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The turnaround sparked a rush to buy Philips shares on the Amsterdam stock market, with the stock up more then eight percent at the opening bell.

"Today, we enter our next phase, the phase of driving profitable growth," chief executive Roy Jakobs told reporters.

Once famous for making lightbulbs and televisions among other products, Amsterdam-based Philips in recent years has sold off subsidiaries to focus on medical care technology.

Since 2021, the company has been battling a series of crises over its DreamStation machines for sleep apnoea, a disorder in which breathing stops and starts during sleep.

Millions of devices were recalled over concerns that users were at risk of inhaling pieces of noise-cancelling foam and fears it could potentially cause cancer.

In April, it announced it had reached a $1.1 billion deal to settle US lawsuits over the faulty machines.

Overall sales came in at 17.8 billion euros last year, a slight dip compared to the 18.0 billion euros it banked in 2024.

This was also fractionally below the analysts' consensus forecast for sales of 17.7 billion euros.

Looking ahead, the firm said it expected sales growth of 3.0 percent to 4.5 percent for 2026.

This outlook includes the impact of "currently known tariffs" but excludes potential costs from the ongoing saga of its sleep apnoea machines, Philips said.

This growth would be led by its business in North America, while sales in China were expected to be flat, Philips predicted.

- 'Mitigation actions' -

Jakobs said the firm was bracing for the first full year of tariffs in 2026, saying: "We see more tariffs hitting us from a cost perspective."

However, he said there were "mitigation actions" that Philips had in place to combat the impact.

"You still have to think of multi-hundred million impact of tariffs, but we are offsetting that," he said.

Turning to the fourth quarter, Philips posted a profit of 397 million euros, above the forecast of 276 million euros.

In the third quarter of last year, the firm banked profits of 187 million euros on sales of 4.3 billion euros.

The firm has continued to shed jobs. It employed 64,817 people at the end of last year, compared to 67,823 at the end of 2024.

Philips also announced a proposal to reappoint Jakobs as CEO.

"(This) reflects the supervisory board's recognition of the progress made since 2022 and its confidence in his leadership as Philips enters the next phase of driving profitable growth," the firm said.

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