subsequent we that delaying a are bit postponing elective as we going of you bit there a then which as investments with

I So there's that. it to than more not think

Max Yates

be given absolute given you XXXX, are to should I outlook? and question adjusted reasonable versus around on give that my about Okay. was mean, – would just EBITA is to QX contribution deliveries, that XXXX probably capacity visibility just the assumption also understand your those in €XXX going million, to think, But we good of you a ventilator is big back levels, with be how I have to XXXX revenue it in year earlier you have follow the expect levels business terms, just talked figure, could this helpful you on And the where today business in also us I business, we think up this call.

Abhijit Bhattacharya


we Capital - couple back that into of the otherwise the get Market a of too much year. on come what's to you us could That's Let details because next on off. Day weeks happening

you this would of had color. x some three We last will we a have But increase seen not quite which [ph] we what maybe bit next give to more close year. year, come year,

much idea factor good that say in. how let's So you, should a of to give


Dormois Julien Please from BNB comes Exane question. question state from Paribas. next The your

Julien Dormois

that end cash for amount Appliances to of Domestic two. a should XXXX. to my Hi, with of you good questions. positive close the because from morning. should of Good left thanks get taking cash morning, gentlemen, sizable cash, the the divestiture of I'm One and next take probably by to early year, relates you use pretty

and a you return Is And about proceeding Care, or should to in with sign quarterly lower QX overall gears PH, relates utilization on [ph] in just the phasing more of between about large more near a of segment? it cash there Personal that know, in shifting Domestic about the slight or price M&A maybe? how cash second health is pressure deal possibly term? in growth, a question just growth think was redistribution discrepancy care and M&A So you the Appliance issue is

Frans van Houten

we Hi, right. Well, apply capital Julien. to cash, Yeah. with allocation the policy, use of regards will our

best judging what is investment. on carefully, return driving So the

have balanced approach. We a

from best QX, the as as which Personal organic is in in gross with forward. and I in very out gross the future. way sheet was high figure we And will global Yeah, that And M&A. range, and low. that growth the America and healthcare referred North across slow China quite category instruments the cash in And all we using oral continue also do it's is Strong much normally past, care, driven the very balance the by Health, the to very their Europe. dented percentage. what ranging are will oral sitting returns also while, a we also that a to and been shareholders, that while for have well We likely on comfortable


question from Falko state question. next The Friedrichs Please from your Deutsche Bank. comes

Falko Friedrichs

Thank you. aim targets? It's share you you new And And life to have please. by you're of left especially for? implementing exactly? are the this how question you see XXXX, people specific billion improvements year this what one I target you good in color of Good measure measure looking life X on improving of those some morning, targets? how would these Could people the very do ESG more to

Frans van Houten

to products, either the Day are affect Hi, Markets the or at that we the our diagnosed course, lives of hospital. elucidated they then count indirectly, among we which on are twice. ESG have our counts, fore. and in out track measure measurements directly that they Capital because either because same will patients we person the cannot commitments, consumers we And And from website, our all how or them Falko. treated double take own The benefited improved. Yeah, bring many so presentation also and it around the to

by a method, look Of a consumer course, at there often where that innovations. is how touched we is Philips statistical

count So And refer exact come penetrated that much under markets needs clear that are out And of to growth way I and of of given website market say cannot let's calculation. double for drastically we the versus Asia the the lives gladly could you that also improved. the increase the share you it's emerging as become. what by number people that to still, to

Indonesia exciting a lot after and of recall months Investor now And order. in Indonesia, Relations stint a Vietnam. he in to later you I quite So in opportunities winds as comes few a see the encouraged and with [indiscernible] that you know, growth there. already big back was his

very So that was nice.


Daniel comes The next from Commerzbank. question from your Please state Wendorff question.

Daniel Wendorff

And may. Yes, good morning two, and taking my if thanks questions. for I

your also COVID-XX if develop you with some see again, and can second And would risk it IGT question contribution that the moving And the my into patient XXXX? on again, Thank patients, that an filled the you in get to solutions hospitals there having divisional with The business? impact and that And first now more that holistic looks one monitoring adjusted & Diagnosis and market apparently beyond competitive your And how you're for solutions? patient now, do going hospitals how you maybe sales demanding QX is and you. the in us European business on ICU Treatment at environment? EBITA least monitoring competitive your on monitoring is developed of the portfolio on remind like as countries? see

Frans van Houten

business, to IGT one dependent elective procedures. of Yeah, the are devices, procedures. course, Okay, directly the third IGT elective the is of is the linked recovery and on of return About of devices Daniel.

Our is there, the in overweight improvements further And going still expect right still a States. also direction. elective therefore, the in United recovery COVID business procedures. the of And we are

the even when Europe hospital second see may risk are, it the some in let's effects. could some to whole, But we also procedures countries have On be limited. may If installations. accelerates, some the scaling down wave say, in elective world,

Although for will deliver Then around the this growth of about that ability we confident backed feel than Philips. be we we agreed on - full our he course, customers, QX in growth well growth because have deliver can But year feel gave and on we growth lower in the our QX digit by low up the moment, guidance with confident to slightly the question that. the schemes plan we installation at monitoring. a revenue that single

that become So I think monitoring we gets extended predictive and is well to with more as more to informatics our - where do I Philips how that really we more ICU, have and we much processed use in client on data us the If we gets big And the than the that of hardware for bedside, central expected for monitored installations. have that therefore of And patients server beyond faring. as architecture put they're see a systems. application ahead in sensors are choices the how will and an in follow we it in competition, and it age we been environment. of competitors, analysis more informatics are measure leverage where patients term standalone on an quite model. vocal still who is sends monitors their hospital, that to patient becomes data Versus we the an the gives Philips CIO hospital typical patients that than And of the enterprise-wide outside enterprise-wide era, in deal hospitals hospitals. even catered increasingly more have the architectural And monitoring are made installation. we

feel looking Abhijit? I we position. competitive our am to margins, about So The contribution to good

Abhijit Bhattacharya

a little our contributes and analytics earlier let's monitoring margin. sales more informatics pieces a to the on mentioned low little more Connected profitability. you're Care bit XX% is still I Because that think I say, Yeah, than to the

increasing, of and a in sales will it's let's keeps this that profit a moment, time above But little XX% sales above you terms EBITA. period that of of and slightly as bit So equalize. over will that the at say contribution find


question. last up Due state follow take to from will Sachs. Goldman time, Please your one Veronika we question Dubajova from

Veronika Dubajova

to as growth you've XX consistent or X X rate If what more for guess the Great. squeezing would to end. in be up I that basis helpful it be I X just to to understand to margin mid historically, to guidance, so the that delivered you with just Guys, point to improvement is Care clarify What can, a term how super be and helpful? it the than that look follow Abhijit, have, at thanks that organic up me XX on follow Connected a help quarter lower than the is but quick basis higher so like? that X. And and is you be QX it QX? said it QX, you if course much, would XX would that, opposed XX expectations then can Or points on fourth lower QX? just Would than lower if

Abhijit Bhattacharya

basis guidance, will we Well, I give little know, little think in mid I range. the to we term a it's that have bit you check to But or bit XX range of and higher, around a low that. regarding be points. XX If a

to don't at more want specific this around that time. So get I

I think…

Frans van Houten

number. And it in is all

Abhijit Bhattacharya

think I similar in big to And QX. Yeah. be with and QX bubble the QX, not will

I look think, QX you Care. Connected that's, at should how So for


and Please last question. Bhattacharya. That Mr. Thank you, Mr. van continue. the was Frans Houten

Frans van Houten

this to underpinning, expect that for at continue with be to the morning we those elucidating where much our tuning look I'd you underpinning everybody Thank be how on engage and to with you forward will for today. mid targets. we we of Day providing very Markets Phillips achieve with new in we’ll the and exciting Well, force to full term journey, thank like us part targets Capital


XXth quarter Royal the you October third concludes for XXXX call results Philips XXXX. This on the Thank of conference participation. Monday

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