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July 27, 2021

Philips reports 9% comparable sales growth in Q2 2021

Philips is set to start a share buyback programme, for capital reduction purposes, totalling up to $1.7bn.

Philips has reported an increase in group sales in the second quarter (Q2) of 2021 to $4.95bn (€4.2bn), signifying a 9% comparable sales growth as against last year.

For the quarter, net income stood at approximately $177m (€153m).

Adjusted EBITA margin rose to nearly $627m (€532m), a surge of 12.6% in the quarter as against $424m (€390m) or 9.8% of sales in the second quarter last year.

Operating cash flow in the second quarter of 2021 was $391m (€332m) as against $557m (€446m) in Q2 2020, while the free cash flow stood at $197m (€167m) versus $250m (€212m) last year.

Comparable order intake witnessed a 15% decline during the quarter with robust double-digit growth in the Diagnosis and Treatment businesses.

The Diagnosis and Treatment businesses generated 16% comparable sales growth and saw a 29% rise in comparable order intake, with double-digit growth in image-guided therapy, ultrasound and diagnostic imaging.

A 16% decline in comparable sales in the Connected Care businesses was seen in Q2 2021.

A mid-single-digit growth in Hospital Patient Monitoring was balanced by a double-digit decline in Sleep and Respiratory Care.

Philips noted that the comparable order intake dropped significantly in the second quarter of 2021 due to the steep Covid-19-linked growth in Q2 last year.

The recently acquired BioTelemetry and Capsule Technologies businesses delivered robust sales growth with growing profitability.

In the Personal Health businesses, a 33% comparable sales growth was noted in the quarter which was caused by double-digit growth in all businesses.

Philips CEO Frans van Houten said: “I am pleased with the good performance momentum in all our businesses except the Sleep and 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 and Treatment businesses, as well as the strong growth of our Personal Health businesses.”

Furthermore, Philips announced a share buyback programme, for capital reduction purposes, totalling up to $1.7bn (€1.5bn).

The company anticipates commencing the programme in the third quarter of this year, with plans to conclude it in three years.

In other news, Philips initiated a voluntary recall of some Sleep and Respiratory care products last month.

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