- Company name
- Koninklijke Philips
- Sector
- Medical technology and personal health
- About
- Koninklijke Philips N.V. (Philips) is a health technology company based in Amsterdam, the Netherlands. It has three segments. Diagnosis & Treatment sells imaging, image-guided therapy and ultrasound systems. Connected Care sells patient monitoring and hospital software. Personal Health sells Sonicare toothbrushes, shavers, and mother and child care products. Group sales were EUR 4,393 million in Q3 2026 and EUR 17,834 million in 2025. Roy Jakobs is Chief Executive Officer, and Charlotte Hanneman is Chief Financial Officer. Philips reports in euros and files 20-F and 6-K reports. The pick is a New York Registry Share. The 2025 Form 20-F lists Philips common shares, with a par value of EUR 0.20, as the security on the New York Stock Exchange, so one New York Registry Share is one common share.
- Thesis
- The price of Philips depends on whether margin keeps rising while the Respironics recall comes to an end. In Q3 2026, comparable order intake rose 8%, comparable sales rose 3%, and the adjusted EBITA margin rose 70 basis points to 13.0%. Productivity measures gave EUR 427 million of net savings in nine months, and Philips is on track for EUR 1.5 billion under its 2026 to 2028 program. Respironics reached an agreement in principle with the US Department of Justice. Philips booked a provision of EUR 288 million, and it expects to pay in the first quarter of 2027. The outlook leaves out other Respironics proceedings, including the investigation by the US State Attorneys General. The 2026 outlook of an adjusted EBITA margin of 13.5% to 14.0% includes a US tariff refund benefit of about 1%, so the margin without it is lower. For the price to hold or rise, four things must be true. Margin must keep rising in 2027 without the tariff refund. Diagnosis & Treatment sales must grow again after a flat Q3. The Department of Justice settlement must be final. The remaining proceedings must not add large new cash costs. The Q4 2026 report in February 2027 is the next test. If these hold, the gap can close over two to three years. If a new legal cost appears, or if China stays weak, the gap can last longer.
- Risks
- Respironics legal costs can grow. The outlook leaves out other proceedings, including the investigation by the US State Attorneys General. Philips booked a provision of EUR 288 million for the Department of Justice in Q3 2026, and charges for the consent decree and field action were EUR 119 million in nine months.
The 2026 margin outlook includes a US tariff refund benefit of about 1%. This benefit may not repeat in 2027, and tariffs can rise again.
Demand in China is weak for some products. In Q3 2026, Precision Diagnosis sales fell, mainly because of the phasing of ultrasound sales and lower sales in China, and Diagnosis & Treatment growth was flat.
Debt is large. Total debt was EUR 8,139 million at September 30, 2026, and net debt was EUR 5,387 million.
Currency changes the value of the pick. Philips reports in euros, and the New York Registry Share trades in US dollars. Nominal sales growth was 2% in Q3 2026, against 3% on a comparable basis.
- Balance sheet
- Cash: €2.8B
Debt: €8.1B
Net debt: €5.4B
Debt due within 12 months: €1.2B
At September 30, 2026, Philips had total debt of EUR 8,139 million, of which EUR 1,154 million is short term, and cash of EUR 2,751 million. Net debt was EUR 5,387 million, and the ratio of net debt to group equity was 32 to 68. In Q3 2026, Philips issued EUR 650 million of fixed rate notes due 2034 under its European Medium Term Note program. Net cash flows from operations were EUR 1,108 million for nine months, and free cash flow was EUR 635 million. Philips expects to pay the Department of Justice settlement in the first quarter of 2027. Shareholders' equity was EUR 11,580 million.
As of Sep 30, 2026.
- Checkpoints
- Feb 9, 2027 (estimate): Q4 2026 results and 2027 outlook. Pending. Watch: Philips meets its 2026 outlook of an adjusted EBITA margin of 13.5% to 14.0% and gives a 2027 outlook with a higher margin, and this passes; a lower margin outlook fails.
Q1 2027 (estimate): Respironics settlement with the US Department of Justice. Pending. Watch: Philips signs the final settlement and pays about EUR 288 million, and this passes; a larger amount or a new proceeding with a cash cost fails.
- Recent events
- Nov 3, 2026: Philips reported Q3 2026 results. Sales were EUR 4,393 million, up 3% on a comparable basis, and comparable order intake rose 8%. Income from operations was EUR 165 million, after a EUR 288 million Respironics provision. Adjusted EBITA was EUR 569 million, a margin of 13.0%. Free cash flow was EUR 384 million. Philips kept its 2026 outlook.
Nov 3, 2026: Philips said that Respironics reached an agreement in principle with the US Department of Justice to settle the criminal and civil investigations on the recall. The settlement is subject to final documents, and Philips expects to pay in the first quarter of 2027. Philips also said that, in Q3 2026, the Enterprise Chamber of the Amsterdam Court of Appeal denied requests from investors for an investigation into Philips.
Jul 28, 2026: Philips reported Q2 2026 results. Sales were EUR 4,360 million, up 4% on a comparable basis. Adjusted EBITA was EUR 717 million, a margin of 16.4%. Comparable order intake fell 1%.
May 6, 2026: Philips reported Q1 2026 results. Sales were EUR 3,905 million, up 4% on a comparable basis, and comparable order intake rose 6%. Adjusted EBITA was EUR 353 million, a margin of 9.0%.
Feb 19, 2026: Philips filed its annual report for 2025 on Form 20-F. Sales for 2025 were EUR 17,834 million, and adjusted EBITA was EUR 2,195 million, a margin of 12.3%.