Q1 2023

Quarterly report

Philips delivers solid operational performance as supply chain improves and

actions to enhance execution start to take effect

Amsterdam, April 24, 2023

First-quarter highlights
• Group sales increased to EUR 4.2 billion, with 6% comparable sales growth
• Comparable order intake growth was flat, with double-digit growth in the Diagnosis & Treatment
businesses, offset by a decline in the Connected Care businesses
• Income from operations amounted to a loss of EUR 583 million, mainly due to provisions for
accelerated restructuring and an important step in litigation
• EUR 575 million litigation provision is related to the anticipated resolution of the Respironics
recall-related economic loss class action in the US
• Adjusted EBITA increased to EUR 359 million, or 8.6% of sales, compared to EUR 243 million, or
6.2% of sales, in Q1 2022
• Operating cash flow improved to EUR 202 million, compared to an outflow of EUR 227 million in
Q1 2022
• Simplification of operating model and restructuring plans on track

Roy Jakobs, CEO of Royal Philips:

“I am encouraged that we delivered a solid start to the year, with sales, profitability and operating cash flow improvements in the
quarter, a first step to drive progressive value creation. We are executing on our three priorities to enhance patient safety and quality,
strengthen our supply chain reliability, and establish a simplified, more agile operating model.

Resolving the Philips Respironics recall for patients remains our highest priority. In the first quarter, we have recorded a provision in
anticipation of a resolution of the economic loss class action in the US. This is an important step in addressing the litigation related to
the recall.

Our supply chain improvements enabled good growth across the Diagnosis & Treatment businesses and in Hospital Patient
Monitoring. Supported by significant change management efforts, we have reduced the workforce by approximately 5,400 roles out
of the planned reduction of 10,000 roles globally.

I realize that we are asking a lot from our employees to work through the necessary changes and deeply appreciate their tremendous
efforts and ongoing commitment to deliver on our company purpose. I would also like to thank our customers and partners for their
continued trust and support. I have met many of them in the last few months, and it is clear that Philips remains a preferred
innovation partner.

Looking ahead, based on our solid performance in the quarter, our order book, and the ongoing actions to further improve
execution, we are confident in our plan for the year 2023, acknowledging that uncertainties remain.”

Group and business segment performance

Sales for the Group increased to EUR 4.2 billion, with 6% comparable sales growth, mainly driven by the Diagnosis & Treatment
businesses. Additionally, sales in the quarter were supported by the good momentum for the Diagnosis & Treatment and Connected
Care businesses in China. Adjusted EBITA for the Group increased to EUR 359 million, or 8.6% of sales, mainly due to increased sales
and productivity measures, partly offset by cost inflation. Philips’ order book remains strong and is 10% higher than one year ago
despite flat order intake growth.

Quarterly Report 2023 - Q1 1

The Diagnosis & Treatment businesses’ comparable sales increased by a strong 15% in the quarter, with double-digit growth in
Ultrasound and Image-Guided Therapy, and mid-single-digit growth in Diagnostic Imaging, driven by continued supply chain
improvements. Comparable order intake grew double-digit, with double-digit growth in Image-Guided Therapy and Enterprise
Diagnostic Informatics and mid-single-digit growth in Diagnostic Imaging. The Adjusted EBITA margin increased to 11.3%, which was
mainly due to increased sales and productivity measures, partly offset by cost inflation.

The Connected Care businesses’ comparable sales increased 3% in the quarter, driven by double-digit growth in Hospital Patient
Monitoring, largely offset by a decline in Sleep & Respiratory Care. Comparable order intake declined double-digit after strong
growth in the period between 2020 and 2022. The Adjusted EBITA margin increased to 2.4%, driven by the improved Adjusted EBITA
margin of the Connected Care businesses excluding Sleep & Respiratory Care.

The Personal Health businesses’ comparable sales decreased by 6% in the quarter due to the anticipated lower consumer demand,
on the back of 8% growth in Q1 2022. The Adjusted EBITA margin amounted to 13.2%. Sales and Adjusted EBITA were both
significantly impacted by portfolio decisions related to Russia in 2022.

Productivity

In the first quarter, operating model productivity savings amounted to EUR 94 million, procurement savings amounted to EUR 32
million, and other productivity programs delivered savings of EUR 64 million, resulting in total savings of EUR 190 million.

Customer and innovation highlights

• In the quarter, the company announced multiple new partnerships, demonstrating the confidence hospital leaders have in Philips’
innovative portfolio. These include an agreement with Grupo Angeles, the largest private hospital group in Mexico, to provide informatics,
diagnostic imaging and image-guided therapy solutions to advance patient care in cardiology, oncology and radiology.
• Highlighting the strength of its comprehensive patient monitoring offering, Philips announced a multi-year partnership with Northwell
Health to standardize and centralize patient monitoring across the hospital, allowing caregivers to see what is happening at each bedside.
• Leveraging its leading expertise in sustainable healthcare operations, Philips announced a multi-year agreement with Champalimaud
Foundation in Portugal aimed at halving its diagnostic imaging carbon footprint by 2028. The partnership will help drive quality and
efficiency, while reducing environmental impact.
• Philips further expanded its industry-leading ultrasound portfolio with the launch of Ultrasound Compact 5500 CV, which enables first-
time-right ultrasound exams for cardiology and vascular patients at the bedside.
• To improve oral care habits among children, Philips introduced Sonicare for Kids 'Design a Pet Edition' with an entry price point designed
to give more parents access to an electric toothbrush for their children.
• Philips took a top ranking in medical technology patent filings at the European Patent Office and was included on the Clarivate Top 100
Global Innovator list for the 10th year in a row.

Philips Respironics field action for specific sleep therapy and ventilator devices
To date, more than 95% of the new replacement devices and repair kits required for the remediation of the registered devices have
been produced. The vast majority of the produced sleep therapy devices have been sent to patients and home care providers. The
remaining 5% of the registered devices are primarily ventilators, for which Philips Respironics is fully focused on working towards a
solution.

In Q2 2023, Philips Respironics expects to report on the VOC testing of ozone-induced foam degradation in the first-generation
DreamStation devices, and on the complete set of testing results for the SystemOne and DreamStation Go sleep therapy devices.

As previously disclosed, Philips is a defendant in several class-action lawsuits and individual personal injury claims. In the US, an
economic loss class action, a medical monitoring class action and personal injury claims have been filed. This quarter, Philips
Respironics recorded a EUR 575 million provision in connection with the anticipated resolution of the economic loss class action, an
important step in addressing the litigation related to the recall.

Philips Respironics is subject to an investigation by the US Department of Justice and remains in ongoing discussions with the FDA
regarding a proposed consent decree. Given the uncertain nature of the relevant events, and of their potential financial and
operational impact and associated obligations, if any, the company has not made any provisions in the accounts for these matters.

Conference call and audio webcast

Roy Jakobs, CEO, and Abhijit Bhattacharya, CFO, will host a conference call for investors and analysts at 10:00 am CET today to discuss
the results and Philips’ plan to create value with sustainable impact. A live webcast of the conference call will be available on the
Philips Investor Relations website and can be accessed here.

Quarterly Report 2023 - Q1 2

Philips performance

Key data in millions of EUR unless otherwise stated • Comparable sales increased by 6%, driven by continued supply
Q1 2022 Q1 2023 chain improvements. The Diagnosis & Treatment businesses
Sales 3,918 4,167 recorded double-digit growth and the Connected Care
Nominal sales growth 2% 6% businesses low-single-digit growth, while the Personal Health
Comparable sales growth1) (4)% 6% businesses posted a mid-single-digit decline.
Comparable order intake2) 5% 0% • Comparable order intake was flat, with double-digit growth in
Income from operations (181) (583) the Diagnosis & Treatment businesses, which was offset by a
as a % of sales (4.6)% (14.0)% decline in the Connected Care businesses in the quarter on the
Financial expenses, net (27) (79) back of the expansion and renewal of the patient monitoring
Investments in associates, net of income taxes (11) (16) installed base during the period 2020 through 2022.
Income tax (expense) benefit 67 15 • Adjusted EBITA improved to EUR 359 million and the margin
Income from continuing operations (152) (663) increased to 8.6%, mainly due to increased sales and
Discontinued operations, net of income taxes - (3) productivity measures, partly offset by cost inflation.
Net income (151) (665) • Restructuring, acquisition-related and other charges amounted
Earnings per common share (EPS)
to EUR 868 million, compared to EUR 350 million in Q1 2022. Q1
Income from continuing operations
2023 includes a EUR 575 million provision in connection with an
attributable to shareholders3) (in EUR) - (0.17) (0.75)
diluted anticipated resolution of the economic loss class action in the US
Adjusted income from continuing related to the Respironics recall, EUR 150 million restructuring
operations attributable to shareholders3) (in 0.15 0.22 charges related workforce reduction, and EUR 54 million
EUR) - diluted1)
Respironics field-action running remediation costs.
Net income attributable to shareholders3)
(0.17) (0.75) • Financial income and expenses resulted in a net expense of EUR
(in EUR) - diluted
79 million, compared to a net expense of EUR 27 million in Q1
EBITA1) (107) (510)
as a % of sales (2.7)% (12.2)%
2022. Q1 2023 includes higher interest expense, primarily due to
Adjusted EBITA1) 243 359 bonds issued in April 2022 and a term loan entered into in
as a % of sales 6.2% 8.6% October 2022, as well as fair value losses on the value of Philips'
Adjusted EBITDA1) 488 575 minority participations.
as a % of sales 12.5% 13.8% • The income tax benefit of EUR 15 million in Q1 2023 is due to
negative income.
1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information. • Net income in Q1 2023 decreased compared to Q1 2022, due to
2)Comparable order intake is presented when discussing the Philips Group's performance. the factors outlined above.
For the definition of this measure, refer to chapter 12.4, Other Key Performance Indicators,
of the Annual Report 2022.
3) Shareholders refers to shareholders of Koninklijke Philips N.V.

Sales per geographic cluster in millions of EUR unless otherwise stated • Comparable sales in mature geographies increased by 4%, with
% change low-single-digit growth in North America and mid-single-digit
Q1 2022 Q1 2023 nominal comparable1) growth in Western Europe. In growth geographies, sales
Western Europe 785 801 2% 4% increased by 10% on a comparable basis, with strong
North America 1,650 1,779 8% 3% contributions from China, Middle East & Turkey, Latin America
Other mature
410 416 1% 9%
and Central & Eastern Europe.
geographies
Total mature
2,846 2,996 5% 4%
geographies
Growth
1,072 1,171 9% 10%
geographies
Philips Group 3,918 4,167 6% 6%

1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information.

Quarterly Report 2023 - Q1 3

Cash and cash equivalents balance in millions of EUR • Net cash flows from operating activities increased, mainly as a
Q1 2022 Q1 2023 result of higher customer receipts, higher cash earnings and
Beginning cash balance 2,303 1,172 lower income tax payments.
Free cash flow1) (402) 117 • Other cash flows from investing activities mainly includes a cash
Net cash flows from operating activities (227) 202 payment with respect to foreign exchange derivative contracts,
Net capital expenditures (175) (85) whereas Q1 2022 mainly included the acquisitions of Vesper
Other cash flows from investing activities (347) (104) Medical and Cardiologs.
Treasury shares transactions (39) • Net capital expenditures includes cash proceeds from the sale of
Changes in debt (40) (22) real estate.
Other cash flow items 14 (31)
Net cash flows from discontinued operations (44) (4)
Ending cash balance 1,445 1,128

1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information.

Composition of net debt to group equity1)

in millions of EUR unless otherwise stated
December 31, 2022 March 31, 2023
Long-term debt 7,270 7,141
Short-term debt 931 1,034
Total debt 8,201 8,175
Cash and cash equivalents 1,172 1,128
Net debt 7,028 7,048
Shareholders' equity 13,249 12,332
Non-controlling interests 34 33
Group equity 13,283 12,366
Net debt : group equity
35:65 36:64
ratio1)

1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information.

Quarterly Report 2023 - Q1 4

Amounts may not add up due to rounding.
Performance per segment

Diagnosis & Treatment businesses

Key data in millions of EUR unless otherwise stated • Comparable sales increased by 15%, driven by double-digit
Q1 2022 Q1 2023 growth in Ultrasound and Image-Guided Therapy and mid-
Sales 1,911 2,204 single-digit growth in Diagnostic Imaging, due to continued
Sales growth supply chain improvements.
Nominal sales growth 3% 15% • Comparable sales in mature and growth geographies showed
Comparable sales growth1) (2)% 15% double-digit growth, with strong contributions from North
Income from operations 88 157 America, Western Europe and China.
as a % of sales 4.6% 7.1% • Adjusted EBITA improved to EUR 250 million and the margin
EBITA1) 114 181 increased to 11.3%, mainly due to increased sales and
as a % of sales 6.0% 8.2% productivity measures, partly offset by cost inflation.
Adjusted EBITA1) 113 250 • Restructuring, acquisition-related and other charges amounted
as a % of sales 5.9% 11.3% to EUR 68 million, compared to a net gain of EUR 1 million in Q1
Adjusted EBITDA1) 181 308 2022. Q1 2023 includes EUR 31 million restructuring costs related
as a % of sales 9.5% 14.0% to workforce reduction. In Q2 2023, restructuring, acquisition-
1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information.
related and other charges are expected to total approximately
EUR 35 million.

Connected Care businesses

Key data in millions of EUR unless otherwise stated • Comparable sales increased by 3%, driven by double-digit
Q1 2022 Q1 2023 growth in Hospital Patient Monitoring, largely offset by a
Sales 993 1,033 decline in Sleep & Respiratory Care.
Sales growth • Comparable sales in growth geographies showed double-digit
Nominal sales growth (14)% 4% growth, driven by double-digit growth in China. Mature
Comparable sales growth1) (21)% 3% geographies recorded a low-single-digit decline, mainly due to
Income from operations (378) (710) flat sales in North America and a decline in Western Europe.
as a % of sales (38.1)% (68.7)% • Adjusted EBITA improved to EUR 25 million and the Adjusted
EBITA1) (334) (667) EBITA margin increased to 2.4%, driven by the improved
as a % of sales (33.6)% (64.6)% Adjusted EBITA margin of the Connected Care businesses
Adjusted EBITA1) 4 25 excluding Sleep & Respiratory Care.
as a % of sales 0.4% 2.4% • Restructuring, acquisition-related and other charges were EUR
Adjusted EBITDA1) 60 72 691 million, compared to EUR 339 million in Q1 2022. Q1 2023
as a % of sales 6.0% 7.0% includes a EUR 575 million provision in connection with an
1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information.
anticipated resolution of the economic loss class action in the US
related to the Respironics recall, EUR 54 million Respironics field-
action running remediation costs, and EUR 30 million
restructuring costs related to workforce reduction. In Q2 2023,
restructuring, acquisition-related and other charges are
expected to total approximately EUR 75 million. This excludes
the impact of the ongoing discussion on the proposed consent
decree, as well as ongoing litigation and the investigation by the
US Department of Justice related to the Respironics field action.

Quarterly Report 2023 - Q1 5

Personal Health businesses

Key data in millions of EUR unless otherwise stated • Comparable sales declined by 6%, including a 4 percentage-
Q1 2022 Q1 2023 point impact from the Russia-Ukraine war, and due to the
Sales 838 798 anticipated lower consumer demand.
Sales growth • Comparable sales in mature geographies showed a mid-single-
Nominal sales growth 13% (5)% digit decline, mainly due to North America. Growth geographies
Comparable sales growth1) 8% (6)% recorded a high-single-digit decline, mainly due to a double-
Income from operations 124 96 digit decline in Russia.
as a % of sales 14.8% 12.0% • Adjusted EBITA was EUR 105 million and the margin amounted
EBITA1) 128 101 to 13.2%, significantly impacted by portfolio decisions related to
as a % of sales 15.3% 12.7% Russia in 2022.
Adjusted EBITA1) 128 105 • Restructuring charges amounted to EUR 5 million and related to
as a % of sales 15.3% 13.2% workforce reduction.
Adjusted EBITDA1) 159 128
as a % of sales 19.0% 16.0%

1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information.

Other

Key data in millions of EUR • Sales decreased by EUR 44 million, mainly due to lower royalty
Q1 2022 Q1 2023 income and a decrease in supplies to the divested Domestic
Sales 176 132 Appliances business.
Income from operations (16) (126) • Adjusted EBITA decreased by EUR 18 million, mainly due to
EBITA1) (15) (124) lower royalty income.
Adjusted EBITA1) of: (2) (20) • Restructuring, acquisition-related and other charges amounted
IP Royalties 100 59 to EUR 104 million, mainly related to workforce reduction,
Innovation (30) (32) compared to EUR 12 million in Q1 2022. In Q2 2023, restructuring,
Central costs (63) (45) acquisition-related and other charges are expected to total
Other (9) (2) approximately EUR 40 million.
Adjusted EBITDA1) 87 66

1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information.

Quarterly Report 2023 - Q1 6

Forward-looking statements and other important information

Forward-looking statements and operational impact and associated obligations, if any, the
This document and the related oral presentation, including company has not made any provisions in the accounts for these
responses to questions following the presentation, contain matters, except for the following. In the first quarter of 2023,
certain forward-looking statements with respect to the Philips Respironics recorded a provision in connection with an
financial condition, results of operations and business of Philips anticipated resolution of the economic loss class action
and certain of the plans and objectives of Philips with respect pending in the US. The provision is subject to final resolution
to these items. Examples of forward-looking statements include and court approval of the negotiated settlement agreement
statements made about our strategy, estimates of sales growth, and is based on Philips’ best estimate for the expected
future Adjusted EBITA*), future restructuring and acquisition- settlement amounts, which is, in part, based on the expected
related charges and other costs, future developments in Philips’ number of claims ultimately filed pursuant the settlement once
organic business and the completion of acquisitions and it is approved. Actual outcomes in future periods of the above
divestments. Forward-looking statements can be identified matters may differ from these estimates and affect the
generally as those containing words such as “anticipates”, company’s results of operations, financial positions and cash
“assumes”, “believes”, “estimates”, “expects”, “should”, “will”, flows.
“will likely result”, “forecast”, “outlook”, “projects”, “may” or
similar expressions. By their nature, these statements involve Third-party market share data
risk and uncertainty because they relate to future events and Statements regarding market share, contained in this
circumstances and there are many factors that could cause document, including those regarding Philips’ competitive
actual results and developments to differ materially from those position, are based on outside sources such as specialized
expressed or implied by these statements. research institutes, industry and dealer panels in combination
with management estimates. Where information is not yet
These factors include but are not limited to: Philips’ ability to
available to Philips, market share statements may also be based
gain leadership in health informatics in response to
on estimates and projections prepared by management and/or
developments in the health technology industry; Philips’ ability
based on outside sources of information. Management’s
to transform its business model to health technology solutions
estimates of rankings are based on order intake or sales,
and services; macroeconomic and geopolitical changes;
depending on the business.
integration of acquisitions and their delivery on business plans
and value creation expectations; securing and maintaining
Philips’ intellectual property rights, and unauthorized use of Market Abuse Regulation
third-party intellectual property rights; Philips’ ability to meet This press release contains inside information within the
expectations with respect to ESG-related matters; failure of meaning of Article 7(1) of the EU Market Abuse Regulation.
products and services to meet quality or security standards,
adversely affecting patient safety and customer operations; Use of non-IFRS information
breaches of cybersecurity; challenges in connection with In presenting and discussing the Philips Group’s financial
Philips’ strategy to improve execution and other business position, operating results and cash flows, management uses
performance initiatives; the resilience of our supply chain; certain non-IFRS financial measures. These non-IFRS financial
attracting and retaining personnel; COVID-19 and other measures should not be viewed in isolation as alternatives to
pandemics; challenges to drive operational excellence and the equivalent IFRS measure and should be used in conjunction
speed in bringing innovations to market; compliance with with the most directly comparable IFRS measures. Non-IFRS
regulations and standards including quality, product safety and financial measures do not have standardized meaning under
(cyber) security; compliance with business conduct rules and IFRS and therefore may not be comparable to similar measures
regulations including privacy and upcoming ESG disclosure and presented by other issuers. A reconciliation of these non-IFRS
due diligence requirements; treasury and financing risks; tax measures to the most directly comparable IFRS measures is
risks; reliability of internal controls, financial reporting and contained in this document. Further information on non-IFRS
management process; global inflation. For a discussion of measures can be found in the Annual Report 2022.
factors that could cause future results to differ from such
forward-looking statements, see also the Risk management
Use of Fair value information
chapter included in the Annual Report 2022.
In presenting the Philips Group’s financial position, fair values
Philips has recognized a provision related to the voluntary recall are used for the measurement of various items in accordance
notification in the US/field safety notice outside the US for with the applicable accounting standards. These fair values are
certain sleep and respiratory care products, based on Philips’ based on market prices, where available, and are obtained from
best estimate for the expected field actions. Future sources that are deemed to be reliable. Readers are cautioned
developments are subject to significant uncertainties, which that these values are subject to changes over time and are only
require management to make estimates and assumptions, valid at the balance sheet date. When quoted prices or
about items such as quantities and the portion to be replaced observable market data are not readily available, fair values are
or repaired. Actual outcomes in future periods may differ from estimated using appropriate valuation models and
these estimates and affect the company’s results of operations, unobservable inputs. Such fair value estimates require
financial position and cash flows. Furthermore, Philips is a management to make significant assumptions with respect to
defendant in several class-action lawsuits and individual future developments, which are inherently uncertain and may
personal injury claims, and is in ongoing discussions with the therefore deviate from actual developments. Critical
FDA regarding a proposed consent decree. Given the uncertain assumptions used are disclosed in the Annual Report 2022. In
nature of the relevant events, and of their potential financial certain cases, independent valuations are obtained to support
management’s determination of fair values.

*)Non-IFRS financial measure. Refer to Reconciliation of non- Quarterly Report 2023 - Q1 7

IFRS information.
Presentation
All amounts are in millions of euros unless otherwise stated.
Due to rounding, amounts may not add up precisely to totals
provided. All reported data is unaudited. Financial reporting is
in accordance with the accounting policies as stated in the
Annual Report 2022 except for the adoption of new standards
and amendments to standards which are also expected to be
reflected in the company's consolidated IFRS financial
statements as at and for the year ending December 31, 2023.

Quarterly Report 2023 - Q1 8

Condensed consolidated statements of income
in millions of EUR unless otherwise stated
Q1
2022 2023
Sales 3,918 4,167
Cost of sales (2,407) (2,411)
Gross margin 1,511 1,755
Selling expenses (1,064) (1,079)
General and administrative expenses (155) (158)
Research and development expenses (495) (528)
Other business income 32 14
Other business expenses (11) (588)
Income from operations (181) (583)
Financial income 17 14
Financial expenses (44) (93)
Investment in associates, net of income taxes (11) (16)
Income before taxes (219) (678)
Income tax (expense) benefit 67 15
Income from continuing operations (152) (663)
Discontinued operations, net of income taxes - (3)
Net income (151) (665)

Attribution of net income

Net income attributable to shareholders1) (151) (665)
Net income attributable to non-controlling interests - -
Income from continuing operations attributable to shareholders1) (152) (663)

Earnings per common share

Weighted average number of common shares outstanding (after deduction of treasury shares) during the period (in
thousands):
- basic 869,370 881,519
- diluted 869,370 881,519
Income from continuing operations attributable to shareholders1) (in EUR)
- basic (0.17) (0.75)
- diluted (0.17) (0.75)
Net income attributable to shareholders1) (in EUR)
- basic (0.17) (0.75)
- diluted (0.17) (0.75)

1) Shareholders refers to shareholders of Koninklijke Philips N.V.

Quarterly Report 2023 - Q1 9

Amounts may not add up due to rounding.
Reconciliation of non-IFRS information

Certain non-IFRS financial measures are presented when discussing the Philips Group’s performance:

• Comparable sales growth

• Adjusted income from continuing operations attributable to shareholders
• Adjusted income from continuing operations attributable to shareholders per common share (in EUR) - diluted (Adjusted EPS)
• EBITA
• Adjusted EBITA
• Adjusted EBITDA
• Free cash flow
• Net debt : group equity ratio

For the definitions of the non-IFRS financial measures listed above, refer to chapter 12.3, Reconciliation of non-IFRS information, of
the Annual Report 2022 and to the Forward-looking statements and other important information.

Comparable order intake is presented when discussing the Philips Group’s performance. For the definition of this measure, refer to
chapter 12.4, Other Key Performance Indicators, of the Annual Report 2022.

Sales growth composition in %

Q1 2023
nominal consolidation currency comparable
growth changes effects growth
2023 versus 2022
Diagnosis & Treatment 15.3% 1.0% (1.1)% 15.2%
Connected Care 4.0% 0.1% (1.5)% 2.6%
Personal Health (4.7)% 0.0% (1.2)% (5.9)%
Philips Group 6.3% 0.5% (1.1)% 5.7%

Adjusted income from continuing operations attributable to shareholders 1) in millions of EUR unless otherwise stated
Q1
2022 2023
Net income (151) (665)
Discontinued operations, net of income taxes - 3
Income from continuing operations (152) (663)
Income from continuing operations attributable to non-controlling interests - -
Income from continuing operations attributable to shareholders1) (152) (663)
Adjustments for:
Amortization and impairment of acquired intangible assets 74 74
Restructuring and acquisition-related charges 25 224
Other items: 325 644
Respironics litigation provision 575
Respironics field-action provision 165
Respironics field-action running remediation costs 50 54
Portfolio realignment charges 87
Remaining items 23 15
Net finance expenses (1) 4
Tax impact of adjusted items and tax only adjusting items (136) (91)
Adjusted income from continuing operations attributable to shareholders1) 135 192
Earnings per common share:
Income from continuing operations attributable to shareholders1) per common share (in EUR) - diluted (0.17) (0.75)
Adjusted income from continuing operations attributable to shareholders1) per common share (in EUR) - diluted 0.15 0.22

1) Shareholders refers to shareholders of Koninklijke Philips N.V.

Amounts may not add up due to rounding. Quarterly Report 2023 - Q1 10

Reconciliation of Net income to Adjusted EBITA in millions of EUR
Diagnosis & Personal
Philips Group Treatment Connected Care Health Other
Q1 2023
Net income (665)
Discontinued operations, net of income taxes 3
Income tax benefit (15)
Investments in associates, net of income taxes 16
Financial expenses 93
Financial income (14)
Income from operations (583) 157 (710) 96 (126)
Amortization and impairment of acquired intangible assets 74 24 43 4 2
EBITA (510) 181 (667) 101 (124)
Restructuring and acquisition-related charges 224 67 47 5 104
Other items: 644 1 644 (1) -
Respironics litigation provision 575 575
Respironics field-action running remediation costs 54 54
Remaining items 15 1 15 (1) -
Adjusted EBITA 359 250 25 105 (20)

Q1 2022
Net income (151)
Discontinued operations, net of income taxes -
Income tax benefit (67)
Investments in associates, net of income taxes 11
Financial expenses 44
Financial income (17)
Income from operations (181) 88 (378) 124 (16)
Amortization and impairment of acquired intangible assets 74 25 44 4 1
EBITA (107) 114 (334) 128 (15)
Restructuring and acquisition-related charges 25 (1) 20 - 6
Other items: 325 319 6
Respironics field-action provision 165 165
Respironics field-action running remediation costs 50 50
Portfolio realignment charges 87 87
Remaining items 23 17 6
Adjusted EBITA 243 113 4 128 (2)

Quarterly Report 2023 - Q1 11

Reconciliation of Net income to Adjusted EBITDA in millions of EUR
Diagnosis & Personal
Philips Group Treatment Connected Care Health Other
Q1 2023
Net income (665)
Discontinued operations, net of income taxes 3
Income tax benefit (15)
Investments in associates, net of income taxes 16
Financial expenses 93
Financial income (14)
Income from operations (583) 157 (710) 96 (126)
Depreciation, amortization and impairments of fixed assets and
311 85 91 28 107
acquired intangible assets
Restructuring and acquisition-related charges 224 67 47 5 104
Other items: 644 1 644 (1) -
Respironics litigation provision 575 575
Respironics field-action running remediation costs 54 54
Remaining items 15 1 15 (1) -
Adding back impairment of fixed assets included in
(21) (3) - (19)
Restructuring and acquisition-related charges and Other items
Adjusted EBITDA 575 308 72 128 66

Q1 2022
Net income (151)
Discontinued operations, net of income taxes -
Income tax benefit (67)
Investments in associates, net of income taxes 11
Financial expenses 44
Financial income (17)
Income from operations (181) 88 (378) 124 (16)
Depreciation, amortization and impairments of fixed assets and
355 95 133 35 92
acquired intangible assets
Restructuring and acquisition-related charges 25 (1) 20 - 6
Other items: 325 319 6
Respironics field-action provision 165 165
Respironics field-action running remediation costs 50 50
Portfolio realignment charges 87 87
Remaining items 23 17 6
Adding back impairment of fixed assets included in
(35) (1) (33) (1)
Restructuring and acquisition-related charges and Other items
Adjusted EBITDA 488 181 60 159 87

Composition of free cash flow in millions of EUR

January to March
2022 2023
Net cash flows from operating activities (227) 202
Net capital expenditures (175) (85)
Purchase of intangible assets (28) (43)
Expenditures on development assets (61) (47)
Capital expenditures on property, plant and equipment (92) (72)
Proceeds from disposals of property, plant and equipment 7 77
Free cash flow (402) 117

Quarterly Report 2023 - Q1 12

Philips statistics
in millions of EUR unless otherwise stated
2022 2023
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Sales 3,918 4,177 4,310 5,422 4,167
Comparable sales growth1) (4)% (7)% (5)% 3% 6%
Comparable order intake2) 5% 1% (6)% (8)% 0%
Gross margin 1,511 1,731 1,730 2,221 1,755
as a % of sales 38.6% 41.4% 40.1% 41.0% 42.1%
Selling expenses (1,064) (1,111) (1,154) (1,280) (1,079)
as a % of sales (27.2)% (26.6)% (26.8)% (23.6)% (25.9)%
G&A expenses (155) (146) (175) (195) (158)
as a % of sales (4.0)% (3.5)% (4.1)% (3.6)% (3.8)%
R&D expenses (495) (490) (615) (504) (528)
as a % of sales (12.6)% (11.7)% (14.3)% (9.3)% (12.7)%
Income from operations (181) 11 (1,529) 171 (583)
as a % of sales (4.6)% 0.3% (35.5)% 3.2% (14.0)%
Net income (151) (20) (1,329) (105) (665)
Income from continuing
operations attributable to
(0.17) (0.03) (1.50) (0.13) (0.75)
shareholders3) per common
share (in EUR) - diluted
Adjusted income from
continuing operations
attributable to shareholders3) 0.15 0.14 0.25 0.41 0.22
per common share (in EUR) -
diluted1)
EBITA1) (107) 92 (94) 301 (510)
as a % of sales (2.7)% 2.2% (2.2)% 5.5% (12.2)%
Adjusted EBITA1) 243 216 209 651 359
as a % of sales 6.2% 5.2% 4.8% 12.0% 8.6%
Adjusted EBITDA1) 488 461 466 891 575
as a % of sales 12.5% 11.0% 10.8% 16.4% 13.8%

1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information, of this document.

2)
Comparable order intake is presented when discussing the Philips Group's performance. For the definition of this measure, refer to chapter 12.4, Other Key Performance Indicators, of the
Annual Report 2022.
3) Shareholders refers to shareholders of Koninklijke Philips N.V.

Quarterly Report 2023 - Q1 13

Philips statistics in millions of EUR unless otherwise stated
2022 2023
January- January- January- January- January- January-
March January-June September December March January-June September December
Sales 3,918 8,095 12,405 17,827 4,167
Comparable sales growth1) (4)% (5)% (5)% (3)% 6%
Comparable order intake2) 5% 3% (1)% (3)% 0%
Gross margin 1,511 3,243 4,973 7,194 1,755
as a % of sales 38.6% 40.1% 40.1% 40.4% 42.1%
Selling expenses (1,064) (2,175) (3,329) (4,609) (1,079)
as a % of sales (27.2)% (26.9)% (26.8)% (25.9)% (25.9)%
G&A expenses (155) (301) (476) (671) (158)
as a % of sales (4.0)% (3.7)% (3.8)% (3.8)% (3.8)%
R&D expenses (495) (985) (1,600) (2,103) (528)
as a % of sales (12.6)% (12.2)% (12.9)% (11.8)% (12.7)%
Income from operations (181) (170) (1,700) (1,529) (583)
as a % of sales (4.6)% (2.1)% (13.7)% (8.6)% (14.0)%
Net income (151) (171) (1,500) (1,605) (665)
Income from continuing
operations attributable to
(0.17) (0.20) (1.72) (1.84) (0.75)
shareholders3) per common
share (in EUR) - diluted
Adjusted income from
continuing operations
attributable to shareholders3) 0.15 0.30 0.55 0.96 0.22
per common share (in EUR) -
diluted1)
EBITA1) (107) (15) (109) 192 (510)
as a % of sales (2.7)% (0.2)% (0.9)% 1.1% (12.2)%
Adjusted EBITA1) 243 459 667 1,318 359
as a % of sales 6.2% 5.7% 5.4% 7.4% 8.6%
Adjusted EBITDA1) 488 948 1,414 2,305 575
as a % of sales 12.5% 11.7% 11.4% 12.9% 13.8%
Number of common shares
outstanding (after deduction
869,298 885,316 885,348 881,481 881,539
of treasury shares) at the end
of period (in thousands)
Shareholders' equity per
16.64 16.63 16.31 15.03 13.99
common share (in EUR)
1)
Net debt : group equity ratio 28:72 31:69 34:66 35:65 36:64
Total employees 78,548 78,831 79,097 77,233 73,712

1) Non-IFRS financial measure. Refer to Reconciliation of non-IFRS information, of this document.

2)
Comparable order intake is presented when discussing the Philips Group's performance. For the definition of this measure, refer to chapter 12.4, Other Key Performance Indicators, of the
Annual Report 2022.
3) Shareholders refers to shareholders of Koninklijke Philips N.V.

Quarterly Report 2023 - Q1 14

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