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1、Annual Report 2024Impact with carePDF/printed versionThis document is the PDF/printed version of the 2024 Annual Report of Royal Philips and has been prepared for ease of use.The 2024 Annual Report was made publicly available pursuant to section 5:25c of the Dutch Financial Supervision Act(Wet op he

2、t financieel toezicht),and was filed with Netherlands Authority for the Financial Markets in European single electronic reporting format(the ESEF package)on February 21,2025.The ESEF package is available on the companys website at https:/ and includes a human readable XHTML version of the 2024 Annua

3、l Report.In any case of discrepancies between this PDF version and the ESEF package,the latter prevails.IFRS basis of presentationThe financial information included in this document is based on IFRS,as explained in General information to the Consolidated financial statements,unless otherwise indicat

4、ed.Forward-looking statementsThis document contains certain forward-looking statements.By their nature,these statements involve risk and uncertainty.For more information,please refer to Forward-looking statements and other information.References to PhilipsReferences to the company,to Philips or the(

5、Philips)Group or group,relate to Koninklijke Philips N.V.and its subsidiaries,as the context requires.Royal Philips refers to Koninklijke Philips N.V.Dutch Financial Markets Supervision ActThis document comprises regulated information within the meaning of the Dutch Financial Markets Supervision Act

6、(Wet op het financieel toezicht).Statutory financial statements and management reportThe chapters Group financial statements and Company financial statements contain the statutory financial statements of the company.Under Management report in section References to the content of this Annual Report w

7、e set out which parts of this Annual Report form the Management report within the meaning of Section 2:391 of the Dutch Civil Code.Due to rounding,amounts may not add up precisely to the totals provided in this report.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and

8、Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information2Contents2024 at a glance41 Our Management51.1 Message from the CEO61.2 Members of the Board of Management and Executive Committee82 Strategy102.1 Strategic focus 112

9、.2 Business133 Financial performance243.1 Performance summary253.2 Results of operations273.3 Financial position313.4 Cashflow and liquidity334 Environmental,Social and Governance374.1 Environmental404.2 Social464.3 Governance485 Supervisory Board595.1 Letter from the Chairman of the Supervisory Boa

10、rd605.2 Members of the Supervisory Board615.3 Supervisory Board report635.4 Remuneration report 2024716 Group financial statements876.1 Consolidated statements of income886.2 Consolidated statements of comprehensive income896.3 Consolidated balance sheets906.4 Consolidated statements of cash flows91

11、6.5 Consolidated statements of changes in equity926.6 Notes to the Consolidated financial statements937 Company financial statements1557.1 Statements of income1567.2 Balance sheets before appropriation of results1577.3 Statements of changes in equity1587.4 Notes to the Company financial statements15

12、98 Sustainability statement1658.1 Tracking our 2025 ESG program1668.2 General basis for preparation1698.3 Double Materiality Assessment1718.4 Environmental information1838.5 Social information2158.6 Governance information2378.7 ESRS cross-reference table2439 Further information2509.1 References to t

13、he content of this Annual Report2519.2 Managements statements and report2519.3 Independent auditors reports2529.4 Corporate governance report2649.5 Risk factors and responses2729.6 ESG reporting frameworks2839.7 How we create value2849.8 Appropriation of profits2859.9 Reconciliation of non-IFRS info

14、rmation2859.10 Other Key Performance Indicators2939.11 Forward-looking statements and other information2949.12 Investor information2969.13 Definitions and abbreviations298Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial

15、statements7 Company financial statements8 Sustainability statement9 Further information32024 at a glancePatient safety and quality Patient safety and quality is further strengthened,and the work continues it is at the heart of everything we do 83%of employees rate our culture of patient safety and q

16、uality favorably,a five-point increase since 2023 Social impact 1.96 billion lives improved,of which 242 million are in underserved communitiesCustomer highlights New strategic collaboration with Bon Secours Mercy Health(US)to improve patient monitoring and help transform care delivery Specialized i

17、nterventional suites are bringing care closer to patients in partnership with Carilion Clinics Cardiovascular Institute(US)Sustainability effort with Champalimaud Foundation(Portugal)achieves a 24%emissions reduction in its first yearInnovation Next-generation helium-free MRI creates potential to ex

18、pand MR access sustainably AI-enabled cardiovascular ultrasound platform helps speed up analysis and reduces burden on labs with simplified workflow OneBlade Intimate is designed for everyone,to protect the most sensitive skinOperations In second year of our plan,the drive continues for focused grow

19、th,people-and patient-centric innovation at scale,and improved execution Significant progress is made to fully resolve the effects of the Respironics recall,with clarity on the way forward More regionalized supply chain is re-shaped for reliable delivery in line with industry lead timesEnvironmental

20、 sustainability Circular revenues at 24%of sales Supplier sustainability approach secures finalist position in Fortunes Change the World rankings CDP A List rating for 13th year in a rowPeople and culture Cultural transformation by bringing in impact with care,centered on patient safety,quality and

21、integrity Employee Engagement Index of 78,a five-point increase since 2023 Recognized as one of the Worlds Best Employers by Forbes for sixth consecutive yearFinancials EUR 18.0 billion sales Adjusted EBITA1 margin:11.5%Free cash flow1:EUR 906 million Credit rating outlook improved to stableContents

22、1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information41Non-IFRS financial measure.For the definition and reconciliation of the most directly comp

23、arable IFRS measure,refer to Reconciliation of non-IFRS information.1 Our ManagementContents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information

24、“We are focused on executing our plan,improving fundamentals and simplifying how we work ensuring we are more competitive and agile,and delivering growth and margin expansion,with patient safety and quality as priority.”Roy Jakobs CEO Royal Philips1.1 Message from the CEODear Stakeholder,Around the

25、world,patients are facing longer waiting times,and we continue to see rising costs and staff shortages,among other issues.I have seen the immense pressure healthcare professionals are under and feel a deep sense of responsibility to help address the challenges and to support them to care for more pa

26、tients in a better way.In parallel,we see that people everywhere want to be empowered to take care of their own health and well-being.At Philips,we want to contribute to healthcare professionals feeling supported and energized,instead of overloaded and overworked,and to help people lead healthier li

27、ves.As an innovation company,we are committed to improving healthcare and driving impact with care for patients,people and the planet through our deep technological insight and our meaningful innovations.Strong partnerships and advances in AI*-enabled innovation are helping to drive real change free

28、ing up space and time for healthcare professionals to focus on their patients and empowering people to take care of their health and well-being.With our next-generation BlueSeal helium-free MRI system,for example,we are helping to expand access to quality imaging and improve care delivery across mul

29、tiple settings,with SmartSpeed AI powering up to three-times faster scanning and up to 65%higher resolution images.In the home,our AI-powered Philips Avent Premium Connected Baby Monitor gives parents peace of mind by allowing them to keep a closer eye on their children.We want to help deliver bette

30、r care for more people across the world.But we know that some people are facing barriers to better health;in parts of the world the devastating consequences of ongoing war and conflict are impacting millions of lives every day.It makes me even more determined to do what we can so people everywhere c

31、an access the care they need.Making progress on our three-year planIn 2024,we made solid progress on our 2023-2025 operating plan.We believe we are on the right path,executing our focused strategy to improve peoples health and well-being through meaningful innovation,with patient safety and quality

32、as our number one priority.Reflecting our new operating model,Businesses are in the lead,driving quality and making impact through innovation,design and sustainability.We remain committed to scaling our AI-enabled innovations through excellence in execution and delivery,focusing on fewer,better-reso

33、urced initiatives.While we have made good progress,we have more to do.Our results were negatively impacted in 2024 by deteriorated demand in China,due to subdued consumer confidence,leading to more cautious spending behavior.In addition,ongoing industry-wide anti-corruption initiatives have contribu

34、ted to extended hospital procurement cycles.Given these factors,we adjusted our growth expectations for the year.Managing developments in China will remain a priority in 2025.Despite global uncertainties and slower growth,we delivered strong profitability improvement and cash flow,and further streng

35、thened our balance sheet.We also made important progress on resolving the Philips Respironics recall.As an indication of the progress we are making,we returned to comparable order intake growth.And,some of our largest investors further expanded their investment in Philips,showing confidence in our f

36、uture.Focusing on our prioritiesOur focus on patient safety is at the center of strengthening our fundamentals and fostering a culture that upholds quality.In our latest engagement survey,colleagues shared that they feel empowered to speak up and take action to support our commitment to patient safe

37、ty and quality.While we acknowledge this progress,we remain diligent in continuing this work.Looking at other areas of progress in 2024,Philips Respironics signed a consent decree,which,coupled with other significant milestones,such as the economic loss settlement and the settlement of personal inju

38、ry and medical monitoring claims in the US,provided clarity on the way forward.We remain committed to rebuilding our position in Sleep&Respiratory Care while resolving the effects of the recall.We continue to work closely with the US Food and Drug Administration(FDA)and other regulators around the w

39、orld.We are concentrating on accelerating momentum,building on our industry-leading innovations,and continuing to improve execution.In our supply chain,we have made significant progress addressing the components shortage and related risks,and reducing our lead times,in support of our drive to increa

40、se customer satisfaction.In addition,we are building in greater agility in our supply chain so we can respond,for example,to the potential impact of geopolitical tension or tariffs.We are also further simplifying our catalogs and products,and regionalizing to win locally.In making sure we become a l

41、eaner,more agile and simpler organization and therefore more competitive and resilient we have made important strides with our move to an end-to-end Business-led model.We reduced approximately 10,000 roles from 2022 through the end of 2024.We focused on enhancing our team and culture with deep medte

42、ch experience and new leadership.This included the strengthening of our experienced and diverse Executive Committee by welcoming,among others,our new Chief Financial Officer,Charlotte Hanneman,and bringing in other proven leaders across Businesses,Regions and Functions.Contents1 Our Management2Strat

43、egy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information6*Artificial intelligence,defined in 10.8 Definitions and abbreviationsWe are reinvigorating our culture of impact

44、 with care.We have shifted back to the workplace following a couple of years when some colleagues worked partly from home,with teams coming back together to build a stronger social fabric and support our thriving innovation culture.We believe we drive greater impact when we work together.In 2024,eng

45、agement across the company,as measured in our People Engagement Survey,increased 5 percentage points.Our plans build on our strong heritage in social and environmental responsibility.In 2024,we improved the lives of 1.96 billion people and contributed to more sustainable healthcare,while ensuring a

46、more sustainable consumer experience.This included,among other things,partnering with hospitals to support them with their own sustainability plans and expanding access to care in and outside the hospital.We have an enhanced and fully integrated approach to doing business responsibly and sustainably

47、,for Philips and for our customers.And this is recognized.For example,our supplier sustainability approach featured in Fortunes 2024 Change the World rankings.In addition,Forbes recognized Philips as one of the worlds best employers.Our ESG commitments help drive our business results and our global

48、impact,and create long-term value for our stakeholders.Looking aheadWe remain focused on successfully executing our three-year plan and are determined to further build on our industry-leading innovations,improve our fundamentals,simplify how we work,and ensure we are more competitive and more agile.

49、We continue to deepen our culture of impact with care with patient safety,quality and integrity at the heart.We want to win and deliver better care for more people in a fast-moving,competitive world,where care provision is under pressure.By doing so,we aim to deliver profitable growth,expand our mar

50、gins,and fulfill our cash and ESG commitments.I would like to thank all our stakeholders for their ongoing trust,support,collaboration,and confidence.I also want to share special thanks to our employees,who show their passion and commitment every day,and to their families.Reflecting the progress we

51、have made in executing our plan,reducing risk and strengthening our balance sheet,along with the importance we attach to dividend stability,we propose to maintain the dividend at EUR 0.85 per share,to be in shares or cash at the option of the shareholder.As I look ahead,I am excited about the opport

52、unity to deliver better care for more people,working with our many partners for the benefit of patients,customers and consumers.Roy JakobsChief Executive OfficerContents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements

53、7 Company financial statements8 Sustainability statement9 Further information71.2 Members of the Board of Management and Executive CommitteeRoyal Philips has a two-tier board structure consisting of a Board of Management and a Supervisory Board,each of which is accountable to the General Meeting of

54、Shareholders for the fulfillment of its respective duties.The Board of Management is entrusted with the management of the company.The other members of the Executive Committee have been appointed to support the Board of Management in the fulfillment of its managerial duties.Please also refer to Board

55、 of Management and Executive Committee within the companys Corporate governance report.Members of the Board of ManagementRoy JakobsBorn 1974,Dutch and GermanChief Executive Officer(CEO)Chairman of the Board of Management and the Executive Committee(since October 2022)Roy joined Philips in 2010 and h

56、as held various global leadership positions across the company,starting as Chief Marketing&Strategy Officer for Philips Lighting.In 2012,he became Market Leader for Philips Middle East&Turkey,leading the Healthcare,Consumer,and Lighting businesses out of Dubai.Subsequently,he became global Business

57、Leader of Domestic Appliances,based in Shanghai,in 2015.In 2018,Roy joined the Executive Committee as Chief Business Leader of the Personal Health businesses and in early 2020 he started as Chief Business Leader of Connected Care.As Chief Executive Officer and Chairman of the Board of Management and

58、 the Executive Committee,he also holds direct responsibility for Patient Safety and Quality,Medical Office,Internal Audit and Brand&Communications.Prior to his career at Philips,he held various management positions at Royal Dutch Shell and Reed Elsevier.Charlotte HannemanBorn 1978,DutchExecutive Vic

59、e PresidentMember of the Board of Management(since October 2024)Chief Financial OfficerCharlotte joined Philips in 2024 and is responsible for Finance,including Investor Relations and M&A,as well as Real Estate and Security.Before joining Philips,Charlotte worked as Controller and Head of Financial

60、Planning&Analysis at global medical technology company Stryker.Prior to this,Charlotte held international finance leadership roles at several multinational healthcare companies.Marnix van GinnekenBorn 1973,DutchExecutive Vice PresidentMember of the Board of Management(since November 2017)Chief ESG&L

61、egal OfficerMarnix joined Philips in 2007 and became Chief Legal Officer of Royal Philips and member of the Executive Committee in 2014.In 2017 he was appointed to the Board of Management.He is responsible for driving ESG efforts across the company,including Group Sustainability.He is also responsib

62、le for Legal,Intellectual Property&Standards and Government and Public Affairs.Since January 1,2024,he is Chairman of the Board of the Philips Foundation.In 2011,he was appointed Professor of International Corporate Governance at the Erasmus School of Law in Rotterdam.Before joining Philips,Marnix w

63、orked for Akzo Nobel and as an attorney in a private practice.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information8This page reflects th

64、e composition of the Executive Committee as per December 31,2024.For a current overview of the Executive Committee members,see also https:/ members of the Executive CommitteeWillem AppeloBorn 1964,DutchExecutive Vice PresidentChief Operations OfficerWim joined Philips in 2022,bringing over 30 years

65、of experience in technology and the medical device technology industry in finance and supply chain management.Steve C de BacaBorn 1968,AmericanExecutive Vice PresidentChief Patient Safety and Quality OfficerSteve joined Philips in 2023 and brings over 30 years of quality and regulatory affairs exper

66、ience in the medical technology industry.Jeff DiLulloBorn 1969,AmericanExecutive Vice PresidentChief Region Leader of Philips North AmericaJeff joined Philips in 2019,drawing on more than 30 years of leadership experience in the US Army and the information technology industry.Deeptha KhannaBorn 1976

67、,SingaporeanExecutive Vice PresidentChief Business Leader Personal HealthDeeptha joined Philips in 2020.She has over 25 years of leadership experience working across Europe,US and Asia,on major global brands and across personal care and the consumer health industry.Ling LiuBorn 1974,ChineseExecutive

68、 Vice PresidentChief Region Leader of Philips Greater ChinaLing joined Philips in 1998 and has more than 26 years experience in leadership roles in Greater China,the Netherlands and North America.Bert van MeursBorn 1961,DutchExecutive Vice PresidentChief Business Leader responsible for Diagnosis&Tre

69、atmentBert joined Philips in 1985 and has more than 39 years of experience in the medical imaging and healthcare business.Edwin PaalvastBorn 1963,DutchExecutive Vice PresidentChief of International RegionEdwin joined Philips in 2020 and brings more than 30 years of leadership experience in the techn

70、ology industry.Shez PartoviBorn 1967,CanadianExecutive Vice PresidentChief Innovation&Strategy OfficerShez joined Philips in 2021 and has more than 30 years of experience leading large health systems,cloud transformation,and artificial intelligence and machine learning initiatives in the healthcare,

71、life sciences and genomics industries.Heidi SichienBorn 1974,BelgianExecutive Vice PresidentChief People OfficerHeidi joined Philips in 2006 and brings over 18 years of experience in leadership roles in HR across many parts of the company.Julia StrandbergBorn 1974,AmericanExecutive Vice PresidentChi

72、ef Business Leader Connected CareJulia joined Philips in 2023 and has 20 years of leadership experience in the medical technology industry.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial st

73、atements8 Sustainability statement9 Further information9This page reflects the composition of the Executive Committee as per December 31,2024.For a current overview of the Executive Committee members,see also https:/ StrategyA clear roadmap to help deliver better care for more people and deliver val

74、ue for our stakeholdersCulture of impact with care,centered on patient safety,quality and integrity,enabling better collaboration to achieve our goals and create impactFocused growth and value creation strategy,with 70%of revenue from accelerating growth in attractive industry leadership segments,an

75、d 30%from capturing value upsideInnovating as close as possible to customers and consumers with a unique,needs-driven approach for scalable,breakthrough advancements and incremental progress Leveraging differentiating software capabilities and AI-enabled innovations to help care providers and consum

76、ers do more with lessStrengthened supply chain and simplified operating model,enabling agility and cost-efficiency to better deliver in volatile market conditionsContents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statement

77、s7 Company financial statements8 Sustainability statement9 Further information102.1 Strategic focus Today,most healthcare systems are struggling to keep up with the ever-rising need for,and cost of,healthcare,while systemic staff shortages and financial resource constraints increase the pressure.Cli

78、mate change is impacting both environmental and human health,compounding the stress on our healthcare systems and influencing consumer behavior.At the same time,in both the hospital and the home,emerging technologies and artificial intelligence are affecting our lives like never before.At Philips,ou

79、r purpose is to improve peoples health and well-being through meaningful innovation.As such,we see huge opportunities to make a difference through innovation,design,and sustainability partnering with our healthcare customers to increase productivity and deliver better care for more people through ou

80、r innovation platforms of monitoring,imaging,interventional and enterprise informatics.And,empowering more people to take care of their health and well-being through our personal health propositions.Our plan:create value with sustainable impact As a health technology company,Philips is committed to

81、driving progressive value creation through a strategy of focused growth,scalable patient-and people-centric innovation,and reliable execution supported by our culture of impact with care.Philips has significant strengths to build on.We have a portfolio of innovations in hardware,software,AI and serv

82、ices,supporting care in the hospital and in the home.We are the preferred strategic and innovation partner for many customers(including governmental entities)across the globe.And our strong heritage in environmental sustainability and social impact helps us make a difference globally and create long

83、-term value for our stakeholders.A strategy of focused growthWe operate in growing market segments,where attractive margins provide a foundation for sustainable value creation.To deliver on our strategy,we make clear business choices.We are concentrating our resources on 70%of our businesses where w

84、e have strong positions and believe we can accelerate growth and expand margins more quickly Image Guided Therapy,Monitoring,Ultrasound,and Personal Health.In doing so,we focus on supporting clinical workflows in areas where we have domain leadership,such as cardiology,and that build on our deep str

85、ength in the intensive care unit and cath lab.The focus for the remaining 30%of the businesses,such as Diagnostic Imaging and Enterprise Informatics,is achieving margin expansion by increasing productivity and scale,and by delivering operational excellence.Additionally,we aim to rebuild our position

86、 in Sleep&Respiratory Care after the progress made to resolve the effects of the Respironics recall.Scalable patient-and people-centric innovationAt Philips,weve been innovating to improve lives for over 130 years.Peoples needs are at the very heart of how we innovate and design for sustainable impa

87、ct with a safety and quality first mindset.Innovation is our strength and will continue to be our core differentiator.Recent challenges in the healthcare industry have accelerated the adoption of technology.We are embracing these trends and have shifted our innovation closer to our customers.This st

88、arts with asking:What do people in our case,patients and clinicians,nurses and technicians,consumers really need?And how can we best support healthcare professionals with their workflow?Emerging AI innovations have the potential to address pain points across operational and clinical workflows in hea

89、lthcare.Philips has AI embedded across our portfolio,and we see significant opportunities to further leverage this technology to deliver more and better care.In our Businesses,we focus our efforts and resources on fewer projects offering greater impact on patient outcomes and care providers clinical

90、,operational and sustainability challenges.We take a long-term view,seeking to ensure the customer has the best experience with Philips throughout time.We do this by balancing new,breakthrough innovations and continuous optimized life cycle management,through upgrades and services,of Philips product

91、s and systems already deployed in care settings.With Research&Development mostly led by the Businesses,we bring together expertise across the product life cycle,from research through serviceability,with the aim of ensuring our innovations scale to drive maximum impact for our customers and consumers

92、 delivering a superior experience and value,with minimum environmental impact.Execution prioritiesEnabled by a culture of patient-and people-centricity,accountability and impact,supported by strong health technology capabilities,we see effective execution as the key value driver of our plan.We are f

93、ocusing on:patient safety and quality our highest priority end-to-end supply chain resilience a simplified operating model with an agile way of workingFirst,patient safety,quality and integrity is at the heart of our culture of impact with care.All employees have dedicated patient safety and quality

94、 objectives,and the Patient Safety and Quality organization champions stronger processes and more effective early warning systems in the Businesses.The topic has high visibility at the Executive Committee level with the leadership of the Chief Patient Safety&Quality Officer and Chief Medical Officer

95、.We invest in systems,capabilities and training to facilitate identification of potential patient safety or quality issues.We listen to patients through our advisory boards.And we are taking the learnings from the Respironics recall to improve our ability to correctly assess patient safety and provi

96、de quality of the highest standard across Philips and in delivery to patients,customers and consumers.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 F

97、urther information11Second,alignment of procurement and supply chain to our Businesses has enabled us to improve the reliability of the delivery of our products,services and orders.A more regionalized supply chain ecosystem combined with dual sourcing can work effectively even when volatile conditio

98、ns emerge in different parts of the world.We are paring down our product portfolio and making our platforms fit for the future,which includes pruning a long tail of smaller product lines and older generations of our products.We also have a dedicated team redesigning products and components to increa

99、se our resilience.Finally,we are in the second year of implementing our simplified operating model to enable us to better serve patients,customers and consumers,as well as ensuring that our cost of organization remains competitive in an inflationary and cost-driven environment,and that we are more a

100、gile in responding to changes in the market.Prime accountability has been assigned to the Businesses,supported by lean Functions and Regions following tailored models,all guided by fewer KPIs and more focused targets.We will continue to simplify our operating model to adapt to the dynamic environmen

101、t.Driving impact for people and planetWe have operationalized our purpose by adopting a fully integrated approach to doing business responsibly and sustainably.We partner with stakeholders to drive environmental,social and governance(ESG)priorities and aim to make a global impact while focusing on t

102、hree UN Sustainable Development Goals(SDGs):SDG 3-Ensure healthy lives and promote well-being for all at all ages SDG 12-Ensure sustainable consumption and production patterns SDG 13-Take urgent action to combat climate change and its impactsActing responsibly toward the planet and society is part o

103、f our DNA.We believe that this is the best way for us to meet our business goals and create superior,long-term value for Philips stakeholders.Our 2021-2025 ESG program includes key ESG commitments that guide execution of the company strategy,setting challenging environmental and social targets,as we

104、ll as the highest standards of governance.As an example,we aim to positively impact 2.5 billion lives per year by 2030,including 400 million in underserved communities.Please refer to Environmental,Social and Governance for an overview of all our key ESG commitments,and for information on how we act

105、 and perform in the environmental and social dimensions and on the main elements of our governance framework.Our approach to risk managementWe approach risk management as a value-creating activity that is integral to innovation and entrepreneurship.It allows us to analyze the relationship between st

106、rategy and risk profile,to identify the specific risks that we face in executing our strategic plan to create value with sustainable impact,to analyze these risks,to set our risk appetite,and to implement balanced risk responses and monitor their effectiveness as an integral part of the Philips busi

107、ness planning and performance review cycle.Refer to Risk management and internal control for more information,including our risk appetite and our risk management governance and process,and to Risk factors and responses for a description of the material risk factors we have identified.Delivering on o

108、ur planWith our global reach,market leadership positions,deep clinical and technological insights,and patient-and people-focused innovation,we believe Philips is well-positioned to help deliver real change across healthcare and personal health.Fueled by our purpose and supported by our culture of im

109、pact with care,we are empowered and hold ourselves accountable to create value with sustainable impact.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9

110、Further information122.2 Business2.2.1 Our business structureKoninklijke Philips N.V.(Royal Philips)is the parent company of the Philips Group.Philips operating model grants end-to-end Businesses with single accountability in order to make the company more agile in its drive to create value with sus

111、tainable impact.The segments Diagnosis&Treatment,Connected Care and Personal Health are each responsible for the management of their business activity worldwide,and are made up of the six Businesses shown below.Additionally,Royal Philips identifies the segment Other.Philips GroupSegmentsDiagnosis&Tr

112、eatmentConnected CarePersonal HealthOtherBusinessesPrecision DiagnosisImage Guided TherapyMonitoringEnterprise Informatics Sleep&Respiratory CarePersonal HealthPhilips GroupTotal sales by reportable segment2024Diagnosis&Treatment 49%Connected Care 29%Personal Health 19%Other 3%Diagnosis&Treatment se

113、gmentOur Diagnosis&Treatment Businesses create value through their portfolio of innovative AI-enabled solutions that support precision diagnosis and minimally invasive treatment in therapeutic areas such as cardiology,peripheral vascular,neurology,surgery,and oncology.With these solutions,we enable

114、our customers to enhance care delivery,optimize workflow to improve productivity,and work toward their sustainability goals.Serving diagnostic imaging markets globally,our strategy is to focus on more precise and predictive diagnoses,integrating our intelligent imaging systems with our industry-lead

115、ing informatics solutions to optimize workflow efficiency,improve productivity and maximize lifetime value.We do this through smart diagnostic systems,connected workflow solutions,and integrated AI-supported diagnostics and pathway informatics that enable clinicians to select tailored care pathways

116、with predictable outcomes for every patient,both inside and outside the hospital.We also provide integrated solutions that combine imaging systems and advanced clinical software,as well as diagnostic and therapeutic devices and services to optimize minimally invasive interventional procedures with m

117、ore effective treatment,better outcomes and higher productivity.Building upon our leading-edge Azurion platform,we address a range of interventional clinical segments with high procedural growth rates,such as coronary artery disease,peripheral artery and venous disease,electrophysiology,structural h

118、eart disease,interventional neuroradiology,and interventional oncology.We are driving further innovation to treat new and more complex patient pools,using clinical and economic evidence to foster the adoption of these solutions,and that translates into guidelines and reimbursement.In 2024,we took ac

119、tion to address key optimization and expansion challenges faced by our Diagnosis&Treatment Business Units.In Diagnostic Imaging,with renewed leadership,we embarked on a clear strategy with a focus on those customers who are looking to optimize care delivery in the mid-and high-end segments.Significa

120、nt progress was made in the execution of our plans to drive margin expansion in line with the companys strategy.We also streamlined and focused our portfolio with one cloud-enabled hardware stack.In Image Guided Therapy(IGT),we continued to take actions to deliver on our ambition to accelerate growt

121、h and expand margins more quickly.The IGT Business Units focused on creating customer preference for our integrated interventional platform,with Systems,Devices and Software seamlessly joined in one simple workflow to innovate the procedure.Contents1 Our Management2Strategy3Financial performance4 En

122、vironmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information13The Diagnosis&Treatment segment consists of the following Businesses.Precision Diagnosis This Business offers a range of diagnostic imaging p

123、roducts and solutions to address some of providers biggest challenges,from staff shortages and burnout to workflow,and ultimately delivering better care for their patients.Diagnostic X-ray Business Unit X-ray and fluoroscopy systems with associated software to optimize diagnostic imaging quality and

124、 improve efficiency and productivity for the hospital.Magnetic Resonance Imaging(MRI)Business Unit comprehensive BlueSeal portfolio with helium-free-for-life operations,bundled with AI-enabled software to streamline workflows,optimize diagnostic quality,and improve patient experience.Computed Tomogr

125、aphy(CT)Business Unit advanced and efficient systems and software,including detector-based Spectral CT and systems equipped with advanced AI capabilities,for diagnosis,interventional procedures and screening,to help expand the standard of care.Ultrasound Business Unit imaging solutions focused on su

126、pporting diagnosis,treatment planning and guidance for cardiac,general imaging,obstetrics/gynecology,and point-of-care applications enabled by proprietary AI software,advanced imaging technology and tele-ultrasound to efficiently and confidently deliver diagnostic images for even the most complex co

127、nditions.Image Guided Therapy This Business includes a market-leading portfolio of integrated interventional imaging systems,smart devices,and disease-specific software as well as services and consulting.Image Guided Therapy Systems Business Unit integrated interventional X-ray systems(fixed and mob

128、ile surgery)and software solutions,supported by AI,to perform a wide range of routine and complex interventional procedures,easily and confidently.Image Guided Therapy Devices Business Unit interventional specialty devices and software to aid in the diagnosis,navigation,treatment and confirmation in

129、 minimally invasive interventional coronary,peripheral vascular and hearth rhythm management procedures.Complemented by seamless integration with Image Guided Therapy Systems.Diagnosis&TreatmentTotal sales by Business2024Precision Diagnosis1 59%Image Guided Therapy 41%1of which Diagnostic Imaging 40

130、%,Ultrasound 19%Revenue is predominantly earned through the sale of products,leasing,customer services fees,recurring per-procedure fees for disposable devices,and software license fees.For certain offerings,per-study fees or outcome-based fees are earned over the contract term.Sales channels are a

131、mix of direct sales,especially in the larger markets,third-party distributors and online sales.This varies by product,market and price segment.Our sales organizations have an intimate knowledge of technologies and clinical applications,as well as the solutions necessary to meet the needs of our cust

132、omers.Sales in the Diagnosis&Treatment Businesses are generally higher in the second half of the year,largely due to the timing of customer spending patterns.At year-end 2024,Diagnosis&Treatment had 24,544 employees worldwide.2024 highlightsPrecision Diagnosis Philips introduced helium-free operatio

133、ns in MRI,and since its launch in 2018,we have installed more than 1,500 BlueSeal systems globally in wide-ranging settings,including the worlds first helium-free mobile MRI units.Our next-generation BlueSeal with Smart Reading,launched at Radiological Society of North America annual meeting in 2024

134、,boosts performance,saves time,and supports better patient outcomes,all while caring for the planet.With AI applications seamlessly integrated into our latest 1.5T BlueSeal scanner,we have applied AI to every aspect of the MRI workflow.BlueSeal magnets are lighter than others,allowing them to be ins

135、talled in more places or even transported in mobile units creating the potential to expand quality access to MRI exams for patients in a more sustainable way.The next-generation AI-enabled cardiovascular ultrasound platform helps speed up cardiac ultrasound analysis with proven AI technology and red

136、uces the burden on echocardiography labs,integrated into EPIQ CVx and Affiniti CVx ultrasound systems.With the latest transesophageal echocardiography(TEE)transducer,it is designed to serve more patients with improved overall comfort,with FDA 510(k)clearance.Philips has developed the smaller X11-4t

137、Mini 3D TEE transducer to serve more patients with this valuable imaging tool,helping physicians serve a wider range of patients,from small children to fragile adults.In General Imaging Ultrasound we launched the Elevate Release featuring the EPIQ Elite Elevate and Affiniti Elevate.More than 100 opt

138、imized pre-sets across multiple clinical applications deliver greater precision imaging and intuitive workflows to help boost clinical confidence.These innovative features also help to deliver an improved user and patient experience by automating image brightness and uniformity,and reducing button p

139、ushes by up to 54%with Next Gen Auto Scan.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information14Diagnosis&Treatment Precision Diagnosis

140、Philips CT 5300Philips launched a series of leading AI-driven innovations across the diagnostic imaging portfolio.MR SmartSpeed is AI-based imaging technology that can increase imaging speed by up to a factor of three while providing up to 65%greater resolution to deliver outstanding image quality.I

141、t is compatible with 97%of clinical protocolsto address the needs of a broad range of patients in various conditions.AI-powered quantitative reporting software from our partner icometrix was seamlessly integrated into the latest BlueSeal MR scanners through new Smart Reading capability,providing con

142、sistent and more accurate diagnoses.Fully AI-enabled CT 5300 with Precise Image reconstruction software results in reduced reading time and 80%lower radiation while delivering better image quality.Philips collaborates with Annalise.ai to evaluate streamlining workflows to prioritize time-sensitive c

143、ases.Powered with Smart Workflow,AI-enabled productivity features of DXR 7300 C reduce X-ray retakes with the Eleva Tube Head and enhance confident diagnosis with Philips UNIQUE 2 image processing.Image Guided Therapy Major enhancements to Azurion,our Image Guided Therapy System,were designed to spe

144、ed up and improve minimally invasive diagnosis and treatment of neurovascular patients.The new Azurion neuro biplane system features enhanced 2D and 3D imaging and X-ray detector positioning flexibility,building on the systems capabilities to streamline neurovascular procedures to help care teams ma

145、ke the right decisions faster,treat more patients,and achieve better outcomes.It has been widely adopted at major healthcare institutions around the world,such as the Miami Cardiac&Vascular Institute in the United States(US),Osaka Police Hospital in Japan,and Leiden University Medical Center in the

146、Netherlands.Our real-time 3D Intracardiac Echocardiography(ICE)Catheter VeriSight Pro is designed to give physicians more confidence and control during a variety of minimally invasive procedures in structural heart disease and electrophysiology.In 2024 we launched the first rollout of this technolog

147、y outside the US,in Hong Kong,and it is expected to be an innovation to watch.Intravascular ultrasound(IVUS)and instantaneous wave-free ratio(iFR)technologies received top-level recognition in new European Society of Cardiology guidelines,reinforcing their role in optimizing coronary interventions a

148、nd patient outcomes.The robust clinical evidence supporting the use of these technologies shows improved patient outcomes through numerous large-scale randomized trials like DEFINE FLAIR and iFR SWEDEHEART.Philips secured FDA approval for its new LumiGuide Navigation Wire,which uses fiber optic tech

149、nology to reduce radiation for both patients and physicians during minimally invasive surgery.The companys breakthrough Fiber Optic RealShape(FORS)technology marked the milestone of more than 1,000 patients treated using FORS technology since the first clinical use in 2020.The Zenition 90 Motorized,

150、designed to deliver state-of-the-art image quality for complex vascular needs and clinical procedures,was launched.It has intuitive motorization for greater control and high power,as well as automated workflows for greater clinical efficiency.Diagnosis&Treatment Philips Image Guided Therapy System A

151、zurion 7 B20/12Diagnosis&Treatment partnershipsPhilips continues to work with health systems to adopt solutions that can improve workflow and ease the technology burden on staff,as well as improve patients experiences and outcomes and advance sustainability.Carilion Clinics Cardiovascular Institute

152、in the US committed to adopt 11 specialized Philips interventional suites,allowing physicians to treat patients with complex conditions closer to where they live.Equipped with these new Philips solutions,the highly skilled medical staff will be able to continue handling complex cases or procedures t

153、hat may not be available at surrounding healthcare facilities.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information15 A 2024 analysis con

154、firmed that the collaboration with Champalimaud Foundation(Portugal)achieved a 24%emissions reduction in its first year.This is equivalent to 40 tonnes CO2e,a strong start to a strategic partnership aimed at halving the carbon footprint of Champalimauds diagnostic and interventional imaging equipmen

155、t use by 2028.For the Japanese market,where cerebrovascular diseases are on the rise and place a heavy social burden on society,Philips has launched SmartCT 3.0,an application powered by AI and specialized for endovascular treatment with high image quality.Additionally,the first MR 7700 with clinica

156、l 3.0T scanner has been installed at Hamamatsu University Hospital.With high image quality and reduced scan time,it provides high accuracy,power,and endurance to support confident diagnosis for every patient.Connected Care segmentWith technology constantly advancing and becoming increasingly pervasi

157、ve in healthcare,the Connected Care Businesses aim to connect and elevate care for all.Philips connects patients and caregivers across care settings,delivering clinical,operational and therapeutic solutions that help our customers deliver better health outcomes,improve the patient and staff experien

158、ce,and lower the cost of care.In 2024,the global economic situation continued to put additional pressure on customer budgets,worsened staff shortages,and increased the need for solutions that enable more effective,sustainable and convenient care in hospital,clinics and the home especially those enab

159、led by strong informatics and AI.With clinical depth and discovery,Philips Connected Care technologies help to cultivate a more accurate and complete view of the patient that drives better care for more people.The combination of advanced technological solutions and a co-creation approach allows Phil

160、ips to be the clinical technology partner to its customers in their digital transformation,across the enterprise and at the level of the individual clinician,nurse and patient.As a clinical technology partner,we help our customers to unlock actionable insights from pools of medical imaging and patie

161、nt monitoring data,through the use of advanced AI,to improve outcomes and drive productivity.Philips open,interoperable platforms aggregate and leverage information from clinical devices,as well as patient and historical data,to support care providers in patient engagement,diagnostics,and patient mo

162、nitoring in diverse settings.The Connected Care segment consists of the following Businesses.Monitoring This Business spans in-hospital,ambulatory and home-based monitoring and diagnosis solutions and services supporting the patient journey,as well as continuous monitoring and workflow solutions fue

163、led by advanced interoperability and patient insights.Hospital Patient Monitoring Business Unit delivers acute patient management solutions to improve clinical and patient outcomes and achieve operational and economic efficiencies.Leveraging a strong presence in the operating theater and intensive c

164、are unit,Hospital Patient Monitoring offers vendor-neutral solutions to enhance customers experiences and improve patient outcomes with seamless patient data generated from admission to discharge that is turned into clinical insights,actionable at the right time and specific to targeted care setting

165、s.Ambulatory Monitoring&Diagnostics Business Unit provides patient care management in ambulatory and home care settings through a suite of cardiac diagnostic and monitoring solutions to identify heart rhythm disorders,plus other disease states,supported by AI algorithms that orchestrate workflows an

166、d services across care settings to provide care virtually anywhere.Emergency Care Business Unit plays a critical role in connected acute care management,both inside and outside the hospital,including cardiac resuscitation(e.g.,automated external defibrillators)and emergency care solutions(devices,se

167、rvices,and digital/data solutions)for professional and consumer applications.On January 28,2025,Philips announced an agreement to sell the Emergency Care Business Unit.Enterprise Informatics By combining our informatics propositions into one end-to-end Business,we can scale our software business,pro

168、viding vendor-agnostic,integrated workflow solutions that convert data from our imaging and monitoring systems into clinical and operational insights.Radiology Informatics Business Unit enables enterprise imaging across sites,specialties and technologies to simplify medical image management,facilita

169、te effective collaboration and enhance patient care.Clinical Integration&Insights Business Unit offers solutions that are seamlessly integrated into the customer workflow.These solutions enable vendor-neutral data capture from more than 1,000 device models and make sense of disparate data,providing

170、insights at scale across the care pathway.Clinical Informatics Business Unit delivers solutions for productivity,diagnostic confidence,and clinical decision support in the domains of digital pathology,advanced visualization and disease management solutions,specifically in radiology,cardiology,pathol

171、ogy and urology.Patient Care Informatics aims to extend the reach of virtual care,support evidence-based practices,and provide actionable insights for continuous improvement,ensuring better health outcomes for patients globally.In 2024,we brought together EMR&Care Management and Cardiovascular Infor

172、matics to reflect shifts in the industry to drive not only data,but also to manage the entire patient journey.This combined portfolio consists of cardiovascular care,virtual care,electronic medical records,and acute care solutions.Sleep&Respiratory Care Working closely with clinical partners and Dur

173、able/Home Medical Equipment providers,Philips Respironics provides sleep and respiratory solutions to customers,clinicians and patients.This extends from ambulatory patient care solutions for obstructive sleep apnea,to solutions encompassing diagnostics,people-centric therapy,cloud-based connected p

174、ropositions and care management services for patients with Chronic Obstructive Pulmonary Disease and respiratory conditions.Hospital Respiratory Care provides invasive and non-invasive ventilators for acute and sub-acute hospital environments;Home Respiratory Care supports chronic care management in

175、 the home.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information16Final agreement was reached on the terms of the Philips Respironics cons

176、ent decree with the US Department of Justice and the US Food and Drug Administration(FDA),primarily focusing on Philips Respironics business operations in the US,including its manufacturing facilities in Murrysville and New Kensington,its service center in Mount Pleasant and its Sleep&Respiratory Ca

177、re headquarters in the Greater Pittsburgh,Pennsylvania region.The consent decree provides a clear path forward for the Sleep&Respiratory Care Business with defined actions,milestones and deliverables to demonstrate compliance with regulatory requirements and to restore the Business.As part of the ag

178、reement,the Business will prioritize completing the remediation of the sleep and respiratory care devices under Respironics voluntary June 2021 recall.More than 99%of the actionable registered CPAP and BiPAP sleep therapy devices have been remediated globally,while the remediation of the ventilators

179、 is ongoing in coordination with the relevant competent authorities.The Sleep&Respiratory Care Business must demonstrate continued compliance with the FDAs Quality System Regulation.In the US,Philips Respironics will continue to service sleep and respiratory care devices already with healthcare prov

180、iders and patients,and supply accessories,consumables,and replacement parts.Until the relevant requirements of the consent decree are met,Philips Respironics will not sell new CPAP or BiPAP sleep therapy devices or other respiratory care devices in the US.Outside the US,Philips Respironics will cont

181、inue to provide new sleep and respiratory care devices,accessories,consumables,replacement parts,and services,subject to certain requirements.Connected Care Sleep&Respiratory Care Philips DreamWear mask systemConnected CareTotal sales by Business2024Monitoring 58%Enterprise Informatics 23%Sleep&Resp

182、iratory Care 19%In 2024,we took action to address the key challenges faced by the Connected Care Business Units.We took steps to deploy a global expansion of channel sales and delivery to scale Enterprise Informatics solutions with partners,and are assessing our approach in areas where this has prov

183、en difficult,particularly in China,and in the Growth geographies in the International Region.We also worked on implementing the terms of the Philips Respironics consent decree,which includes defined actions,milestones and deliverables.In most of the Connected Care Businesses,revenue is earned throug

184、h the sale of products and solutions,as well as services and software licenses.Where bundled offerings result in solutions for our customers,or offerings are based on the number of people being monitored,we see more usage-based earnings models.In the area of patient care management(Ambulatory Monito

185、ring&Diagnostics Business Unit and Sleep&Respiratory Care Business),revenue is generated through clinical services,product sales and through rental models,whereby revenue is generated over time.Sales channels include a mix of direct sales,partly paired with an online sales portal and distributors(va

186、rying by product,market and price segment).Our sales organizations have an intimate knowledge of clinical settings and patient-specific diagnosis and treatment.Philips collaborates with customers and partners to co-create solutions,drive commercial innovation and adapt to new models such as monitori

187、ng-as-a-service and software-as-a-service.Sales in the Connected Care Businesses are generally higher in the second half of the year,largely due to customer spending patterns.At year-end 2024,Connected Care had 16,829 employees worldwide.Contents1 Our Management2Strategy3Financial performance4 Envir

188、onmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information172024 highlightsMonitoringPhilips and Bon Secours Mercy Health(BSMH),one of the largest Catholic health systems in the US,announced a multi-year

189、strategic collaboration for patient monitoring.Putting BSMH clinicians in control,the collaboration aims to reduce the digital burden on staff and give them more time to spend with patients.This 10-year journey is designed to bring innovations that will transform care delivery.BSMH provides patients

190、 care more than 11 million times annually through its network of more than 1,200 care sites,60,000 associates and 49 hospitals serving communities in Florida,Kentucky,Maryland,New York,Ohio,South Carolina and Virginia,as well as Ireland.Philips signed multi-year partnerships for monitoring with seve

191、ral university hospitals in the Netherlands and will provide patient monitors for the new Grand Hpital de Charleroi in Belgium,as well as roll out its ePatch and AI-driven analytics platform across 14 hospitals in Spain.Jackson Health System,one of the largest public health systems in the US,announc

192、ed results of a collaborative Life Cycle Assessment measuring the sustainability impact of transitioning to Philips next-generation monitoring solutions,which can help reduce carbon emissions by 685 tons of CO2e,or 47%,compared with previous systems.This significant reduction can allow the health sy

193、stem to save USD 1.2 million over a 10-year device lifetime.These findings suggest that patient monitoring can become part of an overall carbon reduction strategy for health systems.Connected Care Monitoring Philips Patient Monitor IntelliVue MX750Enterprise InformaticsIn 2024,we expanded our strate

194、gic collaboration with Amazon Web Services(AWS)to offer Philips integrated diagnostics portfolio in the cloud,improving access to critical insights and driving better outcomes across clinical specialties.With more than 150 sites across North America and Latin America successfully transitioned to Phi

195、lips HealthSuite Imaging on AWS,Philips and AWS are accelerating the migration of health systems to the cloud and expanding customer cloud migrations in Europe.Also powered by AWS in 2024,Philips announced the launch of the Tasy EMR AI Virtual Assistant,designed to improve the efficiency and quality

196、 of healthcare delivery in Latin America by simplifying administrative tasks and improving the EMR experience so healthcare professionals can focus on what really matters their patients.As part of a five-year partnership with ABC Medical Center in Mexico,Philips Tasy EMR software is being deployed a

197、s part of an interoperability solution,integrating more than 45 functionalities and 700 licenses and establishing a standardized,unified point between clinical and enterprise information systems.Durham and Darlington NHS Foundation Trust,one of the largest integrated care providers in the United Kin

198、gdom,advanced its radiology and cardiology care with Philips PACS.This technology will provide a single view of patient records,providing more connected and coordinated care across not just the hospital sites but the entire North East and Cumbria region.This commitment marks yet another milestone in

199、 the 14-year partnership with the Trust,just one year after Durham became the first NHS Trust to co-develop a sustainability blueprint with Philips.NYU Langone Health in the US launched a digital pathology program,offering unprecedented clarity for viewing tissue samples,enhancing collaboration and

200、reducing diagnosis time while laying the foundation for advanced AI algorithms.This integrated,collaborative approach will serve as part of a drive to further enhance the patient experience through faster diagnosis and treatment,and improved outcomes.Patient care and collaboration have been signific

201、antly improved in Vienna,Austria,as part of a renewed IT service agreement with Philips that includes solutions that centralize data and deliver insights.The ICCA patient data management system,which integrates patient data from monitors,laboratory data and other sources,has led to significant impro

202、vement in workflows and patient care in anesthesia,intensive care and general patient care at General Hospital of Vienna(Allgemeines Krankenhaus der Stadt Wien).At Vienna Health Group(Wiener Gesundheitsverbund),Philips Cardiovascular Workspace,a vendor-neutral system implemented in the adult and ped

203、iatric departments,helped improve patient care and internal operations.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information18Connected C

204、are Enterprise Informatics Philips Radiology Operations Command Center(ROCC)Personal Health segmentOur Personal Health Business plays an important role in enabling healthy individual care routines with technology and solutions that support peoples long-term health and well-being.Through our Personal

205、 Health Business,we offer a broad range of solutions in various consumer price segments.Depending on the market,we offer an additional portfolio of locally relevant innovations and adjust our range to increase accessibility.We aim to drive profitable growth through a focus on innovation across three

206、 key areas:reaching more people through consumer-driven product and solutions innovation ensuring the highest quality of consumer experience from pre-purchase consideration through to purchase and unboxing,all the way to end-of-use recycling expanding our ecosystem through partnerships with leading

207、retailers and scaling new business models,such as try-and-buy and subscription servicesA notable aspect of our commercial strategy is driving direct-to-consumer relationships and sales through consumer communities and our online store.We are also leveraging connectivity to enable new business models

208、,and partnering with key players in the health ecosystem,such as insurance companies and healthcare professionals,to create more opportunities to support the health and well-being of consumers across the world.Through social media and digital innovation,we are engaging consumers in their health jour

209、ney in new and impactful ways.In Personal Health,improving lives also means caring for the planet,with a key focus on environmental sustainability.In 2024,we expanded our Philips Refurb Editions across select European markets to give products a second life,complete with the same two-year guarantee a

210、s new products.A flagship activation of this initiative took place during Black Friday in the Benelux region,where the team flipped thePonline storefront to prioritize Refurb Editions products,only offering new product supply after refurbished items sold out.This effort reflects Personal Healths com

211、mitment to driving a circular economy and exploring innovative ways to provide consumers with greater choices to live sustainably.We offer mobile solutions to support parents and parents-to-be on a more informed,connected,and healthier journey to parenthood.The Philips Avent Pregnancy+and Baby+apps

212、provide parents with supportive content through the critical first 1,000 days of their childs life.Pregnancy+features photo-realistic,interactive 3D fetal models and personalized daily content to enhance the pregnancy experience.It is the No.1 worldwide pregnancy app,with more than 6.5 million month

213、ly active users,available in 22 languages,and offering premium subscription options.In 2024,we took action to address the key challenges faced by the Personal Health Business Units,including the external context of a volatile macro environment,especially in China.The Personal Health strategy focused

214、 on driving innovation at the core;improving agility in responding to market,retail customer and consumer needs;and more integrated planning with its top customers and in-demand items.In China in particular,Personal Health is not a typical mass consumer business,as our products offer a more personal

215、ized experience for customers,and we are also impacted by cautious spending behavior.Consumer sentiment in China is unlikely to change in the near-term.We intend to address the challenging macro-economic environment by building on our brands that have a strong position with locally relevant accelera

216、tors and customer partnerships,and we aim to complement this effort by expanding our growth outside of China.The Personal Health segment consists of the following units.Personal Health To help people take greater control of their personal health and well-being we deliver sustainable,meaningful solut

217、ions that help them to take care of themselves and their families,for happier,healthier lives,today and tomorrow.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability s

218、tatement9 Further information19 Oral Healthcare Business Unit power toothbrushes for a range of price segments,from entry-level,battery-operated toothbrushes for a young audience to premium power toothbrushes connected to the Sonicare app with in-app coaching;brush heads,which are also available as

219、a subscription service;and products for interdental cleaning and for in-office and take-home teeth whitening.Mother and Child Care Business Unit products to support parents and babies in the first 1,000 days,including infant feeding(breast pumps,baby bottles and sterilizers),connected baby monitors,

220、and digital parental and womens health solutions(Pregnancy+and Baby+apps).Personal Care Business Unit grooming and beauty products ranging from entry-level to premium.The grooming portfolio includes shavers,OneBlade,groomers,trimmers and hair clippers,as well as premium solutions with SkinIQ technol

221、ogy,in-app coaching for a personalized shave,and blade subscriptions.The beauty portfolio includes devices to support skin care,hair care and hair removal,including Lumea premium intense pulsed light hair removal devices and solutions with the latest SenseIQ technology that sense and adapt for perso

222、nalized care;these are also available through subscription models.Personal HealthTotal sales by Business2024Personal Health1 100%1Of which Personal Care 54%,Oral Healthcare 34%,Mother and Child Care 12%The revenue model is mainly based on product sale at the point in time the products are delivered

223、to retailers and online platforms.We continue to increase revenue model diversity by expanding our business models,including direct-to-consumer,subscriptions,and try-and-buy offerings and services.The Personal Health Business experiences seasonality,with higher sales around key events and holidays.A

224、t year-end 2024,Personal Health employed 7,991 people worldwide.2024 highlightsFurther expanding the successful OneBlade product range,Philips launched OneBlade Intimate the first shaving product designed for everyone,to protect the most sensitive skin.Philips also launched its newest On-The-Go Comp

225、act Shaver in Greater China,designed to combine portability and ease of use without compromising quality.Highlighting the quality of the innovation,the On-The-Go shaver is accompanying the China Antarctic expedition team on their journey to the South Pole.Also in the Greater China market,Philips unv

226、eiled a series of new locally relevant innovations,which are designed to meet consumer needs across the Region,including the first medical-grade Philips Lumea 8000 Series IPL hair removal device with cooling technology,the limited edition Transformers-themed 5000,7000 and 9000 series shavers,and the

227、 new Sonicare 5300 power toothbrush.In North America,we launched the Philips Sonicare brands first at-home teeth whitening kit,a clinically proven solution developed by dentists,and debuted the new Philips One for Kids rechargeable toothbrush,helping children between 3 and 12 years old with healthie

228、r oral care routines.In Western Europe,Philips introduced its next-generation Sonicare technology in its new mid-range Sonicare Series 5000-7000,providing consumers with a superior,gentle and effective cleaning experience.The new range gives users a choice of features at different price points,encou

229、raging them to make the switch from a manual toothbrush to achieve improved oral healthcare results.The AI-powered Avent Premium Connected Baby Monitor which offers scientifically proven cry translation as well as SenseIQ technology to track sleep,breathing and movements to support parents and give

230、them peace of mind had its global debut.And,in an effort to support parents in North America,we partnered with March of Dimes on Mom&Baby Mobile Health Centers,bringing care to underserved communities,and It Starts with Mom,an educational platform providing families with pregnancy resources.Personal

231、 Health Mother and Child Care Philips Avent Premium Connected Baby MonitorContents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information20Segment

232、OtherIn Other we report on the items Innovation&Strategy,IP Royalties,Central costs,and other small items.At year-end 2024,18,459 people worldwide were working in these areas.Innovation&StrategyAt Philips,we have set up our innovation teams to be as close to our customers and consumers as possible.T

233、he majority(90%)of our Research&Development(R&D)resources are embedded in our Business Units,where innovation teams can directly hear customer and consumer needs and work closely with other stakeholders to turn innovations into actual products.Innovation at Philips is organized to encourage innovati

234、on anywhere along the value chain not just at the product ideation stage.The remaining R&D resources(10%)are part of our central Innovation&Strategy organization.Within I&S,innovation teams focus on breakthrough ideas that are industry-shifting,and can advance a core product to fulfill the needs of

235、a broad new customer segment.We do that from our four main innovation sites Eindhoven(the Netherlands),Cambridge(US),Bangalore(India)and Shanghai(China)and smaller innovation and research sites in the Regions.Our global footprint enables us to understand,anticipate and react to local markets and nee

236、ds.IP royaltiesPhilips Intellectual Property&Standards(IP&S)proactively pursues the creation of new intellectual property(IP)in close cooperation with Philips operating Businesses and Innovation&Strategy.IP&S is a leading industrial IP organization providing world-class IP solutions to Philips Busin

237、esses to support their growth,competitiveness and profitability.Royal Philips IP portfolio currently consists of approximately 50,500 patent rights,30,500 trademarks,150,000 design rights and 3,200 domain names.Philips filed 700 new patents in 2024,with a strong focus on the growth areas in health t

238、echnology services and solutions.Philips earns substantial annual income from license fees and royalties.Philips believes its business as a whole is not materially dependent on any particular third-party patent or license,or any particular group of third-party patents and licenses.Central costsPhili

239、ps is present in 71 countries globally and has its corporate headquarters in Amsterdam,the Netherlands.Our real estate locations are spread around the globe,with key manufacturing and R&D sites in Europe,the Americas and Asia.The project to move the Philips headquarters to a new location in Amsterda

240、m in 2025 progressed as planned.We recharge the directly attributable part of the Functional costs to the Businesses.The remaining part is accounted for as central costs,and includes costs related to the Executive Committee and Group Functions such as Strategy,Real Estate,Legal and Audit.Other small

241、 itemsOther small items refer to remaining items for intra-group services and legacy items relating to previously disposed businesses.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial stateme

242、nts8 Sustainability statement9 Further information212.2.2 Our geographic structureOur RegionsGeographically,our business is organized in three Regions:North America,Greater China and International Region(the latter consisting of Europe and Growth areas).Within our Regions,we further organize by Zone

243、s and Countries.The Regions primary accountability is to manage customer intimacy,build and maintain relationships,and cultivate an understanding of customer needs,as well as carry out(strategic)account management,service delivery,and indirect partner management.They are also accountable for governm

244、ent relations and for providing local infrastructure needed to support Philips presence in a country(license to operate).For financial reporting purposes,we report in four geographic areas based on similar economic characteristics:Western Europe,North America,Other mature geographies,and Growth geog

245、raphies.Western Europe,North America and Other mature geographies are collectively grouped as Mature geographies in reporting on sales.2024 highlights from our RegionsNorth AmericaIn the biggest healthcare market in the world,our North America team focuses on developing strategic relationships with

246、major health systems that provide care to hundreds of millions of people across the Region.Were working with customers to solve some of the biggest challenges in healthcare,including the crisis around clinician burnout and improving access to care in rural and underserved communities.Bon Secours Mer

247、cy Health,NYU Langone Health,Northwell Health and Nicklaus Childrens Hospital are among the customers using solutions from across our industry-leading portfolio in 2024 to bring better care to more people in the Region.Our work in 2024 built on our more than 50-year innovation relationship with the

248、US Veterans Administration(VA),which serves 16 million veterans and leads the largest integrated healthcare delivery network in the country.More than 9 millionveterans receive its healthcare services and almost one-thirdof them live in rural areas with limited access to care.Our focus with the VA ex

249、panded the largest tele-critical care network in the US and accelerated the adoption of digital pathology to speed cancer care.We also continued our longstanding support of healthcare provided by the Department of Defense,deploying the Rapid Analysis of Threat Exposure algorithm(RATE),an early detec

250、tor of pre-symptomatic infection,part of an effort to improve the readiness monitoring of active-duty military personnel.Philips brings innovative business models and partnerships to solve specific challenges for customers,including programs to improve access to maternal care in partnership with fed

251、eral and state government agencies and philanthropic organizations such as the March of Dimes.Philips North America is consistently recognized in third-party surveys as a great place to work.Greater ChinaIn Greater China Region,were committed to the strategy in China,for China,putting the focus on l

252、ocal innovation,manufacturing,services and partnership.This enables us to continue to deliver industry-leading innovations in our home and hospital portfolio.While demand from hospitals and consumers in China deteriorated in 2024 due to a challenging economic environment,China is a fundamentally att

253、ractive growth market for Philips with strong underlying demand.While in the long run China is expected to remain an important market and growth driver,we expect the level of sales in China to take time to recover.With this in mind,new leadership in the Region is putting emphasis on the strategy to

254、create value to the local healthcare system while also empowering consumers to manage their health and well-being with locally relevant solutions.In health systems,Philips advanced efforts in 2024 to deliver benefits to providers and patients,aligning with the national agenda of improving access and

255、 quality of care.With our latest innovations,we serve the needs identified by the Chinese government to further develop local hospitals and clinics.Among the offerings introduced in the China market:Spectral CT Plus,which provides physiology insights for precise diagnosis in cardiology and oncology,

256、and the MR Elition AI,which triples patient throughput through AI-powered workflow optimization.Leveraging our clinical insights and research capability in cardiology and neurology,we cemented partnerships with several hospitals including Beijing Fuwai(Chinas top cardiology hospital)and Zhangzhou Ji

257、ulongjiang Hospital(a top-tier private hospital)with cross-modality solutions.International In 2024,we continued to pursue our global vision while addressing the distinct local needs and circumstances of our diverse customer base across International Region.We put renewed emphasis on building sustai

258、nable partnerships as we develop value propositions that attract more partners whose capacity can help better serve our customers.These strategic partnerships drive value creation and efficiency,as well as enable us to expand our reach into previously untouched customer territories,ensuring we deliv

259、er better care for more people across our Region.For example,Philips signed a Memorandum of Understanding with Siloam Hospitals Group in Indonesia to advance AI capabilities and development in the healthcare sector in Indonesia.The strategic collaboration,in partnership with the Universitas Pelita H

260、arapan(UPH)Medical Sciences Group,will focus on capacity building,knowledge sharing,and implementing advanced AI solutions.Leveraging Philips AI innovations,the collaboration will help transform clinical care and digital health,enhance healthcare delivery and make the healthcare infrastructure more

261、sustainable.We are advancing our go-to-market strategy for health systems by identifying and seizing new opportunities,strengthening our competitive positions,and providing improved support for customers and patients.The Personal Health Business remains vital in empowering individuals to adopt healt

262、hier care routines,providing innovative technologies and solutions that promote long-term health.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Furthe

263、r information222.2.3 Supply chain and procurementPhilips runs an integrated supply chain tailored to customer needs,which encompasses supplier selection and management through procurement,manufacturing across all the industrial sites,logistics and warehousing operations,and customer installation,as

264、well as demand/supply orchestration.Like the rest of the industry,we remain exposed to continued geopolitical tensions around the world,as well as(sudden)changes in tariffs or other trade measures.Labor costs and availability remained a concern due to continued inflation in 2024 and scarcity of a sk

265、illed workforce.On the other hand,overall macro-economics showed improved availability of materials.As a result,the cost of key raw materials and energy showed a downward trend compared with 2023.The overall growth rate of inflation is slowing down.Driving end-to-end supply chain reliability and agi

266、lityThe supply chain plays an important role in improving our performance and delivering to our customers and consumers as promised.As part of our three-year plan,we initiated multiple interventions and planned longer-term programs to improve our execution capabilities and become more resilient in n

267、avigating volatility.To further increase our responsiveness and our reliability in delivery,we continue to build a robust and efficient,more regionalized supply chain ecosystem,prioritizing service level and customer experience.In this ecosystem we carefully balance our manufacturing capabilities in

268、-house,focusing on our strengths while leveraging suppliers specialized capabilities that support Philips ambitions.When selecting and evaluating supplier partners,we consider not only business metrics such as quality,on-time delivery performance and cost,but also strategic fit and environmental,soc

269、ial and governance factors.We use supplier classification models to identify critical suppliers,including those supplying materials,components and services that could influence the safety and performance of our products and solutions.The Philips Supplier Quality Manual outlines Philips quality,regul

270、atory,product,process and customer requirements.The standards outlined in this manual underpin agreements between suppliers and Philips,and guide compliance with Philips quality standards.In 2024,we continued with our technology re-design,such as the redesign of printed circuit board assemblies,and

271、dual sourcing efforts to further increase reliability of our supply chain,including safeguarding material flows and de-risking in a sustainable manner.We aim to maintain close relationships with our suppliers and conduct an ongoing dialogue with respect to our forecast.Philips GroupSupplier spend an

272、alysis per geographic area in%2024Western Europe 33%North America 33%Other mature geographies 5%Mature geographies 71%Growth geographies 29%Philips Group 100%Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 C

273、ompany financial statements8 Sustainability statement9 Further information233 Financial performanceGroup sales18.0 bn EUR in 2024(1%increase on a comparable basis*)2023 18.2 billion EURIncome from operations 529 m EUR2023 (115)million EUR Adjusted EBITA*2,077 m EUR(12%of sales)2023 1,921 million EUR

274、(11%of sales)Operating cash flow 1.6 bn EUR2023 2.1 billion EURContents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information243.1 Performance sum

275、maryThe year 2024*Sales amounted to EUR 18.0 billion,a decrease of 1%on a nominal basis.On a comparable basis*,sales increased 1%,on the back of solid growth in 2023.Growth in Mature Geographies was partly offset by the decline in China.Comparable sales*showed 1%growth in the Diagnosis&Treatment seg

276、ment,2%growth in the Connected Care segment,and 1%decline in the Personal Health segment due to the decline in China.Income from operations improved to EUR 529 million,mainly driven by higher gross margin and lower Respironics related items,partially offset by higher impairment charges.Net income am

277、ounted to a loss of EUR 698 million,mainly due to Respironics litigation provision charges of EUR 984 million,partly offset by Respironics insurance income of EUR 538 million,and tax expenses including deferred tax asset derecognition of EUR 941 million,compared to a loss of EUR 463 million in 2023.

278、Adjusted EBITA*amounted to EUR 2,077 million,or 11.5%of sales,compared to 10.6%of sales in 2023.Connected Care and Personal Health segments showed an increase in Adjusted EBITA*margin,mainly driven by operational improvements and productivity actions,partly offset by cost inflation.Diagnosis&Treatme

279、nt segment remained flat year over year.Net cash flows from operating activities amounted to EUR 1,569 million;free cash flow*amounted to EUR 906 million.Philips cancelled approximately 4.4 million shares acquired under its 2021 share repurchase program for capital reduction purposes.Philips GroupKe

280、y data in millions of EUR unless otherwise stated20232024Sales18,16918,021Nominal sales growth 2%(1%)Comparable sales growth 6%1%Impairment of goodwill(8)Income from operations(115)529as a%of sales(1%)3%Financial expenses,net(314)(282)Investments in associates,net of income taxes(98)(124)Income tax(

281、expense)benefit73(963)Income from continuing operations(454)(840)Discontinued operations,net of income taxes(10)142Net income(463)(698)Adjusted EBITA1,9212,077as a%of sales 10.6%11.5%Income from continuing operations attributable to shareholders per common share(in EUR)-diluted(0.48)(0.90)Adjusted i

282、ncome from continuing operations attributable to shareholders per common share(in EUR)-diluted1.211.391Non-IFRS financial measure.For the definition and reconciliation of the most directly comparable IFRS measure,refer to Reconciliation of non-IFRS information.2Shareholders in this table refers to s

283、hareholders of Koninklijke Philips N.V.Per share calculations have been adjusted retrospectively for all periods presented to reflect the issuance of shares for the share dividend in respect of 2023.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervi

284、sory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information25*Non-IFRS financial measure.For the definition and reconciliation of the most directly comparable IFRS measure,refer to Reconciliation of non-IFRS information.“In 2024,we expanded our

285、 adjusted EBITA margin and delivered on our cash targets within a challenging growth environment.This was driven by our industry-leading innovations,as well as progress on our execution priorities and productivity measures.”Charlotte Hanneman CFO Royal Philips3.1.1 Factors impacting performanceThe f

286、actors below are believed to have had a significant impact on Philips performance during the year.Macro-economic landscapeIn 2024,global economic growth is estimated to have improved marginally compared to 2023,but the economic situation in China weighed down growth across 2024.Global real GDP is es

287、timated to have grown by 3.2%in 2024,compared with 2.8%in 2023.Oxford Economics expects world real GDP growth of 3.3%in 2025 excluding any impact of tariffs.Simplified operating modelOn January 30,2023,Philips announced its plan to create value with sustainable impact,which is based on focused organ

288、ic growth to deliver patient-and people-driven innovation at scale,with improved execution as a key value driver,prioritizing patient safety and quality,supply chain reliability and a simplified operating model.The introduction of a simplified operating model to increase agility and structurally low

289、er the cost base by giving end-to-end accountability to the segments has continued to contribute positively to the results of operations.Workforce reductionBy year-end 2024 Philips completed its previously announced plans to reduce its workforce by 10,000 roles globally by 2025.These reductions were

290、 focused on Corporate and Functions optimization and non-core activities.Workforce-related restructuring charges were EUR 106 million in 2024 and EUR 196 million in 2023.Supply chain resilienceLimited availability and delays in the supply of certain components and products internationally partly a c

291、onsequence of the COVID pandemic and the Russia-Ukraine war impacted the companys results in recent years.These supply chain constraints resulted in an increase in overall working capital,in particular inventories.In 2023,following significant actions to increase supply chain resilience and mitigate

292、 the impact of disruptions,our sales benefited from improved material availability and resolved shortages in components.In 2024 the company stepped up efforts to make its supply chain more agile in order to increase speed of execution.In addition,the company is increasingly sourcing products in the

293、market in which they are being sold to make the supply chain more agile,which we believe is an important part of the companys ability to cater to the demands in the healthcare market and minimize the impact of potential tariffs and retaliatory trade measures.Geopolitical environmentThe Russia-Ukrain

294、e war continues to put pressure on the global commodity landscape and supply chains,and contribute to higher levels of inflation.Philips operations in Russia and Ukraine on a combined basis represented less than 1%of group sales in both 2023 and 2024.Having substantially reduced its operations in Ru

295、ssia in 2022,the remaining activities were focused on the delivery of medical systems,devices,and spare parts to healthcare providers as well as delivery of a limited range of mother and baby products.The ongoing situation in the Middle East further increases economic and political uncertainty.Phili

296、ps is present in Israel with several subsidiaries,mainly in Diagnosis&Treatment and Connected Care,that are primarily involved in manufacturing and research and development activities.3.1.2 OutlookPhilips remains focused on successfully executing its three-year plan to drive operational improvements

297、 and create value with sustainable impact,within a challenging macro environment.For 2025,Philips expects:1%-3%comparable sales growth,including a mid-to high-single-digit decline in China Adjusted EBITA margin increasing 30-80 bps to 11.8%-12.3%Free cash flow before payment of the USD 1.1 billion c

298、ash-out relating to the US medical monitoring and personal injury settlements will be at the lower end of the range of EUR 1.4 billion to EUR 1.6 billion.Net of this cash-out,free cash flow will be EUR 0.4 billion to EUR 0.6 billion.We anticipate comparable sales growth to be back-end-loaded in the

299、year,with a mid-single-digit decline in Q1 mainly due to lower demand in China and royalties phasing,with correspondingly lower Adjusted EBITA margin.The outlook includes the impact of the recently announced US-China tariffs.It excludes ongoing Philips Respironics-related legal proceedings,including

300、 the investigation by the US Department of Justice.*Non-IFRS financial measure.For the definition and reconciliation of the most directly comparable IFRS measure,refer to Reconciliation of non-IFRS information.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governan

301、ce5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information263.2 Results of operationsSalesPhilips GroupSales in millions of EUR unless otherwise stated20232024SalesNominal sales growthComparable sales growthSalesNominal sales growth

302、Comparable sales growthDiagnosis&Treatment8,825 6%11%8,790 0%1%Connected Care5,138(2%)1%5,134 0%2%Personal Health3,602(1%)3%3,486(3%)(1%)Other604611Philips Group18,169 2%6%18,021(1%)1%1Non-IFRS financial measure.For the definition and reconciliation of the most directly comparable IFRS measure,refer

303、 to Reconciliation of non-IFRS information.Group sales in 2024 amounted to EUR 18,021 million,1%lower than in 2023 on a nominal basis.Considering a 2%negative currency effect and consolidation impact,comparable sales growth*was 1%The negative currency effect was mainly due to depreciation of currenc

304、ies against the euro,and affected all segments.In addition,Group sales were negatively impacted by China,mainly as a result of adverse market developments.Comparable order intake increased to 1%in 2024,compared to a 6%decline in 2023.Comparable order intake is not a financial measure,but is presente

305、d when discussing the Philips Groups performance.For further details,refer to the Other Key Performance indicators section.Diagnosis&TreatmentIn 2024,sales amounted to EUR 8,790 million,in line with the nominal sales in 2023.Considering a 2%negative currency effect and consolidation impact,comparabl

306、e sales*increased by 1%.This was driven by mid-single-digit growth in Image-Guided Therapy,partly offset by a decline in Precision Diagnosis mainly due to the extended hospital procurement cycles as a result of the ongoing industry wide anti-corruption campaign in China.Connected CareIn 2024,sales a

307、mounted to EUR 5,134 million,in line with the nominal sales in 2023.Considering a 2%negative currency effect and consolidation impact,comparable sales*increased by 2%.This growth was mainly driven by mid-single-digit growth in Enterprise Informatics,double-digit growth in Sleep&Respiratory Care,part

308、ly offset by a low-single-digit decline in Monitoring on the back of double-digit growth in 2023.Personal HealthIn 2024,sales amounted to EUR 3,486 million,3%lower than in 2023 on a nominal basis.Considering a 2%negative currency effect and consolidation impact,growth in comparable sales was(1)%.Thi

309、s was mainly due to deteriorated demand in China due to cautious spending behavior,which offset growth in other geographies.OtherIn 2024,sales amounted to EUR 611 million,compared to EUR 604 million in 2023,mainly driven by higher royalty income.Sales by geographic areaPhilips GroupSales by geograph

310、ic area in millions of EUR unless otherwise stated20232024SalesNominal sales growthComparable sales growthSalesNominal sales growthComparable sales growthWestern Europe3,819 6%7%3,978 4%5%North America7,562 0%3%7,655 1%2%Other mature geographies1,626(1%)7%1,526(6%)(1%)Mature geographies13,007 1%4%13

311、,159 1%2%Growth geographies5,162 3%10%4,863(6%)(2%)Philips Group18,169 2%6%18,021(1%)1%1Non-IFRS financial measure.For the definition and reconciliation of the most directly comparable IFRS measure,refer to Reconciliation of non-IFRS information.Sales in Western Europe increased year-on-year on a no

312、minal and comparable basis*with double-digit growth in the Connected Care segment and low-single-digit growth in the Diagnosis&Treatment and the Personal Health segments.Sales in North America increased year-on-year on a nominal and comparable basis*with mid-single-digit growth in the Diagnosis&Trea

313、tment segment and low-single-digit growth in Connected Care segment,which was partly offset by a low-single-digit decline in the Personal Health segment.Sales in Other mature geographies decreased year-on-year,mainly due to lower sales in segment Other which was partly offset by low-single-digit com

314、parable sales growth*in the Diagnosis&Treatment and the Personal Health segments.Connected Care segment sales growth in Other mature geographies was flat.In Growth geographies in 2024 comparable sales growth*was negative in all segments mainly due to lower demand from consumers and health systems in

315、 China.Contents1 Our Management2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information27Cost of salesPhilips GroupCost of sales components in millions of EUR unles

316、s otherwise stated2023As a%of sales2024As a%of salesCosts of materials used4,626 25%4,213 23%Salaries and wages2,381 13%2,313 13%Depreciation and amortization461 3%609 3%Other manufacturing costs3,252 18%3,113 17%Cost of sales10,721 59%10,248 57%Philips cost of sales decreased by EUR 473 million to

317、EUR 10,248 million in 2024 compared to EUR 10,721 million in 2023,and decreased as a percentage of sales,mainly due to decreased Cost of materials used by EUR 413 million in 2024,which was driven by productivity actions,lower restructuring,acquisition-related and other items and a favorable foreign

318、currency impact.Other key factors influencing cost of sales were as follows:Salaries and wages decreased by EUR 68 million,mainly driven by productivity actions,lower restructuring charges and a favorable foreign currency impact,partly offset by cost inflation;Depreciation and amortization increased

319、 by EUR 148 million in 2024,mainly due to an intangible asset impairment charge;Other manufacturing costs decreased by EUR 139 million in 2024,driven by productivity actions and a favorable foreign currency impact,partly offset by cost inflation.Gross marginIn 2024,Philips gross margin was EUR 7,773

320、 million,or 43%of sales,compared to EUR 7,448 million,or 41%of sales,in 2023.The gross margin increased by EUR 325 million year-on-year,driven by operational improvements,productivity measures and lower restructuring,acquisition-related and other items,and a favorable foreign currency impact,partly

321、offset by cost inflation.Selling expensesSelling expenses amounted to EUR 4,486 million,or 25%of sales,in 2024,compared to EUR 4,524 million,or 25%of sales,in 2023.Year-on-year selling expenses decreased by EUR 38 million,mainly driven by productivity actions,lower restructuring,acquisition-related

322、and other items and a favorable foreign currency impact,partly offset by cost inflation.General and administrative expensesGeneral and administrative expenses amounted to EUR 582 million,or 3%of sales,in 2024,compared to EUR 608 million,or 3%of sales,in 2023.Expenditure decreased year-on-year by EUR

323、 26 million,mainly driven by productivity actions,lower restructuring,acquisition-related and other items and a favorable foreign currency impact,partly offset by cost inflation.Research and development expensesResearch and development costs were EUR 1,747 million,or 10%of sales,in 2024,compared to

324、EUR 1,890 million,or 10%of sales,in 2023.The costs decreased by EUR 143 million year-on-year,mainly driven by productivity actions,lower restructuring,acquisition-related and other charges and a favorable foreign currency impact,partly offset by cost inflation.Philips GroupResearch and development e

325、xpenses in millions of EUR unless otherwise stated20232024Diagnosis&Treatment828899Connected Care663599Personal Health197190Other20259Philips Group1,8901,747As a%of sales 10%10%Restructuring,acquisition-related charges and other itemsRestructuring,acquisition-related charges and other items were EUR

326、 1,156 million in 2024,compared to EUR 1,739 million in 2023.Respironics related charges were EUR 691 million in 2024 compared to EUR 1,162 million in 2023.2024 includes Respironics litigation provision charges of EUR 984 million,partly offset by Respironics insurance income of EUR 538 million.Phili

327、ps GroupRestructuring charges in millions of EUR20232024Restructuring charges per segment:Diagnosis&Treatment73122Connected Care6429Personal Health925Other13991Philips Group285268Cost breakdown of restructuring charges:Provision for personnel lay-off costs196106Restructuring-related asset impairment

328、56134Other restructuring-related costs3329Philips Group285268In 2024,Philips continued general productivity actions aimed at simplifying the organization to streamline ways of working and reduce operating expenses.This included the further reduction of 2,000 roles,thereby completing the planned redu

329、ction of 10,000 roles globally across the organization by 2025 ahead of schedule.In addition,other restructuring projects were executed during the year,of which the most significant impacted the segments Other and Connected Care and mainly took place in the US and Netherlands.Contents1 Our Managemen

330、t2Strategy3Financial performance4 Environmental,Social and Governance5 Supervisory Board6 Group financial statements7 Company financial statements8 Sustainability statement9 Further information28For further information on restructuring,refer to Provisions.Philips GroupAcquisition-related charges in

331、millions of EUR20232024Diagnosis&Treatment4534Connected Care5124Philips Group9658In 2024,acquisition-related charges in the Diagnosis&Treatment segment mainly related to the acquisition of Spectranetics,due to post-acquisition integration costs.The Connected Care segment recorded charges mainly rela

332、ted to the acquisition of BioTelemetry,due to post-acquisition integration costs.In 2023,acquisition-related charges in the Diagnosis&Treatment segment mainly related to the acquisition of Spectranetics,and in the Connected Care segment mainly related to the acquisition of BioTelemetry and Capsule T

333、echnologies,due to post-acquisition integration costs.Philips GroupOther items in millions of EUR20232024Diagnosis&Treatment9245Connected Care1,275765Personal Health22Other(32)20Philips Group1,358830Consisting of:Respironics litigation provision575984Respironics insurance income(538)Respironics consent decree charges363113Respironics field-action running costs224133Respironics-related charges 1,16