Philips, a global leader in health technology, has delivers growth, improved profitability, and strong cash flow in Q4 and 2024 and continues solid execution of its three-year plan.
Ir reported sales of 18.0 billion Euros in 2024 with a comparable sales growth of 1% and 5.0 billion Euros in Q4 with sales growth of 1%, despite double-digit decline in China, Comparable order intake increased 1% in 2024; up 2% in Q4, despite double-digit decline in China.
Income from operations was 529 million Euros in 2024 and 199 million Euros in Q4. The adjusted EBITA margin increased 90 basis points to 11.5% of sales in 2024; up 60 basis points to 13.5% in Q4.
Net cash flow from operating activities was 1,569 million Euros in 2024 and 1,459 million Euros in Q4. The free cash flow was 906 million Euros in 2024 and 1,285 million Euros in Q4.
Roy Jakobs, CEO of Royal Philips, says, “We delivered better care for more people by enhancing execution and focusing on driving improvements in profitability and cash flow, as well as order and sales growth. We strengthened our fundamentals and resolved significant US litigation relating to the Respironics recall.
Despite double-digit declines in demand in both consumer and health systems in China, we returned to positive order growth and continued to drive margin expansion and cash-flow generation. With our strong balance sheet we are pleased to offer shareholders the option to receive the dividend in shares or cash.
Within a persistently challenging macro environment, our focus remains on executing our value creation plan, bringing industry-leading innovations to the market and driving a simplified, more agile operating model. We strengthened our team and culture of impact with care, with patient safety and quality as our number one priority.
Looking ahead, we remain confident in our long-term plan and will continue to work closely with customers as we build on our strong innovation pipeline and focus on execution excellence to drive profitable growth.”
Group and segment performance
Comparable order intake increased 2% in the quarter, with strong performance in the North America and Growth geographies, partly offset by a double-digit decline in demand in China. Group comparable sales increased 1% in the quarter, with solid growth of 5% in the rest of the world, largely offset by a double-digit decline in China, where market conditions are expected to remain uncertain.
Adjusted EBITA increased 60 basis points to 13.5% in Q4, driven by operational improvements and productivity measures. Free cash flow increased to 1.3 billion Euros in the quarter, driven by Respironics insurance proceeds, partly offset by phasing in working capital.
For the full year, comparable order intake and sales increased 1%, up 4% excluding China. Adjusted EBITA increased 90 basis points to 11.5% and free cash flow was 0.9 billion Euros.
Diagnosis and treatment comparable sales decreased 1% in Q4, due to a double-digit decline in China, offsetting solid growth elsewhere. Adjusted EBITA margin was 12.1% in Q4, driven by productivity, mix and pricing. For the full year, the diagnosis and treatment businesses recorded 1% comparable sales growth, on the back of 11% growth in 2023, and an adjusted EBITA margin of 11.6%.
Connected Care comparable sales increased 7% in Q4, on the back of a low comparison base. Adjusted EBITA margin was 15.0% in Q4, in line with last year. For the full year, the Connected Care businesses recorded a 2% comparable sales increase and an adjusted EBITA margin of 9.6%.
Personal health comparable sales decreased 2% in Q4 due to a double-digit decline in China, more than offsetting a strong performance elsewhere. Adjusted EBITA margin was 18.0% in Q4, including lower sales in China. For the full year, Personal Health comparable sales decreased 1% and the Adjusted EBITA margin was 16.7%.
Philips remains focused on successfully executing its three-year plan to drive operational improvements and create value with sustainable impact, within a challenging macro environment. For 2025.
