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PHILIPS Q1 2021 Quarterly report Philips delivers Q1 sales of EUR 3.8 billion , with 9 % comparable sales growth ; net income amounts to EUR 40 million and Adjusted EBITA margin improves 390 basis points to 9.5 % Amsterdam , April 26 , 2021 • • • • • First - quarter highlights Following the agreement to sell the Domestic Appliances business to global investment firm Hillhouse Capital , this business is reported as a discontinued operation as of Q1 2021 . Consequently , sales and results from the Domestic Appliances business are no longer included in the results of continuing operations . Group sales amounted to EUR 3.8 billion , with 9 % comparable sales growth Comparable order intake decreased 5 % , with double - digit growth in the Diagnosis & Treatment businesses and a double - digit decline in the Connected Care businesses on the back of 80 % growth in Q1 2020 Income from continuing operations was a loss of EUR 34 million . Excluding the impact of a provision related to precautionary actions to address a component quality issue , income from continuing operations improved by EUR 139 million year - on - year . Income from continuing operations was EUR 17 million in Q1 2020 . Adjusted EBITA increased to EUR 362 million , or 9.5 % of sales , compared to EUR 208 million , or 5.6 % of sales in Q1 2020 Operating cash flow improved to EUR 321 million , compared to EUR 181 million in Q1 2020 Free cash flow was EUR 169 million , compared to an outflow of EUR 15 million in Q1 2020 Frans van Houten , CEO " Despite the ongoing impact of COVID - 19 , our performance gained momentum with a strong 9 % comparable sales growth and profitability improvement in the first quarter , with all business segments and markets contributing . We are encouraged by the strong 11 % comparable order intake growth for the Diagnosis & Treatment businesses , and the strengthening performance of the Personal Health businesses . At the same time , the Connected Care businesses continued to successfully convert their strong order book , while comparable order intake decreased 27 % , as anticipated following the 80 % order intake growth for patient monitors and hospital ventilators in Q1 2020 . Our growth momentum is driven by our portfolio of innovative solutions , for example in the areas of precision diagnosis , image - guided therapy , and telehealth . Moreover , we continued to add long - term strategic partnerships with hospitals on the back of more than 50 new partnerships we signed in 2020. This illustrates our ability to meet the needs of today's hospital leaders , across the globe , as they plan for the future . In line with our plans , we signed an agreement to sell the Domestic Appliances business , which concludes our major divestments . We are pleased that we have found a good home for this business and we look forward to a successful partnership with the new owner , Hillhouse Capital . We are also pleased to have completed the acquisition of BioTelemetry and Capsule Technologies , which will further drive our transformation into a solutions company , and in particular further strengthen our position to improve patient care across care settings for multiple diseases and medical conditions . Regretfully , we have identified a quality issue in a component that is used in certain sleep and respiratory care products , and are initiating all precautionary actions to address this issue , for which we have taken a EUR 250 million provision . Quarterly Report 2021 - Q1 1