The ratings on Netherlands-based diversified technology group Koninklijke Philips Electronics N.V. (Philips) reflect its global reach and wide product diversity, combined with a strong brand name and several world-leading market positions. They are supported by the group's strong positions in stable cash-generative businesses such as medical systems, lighting, domestic appliances, and personal care. The ratings are constrained by Philips' exposure to the cyclical and competitive consumer electronics sector, although the group is reducing this exposure. They are further constrained by variable operating environments in certain divisions, product segments, and geographic markets, due to deteriorating conditions in the global economy and intense competition. A decline in Philips' operating performance that started during the second half of 2008 continued in the first
