Q3 2025 Koninklijke Philips NV Earnings Call

November 4, 2025

Press release, and the Investor presentation can be accessed on our Investor Relations website. The replay and full transcript of this website webcast will be available on our website. After this call concludes I want to draw your attention to our safe Harbor statement on the screen and in the presentation I will now.

Durga Doraisamy: Jacobs, and our CFO, Charlotte Hanneman. The press release and the investor presentation can be accessed on our investor relations website. The replay and full transcript of this webcast will be available on our website after this call concludes. I want to draw your attention to our Safe Harbor statement on the screen and in the presentation. I will now hand over to Roy.

Durga Doraisamy: Jakobs, and our CFO, Charlotte Hanneman. The press release and the investor presentation can be accessed on our investor relations website. The replay and full transcript of this webcast will be available on our website after this call concludes. I want to draw your attention to our Safe Harbor statement on the screen and in the presentation. I will now hand over to Roy.

Hand over to Roy.

Thanks, Doug.

Good morning, everyone.

Thank you for joining us today.

Roy Jacobs: Thanks, Durga. Good morning, everyone. Thank you for joining us today. We entered Q3 with good momentum. We sustained it and delivered on plan for the quarter. Order intake grew 8%, marking the fourth consecutive quarter of improvement. It reflects the robust demand for our products and our disciplined execution. Comparable sales growth stepped up sequentially to 3% year-on-year. All businesses contributed to growth. Personal health delivered particularly strong performance. Adjusted EBITDA margin expanded by 50 basis points to 12.3, in spite of the full quarter impact of currently imposed tariffs. It reflects solid gross margin delivery driven by innovation, as well as the impact of our productivity and cost management. Overall, our performance in the first nine months is tracking as expected, with momentum weighted towards the second half as orders and growth build through the year.

Roy Jakobs: Thanks, Durga. Good morning, everyone. Thank you for joining us today. We entered Q3 with good momentum. We sustained it and delivered on plan for the quarter. Order intake grew 8%, marking the fourth consecutive quarter of improvement. It reflects the robust demand for our products and our disciplined execution. Comparable sales growth stepped up sequentially to 3% year-on-year. All businesses contributed to growth. Personal health delivered particularly strong performance. Adjusted EBITDA margin expanded by 50 basis points to 12.3, in spite of the full quarter impact of currently imposed tariffs. It reflects solid gross margin delivery driven by innovation, as well as the impact of our productivity and cost management. Overall, our performance in the first nine months is tracking as expected, with momentum weighted towards the second half as orders and growth build through the year.

We entered the third quarter with good momentum.

We sustained it.

And delivered on plan for the quarter.

Okay.

Order intake grew 8%.

The fourth consecutive quarter of improvement.

It reflects the robust demand for our products and our disciplined execution.

Roy Jakobs: Despite significant volatility in major currencies, particularly the US dollar, the impact on our adjusted EBITDA margin and EPS was broadly flat, reflecting disciplined hedging, an optimized currency footprint, and targeted commercial actions in markets most exposed to currency fluctuations. We delivered strong cash flow performance this quarter with free cash flow of €172 million, representing a €150 million improvement year over year. Higher earnings drove this. Moving to the balance sheet, we ended the quarter with approximately €1.9 billion of cash and net debt of approximately €6.5 billion. We maintained our disciplined focus on working capital, delivering a solid year-over-year improvement in inventory as a percentage of sales, despite ongoing tariff mitigation initiatives. Our leverage ratio remained in line with Q2 2025 and last year at 2.2x on a net debt to adjusted EBITDA basis. We remain committed to maintaining strong investment-grade credit rating.

Comparable sales growth stepped up sequentially to 3% year on year.

All businesses contributed to growth.

<unk> helped deliver particularly strong performance.

Adjusted EBITDA margin expanded by 50 basis points to 12 three.

In spite of the full quarter impact of currently imposed tariffs.

It reflects solid gross margin delivery driven.

Driven by innovation as well as the impact of our productivity and cost management.

Overall, our performance in the first nine months is tracking as expected.

That momentum weighted towards the second half as orders and growth build through the year.

We are delivering on our commitments.

And we contained.

Roy Jacobs: We are delivering on our commitments, we contain and sustain this momentum with disciplined execution into Q4 to achieve our full year plan as we complete the year. We reiterate our full year comparable sales growth outlook in the range of 1% to 3%. We expect our 2025 Adjusted EBITDA margin to be at the upper end of 11.3% to 11.8% range, reflecting our confidence in our execution. We continue to expect full year free cash flow to be between EUR 0.2 and 0.4 billion. These expectations assume current tariff levels remain unchanged, with mitigation fully on track. Now, let's look at our Q3 performance in more detail. Starting with orders. Equipment order intake grew 8%, maintaining the momentum we have built over the last 12 months, including the typical quarter-to-quarter unevenness in large orders.

Roy Jakobs: We are delivering on our commitments, we contain and sustain this momentum with disciplined execution into Q4 to achieve our full year plan as we complete the year. We reiterate our full year comparable sales growth outlook in the range of 1% to 3%. We expect our 2025 Adjusted EBITDA margin to be at the upper end of 11.3% to 11.8% range, reflecting our confidence in our execution. We continue to expect full year free cash flow to be between EUR 0.2 and 0.4 billion. These expectations assume current tariff levels remain unchanged, with mitigation fully on track. Now, let's look at our Q3 performance in more detail. Starting with orders. Equipment order intake grew 8%, maintaining the momentum we have built over the last 12 months, including the typical quarter-to-quarter unevenness in large orders.

<unk> sustained this momentum with disciplined execution into the fourth quarter to achieve our full year plan as we complete the year.

We reiterate our full year comparable sales growth outlook in the range of 1% to 3%.

We expect our 2025% adjusted EBITDA margin to be at the upper end of 11, three to 11, 8% range, reflecting our confidence in our execution.

Roy Jakobs: Turning to the outlook, with three quarters behind us and continued strong execution, we have solid visibility for the remainder of the year. Our expectations for Q4 remain unchanged from the start of the year. We continue to expect sequential improvement in comparable sales growth, supported by sustained order conversion, sustained momentum in personal health sales, and disciplined execution. For the full year, we continue to expect 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. Year-to-date adjusted EBITDA margin improved to 11.2%, a 40 basis point increase despite higher tariffs, driven by strong execution and cost discipline.

We continue to expect full year free cash flow.

To be between <unk>, two and <unk> 4 billion euros.

These expectations assume current tariff levels remain unchanged with mitigation fully on track.

Now, let's look at our third quarter performance in more detail.

Starting with orders.

Order intake grew 8% and.

Maintaining the momentum we have built over the last 12 months.

Including the typical quarter to quarter unevenness in large orders.

Year to date, our order book is up 6% compared to last year.

Roy Jacobs: Year to date, our order book is up 6% compared to last year. Our strong order performance in Q3 was driven by a sustained double-digit growth in North America. Strong order growth in connected care was partly offset by modest decline in D&T. Within D&T, order growth in Image-Guided Therapy and ultrasound in Q3 was offset by a small decline in diagnostic imaging following 3 consecutive quarters of positive order intake growth. We are pleased with 6% year-to-date order growth in D&T, driven by solid performance, and we continue to focus on strengthening commercial execution in DI and expect improvement in Q4. In Image-Guided Therapy, we released minimally invasive procedures for cardio, neuro, and oncology interventions. Demand for our high-end Azurion 7 system remained strong. Growth in ultrasound orders reflect robust demand for our further enhanced leading EPIQ CVx systems, which highlights Philips leadership in cardiovascular care.

Roy Jakobs: Year to date, our order book is up 6% compared to last year. Our strong order performance in Q3 was driven by a sustained double-digit growth in North America. Strong order growth in connected care was partly offset by modest decline in D&T. Within D&T, order growth in Image-Guided Therapy and ultrasound in Q3 was offset by a small decline in diagnostic imaging following 3 consecutive quarters of positive order intake growth. We are pleased with 6% year-to-date order growth in D&T, driven by solid performance, and we continue to focus on strengthening commercial execution in DI and expect improvement in Q4. In Image-Guided Therapy, we released minimally invasive procedures for cardio, neuro, and oncology interventions. Demand for our high-end Azurion 7 system remained strong. Growth in ultrasound orders reflect robust demand for our further enhanced leading EPIQ CVx systems, which highlights Philips leadership in cardiovascular care.

Our strong order performance in Q3 was driven by a sustained double digit growth in North America.

Roy Jakobs: With continued momentum and even with the impact of tariffs, which is more pronounced in the second half of the year, we now expect full year adjusted EBITDA margin at the upper end of the 11.3% to 11.8% range. Turning to free cash flow, we continue to expect a full year range between €0.2 billion and €0.4 billion. As a reminder, this outlook includes the €1 billion outflow related to the Respironics settlement paid in Q1. Our outlook excludes potential wider economic impact as well as ongoing Philips Respironics-related proceedings, including the Department of Justice investigation. With that, I would like to hand it back to Roy for his closing remarks. Thank you, Charlotte. The third quarter progressed as expected, and we remain confident in delivering on our full year commitments.

Strong order growth and connected care was partially offset by modest decline in DMT.

Within DNT order growth in image guided therapy in ultrasound in Q3 was offset by a small decline in diagnostic imaging following three consecutive quarters of positive order intake growth.

We are pleased with 6% year to date order growth in D&B driven.

<unk> by solid performance and we continue to focus on strengthening commercial execution in di and expect improvement in Q4.

And image guided therapy, we believe amendment invasive procedures for cardio neuro and oncology interventions demand for high end zero seven system remain strong.

Growth in ultrasound orders reflect robust demand for our further enhanced leading epic Cvs systems, which highlights philipps leadership in cardiovascular care.

Roy Jakobs: Looking ahead to our capital markets day in February 2026, we will showcase the fundamental progress achieved under our 2023 to 2025 plan, establishing a strong foundation for the future. And we will share how we will and are evolving this into a next three-year plan of consistent value creation and focused value acceleration. I'm incredibly proud of our passionate teams, staying close to customers, executing with discipline, and keeping our momentum throughout the end of this year. Thank you, and we are now ready for your questions. Thank you, sir. If any participant would like to ask a question, please press the star followed by two times one on your telephone. Due to the time, please limit yourselves to one question and one follow-up. This will give more people the opportunity to ask questions. There will be a short pause while participants register for a question.

These AI powered solutions enhanced precision streamline workflows and boost clinical confidence.

Roy Jacobs: These AI-powered solutions enhance precision, streamline workflows, and boost clinical confidence. Turning to diagnostic imaging. The demand for our BlueSeal MR 5300 and CT 5300 remains strong. We also advanced CT and MR innovation in radiation therapy planning, which we will touch on shortly. These systems, together with our strong imaging informatics offer, are resonating with customers for their precision diagnostics and AI-driven workflow productivity, positioning us well for renewed momentum ahead. In connected care, demand for hospital patient monitoring solutions continued to gain momentum. North America remains a key growth driver with strong demand, supported by major partnerships and continued hospital standardization with strong cybersecurity demands. We are especially pleased with the traction of our latest IntelliVue MX patient monitors, the AI-powered PIC iX central monitoring systems, and our X3 transport monitors equipped with measurement modules.

Roy Jakobs: These AI-powered solutions enhance precision, streamline workflows, and boost clinical confidence. Turning to diagnostic imaging. The demand for our BlueSeal MR 5300 and CT 5300 remains strong. We also advanced CT and MR innovation in radiation therapy planning, which we will touch on shortly. These systems, together with our strong imaging informatics offer, are resonating with customers for their precision diagnostics and AI-driven workflow productivity, positioning us well for renewed momentum ahead. In connected care, demand for hospital patient monitoring solutions continued to gain momentum. North America remains a key growth driver with strong demand, supported by major partnerships and continued hospital standardization with strong cybersecurity demands. We are especially pleased with the traction of our latest IntelliVue MX patient monitors, the AI-powered PIC iX central monitoring systems, and our X3 transport monitors equipped with measurement modules.

Turning to diagnostic imaging the demand for our Blue Shield <unk> five to 105 to 100 remained strong we also advanced <unk> and EMR innovation and radiation therapy planning, which I will touch on shortly.

These systems together with our strong imaging informatics offer are resonating with customers for the precision diagnostics and AI driven workflow productivity.

Positioning us well for renewed momentum at.

And connected care demand for hospital patient monitoring solutions continued to gain momentum.

North America remains a key growth driver with strong demand supported by major partnerships and continued hospital standardization with strong cyber security demands.

We are especially pleased with the traction of our latest <unk> <unk> patient monitors the AI powered <unk> central monitoring systems, and our <unk> III transport monitors equipped with measurement modules.

Roy Jakobs: The first question comes from Mr. Julien Leroy from Jefferies. Please state your question, sir. Hi, good morning, Roy. Good morning, Charlotte. Thanks for taking my questions. I have two. The first one would relate to a general question around price hikes going forward. You are obviously out of a period of inflation and also the tariff impact. So just curious how you think about price increase going forward. We can remember that two or three years ago, the whole industry proceeded with price hikes at the end of the inflation crisis. So just curious whether you should expect some benefit from that in the next couple of years. That would be my first general question. The second question relates to PH. Obviously, a super strong quarter on EasyComps.

With collaborations and partnerships that spending at the industry from Apple life Sciences to Medtronic, Masimo and getting it.

Roy Jacobs: With collaborations and partnerships that span the industry from Abbott Laboratories to Medtronic, Masimo, and Getinge, we have created an efficient interoperable patient monitoring and real-time data platform that addresses the key customer priorities. It's the ecosystem platform of choice for patient monitoring. Building on the strong value proposition, we expanded our enterprise partnerships, as reflected in some new ones that we announced this quarter. For example, our monitoring as service agreements with leading US health systems, such as Hoag Health System in Orange County and Rady Children's Hospital in San Diego. They empower our customers to focus on what matters most, improving patient outcomes while we handle system complexity. Moving to enterprise informatics, which also contributed to connected care's order growth in the quarter. Migration to the cloud remains a strategic priority to unlock further value in this business.

Roy Jakobs: With collaborations and partnerships that span the industry from Abbott Laboratories to Medtronic, Masimo, and Getinge, we have created an efficient interoperable patient monitoring and real-time data platform that addresses the key customer priorities. It's the ecosystem platform of choice for patient monitoring. Building on the strong value proposition, we expanded our enterprise partnerships, as reflected in some new ones that we announced this quarter. For example, our monitoring as service agreements with leading US health systems, such as Hoag Health System in Orange County and Rady Children's Hospital in San Diego. They empower our customers to focus on what matters most, improving patient outcomes while we handle system complexity. Moving to enterprise informatics, which also contributed to connected care's order growth in the quarter. Migration to the cloud remains a strategic priority to unlock further value in this business.

We have created in.

An efficient interoperable patient monitoring and real time data platform that.

That addresses the key customer priorities.

The ecosystem platform of choice for patient monitoring.

Building on the strong value proposition, we expanded our enterprise partnerships as reflected in some new ones that we announced this quarter for example, our monitoring our service agreements with leading U S health systems, such as <unk> health system in Orange County, and Rady Children's Hospital in San Diego.

They empower our customers to focus on what matters, most improving patient outcomes, while we handle system complexity.

Roy Jakobs: So just curious whether there is any restocking effect in China and maybe help us understand what was actually the contribution of China in this quarter. That's it. Thank you. Thank you, Julien. Let me take the first one, and then maybe Charlotte can take the second. So on the pricing, so as you've seen also from our bridge, kind of we are driving our margin expansion on the back of two key drivers that we see taking effect. One is expansion of gross margin, and that actually is especially the new innovations generating more traction in the total percentage of orders and then flowing through to sales. That's where we see actually that price increases do support our margin, as well as the productivity and cost discipline actions that we're taking.

Moving to enterprise Informatics, which also contributed to connected gears order growth in the quarter.

Turning to Diagnostic Imaging the demand for a blue seal Mr. 5300. And CT 5300, remain strong. We also Advanced CT and Mr. Innovation, in radiation therapy planning, which will touch on shortly.

Migration to the cloud remains a strategic priority to unlock further value in this business. This quarter, we signed a multiyear agreement with a major U S health system to move its radiology imaging to the cloud.

Roy Jacobs: This quarter, we signed a multi-year agreement with a major US health system to move its radiology imaging to the cloud. It's using Philips IntelliSpace Radiology on Amazon Web Services for that, improving efficiency, scalability, and security while enabling future AI innovation. Turning back to personal health. Growth was strong and broad-based across all three businesses. Grooming and beauty, oral healthcare, and mother and childcare. Seller trends remained healthy across Europe and most growth geographies. China remains subdued amid cautious consumer sentiment, and demand in the US remains resilient. We saw strong demand for premium products, including high-end shavers and IPL hair removal devices in grooming and beauty, but also for DiamondClean series in oral healthcare. Our continued investment in innovation fuels the momentum in orders we are delivering across the portfolio.

Roy Jakobs: This quarter, we signed a multi-year agreement with a major US health system to move its radiology imaging to the cloud. It's using Philips IntelliSpace Radiology on Amazon Web Services for that, improving efficiency, scalability, and security while enabling future AI innovation. Turning back to personal health. Growth was strong and broad-based across all three businesses. Grooming and beauty, oral healthcare, and mother and childcare. Seller trends remained healthy across Europe and most growth geographies. China remains subdued amid cautious consumer sentiment, and demand in the US remains resilient. We saw strong demand for premium products, including high-end shavers and IPL hair removal devices in grooming and beauty, but also for DiamondClean series in oral healthcare. Our continued investment in innovation fuels the momentum in orders we are delivering across the portfolio.

These systems together with our strong Imaging, informatics offer are resonating with customers for their Precision, Diagnostics, and ai-driven workflow productivity.

And it's using Philips entellus based radiology on Amazon Web services <unk>.

Positioning as well for renewed momentum ahead.

Improving efficiency scalability and security, while enabling future AI innovation.

And connected care, demand for hospital patient monitoring solutions continue to gain momentum.

Turning back to personal health.

Growth was strong and broad based across all three businesses grooming and beauty oral healthcare and modern childcare.

North America remained the key growth driver, with strong demand supported by major partnerships and continued hospital standardization, along with strong cybersecurity demands.

Roy Jakobs: We expect in the coming period that there will be some pricing, given the inflationary environment that we're in. But we also know that kind of actually the inherent value increase of our innovations and how we price them in combination with kind of productivity and cost will be the bigger driver of that. So we see pricing opportunity, but not to kind of a large extent that kind of we also would impede growth because growth is still of critical importance, and we will keep driving that whilst we expand the margin at the same time as you have seen. Yeah. Then thank you, Julien, for your second question on personal health. We are very pleased with our personal health sales in the quarter of 11% indeed.

Sellout trends remained healthy across Europe, and most growth geographies.

China remained subdued amid cautious consumer sentiment.

We are especially pleased with the traction of our latest in Tel Aviv: MX Patient Monitors, the AI-powered Pickax Central Monitoring Systems, and our X3 Transport Monitors equipped with measurement modules.

And demand in the us remains resilient.

We saw strong demand for premium products, including high end, shavers, and IPL hair removal devices and grooming in beauty.

With collaborations and Partnerships that span the industry from Apple Life Sciences to Medtronic masimo and getting it.

We have created.

But also for Diamond clean series and or health care.

Our continued investment in innovation fueled the momentum in orders, we are delivering across the portfolio.

That addresses the key customer priorities. It's the ecosystem platform of choice for patient monitoring.

In Q3, we expanded our pipeline with solutions designed to accelerate growth enhance customer value and drive consumer engagement.

Roy Jacobs: In Q3, we expanded our pipeline with solutions designed to accelerate growth, enhance customer value, and drive consumer engagement. We launched Transcend Plus in Ultrasound across our EPIQ and Affiniti systems. It's featuring enhanced imaging and 26 FDA-cleared cardiovascular AI applications, the most in the industry, supporting faster, more consistent diagnostics. Similarly, in radiation therapy treatment planning, we continue to advance our innovation pipeline. At the American Society for Radiation Oncology, we introduced Areta RT CT scanners and BlueSeal MR Radiation Therapy, which expanded our radiation oncology imaging portfolio and our sustainable MR leadership. Moving to consumers. We are also strongly driving our innovation pipeline in personal health. Last month, TIME named the Philips S9000 Prestige Ultra one of the best inventions of 2025. A clear example of how our SenseIQ Pro AI technology continues to drive leadership in premium grooming.

Roy Jakobs: In Q3, we expanded our pipeline with solutions designed to accelerate growth, enhance customer value, and drive consumer engagement. We launched Transcend Plus in Ultrasound across our EPIQ and Affiniti systems. It's featuring enhanced imaging and 26 FDA-cleared cardiovascular AI applications, the most in the industry, supporting faster, more consistent diagnostics. Similarly, in radiation therapy treatment planning, we continue to advance our innovation pipeline. At the American Society for Radiation Oncology, we introduced Areta RT CT scanners and BlueSeal MR Radiation Therapy, which expanded our radiation oncology imaging portfolio and our sustainable MR leadership. Moving to consumers. We are also strongly driving our innovation pipeline in personal health. Last month, TIME named the Philips S9000 Prestige Ultra one of the best inventions of 2025. A clear example of how our SenseIQ Pro AI technology continues to drive leadership in premium grooming.

Roy Jakobs: As I said also just earlier, partially that was helped by a low comparable base in China, but even excluding China, we saw broad-based growth across all businesses and geographies. So very pleasing. Your question on the restocking in China, we don't see any restocking. In fact, as we said, we finalized the inventory destocking at the end of Q2 and continue to be very, very cautious on making sure that those inventory levels are in line with our expectations. So no restocking there. Thank you very much. Thank you. The next question comes from Ed Wright from Redburn. Please ask your question. Good morning. Thank you. Really a strong improvement in productivity this year, despite some of the challenges you faced. How should we think about maintaining that momentum into 2026? And particularly related to tariffs, and you've almost fully offset the tariff headwinds this quarter.

We launched <unk>, plus and ultrasound across our epic and <unk> systems.

Building on the strong value proposition, we expanded our enterprise partnerships as reflected in some new ones that we announced. This quarter, for example, our monitoring-as-a-service agreements with leading U.S. health systems, such as Hawk Health System, Orange County, and Rady Children's Hospital in San Diego.

It's featuring enhanced imaging and 26 FDA cleared cardiovascular AI applications. The most in the industry supporting foster more consistent diagnostics.

they Empower, our customers to focus on what matters most improving patient outcomes while we handle system complexity

Similarly in radiation therapy treatment planning, we continue to advance our innovation pipeline at.

Moving to Enterprise Informatics, which also contributed to connected gears order growth in the quarter.

Migration to the cloud remains a strategic priority to unlock further value in this business.

At the American Society for radiation oncology, we introduced.

Remember, our weaker radiation therapy city scanners, and Blue C LMR radiation therapy.

This quarter, we signed a multi-year agreement with a major US Health System to move its Radiology Imaging to the cloud.

We've expanded our radiation oncology imaging portfolio and our sustainable leadership.

And it's using Philips intellispace Radiology, on Amazon web services for that.

Moving to consumers. We are also strongly driving our innovation pipeline in personal health.

Improving efficiency scalability and security while enabling future AI innovation.

Turning back to personal health.

Last month <unk> named the Philips <unk> procedure Ultra one of the best inventions of 2025.

Growth was strong and broad-based across all three businesses: grooming and beauty, healthcare, and modern childcare.

Clear example of our center Cube Pro AI technology continues to drive leadership in premium grooming.

Salon trans remained healthy, across Europe, and most growth geographies.

Our latest launches continue to resonate.

China remained subdued, and cautious consumer sentiment and demand in the U.S. remain resilient.

Not only with consumers, but with high performing retailers too.

Roy Jacobs: Our latest launches continue to resonate, not only with consumers, but with high-performing retailers too. Lumea IPL debuted in the US exclusively on Amazon with strong early uptake. The next generation Sonicare 6000 and 6400 models launched exclusively with Walmart. We continue to execute our priorities, from enhancing patient safety and quality, to improving supply chain resilience, and simplifying our operations. Our multi-year program to strengthen quality systems and embed a patient safety first culture is delivering steady progress. In 2025, we passed 6 out of 9 FDA inspections with no observations. Between 2024 and 2025, our 15 FDA inspections resulted in a 43 issuance rate, nearly 60% lower than in 2021 to 2023, despite the comparable number of inspections.

Roy Jakobs: Our latest launches continue to resonate, not only with consumers, but with high-performing retailers too. Lumea IPL debuted in the US exclusively on Amazon with strong early uptake. The next generation Sonicare 6000 and 6400 models launched exclusively with Walmart. We continue to execute our priorities, from enhancing patient safety and quality, to improving supply chain resilience, and simplifying our operations. Our multi-year program to strengthen quality systems and embed a patient safety first culture is delivering steady progress. In 2025, we passed 6 out of 9 FDA inspections with no observations. Between 2024 and 2025, our 15 FDA inspections resulted in a 43 issuance rate, nearly 60% lower than in 2021 to 2023, despite the comparable number of inspections.

EMEA IPL debuted in the U S exclusively on Amazon.

Roy Jakobs: Should we be perhaps assuming that you can fully offset the annualized tariff impact next year? Thanks. Thank you. Thank you very much, Ed. Let me take that question. So first of all, we're very much focused on 2025 and delivering in line with our expectation, which is now at the higher end of the 11.3% to 11.8% range. And as you rightfully mentioned, we've been able to compensate a lot of the tariffs while we still have a net impact of €150 to 200 million after substantial mitigations. And that gives us a lot of confidence. Now, if I look ahead at 2026, of course, we have our capital markets day on 10 February, and we're looking forward to giving you a lot more details at that point in time.

We saw strong demand for premium products, including high-end Shavers, and IPL hair removal devices in grooming and beauty.

With strong early uptake.

but also for Diamond clean series, and or Healthcare

And a next generation <unk> 6000, and 6400 models launched exclusively with Walmart.

Our continued investment in innovation fuels the momentum and orders. We are delivering across the portfolio.

We continue to execute our priorities.

From enhancing patient safety and quality to improving supply chain resilience and simplifying our operations.

In Q3, we expanded our pipeline with solutions designed to accelerate growth, enhance customer value, and drive consumer engagement.

Our multiyear program to sanction quality systems, and our best patient safety first culture is delivering steady progress in.

We launched Transcend Plus in ultrasound across our EPIC and Affinity systems.

In 2025, we passed six out of nine FDA inspections with no observations.

Between 2024, and 2025 hour 15, FDA inspections resulted in a 43 issuance rate nearly 60% lower than in 'twenty, one to 'twenty three despite a comparable number of inspections.

Vascular AI applications, the most in the industry, support faster, more consistent diagnostics.

Roy Jakobs: What I would tell you in broad strokes is we are happy with the momentum that we've seen from an order intake perspective, from a sequential sales step-up perspective, from a margin perspective. So we are very focused on continuing improving on all fronts, but more to come on 10 February from that perspective. Thanks. Thank you. The next question comes from Hugo Soltvedt from BNP Paribas Exane. Please go ahead. Hi, hello. Thanks for taking my questions and congrats on the results. I have two, please. First, can you explain a bit on the order timing in D&T and how would you expect diagnostic imaging sales to evolve going forward? Second, Roy, happy to get your thoughts on Section 232. How do you think this could impact imaging and connected care business, and where do you stand exactly on reshoring of manufacturing in the US in particular? Thank you.

Similarly, in radiation therapy, treatment planning. We continue to advance our Innovation pipeline.

Against that background background. The FDA warning letter issued last week is disappointing.

at the American society, 48 radiation oncology, we introduced

Roy Jacobs: Against that background, the FDA warning letter issued last week is disappointing, and we are fully committed and in full remediation since Q2 to resolve all observations to the agency's satisfaction. We continue to work constructively with the regulatory agencies, also on new innovations, and we already received 27 FDA clearances through Q3, matching the total for 2024 and demonstrating an accelerating approval rate. We have also reduced global field actions by around 20% year-to-date, following a similar reduction last year, while we continue to improve complaint handling and strengthening corrective and preventive action processes. We remain fully focused on driving measurable, lasting improvements in our business in coro-collaboration with the global regulators, and on reinforcing trust among patients, clinicians, and investors. Moving to supply chain, we continue to make executional improvements.

Roy Jakobs: Against that background, the FDA warning letter issued last week is disappointing, and we are fully committed and in full remediation since Q2 to resolve all observations to the agency's satisfaction. We continue to work constructively with the regulatory agencies, also on new innovations, and we already received 27 FDA clearances through Q3, matching the total for 2024 and demonstrating an accelerating approval rate. We have also reduced global field actions by around 20% year-to-date, following a similar reduction last year, while we continue to improve complaint handling and strengthening corrective and preventive action processes. We remain fully focused on driving measurable, lasting improvements in our business in coro-collaboration with the global regulators, and on reinforcing trust among patients, clinicians, and investors. Moving to supply chain, we continue to make executional improvements.

And we are fully committed and in full remission since Q2 to resolve all observations to the agency satisfaction.

Weber areata radiation therapy. CT scanners and blue. CRMR radiation therapy.

Which expanded our radiation ecology Imaging portfolio and our sustainable. Mr. Leadership.

We continue to work constructively with regulatory agencies also new innovations and we already received 27 FDA clearances through Q3.

Moving to Consumers.

Matching the total for 2024 and demonstrating an accelerating approval rate.

Last month time named The Philips. I 9000 Prestige Ultra 1 of the best inventions of 2025.

We have also reduced global field actions by around 20% year to date.

Growing a similar reduction last year.

A clear example of how our sensor que Pro AI technology continues to drive leadership in premium grooming.

While we continue to improve complaint handling and strengthened corrective and preventive action processes.

Our latest launches continue to resonate.

Not only with consumers, but with high performing retailers too.

We remain fully focused on driving measurable loss improvements in our business and core collaboration with global regulators and on reinforcing trust among patients clinicians and investors.

Lumere IPL. Debuted in the US exclusively on Amazon.

With strong early, uptake.

Roy Jakobs: Thank you, Hugo. So on the order timing, and I think it's good indeed to if you look at the order buildup of D&T, as said, we are happy with the 6% year-to-date. You also saw that it's not yet fully evenly balanced, right? Q2 was really the quarter of D&T. Q3 is the quarter of CC. Right? So as we build up our order momentum, we're also getting some of these large deals. And Q2 was really a very strong D&T quarter. Q3 is a very strong CC quarter. Actually, in Q4, we expect D&T also to further step up. Also, we see that in our funnel. So actually, whilst there's certain lumpiness, the underlying improvement is visible. And you also see that coming through. The same is for the realization of sales.

Moving to supply chain, we continue to make execution improvements in Q2, we announced a multi year nationwide agreement with unique Indonesian Ministry of health to expand access to therapy using our <unk> platform. Now we are already installing the first system, a clear proof points of our speed and agility.

We continue to execute our priorities.

Roy Jacobs: In Q2, we announced a multi-year nationwide agreement with Indonesian Ministry of Health to expand access to therapy using our Azurion platform. Now, we are already installing the first system, a clear proof point of our speed and agility and execution strength. This collaboration exemplifies the broader progress we are making across our supply chain, where we continue to deliver tangible operational impact and greater resilience in an uncertain supply chain environment. This is also demonstrated by the continued increase in service levels across health systems modalities, reaching 87% in the quarter, a new high and another sequential step up. Finally, we continue to simplify how we work with a more connected organization that focuses talent and resources where growth is happening. This shift is fueling continued progress in productivity and in performance. Turning to the regions. The fundamentals of the markets we serve remain sound.

Roy Jakobs: In Q2, we announced a multi-year nationwide agreement with Indonesian Ministry of Health to expand access to therapy using our Azurion platform. Now, we are already installing the first system, a clear proof point of our speed and agility and execution strength. This collaboration exemplifies the broader progress we are making across our supply chain, where we continue to deliver tangible operational impact and greater resilience in an uncertain supply chain environment. This is also demonstrated by the continued increase in service levels across health systems modalities, reaching 87% in the quarter, a new high and another sequential step up. Finally, we continue to simplify how we work with a more connected organization that focuses talent and resources where growth is happening. This shift is fueling continued progress in productivity and in performance. Turning to the regions. The fundamentals of the markets we serve remain sound.

From enhancing patient safety and quality to improving supply chain resilience and simplifying our operations.

Our multi-program to thank Quality Systems and about a patient. Safety-first culture is delivering steady programs.

And execution strength.

This collaboration exemplifies the broader progress, we're making across our supply chain.

In 2025, we passed 6 out of 9, FDA inspections with no observation.

Where we continue to deliver tangible operational impact and greater resilience and an uncertain supply chain environment.

There is also demonstrated by the continued increase in service levels across health systems modalities, reaching.

Between 2024 and 2025 our 15 fa inspections resulted in a 43 issuance rate, nearly 60%, lower than in 21 to 23, despite a comparable number of inspections.

Reaching 87% in the quarter, a new high and another sequential step up.

Roy Jakobs: We also have seen the step-up in sales, although also there, of course, it goes with the order conversion. And there we see that some timelines are longer, but also we expect there an improvement in Q4, which also in the eye is coming through. On top, I think it's also good to say that, as you know from our strategy, we had in how we drive our businesses two different parts. One was we have growth businesses at higher margins that we explicitly drive for growth, and we have margin expansion businesses, and those are exactly doing what they should be doing. So we have been expanding DI margin. We have been expanding EI margin. We have been expanding SRC margin, also in the third quarter. We have been really driving growth strongly across the order of growth businesses.

Finally, we continue to simplify how we work with a more connected organization that focuses talent and resources where growth is happening.

Against that background background. The FDA warning letter issued last week is disappointing, and we are fully committed and in full remediation since Q2 to resolve all observations to the agency satisfaction.

This shift is fueling continued progress in productivity and in performance.

Turning to the regions.

We continue to work constructively with the Regulatory Agencies, also on new Innovations. And we already received 27, FDA clearances through Q3

The fundamentals of the markets, we serve remain sung <unk>.

Dynamics vary per region.

Matching the total for 2024, demonstrating an accelerating approval rate.

And in some areas uncertainty is increasing.

Roy Jacobs: Dynamics vary per region and in some areas, uncertainty is increasing. In North America, hospital demand remains strong with continued customer pool for platforms that deliver productivity to serve more patients at lower costs and to achieve better outcomes, increasingly enabled by AI. That said, demand is unevenly spread across hospitals and regions of the US. As hospital resource constraints in people and costs increase, they seek smarter, more productive ways to manage higher workloads with less people while serving more patients. Productivity has become a defining theme for our customers, one that sits at the heart of our innovation agenda. This positions us well to capture growth, reflected in the sustained double-digit order intake growth over the past 12 months in the US. In China, tender activity has been gradually increasing throughout the year. Although from a low base fueled by stimulus measures.

Roy Jakobs: Dynamics vary per region and in some areas, uncertainty is increasing. In North America, hospital demand remains strong with continued customer pool for platforms that deliver productivity to serve more patients at lower costs and to achieve better outcomes, increasingly enabled by AI. That said, demand is unevenly spread across hospitals and regions of the US. As hospital resource constraints in people and costs increase, they seek smarter, more productive ways to manage higher workloads with less people while serving more patients. Productivity has become a defining theme for our customers, one that sits at the heart of our innovation agenda. This positions us well to capture growth, reflected in the sustained double-digit order intake growth over the past 12 months in the US. In China, tender activity has been gradually increasing throughout the year. Although from a low base fueled by stimulus measures.

We have also reduced Global field actions by around 20% year to date.

In North America Hospital demand remains strong with continued customer pool for platforms that deliver productivity to serve more patients at lower costs and to achieve better outcomes.

Following a similar reduction last year.

While we continue to improve compain, handling, and strengthening corrective and preventive action processes.

Recently enabled by AI.

Demand is unevenly spread across hospitals in regions of the U S.

Roy Jakobs: Now, of course, we want to have both margin and growth expansion from all segments, but actually, we're also driving them within the strategy. So in that sense, I think you've seen that we will kind of step up, and that's also what Charlotte mentioned. In Q4, we also are launching, of course, new innovations like the radiation therapy suite that will support that. As well, of course, we have the RS&A upcoming with some exciting news there as well. So that's kind of how we look to continue the D&T trajectory into Q4, but also, of course, in the period to come next year. The 232. So we see that. I think we look at this in conjunction with tariffs. There's a lot of fluctuation out there. We are focusing very strongly on the controllable to see how we can mitigate that.

We remain fully focused on driving measurable, lasting improvements in our business in collaboration with the global regulators.

As hospital resource constraints in people and cost increase they seek smarter more productive ways to manage higher workloads with less people, while serving more patients.

And on reinforcing trust among patients, clinicians and investors.

So productivity has become a defining theme for our customers.

That sits at the heart of our innovation agenda.

And this positions us well to capture growth reflected in the sustained double digit order intake growth over the past 12 months in the U S.

Moving to supply chain, we continue to make executional improvements in Q2. We announced a multi-year nationwide agreement with Eunice Indonesian Ministry of Health to expand access to therapy using our azurion platform. Now, we are already installing the first system, a Clear Proof point of our Speed and Agility and execution strength.

In China tender activity has been gradually increasing throughout the year.

This collaboration exemplifies the broader progress, we are making across our supply chain.

Although from a low base fueled by stimulus measures.

Where we continue to deliver tangible operational impact and greater resilience in an uncertain supply chain environment.

At the same time centralized procurement kept expanding which meant lower processing times and tougher competition, making it harder for bidding activity to translate into meaningful market growth.

Roy Jacobs: At the same time, centralized procurement kept expanding, which meant longer processing times and tougher competition, making it harder for bidding activity to translate into meaningful market growth. We continue to have a cautious view on the near-term outlook for China, but remain positive about the market's long-term growth potential. Capital spending remains stable in Europe and Latin America, while India and Saudi Arabia continue investing in healthcare and digitization, creating strong opportunities. In an uncertain environment, staying close to our customers and partners is more important than ever. We are also actively engaging with leading industry associations like AdvaMed in the US and MedTech Europe, as well as authorities in key markets. Our objective remains clear: to advocate for patients and ensure access to care. Every dollar, euro, or RMB spent on tariffs is one not spent on innovation.

Roy Jakobs: At the same time, centralized procurement kept expanding, which meant longer processing times and tougher competition, making it harder for bidding activity to translate into meaningful market growth. We continue to have a cautious view on the near-term outlook for China, but remain positive about the market's long-term growth potential. Capital spending remains stable in Europe and Latin America, while India and Saudi Arabia continue investing in healthcare and digitization, creating strong opportunities. In an uncertain environment, staying close to our customers and partners is more important than ever. We are also actively engaging with leading industry associations like AdvaMed in the US and MedTech Europe, as well as authorities in key markets. Our objective remains clear: to advocate for patients and ensure access to care. Every dollar, euro, or RMB spent on tariffs is one not spent on innovation.

This is also demonstrated by the continued increase in service levels across health system modalities.

Reaching 87% in the quarter, the new high, and another sequential step up.

Roy Jakobs: I think we are happy that actually in Q3, we showed that we are able to offset in full the tariff impact. Now, that's hard work because it's still substantial. We also have the same plan for Q4, where we want to deliver a strong margin quarter that also helps us to kind of give the higher end of the range. We, of course, following the 232 and are engaged because we're engaged in Europe, US, and China in advocating strongly that actually we can lower tariffs and actually forego further impact on patient care. So in that sense, kind of A, we're actively engaging in a dialogue. B, we are preparing ourselves to focus on the controllable so that we can deal with any consequences. On that last point also, we have further strengthened our footprint in the US.

We continue to have a cautious view on our near term outlook for China, but we remain positive about the markets long term growth potential.

Finally, we continue to simplify how we work with a more connected organization that focuses talent and resources where growth is happening.

Capital spending remains stable in Europe, and Latin America, while India, and Saudi Arabia continue investing in healthcare and Digitization.

This shift is fueling continued progress in productivity and in performance.

Turning to the regions.

Creating strong opportunities.

The fundamentals of the markets, we serve remain sound.

In an uncertain environment, staying close to our customers and partners is more important than ever.

Dynamics vary per region.

And in some areas, certainty is increasing.

We are also actively engaging with leading industry associations like AD format in U S <unk> Europe as well as authorities in key markets.

Our objective remains clear to advocate for patients and ensure access to care.

Every dollar euro RMB spend on tariffs is one not spend on innovation.

Roy Jakobs: So we invested another $50 million in Richfield, expanding our ultrasound, but also wider facility there. We're also looking at another facility to actually be even better prepared for the localization needs. That's in line with kind of the trajectory we have been having across our supply chain. I mentioned that we've really strengthened our supply chain delivery and also the agility to kind of address challenges. Whether challenges with tariffs or next period, we are better prepared, and actually, we are upping our service levels and upping orders and sales. So we make sure that we stay resilient while we deal with uncertainties around us. Thank you. The next question comes from the line of Mr. Hassan Al-Wakil from Barclays. Please go ahead. Good morning. Thank you for taking my questions. A couple for me. Firstly, follow-up on D&T, please.

In North America, hospital demand remains strong, with continued customer pool for platforms that deliver productivity to serve more patients at lower costs and to achieve better outcomes, increasingly enabled by AI. That said, demand is unevenly spread across hospitals and regions of the U.S.

We must ensure tariff measures and trade barriers do not hinder innovation access or affordability of care.

Roy Jacobs: We must ensure tariff measures and trade barriers do not hinder innovation, access, or affordability of care. We remain closely attuned to evolving customer and consumer dynamics to stay agile and responsive. We innovate to deliver better and more care. Charlotte will now discuss our Q3 performance in more detail and our outlook for 2025.

Roy Jakobs: We must ensure tariff measures and trade barriers do not hinder innovation, access, or affordability of care. We remain closely attuned to evolving customer and consumer dynamics to stay agile and responsive. We innovate to deliver better and more care. Charlotte will now discuss our Q3 performance in more detail and our outlook for 2025.

We remain closely tuned to evolving customer and consumer dynamics to stay agile and responsive we.

As Hospital resource constraints in people and causes increase, they seek smarter more productive ways to manage higher workloads with less people, while serving more patients.

We innovate to deliver better and more care.

So productivity has become a defining theme for our customers.

<unk> will now discuss our third quarter performance in more detail and our outlook for 2025.

1 that sits at the heart of our Innovation agenda.

Thank you Roy.

The group achieved 3% comparable sales growth, while our three business segments delivered four 3% underscoring the strength of our core operations.

over the past 12 months in the US,

Charlotte Hanneman: Thank you, Roy. The group achieved 3% comparable sales growth, while our three business segments delivered 4.3%, underscoring the strength of our core operations. In diagnosis and treatment, comparable sales improved sequentially in line with our expected phasing, increasing by 1% year-over-year. Image-Guided Therapy delivered solid growth, nearing the mid-single digit range, marking consecutive multi-year expansion. A remarkable track record of consistent performance fueled by strong momentum in our flagship Azurion platform and strength in coronary intravascular ultrasound devices. Precision diagnosis sales were broadly in line with last year. Strong growth in ultrasound was driven by continued strength in cardiovascular, led by our EPIQ CVx systems. This was offset by a modest decline in diagnostic imaging, primarily due to the timing of orders.

In China tender activity has been gradually increasing throughout the year.

In diagnosis and treatment comparable sales improved sequentially in line with our expected phasing increasing by 1% year over year.

although, from a low base fueled by stimulus measures,

Image guided therapy delivered solid growth nearing the mid single digit range, marking consecutive multiyear expansion a remarkable track record of consistent performance fueled by strong momentum in our flagship <unk> platform and strength in coronary entire kastler ultrasound devices.

Roy Jakobs: Last quarter, Roy, you talked about your win rate improving in China, particularly in CT on the back of Spectral. How is that faring today? Do you think your softer China order commentary is a function of market growth or share losses, or both? And then, secondly, just if you can expand on the warning letter in ultrasound and informatics and what gives you confidence that this will not result in regulatory action and that your more recent quality improvement measures are yielding company-wide change. Thank you. Yeah, thank you, Hassan. So on D&T, we have seen indeed, and that's also what was called out, further traction on the 5300 and CT, as well as the MR. And actually, that is building in the funnel. Next to that, we saw ultrasound really picking up. And actually, that in part also addressed maybe some concern from the warning letter.

At the same time, centralized procurement kept expanding, which meant longer processing times and tougher competition, making it harder for bidding activity to translate into meaningful market growth.

We continue to have a course of view on the near-term outlook for China, but remain positive about the market's long-term growth potential.

Precision diagnosis yields were broadly in line with last year.

<unk> growth in ultrasound was driven by continued strength in cardiovascular led by our epic PBX systems.

Capital spending remains stable in Europe and Latin America while India and Saudi Arabia continue investing in healthcare and digitalization creating strong opportunities.

This was offset by a modest decline in diagnostic imaging, primarily due to the timing of orders.

In an uncertain environment, staying close to our customers, and partners is more important than ever.

Our flagship product continued to perform well, particularly the <unk> 300, which delivered a strong ramp up in order conversions. Following its launch last year. The major contributor to our further improvements in gross margin within diagnostic imaging.

Charlotte Hanneman: Our flagship products continued to perform well, particularly the CT 5300, which delivered a strong ramp-up in order conversions following its launch last year. The major contributor to a further improvement in gross margin within diagnostic imaging. Adjusted EBITDA margin decreased by 80 basis points to 11.8%, mainly due to the incremental headwinds from the currently imposed tariffs and cost inflation, partially offset by gross margin from recently launched innovations as well as productivity. Absent these headwinds, both gross and adjusted EBITDA margins improved year-on-year, highlighting the underlying strength and demonstrating robust operational execution. In Connected Care, comparable sales grew 5%, supported by strong growth in monitoring. This was partially offset by lower sleep and respiratory care sales, while enterprise informatics remained stable.

We are also actively engaging with leading industry, associations like at forat in the US and MK Europe as well as authorities in key markets.

Our objective remains clear: to advocate for patients and ensure access to care.

Adjusted EBITA margin decreased by 80 basis points to 11, 8%, mainly due to the incremental headwinds from the currently imposed tariffs and cost inflation, partially offset by gross margin from recently launched innovation as well as productivity.

Every dollar or Euro or R&B spend on tariffs is 1 not spend on innovation.

We must ensure that tariffs, measures, and trade barriers do not hinder innovation, access, or affordability of care.

Roy Jakobs: Actually, ultrasound, we have been dialing up order intake momentum and sales momentum while we actually have been working in parallel the remediation since Q2 because this is not new, right? For us, we got the 483 at the end of Q1. We started to remediate in Q2 and in Q3, and you have seen no impact on results. That's also why we can be quite confident that this will not have impact on results. We are remediating the process part of it, and we are in full kind of remediation and take it very seriously, of course. But we also know that this is no product issue, not a patient safety issue. This is process remediation. And we have been working that while absorbing it and stepping up our products. Then on China, I think in China, you see that it's a mixed picture.

We remain closely tuned to evolving customer and consumer dynamics to stay agile and responsive.

Absent these headwinds both gross and adjusted EBITDA margins improved year on year, highlighting the underlying strength and demonstrating robust operational execution.

We innovate to deliver better and more care.

shallot will now discuss our third quarter performance in more detail and our outlook for 2025

Thank you, Roy.

And connected care comparable sales grew 5% supported by strong growth in monitoring this.

This was partially offset by lower sleep and respiratory care sales, while enterprise informatics remained stable.

The group achieved 3% comparable sales growth. While our 3, business segments, delivered 4.3% underscoring, the strength of our core operations

Growth in monitoring was driven by higher installation of latest Intel <unk> Nx patient monitors X three transport patient monitors and AI power pick IX central monitoring systems across most geographies with particular strength in North America.

Charlotte Hanneman: Growth in monitoring was driven by higher installation of latest IntelliVue MX patient monitors, IntelliVue X3 transport patient monitors, and AI-powered PIC iX central monitoring systems across most geographies, with particular strength in North America. Adjusted EBITDA margin improved by 410 basis points to 11.4%, including a 150 basis point gain from the remeasurement of a minority investment. Excluding this gain, the margin improved by 260 basis points to 9.9%, driven by operational leverage in the hospital patient monitoring business, favorable mix effects, and productivity, partially offset by tariffs and cost inflation. In personal health, comparable sales increased by 11% in the quarter, with broad-based growth across all regions and strong performance across the three businesses within the segment.

in diagnosis and treatment comparable sales improved sequentially in line with our expected phasing increasing by 1% year-over-year,

Adjusted EBITA margin improved by 410 basis points to 11, 4%, including a 150 basis point gain from the re measurement of our minority investments.

Roy Jakobs: Overall, the market momentum, I would still call out for health systems as subdued, right? We still don't see the market growth coming back as we all hope. And that's really market phenomena. We see vendors increasing, but it's not turning to order growth because we see that they are not landing yet. Processing times are longer. They are being disputed. And that's something that actually we are facing as industry. On the other hand, we have seen that ultrasound, for example, has been up in our mix, and we saw ICT also picking up. We saw some slowness in DI, where actually last quarter it was stronger. So actually, we're working also to kind of see how we can strengthen it again in Q4. So it's not that linear over the quarters. But in general, I think we are all waiting for further strengthening of China.

That delivered solid growth nearing, the mid single digit range, marking consecutive multi-year expansion. A remarkable track record of consistent performance. Fueled by strong momentum in our Flagship auran platform and strength in coronary interval ultrasound devices.

Precision diagnosis seals were broadly in line with last year.

Excluding this gain the margin improved by 260 basis points to nine 9% driven by operational leverage in the hospital patient monitoring business favorable mix effects and productivity, partially offset by tariffs and cost inflation.

Strong growth in ultrasound was driven by continued strength in cardiovascular LED bar. Epiq CVX systems.

This was offset by a modest decline in Diagnostic Imaging, primarily due to the timing of orders.

In personal health comparable sales increased by 11% in the quarter with broad based growth across all regions and strong performance across.

Across the three businesses within the segment.

This sustained strong performance reflects robust demand across most geographies, including our resilient customer sentiment in North America.

Our Flagship products continue to perform well particularly the CT 5300 which delivered a strong ramp up in order conversions. Following its launch last year the major contributor to a further Improvement in gross margin within Diagnostic Imaging.

Adjusted Abita margin decreased by 80 basis points.

Charlotte Hanneman: This sustained strong performance reflects robust demand across most geographies, including a resilient customer sentiment in North America. Growth was also supported by an easier comparison base in China following the impact of inventory destocking last year, which concluded in Q2 of 2025. Personal health adjusted EBITDA margin improved by 60 basis points to 17.1%, driven by increased sales and productivity, partially offset by tariffs. Impact from advertising and promotion spend remained slightly elevated year-on-year, though lower than in Q2, to support sustained demand and recent launches. These investments are delivering as intended, contributing to higher sales growth, and are underscored by strong demand for our premium products across all businesses. Sales and other decreased by EUR 41 million, primarily due to lower royalty income as we expected, resulting in a EUR 21 million reduction in adjusted EBITDA for the quarter.

Roy Jakobs: Now, we do expect it to come, but it's just not clear when. So therefore, we remain cautious. And of course, you know that the China part of D&T is just bigger than also the CC part. So you see that that weighs a bit stronger on the portfolio. Maybe one data point was important. If you look at DI in North America, we have been growing orders by 16% year-to-date. So while we are growing, of course, we're coming from a smaller base, and that weighs upon us. But it's not we don't have momentum there, but of course, we are rebuilding from a smaller base. So those are a few, I think, data points on the D&T momentum. So we keep building it. We also have strong engagement with customers.

Growth was also supported by an easier comparison base in China. Following the impact of inventory Destocking last year, which included in the second quarter of 2025.

To 11.8% mainly due, to the incremental, headwinds from the currently, imposed tariffs and cost inflation. Partially offset by gross margin from Recently, launched Innovation, as well as productivity

Personal health adjusted EBITA margin improved by 60 basis points to 17, 1% driven by increased sales and productivity, partially offset by tariffs.

Absent. These headwinds, both gross and adjusted, Abita margins improved year on year, highlighting the underlying strength and demonstrating robust operational execution.

Impacts from advertising and promotion spend remains slightly elevated year on year, though lower than in Q2 to support sustained demand and recent launches. These.

In Connected Care, comparable sales grew by 5%, supported by strong growth in monitoring.

This was partially offset by lower Sleep and Respiratory Care sales, while Enterprise Informatics remained stable.

These investments are delivering as intended contributing to higher sales growth and are underscored by strong demand for our premium products across all businesses.

Roy Jakobs: We have been receiving many of them actually here for co-creation sessions, and I've been individually also part of that. So I see it coming also towards the next year, but we are sequentially building it through the quarters. Roy, if I could just quickly follow up, in your prepared remarks, you talked about tougher competition on the ground in China, as well as some of the market issues that you just talked about. Where is that manifesting itself? Yeah, I think what I mean with the tough competition is that in, of course, the centralized procurement, you have a much more regulated process around competition. And that makes that we see, and I think everybody's facing that, that you're kind of much more guided in that process. There are more disputes coming out. So when you have one, people are rebutting it.

Finally sales and other decreased by 41 million euros, primarily due to lower royalty income as we expected, resulting in a 21 million euros reduction reduction in adjusted EBITDA for the quarter.

Growth in monitoring was driven by higher installation of latest intelligent view, MX. Patient monitors X3 transport patient monitors and AI, powered pickax Central monitoring systems across most geographies with particular strength in North America.

Turning to our group results and operating highlights for the third quarter.

I just did Abita margin improved by 410 basis points to 11.4%, including a 150 basis. Point game from the re-measurement of a minority investment.

Charlotte Hanneman: Turning to our group results and operating highlights for the Q3. Comparable sales growth improved sequentially, aligned with our expected phasing, increasing 3% with broad-based growth across all three segments, partially offset by lower royalty income as expected. Comparable sales in mature geographies grew 3%, led by North America, with contributions from all segments. Growth geographies increased 5%, driven by strength in Personal Health and Connected Care, while Diagnosis & Treatment was broadly flat. Adjusted EBITDA margin increased by 50 basis points to 12.3%, driven by higher sales, favorable mix effects, and productivity measures, which more than offset the impact from incremental tariffs and lower royalty income. With tariffs evolving, we continue to actively mitigate their impact, strengthening our ability to execute with consistency and deliver sustained performance. The impact year-to-date is tracking in line with our expectations.

Comparable sales growth improved sequentially aligns with our expected phasing, increasing 3% with broad based growth across all three segments, partially offset by lower royalty income as expected.

Comparable sales in mature geographies grew 3% led by North America with contributions from all segments.

Excluding this game, the margin improved by 260 basis points to 9.9%, driven by operational leverage in the hospital patient monitoring business. Favorable mix effects and productivity were partially offset by tariffs and cost inflation.

Growth geographies increased 5% driven by strength in personal health and connected care, while diagnosis and treatment was broadly flat.

Roy Jakobs: So that's, I think, where you see on the ground that it's becoming tougher because it's not only clinical preference. There's also more process in the mix. I think that is a fair, I think, depiction of the China situation, and that's something that we all are dealing with, I think, all parties. And you saw it also, I think, in some commentary of others. I think we are working through that. I think on the other side, on the positive side, we also mentioned that kind of we are working to offset, and that's not only short-term, but also longer-term. The strong momentum of double-digit orders in North America, of course, is also a big part of mitigation for that. And there also, we could still deliver 8% total order growth despite that China is not back where it is.

In personal health comparable, seals increased by 11% in the quarter with broad-based growth across all regions and strong performance across the 3 businesses within the segment.

Adjusted EBITDA margin increased by 50 basis points to 12, 3% driven by higher sales favorable mix effect and productivity measures, which more than offset the impact from incremental tariffs and lower royalty income.

This sustained strong performance reflects robust demand across most geographies, including a resilient customer sentiment in North America.

With tariffs evolving we continue to actively mitigate their impact strengthening our ability to execute with consistency and deliver sustained performance.

Growth was also supported by an easier comparison. Based in China, following the impact of inventory D stocking last year, which included in the second quarter of 2025?

The impact year to date is tracking in line with our expectations for full year 2025, we continue to anticipate a net impact of 150 to 200 million euros after substantial mitigation with nowhere patients since the outlook we provided in July.

Virtually upset by tariffs.

Charlotte Hanneman: For full year 2025, we continue to anticipate a net impact of 150 to 200 million EUR after substantial mitigation, with no revisions since the outlook we provided in July. As planned, short-term tariff mitigation initiatives in Q3 focused on inventory management, specialty programs, exemptions, and cost discipline, and helped reduce the tariff impact. We also advanced medium-term initiatives meaningfully, including our supplier network and commitment to manufacturing location optimization. In August, we announced a $150 million investment in the US, which will not only expand production, but also strengthen both cost efficiency and local supply continuity. We will continue progressing similar initiatives across the portfolio, carefully balancing regulatory, operational, and customer considerations. In Q3, we delivered 222 million EUR in productivity savings, bringing the year-to-date total to 566 million EUR.

Roy Jakobs: And of course, there we are firing also on the strongholds that we have. And CC was particularly strong this quarter, but also we continue to build on the rest. So as we are shifting to get where the demand is coming, more contribution, that's North America, but also Europe. You also see that kind of we will be building that into our sales of the various underlying segments. Very helpful. Thank you. Thank you. We will now take the next question from Mr. David Adlington from J.P. Morgan. Please go ahead. Mr. David Adlington, J.P. Morgan. Thanks for the questions. First, maybe just we could get your thoughts on GE's decision. Can you hear me? Yes. Can you hear me, David? Okay. Yeah, so just on GE's decision to sell the Chinese.

The impact from advertising and promotion spend remained slightly elevated year on year, though lower than in Q2, to support sustained demand and recent launches.

As planned short term tariff mitigation initiatives in the third quarter focused on inventory management specialty programs exemptions and cost discipline and helps reduce the tariff impact.

These investments are delivering as intended, contributing to higher sales growth, and are underscored by strong demand for our premium products across all businesses.

We also advanced medium term initiatives meaningfully, including our supplier network and commitment to manufacturing locations to mutation in.

Finally sales and other decreased by 41 million euros primarily due to lower royalty income. As we expected resulting in a 21 million euros. Reduct reduction in adjusted abeyta for the quarter.

In August we announced a 150 million U S dollar investments in the U S, which will not only expand production, but also strengthen both cost efficiency and local supply continuously.

Turning to our group results and operating highlights for the third quarter.

We will continue progressing similar initiatives across the portfolio carefully balancing regulatory operational and customer considerations.

Comparable, sales growth improved sequentially aligned with our expected phasing, increasing. 3%, with broad-based growth across all 3 segments, partially offset by lower royalty income as expected,

In Q3, we delivered 222 million euros in productivity savings, bringing the year to date total to 566 million euros, we remain on track to achieve the $800 million and productivity savings in 2025.

Comparable sales and mature geographies grew. 3%, led by North America with contributions from all segments.

Roy Jakobs: Business, just wondered if you thought there was potential to pick up share, but also just get your thoughts in terms of why they might be looking to exit China. And then secondly, just wondered if we would, as the hedges rolled us on the foreign exchange, just wondered what sort of headwind that will be to margin for next year. Thank you. Okay. So on GE, of course, I cannot speak on behalf of GE and what they're doing. What I do see is actually that indeed on the ground, we are dialing up our competitive positioning around the innovations that we have been launching. And as I said, kind of we see that that also is resonating. We saw the ultrasound pickup. We see also that there is kind of more activity, but kind of we need to materialize that.

Growth geographies increased 5%, driven by strength in personal health and connected care, while diagnosis and treatment was broadly flat.

Charlotte Hanneman: We remain on track to achieve the EUR 800 million in productivity savings in 2025. Our disciplined approach to cost management and productivity initiatives has cumulatively delivered EUR 2.3 billion in savings since the start of our 3-year plan in 2023, exceeding our initial commitment to delivering EUR 2 billion by the end of 2025. As we build on this strong foundation, we are increasingly leveraging AI to unlock the next wave of productivity gains across the company. In personal health, since Q2, more than 80% of our marketing content has been created or enhanced using GenAI tools. This includes how we generate insights, refine creative content, and even how we manage digital assets. These capabilities are already improving productivity and have delivered an increase in ROI up to double-digit returns.

Our disciplined approach to cost management and productivity initiatives as cumulatively delivered $2 3 billion euros in savings since the start of our three year plan in 2023 exceeding our initial commitment to delivering $2 billion by the end of 2025.

Adjusted Abita margin increased by 50 basis points to 12.3%, driven by higher sales.

Favorable mix effects and productivity measures more than offset the impact from incremental tariffs and lower royalty income.

As we build on this strong foundation, we are increasingly leveraging AI to unlock the next wave of productivity gains across the company.

The tariffs evolving. We continue to actively mitigate their impact. Strengthening our ability. To execute with consistency and deliver sustained performance.

In personal health since the second quarter more than 80% of our marketing content has been created or enhance using gen. AI tools. This includes how we generate insights we find creative content and even how we manage digital assets. These capabilities are already improving productivity and have delivered.

Roy Jakobs: And I think overall, globally, you see that we have good order momentum. And kind of that is because of the customer preference for our platforms. I think the approach of innovation that we're taking, where we're really looking into the broader productivity and workflow support, supported with the combination of products and AI and informatics is something that is resonating. So I would say that's kind of our competitive differentiation and where we have three strong platforms that we're pulling from that customers can build upon, and they are interoperable and open. So that kind of we can play with partnerships in the industry as well to strengthen the delivery towards customers. I think that's on the first part, and maybe you can take the second on FX, Charlotte. Yeah, absolutely. Thanks, David.

The impact here today is tracking in line with our expectations for full-year 2025. We continue to anticipate a net impact of €150 million to €200 million after substantial mitigation, with no revisions since the outlook we provided in July.

An increase in return on investment up to double digit returns.

As planned, short-term tariffs and mitigation initiatives in the third quarter focused on inventory management, specialty programs, exemptions, and cost discipline, which helped reduce the tariff impact.

In enterprise Informatics, AI is accelerating R&D through greater use of AI generated code enhancing customer support with predictive AI agents and strengthening sales and marketing throughout two AI automated content creation and real time buyer analytics for example, and customer support or AI.

Charlotte Hanneman: In enterprise informatics, AI is accelerating R&D through greater use of AI-generated code, enhancing customer support with predictive AI agents, and strengthening sales and marketing throughout through AI automated content creation and real-time buyer analytics. For example, in customer support, our AI agents automatically perform remote system health checks and proactive maintenance, reducing support costs by 80%. In the quarter, adjusting items amounted to EUR 122 million, of which EUR 40 million were related to Respironics field action and consent decree remediation. This is below our Q3 2025 outlook of EUR 165 million, mainly driven by cost phasing within the year. Income tax expense increased by EUR 22 million, reflecting higher income before tax, while net income rose to EUR 187 million, mainly driven by higher earnings.

We also Advanced medium-term initiatives meaningfully including our supplier Network and commitment to manufacturing location optimization.

Agents automatically perform remote system health checks and proactive maintenance, reducing support costs by 80%.

In August, we announced 150 million US dollar investments in the US, which will not only expand production, but also strengthen both cost efficiency and local Supply continuity.

Roy Jakobs: So your question on FX, and of course, we're very pleased with not seeing any impact from FX perspective in Q3. Now, if you go and also look at Q4, that's where we do expect some currency headwinds to come in, which also will impact our margin, and that's fully, fully included in the guide of the higher end of 11.3% to 11.8%. And where we'll get out in February, we'll also take the currency impact into account in our guide there. But what I would tell you overall, that we've been doing very well in terms of offsetting any currency impacts, as you have seen also in Q3. Thank you. We will now take the next question from Mr. Graham Doyle from UBS. Please go ahead. Thanks, guys. Just two for me.

In the quarter adjusting items amounted to 122 million euros of which 40 million euros will related to restaurant field action and consent degree remediation.

We will continue progressing, similar initiatives across the portfolio, carefully balancing regulatory, operational, and customer considerations.

This is below our Q3 2025 outlook of 165 million euros, mainly driven by cost savings within the year.

In Q3 we delivered, 222 million euros, in productivity savings, bringing the year to today, total to 566 million euros. We remain on track to achieve the 800 million euros in productivity Savings in 2025

Income tax expense increased by $22 million.

Reflecting higher income before tax while net income rose to 187 million, mainly driven by higher earnings.

Adjusted diluted EPS from continued operations was 36 zero cents in the quarter up 13% year over year, driven by positive contribution from growth.

Charlotte Hanneman: Adjusted diluted EPS from continuous operations was EUR 0.36 in the quarter, up 13% year-over-year, driven by positive contribution from growth. Despite significant volatility in major currencies, particularly the US dollar, the impact on our Adjusted EBITDA margin and EPS was broadly flat, reflecting disciplined hedging and optimized currency footprint and targeted commercial actions in markets most exposed to currency fluctuations. We delivered strong cash flow performance this quarter with free cash flow of EUR 172 million, representing a EUR 150 million improvement year-over-year. Higher earnings drove this. Moving to the balance sheet. We ended the quarter with approximately EUR 1.9 billion of cash and net debt of approximately EUR 6.5 billion.

Our disciplined approach to cost management and productivity initiatives has cumulatively delivered €2.3 billion in savings since the start of our three-year plan in 2023, exceeding our initial commitment to deliver €2 billion by the end of 2025.

As we build on this strong foundation, we are increasingly leveraging AI to unlock the new.

Despite significant volatility in major currencies, particularly the U S dollar the impact on our adjusted EBITA margin and EPS was broadly flat, reflecting disciplined hedging and optimized currency footprint and targeted commercial actions in markets most exposed to currency fluctuations.

net wave of productivity gains across the company.

In personal health. Since the second quarter more than 80% of our marketing content has been created

Roy Jakobs: Just firstly, on the tariff side of things, just conceptually, we think of the order book growth you've had, which probably would support, say, mid-single-digit growth next year. You think of the cost savings, the mitigation you've got in there. Just to be fair, is it reasonable to assume margins can expand next year with tariffs where they are at the moment? Just to get some clarity on that. We're not asking for a level, but just to assume that they can expand. And then just on China, we're hearing quite a bit about VBP within the CT and ultrasound segments. And I know a couple of your peers have seen it, but mainly because they play in the sort of lower end and mid-level hospitals. Is this something that's affecting your business, or do you just not play in those categories? Thank you. Thank you, Graham.

In Genai tools.

We delivered strong cash flow performance this quarter with free cash flow of 172 million euros, representing 150 million improvement year over year.

This includes how we generate insights, find creative content, and manage digital assets. These capabilities are already improving productivity and have delivered an increase in return on investment of up to double-digit returns.

Here earnings drove this.

Moving to the balance sheet, we ended the quarter with approximately $1 9 billion euros of cash and net debt of approximately $6 5 billion euros. We maintained our disciplined focus on working capital delivering a solid year over year improvement in inventory as a percentage of sales despite ongoing tariff mitigation initiatives.

Charlotte Hanneman: We maintained our disciplined focus on working capital, delivering a solid year-over-year improvement in inventory as a percentage of sales despite ongoing tariff mitigation initiatives. Our leverage ratio remained in line with Q2 2025 and last year at 2.2x on a net debt to Adjusted EBITDA basis. We remain committed to maintaining strong investment-grade credit rating. Turning to the outlook. With three quarters behind us and continued strong execution, we have solid visibility for the remainder of the year. Our expectations for Q4 remain unchanged from the start of the year. We continue to expect sequential improvement in comparable sales growth, supported by sustained order conversion, sustained momentum in Personal Health sales, and disciplined execution.

In enterprise informatics, AI is accelerating R&D through greater use of AI-generated code and enhancing customer support with predictive AI agents, and strengthening sales and marketing throughout through AI-automated content creation and real-time buyer analytics. For example, in customer support, our AI agents automatically perform remote.

Our leverage ratio remained in line with Q2 2025 and last year at two two times on a net debt to adjusted EBITDA basis, we remain committed to maintaining strong investment grade credit rating.

Roy Jakobs: Let me take the first question on tariffs. So as you know, for this year, tariffs after substantial mitigations are impacting us to an extent of €150 to 200 million. And despite that, we're expanding our margins at this point in time at the higher end of the 11.3% to 11.8% margin, so by 30 basis points. You said it, of course. The tariffs are annualizing next year, so that will be a little bit of a bigger impact. But the way we are looking at it is we know every year we need to improve, including the new reality around us. And one of the big new realities around us is tariffs.

System health checks and proactive maintenance, reducing support costs by 80%.

Turning to the outlook.

With three quarters behind Us and continued strong execution, we have solid visibility for the remainder of the year.

In the quarter, adjusting items amounted to 122 million euros of which 40 million euros were related to Respironics field action and consent degree remediation. This is below our Q3 2025 Outlook of 165 million euros, mainly driven by cost facing within the year.

Our expectations for Q4 remained unchanged from the start of the year. We continue to expect sequential improvement in comparable sales growth supported by sustained order conversion sustained momentum in personal health sales and disciplined execution.

Income tax expense increased by €22 million, reflecting higher income before tax. While net income rose to €1,877 million, mainly driven by higher earnings.

For the full year, we continue to expect 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 DMT delivering slight growth year over year.

Roy Jakobs: So without wanting to go into any specifics at this point in time, because we'll do that on 10 February, what I can tell you is that we're very much focused on improvement, improvement from a sales perspective, improvement from a margin perspective, and also improvement from a cash flow perspective. On the CT ultrasound question, VBP in China, I think the procurement rollout is quite broad-based, so we are also affected by that. So we see that as well in part of kind of the portfolio where we play. So that's, I think, a market phenomena. That's also where I was earlier alluding to that actually is causing some of the slowness that we see because actually that really causes longer processing times as well as a more orchestrated approach towards buying. And that has an impact, continued impact on market growth in China.

Charlotte Hanneman: For the full year, we continue to expect 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 DMT delivering slight growth year-over-year. Year-to-date adjusted EBITDA margin improved to 11.2%, a 40 basis point increase despite higher tariffs, driven by strong execution and cost discipline. With continued momentum and even with the impact of tariffs, which is more pronounced in the second half of the year, we now expect full year adjusted EBITDA margin at the upper end of the 11.3% to 11.8% range. Turning to free cash flow, we continue to expect a full year range between EUR 0.2 and EUR 0.4 billion.

First, the diluted EPS from continued operations was €0.36 in the quarter, up 13% year-over-year, driven by a positive contribution from growth.

Year to date, adjusted EBITA margin improved to 11, 2%, a 40 basis points increase despite higher tariffs driven by strong execution and cost discipline with.

The effect on our adjusted appetite margin and EPS was broadly flat, reflecting disciplined hedging, an optimized currency footprint, and targeted commercial actions in markets most exposed to currency fluctuations.

With continued momentum and even with the impact of tariffs, which is more pronounced in the second half of the year. We now expect full year adjusted EBITDA margin at the upper end of the 11 three to 11, 8% range.

We delivered strong cash flow performance this quarter, with free cash flow of €172 million, representing an improvement of €150 million year-over-year. Higher earnings drove this.

Turning to free cash flow, we continue to expect our full year range between <unk>, two and <unk> 4 billion euros. As a reminder, this outlook includes the 1 billion outflow related to the Respironic settlement paid in Q1.

Charlotte Hanneman: As a reminder, this outlook includes the EUR 1 billion outflow related to the Respironics settlement paid in Q1. Our outlook excludes potential wider economic impact as well as ongoing Philips Respironics related proceedings, including the Department of Justice investigation. With that, I would like to hand it back to Roy for his closing remarks.

Our outlook excludes potential wider economic impact as well as ongoing Philips respironics related proceedings, including the department of Justice investigation with that I would like to hand, it back to <unk> for his closing remarks. Thank you Sheila.

Roy Jakobs: So therefore, we did see that as well for us. I think on the positive side, as I already mentioned, we saw really an ultrasound positive growth coming in because also of some of the new launches that we have. Now, we have also building the pipeline for the CT part. So we see that there's tender activity, but as I also mentioned, it's not yet kind of concluded. And therefore, we remain a bit cautious on how this evolves because it's not very predictable yet when activity turns into orders and then turns into sales. Thank you. Thanks, Austin. Thanks, Stop. And thanks, Charlotte. The next question comes from the line of Veronica Dubajova from CT. Please go ahead. Good morning, Roy, Charlotte, and Durga. Thank you for taking my questions.

Moving to the balance sheet, we ended the quarter with approximately €1.9 billion of cash and net debt of approximately €6.5 billion. We maintained our disciplined focus on working capital, delivering a solid year-over-year improvement in inventory as a percentage of sales, despite ongoing tariff mitigation initiatives.

The first quarter progress as expected and we remain confident in delivering on our full year commitments.

Our leverage ratio remained in line with Q2 2025 and last year at 2.2 times on a net debt to adjusted EBITDA basis. We remain committed to maintaining strong investments and a great credit rating.

Roy Jacobs: Thank you, Charlotte. The Q3 progress as expected, and we remain confident in delivering on our full year commitments. Looking ahead to our capital market day in February 2026, we will showcase the fundamental progress achieved under our 2023 to 2025 plan, establishing a strong foundation for the future. We will share how we will and are evolving this into a next three-year plan of consistent value creation and focused value acceleration. I'm incredibly proud of our passionate teams, staying close to customers, executing with discipline, and keeping our momentum throughout the end of this year. Thank you, and we are now ready for your questions.

Roy Jakobs: Thank you, Charlotte. The Q3 progress as expected, and we remain confident in delivering on our full year commitments. Looking ahead to our capital market day in February 2026, we will showcase the fundamental progress achieved under our 2023 to 2025 plan, establishing a strong foundation for the future. We will share how we will and are evolving this into a next three-year plan of consistent value creation and focused value acceleration. I'm incredibly proud of our passionate teams, staying close to customers, executing with discipline, and keeping our momentum throughout the end of this year. Thank you, and we are now ready for your questions.

Turning to the Outlook.

Looking ahead to our capital markets day in February 2026.

With three quarters behind us and continued strong execution, we have solid visibility for the remainder of the year.

We will showcase a fundamental fundamental progress achieved under our 2023 to 2025 planned establishing a strong foundation for the future.

And we will share how we will and are evolving into our next three year plan of consistent value creation and focus value acceleration.

Our expectations for Q4 remain unchanged from the start of the year. We continue to expect sequential improvement in comparable sales growth, supported by sustained order conversion, sustained momentum in personal health sales, and disciplined execution.

I am incredibly proud of our passionate teams staying close to customers executing with discipline and keeping our mentum throughout the end of this year.

Roy Jakobs: I am going to ask two please, and a very quick third one if you forgive me, just because that's one word, hopefully one. But I just want to circle back to the downgrade to the guidance, to the sales guidance for D&T. And obviously, Roy, you've talked a lot about China, but can you sort of confirm that the downgrade is entirely just China-related? Or is there anything else that you're seeing in other regions that's worrying you there? And I guess how you feel about that kind of D&T growth momentum exiting this year, underpinning this roughly 5% growth rate that consensus has for next year, if you can talk to that, that would be my first question. My second question is the low single-digit growth rate in IGT, quite a deviation from the trend that we've seen through the last couple of years.

And we are now ready for your questions.

For the full year, we continue to expect 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 DNT delivering slight growth year-over-year.

Thank you Sir if any participant would like to ask a question. Please press the star followed by two times, one hunter telephone tier to the time. Please limit yourself to one question and one follow up this will give more people the opportunity to ask questions.

Operator: Thank you, sir. If any participant would like to ask a question, please press the star followed by 2 times 1 on your telephone. Due to the time, please limit yourself to one question and one follow-up. This will give more people the opportunity to ask questions. There will be a short pause while participants register for a question. The first question comes from Mr. Julien Dormois from Jefferies. Please state your question, sir.

To date, adjusted EBITDA margin improved to 11.2%, a 40 basis point increase, despite higher tariffs, driven by strong execution and cost discipline.

B, a short pause while participants register for a question.

With continued momentum, and even with the impact of tariffs— which is more pronounced in the second half of the year— we now expect full year, adjusted EBITDA margin at the upper end of the 11.3% to 11.8% range.

The first question comes from Mr. Julien Roch.

<unk> from Jefferies.

Please state your question Sir.

Hi, Good morning, Roy the money in Charlotte six in 14.

Roy Jakobs: So curious if you have some thoughts on that, and again, if you can elaborate on what's driving that. And my third, very, very quick yes or no question is, do you expect the warning letter to have any impact on your ability to return to the CPAP market through the next 6 to 12 months? Thank you so much, guys. Okay, let me start with the D&T. So on the sales momentum, yes, there is some China impact in that, but the other part that we have seen is also some longer conversion cycles of orders. There's no particular kind of other reason that we see in other regions. As I said kind of, especially in the diagnostics side, of course, we have a different footprint in terms of more weighted towards Europe and China and a bit less in North America where we are building.

My questions I have two.

Turning to free cash flow, we continue to expect a full year range between €0.2 billion and €0.4 billion. As a reminder, this outlook includes the €1 billion outflow related to the Respironics settlement paid in Q1.

Julien Dormois: Hi, good morning, Roy. Good morning, Charlotte. Thanks. Thanks for taking my questions. I have two. The first one would relate to a general question around price hikes going forward. You are obviously out of the period of inflation and also the tariff impact. Just curious how you think about price increase going forward. We can remember that two or three years ago, the oil industry proceeded with price hikes at the end of the inflation crisis. Just curious whether you should expect some benefit from that in the next couple of years. That would be my first general question. The second question relates to PH. Obviously, a super strong quarter on easy comp.

The first one would relate to.

Question around price hikes going forward.

The out of period of inflation and also the tariff impact. So just curious how you think about price increases going forwards. We can remember that two or three years ago. The only industry proceeded with price hikes at the end of the increasing prices. So just curious whether you should expect some benefit from that in the next couple of years.

Our outlook excludes potential wider economic impacts, as well as ongoing Philips Respironics-related proceedings, including the Department of Justice investigation related to that. I would like to hand it back to Roy for his closing remarks. Thank you. Shalom.

The third quarter progressed as expected, and we remain confident in delivering on our full-year commitments.

Looking ahead to a capital markets Day in February 2026.

That would be my first question and the second question relates to th, obviously, a super strong quarter on easy comps. So just curious whether there is any restocking effect in China, and maybe help us understand what was actually the contribution of China in this quarter.

We will showcase the fundamental progress achieved under our 2023 to 2025 plan, establishing a strong foundation for the future.

Julien Dormois: Just curious whether there is any restocking effect in China and maybe help us understand what was actually the contribution of China in this quarter. And that's it. Thank you.

Roy Jakobs: But I also mentioned to you that we are actually building that with double-digit order growth. So actually, we are stepping that up, and we expect that also to continue. So yes, while the overall mix is a bit changing in the year, we remain with 1% to 3%. I haven't heard too many people talking about CC. It was quite extraordinary this quarter how they delivered in terms of the demand that there is, as well as kind of supported in hospital-based monitoring and in kind of EI. So of course, we're tapping the opportunity and also growing and leveraging the strength of our portfolio to the fullest. And that also holds true actually for IGT. So in IGT, the CSG has been high, especially if you look also then in terms of the comparable from a two-year comps in Q3. And that was also supply chain related.

And we will share how we will and are evolving this into a next 3 year, plan, of consistent value, creation and focus value acceleration.

Thank you.

Thank you Julian let me take the first one and then maybe <unk> can take the second so on the pricing. So as you have seen also from a bridge.

I'm proud of our passionate teams.

Roy Jacobs: Thank you, Julien. Let me take the first one and then maybe Charlotte can take the second. On the pricing, as you have seen also from our bridge, kind of we are driving our margin expansion on the back of two key drivers that we see taking effect. One is expansion of gross margin, and that actually is especially the new innovations generating more traction in the total percentage of orders and then flowing through to sales. That's where we see actually that price increases do support our margin as well as the productivity and cost discipline actions that we're taking. We expect in the coming period that there will be some pricing given in the inflationary environment that we're in.

Roy Jakobs: Thank you, Julien. Let me take the first one and then maybe Charlotte can take the second. On the pricing, as you have seen also from our bridge, kind of we are driving our margin expansion on the back of two key drivers that we see taking effect. One is expansion of gross margin, and that actually is especially the new innovations generating more traction in the total percentage of orders and then flowing through to sales. That's where we see actually that price increases do support our margin as well as the productivity and cost discipline actions that we're taking. We expect in the coming period that there will be some pricing given in the inflationary environment that we're in.

Kind of we are driving our margin expansion on the back of two key drivers that we see taking effect. One is expansion of gross margin and that actually is especially the new innovations generate more traction in the total percentage.

Staying close to customers, executing with discipline, and keeping our momentum throughout the end of this year. Thank you. We are now ready for your questions.

Thank you, sir.

If any participant would

If you would like to ask a question, please press the star key followed by the number one on your telephone.

Of orders and then flowing through to sales.

And Thats, where we see actually the price increases to support our margin as well as the productivity and cost discipline actions that we're taking.

Due to the time, please limit yourselves to 1 question and 1 follow-up. This will give more people the opportunity to ask questions, there will be a short post while participants register for a question.

We expect in the coming period that there will be some pricing given the inflationary.

Roy Jakobs: You see that kind of explains some of the LSD, but actually we keep very much leading in IGT. The new launches are contributing to that. People are really excited about not only what we have been launching, but also the pipeline with Azurion AI and other innovations that we have. So actually, we remain very excited about the interventional opportunity that's out there and that we also keep pursuing. Then on the warning letter, no, I don't expect any impact to the CC because these are two separate topics. The CC has its own kind of SRC-related demands. As I mentioned earlier, we're fully on track in kind of working through those. This is a separate warning letter we need to address. And we are in full remediation of it. And as I said earlier, we don't expect any commercial impact of it.

Environment that we're in but we also know that kind of actually the inherent value increase of our innovations and how we price them in combination, but on our productivity and cost will be the bigger driver of that so we see pricing opportunity, but not to a large extent that's gone up we also beat.

Roy Jacobs: We also know that kind of actually the inherent value increase of our innovations and how we price them in combination with kind of productivity and costs will be the bigger driver of that. We see pricing opportunity, but not to kind of a large extent that kind of we also would impede growth because growth is still of critical importance and we will keep driving that whilst we expand the margin at the same time as you have seen.

Roy Jakobs: We also know that kind of actually the inherent value increase of our innovations and how we price them in combination with kind of productivity and costs will be the bigger driver of that. We see pricing opportunity, but not to kind of a large extent that kind of we also would impede growth because growth is still of critical importance and we will keep driving that whilst we expand the margin at the same time as you have seen.

The first question comes from Mr. Julian DMA from Jefferies.

Please State your question, sir.

<unk> growth because growth is still of critical importance that we will keep driving that whilst we expanded margins at the same time as you have some.

And then thank you as Udi here a second question on personal health. We are very pleased with our personal health and sales in the quarter of 11%. Indeed as I said also just earlier, partially that was helped by a low comparable base in China, but even excluding China, we saw broad based.

Charlotte Hanneman: Thank you, Julian, your second question on personal health. We are very pleased with our personal health sales in the quarter of 11% indeed. As I said also just earlier, partly that was helped by a low comparable base in China. Even excluding China, we saw broad-based growth across all businesses and geographies, so very pleasing. Your question on the restocking in China, we don't see any restocking. In fact, as we said, we finalized inventory destocking at the end of Q2 and continue to be very cautious on making sure that those inventory levels are in line with our expectations. No re-destocking.

Roy Jakobs: So in that sense, yes, it's a disappointment. And we are kind of actioning it with very strong discipline follow-through, but we don't expect that to have any further operational impact. Got it. Thank you so much. Thank you. We will now take the next question from Mr. Richard Felton from Goldman Sachs. Please go ahead. Thank you very much. Good morning. Two for me, please, both on connected care. So first of all, I suppose just to follow up on the strong order performance in connected care, could you maybe add a bit more color on what was driving that and how much benefit was there from the longer-term partnerships that you signed in the quarter? And then secondly, on enterprise informatics specifically, I think it's roughly a year on since you extended your partnership with AWS to advance cloud services.

Hi, good morning row. Good morning, Charlotte Texas. Thanks for taking my questions. I have to, uh, the first 1 would relate to, uh, general question around price hikes going forwards. Uh, you are obviously out of a period of inflation and also the Tariff impact. So, just curious how you think about price increase going forward? Uh, we can remember that 2 or 3 years ago, the all industry proceeded with price hikes at the end of the inflation crisis. So just curious, whether you should expect some benefits from that in the next couple of years.

Both across all businesses and geographies so won't be pleasing.

And on your question on the restocking in China, We don't see any restocking in fact, as we said.

Our lives inventory.

Destocking at the end of Q2 and continues to be very very cautious on making sure that those inventory levels are in line with our expectations.

That would be my personal question. And the second question relates to pH, obviously, a super strong quarter on easy comps. So, just curious whether there is any restocking effect in China, and maybe help us understand what was actually the contribution of China in this quarter. And that's it. Thank you.

Please.

Yeah.

Thank you very much.

Sure.

Thank you.

Julien Dormois: Thank you very much.

Operator: Thank you. The next question comes from Edward Ridley-Day from Rothschild & Co Redburn. Please ask your question.

The next question comes from Ed Ridley day from Rothschild Uncle <unk>. Please ask your question.

Good morning, Thank you.

Really strong improvement.

Edward Ridley-Day: Good morning. Thank you. Really a strong improvement in productivity this year, despite some of the challenges you faced. How should we think about that maintaining that momentum into 2026, and particularly on related to tariffs? I mean, you've almost fully offset the tariff headwind this quarter. Should we be perhaps assuming that you can fully offset the annualized tariff impact next year? Thanks.

In productivity this year.

Roy Jakobs: How has that partnership impacted your enterprise informatics business from both a top and bottom-line perspective? Thank you. Yeah, great questions, Richard. So let me start with hospital patient monitoring and CC development there. I think we have been seeing strong demand on the patient monitoring side. And in combination with, I would say, really unique ecosystem that we have been building, we see us really winning. And that's not only kind of building on the momentum in the market, but also then kind of really taking positions also of competition. That is built also with partnerships. Now, we mentioned two in the quarter, but it's not only of that. It's quite broad-based and also across regions. You know that we play mostly outside of China. So of course, you see it doesn't have that China impact, but it's really kind of driving a very strong North America contribution.

From a talent review phase.

How should we think about maintaining.

Uh the first 1 and then maybe a shout out can take a second. So on the pricing. So as you've seen also from our Bridge, um, kind of we are driving our margin expansion on the back of 2 key drivers that we see taking Effect 1 is expansion of gross margin and that actually is specially the new Innovations, generating more traction in the total percentage of um, of orders and then flowing through to sales. Um, and that's where we see. Actually that price increases do support our marketing as well as the productivity and cost discipline actions that we're taking.

Maintaining that momentum into 'twenty six.

And particularly on tires.

<unk> should be almost fully offset.

The tariff headwind this quarter.

Should we be perhaps excuse me, but you can fully offset the annualized tariff impact next year. Thanks.

Thank you. Thank you very much and let me take that question. So first of all we're very much focused on 2025 and delivering in line with our expectation, which is now at the higher end of the 11, 3% to 11, 8% range and as you rightfully mentioned, we've been able to compensate a lot of the tariffs while we still.

Charlotte Hanneman: Thank you. Thank you very much, Ed. Let me take that question. First of all, we're very much focused on 2025 and delivering in line with our expectation, which is now at the higher end of the 11.3% to 11.8% range. As you rightfully mentioned, we've been able to compensate a lot of the tariffs while we still have a net impact of EUR 150 to 200 million after substantial mitigations. That gives us a lot of confidence. Now, if I look ahead at 2026, of course, we have our capital markets day on 10 February, and we're looking forward to giving you a lot more details at that point in time.

We expect in the coming period that there will be some pricing, uh, given the inflationary um, uh, environment that we're in. But we also know that kind of actually the inherent value increase of our innovations and how we price them, in combination with kind of productivity and cost, will be the bigger driver of that. So we see pricing opportunity, but not to kind of a large extent that kind of we also would, um, impede growth because growth is still of critical importance. We will keep driving that whilst we expand the margin at the same time, as you have seen.

Half and net impact of 150 to 200 million euros after substantial mitigation.

And that gives us a lot of confidence now if I look ahead at 2026 of course, we have our capital markets day on February 10, and and we're looking forward to giving you a lot more details at that point in time, what I would tell you in broached broad strokes is we are happy with the momentum that we've seen from an order intake perspective from a sequential.

Roy Jakobs: They're investing in patient monitoring, standardization, but also patient safety is important there to watch over the patient as well as the cybersecurity part. And we have been really also driving the partnership approach, as you have been seeing. So we kind of offer a full open modular approach, and that's really working for the market and for our customers. So I think a winning formula there that we expect to continue to deliver results. And that not only has been driving order sales, but also strong margin contribution because, as you know, the hospital patient monitoring business is also a strong margin business. Then on EI, we also mentioned strong contribution from EI in the quarter. As I said, we drive, of course, EI for margin. So we saw margin improvement, but we also were very pleased with the order improvement.

Yeah, and then, thank you, Julia. As your second question on personal health, we are very pleased with our personal health sales in the quarter of 11%. Indeed, as I said also just earlier, that was helped by a low comparable base in China, but even excluding China, we saw broad-based growth across all businesses and geographies. So very...

Charlotte Hanneman: What I would tell you in broad strokes is we are happy with the momentum that we've seen from an order intake perspective, from a sequential sales step-up perspective, from a margin perspective. We are very focused on continuing improving on all fronts, but more to come in on 10 February from that perspective.

Sales step up prospect as expected from a margin perspective. So we are very focused on continuing improving on all fronts, but more to come in on February 10 from that perspective.

Pleasing. Um, and your question on the restocking in China, we don't see any restocking. In fact, as we said, we finalized the inventory and these stock levels at the end of Q2 and continue to be very, very cautious on making sure that those inventory levels are in line with our expectations. So, no, we do not stock in them.

Thanks.

Thank you very much.

Thank you.

Edward Ridley-Day: Thanks.

Thank you.

Okay.

Next question comes from clinical feedback from BNP paper Exxon. Please go ahead.

Operator: Thank you. The next question comes from Hugo Solvet from BNP Paribas Exane. Please go ahead.

Hi, Hello, Thanks for taking my questions and congrats on the results I have two please.

The next question comes from Ed rightly. They from rosch and Co Redbarn. Please. Ask your question.

Hugo Solvet: Hi. Hello. Thanks for taking my questions and congrats on the results. I have two, please. First, can you explain a bit on the order timing and in DNT and how would you expect diagnostic imaging sales to evolve going forward? Second, Roy, happy to get your thoughts on Section 232. How do you think this could impact imaging and Connected Care business, and where do you stand exactly on reshoring of manufacturing in the US in particular? Thank you.

Good morning. Thank you. Um,

Roy Jakobs: And that indeed is really also in combination with that offer that we have with AWS. The cloud migration is a big topic. Not only the cloud migration, we do also AI and some language model collaboration with them. So we see that's really kind of supporting the engine. They're also doing some marketing and sales efforts because they, in essence, co-sell our solutions. As well as that we, of course, support their cloud services when we go out to customers together. And that is a formula that also works within the market and with customers. So we see that kind of strengthening our approach, and that's indeed building the funnel and now also building the conversion since we started that collaboration with AWS. Great. Thank you, Roy. Thank you. We will now take the next question from the line of Tim Killelly from ABN AMRO. Please go ahead. Yes.

Can you extend a bit on the timing and.

DN TNF or would you expect.

The <unk> sales.

Really strong improvement in productivity this year, despite some of the challenges you faced.

One quick follow up.

And so.

Really happy to get your thoughts on so to speak to.

Do you think this could impact <unk> and connectors business and where do you stand.

On rehearing.

<unk> in the U S for Q.

How should we think about that? Maintaining that momentum into 26? Uh, and particularly, uh, on related to tariffs, we need almost fully offset, uh, the Tariff headwind this quarter. Um, should we be perhaps receiving that? You can fully offset the annualized Paris impact next year?

Thank you so on the order timing and I think it's good <unk> to two if you look at the order book.

Roy Jacobs: Thank you, Hugo. On the order timing, and I think it's good indeed. If you look at the order build-up of D&T, as said, we are happy with the 6% year to date. You also saw that it's not yet fully evenly balanced, right? Q2 was really the quarter of D&T, Q3 is the quarter of CC, right? As we have built up our order momentum, we're also getting some of these large deals, and Q2 was really a very strong D&T quarter. Q3 is a very strong CC quarter. Actually, in Q4, we expect D&T also to further step up. We see that in our funnel. Actually, whilst there are certain lumpiness, the underlying improvement is visible, and you also see that coming through. The same is for the realization of sales.

Roy Jakobs: Thank you, Hugo. On the order timing, and I think it's good indeed. If you look at the order build-up of D&T, as said, we are happy with the 6% year to date. You also saw that it's not yet fully evenly balanced, right? Q2 was really the quarter of D&T, Q3 is the quarter of CC, right? As we have built up our order momentum, we're also getting some of these large deals, and Q2 was really a very strong D&T quarter. Q3 is a very strong CC quarter. Actually, in Q4, we expect D&T also to further step up. We see that in our funnel. Actually, whilst there are certain lumpiness, the underlying improvement is visible, and you also see that coming through. The same is for the realization of sales.

Buildup of BNP.

We are happy with the 6% year to date you also say so that is not yet fully evenly balanced right Q2 was really the quarter of BNP Q3 is the quarter of Cc right. So we call. It as we are below our order momentum. We also getting some of these large deals in Q2, we have very strong BNP quarter Q3 is a very strong <unk>.

Thank you. Thank you very much. Uh, Ed. I let me take that question. So, uh, first of all, we're very much focused on 2025 and delivering in line with our expectation, which is now at the higher end of the 11.318% range and as you rightfully mentioned, we've been able, uh, to compensate a lot of the tariffs while we still have. And

This quarter actually in Q4, we expect <unk> to further step up also we see that in our funnel.

Roy Jakobs: Very good morning. I have two questions, actually. First, you reported 8% order intake growth in Q3, predominantly driven by CC this quarter. You also gave some color during this earnings call on the funnel for Q4, but I missed that answer. So can you reiterate it? Basically giving a bit of granularity on how you see the sales funnel and the order intake develop into Q4 for both D&T as well as CC. The second question is related to E&I, enterprise informatics. As I understand it, order intake was pretty okay, but sales has been flat also in Q3 and was also quite disappointing, relatively low in the previous quarters, which reads a bit disappointing vis-à-vis market growth there.

So actually whilst there is certain lumpiness the underlying improvement is visible and you also see that coming through the same is for the realization of sales. We also have seen that the step up in sales. Although also there of course it goes with the order conversion.

Roy Jacobs: We also have seen, the step-up in sales, although also there, of course, it goes with the order conversion, and there we see that some timelines are longer. Also we expect there an improvement in Q4, which also NDI is coming through. On top, I think it's also good to say that, as you know from our strategy, we have in how we drive our businesses two different parts. One was we have growth businesses at higher margins that we explicitly drive for growth, and we have margin expansion businesses, and those are exactly doing what they should be doing. We have been expanding DI margin, we have been expanding EI margin, we have been expanding SRC margin, also in Q3. We have been really driving growth strongly across the order of growth businesses.

Roy Jakobs: We also have seen, the step-up in sales, although also there, of course, it goes with the order conversion, and there we see that some timelines are longer. Also we expect there an improvement in Q4, which also NDI is coming through. On top, I think it's also good to say that, as you know from our strategy, we have in how we drive our businesses two different parts. One was we have growth businesses at higher margins that we explicitly drive for growth, and we have margin expansion businesses, and those are exactly doing what they should be doing. We have been expanding DI margin, we have been expanding EI margin, we have been expanding SRC margin, also in Q3. We have been really driving growth strongly across the order of growth businesses.

And there we see that some timelines are longer but also we expect an improvement in Q4, which also MDI is.

Net impact of 150 to 200 million euros after substantial mitigations and that gives us a lot of confidence. Now if I look ahead at 2026, of course we have our Capital markets day on February 10th and I'm we're looking forward to giving you a lot more details at that point in time. What I would tell you in Broad broad Strokes is we are happy with the momentum that we've seen from an order intake perspective from a sequential sales Step Up perspective perspective from a margin perspective. So we are very focused on continuing improving on all fronts but more to come in on February 10th, from that perspective.

Is coming through.

Thanks.

On top of I think it's also good to say that as you know from our strategy. We have in how we drive our business. There is two different parts one whilst we have growth businesses at higher margins that we explicitly drive for growth and we have margin expansion businesses and those are exactly doing what they should be doing so we have been expanding the margin would have been <unk>.

Thank you.

The next question comes from Hugo Svet from VMP, private Exxon. Please go ahead.

Spending EBITDA margin, we have been expanding Src margin also in the third quarter and we have been really driving growth strongly across the order growth businesses. Now of course, we want to have both margin and growth expansion all segments, but actually we also driving them within this strategy. So in that sense I think you've seen that we will.

Roy Jakobs: So what has been holding you back in the last couple of quarters, and when would you expect the order intake in E&I to come and convert into sales growth here? Thanks. Yeah. Let me maybe take the first one in terms of the order momentum. So we said kind of when we look to the year, we expect a strong full-year delivery of orders where we continue on the track that we have been building. So a positive order intake also into Q4, probably a bit more evenly based with CC and D&T. As I've said, kind of has been a bit lumpy through the quarters, but in Q4, we expect it to be more evenly based. Then, depending on kind of what big orders will fall, you will see kind of this will have potential some impact in Q4 or we see next year back.

Roy Jacobs: Of course, we want to have both margin and growth expansion from all segments, but actually we're also driving them within the strategy. In that sense, I think you've seen that we will kind of step up, and that's also what Charlotte mentioned in Q4. We also are launching, of course, new innovations, like the radiation therapy suite that will support that. Of course, we have the RSNA upcoming with some exciting news there as well. That's kind of how we look at to continue to D&T trajectory into Q4, but also of course in the period to come next year.

Roy Jakobs: Of course, we want to have both margin and growth expansion from all segments, but actually we're also driving them within the strategy. In that sense, I think you've seen that we will kind of step up, and that's also what Charlotte mentioned in Q4. We also are launching, of course, new innovations, like the radiation therapy suite that will support that. Of course, we have the RSNA upcoming with some exciting news there as well. That's kind of how we look at to continue to D&T trajectory into Q4, but also of course in the period to come next year.

Kind of step up and Thats also what Charlotte mentioned in Q4. We also are launching of course, new innovations like radiation therapy suite that will support that as well of course, we have to RNA upcoming with some some exciting news there as well.

Hi. Hello. Uh, thanks for taking my questions and congrats on the results. I have 2 please. Um, first, can you explain a bit on the other timing and, uh, in DNT? And how would you expect, uh, that the stick image in sales to to, to evolve going forward? Uh, and, um, S Roy happy to get your thoughts on, uh, section 232. Uh, or do you think this could impact the Imaging and and connected care business and where do you stand? Exactly, on on reassuring, uh, of manufacturing, uh, in the US in particular, thank you.

So thats kind of how we look at to continue to D&C trajectory.

Into Q4, but also of course in the periods to come next year.

The $2 32.

So we see that.

Operator: 232.

Charlotte Hanneman: 232.

Roy Jacobs: The 232. We see that, and I think there, we look at this in conjunction with tariffs. There's a lot of fluctuation out there, we are focusing very strongly on the controllables to see how we can mitigate that. I think we are happy that actually in Q3 we showed that we are able to offset in full the tariff impact. Now, that's hard work because it's still substantial. We also have the same plan for Q4, where we want to deliver a strong margin quarter that also helps us to kind of give the higher end of the range. We, of course, following the 232 and are engaged because we're engaged in Europe, US, and China in advocating strongly that actually we can lower tariffs and actually forgo further impact on patient care.

Roy Jakobs: The 232. We see that, and I think there, we look at this in conjunction with tariffs. There's a lot of fluctuation out there, we are focusing very strongly on the controllables to see how we can mitigate that. I think we are happy that actually in Q3 we showed that we are able to offset in full the tariff impact. Now, that's hard work because it's still substantial. We also have the same plan for Q4, where we want to deliver a strong margin quarter that also helps us to kind of give the higher end of the range. We, of course, following the 232 and are engaged because we're engaged in Europe, US, and China in advocating strongly that actually we can lower tariffs and actually forgo further impact on patient care.

And I think there we.

At this in conjunction with tariffs, there's a lot of fluctuation out there.

Roy Jakobs: But a strong finish in orders. Then on sales, also there, kind of we have said before, we are stepping up, and also we will step up in Q4. And that will be across the different segments. So we will expect contribution from everybody in that step up. So PH continuing to be strong. We see CC continuing and also D&T stepping up. So in that sense, I think we maintain the momentum as we also signaled, and that's built on the funnel. Now, of course, still two months to go. So working hard to kind of get it over the finish line with our teams, but all kind of geared towards delivering upon what we also have guided for. And I think that's, of course, a reiteration of what we have been planning for and saying all year long. Yeah.

And we are focusing very strongly on the controllable. So see how we can mitigate that and I think we are happy that actually in Q3, we showed that we are able to offset in food.

That's how it worked because its still substantial.

We also have the same plan for Q4, where we want to deliver a strong margin quarter that also helps us to kind of give the higher end of the range. We are of course, following the 232 and our engaged because we're engaged in Europe, and U S and China and advocating strongly that actually we can lower tariffs and actually forego.

Further impact on patient care.

So in that sense kind of a weird actively engaging in a dialogue b. We are preparing ourselves to focus on our controllable we can deal with any consequences on that last point also we have further strengthened our footprint in the U S. So we invested on our $50 million in retail expanding our ultrasound, but also wider facility. There. We're also looking at <unk>.

Roy Jacobs: In that sense, kind of, A, we are actively engaging in a dialogue. B, we are preparing ourselves to focus on the controllables so that we can deal with any consequences. On that last point also, we have further strengthened our footprint in the US, so we invested on a $50 million in Reedsville, expanding our ultrasound, but also wider facility there. We're also looking at a order facility to actually be even better prepared for the localization needs, and that's in line with kind of the trajectory we have been having across our supply chain. I mentioned that we've really strengthened our supply chain delivery and also the agility to kind of, address challenges. Whether that's challenges with tariffs or next period, we are better prepared and actually we are upping our service levels and upping orders and sales.

Roy Jakobs: In that sense, kind of, A, we are actively engaging in a dialogue. B, we are preparing ourselves to focus on the controllables so that we can deal with any consequences. On that last point also, we have further strengthened our footprint in the US, so we invested on a $50 million in Reedsville, expanding our ultrasound, but also wider facility there. We're also looking at a order facility to actually be even better prepared for the localization needs, and that's in line with kind of the trajectory we have been having across our supply chain. I mentioned that we've really strengthened our supply chain delivery and also the agility to kind of, address challenges. Whether that's challenges with tariffs or next period, we are better prepared and actually we are upping our service levels and upping orders and sales.

Roy Jakobs: And then your question on enterprise informatics, indeed, as you pointed out, our order intake has been very strong in Q3 for enterprise informatics, and we're very pleased with that. You probably also know that the order conversion cycle from order to sales in enterprise informatics is pretty long. So it'll take quite a while for order intake growth to convert into sales. And Roy just spoke about AWS and our AWS partnership as well, which will also help contribute as we move customers to the cloud. We'll also help drive sales growth there over time. And in that transition where you are moving your clients from on-prem to cloud. Have you any indication? Can you give any indication where you are in that process? Is it like a quarter is done? Are you halfway there, or are we now at the end of the conversion? Yeah.

<unk> to actually be even better prepared for localization needs.

Also, we see that in our funnel. Um, so actually, while there are certain lumpiness, the underlying Improvement is visible and you also see that coming through the same is for the realization of sales. We also have seen the step of in sales, although also there, of course, it goes with the auto conversion. Um, and there we see that some timelines are longer, but also we expect there, an improvement in Q4. Uh, which also in the eye is uh is is coming through on top. I think it's also good to say that as, you know, from our strategy, we had in how we drive our businesses through different parts 1 was, we have growth businesses at higher margins that we explicitly drive for growth and we have margin expansion businesses and those are exactly doing what they should be doing. So we have been expanding the IM margin. We have been expanding EI margin. We have been expanding SRC, margin also in the third quarter and we have been really driving growth strongly across the other growth businesses. Now, of course, we want to have both margin

And that's in line with kind of trajectory, we have been having across our supply chain I mentioned that we've really strengthened our supply chain delivery and also the agility to address challenges and what are the challenges with tariffs or Xperia, we are better prepared and actually we are upping our service levels and opening orders and sales. So we make sure that we stay resilient.

While we deal with uncertainties around us.

Roy Jacobs: We make sure that we stay resilient while we deal with uncertainties around us.

Roy Jakobs: We make sure that we stay resilient while we deal with uncertainties around us.

Thank you.

The next question comes from the line of Chris.

And growth expansion from all segments, but actually we also driving them within the strategy. So in that sense, I think, um, you have seen that, we will kind of Step Up. And that's also what Charlotte mentioned in Q4. Um, we also are launching, of course, new Innovations. Like the radiation therapy Suite, that will support that as well. Of course, we have the RNA upcoming with some some exciting news there as well. Um, so that's kind of how we look at to continue to DNT trajectory, um, into

Operator: Thank you. The next question comes from the line of Mr. Hassan Al-Wakeel from Barclays. Please go ahead.

Hassan Al <unk> from Barclays. Please go ahead.

4 but also of course in the in the period to come next year.

Good morning. Thank you for taking my questions. A couple for me firstly follow up on TNT. Please.

232.

Hassan Al-Wakeel: Good morning. Thank you for taking my questions, a couple from me. Firstly, follow up on D&T, please. Last quarter, Roy, you talked about your win rate improving in China, particularly in CT on the back of spectral. How is that fairing today? Do you think your softer China order commentary is a function of market growth, or share losses, or both? Secondly, just if you can expand on the warning letter in ultrasound and informatics and what gives you confidence that this will not result in regulatory action and your more recent quality improvement measures are yielding company-wide change? Thank you.

Roy Jakobs: It's difficult to say, and it also depends really customer by customer. So we've done a number of successful conversions from on-prem to the cloud. But ultimately, the thing to keep in mind is that this will take time to fully execute on because it really touches also the hospitals and the hospital operations very, very deeply. So this will take time. But we've done a few that have been very successful. Thank you. Thank you. Once again, if you would like to ask a question, please press the star followed by two times one on your telephone. To cancel the request, please press the star followed by two times one. We will now take the next question from Mr. Falko Valkenburg from Deutsche Bank. Please go ahead. Thank you. Good morning. My first question is, how did the Respironics business perform in Q3?

Last quarter Roy you talked about your win rate improving in China, particularly in C. T. On the back of spectral how is that Ferring today, and do you think youre softer China or the commentary is a function of market growth or share losses.

For both <unk>.

And then secondly, just.

Just if you can expand on the warning letter in ultrasound and informatics and.

What gives you confidence that this will not result in regulatory action and your more recent quality improvement measures.

Yielding company wide change thank you.

Yes, thank you awesome so deep.

Um, so we see that. Um, and I think there, um, we look at this in conjunction with tariffs. There's a lot of fluctuation out there, and we are focusing very strongly on the controllables to see how we can mitigate that. I think we are happy that actually in Q3 we showed that we are able to offset in full the impact of the tariffs. Now, that's how it worked because it's still substantial. Um, we also, uh, have the same plan for Q4, where we want to deliver a small margin quarter that also helps us to kind of, uh, give the higher end of the range. We, of course, are following the 2322, and we're engaged because we're engaged in Europe, the U.S., and China in advocating strongly that we can actually lower tariffs and actually forgo.

DMT, we have seen and Heath and vessels that was called out further traction on the 500 to 100.

Roy Jacobs: Yeah. Thank you, Hassan. On D&T, we have seen indeed, and that's also what was called out, further traction on the 5300 and CT as well as the MR. That is building in the funnel. Next to that, we saw ultrasound really picking up. That in part also addressed maybe some concern from the warning letter. Actually, ultrasound, we have been dialing up order intake momentum and sales momentum whilst we actually have been working in parallel the remediation since Q2 because this is not new, right? For us, we got the 43 at the end of Q1. We started remediating in Q2 and in Q3, and you have seen no impact on results.

Roy Jakobs: Yeah. Thank you, Hassan. On D&T, we have seen indeed, and that's also what was called out, further traction on the 5300 and CT as well as the MR. That is building in the funnel. Next to that, we saw ultrasound really picking up. That in part also addressed maybe some concern from the warning letter. Actually, ultrasound, we have been dialing up order intake momentum and sales momentum whilst we actually have been working in parallel the remediation since Q2 because this is not new, right? For us, we got the 43 at the end of Q1. We started remediating in Q2 and in Q3, and you have seen no impact on results.

The city as well as the EMR and actually that is building in the funnel.

Next to that we saw ultrasound really picking up.

And actually that in part also address maybe some concern from the warning letter actually ultrasounds, we have dialing up order intake momentum and sales momentum, whilst we actually have been working in parallel to remediation since Q2, because there is not new right for US we got to 43 at the end of Q.

Roy Jakobs: And are you seeing the momentum build as you re-enter European markets? My second question is, there has been a very large number of earnings adjustments again in the third quarter. Is that something you plan to significantly reduce going into 2026? Thank you. Yeah. Let me take the first one, Falko. As I see, I think two parts. One, as I said before, of course, we have been driving very strong margin improvement. We have seen very strong margin realization in Q3 of SRC also. That also contributed to the strong CC margin step up. So that part of the strategy is fully working. Also, we have seen really the OSA portfolio, so the sleep apnea portfolio, stepping up. So we see actually as we're returning into the market, actually that's something that is delivering growth to us. Where we see it being offset is with ventilation.

Q1, we started to remediate in Q3, and Q2 and Q3 and you have seen no impact on results. Thats also why we can be quite confident that this will not have impact on results. We are re mediating the process part of it.

Further impact on patient care. Um, so in that sense, uh, kind of a we are actively engaging in a dialogue B. We are preparing ourselves to focus on the control over so that we can deal with any consequences on the last point. Also, we have further, strengthened our footprint in the US, so we invested 150 million in retail, expanding our ultrasound. But also wider facility. There, we also looking at our order facility to actually be even better prepared for the localization needs. Um, and that's in line with kind of transactions. We have been having across our supply chain. I mentioned that, we really strengthened our supply chain delivery and also the agility to kind of, um, address challenges and what are the challenges with?

Roy Jacobs: That's also why we can be quite confident on that this will not have impact on results. We are remediating the process part of it, and we are in full kind of remediation and take it very seriously, of course. We also know that this is no product issue, not a patient safety issue. This is process remediation. We have been working that whilst absorbing it and stepping up our products. On China, I think in China you see that it's a mixed picture. Overall, the market momentum, I would still call out for health systems as subdued, right? We still don't see the market growth coming back as we all hope, and that's really market phenomena. We see standards increasing, but it's not turning to order growth because we see that they are not landing yet.

Roy Jakobs: That's also why we can be quite confident on that this will not have impact on results. We are remediating the process part of it, and we are in full kind of remediation and take it very seriously, of course. We also know that this is no product issue, not a patient safety issue. This is process remediation. We have been working that whilst absorbing it and stepping up our products. On China, I think in China you see that it's a mixed picture. Overall, the market momentum, I would still call out for health systems as subdued, right? We still don't see the market growth coming back as we all hope, and that's really market phenomena. We see standards increasing, but it's not turning to order growth because we see that they are not landing yet.

And we are in full <unk>.

Errors or an Xperia, we are better prepared and actually we are upping our service levels and upping orders and sales. So uh, we make sure that we stay resilient while we deal with uncertainties around us.

We mediation and take it very seriously of course.

But we also know that this is no product issue not a patient safety issue digital process remediation.

We have been working that whilst absorbing it and stepping up our our products that on China.

Thank you. The next question comes from the line of Mr. Hassan Akhil from Barclays. Please go ahead.

In China, you see that it's a mixed picture overall market momentum I would still call out for health systems as subdued right. We still don't see the market growth coming back as we all hope and Thats really market phenomena, we see centers, increasing but it's not turning to order growth.

Roy Jakobs: There, actually, we have improving portfolio and also been taking out. So that actually is going at the cost of the sleep momentum. So therefore, in the mix, you see that there is slight pressure on the sales because of that ventilation reset. But we are very encouraged and excited by the fact that in sleep, both on the devices but also the masks, we see it stepping up. And that, of course, with the re-entry that we have been doing across the various countries now. In due course of this year. Yeah. And now, Falko, I'll take your second questions on the adjusting items. And although adjusting items came in significantly lower than we had guided for, I absolutely acknowledge that they're still high.

We see that they are not lending yet processing time or longer theyre being disputed and that's something that actually we are facing as industry on the other hands. We have seen that ultrasound. For example has been up and our mix and we saw IGT also picking up we saw some slowness in DIY, we're actually last quarter was stronger so actually youre working also to kind of see.

Roy Jacobs: Processing time are longers, they are being disputed, that's something that actually we are facing as industry. On the other hand, we have seen that ultrasound, for example, has been up in our mix, and we saw IGP also picking up. We saw some slowness in DI, where actually last quarter was stronger. Actually we're working also to kind of see how we can strengthen it again in Q4. It's not that linear over the quarters. In general, I think we are all waiting for further strengthening of China. Now, we do expect it to come, but it's just not clear when. Therefore, we remain cautious. Of course, you know that the China part of D&T is just bigger than also the CC part. You see that weighs a bit stronger on the portfolio.

Roy Jakobs: Processing time are longers, they are being disputed, that's something that actually we are facing as industry. On the other hand, we have seen that ultrasound, for example, has been up in our mix, and we saw IGP also picking up. We saw some slowness in DI, where actually last quarter was stronger. Actually we're working also to kind of see how we can strengthen it again in Q4. It's not that linear over the quarters. In general, I think we are all waiting for further strengthening of China. Now, we do expect it to come, but it's just not clear when. Therefore, we remain cautious. Of course, you know that the China part of D&T is just bigger than also the CC part. You see that weighs a bit stronger on the portfolio.

How we can strengthen that began in Q4, so it's not that linear over the quarters, but in general I think we are all waiting for further strengthening of China, We do expect it to come but it's just not clear one. So therefore, we remain cautious and of course you noticed the China part of DNP is just bigger and then also the cc part so you see that weighs a bit strong.

Good morning. Uh, thank you for taking my questions. Uh, a couple for me. Uh firstly, follow up on DNT, please. Uh, last quarter Roy, you talked about your win rate, improving in China, particularly in CT, on the back of spectral. How is that fairing today? And do you think your softer China order, uh, commentary is a function of market growth, uh, or share losses, um, or both? Um and then secondly, um, just if you can expand on the warning letter in ultrasound and informatics and what what gives you confidence that this will not result in regulatory action and that you're more recent quality improvement measures uh a yielding companywide change. Thank you.

Roy Jakobs: And the moving pieces are, on the one hand, we continue to have costs related to the consent decree, Respironics consent decree, that will reduce over time. The other element is that we continue to have restructuring costs as we're continuing to simplify our operating model and to simplify Philips as a company. Now, having said all of that, we are very much focused on, and it is a priority of mine to reduce adjusting items over time. So that is what we're fully focused on. There's a lot on the table there. There's a lot of strengthening of processes that we're doing. So over time, I see the reduction in adjusting items. And what I would also tell you is that adjusting items have already come down versus 2024 and 2025. So this is a journey and a trajectory we're on. Thank you. Thank you.

On.

<unk>.

On the portfolio, maybe not a data point, what's important if you look at the <unk> in North America, we have been growing orders by 16% year to date.

Roy Jacobs: Maybe another data point what is important. If you look at DI in North America, we have been growing orders by 16% year to date. Whilst we are growing, of course we're coming from a smaller base and that weighs upon us. It's not we don't have momentum there, but of course we are rebuilding from a smaller base. Those are a few, I think, data points on the D&T momentum. We keep building it. We also have strong engagement with customers. We have been receiving many of them actually here for co-creation sessions and have been individually also part of that. I see it coming also towards next year, but we are sequentially building it through the quarters.

Roy Jakobs: Maybe another data point what is important. If you look at DI in North America, we have been growing orders by 16% year to date. Whilst we are growing, of course we're coming from a smaller base and that weighs upon us. It's not we don't have momentum there, but of course we are rebuilding from a smaller base. Those are a few, I think, data points on the D&T momentum. We keep building it. We also have strong engagement with customers. We have been receiving many of them actually here for co-creation sessions and have been individually also part of that. I see it coming also towards next year, but we are sequentially building it through the quarters.

Whilst we are growing of course, we're coming from a smaller base and that weighs upon us, but it's not we don't have momentum there, but as far as we are rebuilding from a smaller base. So those are a few I think data points on the DMT momentum. So we keep building. It we also have strong engagement with customers.

We have been receiving many of them actually here for co creation sessions and individuals who are part of that.

Ice's coming also towards <unk>.

Next year, but we are sequentially building it through the quarters.

Roy if I could just quickly follow up in your prepared remarks, you talked about tougher competition.

Roy Jakobs: The last question comes from the line of Mr. Oliver Reinberg from Kepler Chevreux. Please ask your question. Well, thanks so much for squeezing in. Two questions also from my side. Firstly, I just want to discuss the margin impact from innovation SKU reduction. I mean, I guess this is a kind of continuous effort, but can you just give us any kind of flavor in which year do you expect this kind of measures to peak? Will this probably be next year as the kind of order backlog is being worked through, or would you expect the kind of margin contribution to be similar compared to 2025? And also, can you give us a flavor when you're pruning your kind of product portfolio, what was actually the headwind to compare with sales growth? Because my understanding is that you're not adjusting for that.

Charlotte Hanneman: Roy, if I could just quickly follow up. In your prepared remarks, you talked about tougher competition on the ground in China, as well as some of the market issues that you just talked about. Where is that manifesting itself?

On the ground in China as well as some of the market issues that you just talked about where is that manifesting itself.

That this will not have an impact on results. We are remediating the process part of it, um, and we are in full kind of, um, remediation and take it very seriously, of course. Um, but we also know that this is no product issue, not a patient safety issue. This is process remediation. Uh, and, uh, we have been, uh, working on that while resolving it and stepping up our products in China.

Yes, I think what I mean with the tough competition is that of.

Of course, the centralized procurement, you'll have a much more regulated process around competition and that makes that that we see and I think everybody is facing that and that you would call. It up much more guided in the process. They are more disputes coming out. So when you have one people are bundling it.

Roy Jacobs: Yeah. I think what I mean with the tough competition is that, in of course, a centralized procurement, you have a much more regulated process around competition. That makes that, we see, and I think everybody's facing that you're kind of much more guided in that process. There are more disputes coming out. When you have one, people are re-bubbling it. That's, I think, where you see on the ground that it's becoming tougher because it's not only clinical preference, there's also more process in the mix. I think that is a fair, I think depiction of the China situation, and that's something that we all are dealing with, I think all parties. You saw it also, I think, in some commentary of others. I think we are working through that.

Roy Jakobs: Yeah. I think what I mean with the tough competition is that, in of course, a centralized procurement, you have a much more regulated process around competition. That makes that, we see, and I think everybody's facing that you're kind of much more guided in that process. There are more disputes coming out. When you have one, people are re-bubbling it. That's, I think, where you see on the ground that it's becoming tougher because it's not only clinical preference, there's also more process in the mix. I think that is a fair, I think depiction of the China situation, and that's something that we all are dealing with, I think all parties. You saw it also, I think, in some commentary of others. I think we are working through that.

So that's I think where you see on the ground, it's becoming tougher because there's not only clinical preference. There is also up more process in the mix I think that is a fair I think depiction of the China situation and Thats something that we all are dealing with I think all parties and you saw it also I think in some commentary of orders I think we are working through.

Roy Jakobs: And then the second question, if I may, just on Americas. I mean, you talked about different, more uncertainty in some kind of regions. I was just wondering if this also relates to Americas. We pointed to different dynamics by region. So just try to get a kind of flavor. How confident are you that this kind of growth in North America will continue into next year? Thank you. Yeah. Thank you, Oliver. Let me take the first question on the margin impact from the SKU reduction, which we internally call Project Synchronize. So what I would tell you, and if I take a step back on our margin improvement trajectory, we have consistently said that part of our margin improvement trajectory is related to gross margin improvement. And there are a couple of different reasons for that.

<unk>.

I think on neuroscience out on the positive side and we also mentioned that we are working to offset and vessels on short term, but also longer term that the strong momentum of double digit orders in North America of course is also a big part mitigation for that and there also we could still deliver 8% total order growth despite that China is not backwards.

Roy Jacobs: I think on the other side, on the positive side, we also mentioned that we are working to offset, and that's not only short-term, but also longer term. The strong momentum of double-digit orders in North America, of course, is also a big part of mitigation for that. There also we could still deliver 8% total order growth despite that China is not backwards where it is. Of course, there we are firing also on the strongholds that we have. CC was particularly strong this quarter, but also we continue to build on the, on the rest. As we are shifting to get where the demand is coming, more contribution, that's North America, but also Europe.

Roy Jakobs: I think on the other side, on the positive side, we also mentioned that we are working to offset, and that's not only short-term, but also longer term. The strong momentum of double-digit orders in North America, of course, is also a big part of mitigation for that. There also we could still deliver 8% total order growth despite that China is not backwards where it is. Of course, there we are firing also on the strongholds that we have. CC was particularly strong this quarter, but also we continue to build on the, on the rest. As we are shifting to get where the demand is coming, more contribution, that's North America, but also Europe.

I think in China, you see that it's a mixed picture. Overall, the market momentum, I would still call out for Health Systems as subdued, right? We still don't see the market growth coming back as we all hope. And that's really a market phenomenon. We see banners increasing, but it's not turning to auto growth because we see that they are not landing. Yet processing times are longer, they are being disputed, and that's something that actually we are facing as an industry. On the other hand, we have seen that ultrasound, for example, has been up in our mix, and we saw ICT also picking up. We saw some slowness in the eye, where actually last quarter was stronger. So actually, you're working also to kind of see how we can strengthen that again in Q4. So it's not that linear over the quarters. But in general, I think we are all waiting for further ranking of China. Now, we do expect it to come, but it's just not clear when, so therefore we remain cautious. And of course, you know that the China part of DNT is just bigger than also the CC part. So you see that.

And of course. They are we are firing also on a strong wells that we have at MCC was particularly strong.

This quarter, but also we continue to build on the on the rest. So as we are shifting to control that to guess where the demand is coming more contribution.

Roy Jakobs: On the one hand, we see improvement from gross margin driven by innovations, and our innovations driving higher margins. So there's an aspect there. The other component, as you rightfully call out, is the SKU reduction, where, for instance, we have pruned the number of transducers and ultrasounds significantly, which leads to lower R&D costs, lower quality costs, and lower supply chain costs. So all of that helps to drive improvement of margins, which is also, again, seen in Q3. So, for instance, I'll give you one other data point there. Our gross margin in diagnostic imaging, where we've done also a lot of product pruning SKU reductions, has improved year over year despite the tariffs. So that gives you a good sense of, on the one hand, we have the innovations like CT 5300, like Blue Seal MR 5300 driving gross margin expansion.

North America, but also Europe and you also see that kind of we will be building that into our sales of the various underlying segments.

Roy Jacobs: You also see that kind of we will be building that into our sales of the various underlying segments.

Roy Jakobs: You also see that kind of we will be building that into our sales of the various underlying segments.

Very helpful. Thank you.

Thank you.

Charlotte Hanneman: Very helpful. Thank you.

We will now take the next question from Mr. David Adlington from Jpmorgan. Please go ahead.

Operator: Thank you. We will now take the next question from Mr. David Adlington from JPMorgan. Please go ahead. Mr. David Adlington, JPMorgan.

Mr. David Gladstone.

Firstly, maybe just get your thoughts on Ge's decision.

That weighs a bit stronger on um um on the portfolio. Maybe not a data point. What is important? If you look at the eye in North America, we have been growing orders by 16% here today. So whilst we are growing. Of course, we're coming from a smaller base and that weighs upon us, but it's not we don't have momentum there, but of course, we are rebuilding from a smaller base. So, those are a few, I think data points on the DNT momentum. So we keep building it. We also have strong engagements with customers. Um, uh, we have been receiving many of them actually here. Uh, for co-creation sessions, and I've been individually, also part of that. Um, so I see it coming also towards, uh, the next year, but we are sequentially building it to the quarters.

David Adlington: Thanks for the questions. Firstly, maybe just be good to get your thoughts on GE's decision. Hello, can you hear me?

But can you hear me yes.

So gaming David.

Roy Jacobs: Yes. Can, David?

Roy Jakobs: Yes. Can, David?

Roy, if I could just quickly follow up. In your prepared remarks, you talked about tougher competition on the ground in China, as well as some of the market issues that you just mentioned. Where is that manifesting itself?

Okay.

Yes, just on.

Yes, so just on Ge's decision to sell the Chinese Tony.

David Adlington: Okay. Yeah, just on GE's decision to sell their Chinese business, just wondered if you thought there was potential to pick up share, but also good to get your thoughts in terms of why they might be looking to exit China. Then secondly, just wondered if we would, as the hedges rolled off on the foreign exchange, what sort of headwind that will be to margin for next year. Thank you.

Tony's business just wondered if you thought there was potential to pick up share, but also just getting <unk>.

Get your thoughts in terms of why they might be looking to exit China and then secondly, just wanted to be treated as the hedges rolled off some of the foreign exchange I, just wondered what sort of headwind that will be to margin for next year.

Roy Jakobs: On the other hand, there's also the impact from Project Synchronize or SKU reduction. Now, if you then talk about how should we think about that year over year, this is a journey. So we've seen some impact in 2025. We'll see some impact in 2026 and the years to come. And then your last sub-question in your question was around the sales impact that we see from that. There's nothing really that I can call out there that stands out. There's not a major impact on CSG, as I would see it now. It's really to focus on the great innovations that we have and doubling down on selling those. So that's what we're focused on. And then your second question. Yeah, maybe conclude on North America. So actually, indeed, we see kind of winners and losers in the US. So we see some smaller hospitals really being pressured.

Okay. So on GE of course, I cannot speak on behalf of GE and what Theyre doing what I do see is actually that indeed on the on the ground. We are dialing up our competitive positioning around innovations that we've been launching and as I said kind of we see that that also is resonating we sold yoga some pickup we.

Roy Jacobs: Okay. On GE, of course, I cannot speak on behalf of GE and what they're doing. What I do see is actually that indeed on the ground, we are dialing up our competitive positioning around the innovations that we've been launching. As I said, we see that also is resonating. We saw the ultrasound pickup. We see also that there is more activity, but we need to materialize that. I think overall, globally, you see that we have good order momentum, and that is because of the customer preference for our platforms. I think the approach of innovation that we're taking, where we're really looking into the broader productivity and workflow support, supported with the combination of products, AI, and informatics is something that is resonating.

Roy Jakobs: Okay. On GE, of course, I cannot speak on behalf of GE and what they're doing. What I do see is actually that indeed on the ground, we are dialing up our competitive positioning around the innovations that we've been launching. As I said, we see that also is resonating. We saw the ultrasound pickup. We see also that there is more activity, but we need to materialize that. I think overall, globally, you see that we have good order momentum, and that is because of the customer preference for our platforms. I think the approach of innovation that we're taking, where we're really looking into the broader productivity and workflow support, supported with the combination of products, AI, and informatics is something that is resonating.

Yeah, I think what I mean with the tough competition is that at, in, of course, a centralized procurement, you have a much more regulated process around competition. And that makes that we see, and I think everybody's facing that, that you kind of much more guided in that process. There are more disputes coming out. So when you have, one, people are rebuilding it. Uh, so that's, I think, where you see, on the ground, that it's becoming tougher because it's not only clinical preference. There's also a more process in the mix. I think that is a fair, uh, I think, depiction of the China situation and that's something that we all are dealing with. I think all parties, and you saw.

We see also that there is more activity on if we need to materialize that and I think overall global Youll see that we have good order momentum.

And kind of that is because of the customer preference for our platforms. I think the approach of innovation that we're taking we're really looking into at the border of productivity and workflow support support that with the combination of products Nai and informatics is something that is resonating. So I would say that's kind of our competitive differentiation and where we have three strong platforms that we have.

Roy Jacobs: I would say that's kind of our competitive differentiation, where we have three strong platforms that we're pulling from, that customers can build upon, and they are interoperable and open. That kind of we can play with partnerships in the industry as well to strengthen the delivery towards customers. I think that's on the first part. Maybe you can take the second on FX, Charlotte.

Roy Jakobs: I would say that's kind of our competitive differentiation, where we have three strong platforms that we're pulling from, that customers can build upon, and they are interoperable and open. That kind of we can play with partnerships in the industry as well to strengthen the delivery towards customers. I think that's on the first part. Maybe you can take the second on FX, Charlotte.

Roy Jakobs: They're also more dependent on Medicare, Medicaid patients, some of those also in urban areas. So there, actually, we see there's a lot of pressure. We are working with them on productivity solutions more. And then we see the ones that are strong are expanding, and we're also very strongly winning with them. So therefore, actually, you have seen sustained momentum in North America, also our double-digit order intake growth. We actually expect that to continue. We have no signs yet that kind of this market from the needs that we are serving is cooling down. And that's, I think, good news. So we actually expect continued strength in North America. That's also why we have kept investing in winning in America with the further footprint, the specific customer relation, and partnerships that we are concluding there. And we are excited about the opportunity there. Perfect. Thanks so much.

Pulling from that customers can build upon and they are interoperable and open how should that kind of we can play with partnerships in the industry as well to strengthen the delivery to our customers I think that's on the first part and maybe you can take the second on ethics, social yeah, absolutely yeah. Thanks, David So your question on FX and of course, we're very pleased with not seeing.

But also, I think in in some commentary of others, uh, I think we are working through that. Um, I think on the other side on the positive side, um, we also mentioned that kind of, we are working to offset and that's not only short-term, but also longer term, the strong momentum of double digit orders in. North America, of course, is also a big part of mitigation for that and there also, we could still deliver 8% total order growth. Despite that China is not backward, uh, where it is. And of course, there we are firing also on a strong walls that we have and CC was particularly strong, um, this quarter, but also we continue to build on the on the rest. So as we are shifting to to get where the demand is coming more contribution, that's North America, but also Europe. Um, you also see that kind of we will be building that into our sales of the various, uh, underlying segments

Very helpful. Thank you.

Thank you.

Charlotte Hanneman: Yeah, absolutely. Thanks, David. So your question on FX, and of course, we're very pleased with not seeing any impact from FX perspective in Q3. Now, if you go and also look at Q4, that's where we do expect some currency headwinds to come in, which also will impact our margin, and that's fully included in the guide of the higher end of 11.3% to 11.8%. Where we'll get that out in February, we'll also take the currency impact into account in our guide there. What I would tell you overall, that we've been doing very well in terms of offsetting any currency impacts, as you have seen also in Q3.

Any impact from a mix perspective in Q3 now if you go and also look at Q4 and that's why we do expect some currency headwinds to come in which also will impact on margin and Thats fully fully included in the in the guide of the higher end of 11, three to 11, 8% and we will get that out in February.

We will now take the next question from Mr. David at Lincoln from JP Morgan. Please go ahead.

Mr. David, I just don't have any questions. Firstly, maybe it would be good to get your thoughts on G's decision.

Can you hear me? Yes.

Also take the currency impact into account in our guide there, but what I would tell you overall that we've been at.

Okay.

Uh yeah. Just on

We've been doing very well in terms of.

Roy Jakobs: Thank you all. That was the last question. Mr. Jakobs, please continue. So thank you all for your questions. I think concluding, we delivered on our promise in Q3. Strong order intake growth, 8%. We had a positive step up in sales growth to 3% and a margin expansion despite tariffs. Now, we are fully focused on continuing to deliver in Q4 and therefore concluding this year within the reiteration of the sales range of one to three. We said that we would do upper end of our margin and strong cash delivery, and that will hopefully set us up for a good 2026. And we look forward to also kind of engage with you at the C&D. So thank you so much for your attention and your questions, and have a great rest of the day.

Offsetting any currency impacts as you have seen also in Q2.

Yeah.

Okay.

Thank you.

Yeah, so just on GE's decision to sell the Chinese, uh, the Chinese business, just wondered if you thought there was potential to pick up share, but also just get your thoughts in terms of why they might be looking to exit China.

Keith We will now take the next question.

Operator: Thank you. We will now take the next question from Mr. Graham Doyle from UBS. Please go ahead.

Mr. Graham Doyle from UBS. Please go ahead.

Thanks, guys just two for me.

Just firstly on the on the tire side of things just conceptually, we think of the order book growth, you've had which probably Tim which supports a mid single digit growth next year, you think of the cost savings from the mitigation you've got in there just to be fair is it reasonable to assume margins can expand next year.

Graham Doyle: Thanks guys. Just two for me. Just firstly on the tariff side of things, just conceptually, we think of the order book growth you've had, which probably, you know, would support, say, mid-single digit growth next year. You think of the cost savings, the mitigation you've got in there. Just to be fair, is it reasonable to assume margins can expand next year with tariffs where they are at the moment? Just to get some clarity on that. We're not asking for a level, but just to assume that they can expand. Just on China, we're hearing quite a bit about VBP within the CT and ultrasound segments, and I know a couple of your peers have seen it, but mainly because they play in the sort of lower end of mid-level hospitals.

With Paris, where they are at the moment just to get some clarity on that as we're not asking for a level, but just to assume that they can expand and then just on China. We're hearing quite a bit abate V BP within DCT and ultrasound segments and I know a couple of your peers have seen it but mainly because they play in the sort of lower end of mid mid level hospitals is this.

That's affecting your business or do you just not playing those categories. Thank you.

Graham Doyle: Is this something that's affecting your business, or do you just not play in those categories? Thank you.

Thank you Graeme let me take the first question on tariffs. So as you know ash are for this year and tariffs after substantial mitigation are impacting us too.

Charlotte Hanneman: Thank you, Graham. Let me take the first question on tariffs. As you know, for this year, tariffs after substantial mitigations are impacting us to an extent of EUR 150 to 200 million. Despite that, we're expanding our margins at this point in time at the higher end of the 11.3% to 11.8% margin, so by 30 basis points. You said it, of course, the tariffs are annualizing next year, that will be a little bit of a bigger impact. The way we are looking at it is we know every year we need to improve, including the new reality around us, and one of the big new realities around us is tariffs.

And extended 150 to 200 million euros and despite that we're expanding our margins at this point in time at the higher end of 11, three to 11, 8% margin. So by 30 30 basis points. You you said it of course to tariffs our annualized next year, so that will be a little bit of a bigger in fact, but the way we are.

See. Also that there is kind of more activity of kind of, we need to materialize that and I think overall Global you see that we have good or momentum um and kind of that is because of the customer preference for our platforms, I think the approach of innovation that we're taking where we're really looking into the broader productivity and workflow support supported with the combination of products and Ai and informatics is something that is resonating. So I would say that's kind of our competitive differentiation and where we have 3, strong platforms that we're pulling from that customers can build upon and they are interoperable and open, huh? So that kind of we can play with Partnerships in the industry as well to strengthen the delivery towards customers. I think that's on the first part and maybe you can take the second on FX shallow. Yeah, absolutely. Yeah. Thanks David. So, your question on on FX and, of course, we're very pleased with not seeing any impact from FX perspective in in Q3. Now if you go and also look at Q4, that's where we do expect some currency headwinds, uh, to come in which also

Looking at it is we know every year, we need to improve including the new reality around us and one of the big new realities around us is tariffs so without wanting to go into any specifics at this point in time, because we'll do that on February 10.

Charlotte Hanneman: Without wanting to go into any specifics at this point in time, because we'll do that on 10 February, what I can tell you is that we're very much focused on improvement. Improvement from a sales perspective, improvement from a margin perspective, and also improvement from a cash flow perspective.

I can tell you is that we're very much focused on improvement improvements from a sales perspective improvement margin expect perspective, and also improving from a cash flow perspective.

Will impact our margin and that's fully fully included in the in the guide of the higher, end of the 11.4 will ALS take the currency impact into account in our guide there. But what I would tell you overall that we've been, um, we've been doing very well in terms of offsetting any currency impacts as you have seen, also in Q3

Thank you.

On the city.

So Sean question Ppb in China.

We will not take the next question.

Roy Jacobs: On the CT, ultrasound question, VBP in China, I think the procurement rollout is quite broad-based, so we are also affected by that. We see that as well in part of kind of the portfolio where we play. That's, I think, a market phenomena. That's also where I was earlier alluding to that actually is causing some of the slowness that we see, 'cause actually that really causes longer processing times, as well as a more orchestrated approach towards buying. That has an impact, continuous impact on market growth in China. Therefore, we did see that as well for us.

Roy Jakobs: On the CT, ultrasound question, VBP in China, I think the procurement rollout is quite broad-based, so we are also affected by that. We see that as well in part of kind of the portfolio where we play. That's, I think, a market phenomena. That's also where I was earlier alluding to that actually is causing some of the slowness that we see, 'cause actually that really causes longer processing times, as well as a more orchestrated approach towards buying. That has an impact, continuous impact on market growth in China. Therefore, we did see that as well for us.

The procurement rollout, it's quite broad based so we are also affected by that so we see that as well and part of that.

From Mr. Graham Toy from UBS. Please go ahead.

The portfolio, where we play so that's I think market phenomena.

That's also where it was earlier was alluding to that actually is causing some of the slowness that we see because actually that.

Really causes lower processing times as well as a more orchestrated approach towards buying and that hasnt impact continue to impact on market growth in China.

Therefore, we.

We did see that as well for us I think on positive side as already mentioned, we saw really an ultra signs of positive growth coming in because also of some of the new launches that we have now we are also building the.

Roy Jacobs: I think on the positive side, as I already mentioned, we saw really an ultrasound positive growth coming in because also of some of the new launches that we have. Now, we have also building the pipeline for the CT part. We see that there is standard activity, but as I also mentioned, it's not yet kind of concluded and therefore kind of, we remain a bit cautious on how this evolves because it's not very predictable yet when activity turns into orders and then turns into sales.

Roy Jakobs: I think on the positive side, as I already mentioned, we saw really an ultrasound positive growth coming in because also of some of the new launches that we have. Now, we have also building the pipeline for the CT part. We see that there is standard activity, but as I also mentioned, it's not yet kind of concluded and therefore kind of, we remain a bit cautious on how this evolves because it's not very predictable yet when activity turns into orders and then turns into sales.

Pipeline for the <unk> part so we see that there is vendor activity, but as I also mentioned, it's not yet kind of concluded and therefore kind of.

Uh thanks guys, just at 2 for me. Um just briefly on the on the tarah side of things just conceptually we think of the order book growth you've had which probably, you know, would support say mid single digit growth next year. You think of the cost savings, the mitigation you got in there just to be to be fair. Is it reasonable to assume margins can expand next year? Um, with Paris where they are at the moment, just to get some clarity on that, we're not asking for a level, but just to assume that they can expand, and then just on China, we're here in quite a bit about, uh, vbp within the CT and ultrasound segments. And I know a couple of your peers have seen it, uh, but mainly, because they play in the sort of lower end of mid mid. Mid mid-level hospitals. Is this something that's affecting your business or do you just not play in those categories? Thank you.

We remain a bit cautious on how does he holds because it's not very predictable yet one activity turns into orders and then turns into sales.

Thank you Graeme. Let me take the first question on on tariffs. Uh, so, uh, as you know, uh, so for

Thank you, Josh and thanks, Bob and thanks, Sean.

Charlotte Hanneman: Thank you.

The next question comes from the line of Veronica Silva from Citi. Please go ahead.

Graham Doyle: Awesome. Thanks, Sofie, and thanks, Char-

Operator: The next question comes from the line of Veronika Dubajova from Citi. Please go ahead.

Good morning, or in Charlotte and Derek I. Thank you for taking my questions I am.

Veronika Dubajova: Good morning, Roy, Charlotte, and Durga. Thank you for taking my questions. I am going to ask 2, please, and a very quick 3rd one if you, if you forgive me, just 'cause it's 1 word, hopefully 1. But I just want to circle back to the downgrade, to the guidance, to the sales guidance for D&T. Obviously, Roy, you've talked a lot about China, but can you sort of confirm that the downgrade is entirely just China-related? Or is there anything else that you're seeing in other regions that's worrying you there? I guess how you feel about that kind of D&T growth momentum exiting this year underpinning this roughly 5% growth rate that consensus has for next year, if you can talk to that. That would be my first question.

Tariffs after substantial mitigations are impacting us to an extent of €150 to €200 million. Despite that, we're expanding our margins at this point in time to the higher end of the 11.3% to 11.8% margin. So, by 30 to 30 basis points, you said it. Of course, the tariffs are annualizing next year, so that will be.

Going to ask two please and a very quick third one if he if he forgive me just because thats. The one one more hopefully one.

Just wanted to circle back to the downgrade to the guidance the sales guidance for DNT and obviously, you've talked a lot about China can you.

And sort of confirm that the downgrade is entirely just China related.

Or is there anything else that youre seeing in other regions. That's worrying you there and I guess, how you feel about that kind of TNT.

This momentum exiting this year underpinning that's roughly 5% growth rate that consensus has for next year. If you can talk to that that would be my first question Mike.

A little bit of a of a bigger impact but the way we are looking at it is we know every year we need to improve including the new reality around us and 1 of the big new realities around us is terrorists. So without wanting to go into any specifics at this point in time because we'll do that on February the 10th. What I can tell you is that we're very much focused on improvement improvement from a sales perspective, improvement from margin, expect uh perspective and also improving from a cash flow perspective.

On this CT, um, ultrasound question, VPP in China.

My second question is on the low single digit growth rate in ITT quite a deviation from the trend that we've seen through the last couple of year. So curious if you have some thoughts on that and again if you can elaborate on what's driving that and my sort of very very quick yes, or no question is do you expect the warning letter to have any impact on your ability to return.

Veronika Dubajova: My second question is, the low single digit growth rate in IGT, quite a deviation from the trend that we've seen through the last couple of years. Curious if you have some thoughts on that, and again, if you can elaborate on what's driving that? My third very, very quick yes or no question is, do you expect the warning letter to have any impact on your ability to return to the CPAP market through the next 6 to 12 months? Thank you so much, guys.

C path market.

Over the next six to 12 months. Thank you so much guys.

Okay. Let me, let me start with the DMT. So on the sales momentum, yes, there is some China impact in that but Europe for US that we are seeing is also some longer conversion cycles of orders. There is no particular kind of or a reason that we see in or regions I said.

Roy Jacobs: Okay. Let me let me start with the D&T. On the sales momentum, yes, there is some China impact in that, but the other force that we're seeing is also some longer conversion cycles of orders. There's no particular kind of order reason that we see in other regions. I said kind of, especially in the eye side, of course, we have a different footprint in terms of more weighted towards Europe and China, and a bit less in North America where we are building. I also mentioned to you that we are actually building that with double-digit order growth. Actually we are stepping that up and we expect that also to continue. Yes, whilst the overall mix is a bit changing in the year, we remain this 1 to 3%.

Roy Jakobs: Okay. Let me let me start with the D&T. On the sales momentum, yes, there is some China impact in that, but the other force that we're seeing is also some longer conversion cycles of orders. There's no particular kind of order reason that we see in other regions. I said kind of, especially in the eye side, of course, we have a different footprint in terms of more weighted towards Europe and China, and a bit less in North America where we are building. I also mentioned to you that we are actually building that with double-digit order growth. Actually we are stepping that up and we expect that also to continue. Yes, whilst the overall mix is a bit changing in the year, we remain this 1 to 3%.

Especially in the <unk> side of course, we have a different footprint in terms of more weighted towards Europe, and China and a bit less in North America, where we are building, but I also mentioned to you that we are actually billing that with double digit order growth. So actually we are stepping that up and we expect that also to continue so yes, whilst the overall mix has been changing in the year, we remained at 1% to three person.

Um, I think the procurement rollout is quite broad based. So we also affected by that, so we see that as well, in part of kind of the, the, the portfolio where we play. Um, so that's I think a market phenomenon. Um, that's also where I was earlier alluding to that actually, is causing some of the slowness that we see because actually that, uh, uh, really causes longer processing times as well as a more orchestrated, uh, approach uh, towards buying. Uh, and that has an impact continued impact on market growth in China. Uh, so therefore, um, uh, we did see that as well for us. I think on positive side, as I already mentioned, we saw really an ultrasound positive growth coming in because also, of some of the new launches that we have. Now, we have also building, uh, the pipeline for the CT part. So we see that there's standard activity, but as I also mentioned, it's not yet kind of concluded and therefore, kind of um uh we remain a bit.

Courses on how this evolves, because it's not very predictable yet. One activity turns into orders, and then turns into sales.

Thank you. Awesome. Thanks a lot, and thanks.

<unk>.

Too many people talking about <unk>. It was quite extraordinary this quarter, how they de levered in terms of the demand that there is as well as garner support this in hospital patient monitoring and in our firm.

Roy Jacobs: I haven't heard too many people talking about CC. It was quite extraordinary this quarter how they delivered in terms of the demand that there is, as well as kind of, supported in hospital-based monitoring and in kind of, EI. Of course we're tapping the opportunity and also growing and leveraging the strength of our portfolio in fullest. That also is true actually for IGT. In IGT, the CEG has been high, especially if you look also then in terms of the, compare, from a 2 years comps in Q3, and that was also supply chain related. You see that kind of explains some of the LSD, actually we keep very much leading in IGT. The new launches are contributing to that.

Roy Jakobs: I haven't heard too many people talking about CC. It was quite extraordinary this quarter how they delivered in terms of the demand that there is, as well as kind of, supported in hospital-based monitoring and in kind of, EI. Of course we're tapping the opportunity and also growing and leveraging the strength of our portfolio in fullest. That also is true actually for IGT. In IGT, the CEG has been high, especially if you look also then in terms of the, compare, from a 2 years comps in Q3, and that was also supply chain related. You see that kind of explains some of the LSD, actually we keep very much leading in IGT. The new launches are contributing to that.

The next question comes from the line of Veronica from City. Please go ahead.

So of course, we're tapping the opportunity and also growing leveraging the strength of our portfolio and foolish.

And that also through actually for IGT. So in IGT <unk> has been high, especially if you look also then in terms of the compare from a two year comps in Q3.

And that was all supply chain related do you see that kind of explains some of the LSD, but actually we keep very much leading in IGT. The new launches are contributing to that people are really excited about not only what we have been launching but also the piping with azure and <unk> and all of our innovations that we have.

Roy Jacobs: People are really excited about not only what we have been launching, but also the pipelining with zero and I and other innovations that we have. Actually we remain very excited about interventional opportunity that's out there and that we also keep pursuing. On the warning letter, no, I don't expect any impact to the CD because these are two separate topics. The CD has its own kind of SRC related demands. As I mentioned earlier, we're fully on track in kind of working through those. This is a separate warning letter we need to address. And we are in full remediation of it. As I said earlier, we don't expect any commercial impact of it.

Roy Jakobs: People are really excited about not only what we have been launching, but also the pipelining with zero and I and other innovations that we have. Actually we remain very excited about interventional opportunity that's out there and that we also keep pursuing. On the warning letter, no, I don't expect any impact to the CD because these are two separate topics. The CD has its own kind of SRC related demands. As I mentioned earlier, we're fully on track in kind of working through those. This is a separate warning letter we need to address. And we are in full remediation of it. As I said earlier, we don't expect any commercial impact of it.

We remain very excited about interventional opportunity.

It's out there and that we also keep pursuing than on the warning letter no I don't expect any impact to the CD. Because these are two separate topics and <unk> has its own kind of src related demand as I mentioned earlier, we're fully on track and kind of working through dose. This is a separate wanting that that we need to address.

And we are in.

Full remediation of it and as I said earlier, we don't expect any commercial impact of it so in that sense, yes, it's a disappointment and we are going to.

Cuz that's one word, hopefully, one. Um, but what I just want to circle back to is the downgrade, to the guidance. Um, the sales guidance for DNT, and obviously, where you've talked a lot about China, but can you sort of confirm that the downgrade is entirely just China-related? Um, or is there anything else that you're seeing in other regions that's worrying you there? And I guess how you feel about that kind of DNT growth momentum exiting this year, underpinning this roughly 5% growth rate that consensus has for next year. If you can talk to that, um, that would be my first question. Um, my second question is, um, the low single-digit growth rate in IGT, quite a deviation from the trend that we've seen through the last couple of years. So curious if you have some thoughts on that, and again, if you can elaborate on what's driving that. And my third, very, very quick yes or no question is, do you expect the warning letter to have any impact on your ability to return to the CPAP market through the next 6 to 12 months? Thank you so much, guys.

Roy Jacobs: In that sense, yes, it's a disappointment, and we are kind of actioning it with very strong follow through, but we don't expect that to have any further operational impact.

Roy Jakobs: In that sense, yes, it's a disappointment, and we are kind of actioning it with very strong follow through, but we don't expect that to have any further operational impact.

<unk> with very strong follow through.

But we don't expect that to last for operational impact.

Got it thank you so much.

Thank you.

Durga Doraisamy: Got it. Thank you so much.

We will now take the next question from Mr. Richard Felton from Goldman Sachs. Please go ahead.

Operator: Thank you. We will now take the next question from Mr. Richard Felton from Goldman Sachs. Please go ahead.

Thank you very much good morning tea for me. Please based on connected care. So first of all just to follow up on the on the strong order performance in connected care could you maybe add a bit more color on what was driving that and how much benefit was there from the longer term partnerships that you signed in the quarter and then secondly on enterprise Informatics, specifically I think it's in a row.

Richard Felton: Thank you very much. Good morning. 2 for me, please. Both on connected care. First of all, just to follow up on the strong order performance in connected care, could you maybe add a bit more color on what was driving that? How much benefit was there from the longer-term partnerships that you signed in the quarter? Secondly, on enterprise informatics specifically, I think it's, you know, roughly a year on since you extended your partnership with AWS to advance cloud services. How has that partnership impacted your enterprise informatics business from both a top and bottom-line perspective? Thank you.

Okay, let me um let me start with the DNT so on the sales format. Yes, there is some China impact in that but the other force that that we have seen is also some longer conversion cycles of orders. There's no particular kind of, um, other reason that we see in other regions, I said kind of fast especially in the eyesight. Of course, we have a different footprint in terms of more weighted towards Europe and China and a bit less in North America where we are building. But I also mentioned to you that we are actually building that with double digit order growth. So, actually, we are stepping that up and we expect

A year on since you extended your partnership with AWS.

Advanced cloud services.

Is that partnership impacted your enterprise informatics business from both a top and bottom line perspective. Thank you.

Yes, great questions.

So let me start with wholesale patient monitoring NCC.

Roy Jacobs: Great questions, Richard. Let me start with hospital patient monitoring and CC development there. I think we have been seeing strong demand on the patient monitoring side. In combination with, I would say, really unique ecosystem that we have been building, we see us really winning. That's not only building on the momentum in the market, but also then really taking positions also of competition that is built also with partnerships. We mentioned 2 in the Q, but it's not only of that, it's quite broad-based and also across regions. You know that we play mostly outside of China, of course CC doesn't have that China impact, it's really driving a very strong North America contribution.

Roy Jakobs: Great questions, Richard. Let me start with hospital patient monitoring and CC development there. I think we have been seeing strong demand on the patient monitoring side. In combination with, I would say, really unique ecosystem that we have been building, we see us really winning. That's not only building on the momentum in the market, but also then really taking positions also of competition that is built also with partnerships. We mentioned 2 in the Q, but it's not only of that, it's quite broad-based and also across regions. You know that we play mostly outside of China, of course CC doesn't have that China impact, it's really driving a very strong North America contribution.

Element there I think we havent seeing strong demand on the patient monitoring sites and in combination with I would say really unique ecosystem that we have been building, we see us really winning.

And that's not only on one building on our momentum in the market, but also then going to <unk>.

Taking positions also a competition.

That is built also with partnerships that we mentioned too in the quarter, but it's not only of that is quite broad based and also across regions. You know that we play mostly outside of China of course, you see it doesn't have the China impact, but it's really kind of driving a very strong North America.

Expect that also to continue. So, yes, whilst the overall mix is be changing in the year. We remain this 1 to 3%. I haven't heard too many people talking about CC. It was quite extraordinary this quarter, how they delivered in terms of the demand that there is, as well, as kind of, uh, supported in hospital based monitoring and in kind of, um, EI. So, of course, we're tapping the opportunity and also growing and leveraging the strengths of our portfolio in fullest. Um, and that also also actually for IGT so in IGT, the CSG has been high, especially if you look also then in terms of the um compared from a 2 years comps in Q3. Um, and that was also supply chain related. You see that kind of explains some of the LSD, but actually, we keep very much leading in IGT, uh, the new launches are contributing to that and people are really excited about not only what we have been launching but also the piping with Azure and I and other innovations that we have. Um, so actually we we remain very excited about in Interventional opportunity, um, that's out there and that we also keep

Contribution they are investing in patient monitoring standardization, but also patient safety is important there to watch over over their patients as well as the cyber security part and we have been really also driving the partnership approach as you have been seeing so we can offer a full open modular approach and Thats really working.

Roy Jacobs: They're investing in patient monitoring, standardization, but also patient safety is important there to watch over the patients as well as the cybersecurity part. We have been really also driving the partnership approach, as you have been seeing. We kind of offer a full open modular approach, and that's really working for the market and for our customers. I think a winning formula there, and that we expect to continue to deliver results. That not only has been driving order sales, but you saw also strong margin contribution because as you know, CC, the hospital patient monitoring business, also a strong margin business. On EI, we also mentioned strong contribution from EI in the quarter.

Roy Jakobs: They're investing in patient monitoring, standardization, but also patient safety is important there to watch over the patients as well as the cybersecurity part. We have been really also driving the partnership approach, as you have been seeing. We kind of offer a full open modular approach, and that's really working for the market and for our customers. I think a winning formula there, and that we expect to continue to deliver results. That not only has been driving order sales, but you saw also strong margin contribution because as you know, CC, the hospital patient monitoring business, also a strong margin business. On EI, we also mentioned strong contribution from EI in the quarter.

Pursuing then on the warning letter know, I don't expect any impact to the CD because these are 2 separate topics. Uh, the CD has its own kind of uh uh SRC related demands. As I mentioned earlier, we're fully on track in kind of uh working through those. This is a separate warning that we need to address um and we are in uh full remediation of it. And as I said earlier, we don't expect any commercial impact of it. So, uh, in that sense, yes, it's a disappointment and we are kind of uh uh, actioning it with very strong.

For the market and for our customers. So I think a winning formula there and that we expect to continue to deliver results and.

Has been followed through, um, but we don't expect that to have any further operational impact.

Got it. Thank you so much.

Thank you.

And that not only has it been driving order sales, but <unk> also strong margin contribution because as you know she's at the adult patient monitoring business also a strong margin business.

We will now take the next question from Mr. Richard Felton from Goldman Sachs. Please go ahead.

We also mentioned strong contribution from <unk> in the quarter.

As I said, we drive of course EI for margins. So we saw margin improvement, but we also were very pleased with the <unk>.

Roy Jacobs: As I said, we drive, of course, EI for margin, so we saw margin improvement, but we also were very pleased with the order improvement. That indeed is really also in combination with that offer that we have and with AWS. The cloud migration is a big topic. Not only the cloud migration, we do also AI and some language model collaboration with them. We see that's really kind of supporting the engine. They're also doing some marketing and sales efforts because they, in essence, co-sell our solutions, as well as that we of course, support their cloud services when we go out to customers together. That is a format that also works within the market and with customers.

Roy Jakobs: As I said, we drive, of course, EI for margin, so we saw margin improvement, but we also were very pleased with the order improvement. That indeed is really also in combination with that offer that we have and with AWS. The cloud migration is a big topic. Not only the cloud migration, we do also AI and some language model collaboration with them. We see that's really kind of supporting the engine. They're also doing some marketing and sales efforts because they, in essence, co-sell our solutions, as well as that we of course, support their cloud services when we go out to customers together. That is a format that also works within the market and with customers.

Order improvement and that indeed is really also in combination with the offer that we have.

With AWS.

AWS the cloud migration is a big topic not only the cloud migration, we do also AI and so.

The language model collaboration with them. So we see that's really kind of supporting the engine. They're also doing some marketing and sales efforts because they in essence go sell our solutions.

Thank you very much. Good morning. Uh, T from me, please, both on Connected Care. So, um, first of all, I suppose just to follow up on the uh, on the strong order performance in Connected Care. Uh, could you maybe add a bit more color on what was driving that and how much benefit was there from the longer-term partnerships that you signed in the quarter? Uh, and then secondly, on Enterprise Informatics specifically, I think it's, you know, roughly a year on since you extended your partnership with AWS to advanced cloud services. Um, how has that partnership impacted your Enterprise Informatics business from both a top and bottom line perspective? Thank you.

And as well is that we of course support.

Their cloud services when we go out to customers together and that is a format that also works within the market and with customers. So we see that's gone up strengthening our approach and Thats. Indeed building the funnel and are also building a conversion since we started that collaboration with AWS.

Roy Jacobs: We see that, kind of strengthening our approach, and that’s indeed building the funnel and now also building the conversion since we started that collaboration with AWS.

Roy Jakobs: We see that, kind of strengthening our approach, and that’s indeed building the funnel and now also building the conversion since we started that collaboration with AWS.

Alright, Thank you Murray.

Thank you.

We will now take the next question from the line of <unk> <unk> from ABN Amro quarter with DHS. Please go ahead.

Richard Felton: Great. Thank you, Roy.

Operator: Thank you. We will now take the next question from the line of Wim Gille from ABN AMRO – ODDO BHF. Please go ahead.

Yeah, great questions. Um Richard. So let me start with housefull patient monitoring and CC um development there. I think we have been seeing um a strong Demand on the patient monitoring side. Uh and in combination with I would say really unique ecosystem that we have been building. We see us really winning uh and that not only kind of building on the momentum in the market but also then kind of really um uh yeah taking uh positions also of competition. Um that is built also with Partnerships. Now, we mentioned 2 in the quarter but it's not only of that it's quite broad base and also across regions. Uh, you know, that we

Yes, very good morning.

Two questions actually.

Wim Gille: Yes, very good morning. I have two questions, actually. First, you reported 8% order intake growth in Q3, predominantly driven by CC this quarter. You also gave some color during this earnings call on the funnel for Q4, but I missed that answer, so can you reiterate it? Basically giving a bit of granularity on how you see the sales funnel and the order intake develop into Q4 for both D&T as well as CC. The second question is related to ENI, Enterprise Informatics. As I understand it, order intake was pretty okay, but sales has been flat also in Q3 and was also quite disappointing, relatively low in the previous quarters. Which reads a bit disappointing vis-à-vis market growth there.

First.

You reported 8% order intake growth in Q3 predominantly driven by FCC. This quarter. You also gave some cooler June.

This earnings call on the center for Q4, but I missed that answer so can you reiterated.

Basically, giving a bit of granularity on how you see the seals pheno and the order intake develop into Q4 for both <unk> as well as Cc <unk>.

The second question is related to Eni enterprises kinetics.

As I understand it order intake was pretty okay.

<unk> has been.

Also in Q3 and it was also our disappointing relatively.

Relatively low in the previous quarters.

Could you reach a bit disappointing PCB market growth. There. So what has been holding you back in the last couple of quarters and when would you expect your order intake and eni to come incorporate into sales growth here.

Wim Gille: What has been holding you back in the last couple of quarters? When would you expect the order intake in ENI to come, and convert into sales growth here? Thanks.

Thanks.

Yes, let me let me maybe take the first one in terms of the order momentum. So we said quantify when we look through the year that we expect a strong full year delivery of orders.

Roy Jacobs: Yeah, let me maybe take the first one in terms of the order momentum. We said kind of that when we look through the year, we expect a strong full year delivery of orders, where we continue on the track that we have been building. Of course, the order intake also in into Q4, probably a bit more evenly based with CC and D&T. As I've said, kind of has been a bit lumpy through the quarters. In Q4, we expect it to be more evenly based. Depending on kind of what big orders will fall, you will see kind of this will have potential some impact in Q4, or we see it next year back. A strong finish in orders.

Roy Jakobs: Yeah, let me maybe take the first one in terms of the order momentum. We said kind of that when we look through the year, we expect a strong full year delivery of orders, where we continue on the track that we have been building. Of course, the order intake also in into Q4, probably a bit more evenly based with CC and D&T. As I've said, kind of has been a bit lumpy through the quarters. In Q4, we expect it to be more evenly based. Depending on kind of what big orders will fall, you will see kind of this will have potential some impact in Q4, or we see it next year back. A strong finish in orders.

We continue on the track that we have been building so of course the order intake also in.

Into Q4, probably a bit more easily base.

With HCC and DMT.

Modular approach and that's really working for the market and for our customers. So I think winning formula there that we expect to continue to deliver results. Um, and that not only has been driving order sales, but you also strong margin contribution because, as, you know, she the patient monitoring business, also a strong margin business. Then, on EI. Uh, we also mentioned strong contribution, um, from EI in the quarter. Um, as I said, we drive, of course, EI for margin. So, we saw margin Improvement, but we also were very pleased with the, um, order Improvement, and that indeed is really also in combination with that offer that we have and, uh, with, uh, AWS the cloud, migration is a big topic, not only the cloud migration. We do also Ai, and some, um, uh, uh, uh, language model collaboration with them. So we see that it's really kind of supporting the engine. They're also doing some marketing and sales effort, because they in essence Co sell our Solutions. Um um. As well as that we, of course, uh uh, support their cloud.

As I've said has been a bit lumpy through the quarters.

In Q4, we expect it to be more evenly based.

Then depending on kind of what big orders will fall and you will see kind of this will have a substantial impact in Q4 or we see next year back.

Services when we go out to customers together and that is a Formula that also works within the market and with customers. So we see that the kind of strengthening our approach and that's indeed building the funnel and now also building a conversion since we started that collaboration with AWS.

Great, thank you. Bye.

But a strong finish in orders than on sales also there kind of a you have said before we are stepping up and also we will step up in Q4.

Thank you.

Roy Jacobs: On sales, also there, we have said before, we are stepping up and also we will step up in Q4. That will be across the different segments. We will expect contribution from everybody in that step up. PAH continuing to be strong. We see CC continuing, also D&T stepping up. In that sense, I think, we maintain the momentum, as we also signaled, and that's built upon the funnel. Now, of course, still 2 months to go, so working hard to get it over the finish line with our teams. All that geared towards delivering upon what we also have guided for.

Roy Jakobs: On sales, also there, we have said before, we are stepping up and also we will step up in Q4. That will be across the different segments. We will expect contribution from everybody in that step up. PAH continuing to be strong. We see CC continuing, also D&T stepping up. In that sense, I think, we maintain the momentum, as we also signaled, and that's built upon the funnel. Now, of course, still 2 months to go, so working hard to get it over the finish line with our teams. All that geared towards delivering upon what we also have guided for.

That will be across.

We will now take the next question from the line of Vim KS, from ABN Amro Oddo BHF. Please go ahead.

The different segments. So we will expect contribution from everybody and that step up.

<unk> continued to be strong, we CCC companion animals with DMT stepping up so in that sense I think we maintain the momentum as fuels for signals.

Bill on the phone.

Now of course still two months ago, so working hard to kind of get it over the finish line with our teams, but OLED gone appeared towards delivering upon but we also have guided for.

And I think that's of course origination of what we have been planning for.

Roy Jacobs: I think that's, of course, a reiteration of what we have been planning for and saying all year long.

Roy Jakobs: I think that's, of course, a reiteration of what we have been planning for and saying all year long.

Saying all year long.

Yeah, and then maybe a question on the enterprise Informatics. Indeed, as you pointed out our order intake has been very strong in Q3 for enterprise Informatics and we're very pleased with that you probably also know that the order conversion cycle from order to sales and enterprise informatics is pretty long so it'll take quite a while for order intake growth to converge.

Charlotte Hanneman: Wim, your question on enterprise informatics. Indeed, as you pointed out, our order intake has been very strong in Q3 for enterprise informatics, and we're very pleased with that. You probably also know that the order conversion cycle from order to sales in enterprise informatics is pretty long, so it'll take quite a while for order intake growth to convert into sales. Roy just spoke about AWS and our AWS partnership as well, which will also help contribute as we move customers to the cloud, will also help drive sales growth there over time.

<unk> into sales and Roger spoke about AWS, and our AWS partnership as well, which will also help contribute as we move customers to the cloud will also help drive that drive sales goes down over time.

Yes, very good morning. I have have 2 questions, actually. Uh, first, um, you reported 8% or the intake growth, uh, in Q3 predominantly driven by CeCe. Disc Quarton, uh, you also gave some color during, uh, this earnings call on the front of, for Q4, but I missed that answer. So, can you reiterate it? Uh, basically giving a bit of granularity on how you see the sales, uh, funnel, and the order intake develop into Q4 for both DNT. As well as CC. The second question is related to eni and pricing metrics. Um, as I understand it all the intake was pretty. Okay. Uh but still um, has been uh flat also in Q3 and was also quite disappointing uh relatively low in in the previous quarters, which reads a bit disappointing, vcv market growth there. So what has been holding you back in the last couple of quarters? And when would you expect the order intake in eni to come, uh, and convert it into sales growth?

With you.

Thanks.

And in the transition where you're moving your clients too from on Prem to cloud.

Roy Jacobs: In that transition where you are moving your clients to, from on-prem to cloud, can you give any indication where you are in that process? Is it like, you know, a quarter is done? Are you halfway there, or are we now at the end of the conversion?

Roy Jakobs: In that transition where you are moving your clients to, from on-prem to cloud, can you give any indication where you are in that process? Is it like, you know, a quarter is done? Are you halfway there, or are we now at the end of the conversion?

Have you any indication can you give any indication where you are in the process is like.

Quarter as Don are you half way there or are we now at the end of the conversion.

Yeah, it's it's it's difficult to say and it also depends really customer by customer. So we've done a number of successful conversions from on Prem to the cloud and but ultimately the thing to keep in mind is that this will take time to fully.

Charlotte Hanneman: Yeah. It's difficult to say, it also depends really customer by customer. We've done a number of successful conversions from on-prem to the cloud. Ultimately the thing to keep in mind is that this will take time to fully execute on because it really touches also the hospitals and the hospital operations very, very deeply. This will take time. We've done a few that have been very successful.

Fully execute on it because it really touches also the hospitals and the hospital operations very very deeply so this will take time, but we've done a few that have been very successful.

Okay.

Thank you.

Thank you once again, if you would like to ask a question. Please press the star followed by two times one on your telephone to cancel their request. Please press.

Yeah, let me, let me maybe take the first 1 in terms of the order momentum. So we said, kind of fact, when we look to the year, uh, we expect a strong full year delivery of orders, um, uh, where we continue on the track that we have been building. Uh, so a positive order intake also in, um, uh, into Q4, probably a bit more evenly based, uh, with, uh, with CC and DNT. Um, as I've said, kind of has been a bit lumpy through, uh, the quarters. Um, but in Q4, we expect it to be more evenly based, um, then depending on kind of what big orders will fall. You will see kind of this will have potential some impact in Q4 or we see next year back. Uh, but a strong finish in orders, um, then on sales, uh, also their kind of, we have said before, we are stepping up. And also, we will step up in Q4. Um, and that will be across, um, uh, the the different segments. Uh, so we will expect contribution from everybody in that step up.

Roy Jacobs: Thank you.

Roy Jakobs: Thank you.

Operator: Thank you. Once again, if you would like to ask a question, please press the star followed by two times one on your telephone. To cancel the request, please press the star, follow the two times one. We will now take the next question from Mr. Falko Friedrichs from Deutsche Bank. Please go ahead.

Star followed two times one.

We will now take the next question from Mr. Falko Friedrichs from Deutsche Bank. Please go ahead.

Thank you good morning.

My first question is how did Derisked Bureau, Nicks business perform in Q3, and how you're seeing the momentum build SUV and European markets.

Falko Friedrichs: Thank you. Good morning. My first question is how did the Respironics business perform in Q3, and are you seeing the momentum build as you reenter European markets? My second question is, there has been a very large number of earnings adjustments again in Q3. Is that something you plan to significantly reduce going into 2026? Thank you.

Um, so pH continue to be strong. Um, we see CC continuing and also DMT stepping up. So in that sense, I think, uh, we maintain the momentum, uh, as we also signaled, um, and that, uh, built from the funnel now, of course, still 2 months ago. So working hard to kind of get it over the Finish Line with our teams. Um but all the kind of geared towards delivering upon what we also have guided for um and I think uh that's of course a reiteration of what we have been.

Planning for, uh, saying all year long?

Second question is.

Yeah, and then when your question on Enterprise Informatics,

A very large number of earnings adjustments again in the third quarter is that something you plan to significantly reduce going into 2026. Thank you.

Yeah, Let me take the first one.

<unk> focus on Src.

Roy Jacobs: Yeah. Let me take the first one, focus on SRC. I think two parts. One, as I said before, of course, we have been driving very strong margin improvement. We have seen very strong margin realization in Q3 of SRC also. That also contributed to the strong CC margin step up. That part of the strategy is fully working. Also, we have seen really the OSA portfolio, so the sleep apnea portfolio stepping up. We see actually as we returning into the market, actually that's something that is delivering growth to us. Where we see it being offset is with ventilation. There actually we have improving portfolio and also been taking out. That actually is going at the cost of the sleep momentum.

Roy Jakobs: Yeah. Let me take the first one, focus on SRC. I think two parts. One, as I said before, of course, we have been driving very strong margin improvement. We have seen very strong margin realization in Q3 of SRC also. That also contributed to the strong CC margin step up. That part of the strategy is fully working. Also, we have seen really the OSA portfolio, so the sleep apnea portfolio stepping up. We see actually as we returning into the market, actually that's something that is delivering growth to us. Where we see it being offset is with ventilation. There actually we have improving portfolio and also been taking out. That actually is going at the cost of the sleep momentum.

Two parts one as I said before of course, we have been driving very strong margin improvement. We have seen very strong margin realization in Q3 of Src also that also contributed to the strong <unk> margin step up so thats part of strategy fully working also we have seen really the OSA portfolios with sleep apnea portfolio stepping up so we see actually.

In the Q3 earnings call, we're very pleased with that. You probably also know that the order conversion cycle from order to sales in Enterprise Informatics is pretty long. So, it'll take quite a while for order intake growth to convert into sales. Roy just spoke about AWS and our AWS partnership as well, which will also help contribute as we move customers to the cloud, also helping drive sales there over time.

As we returning into the market actually that's something that is delivering growth to us and where we see it being offset is with ventilation. They're actually we have important portfolio and also been taking out so that actually is going at the cost of the sleep momentum. So therefore in the mix you see that there is slight pressure on the sales and because of.

Roy Jacobs: In the mix you see that there is slight pressure on the sales because of that ventilation reset. We are very encouraged and excited by the fact that in sleep, both on the devices but also the masks, we see it stepping up. Of course with the re-entry that we have been doing across the various countries now in due course of this year.

Roy Jakobs: In the mix you see that there is slight pressure on the sales because of that ventilation reset. We are very encouraged and excited by the fact that in sleep, both on the devices but also the masks, we see it stepping up. Of course with the re-entry that we have been doing across the various countries now in due course of this year.

The ventilation VSAT.

But we are very encouraged and excited about affected and seep bolt on the.

Devices, but also the mosques, we see it stepping up.

That's of course with the re entry that we have been doing across the various countries now.

Yeah, it's it's it's difficult to say and it also depends really customer by customer. So we've done a number of successful conversions from, uh, on-prem to the cloud. And but ultimately, the thing to keep in mind is that this will take time to fully uh fully execute on. Because it really touches also, the hospitals and the hospital operations. Very, very deeply. So this will take time but we've done a few that have been very successful.

In due course of this year.

Thank you.

<unk> I'll take your second questions on the on the adjusting items and although adjusting items came in at.

Charlotte Hanneman: Yeah. Falko, I'll take your second questions on the adjusting items. Although adjusting items came in significantly lower than we had guided for, I absolutely acknowledge that they're still high, huh. The moving pieces are, on the one hand, we continue to have costs related to the Consent Decree, Respironics Consent Decree that will reduce over time. The other element is that we continue to have restructuring costs as we're continuing to simplify our operating model and to simplify Philips as a company. Now, having said all of that, we are very much focused on, and it is a priority of mine, to reduce adjusting items over time. That is what we're fully focused on. There's a lot on the table there. There's a lot of strengthening of processes that we're doing.

Significantly lower than we had guided for I, absolutely acknowledge that they are still high and the moving pieces are on the one hand, who continue to have cost related to the consent degree investor on the consent degree that will reduce over time. The other element is that we continue to have restructuring cost as we are continuing to simplify our operating model.

Thank you. Once again, if you would like to ask a question, please press the star followed by 2 times, 1 on your telephone, to cancel the request, please, press the star. Follow the 2 2 times 1.

Will not take the next question from Mr. Falco Frederick from Deutsche Bank. Please go ahead.

To simplify Philips as a company now having said all of that we are very much focused on and it is a priority of mine to reduce adjusting items over time. So that is what we're really focused on there is a lot on the table. There are lot of strengthening of processes that we're doing so overtime I can Dan.

Thank you. Good morning. Um, my first question is, how did the Respironics business perform in Q3? And are you seeing the momentum build as you re-enter European markets?

I see the reduction in adjusting items and what I would also tell you is that adjusting items have already come down versus 2024 in 2025. So this is a journey in a trajectory wrong.

Charlotte Hanneman: Over time, I could, I see the reduction in adjusting items. What I would also tell you is that adjusting items have already come down versus 2024 and 2025. This is a journey and a trajectory we're on.

My second question is they have been a very large number of earnings adjustments. Again in the third quarter is that something you plan to significantly reduce going into 2026? Thank you.

Thank you.

The last question comes from the line of Mr. Oliver <unk> from Kepler Cheuvreux. Please ask your question.

Falko Friedrichs: Thank you.

Operator: Thank you. The last question comes from the line of Mr. Oliver Reinberg from Kepler Cheuvreux. Please ask your question.

Okay. Thanks, so much for squeezing me in.

Two questions also from my side, Firstly, I just want to discuss the margin impact from innovation SKU reduction.

Oliver Reinberg: Oh, yeah. Thanks so much for squeezing me in. Two questions also from my side. Firstly, I just want to discuss the margin impact from innovation SKU reduction. I mean, I guess this is kind of continuous effort, but can you just give us any kind of flavor in which year do you expect this kind of measures to peak? Will this probably be next year as the kind of order backlog is being worked through, or would you expect the kind of margin contribution to be similar co-compared to 2025? Also, can you give us a flavor when you are pruning your kind of pro-product portfolio, what was actually the headwind to comparable sales growth? Because my understanding is that you're not adjusting for that.

I guess this is kind of continuous effort, but can you just give us any kind of flavor in which year do you expect this kind of measures to peak with its probably be next year as they come up all the backlog is.

<unk> or would you expect the kind of margin contribution to be similar compared to 2025 and also can you give us a flavor when you pull new kind of product portfolio, what was actually the headwind to comparable sales growth because my understanding is that the not adjusting for that and then the question. The second question. If I may just on America, I mean, you talked about.

Yeah, let me take the first 1, um, focus on as I see. Uh, I think, um, 2 parts 1, as I said before, of course, we have been driving very strong on margin Improvement. We have seen very strong margin realization, Q3 of SRC. Also, that also contributed to the strong CC margin step up, so that part of the strategy fully working. Also, we have seen really the Osa portfolio so the sleep up. No portfolio. Stepping up. So we see actually, as we returning into the market actually that's something that uh, is delivering growth to us. Um where we see it being offset is with ventilation there. Actually we have in pooling portfolio and also been taking out so that actually is going at the cost of the Sleep momentum. So therefore in the mix, you see that there is a slight pressure on the sales, um, because of that ventilation reset. Um, but we are very encouraged and excited about the fact that in sleep, both on the, uh, devices. But also the masks we see it, uh, stepping up. Uh, and that of course, with um, the we entry that we have been doing

Oliver Reinberg: The 2nd question for me, just on Americas, I mean, you talked about different, more uncertainty in some kind of regions. I was just wondering if this also relates to Americas. We responded to different dynamics by region. Just try to get a kind of flavor, how confident are you that this kind of growth in North America will continue into next year? Thank you.

It's a different more uncertainty in some kind of regions I was just wondering if it also relates to America, we reported two different dynamics by region. So just trying to get a kind of a flavor of how confident are you that this kind of growth in North America will continue into next year. Thank you.

Across the various countries now, um, uh, in due course of this year.

Thank you Oliver let me take the first question on the margin impact from the SKU reduction, which we internally call project synchronized so what I would tell you and if I take a step back on our margin improvement trajectory. We have consistently said that part of our margin improvement trajectory is related to gross margin improvement and there are a couple of different things.

Charlotte Hanneman: Yeah. Thank you, Oliver. Let me take the first question on the margin impact from the SKU reduction, which we internally call Project Synchronize. What I would tell you, and if I take a step back on our margin improvement trajectory, we have consistently said that part of our margin improvement trajectory is related to gross margin improvements. There are a couple of different reasons for that. On the one hand, we've seen improvements from gross margin driven by innovations and our innovations driving higher margins. There's an aspect there.

Yeah, and then Falco, I'll take your second questions on the on the adjusting items and although adjusting items came in uh the significantly lower than we had guided for I absolutely acknowledge that they're still high. Yeah, and the moving pieces are on the 1 hand, we continue to have cost related to the consent degree restaurant consent degree, that will reduce over time. The other element is that we continue to have

On the one hand improvement from gross margin driven by innovations and our innovations driving higher margins. So there is an aspect there. The other components as you rightfully pull out is the SKU reduction where for instance, we have pruned the number of <unk> juices, and ultrasound significantly which lead to lower.

Charlotte Hanneman: The other component, as you rightfully call out, is the SKU reduction, where, for instance, we have pruned the number of transducers in ultrasound significantly, which leads to lower R&D costs, lower quality costs, and lower supply chain costs. All of that helps to drive improvement of margins, which is also again seen in Q3. For instance, I'll give you one other data point there. Our gross margin in diagnostic imaging, where we've done also a lot of product pruning, FPU reductions, has improved year-over-year despite the tariffs. That gives you a good sense of, on the one hand, we have the innovations like sixty-five three hundred, like MR BlueSeal, driving gross margin expansion. On the other hand, there's also the impact from Project Synchronizer FPU reduction.

R&D of lower quality cost and lower supply chain costs. So all of that helps drive to drive improvement of margins, which is also again.

Uh restructuring cost as we're continuing to simplify our operating model and to simplify Philips as a company. Now having said all of that we are very much focused on and it is a priority of mine to reduce adjusting items over time. So that is what we're fully focused on. There's a lot on the table there, a lot of strengthening of processes that we're doing. So uh, over time I could I I see the reduction uh, in adjusting items. And what I would also tell you is that adjusting items have already come down versus 2024 in 2025. So, this is a, a journey and a trajectory role.

Thank you.

In that in Q3, so for instance, I'll give you one other and other data point there our gross margin in diagnostic imaging, where we've done also a lot of product pruning SKU reductions as improved year over year. Despite the tariffs. So that gives you a good sense of on the one hand, we have the innovation slide three.

Thank you.

The last question comes from the line of Mr. Oliver Hinder from Kepler. Please ask your question.

Hundred like MRI Blue Shield driving gross margin expansion on the other hand. There is also the impact from from project synchronize our SKU reduction now if you then talk about how should we think about that year over year. This is a journey.

Charlotte Hanneman: If you talk about how should we think about that year-over-year, this is a journey. We've seen some impact in 2025. We'll see some impact in 2026 and the years to come. Your last sub-question in your question, it was around sales impact that we see from that. There's nothing really that I can call out there that stands out. There's not a major impact on CSC as I would see it now. It's really to focus on the great innovations that we have and doubling down on selling those with... That's what we're focused on. Your second question?

<unk> seen some impact in 2025, we will see some impact in 2026 years.

And then your last question in your question. It was around two sales impact that we see from that.

There is nothing really that I can call out there that stands out and that's not a major impact on CSC is I would say as I would see it now and it's really to focus to focus on the <unk>.

Yeah, thanks so much for squeezing me in um 2 questions also on my side firstly I just want to discuss the March impact from Innovation as KU reduction. I mean I guess this is kind of continuous effort but can you just give us any kind of flavor in which year do you expect this kind of measures to Peak and will? This probably be next year as the kind of order backlog, um, is being worked through or what do you expect? The kind of margin contribution to be similar. It's compared to 2025 and also, can you give us the flavor when you're pruning your kind of product portfolio? What was actually the headwind to compare the sales course? Because my understanding is that you're not adjusting for that. And then the question second question for me just in America. So I mean you talked about a different more

Innovations that we have and doubling down on selling those.

So that's what we're focused on and secondly, maybe conclude on Motor America. So actually indeed, we see kind of winners and losers in the U S. So we see some smaller hospitals really the pressure. They are also more dependable Medicare Medicaid patients.

Roy Jacobs: Yeah, maybe conclude on North America. Actually, indeed, we see kind of winners and losers in the US. We see some smaller hospitals really being pressured. They're also more dependent on Medicare, Medicaid, patients, some of those also in urban areas. There, actually, we see there's a lot of pressure. We're working with them on productivity solutions more. We see the ones that are strong are expanding, and we're also very strongly winning with them. Therefore, actually, you have seen sustained momentum in North America, also our double-digit order intake growth. We actually expect that to continue. We have no signs yet that kind of this market, from the needs that we are serving is cooling down. That's, I think, good news. We actually expect continued strength in North America.

Roy Jakobs: Yeah, maybe conclude on North America. Actually, indeed, we see kind of winners and losers in the US. We see some smaller hospitals really being pressured. They're also more dependent on Medicare, Medicaid, patients, some of those also in urban areas. There, actually, we see there's a lot of pressure. We're working with them on productivity solutions more. We see the ones that are strong are expanding, and we're also very strongly winning with them. Therefore, actually, you have seen sustained momentum in North America, also our double-digit order intake growth. We actually expect that to continue. We have no signs yet that kind of this market, from the needs that we are serving is cooling down. That's, I think, good news. We actually expect continued strength in North America.

Patients some of those also in urban areas. So there actually we see there is a lot of pressure we are working with them on productivity solutions more and then we see the ones that are strong are expanding and we also very strongly winning with them. So therefore actually you have seen sustained momentum in North America, our double digit oriented growth, we actually expect that to continue.

We have no signs yet that kind of this market from the needs that we are observing is cooling down and Thats I think good news. So we actually we expect continued strength in North America is also why we have kept investing and winning in America with the photo footprint the specific customer relation and partnerships that we are concluding there and we're excited about the opportunity.

Roy Jacobs: That's also why we have kept investing in winning in America with the further footprint, the specific customer relation and partnerships that we are concluding there. We are excited about the opportunity there.

Roy Jakobs: That's also why we have kept investing in winning in America with the further footprint, the specific customer relation and partnerships that we are concluding there. We are excited about the opportunity there.

Peter.

Perfect. Thanks, so much.

Thank you that was the last question Mr. Jacobs. Please continue.

Edward Ridley-Day: Perfect. Thanks so much.

Operator: Thank you all. That was the last question. Mr. Jacobs, please continue.

So thank you all for your questions I think concluding we delivered on our promise in Q3 strong order intake rose 8%.

Roy Jacobs: Thank you all for your questions. I think concluding, we delivered on our promise in Q3. Strong order intake growth, 8%. We had a positive step-up in sales growth to 3% and a margin expansion despite tariffs. We are fully focused on continuing to deliver in Q4, concluding this year with in the reiteration of the sales range of 1 to 3. We said that we would do upper end of our margin and strong cash delivery. That will hopefully set us up for a good 2026. We look forward to also kind of engage with you at the CMD. Thank you so much for your attention and your questions. Have a great further day.

Roy Jakobs: Thank you all for your questions. I think concluding, we delivered on our promise in Q3. Strong order intake growth, 8%. We had a positive step-up in sales growth to 3% and a margin expansion despite tariffs. We are fully focused on continuing to deliver in Q4, concluding this year with in the reiteration of the sales range of 1 to 3. We said that we would do upper end of our margin and strong cash delivery. That will hopefully set us up for a good 2026. We look forward to also kind of engage with you at the CMD. Thank you so much for your attention and your questions. Have a great further day.

<unk> had a positive step up in sales growth to 3% and a margin expansion. Despite tariffs now we are fully focused on continuing to deliver in Q4, and therefore, concluding this year with the reiteration of the sales gain a range of one to three we said that we would do upper end of our margin and strong cash.

On 1st and our Innovations driving higher margins. So there's an aspect there, the other component as you rightfully fall. Out is the SKU reduction. Where for instance we have pruned the number of transducers and ultrasound significantly which leads to lower R&D costs lower quality cost and lower supply chain costs. So all of that helps drive to drive Improvement of margins which is also again seen in uh in Q3. So for instance, I'll give you 1 other other data point, there are gross margin in Diagnostic Imaging where we've done. Also, a lot of product pruning, fdu reductions as improved year-over-year. Despite the tariffs. So that gives you a good sense of, on the 1 hand, we have the Innovations like 55300, like Mr. Blue Seal, driving gross, margin expansion on the other hand. There's also the impact from uh, from Project synchronizer SKU reduction.

Now, if you then talk about, how should we think about that year-over-year? This is a journey. So we've seen some impact in 2025, we'll see some impact in 2026 and the years, the years to come

Delivery and that will hopefully set us up for a good 2026, and we look forward to also kind of engage with you at the C&D. So thank you so much for your attention and your questions and have a great for today.

And then your last sub question in your question. It was around the sales impact that we see from that. There's there's nothing really that I can call out there that stands out. Um, there's not a major impact on on CSG as I would, as, I would see it now. Uh, it's, it's really to focus, uh, to focus on the great innovations that we have and doubling down on selling those, uh, with uh, so that's what we're focused on.

And then your second. Yeah, maybe conclude on North America. So, um, actually indeed we see kind of winners and losers in the US. So we see some smaller hospitals, really being pressured. They also more dependent on Medicare and Medicaid, um, patience. Um, so some of those also, in urban areas so they're actually, we see, there is a lot of pressure, we're working with them on productivity Solutions more. And then we see the ones that we are strong or expanding, and we also very strongly winning with them. So, therefore, actually you have seen sustainable momentum in North America. Also, our double digit order intake growth. We actually expect that to continue. We have no signs yet that kind of this Market, uh, from the needs that we are serving is cooling down and that I think good news. So we actually we expect it continued strength in North America as also why we have kept investing in winning in America with the further blueprint, the specific customer relations and Partnerships that we are concluding their, uh, and we are excited about the opportunity there.

Perfect, thanks so much.

Thank you. All that was the last question, Mr. Jacobs, please continue.

So thank you all for, um, your questions. I think concluding, we delivered on our promise in Q3: strong order intake, growth at 8%. We had a positive step-up in sales growth to 3% and margin expansion despite tariffs. Now we are fully focused on continuing to deliver in Q4 and therefore concluding this year with a reiteration of the sales guidance range of 1% to 3%. We said that we would do the upper end of our margin and strong cash delivery, and that will hopefully set us up for a good 2026. We look forward to also engaging with you at the CMD. So thank you so much for your attention and your questions, and have a great rest of the day.

This concludes the Royal Phillips third quarter, 2025 results conference call on Tuesday, November 4th 2025, thank you for participating. You may now. Disconnect

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