Koninklijke Philips N.V. (PHIA.AS) | Investment Case

1. Company Snapshot

1.a. Company Description

Koninklijke Philips N.V. operates as a health technology company in North America and internationally.It operates through Diagnosis & Treatment Businesses, Connected Care Businesses, and Personal Health Businesses segments.The company provides diagnostic imaging solutions, includes magnetic resonance imaging, computed tomography (CT) systems, X-ray systems, and detector-based spectral CT solutions, as well as molecular and hybrid imaging solutions for nuclear medicine; integrated interventional systems; echography solutions focused on diagnosis, treatment planning and guidance for cardiology, general imaging, obstetrics/gynecology, and point-of-care applications; proprietary software to enable diagnostics and intervention; and enterprise diagnostic informatics products and services.

It also offers acute patient management solutions; emergency care solutions; sleep and respiratory care solutions; and electronic medical record and care management solutions.In addition, the company provides power toothbrushes, brush heads, and interdental cleaning and teeth whitening products; infant feeding and digital parental solutions; and male grooming and beauty products and solutions.It has a strategic collaboration with Ibex Medical Analytics Ltd.

to jointly promote the digital pathology and AI solutions to hospitals, health networks, and pathology laboratories worldwide, as well as a strategic partnership agreement with NICO.LAB.The company was formerly known as Koninklijke Philips Electronics N.V. and changed its name to Koninklijke Philips N.V. in May 2013.Koninklijke Philips N.V. was founded in 1891 and is headquartered in Amsterdam, the Netherlands.

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1.b. Last Insights on PHIA

Breaking News: Koninklijke Philips N.V. recently reiterated its 2026 outlook, expected to be issued on February 10. The company anticipates continued performance improvement with sequential comparable sales growth, expanded margins, and strong cash flow. Despite tariff headwinds, Philips expects organic sales growth to improve in 2026, but at a slower pace than previously expected, likely between 2-4%. CEO Roy Jakobs expressed caution, citing growth expectations. Soren Peterson presented a bullish thesis on PHG, highlighting a forward P/E of 14.90.

1.c. Company Highlights

Last Price	23.27
Change Percentage	2.42%
Open	22.96
Previous Close	22.72
Market Cap ( Millions)	22124
Volume	2236208
Year High	27.63
Year Low	18.9
M A 50	24.07
M A 200	22.65

FCF Yield	1.26%
Dividend Yield	3.65%
ROE	1.41%
Debt / Equity	81.18%
Net Debt / EBIDTA	360.38%
Price To Book	2.12
Price Earnings Ratio	135.93
Price To FCF	79.3
Price To sales	1.24
EV / EBITDA	15.68

2. Royal Philips' Q3 2025 Earnings: Delivering on Commitments

Royal Philips reported a strong third quarter, with order intake growing 8% and comparable sales growth stepping up to 3% year-on-year. The adjusted EBITDA margin expanded by 50 basis points to 12.8%, reflecting solid gross margin delivery driven by innovation and the impact of productivity and cost management. The earnings per share (EPS) came in at 0.3661, beating estimates of 0.2732. The company's financial performance was driven by robust demand for its products, particularly in the Personal Health segment, which delivered strong and broad-based growth across all three businesses.

Publication Date: Nov -05

                                    📋 Highlights
                                    Order Intake Growth::
                                                Q3 order intake rose 8% (6% year-to-date), driven by North America's double-digit growth and strong demand in Connected Care and Personal Health.
Adjusted EBITDA Margin Expansion::
                                                Margins expanded 50 bps to 12.3% despite tariffs, with EUR 222 million in Q3 productivity savings (EUR 566 million year-to-date). Full-year savings target of EUR 800 million remains on track.
Personal Health Performance::
                                                Broad-based growth across Grooming, Oral Healthcare, and Mother & Child Care, with healthy sell-out trends in Europe and growth geographies (excluding China). Expected to outperform mid-single-digit growth for 2025.
Innovation Momentum::
                                                Launched Transcend Plus Ultrasound with 26 FDA-cleared AI applications and advanced CT/MR innovations in radiation therapy planning, enhancing competitive differentiation and customer adoption.
Full-Year Outlook::
                                                Maintained adjusted EBITDA margin guidance at upper end of 11.3–11.8% range, with free cash flow projected at EUR 0.2–0.4 billion. Comparable sales growth expected at 1–3% for 2025, supported by Connected Care and Personal Health momentum.

                                

Segmental Performance

The Connected Care segment continued to gain momentum, driven by major partnerships and continued hospital standardization with strong cybersecurity demands. The Personal Health segment delivered strong growth, driven by the Grooming and Beauty, Oral Healthcare, and Mother and Child Care businesses. The Diagnosis and Treatment (D&T) segment saw further traction on the CT 5300 and MR, and ultrasound picking up, although the market momentum in China remains subdued.

Margin Expansion and Productivity Savings

The company delivered EUR 222 million in productivity savings in Q3, bringing the year-to-date total to EUR 566 million. The adjusted EBITDA margin expanded by 50 basis points to 12.3%, despite the full quarter impact of currently imposed tariffs. The company remains on track to achieve the EUR 800 million in productivity savings in 2025.

Outlook and Valuation

For full-year 2025, the company expects comparable sales growth in the 1% to 3% range, with Connected Care growing within this range, Personal Health slightly above the mid-single-digit range, and D&T delivering slight growth year-over-year. The company's valuation metrics, such as the P/E Ratio of 143.53 and EV/EBITDA of 16.35, indicate a premium valuation. However, the company's strong track record of delivering on commitments and its focus on innovation and productivity savings may justify this premium.

Dividend Yield and Free Cash Flow

The company's dividend yield of 3.46% is attractive, and the free cash flow yield of 1.19% is relatively low. However, the company's strong cash flow performance, with free cash flow of EUR 172 million, a EUR 150 million improvement year-over-year, driven by higher earnings, is a positive sign.

3. NewsRoom

Sector Update: Health Care Stocks Slide Late Afternoon

Dec -04

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Sector Update: Health Care Stocks Softer in Afternoon Trading

Dec -04

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Health Care Roundup: Market Talk

Dec -04

Source:

Koninklijke Philips N.V. (PHG): A Bull Case Theory

Dec -04

Source:

Philips says it hasn’t released guidance after concerns sink stock

Dec -04

Source:

Philips reiterates timing of 2026 outlook

Dec -04

Source:

Globant presents a new edition of Converge, its annual thought-provoking event, with global leaders sharing how to move from AI ideation to execution

Dec -03

Source:

Is Philips A Hidden Value Play After Restructuring And Mixed Valuation Signals In 2025

Dec -03

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.25%)

6. Segments

Diagnosis & Treatment Businesses

Expected Growth: 4.5%

Philips' Diagnosis & Treatment business growth of 4.5% is driven by increasing demand for precision medicine, strong sales of imaging systems, and growing adoption of minimally invasive treatments. Additionally, the company's innovative solutions in radiation therapy and health technology services contribute to its growth momentum.

Connected Care

Expected Growth: 6.0%

Philips' Connected Care growth (6.0%) is driven by increasing demand for healthcare technology, driven by aging populations and COVID-19 pandemic. Strong sales of telehealth, patient monitoring, and medical imaging solutions contribute to growth, as healthcare providers shift towards value-based care and digital transformation.

Personal Health Businesses

Expected Growth: 5.5%

The 5.5% growth in Personal Health Businesses from Koninklijke Philips N.V. is driven by increasing demand for health and wellness products, strong sales of connected health devices, and expanding e-commerce capabilities. Additionally, Philips' innovative product offerings and strategic partnerships have enhanced its market position, contributing to the segment's growth.

Other

Expected Growth: 3.0%

Philips' growth is driven by innovative healthcare solutions, strong demand for consumer electronics, and increasing adoption of LED lighting solutions. The company's focus on digital transformation, strategic partnerships, and expansion into emerging markets also contribute to its growth. Additionally, Philips' commitment to sustainability and improving healthcare outcomes supports its long-term growth prospects.

Inter-Segment Eliminations

Expected Growth: 0.0%

Inter-Segment Eliminations from Koninklijke Philips N.V. with 0.0% growth implies that there are no changes in intersegment transactions or pricing. This stagnation suggests that Philips' business segments are not experiencing significant shifts in demand, cost structures, or supply chain dynamics that would impact intersegment interactions.

7. Detailed Products

Philips TVs

Philips TVs offer a range of display technologies, including LED, OLED, and Ambilight, providing an immersive viewing experience with vibrant colors and contrast.

Philips Healthcare Solutions

Philips Healthcare offers a range of medical imaging, patient monitoring, and health informatics solutions to help healthcare professionals diagnose and treat patients more effectively.

Philips Lighting

Philips Lighting offers a range of lighting solutions, including LED bulbs, luminaires, and smart lighting systems, to provide energy-efficient and sustainable lighting for homes, businesses, and cities.

Philips Sonicare Toothbrushes

Philips Sonicare Toothbrushes use advanced sonic technology to provide a deep and gentle cleaning experience, helping to maintain good oral health.

Philips Coffee Machines

Philips Coffee Machines offer a range of coffee makers, grinders, and brewers, allowing users to create a variety of coffee drinks at home.

Philips Air Purifiers

Philips Air Purifiers use advanced filtration technology to remove pollutants and allergens from the air, improving indoor air quality and health.

Philips Shavers

Philips Shavers offer a range of electric shavers, trimmers, and epilators, providing a close and comfortable shaving experience for men and women.

Philips Monitor

Philips Monitor offers a range of computer monitors, including gaming monitors, 4K monitors, and USB-C monitors, providing high-quality visuals and ergonomic design.

8. Koninklijke Philips N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Philips faces a moderate threat from substitutes as some of its products, such as lighting and consumer electronics, have alternative products available in the market. However, the company's focus on innovation and technology, such as LED lighting and health technology, reduces the threat.

Bargaining Power Of Customers

Philips' customers, particularly in the healthcare and consumer electronics segments, have significant bargaining power due to their large volumes and ability to negotiate prices. This can put pressure on Philips' pricing strategy.

Bargaining Power Of Suppliers

Philips has a diverse supplier base and is not heavily reliant on any single supplier. This reduces the bargaining power of suppliers and allows Philips to negotiate favorable terms.

Threat Of New Entrants

The barriers to entry in Philips' industries, such as healthcare technology and consumer electronics, are high due to significant R&D investments and regulatory requirements. This reduces the threat of new entrants.

Intensity Of Rivalry

The industries in which Philips operates, such as consumer electronics and healthcare technology, are highly competitive with many established players. This leads to intense rivalry and pricing pressure.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	38.42%
Debt Cost	4.28%
Equity Weight	61.58%
Equity Cost	8.41%
WACC	6.82%
Leverage	62.39%

11. Quality Control: Koninklijke Philips N.V. passed 1 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Synektik

A-Score: 5.9/10

Value: 1.8

Growth: 9.8

Quality: 7.5

Yield: 5.0

Momentum: 8.5

Volatility: 3.0

1-Year Total Return ->

GSK

A-Score: 5.7/10

Value: 3.9

Growth: 2.2

Quality: 6.5

Yield: 6.9

Momentum: 7.5

Volatility: 7.3

1-Year Total Return ->

STERIS

A-Score: 5.2/10

Value: 2.0

Growth: 6.6

Quality: 6.5

Yield: 1.2

Momentum: 6.0

Volatility: 8.7

1-Year Total Return ->

Sonova

A-Score: 4.5/10

Value: 2.5

Growth: 4.6

Quality: 7.3

Yield: 3.1

Momentum: 1.0

Volatility: 8.7

1-Year Total Return ->

Novo Nordisk

A-Score: 4.4/10

Value: 3.5

Growth: 8.8

Quality: 8.0

Yield: 5.0

Momentum: 0.0

Volatility: 1.3

1-Year Total Return ->

Philips

A-Score: 3.5/10

Value: 2.4

Growth: 1.7

Quality: 2.9

Yield: 6.9

Momentum: 1.5

Volatility: 5.3

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

11.15%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.82%

Koninklijke Philips N.V. - NL0000009538

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on PHIA

1.c. Company Highlights

Higher Yield

Cheaper

Lower Growth

Earnings Miss

Revenues Miss

Earnings Beats

Lower Quality

Strong Momentum

Revenues Beats

Stable Momentum

2. Royal Philips' Q3 2025 Earnings: Delivering on Commitments

Segmental Performance

Margin Expansion and Productivity Savings

Outlook and Valuation

Dividend Yield and Free Cash Flow

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.25%)

6. Segments

Diagnosis & Treatment Businesses

Expected Growth: 4.5%

Connected Care

Expected Growth: 6.0%

Personal Health Businesses

Expected Growth: 5.5%

Other

Expected Growth: 3.0%

Inter-Segment Eliminations

Expected Growth: 0.0%

7. Detailed Products

Philips TVs

Philips Healthcare Solutions

Philips Lighting

Philips Sonicare Toothbrushes

Philips Coffee Machines

Philips Air Purifiers

Philips Shavers

Philips Monitor

8. Koninklijke Philips N.V.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Koninklijke Philips N.V. passed 1 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

23.27$

Current Price

23.27$

Potential

-0.00%

12.e Scoring ^Insights

12.f DCF ^BETA