The ratings on the Netherlands-based diversified technology group Koninklijke Philips Electronics N.V. (Philips) reflect its global reach and wide product diversity. Additional strengths include a strong brand name and several world-leading market positions in relatively stable cash-generative businesses such as medical systems, lighting, domestic appliances, and personal care. From a financial perspective, relatively robust cash generation and low absolute debt levels renders cash flow debt protection measures adequate for the rating level. The ratings are further supported by a strong liquidity position and a conservative financial policy. Standard&Poor's Ratings Services considers these strengths to be offset by Philips' exposure to competitive pricing and innovation pressure in cyclical end-markets, especially in the consumer electronics sector--although the group is reducing
