Philips Reports Q2 Results with Tariff Refund Boosting Margins
Royal Philips reported second-quarter sales of €4.4 billion, a 4% increase year-over-year on a comparable basis. Adjusted EBITA margin rose to 16.4%, largely due to an €186 million U.S. tariff refund that contributed significantly to operating income. However, excluding the refund, underlying profitability declined slightly amid cost inflation and ongoing challenges. Order intake fell by 1% in comparable terms, primarily affected by delayed Connected Care contracts in North America expected to shift into Q3. Despite this, Europe saw strong double-digit order growth across all three divisions: Diagnosis & Treatment (+2%), Connected Care (+2%), and Personal Health (+8%). Philips maintained its full-year sales guidance but raised margin and free cash flow forecasts. Investors reacted negatively as the tariff refund overshadowed underlying performance concerns. The company remains under scrutiny due to ongoing legal issues related to Respironics, which are not reflected in current financial projections.
Topics: ebita margin guidance update operating income tariffs