Koninklijke Ahold Del Ord

Good morning everyone and thank you for joining us. Before we start, a quick update on our investor relations team. As you may have seen in our announcement earlier today, Doreen Danu is taking over as our head of investor relations. Many of you will already know Doreen well and his experience and strong relationships across our investor community will ensure continuity and an open, constructive dialogue. Durga Doraisamy is leaving Philips, and we thank her for her contribution and wish her all the best for the future. With that, Roy, over to you.

Good morning, everyone. Let me start with an overview of our Q3 performance. We delivered an excellent order intake growth of 8%, driven by sustained customer demand and further traction from our recently launched innovations, supporting near and midterm sales delivery. Comparable sales grew approximately 3%, driven by strength in personal health and connected care. Diagnosis and treatment was broadly flat, reflecting the phasing of certain ultrasound shipments and lower sales in China, as communicated in our Q2 release. Our innovations and productivity measures drove significant margin expansion across all business segments. Adjusted EBITDA margin increased by 70 basis points to 13%, ahead of our expectations. Free cash flow was a strong inflow of 384 million euros. We continue to make progress on Respironics-related legal proceedings. The Respironics Agreement in principle with the US Department of Justice marks an important step in resolving the consequences of the sleep and respiratory care recall. As a result, Philips recorded a provision of 288 million euros. Our year-to-date performance keeps us well on track for the full year. Order intake is up 4%, comparable sales growth is within our full year range at 3.5%, and underlying margins have expanded by 30 basis points despite inflation and tariffs. This reinforces our confidence in delivering the first year of our plan and in the medium-term trajectory we outlined at Capital Markets Day. We reiterate our full-year outlook for comparable sales growth adjusted EBITDA margin and free cash flow. Let me expand on our orders. Equipment order intake grew 8%, building on an 8% increase in the prior year quarter, driven by very strong performance in diagnosis treatment and growth across all regions. Our equipment order book has increased both sequentially and year on year, providing good visibility in future sales, including the near term. Turning first to diagnosis and treatment, order intake growth approached 20%, with both image-guided therapy and precision diagnosis delivering double-digit order growth, supported by broad-based growth across modalities and regions. In image-guided therapy, this double-digit growth came on top of an already solid comparable. North America was particularly strong, as health systems consolidate purchasing decisions remain primarily driven by clinical differentiation, productivity gains, and long-term strategic value rather than price alone. This is where an open, integrated, interventional platform combining systems, devices, software, and AI across the clinical workflow gives us a distinct competitive advantage and sets the industry standard while helping customers to drive productivity and generate revenue reliably over the long term. We secured vendor of choice positions at major US health systems where competitors have established relationships for more than a decade, breaking through long-standing barriers to entry. This opens up significant new opportunities to capture market share by dislodging incumbents and expanding our install base. Within precision diagnosis, the innovation pipeline we presented at Capital Markets Day continues to gain commercial traction, contributing to a very strong Double-digit order intake growth in the quarter. Importantly, we have reached a turning point in rebuilding the precision diagnosis order book, which has now expanded for three consecutive quarters. Strong customer wins and sustained order momentum as we exit in Q3 reinforce our confidence in the growth trajectory of this business. Looking at some of the key highlights from the quarter, we're particularly pleased with the strongly increasing customer demand for our CT portfolio. In the premium segment, we continue to scale our industry-leading spectral CT portfolio, including CT7500 and AI-enabled Farida, building on a foundation of over 1,250 clinical publications, providing strong clinical evidence for use of spectral technology. The order book for these spectral CT platforms grew double-digit year on year, with Farida becoming an increasingly meaningful contributor. In the performance segment, Our AI-enabled productivity workhorse CT5300 is also gaining traction, with its order book nearly doubling year on year. We see opportunities to build on this momentum with existing customers, but also to reach new segments, including private and outpatient imaging centers. In MR, our helium-free blue seal systems delivered strong order growth in the quarter. Philips continues to lead the industry in its transition to helium-free MR. Around 70% of our MR systems shipped year-to-date were helium-free. And subject to regulatory approvals, we expect Blue Seal Horizon, the industry's first 3T helium-free MR platform, to begin contributing to taking order intake from 2027 onwards. In ultrasound, demand for Epic CVX remains strong in cardiovascular imaging, and we are extending our cardiovascular excellence into other clinical settings. Flash is gaining traction in point-of-care ultrasound, and in general imaging, Ulturion recently received FDA clearance and began securing its first orders in Q3. In connected care, order intake declined mid-single-digit in Q3, against a particularly high prior-year comparison of more than 20% last year. Customer engagement remained very strong. as we continue to win major competitive deals by dislodging incumbents, reflected in our strong monitoring order book. In monitoring, the larger agreements that shifted from Q2 were booked as expected. Longer negotiation and contracting cycles for some major enterprise-wide standardization agreements resulted in several order orders shifting into Q4 as well. In the quarter, we signed several long-term enterprise monitoring as a service agreements, including one with Avera Health in the US, supporting standardized patient monitoring across 24 hospitals. In enterprise informatics, Ontario Health selected the Philips Enterprise Imaging Vendor Neutral Archive to modernize province-wide imaging infrastructure, supporting the sharing of more than 20 million imaging studies annually across more than 150 hospitals and 50 imaging clinics. Turning to personal health. We delivered another quarter of broad-based growth across businesses and regions, resulting in a strong 8% comparable sales growth. We continue to scale our proven growth model across core platforms such as Sonicare, High End Shaving, OneBlade, Lumea IPL, and Avent. Our category leadership, combined with innovation, premiumization, and strong commercial execution, is driving consumer demand. helping us to secure more shelf space with key retail partners and expanding distribution. This momentum is reflected in sustained market share gains and strong sellout trends across all businesses, alongside category growth that we are driving for key retail partners. As we continue to innovate, we support our launches with investment in customer activation and consumer awareness to sustain this momentum and build long-term demand. Innovation continues to strengthen our differentiation across the portfolio. In image guided therapy, we're investing 50 million euros in AI, robotics, and advanced imaging in the Netherlands, alongside over 100 million from the Dutch government and a further 150 million euros in private financing. In the US, an ARPA-H award up to $34 million will support AI-enabled robotic stroke care on the Azurian platform. In MR, Together with Imricor, we introduced the first commercially available cardiac interventional MR lab solution, enabling radiation-free, MR-guided cardiac interventions. And in personal health, we launched the Lumea 9900 Pro, the first at-home IPL device with real-time audio feedback and motion guidance, which received special mention on Time's 2026 Best Inventions list. These examples demonstrate how we are combining AI, clinical leadership, and differentiated technologies to extend our leadership positions and create new growth opportunities across the portfolio. A disciplined execution starts with patient safety and quality our highest priority. Strengthening our quality systems and embedding a patient safety first culture is a multi-year journey, and we continue to make progress. We continue to improve the timelines in corrective and preventive actions and on-time medical device reporting. Our focus remains on taking appropriate actions to further strengthen end-to-end quality and regulatory discipline. On supply chain, we continue to strengthen the reliability, resilience and efficiency of our end-to-end supply chain. Despite continued geopolitical uncertainty and increasing demand for electronic components, including from AI infrastructure, service levels improved further year on year. helping us to deliver more reliably for our customers. We continue to strengthen supply chain resilience through dual sourcing and by expanding our supplier network. We're also advancing our service excellence agenda while continuing to regionalize and selectively localize our supply chain and service footprint, bringing parts and capabilities closer to our customers. In Indonesia, for example, we opened a new parts distribution center in Jakarta strengthening local service capability while leveraging our global network. Looking at our regions, consumer sentiment remained resilient in North America, was positive in Europe and also positive in selected international regions. In China, it was subdued and broadly unchanged. Hospital demand in Q3 was strong across North America and international regions. Let me share more color on the regional dynamics. In North America, we delivered order growth, following strong double-digit growth in the prior year quarter. We expect this growth to continue. Healthy patient volumes, procedural growth, and sustained capital investment by large health systems continue to support demand. Customers increasingly want to standardize care through fewer, deeper strategic partnerships. As market leaders in patient monitoring and image-guided therapy in North America, our platform-based portfolio differentiated innovation and deep long-standing customer relationships position us well to capture this demand. Our sustained order momentum and healthy pipeline reinforce our confidence in North America's role as core growth engine for Philips in 26 and over the midterm. Turning to Europe, order intake was robust for another quarter. European health systems are investing in productivity, digitization and modernizing care delivery. Our differentiated portfolio and commercial execution continue to resonate well with customers. This gives us the confidence that Europe will remain an increasingly important contributor to our growth. In China, order intake grew, supported by the timing of the renewal program and a weaker prior year comparison. We remain prudent in assessing the sustainability of this momentum as centralized procurement continues to expand. Our cautious view on the market in the near term therefore remains unchanged. For the full year, we continue to expect China's sales to be broadly stable, with growth in personal health offsetting a decline in health system businesses. In remaining growth regions, we continue to see healthy demand, supported by investments in healthcare infrastructure and digitization. In Q3, demand was particularly strong across Latin America, India, and Asia Pacific. I will now hand over back to Charlotte.

Thank you, Roy. I will start with segment level performance. In diagnosis and treatment, comparable sales were broadly flat in the third quarter, as mid-single digit growth in image guided therapy offset a mid-single digit decline in precision diagnosis. Within precision diagnosis, the decline primarily reflected the two factors we highlighted during Q2 results, the phasing of ultrasound sales and lower China sales. Ultrasound was the larger headwind to D&T growth in Q3, as shipment delays related to manufacturing process improvement weighed on sales. Production has been ramping up since late Q3, and we expect the affected sales to come through in Q4 and early 2027. This extended timing is reflected in our updated full-year segment outlook, which I will cover shortly. Image guided therapy continued to perform strongly, led by North America. This reflected conversion of the strong order book, particularly in Azurian, including the ongoing deployment of the SHIRIN project in Indonesia, as well as higher revenues from coronary intravascular ultrasound devices and services. Year-to-date order intake in D&T was strong across all modalities, further building our order book. Together with the expected phasing of ultrasound sales into Q4, this supports the expected acceleration in sales in the final quarter and mid-term. Adjusted EBITDA margin in diagnosis and treatment increased by 50 basis points year-on-year to 12.3%, driven by higher gross margins and productivity measures, more than offsetting cost inflation. Execution was strong across both businesses, with continued sales growth and gross margin improvement in image guided therapy supporting operating leverage, while precision diagnosis expanded gross margin benefiting from the growing contribution of margin-accretive innovations, including Spectral CT and Helium-free MR. Moving to connected care. Comparable sales growth was 5%. Monitoring delivered mid-single-digit comparable sales growth led by North America and Europe. Growth was supported by conversion of the Strong Order Book with particular strength in IntelliView hospital monitors and consumables. Our enterprise monitoring as a service business model also continued to scale, with revenues nearly doubling year on year, demonstrating steady progress in building more recurring and predictable revenue. Sleep and respiratory care sales growth accelerated to mid-single digits, driven by strong demand for sleep therapy devices in Japan and Europe. Enterprise informatics delivered high single-digit sales growth, led by North America and Europe, Partially benefiting from the timing of larger implementations, reflecting the phase deployment of enterprise informatics agreements. Adjusted EBITDA margin in connected care increased by 190 basis points year on year to 13.3%. The prior year margin included 150 basis point gain from the re-measurement of a minority investment. Excluding this gain, Margin expanded by 340 basis points year on year, driven by higher sales, higher gross margin, favorable mix effect, and productivity measures partially offset by cost inflation. In personal health, comparable sales grew 8%, building on double-digit growth in the prior year. Growth was broad-based across all three businesses and all regions. Europe and growth geographies, including China, led the increase, while North America delivered further growth on top of a double-digit increase in the prior year quarter. Performance was driven by premium shavers, the OneBlade platform, as well as Sonicare Power toothbrushes and Philips Avent infant feeding solutions. Adjusted EBITA margin expanded by 60 basis points year-over-year to 17.7%, mainly driven by higher sales and productivity measures. Advertising and promotion spend increased year-on-year to support sustained demand and recent launches. These investments are delivering as intended, contributing to higher sales growth. Finally, sales in segment other were €179 million, up €39 million year-on-year, mainly reflecting divestment-related activities that are excluded from comparable sales growth. Adjusted EBITDA was a loss of €12 million, compared with a loss of €3 million last year. Now, turning to the group results. Comparable sales growth was 3%, with growth across all regions. We are pleased with our stronger-than-expected margin performance. Group-adjusted EBITDA margin increased by 70 basis points year-on-year to 13%, with margin expansion across all three segments. This margin expansion was driven by higher sales, improved cross margin, including a growing contribution from higher margin innovations, and Strong delivery on our productivity program, with a modest benefit from more favorable tariff rates versus last year. Together, these factors more than offset higher cost inflation. Year-to-date underlying adjusted EBITDA margin, excluding the U.S. tariff refund received in full in Q2, expanded by 30 basis points to 11.5%, despite the annualization of tariffs and continued cost inflations. Cost inflation remained a headwind in Q3 as expected. While input cost pressures have slightly increased, we continue to expect a full-year impact in the high double-digit million euros at group level, consistent with our previous communication. Against this backdrop, we remain focused on what we can control and are responding with disciplined cost management, inflation mitigation and productivity measures, while continuing to pursue profitable growth and strengthen our underlying margins. Our productivity program delivered 170 million euros in savings in Q3, bringing year-to-date savings to 427 million euros, despite pressure from higher cost inflation. We remain on track to achieve our 1.5 billion euros target by the end of 2028. We are extending these efforts by embedding AI in operational workflows, customer service, and R&D, reducing manual work and shortening cycle times. Adjusting items were 353 million euros compared with 122 million euros in the third quarter of last year. This includes a 288 million euro provision related to a Respironics DOJ settlement. Excluding this provision, adjusting items declined to 65 million euros, mainly due to phasing in the year. For the full year, our outlook for adjusting items remains in line with previous expectations, excluding the DOJ provision. Net financial expenses were 42 million euros in the quarter compared with 57 million euros a year ago, reflecting higher interest income and fair value gains. We now expect full-year net financial expenses of approximately 230 million euros, down from 240 to 260 million euros previously. Adjusted EPS increased more than 10% year-on-year to 40 euro cents in the quarter, reflecting higher earnings. Free cash flow was an inflow of 384 million euros, a significant increase from 172 million euros in the third quarter of last year, mainly driven by higher cash earnings and lower working capital outflows. Moving to the balance sheet, we closed Q3 with 2.8 billion euros in cash and net debt of 5.4 billion euros. Driven by higher earnings, our net debt-to-adjusted EBITDA ratio declined further to 1.7 times from 2.2 times a year ago, giving us resilience to navigate an uncertain environment and flexibility to invest in long-term value creation. In August, we also issued a €650 million EU Green Bond on competitive terms. It was the healthcare industry's first bond under the new European Green Bond standard. The bond was 2.7 times oversubscribed, reflecting robust investor demands. Turning to the outlook. With three quarters behind us and continued solid execution, we have good visibility for the remainder of the year. We remain firmly on track to deliver the full year guidance that we set in February. As a reminder, we received a full US tariff refund in Q2 and reflected the benefit in our updated outlook in our Q2 release. For the full year, we reiterate our comparable sales growth outlook of 3-4.5%. By segment, we expect diagnosis and treatment to deliver comparable sales growth at the upper end of the low single-digit range, connected care within the 3-4.5% range, and personal health at the lower end of the high single-digit growth rate. Our full-year adjusted EBITDA margin outlook remains unchanged at 13.5-14%, including a US tariff refund benefit of approximately 1%. Our free cash flow outlook also remains unchanged at 1.5 to 1.7 billion euros including a net US tariff refund benefit of approximately 200 million euros. Our outlook includes currently known tariffs and assumes payment of the US DOJ settlement in the first quarter of 2027 which is subject to finalization of the relevant documentation. The outlook excludes other ongoing Philips Respironics-related proceedings, including the investigation by the US State Attorneys General. With that, I would like to hand it back to Roy for his closing remarks.