Philips CEO Says Strong Demand Tempers Tariffs; Sets New Goals

Royal Philips’s top executive said improving performance after introducing new products and streamlining the business is helping to navigate tariffs and volatility.

The Dutch maker of MRI and scanners reported comparable sales growth of 7% during the fourth quarter, it said Tuesday. Adjusted Ebita at 15.1% beat expectations, after innovations and higher productivity more than offset the impact from tariffs, the company said.

Amsterdam-listed Philips also set new mid-term goals on adjusted Ebita and sales growth, at a similar trajectory to current levels.

“We clearly see North America as the growth engine,” Chief Executive Officer Roy Jakobs told Bloomberg in a phone interview. “We see a strong economy that has given us a lot of opportunities on both the healthcare and consumer side.”

US-listed Philips shares jumped 8% in overnight trading.

Makers of medical scanner like Philips and Siemens Healthineers AG are taking a hit from import duties into the US. Philips’ German peer earlier this month said it would be able to mitigate the impact of tariffs over the next three years.

The Amsterdam-listed company is also seeking to draw a line under a recall of devices treating sleep apnea that have cost Philips around $5 billion. The issues arose after noise-dampening foam turned out to be prone to disintegrating inside the ventilators, posing serious health risks when inhaled.

While Philips has risen 6.2% to €24.67 a share since the start of the year, the stock remains far below its pre-recall price of around €47 per share in early 2021. While the product issues have centered on the US, in September French prosecutors stepped up an investigation into the CPAP, BiPAP and mechanical ventilator devices.

Mid-Teens

The company is targeting an operating margin around the mid-teens by 2028. For this year, it sees sees adjusted Ebita returns of 12.5% to 13% and comparable sales growth between 3% to 4.5%.

The maker of CT and MRI scanners set the fresh goals ahead of an investor day later Tuesday. The company also outlined expected growth for comparable sales in the mid-single-digits between 2026 and 2028, it said.

Since taking the helm in 2022, Roy Jakobs has made patient safety a priority and streamlined the organization, cutting thousands of jobs. The company also set made provisions to cover the costs of a medical monitoring class-action lawsuit and individual personal injury claims in the US.

On Tuesday, Philips proposed to re-appoint Jakobs as CEO, according to a separate statement.