Why invest in Philips?

Philips is committed to driving progressive value creation through a strategy of focused organic growth, scalable patient- and people-centric innovation, and focus on reliable execution – creating value with sustainable impact.

Operating in growing and attractive HealthTech segments

Operating in growing and attractive HealthTech segments

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

The addressable market is expected to grow at mid-single digit CAGR over the 2022-2025 period, with mid-to-high-teens margins.

In the HealthTech market there is a structural and increasing gap between demand and supply of care. We are well-positioned to capture the opportunities arising from this gap. Around the world, the population is aging, number of patients increasing, growing chronic and complex diseases, healthcare costs are increasing, and there are massive staff shortages. This is fueling demand for better outcomes, increased productivity, care outside the hospital, and actionable insights from the growing pools of health data. We also see increasing interest and spend on self care. We have deep customer relationships and are the preferred innovation partner with leading positions and unique capabilities to capture growth.

As a HealthTech leader we are fully focused on delivering better care for more people. We have leading innovations in hardware, software and services, supporting care in the hospital and in the home. For many customers we are the preferred strategic and innovation partner. And ~40% of our revenue is recurring.
Focused growth and value creation strategy

Focused growth and value creation strategy

We will accelerate growth in attractive leadership segment, scale our Enterprise Informatics business to unlock insights, and enhance operational excellence and focus on customer productivity in Diagnostic Imaging.

Differentiated strategy of accelerating growth in attractive leadership segments and capturing value upside where there are distict margin opportunities

Approximately 70% of our sales are generated by businesses in high growth and high margin segments where we have leadership positions. Going forward, we will concentrate resources accelerating growth in Image-Guided Therapy, Monitoring, Ultrasound, and Personal Health; growing our leadership.

In the remaining 30% there are distinct margin opportunities. We have an innovation strategy focusing on generating better margins in Enterprise Informatics, Diagnostic Imaging and Sleep & Respiratory Care.

Scaling Enterprise Informatics to unlock insight and deliver profitable growth

We help our customers to unlock actionable insights from pools of medical imaging data, patient monitoring data and even third-party systems. With the creation of our end-to-end Enterprise Informatics business, the largest multi-vendor enterprise informatics business in the industry, we can scale our platforms such as remote radiology, remote pathology and remote nursing.

Levers to scale enterprise informatics profitably are:

Driving enhanced performance in Diagnostic Imaging, focusing on mid and high-end segment

We focus our strategy on the mid and high-end segment. The segment demanding enhanced capacity and productivity. We have standard setting innovations meeting these demands. Furthermore, we will drive operational excellence focusing on our execution priorities:
People and patient-centric innovation, business-led, at scale
People and patient-centric innovation, business-led, at scale
Innovation is Philips’ core strength and core differentiator. An innovation powerhouse innovating sustainably with quality as the higher priority. Recent industry trends have accelerated the technology adoption lifecycle within healthcare. We are embracing these trends and shifting to a more patient and people-centric innovation model, led by the business and closer to our customers. ~90% of our R&D investments are in the business up from 70% previously.

Resourcing to scale high-impact innovations

At approximately 9% of sales, we continue to have industry-leading R&D spend, but through our new model, we are focusing our efforts and resources on a smaller number of projects offering greater scale and impact on patient outcomes and care providers’ clinical, operational and sustainability challenges. Patient safety is at the core of innovation design.

Scalable innovations setting the standard across segments of care

September 26, 2025

Philips unveils latest CT and MR innovations in radiation therapy, advancing precision cancer care at ASTRO 2025

August 27, 2025

Philips launches Transcend Plus for EPIQ CVx and Affiniti CVx, delivering breakthrough image quality and FDA-cleared AI enhancements in cardiovascular ultrasound

July 02, 2025

Philips Advances MRI Speed and Precision with FDA 510(k) Clearance of SmartSpeed Precise Dual AI Software
Execution as key value driver

Execution as key value driver

Supported by a culture of impact with care and HealthTech talent, we see execution as the key value driver. We focus on three priorities:

Resolving the Respironics recall remains our highest priority. Click here to read more.
Path to value creation supported by balanced capital allocation

Path to value creation supported by balanced capital allocation

Our strategy, innovation and execution plan will progressively create value with sustainable impact. We will drive growth, margin and free-cash-flow improvement over the 2023 - 2025 period through simplification, implementation of the strategy, and increasing our innovation impact. We target to reach our full potential beyond 2025.

Progressive value creation supported by balanced capital allocation

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

Margin increase from productivity, pricing & supply chain improvements — cumulative drivers 2023-2025

Improvement in profit trajectory will, to a large extent, be driven by productivity initiatives delivering EUR 2.5 billion (raised from EUR 2.0 billion) savings in the 2023-2025 period billion driven by further simplification of operating model and procurement savings. Approximately EUR 1 billion savings will come from operating model simplification. Procurement savings will deliver between EUR 650-700 million, and a string of other productivity measures, including S&RC rightsizing, will deliver €700-750 million.

Margin expansion will primarily be driven by the productivity initiatives mentioned above, pricing & supply chain improvements.

Balanced capital allocation

Progressive value creation is supported by a balanced capital allocation policy focusing on organic growth, margin and cashflow improvement . Organic growth is the main premise and priority of our value creation. We strive for dividend stability, with a pay-out ratio of 40-50% of net recurring income. M&A will be on a reduced basis, with disciplined bolt-on acquisitions in core areas, which are going to be the beachheads for growth.
Environmental, Social & Governance - purpose in action
Environmental, Social & Governance - purpose in action
It is our purpose to improve people’s health and well-being through meaningful innovation. As a purpose-driven company, we are conscious of our responsibility towards society and of the need to continue to embed sustainability ever deeper in the way we do business. We are partnering with stakeholders to drive environmental, social and governance priorities and make a global impact.

Making the world healthier and more sustainable

We aim to improve the lives of 2 billion people a year by 2025, including 300 million in underserved communities, rising to 2.5 billion and 400 million respectively by 2030

We have been carbon-neutral in our operations since 2020 and are partnering with customers and suppliers on reducing emissions across the full value chain in line with the 1.5 °C target

We are a leader in sustainable innovation, innovating in line with Eco-design requirements (Helium-free-for-life MR, etc.)

We aim to increase circular revenues from 16% of sales in 2021 to 25% of sales by 2025

ESG rankings and recognition

CDP

Carbon leadership

Philips once again ranked among the world’s top global companies for its commitment to action on climate change.

Fortune

Change the World

In 2024, Philips Supplier Sustainability approach secures #26 position.

CDP

Supplier development

Philips has been recognized as a supplier engagement leader by CDP for the 9th year in a row

We take a fully integrated ESG approach to doing business responsibly and sustainably

December 07, 2023

Philips’ 2023 Human Rights Report details the company’s commitment to upholding human rights and its progress over the last year.

November 30, 2023

COP28: Teaming up for sustainable and accessible healthcare with partners across the value chain

November 16, 2023

Cero Generation’s 70MW Italian agrivoltaic project goes live, backed by agreements with Philips and HEINEKEN

Do you want to learn more? Download the presentation or reach out to our Investor Relations contacts below to receive more information.

Investor presentation (2.35MB)

Why invest in Philips?

Philips is committed to driving progressive value creation through a strategy of focused organic growth, scalable patient- and people-centric innovation, and focus on reliable execution – creating value with sustainable impact.

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

We will accelerate growth in attractive leadership segment, scale our Enterprise Informatics business to unlock insights, and enhance operational excellence and focus on customer productivity in Diagnostic Imaging.

Differentiated strategy of accelerating growth in attractive leadership segments and capturing value upside where there are distict margin opportunities

Scaling Enterprise Informatics to unlock insight and deliver profitable growth

Driving enhanced performance in Diagnostic Imaging, focusing on mid and high-end segment

Resourcing to scale high-impact innovations

Scalable innovations setting the standard across segments of care

Philips unveils latest CT and MR innovations in radiation therapy, advancing precision cancer care at ASTRO 2025

Philips launches Transcend Plus for EPIQ CVx and Affiniti CVx, delivering breakthrough image quality and FDA-cleared AI enhancements in cardiovascular ultrasound

Philips Advances MRI Speed and Precision with FDA 510(k) Clearance of SmartSpeed Precise Dual AI Software

Supported by a culture of impact with care and HealthTech talent, we see execution as the key value driver. We focus on three priorities:

Resolving the Respironics recall remains our highest priority. Click here to read more.

Progressive value creation supported by balanced capital allocation

Margin increase from productivity, pricing & supply chain improvements — cumulative drivers 2023-2025

Balanced capital allocation

Making the world healthier and more sustainable

ESG rankings and recognition

We take a fully integrated ESG approach to doing business responsibly and sustainably

Philips’ 2023 Human Rights Report details the company’s commitment to upholding human rights and its progress over the last year.

COP28: Teaming up for sustainable and accessible healthcare with partners across the value chain

Cero Generation’s 70MW Italian agrivoltaic project goes live, backed by agreements with Philips and HEINEKEN

Related pages

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