Philips reports benefit from US tariff refund

AMSTERDAM – Philips has reported group sales of EUR 4.4 billion for the second quarter of 2026, a 4% comparable increase. Income from operations were EUR 609 million, including a U.S. tariff refund benefit of EUR 186 million.

Other financial results:

• Adjusted EBITA margin increased to 16.4%, including U.S. tariff refund benefit of effectively 4.2%
• Operating cash flow of EUR 376 million, with free cash flow of EUR 222 million, including receipt of U.S. tariff refund

“We delivered another solid quarter with comparable sales growth of 4%, driven by all business segments, and strong disciplined execution within an uncertain macro environment,” said Roy Jakobs, CEO of Royal Philips. “Customer demand for our innovations remains healthy, with certain large orders in North America shifting into the third quarter, while Europe delivered strong double-digit order growth. Our plan continues to gain traction, creating value through focused segment strategies, differentiated platform innovations, commercial excellence and disciplined execution.”

For the Connected Care business unit, which includes Sleep & Respiratory Care:

• Comparable sales increased 2%
• Adjusted EBITA margin increased to 17.8%, including a U.S. tariff refund benefit of approximately 6.1%. Excluding the U.S. tariff refund benefit, adjusted EBITA increased mainly driven by operational improvements and productivity measures, partly offset by cost inflation and higher tariffs

Philips says disciplined cost management and productivity initiatives delivered EUR 132 million in savings in the quarter. It says it is on track to deliver EUR 1.5 billion in savings under its 2026-28 productivity program.

The company is reiterating its full-year 2026 outlook, updated to reflect the U.S. tariff refund benefit:

• Comparable sales growth: 3%-4.5%
• Adjusted EBITA margin: 13.5%-14.0%, including a U.S. tariff refund benefit of approximately 1%, compared to 12.5%-13% previously
• Free cash flow: EUR 1.5-1.7 billion, updated to reflect the U.S. tariff refund, compared to EUR 1.3-1.5 billion previously

Related: Philips continues to lean on international sleep growth, as FDA path continues.