Dutch health tech company Philips revised its estimated tariff impact downward on Tuesday following a new trade agreement between the United States and the European Union. The agreement imposes a 15% tariff on most European goods imported into the U.S., averting the initially proposed 30% rate that was set to begin August 1 in the absence of a deal.<\/p>\n\n\n\n
Philips now expects a tariff-related cost between 150 million and 200 million euros for the year, down from its prior estimate of 250 million to 300 million euros. The company\u2019s Amsterdam-listed shares rose sharply following the announcement, leading the STOXX Europe 600 index with a 10% increase during early trading.<\/p>\n\n\n\n
Despite the reduced tariff impact, Philips CEO Roy Jakobs indicated that the company would continue to push for exemptions related to healthcare equipment in both the U.S. and China. Philips has localized 90% of its manufacturing for the Chinese market, softening the effect of China’s recent restrictions on EU medical imports above 45 million yuan. The restrictions were imposed in response to European curbs enacted earlier this year.<\/p>\n\n\n\n
Jakobs emphasized that the Chinese market is showing signs of gradual recovery and remains a strategic focus for the company\u2019s global expansion plans.<\/p>\n\n\n\n
Philips raised its full-year core profit (EBITA) margin outlook to a range of 11.3% to 11.8%, up from the previous 10.8% to 11.3%. The revised guidance reflects both improved performance and reduced tariff pressure. In the second quarter, Philips reported an adjusted EBITA margin of 12.4%, exceeding analyst expectations of 9.9%. Quarterly revenue was reported at 4.3 billion euros, aligning with market projections.<\/p>\n\n\n\n
Chief Financial Officer Charlotte Hanneman added that the company expects mid-single-digit revenue growth and mid-teens profit margins beyond 2025, even with ongoing trade considerations factored in.<\/p>\n\n\n\n
Philips continues its recovery in the sleep and respiratory care segment, which has not fully regained pre-pandemic volumes since the 2021 recall of sleep apnea devices. These products made up about 6% of total 2024 sales, down significantly from historical levels. The company previously settled related legal claims in the U.S. for $1.1 billion.<\/p>\n\n\n\n
Efforts to rebuild market share include strong momentum in mask products and renewed entry into previously paused markets. Philips also reported a 6% increase in comparable order intake, driven by innovations in AI-powered diagnostic tools.<\/p>\n\n\n\n
Additionally, the company signed a long-term agreement with Indonesia\u2019s Ministry of Health to supply its Azurion image-guided therapy systems, expected to significantly boost revenue over time. The systems will support care for cardiovascular, stroke, and cancer patients.<\/p>\n\n\n\n
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