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Philips delivers Q1 sales of EUR 4.2 billion, with 2% comparable sales decrease

Press releases may be edited for formatting or style | April 20, 2020 Business Affairs
First-quarter highlights

• Sales amounted to EUR 4.2 billion, with a 2% comparable sales decrease

• Comparable order intake increased 23%

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• Income from continuing operations was EUR 42 million, compared to EUR 171 million in Q1 2019

• Adjusted EBITA margin was 5.9% of sales, compared to 8.8% of sales in Q1 2019

• Income from operations amounted to EUR 43 million, compared to EUR 245 million in Q1 2019

• EPS from continuing operations (diluted) amounted to EUR 0.05; Adjusted EPS amounted to EUR 0.18, compared to EUR 0.29 in Q1 2019

• Operating cash flow amounted to EUR 143 million, compared to EUR 14 million in Q1 2019

• Free cash outflow was EUR 57 million, compared to an outflow of EUR 206 million in Q1 2019

Frans van Houten, CEO

"The start of 2020 was marked by the COVID-19 outbreak, and we have mobilized our resources since January to address this unprecedented challenge. At Philips, we are focused on our triple duty of care: meeting critical customer needs, safeguarding the health and safety of our employees, and ensuring business continuity. I am very proud of the commitment, hard work and resourcefulness of our employees to keep Philips fully functioning, and I would like to thank them for that.

COVID-19 significantly affected our results in this quarter. There was increased demand for our professional healthcare products and solutions, with comparable sales and order intake growth for the Connected Care and Diagnosis & Treatment businesses. Comparable order intake grew 23%, most notably in diagnostic imaging, hospital ventilators, and patient monitors. We are investing more than EUR 100 million to steeply ramp up our production volumes, in close collaboration with our suppliers and partners. At the same time, there was a significant decline in demand for our Personal Health portfolio and we saw Image-Guided Therapy procedures trending down as the quarter progressed. This resulted in a 2% comparable sales decrease and an Adjusted EBITA margin of 5.9% for the Group.

The impact of COVID-19 gradually increased in the course of the first quarter, initially affecting our businesses in China and Asia Pacific starting late January, and subsequently affecting our businesses in the rest of the world from March onwards. On that basis, we expect that all our geographies will be impacted throughout the second quarter. This is expected to result in a steep revenue decline for our Personal Health businesses and a sizable high-single-digit decline for our Diagnosis & Treatment businesses, partly offset by a significant increase in revenue of our Connected Care businesses.

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