Koninklijke Philips N.V. (NYSE:PHG) Q2 2023 Earnings Call Transcript

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Abhijit Bhattacharya: Yeah, Sezgi, maybe to understand your question on cash flow. Is it that because we have a stronger second half you’re questioning the guidance whether should it go up? I am not very clear, sorry. Could you just ask that again?

Sezgi Bice Ozener: Actually the question is more like, do you see the risk to the current guidance, which was not updated to the downside or upside given that your second half tends to be much stronger, but you had a guidance upgrade in other metrics, but not in free cash flow and first half guidance — first half actual free cash flow is — it shows significant improvement year-on-year, but compared to guidance, it’s on the weaker side.

Abhijit Bhattacharya: Yeah, I would not say that the first half guidance is on the weaker side. If you look typically like you mentioned, our second half’s cash flow is much stronger. We are actually pretty happy with where we are with the first half of the year. So I don’t see any risk to the guidance. In fact, as I just mentioned, we would probably be at the upper end of the current guidance.

Sezgi Bice Ozener: Okay. That’s very helpful. Thanks a lot.

Operator: Thank you. [Operator Instructions] We will now go to your next question. And your next question comes from the line of Falko Friedrichs from Deutsche Bank. Please go ahead.

Falko Friedrichs: Perfect. Thank you and good morning. And I have two questions left, please, both on D&T. And the first one on this mid-single digit growth in Diagnostic Imaging. Can you provide some kind of a split into MRI and CT? And then secondly, what was driving this continued strong growth in your Ultrasound business? Thank you.

Abhijit Bhattacharya: Yeah, Falco, we provide a lot of color. Now going into every modality and the specific becomes maybe even too much color. But yes, across the board we have, we continue to grow. So both MR and CT were actually nicely up. And the growth in Ultrasound comes from the fact that the order book is very, very strong. And last year we had component issues in Ultrasound in Q3 and Q4 and once that is resolved, we are just going through the order book. So that continues good momentum and our shares are also trending well. So I think overall, yeah, you see growth across the board and Ultrasound is largely due to the order book that we were carrying.

Falko Friedrichs: Perfect. Thank you.

Operator: Thank you. Gentlemen, that was the last question. Please continue.

Roy Jakobs : Thank you all for joining our call. As I said at the beginning, I’m pleased with the progress that we are making as we see that the measures that we have been taking at the beginning of the year are really yielding effect. And as a result, we delivered strong operational performance with 9% comparable sales growth, improvement in profitability, operating cash flow. And that was coming from all businesses and all regions. We also expect to carry that into the second half, that positive momentum, based on further progress on the three priorities that we’re executing against and that actually led us to raise our guidance for the full year. So whilst uncertainties, especially also in our environment remain, we remain confident in our plan, the execution of it and will stay the course to kind of comeback quarter-over-quarter showing an improvement part for Philips on the long-term value creation trajectory.

So thank you for listening in. Looking forward to connect with you and wish you a further great day.

Operator: Thank you. This concludes the Royal Philips second quarter and semi-annual 2023 results conference call on Monday, July 24, 2023. Thank you for participating. You may now disconnect.

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