Bulletin: Koninklijke Philips N.V.'s Diverse Business Model Helps Moderate COVID-19's Effects

LONDON (S&P Global Ratings) July 21, 2020--S&P Global Ratings today said that Koninklijke Philips N.V.'s (BBB+/Stable/A-2) operating performance continues to be affected by COVID-19, although the diversity of its business model helps mitigate the diverging impact among its divisions. In first-half 2020, comparable sales declined by 4%. Connected care increased strongly, helped by sales of ventilators and monitors, while diagnosis and treatment businesses declined by 4% as hospitals postponed large-item purchasing, and personal health fell 16% due to a significant drop in consumer demand. Under our base-case scenario, we expect sales in 2020 to be broadly in line with 2019, because connected care growth will accelerate in second-half 2020, with a gradual recovery in the other two segments. We assume

...July 21, 2020 LONDON (S&P Global Ratings) July 21, 2020--S&P Global Ratings today said that Koninklijke Philips N.V.'s (###+/Stable/A-2) operating performance continues to be affected by COVID-19, although the diversity of its business model helps mitigate the diverging impact among its divisions. In first-half 2020, comparable sales declined by 4%. Connected care increased strongly, helped by sales of ventilators and monitors, while diagnosis and treatment businesses declined by 4% as hospitals postponed large-item purchasing, and personal health fell 16% due to a significant drop in consumer demand. Under our base-case scenario, we expect sales in 2020 to be broadly in line with 2019, because connected care growth will accelerate in second-half 2020, with a gradual recovery in the other two segments. We assume that costs savings, mainly in the personal health division, will benefit margins, together with the growth in connected care, although the company is still recording underlying...

Bulletin