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Welcome to the Royal Philips First Quarter 2022 Results Conference Call on Monday, April 25, 2022. During the call hosted by Mr. Franz Van Outen, CEO, and Mr. Abhijit Bhattacharya, CFO, all participants will be in a listen-only mode. After the introduction, there will be an opportunity to ask questions. If any participant has difficulty hearing the conference at any time, Please press the star followed by the zero on your telephone for operator assistance. Please note that this call will be recorded and replay will be available on the Investor Relations website of Roy Philips. I will now hand the conference over to Mr. Leandro Massoni, Head of Investor Relations. Please go ahead, sir.

Hi, everyone. Welcome to the Philips First Quarter 2022 Results Call. Our CEO, Frans Van Houten, and our CFO, Abhijit Bhattacharya, will take you through our strategic and financial highlights for the period, and after that, we will take your questions. Our press release, slide deck, as well as frequently asked questions on the Respironics recall were published at 7 a.m. CET this morning on our investor relations website. The full transcript of this call will also be made available today on the website. As mentioned in the press release, adjusted EBITDA is defined as income from operations, Excluding Amortization of Acquired Intangible Assets, Impairment of Goodwill and Other Intangible Assets, Restructuring Charges, Acquisition-Related Costs, and Significant One-Off Items. Comparable growth for sales and orders are adjusted for currency and portfolio changes. With that, I'll turn the call to Franz.

Thanks, Leandro, and thanks, everyone, for joining us this morning. There are three factors shaping our Q1 results and outlook today. Number one, it's the continued strong delivery of our strategy and operational performance leading to an increased order book despite the very challenging backdrop. Two, are obviously the shortages and dislocation in the supply chain, geopolitical challenges and increasing inflationary environment. And three, the huge undertaking in Philips Respironics to do everything to deliver a solution to patients and caregivers affected as fast as we can. Patient well-being remains at the heart of everything that we do at Philips. Now let me unpack these three factors. Our strategy and portfolio continue to resonate very well with customers and consumers, and we again experience solid demand for our products and solutions. Order intake grew 5% in the quarter for the group, or 8% excluding the sleep and respiratory care business, driven by strengths across the diagnosis and treatment businesses, hospital patient monitoring, and connected care informatics, to just name a few. This further builds on the good order intake growth in recent quarters, resulting in an all-time high equipment order book for Philips, in fact more than 30% higher than a year ago, as shown on page 27 of our presentation. During the first quarter, we also signed 12 more long-term strategic partnerships across the world, demonstrating the trust hospital leaders have in our ability to help them enhance health outcomes, lower the cost of care, improve patient and staff experience. Also in China, we signed an agreement with Shanghai East Hospital to provide its hospitals in the Shandong and Hainan provinces With a broad range of advanced imaging and critical care solutions. Thanks to the hard work of our people, we recorded sales of €3.9 billion in the quarter in these challenging circumstances, with a 4% comparable sales decline, which exceeded our prior guidance of a high single-digit decline. Adjusted EBITDA was 6.2% of sales. I am also pleased with the 8% comparable sales growth for our personal health businesses, which demonstrates strong consumer demand for our propositions in this segment. We continue to face severe supply chain disruptions across our businesses, primarily related to the shortage of electronic components, increased shipping times, and now again COVID affecting suppliers. We expect these headwinds to continue in the coming quarters. But we are taking decisive actions with daily management to mitigate the impact. We had already expanded the long-term orders with our suppliers and increased spot buying. Our R&D teams are adjusting product designs to diversify sourcing of components. Moreover, we are calling on suppliers and governments at senior levels to prioritize healthcare products in the supply of components. While we see some positive effects of these actions, Visibility and component availability remains poor due to lack of visibility from suppliers, which makes difficult to forecast accurately. We are concerned about the lockdowns in China, which pose additional uncertainty on the outlook for the year, both in terms of domestic sales as well as for the global supply chain. The Russia-Ukraine war, which we strongly condemn, has so far a small negative effect on our overall revenues for the year, and we continue to monitor the situation closely. The current macroeconomic, geopolitical, and supply chain environment also leads to mounting inflationary pressure, so we are implementing price increases and taking additional cost measures to mitigate these headwinds. Now let me speak about the Respironics recall. As I said, we are deeply committed to supporting the community of patients who rely on our sleep and respiratory care solutions, and the physicians and customers who are dedicated to meeting patient needs. The repair and replacement program is underway globally, and we have produced more than 2.2 million repair kits and replacement devices to date. We have increased our weekly production output more than threefold over recent months and are accelerating further. Despite the global supply chain challenges. We recorded a 65 million increase in the field action provision in the quarter, which is mainly related to a higher expected volume of devices eligible for remediation and higher communication costs. Since there have been increases over the last two quarters, it is important to explain how the device registration process works. For most markets outside of the United States, the equipment is owned by our customers, the durable medical equipment providers, and hence we have fairly accurate view of the quantities to be remediated in their installed base. In the United States, after an initial rental period, ownership of CPAP devices transfers to the patient. As a result, unless the patient registers the units, it's very challenging to make an accurate estimation. It is for this reason that we have used a regression model, which looks at the existing pattern of weekly patient registrations to project the total number of units that will likely need to be remediated. As you can see from the chart on page 33 of our presentation, around mid-February, when there was extensive communication around the recall, there was an increase in the number of daily registrations, which has subsequently reduced. This increase in registrations led us to revise the U.S. regression model based on which we now anticipate an additional 300,000 units which will need to be remediated. Given the increased number of devices, we now expect to complete over 90% of the production and shipment to customers in 2022. Additionally, a further 100 million provision was recorded for potentially Higher cost of execution, such as inflationary pressures, and to ensure the speed of the program in a volatile environment as we strive to get a solution to patients as fast as possible. I would like to reiterate that we have a strong program management in place to ensure the field action is executed with speed. As I explained last time, we have a strong team working under the leadership of Roy Jakobs, We have strengthened management responsibility and oversight with organizational changes made in the sleep and respiratory care as well as in the quality and regulatory affair teams throughout 2021. These teams are laser focused on resolving this legacy issue whilst ensuring airtight procedures are in place for the future. We have also bolstered staffing and expertise around post-market surveillance Medical Affairs, Biocompatibility, and Toxicology within Philips. As you know, Philips Respironics is a defendant in several class action lawsuits and individual personal injury claims. As the litigation is still in its early stages, it is too early to draw any conclusions on the ultimate outcomes. Ultimately, the science will be very important. And as you know, we are conducting a comprehensive test program to characterize the potential risks associated with the use of the devices. We plan to provide an update on testing in the second quarter. We also reference the Canadian study, which should be reassuring for patients as it does not show any correlation between the occurrence of cancer and the use of respironics devices based on an epidemiological study amongst almost 7,000 users. Building on the foundation of work already done and the material quality improvements already made over recent years, we are using this pivotal moment to reinforce the focus on patient safety across the company and to cross-check learnings from the sleep recall where relevant across the enterprise. We have also further stepped up scrutiny and have re-looked at past severe incidents and are reviewing all products and complaints which has not led to the discovery of additional significant quality issues over the ones already announced earlier. Last quarter, I mentioned that we recorded the provision in relation to two voluntary recalls in smaller business lines in the Connected Care portfolio with a well-defined scope. Both field actions are under execution in alignment with customers and regulators globally since earlier in the year. Importantly, We continue to engage and work closely with regulators globally, including the FDA, to clarify and follow up on the inspectional findings and requests in the Form 483. Philips Respironics and certain Philips subsidiaries in the United States recently received a subpoena from the U.S. Department of Justice to provide information related to the events leading to the Respironics recall. Receiving a request for information under these circumstances is not out of the ordinary. At this time, the subpoena is a request for information focused on Philips Respironics to support their investigation, and we are not aware of any specific allegations. Respironics and other US subsidiaries are fully cooperating. At this point in time, there is no further information on this subject. As Leandro mentioned, we have published FAQs on the recall to provide details and clarification on the progress. You will also find information on the topic on our presentation and investor relations website. There are some areas, particularly related to litigation, where we are not able to provide further details at this time. We will share information in a transparent and timely manner as the situation evolves. Now I would like to provide some color on how we are supporting the needs of today's hospital leaders across the globe as they plan for the future. In the first quarter, we expanded our leading ultrasound portfolio with advanced hemodynamic measurement capabilities on our handheld ultrasound Lumify, enabling clinicians to quantify blood flow in a wide range of point-of-care applications, including cardiology, obstetrics, and gynecology. During the first quarter, we enjoyed strong growth in our enterprise diagnostic informatics portfolio. Next to winning several customers for our enterprise imaging suite of solutions, we also entered into several partnerships with healthcare providers, among which in the UK and Germany, to deliver our vendor-neutral radiology operations command center, which enables remote collaboration between technologists, radiologists, and imaging operation teams across multiple sites, thereby helping to increase productivity and expand access to, for example, MR and CT-based diagnosis. Our MR business delivered strong double-digit order intake growth once again in the quarter and continued to deliver market share gains. In fact, our team installed more than 500 helium-free Ingenia Ambition MRI Systems to date, highlighting the success of our unique portfolio. In Image Guided Therapy, we are successfully expanding into interventional oncology with the installation of our lung cancer diagnosis and treatment solution called LungSuite in Belgium, France, Israel, and in the UK. Based on Philips Azurion, this solution enhances the accuracy of biopsy procedures and provides a therapy option to immediately treat early-state lung cancer patients. We continue to see strong traction for our image-guided therapy suite of solutions, which delivers interventional procedure speed and efficacy. We see strong growth of our portfolio of smart devices. For example, OmniWire, which is the world's first solid core pressure wire, which combines a workhorse design With IFR proven outcomes and IFR co-registration compatibility, making it easy to use physiology throughout the case. OmniWire is a game changer, and we see 20-30% uplift in our sales volumes in accounts that are already adopting this innovation. In personal health, we continue to invest in new products, and completed the global introduction of the new Philips Shaver S9000 with Skin IQ, which is driving accelerated sales growth for the category. Moreover, our oral healthcare business recorded strong double-digit growth in the quarter, with very strong performance in North America and China. This is a result of the successful refresh of our entry range and premium range electric toothbrushes, as well as the recent launch of innovative interdental cleaning devices. To round off, looking ahead, the strong customer demand and order book coupled with our first quarter sales performance support our range of 3-5% comparable sales growth and 40-90 basis points adjusted EBITDA margin improvement for the year as provided in January. At the same time, it is important that we recognize the increasing risk related to the COVID-19 situation The Russia-Ukraine War, Supply Chain Challenges, and Inflationary Pressures, which may potentially impact our ability to convert our strong order book to sales and achieve our margin target if conditions deteriorate further. Our teams, however, are fully focused on everyday execution, delivering on the customer demand and strong order book, and are addressing the supply chain risks. Moreover, we are implementing additional cost measures as well as price increases to mitigate the inflationary headwinds. We will, of course, provide further color or updates as appropriate as the year progresses. Our journey to leadership in health technology continues, and I remain confident about our potential to grow and create value. Our customers tell us we are very relevant to them and that we have a stronger than ever portfolio. We are fully focused on execution and operational excellence to manage the near-term headwinds that we are facing and to unlock higher growth and margin in the medium term. As I mentioned before, we plan to provide more color on our medium-term performance roadmap in the summer. Over to you, Abhijit.