Investor presentation

Important information

Forward-looking statements and other important information

This document and the related oral presentation, including responses to questions following the presentation, contain certain forward-looking statements with respect to the financial condition, results of operations and business of Philips and certain of the plans and objectives of Philips with respect to these items. Examples of forward-looking statements include statements made about our strategy, estimates of sales growth, future Adjusted EBITA*), future restructuring and acquisition-related charges and other costs, future developments in Philips' organic business and the completion of acquisitions and divestments. Forward-looking statements can be identified generally as those containing words such as "anticipates", "assumes", "believes", "estimates", "expects", "should", "will", "will likely result", "forecast", "outlook", "projects", "may" or similar expressions. By their nature, these statements involve risk and uncertainty because they relate to future events and circumstances and there are many factors that could cause actual results and developments to differ materially from those expressed or implied by these statements.

These factors include, but are not limited to, macro-economic and geopolitical changes-including the war in Ukraine and ongoing conflicts in Israel and the Middle East-as well as measures such as announced and proposed tariffs and trade actions introduced in response to rising global tensions; Philips' ability to keep pace with the changing health technology environment; Philips' ability to gain leadership in health informatics and artificial intelligence in response to developments in the health technology industry; integration of acquisitions and their delivery on business plans and value creation expectations; ability to meet expectations with respect to ESG-related matters; securing and maintaining Philips' intellectual property rights, and unauthorized use of third-party intellectual property rights; failure of products and services to meet quality or security standards, adversely affecting patient safety and customer operations; the resilience of our supply chain; challenges in simplifying our organization and our ways of working; attracting and retaining personnel; breach of cybersecurity; challenges in driving operational excellence and speed in bringing innovations to market; treasury and financing risks; tax risks; reliability of internal controls; compliance with regulations and standards involving quality, product safety, (cyber) security and artificial intelligence; and compliance with business conduct rules and regulations including privacy, existing and upcoming ESG disclosure and due diligence requirements. As a result, Philips' actual future results may differ materially from the plans, goals and expectations set forth in such forward-looking statements. For a discussion of factors that could cause future results to differ from such forward-looking statements, see also the Risk management chapter included in the Annual Report 2024.

Third-party market share data

Statements regarding market share contained in this document, including those regarding Philips' competitive position, are based on outside sources such as specialized research institutes, as well as industry and dealer panels, in combination with management estimates. Where information is not yet available to Philips, market share statements may also be based on estimates and projections prepared by management and/or based on outside sources of information. Management's estimates of rankings are based on order intake or sales, depending on the business.

Market Abuse Regulation

This slide deck contains inside information within the meaning of Article 7(1) of the EU Market Abuse Regulation

Use of non-IFRS Information

In presenting and discussing the Philips Group's financial position, operating results and cash flows, management uses certain non-IFRS financial measures. These non-IFRS financial measures should not be viewed in isolation as alternatives to the equivalent IFRS measure and should be used in conjunction with the most directly comparable IFRS measures. Non-IFRS financial measures do not have standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. A reconciliation of these non-IFRS measures to the most directly comparable IFRS measures is contained in this document. Further information on non-IFRS measures can be found in the Annual Report 2024.

Presentation

All amounts are in millions of euros unless otherwise stated. Due to rounding, amounts may not add up precisely to totals provided. All reported data is unaudited. Financial reporting is in accordance with the accounting policies as stated in the Annual Report 2024. Per share calculations for all periods presented have been retrospectively adjusted to reflect the issuance of shares in 2025 with respect to the share dividend for 2024.

* Non-IFRS financial measure. Refer to reconciliation of non-IFRS information

Company overview

Creating value with sustainable impact

Path to value creation

Our purpose:

To improve people's health and well-being through meaningful innovation.

Our vision:

Better care for more people.

Philips at a glance

• EUR 18.0bn in sales; 11.5% Adjusted EBITA margin¹
• ~70% sales from #1 or #2 positions
• ~40% of sales from recurring revenues
• ~9% of sales invested in R&D
• Leader in ESG in various rankings³

Global sales footprint¹

• North America: 43%
• Western Europe: 22%
• Other mature geographies: 8%
• Growth geographies²: 27%

¹2024 full-year | ²Growth geographies consist of all geographies excluding USA, Canada, Western Europe, Australia, New Zealand, South Korea, Japan and Israel | ³Including S&P ESG rating, CDP Carbon Disclosure Project, EcoVadis

Note: Leadership in Philips-addressable markets

Well-positioned to capture growing and attractive markets, enabling better care for more people through sustainable innovation

Addressable market¹

EUR ~90 billion in 2025

Mid-single digit 2022-2025 CAGR

¹ Philips addressable market, excluding potential adjacencies

Structural and increasing gap between demand and supply of care

• Aging population and more patients
• Growing chronic and complex diseases
• Increasing spend on self-care and personal health
• Staff shortages and rising costs
• Expanding access to healthcare

Global hospital demand and consumer sentiment

Health Systems¹

• North America: Solid
• Europe: Slight improvement
• Greater China: Strong underlying demand
• Rest of world: Solid

Key drivers

• North America: Productivity and consolidation
• Europe: Productivity and digitalization
• Greater China: Anti-corruption and national renewal program; Regulatory changes and localization
• Rest of world: Infrastructure investments and digitalization

Personal Health

• North America: Currently stable
• Europe: Strong
• Greater China: Subdued
• Rest of world: Strong

¹ Diagnosis & Treatment and Connected Care businesses

Closely monitoring hospital demand and consumer sentiment

Our businesses

Full year 2024

Note: Excluding segment Other, 2024 full-year sales and margin

We leverage platforms for personal health, monitoring, imaging and interventional to serve our customers across care settings

Enabled and connected by Enterprise Informatics and services

Diagnosis & Treatment - advancing outcomes for more patients and hospital productivity with precise and predictive imaging

Enabled by industry leading Enterprise Informatics

#1 in PACS¹ and inter-operability

¹ Picture Archiving and Communication System

Note: Leadership positions in Philips addressable market; based on full year 2024 data

Diagnosis & Treatment – a global leader uniquely integrating systems, software, and devices in one interventional platform

Market leading installed base

Note: Leadership positions in Philips addressable market; based on full year 2024

Connected Care – global leader in hospital and ambulatory Monitoring, largest vendor-agnostic Enterprise Informatics

Note: Leadership positions in Philips addressable market; based on full year 2024

Personal Health - strong leadership across businesses, supported by innovation and a trusted brand

Note: Leadership positions in Philips addressable market; based on full year 2024 data

ESG integrated in our purpose and strategy

Leader in ESG in various ratings¹

¹ Including S&P ESG rating, CDP Carbon Disclosure Project, EcoVadis | ² Carbon neutrality in own operations

We are deploying our new culture of impact with care, building on the right team and Healthtech capabilities

Our culture: Impact with care

For patients, people and planet with patient safety, quality and integrity at the heart

The right team and capabilities

• 70% Renewal of Executive Committee
• 75% Executive hires with Healthtech and clinical background
• 77% Employee engagement score

Experienced and passionate executive team

¹ All geographies excluding North America and Greater China

Company overview

Creating value with sustainable impact

Path to value creation

Our plan

Supported by a culture of impact with care and HealthTech talent and capabilities

Focused growth and value creation strategy

70% of revenue, industry leading margins

Accelerating growth in attractive leadership segments

30% of revenue margin upside

Capture value upside with clear execution roadmap

We turn possibilities into great innovations

• 9.4% of sales invested in R&D in 2024
• Approximately 1 out of 2 R&D personnel in software and data science

• 700 new patents filed in 2024
• 50,500 patents

• Philips named Clarivate Top 100 Global Innovator™ for 12th year in a row in 2025
• #1 company for medical technology patent applications with European Patent Office in 2024

Innovating sustainably with quality as highest priority

Innovation is deeply clinically embedded through global partnerships

Global Partnerships:

• MAYO CLINIC
• NYU Langone Health
• THE UNIVERSITY OF CHICAGO UChicago Medicine
• PHOENIX CHILDREN'S Hospital
• KAROLINSKA University Hospital
• UMC Utrecht
• MTIC
• HCL
• SPICES CIVILS DE LYON
• cnic
• Leiden University MC Medical Center
• 臺中榮民總醫院 Taichung Veterans General Hospital
• 臺北榮民總醫院 Taipei Veterans General Hospital
• 北京大学第一医院 PEKING UNIVERSITY FIRST HOSPITAL
• Tohoku University Hospital
• SingHealth
• Fortis
• Narayana Health

Businesses are accountable to deliver innovation from creation to delivery

R&D spend

• 90%
• Diagnosis & Treatment: Diagnostic Imaging, Ultrasound, Image-Guided Therapy
• Connected Care: Monitoring, Enterprise Informatics, Sleep & Respiratory Care
• Personal Health: Personal Health

Driving quality through integrated innovation, design and sustainability

10%

Enterprise innovation: Fundamental and breakthrough innovation, ventures and partnerships

Scalable innovations setting the standard across segments of care

Choose Philips OneBlade, from the #1 Preferred electric Grooming Brand*

Recently launched AI innovations

Execution as key value driver

• Patient safety and quality as highest priority
• Reliable end-to-end supply chain
• Simplified operating model

We have made solid progress on our execution priorities

Company overview

Creating value with sustainable impact

Path to value creation

Continued solid execution of the three-year plan

¹ Excluding restructuring costs, acquisition-related charges and other one-time charges and gains | ² Cumulative in the period | ³ Excluding payments and receipts related to the Respironics litigation in the US

Increasing Adjusted EBITA margin and FCF outlook, including currently announced tariff levels; reiterating comparable sales growth outlook

Note: This outlook reflects currently-announced tariff levels; excludes ongoing Philips Respironics-related proceedings, including the investigation by the US Department of Justice

¹ After payment EUR 1,025 million cash-out relating to the US medical monitoring and personal injury settlements in Q1 2025

Productivity initiatives¹ to deliver EUR 2.5 billion in the 2023-2025 period

Productivity initiatives savings¹

In millions of EUR unless otherwise stated

~2,500

¹ Gross productivity initiatives and re-investments, before inflation

Note: Raising productivity savings target from EUR 2 billion to EUR 2.5 billion driven by further simplification of operating model and procurement savings

Margin increase from productivity, pricing and supply chain improvements – cumulative drivers 2023-2025

Adj. EBITA margin¹

7.4% Adj. EBITA FY2022

4.5% Volume

4-5% Pricing, mix, COGS

3-4% Non-manufacturing cost reduction

~(6)% Inflation

~(2)% Risk

Low-teens Adj. EBITA FY2025E

Performance actions:

• End-to-end supply chain and procurement
• Pricing actions
• Mix and innovation

• Reduction in roles
• R&D prioritization
• GBS and hyper-automation

¹ Investments in patient safety and quality and supply chain improvements included

Note: As provided on January 30, 2023

Balanced capital allocation focusing on organic growth, margin improvement and cash

¹ Organic ROIC excludes acquisitions over a five years period and other items defined as material and of the same nature as the items excluded from Adjusted EBITA such as pension settlements, significant tax charges and benefits, and one-time legal and other provisions; ROIC % = LTM EBIAT/ average NOC over the last 5 quarters;

² Organic ROIC 2019 and 2021 restated to reflect discontinued operations; ³ Organic ROIC in 2019 includes value adjustments of capitalized development costs and the impact of IFRS 16 lease accounting standard

2023-2025 Execute our plan, drive profitable growth

Making solid progress on execution:

• Patient Safety & Quality as first priority
• Reliable supply chain
• Simplification of operating model

Within a more challenging macro environment

Creating value with sustainable impact

2025+ Deliver on full potential of our segments

• Focused growth and value creation strategy
• Delivering people and patient-centric innovation at scale
• Execution as key value driver

Delivered by Healthtech talent and culture of impact with care

Better care for more people