Philips Reports Q2 Earnings, Posts Mixed Segment Results, Announces €1.5B Share Buyback

  • Koninklijke Philips NV PHG reported second-quarter FY21 sales growth of 6% year-on-year to €4.23 billion.
  • Comparable sales grew 9% Y/Y, representing double-digit growth in the Personal Health businesses and Diagnosis & Treatment businesses, partly offset by a double-digit decline in the Connected Care businesses.
  • The comparable order intake decreased by 15%, with double-digit growth in the Diagnosis & Treatment businesses, which was more than offset by a double-digit decline in the Connected Care businesses.
  • The Diagnosis & Treatment businesses posted 16% comparable sales growth Y/Y with double-digit growth in all businesses. The comparable order intake rose 29% Y/Y, with strong double-digit growth in Image-Guided Therapy, Ultrasound, and Diagnostic Imaging. The adjusted EBITDA for the segment was 13.2%.
  • The comparable sales in the Connected Care businesses declined 16% Y/Y. The adjusted EBITDA was 11.3%.
  • The Personal Health businesses recorded a comparable sales growth of 33% Y/Y, driven by double-digit growth across every business. The adjusted EBITDA was 17%.
  • The consolidated adjusted EBITA expanded 280 basis points to 12.6%, driven by sales growth and productivity measures.
  • It recorded an EPS of €0.16.
  • The adjusted EBITDA expanded 210 basis points to 18%.
  • Philips generated €332 million in operating cash flow.
  • It held €1 billion in cash and equivalents.
  • The company launched a €1.5 billion share buyback program.
  • Outlook: Philips’ FY21financial outlook remains within its guided range for low-to-mid-single-digit comparable sales growth. Adjusted EBITA margin improvement of 60 basis points, versus prior outlook for improvement of 60-80 basis points.
  • Price action: PHG shares traded lower by 4.13% at $45.96 in the premarket session on the last check Monday.
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