Jul 28, 2026 earnings call — Tariff refund lifts margins; orders stay strong
Q2 adjusted EBITA margin was 16.4% including a tariff refund, with free cash flow of EUR 222 million.
Revenue $5.0B (est $4.9B) · EPS $0.57 (est $0.40)
Key quotes
"We largely completed the U.S. tariff refund process during the quarter, demonstrating the agility of our teams in a changing environment."
"On a rolling 12-month basis, order intake grew 5%, demonstrating the resilience of our commercial momentum."
"In Q2, we delivered EUR 132 million in productivity savings, bringing year-to-date delivery to EUR 258 million despite pressure from higher cost inflation."
Analyst Q&A 7
D&T margins and China procurement
Q (Hassan Al-Wakeel · Barclays): Analyst asked why D&T margin (9.3% ex tariff) was below expectations, how gross margins and innovation are trending, outlook for D&T margins in Q3/Q4/full year, and whether China centralized procurement is already hitting margins and if differentiated products remain insulated.
A: Management said the group delivered on their margin expectations and expanded margins 10 basis points in H1 ex tariffs. They said D&T was hit harder by cost inflation, tariffs, currency and China exposure, while innovation (e.g., Rembra, Verida, MR service upgrades) is improving gross margins. They also said China’s centralized procurement creates market turmoil but unique innovations can still find a place; some orders shifted timing into Q3.
"So I think it's important to note that overall, we delivered on our margin expectations exactly in line as we said at the beginning of the quarter." — Charlotte Hanneman (CFO)
Hospital demand and Personal Health drivers
Q (Richard Felton · Goldman Sachs): Analyst asked what is driving improved demand in Europe and when that will lift D&T and Connected Care growth; also asked what is driving strong Personal Health performance and how durable it is.
A: Management said North America remains strong and Europe is stepping up with big programs (e.g., Karolinska, nationwide upgrades) that will feed Imaging and PD sales and margins over time. They said Personal Health strength comes from recent innovation launches (Sonicare ranges, OneBlade) and stronger retail and pharmacy distribution, giving room to grow for multiple quarters.
"These new ranges have a lot of runway because one platform is just in the market 1 year, another platform just launched this year." — Roy Jakobs (CEO)
Cost inflation next year and US procedure volumes
Q (David Adlington · JPMorgan): Analyst asked how cost inflation may evolve next year as hedges roll off, and for color on U.S. procedural volumes given mixed data.
A: Management said they see high single-digit cost inflation this year, driven by e-components, freight and small energy exposure; hedges won't change much and they plan mitigation actions (bill of material, AI, tariff mitigation) and the CMD buffer covers FX/macro. On procedures, they said IGT— their best proxy—has 22 consecutive quarters of growth and pipeline and HealthTrust wins show continued North America strength.
"First of all, there are the e-components that we've seen increase significantly." — Charlotte Hanneman (CFO)
Full-year margin confidence and China outlook
Q (Veronika Dubajova · Citi): Analyst asked where in the full-year margin range management feels comfortable given Q3 weakness and whether China centralized procurement changes CMD expectations.
A: Management said they remain very confident in the full-year margin outlook and expect Q3 slightly below prior year and a meaningful Q4 step-up to the upper mid-teens driven by higher volumes, innovation-led gross margin gains and productivity actions. On China, they said centralized procurement can pressure margins unless innovation justifies higher price, but faster-than-expected North America, Europe and India growth should mitigate China headwinds.
"We remain and I remain very confident in our full year margin outlook." — Charlotte Hanneman (CFO)
Order book not converting and Enterprise Informatics
Q (Julien Dormois · Jefferies): Analyst asked why strong order intake has not translated into stronger D&T/Connected Care sales, and why Enterprise Informatics sales declined two quarters in a row.
A: Management said strong orders continue but conversion takes longer due to larger, complex deals and constrained installation capacity, so revenue lags. For Enterprise Informatics, they said the shift to cloud/SaaS is winding down on-prem work and delaying revenue conversion; orders are improving but revenue will recover over 12–18 months as implementations complete.
"As we move into this cloud business, we are winding still down some of the on-prem that is changing." — Roy Jakobs (CEO)
D&T ex-tariff headwinds and India competition
Q (Hugo Solvet · BNP Paribas): Analyst asked the composition of headwinds on D&T ex tariff (mix, FX, inflation) and whether Chinese competitors are increasing pressure in India.
A: Management said D&T was more affected by cost inflation, full-quarter tariffs, negative currency and China exposure, and Q2 2025 was a high comparable. On India, they said the market is growing, they win on quality and platform solutions in premium segments, and India contributes double-digit growth with attractive margins supporting future strength.
"That is, first of all, we had cost inflation that was hitting us harder in D&T than it was hitting us in other segments." — Charlotte Hanneman (CFO)
Q3 margin phasing and order growth outlook
Q (Graham Doyle · UBS): Analyst asked whether Q3 margin weakness was always expected and how much work is needed to keep full-year margin range; also asked whether orders can return to mid-single-digit growth.
A: Management said yes, the margin phasing through the year is exactly in line with their underlying plans. They also said order intake should return to mid-single-digit growth in Q3 and beyond.
"Yes, the margin phasing as we see it throughout the year is exactly in line with our underlying plans." — Charlotte Hanneman (CFO)