Fitch affirms Royal Philips

Fitch Ratings said it affirmed Royal Philips Electronics' long-term issuer default rating and senior unsecured notes at A and short-term issuer default rating at F2.

The outlook is stable.

The company has announced a €2 billion share buyback program, which is expected to be gradually completed over the coming 12 months, Fitch said, reflecting the company's balance sheet optimization strategy and short- to medium-term needs for acquisitions.

While the buyback will reduce its financial flexibility to make acquisitions, it is not inconsistent with the expectation that Royal Philips will continue to maintain a strong financial profile and a robust liquidity position, the agency said.

The ratings also are supported by its conservative capital structure, Fitch added.

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