November 02, 2017

• Philips has transformed into a focused leader in health technology, delivering on its strategy to capture opportunities in an attractive EUR 149 billion market [1] and further creating value by boosting growth in its core businesses, expanding in adjacencies and improving margins
• The company reiterates its targets of 4% - 6% comparable sales growth [2] and Adjusted EBITA [3] margin improvement of 100 basis points on average annually for the 2017 – 2020 period

New York, United States – At a meeting with investors and financial analysts today in New York, Royal Philips (NYSE: PHG, AEX: PHIA) will provide an update on the company strategy and performance. Chief Executive Officer Frans van Houten, together with Chief Financial Officer Abhijit Bhattacharya and several senior executives will discuss the company’s momentum following its transformation and the many attractive opportunities in the fast growing EUR 149 billion health technology market.

“We have transformed Philips into a focused leader in health technology, delivering innovation to help people manage their own health and support care providers in delivering care effectively and efficiently,” said Frans van Houten. “We will further build on our deep clinical expertise and consumer insights to expand our solutions capabilities and deliver on the promise of the personalization, industrialization and accessibility of care. At the same time, our innovations are driving meaningful organic growth for Philips, and we will continue to create value by boosting growth in our core businesses, expanding in adjacencies and improving margins. We are on track to deliver on our targets for this year.”

Philips reiterates its targets for the medium term: Next to the 4% - 6% comparable sales growth and an Adjusted EBITA margin step-up of 100 basis points on average per year for the 2017 – 2020 period, Philips also continues to expect to generate approximately EUR 1 billion – EUR 1.5 billion of free cash flow annually and an improvement of the Return on Invested Capital (ROIC) to mid-to-high teens by 2020 [4].

Presentations at the New York Stock Exchange in New York City will start at 08:30 am ET (13:30 pm CET). Until approximately 12:15 pm ET (17:15 pm CET), the plenary sessions can be followed via a live webcast. A video summary of the subsequent business zooms will be made available soon after the end of the event. Please click on this link to follow the webcast and download the slides that will be used during the day.

[1]    2016 health technology market, which is projected to grow to EUR 190-195 billion in 2020. Source: Philips internal analysis, McKinsey analysis; Philips-defined addressable markets including adjacencies.

[2]    Comparable sales exclude the effect of currency movements and acquisitions and divestments (changes in consolidation). Philips believes that comparable sales information enhances understanding of sales performance.

[3]    Adjusted EBITA is defined as Income from operations (EBIT) excluding amortization of acquired intangible assets, impairment of goodwill and other intangible assets, restructuring charges, acquisition-related costs and other significant items.

[4]    Based on the organic growth plan.

About Royal Philips