The ratings on The Netherlands-based diversified technology group Koninklijke Philips Electronics N.V. (Philips) reflect the group's global reach and wide product diversification, combined with a strong brand name and several world-leading positions; its strong positions in stable cash-generative businesses such as medical systems, lighting, domestic appliances, and personal care; and very solid financial flexibility enhanced by substantial disposable, listed financial assets. The ratings are constrained by Philips' exposure to the seasonal and competitive consumer electronics sector and volatile operating performance in certain divisions, product segments, and geographical markets due to macroeconomic performance and competition. Historically volatile cash flow generation, which reflected capital intensity and lack of visibility in the group's Semiconductors unit and has constrained the ratings, is expected to
