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S&P moves Philips view to negative
S&P said it revised its outlook for Koninklijke Philips NV to negative from stable and affirmed its BBB+ ratings.
“Due to Philips' weak year-to-date performance, the group will not meet its profit and leverage targets for 2022. According to Philips' recent profit warning, the group's limited ability to source critical components to finish orders has not dissipated as previously anticipated,” S&P said in a press release.
The agency said it forecasts that Philips’ S&P Global Ratings-adjusted EBITDA margins will decline to about 8% in 2022 from 11% in 2021 and 15% in 2020.
“We also expect the group will report materially negative FOCF of up to €600 million in 2022 and total cash consumption of up to €2 billion over the year. Moreover, we forecast that debt to EBITDA will reach 4.5x-5x versus 2.5x in 2021, which is significantly higher than our expectation for the current rating,” S&P said.
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