Facts, scenarios, and actions for leaders

Ensuring an Inclusive
Recovery30 June 2020

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

COVID-19 BCG Perspectives Series

COVID-19

BCG Perspectives

COVID-19 is a global
societal crisis

Leaders need to drive an integrated
response to navigate the crisis

We at BCG believe that the COVID-19 outbreak isfirst and foremost a societal crisis, threatening
lives and the well-being of our global community.
Society now, more than ever, needs to collaborate
to protect people’s lives and health, manage midterm implications, and search for lasting solutions.

It is the duty of health, political, societal, and businessleaders to navigate through this crisis. A complex
interplay of epidemic progression, medical response,
government action, sector impact, and company
action is playing out. This document intends to help
leaders find answers and shape opinions to navigate
the crisis in their own environments. It encourages
thinking across the multiple time horizons over which
we see the crisis manifesting itself.

Source: BCG

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Objectives of this document

COVID-19 will be a journey with three distinct phases, requiring
an integrated perspective
Fight

FutureTypically the initial phase after a pandemic
outbreak–goal is to urgently limit numberof new cases, especially critical care

Finding paths to collectively fight the virus,
restart the economy, and support society inbalancing lives and livelihood

Disease controlled through vaccine/cure/herd immunity and treatment withinsustainable medical capacities possible

Social distancing (lockdown) and partial businessclosures lead to economic recession with large
employment impact

Increasing economic activity with recovering
GDP, some business reopenings, and social
distancing on a sustainable level

Reactivated economy with strong businessrebound and job growth, social restrictions
limited or completely suspended

1. Disease progression, health care system capacity, and response
2. Government policies and economic stimulus
3. Economic scenarios
4. Business engagement and response
5. Public engagement and response

All of the above five factors result in specific economic and social outcomes in each phase
Source: BCG

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FlattenCOVID-19 is disproportionately affecting the disadvantaged; a successful recovery must be inclusive and can set up a better future for all• COVID-19 has created a humanitarian crisis and disproportionately affects the lives of the disadvantaged/vulnerable in our society• The impact on health, education, food security, and livelihood outcomes is staggering; those that were struggling already are hit hardest• Protecting the disadvantaged helps flatten the curve for all and is critical for maintaining social stability across the globe• A successful and inclusive response now can set us up for a better future: (i) health care preparedness for future pandemics, (ii) new models of highvalue and low-cost learning, (iii) a more resilient food system, and (iv) a reskilled and diverse workforce• There is a clear imperative for private, public, and social sector leaders to take concrete action for an inclusive recovery
Several countries are witnessing a rapid increase in daily cases; a severe global economic downturn is expected for 2020
• Globally, 50% of patients have recovered from COVID-19; the growth rate of daily new cases is about 2.0%1• Daily new cases are increasing rapidly, with cases in June2 being ~1.5x those in May and ~1.7x those in April• Vaccine and therapeutics development continues to move at an unprecedented pace; 16 vaccine candidates are currently in phases I, II and III• Latest economic forecasts from IMF point to a 4.9% decline in global GDP in 2020; it’s expected to rebound to 5.4% growth in 2021
• Only the pharma sector is currently at pre-crisis TSR3 levels; 8 (out of 24) sectors have a significant share4 of companies with >15% default risk

We believe during
this crisis leadersneed to think along
two dimensions:

Taking an integrated perspective on
health/medical progression,
governmental responses, societal
reactions, and economic implications
to understand business/sector impacts

Thinking multitimescale in a
Flatten-FightFuture logic

1. Daily new case growth rate is calculated based on 7-day rolling average; 2. Calculated as monthly average of daily new cases; 3. Total Shareholder Return; compared with 21 Feb 2020; 4. Retailing, Materials,
Transport, Auto, Real Estate, Energy, Hospitality with > 10% of companies with probability of default > 15% as of 18 June 2020; based on top S&P Global 1200 companies; sectors based on GICS definitions
Source: BCG

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Executive Summary | COVID-19 BCG Perspectives

Disproportionate impact of COVID-19 crisis on the disadvantaged
Inclusive solutions for a reimagined future

Updated analyses and impact
Epidemic progression and virus monitoring
Economic, business, & societal impact

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

Guide for leaders

COVID-19 impact dashboard
As of 26 June 2020

Economic Impact

9.8M

4.9M

494K

# of cases# of recoveries# of fatalities

Recent developments

EuropeDaily new cases in June1 are ~1.5x May, ~1.7x April

USSouth America driving ~32%

Japanof global daily new cases1
12 June# of daily new cases2

125K

26 June161K# of reported recoveries
as % of total cases

47%# of tests / cases3

19

19

VaccineTreatment

Trials in pre-clinicalstage and beyond4
Trials in Phase 1 andbeyond5172

Current est. timeline
for approval & scale-up

50%

IMF (24 June)

GDP forecasts (%)
2020-10 -8 -6 -4 -2 0 2 4 6-10.2%
Baseline 1.3%9-8.0%

Banks8

8 10

2.0%

-5.8%

0.7%
1.0%

China

Business Impact
Stock market performance11
20 Marvs 21 Feb

-31%

-28%

-30%

-34%

-10%

26 Junevs 21 Feb

-10%

2%

-17%

-11%

-2%

DAX

CHN SSE

S&P500 NASDAQ FTSE100

Total Shareholder Returns (S&P1200)11

6.0%

First column: 21 Feb to 20 Mar; Second column: 21 Feb to 26 June

-4.5%

India

5.8%

Estimated employment impact
Total employment
Employees% of employees
2019 (M)
impacted10 (M)impacted

Americas

EuropeAsia

Pharma-19% 1%-20% -3%-22% 8%F&B12-26% -13%-24% -12%-12% -4%

Telecom-17% -12%-20% -15%-14% -6%

Software-30% -4%-32% -8%-28% 7%

US

159

47

30%

Retail

-42% -11%-36% -13%-24% 15%

UK

33

11

32%

Capital goods

139-38% -16%-35% -17%-29% -8%

Germany

45

12

26%

Auto

-47% -25%-45% -19%-32% -12%

16

58

France

28

14

49%

Real Estate-42% -31%-26% -31%-22% -18%

9-33

6-21

Italy

23

8

35%

Energy-56% -33%-45% -31%-41% -24%months6months7

Spain

20

4

22%

Banks

-41% -31%-44% -38%-26% -15%

1. Calculated as monthly average of daily new cases; 2. Calculated as 7-day rolling average of daily cases; 3. Median of values for top 15 countries by nominal GDP (except China); 4. Ongoing trials including pre-clinical, Phase 1 (first trial in humans), Phase 2, Phase 3, Phase 4 ; 5. Ongoing trials including Phase 1 (first trial
in humans), Phase 2, Phase 3, Phase 4; 6. 9-month development current “best case” for first supply (12 months since Apr 2020), then likely to require time for scale-up and continuing to prepare for populations; 7. Remdesivir is approved now, could be more widely available by Jul-Sep 2020. For the next wave, estimatedtimeline is Oct '20 – April '22 (3-21 months). If first round of drugs being tested succeeds – then 6-9 months; if not – substantially longer; 8. For India, forecast is for financial year; for others, it is for calendar year; YoY forecasts; range from forecasts (where available) of World Bank, International Monetary Fund, JP Morgan
Chase; Goldman Sachs, Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; As of reports dated 12 April 2020 to 26 June 2020; 9. IMF June 2020 forecast; 10. Available cumulative data as of 26 June 2020 from mid-March 2020; includes increase in unemployment & employees
covered by gov. wage support programs; US: unemployment insurance claims (data as of 25 June); UK no self-employment (data as of April) and Italy (data as of April) active & inactive unemployment; Germany: short-time work requests, may not actually utilized (data as of May); France: (data as of June); Spain: (data as ofMay); figures are changing rapidly and often being reported with a lag from the current date; 11. Sectors are based on Global Industry Classification Standard (GICS) definitions; Performance is tracked for two periods, first from 21 February 2020 (before international acceleration of outbreak) to 20 March 2020 (trough of themarket) and from 21 February 2020 through 26 June 2020; 12. Food & Beverage. Source: WHO, World Bank, JHU CSSE, Our World in Data, IMF, Bloomberg, Reuters, Eurostat (Europe), Gov't Wage Support & Unemployment figures & comments: UK Gov't 5/12, Bloomberg 6/16 (UK), ISTAT 4/30 & Fitch Ratings 5/18 (Italy),
U.S. Department of Labor 5/21 (US), Ministerio de Trabajo 6/2 (Spain), Ministere du Travail 6/5 (France), Arbeitsagentur 6/3 (Germany), BCG

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Epidemic Progression

COVID-19 is creating an unprecedented humanitarian crisis;
there is a moral imperative to act
As of 26 June 2020

Education

Food security

Livelihoods

>494K

~50%

~265M

~650M

reported deaths due to
COVID-19 globally;
with >9.8M confirmed
cases

of 1.6B+ students affectedby school closures lack acomputer at home toparticipate in digital learning

people could face acutefood insecurity by end of
2020, up from 135M precrisis

workers from the informal
sector estimated to be
driven into relative poverty3
due to the crisis(JHU CSSE)1(UNESCO, ITU)2(World Food Program)(International Labor Organization)4

1. As of 21 June 2020; 2. As of 21 April 2020; 3. Relative poverty value is defined as income of <50% of country's median monthly earnings; 4. As of 29 April 2020
Sources: JHU CSSE, UNESCO, International Telecommunication Union (ITU), WFP, ILO

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HealthHealth | COVID-19 disproportionately impacts the disadvantaged* andcreates cascading health outcomes beyond the direct effects of the virus
US example

US example

Global examples

Those at higher risk of infection
are disproportionately low income

Higher COVID-19 mortality rate
for racial minorities

Cascading health outcomes

Share of employees
in or at edge of poverty2

COVID-19 deaths per 100,000
people in each group3

Share of total
employees1
22%

Black

62

Indigenous
89%

51%

27%
0%
High contact

Medium contact

11%

36

Latino

28

Asian

26

White

26

Low contact

Drivers of infection risk include more high-contact work,
housing in congregate facilities, reliance on mass transit

50%

Decrease in heart attack
patients visiting hospitals,
likely increasing
preventable deaths4

80M

Children at risk due toimpact on routine
vaccination programs in
68 countries5

Mortality rate for Blacks is 2.3x higher than that for
whites and Asians*Disadvantaged refers to low-income populations and populations facing discrimination
1. Federal Reserve Bank of St Louis, American Community Survey; 2. Income below 150% of the poverty level for individuals (WHO); 3. APM
Research Labs; 4. Becker's Hospital Review; 5. Warning from WHO, UNICEF, & Gavi

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As of 10 June 2020

Education | COVID-19 is disrupting learning for an entire generation;school closures affect disadvantaged populations much more severely
As of 26 May 2020~60%

without a householdcomputer in developing
countries~50%

with limited access to internet
in developing countries;
lacking a prerequisite forremote learning

Reduced participation by
disadvantaged groups

23%

25%

lower online classattendance in US schools
with >75% low-income
students vs. those with<25% low income students1of Italian households haveinternet that is too slow tostream educational content,
limiting quality participation

Cascading social
consequences

310M

children dependent onschool meals affected by
global school closures

10M

additional estimated dropouts for secondary schoolaged girls in low- and lowermiddle-income countries3

1. Attendance rate for virtual classes is 68% in schools with >75% low-income students vs 88% in schools with <25% low-income students; as of 10 April 2020; 2. 32% of largest non-CGCS (Council of the Great City
Schools) districts vs 19% of largest CGCS districts have a distance learning plan; as of 26 May 2020; 3. Estimated by Malala Fund based on percentage of dropouts during Ebola; as of 2 Apr 2020
Source: ITU, WFP, Bill & Melinda Gates Foundation, Education Week, Malala Fund, UNESCO

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Digital divide exacerbating
accessibility issues

Food security | Hunger is growing rapidly, driven by a declining ability toafford food and a disruption in the food supply chain

135M

Impact of COVID-19 on
ability to afford foodpeople facing acutefood insecurity1,pre-crisis

Loss of livelihoods expanded numberof people who could not afford food

Reduced food imports(e.g., rice) in sub-Saharan Africa

Scarcity of public transit makes it
prohibitively expensive for people
living in food deserts to access food

Increased food waste due todisruption in food transportation

Increase in food prices driven by
supply shocks

Delay in channeling food to new
demand (e.g., hospitality to grocers)>820M food insecure2 globally;> 70% in sub-Saharan Africa orSouth Asia

Impact of macro-ecosystem
shock on food accessibility

265M
people expected to faceacute food insecurity1
by end of 2020

Food insecurity expanding
significantly globally

1. Acute food insecurity is "any manifestation of food insecurity at a specific point in time of a severity that threatens lives, livelihoods or both, regardless of the causes, context or duration"; 2. Food
insecurity is defined as a long-term or persistent inability to meet dietary energy requirements (lasting for a significant period of time during the year); Source: WFP, UN, Feeding America, BCG

9Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

COVID-19 is expanding global hunger

Livelihoods | Job and income losses are concentrated in sectors where workers
earn the least, and exacerbate challenges that low-skilled workers are facing
As of 09 June 2020

Informal sector globally (~2B
people) threatened by poverty4

US unemployment rate (31 May 2020)1

Estimated relative poverty rates5 ofpeople employed in the informal sector

36%

84%

83%

80%

59%
15%

Leisure & Wholesale
hospitality & retailtrade
Avg. annual income2
$23K

$34K

(US Bureau of Labor Statistics)

13%

9%

Overall Professional& businessservices
$54K3

$67K

26%

21%

World

27%

22%

36% 34%Africa Americas Asia & Europe,
Pacific Central
Asia

Pre COVID-19

COVID-19 will increase the alreadywidening skills mismatch6~1.5B
People affected by skills
mismatch over next 10 years,
compounded by COVID-19

First month of crisis(International Labor Organization)(Oxford Economics)

1. Represented only for select sectors; 2. Average weekly earnings by sector * 52, 31 May 2020; 3. Average private sector earnings; 4. As of 29 Apr 2020; 5. Relative poverty defined as income of <50% of country's
median monthly earnings; 6. As of 27 Apr 2020; skills mismatch impact quantified using BCG's Future Skills Architect methodology, based on capabilities (relevance of skill inventory to current and future
economic needs), motivation (an environment that attracts talent and encourages self-realization through work), and access (availability of efficient skill matching mechanisms in the labor market)
Source: US Bureau of Labor Statistics, Oxford Economics, EIU, ILO, BCG

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Sectors hit hardest by COVID-19
have lower-income workers

Protecting the most disadvantaged helps flatten the curve for all
and is also critical for social stability
As of 26 June 2020

June 23, 2020

German region in new lockdown
after slaughterhouse outbreak
Thousands of workers, many of them migrants from Eastern
Europe, & family members have been put under quarantine

June 16, 2020

They came to Canada as essential
workers. Hundreds were infectedwith the coronavirus on the job

Ensure social stability
June 20, 2020

Leaving lockdowns in Latin America:
Many informal workers–street vendors,cleaners, and the like–must work to eat

June 17, 2020

Reverse migration of India’s laborers
provided a passage for the virus to
spread to the poorest hinterlands

June 22, 2020

Bangladesh's vulnerable garment
workers protest for food andpending wages

June 10, 2020

Workers march after virus outbreakat Utah meatpacking plant

June 16, 2020

Nigerian doctors stage “indefinite”
walk-out over lack of “hazard” pay,
crippling coronavirus response

June 18, 2020

Protesters demand Guatemala easecoronavirus lockdown rules
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Prevent new waves of COVID-19

HealthEducation

Food security

Livelihoods

Betterpreparedness for
future pandemics
and accelerated
access to health carefor the underserved

High-value, low-costlearning models
that meaningfully
advance learningand achievement for
students who are
traditionally
underserved

More resilient foodsystem, with lessfood waste andmore innovative“last mile” solutions
for reaching themost disadvantaged

A massive
investment inreskilling capacity
coupled with a strong
commitment todiversity and equity
to build a workforceof the future

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Our response can accelerate us toward a better, more inclusive future for allActions required now for a successful and inclusive recovery
HealthAll

Education

Food security

Livelihoods

Protect health-vulnerable and disadvantaged to improve overall societal outcomes & ensure open economies

Private sector

Leverage digital capabilities to close gaps in essential services, particularly health care and education
Strengthen supply chain resilience to the last mile for essential goods, particularly food and medicine
Invest in reskilling & redeployment of workers, with a commitment to diversity & equity

Prioritize protecting, testing, & treating the disadvantaged and health-vulnerable

Public sector

Reopen public services such as education with prioritization for the disadvantaged
Ensure robust social & financial safety nets
Shape stimulus packages to drive reskilling, job programs, small-enterprise support

Social sector
Source: BCG

Provide financing that attracts and catalyzes private sector investment
Innovate & demonstrate models for reaching the most vulnerable in collaboration with private & public sectors
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Ensure employees are safe at work, with tailored solutions for the health-vulnerable

Health | Prioritize health-vulnerable and disadvantaged in response & recovery
Select examples

Speed and scale testing, tracking & quarantining solutions, especiallyfor the health-vulnerable and high risk communities1
Reduce risks in residential settings particularly for high-risk exposure
individuals; provide facilities for medical staff to isolate

April 2020

$20M Hotels for Heroes program
launched in Australia for medical
workers to help them isolate in
hotels for freeJune 2020

Ensure rollout Prioritize access for health-vulnerable and the disadvantaged;of therapeutics accelerate country-readiness (specifically developing countries) for
therapeutic & vaccine rollout& vaccine

Minimize
indirect healtheffects

Prioritize support for health systems that serve the disadvantaged &health-vulnerable
Innovate and scale digital models and new sites of care that aredesigned for low-resource settings

Gavi launched $2B COVID-19 vaccine
initiative to ensure affordable
doses to developing countries2

May 2020

Médicins Sans Frontieres3 isincreasing access to telemedicine
and health information on social
media

1. High-risk communities include people living in high density, with limited in-home water & sanitation; those exposed to higher risks at work or home; 2. Gavi is a global vaccine alliance catering to children
and those living in world's poorest countries; 3. International humanitarian medical non-government organization; Source: Bloomberg, Henry Ford, Lancet, BCG

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Prioritize
prevention &ensure accessfor thevulnerable

Beyond general guidelines, make workplaces, schools, and transport
safe; expand medical coverage, shelter-in-place for high-contact workers

Education | Focus on solutions for disadvantaged and health-vulnerable in orderto ensure continuity of learning for all
Select examples

Take aninclusive
approach toreopening
schools

Develop high-quality innovative digital learning solutions for students
and educators in low-resource settings / without broadband connection
Develop alternatives for essential school-based services, e.g.
partnerships to deliver meals to students, parent counseling

Safely reopen schools1; create teaching and learning alternatives
especially for the students and staff who are health-vulnerable
Prioritize the needs of those who have fallen furthest behind andoffer remediation programs
Ensure all students, especially low-income students and girls, return toschool by addressing financial and gender-specific barriers

1. Modify schedules, offer screening and testing, PPE, etc.; 2. Centers for Disease Control and Prevention
Source: UNESCO, country and state education board or equivalent websites, UNICEF, Center for Global Development, Press search, BCG

April 2020

Indian remote learning start-up
delivering content to students,
parents, and teachers via
WhatsApp; targeting 10M students
across 3 states

June 2020

French schools remained partly open
to care for more than 28,000
children of frontline and otheraffected workers, ensuring healthprotocols from local healthdepartment were followed

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Enable remotelearning
solutionsfor allPartner to bridge the digital divide, e.g. provide internet access, devices,and tech support to underserved groups

Food security | Efforts to ensure food security for the disadvantaged could
translate into a more resilient food system for all
Select examples
April 2020

Strengthen
food supply
chain
resilience

Support last-mile delivery to quarantined or disadvantaged groups
Review regulations and trade bans to prevent unintended disruption

Asian food tech start-up partneredwith hospitals to deliver food toquarantine facilities

Shift mix of goods to priority SKUs to ensure availability of staples

Use direct cash transfers as simple and most impactful lever to support
low-income households & workers

Ensure accessto food for all

Distribute food in-kind to disadvantaged households; scale up
platforms to connect excess commercial supply with donation centers
Manage / differentiate prices and discounts on staples for increased
accessibility to foodApril 2020

Global food-processing conglomeratepartnered with social organizations toprovide food and medical nutrition
products to the vulnerable;
deployed available logistics capacities
to support relief operations

1. Classify food supply chain workers as essential; public support for farmers, food processors, and food businesses; 2. Repackaging of wholesale and food service excess supply for consumers
Source: Gentilini, USDA, Press search, BCG

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Strengthen1 and adapt2 to fill gaps in supply chains

Livelihoods | Address COVID-19’s disproportionate impact on lower-paid workers
through safety nets, reskilling, and public-works job creation efforts
Select examples

Invest in a
massive,
inclusive1
reskilling
effortScale financial inclusion efforts to increase reach & efficiency of social
safety nets; target low-income families, informal sector, health-vulnerable
Provide tailored support to small businesses that lack formal banking
relationships or resources to go digital

Launch large-scale reskilling efforts like entrepreneurship programs &digital literacy; provide technical scholarships for displaced workers
Rapidly redeploy labor force, balancing supply and demand; launch
PPP to retrain furloughed employees

June 2020

CDFIs2 in the US work to ensuresmall/micro businesses wereable to access federal aid

April 2020

Scandinavian airline partneringwith a foundation to retrain its
10k furloughed employees toassist in hospitals

May 2020

Focus onsustainable
job creation
measuresLeverage stimulus packages to drive job creation in areas that will
strengthen inclusiveness and sustainability, e.g., green recovery,
infrastructure

1. With a commitment to diversity and equity; 2. Community Development Financial Institutions; Source: Press search, BCG

130K+ jobs expected to be createdby 2022, as part of the ~$10B green
stimulus measures by South
Korean government

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Ensure reachof liquidity &safety nets tothe most
affectedSupport stakeholders andsociety
Actions will be remembered for
decadesInnovate and build
back better

1

Care for your employees by ensuring workplace safety, restructuring for longevity as needed,
and reskilling and accelerating hiring where feasible

2

Support customer and supplier resilience and recovery

3

Be part of the COVID-19 solution for immediate response and economic rebound4

As you transform your strategy, portfolio, and business models, add a societal impact lens5

When adapting supply chains for resilience, improve climate, environmental, & social impact

6

When reimagining customer journeys and offers, build in societal benefits

7

Retain new ways of working to reduce climate impact and enhance employee well-being

8

Increase public and social sector partnerships to accomplish for society what you cant achievealone

Businesses must adapt

Communicate to capture
value

9

Investors’ & other stakeholders’expectations are changing

10

Communicate actions and live your purpose to engage your people, strengthen your brand,
and deepen relationships with customers
Reorient your approach to investor engagement, renew your understanding of material
environmental, social, and governance (ESG) issues, and adopt integrated ESG reporting

Companies with higher ESG performance continue to outperform market benchmarks during the crisis

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Consulting
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Agenda for CEOs | Building total societal impact into your COVID-19 response plan

Disproportionate impact of COVID-19 crisis on the disadvantaged
Inclusive solutions for a reimagined future

Updated analyses and impact
Epidemic progression and virus monitoring
Economic, business, & societal impact

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

Guide for leaders~4.9M reported recoveries so far;growth rate of daily new cases at ~2%1

EPIDEMIC PROGRESSION& VIRUS MONITORING

As of 26 June 2020

RussiaSpain

USA

29th May'20

12th June'20

101K(∆0.9%)(∆0.9%)

26th June'20

Italy
China

Japan

India

Brazil

125K

161K(∆2.0%)# of daily new cases (growth rate%)1
South
AfricaDaily cases’ growth (≥100 daily cases)1
Less than 100
daily cases1

185Countries with cases2

< -5%

9.8M

-5%-0%[∆1.8%]3

Confirmed cases globally

0-5%

494k

> 5%

2.5M

3.6M

4.9M

(42%)

(47%)

(50%)

Total # of recoveries (as % of confirmed cases)[∆1.0%]3

Fatalities globally

Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards, and hence are imperfect measures
1. # of daily new cases calculated as 7-day rolling average; growth rate calculated basis 7-day average; 2 Basis Johns Hopkins CSSE; 3. Daily growth rate basis 7-day average
Source: Johns Hopkins CSSE; Our World in Data; BCG

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UK
FranceEPIDEMIC PROGRESSION& VIRUS MONITORING

As of 26 June 2020

Daily new cases (seven-day rolling average)
180,000
160,000
140,000
South
America

120,000
100,000
80,000Asia1

60,000Africa40,000North
America

20,000Europe0

Average daily casesin the month2Month on month
growth rate of
new cases3

Mar

Apr

May

June

Last 7 days4

17k

76k

89k

131k

161k

343%

17%

47%

62%

1. Includes Middle East & Oceania; 2. Calculated as monthly average of daily new cases except in for the last 7 days; 3. Calculated as growth in month’s
average as compared to previous month; 4. Average daily case is 7-day average and growth rate is calculated basis last 7-day average as compared to 7-day
average of equivalent week in May; Source: Johns Hopkins CSSE; Our World in Data; BCG

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Daily new cases
increasing globally;
new cases in June
are already ~1.5X
those in May3

EPIDEMIC PROGRESSION& VIRUS MONITORING

Epidemic progression snapshot
As of 26 June 2020

Data shown only for leading economies within each continent4 with 100+ daily new cases

Growth of daily new cases1

Argentina

10.9%

BrazilS. America

5.2%

Colombia

3.0%

Total cases

RecoveryNew cases per
million population2

In thousands% of total cases

53

52

33%

168

1,228

55%

57

81

41%

254

259

85%

Peru

-2.8%

105

269

59%

11

490

58%

4.1%

Iran

0.0%

30

215

82%

Indonesia

-0.1%

4

50

41%

Turkey

-1.4%

15

193

86%

KSA

-2.8%

101

171

69%

83

118

51%

3

23

35%

15

61

27%

100

2,422

27%

42

203

75%

4.5%
0.7%

NigeriaEgypt7N.
America

Daily cases/M-2.5%

S. Africa

AfricaTesting

Chile6
India

Asia5

Cumulative cases

US
Mexico

0.0%
4.7%
2.5%

Test/casecurrent value3
10

0

6
\

\

\

2
8

4

\

\

6

\

15

9

\

\

8

16

\

12
5

\

7

\

\

\

\

2

2 weeks ago
20
30

12

\

1. Growth rate calculated basis 7-day rolling average of new cases; 2. 7-day rolling average; represented scale rounds up daily case/m to next 20th place; 3. Test/case data is not updated daily for few countries,
data represented is within last 1 week; 4 European countries data not shown as Europe is seeing decline in daily cases; 5. Includes Middle East & Oceania; 6. Data of 18Th June excluded for Chile as ~36k cases
were added on one day due to correction in reporting; 7. Recent test per case data not available for Egypt; Source: Our World in Data, John Hopkins, Worldometers, BCG

22

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

Daily cases

EPIDEMIC PROGRESSION& VIRUS MONITORING

5-10x higher
COVID-19 fatality
rate for thoseolder than 50
years and thosewith medical preconditions
1.6B people at relatively
higher risk globally

Fatality rate w/o underlying conditions1

Fatality rate with underlying conditions1

Estimated COVID-19 fatality rate2 in the US
without medical pre-conditions2 (%)

Estimated COVID-19 fatality rate2 in the US
with medical pre-conditions2 (%)

4-7

<0.01

<0.02

0.1-0.2

<18

18-49

50-64

0.4-0.9
65+ Age

Corresponding global population

2.3B
xx

2.9B

0.1-0.2

<18

18-49

0.4-0.8
50-64

65+

Age

Corresponding global population

0.6B

Low fatality rate <0.02 (baseline3)

0.1-0.2

0.2B
xx

0.1B

0.7B

0.5B

0.5B

Increased fatality rate compared to baseline3

1. Underlying conditions are those identified by the CDC as making people more vulnerable to COVID-19, including severe obesity (Body Mass Index >40),
diabetes, chronic heart disease, respiratory disease, kidney & liver disease; 2. US numbers estimate based on data from the New York City Department of
Health and Mental Hygiene. Fatality rate is defined as ratio between number of deaths and number of infected; 3. Baseline defined as fatality rate of
infected people <50 years old without pre-conditions; Source: Centers for Disease Control (CDC); Kaiser Family Foundation; PLOS One; The Lancet, Clark etal., Global, regional, and national estimates of the population at increased risk of severe COVID-19 due to underlying health conditions in 2020: a modelling23
study, June'20; BCG

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated
June2020
2020Version
Version5.1.
12.1.
Updated30
8 May

As of 04 June 2020

Vaccine fast movers | 16 vaccine candidates already in clinical trials

EPIDEMIC PROGRESSION& VIRUS MONITORING

As of 26 June 2020

Phase III

5

Phase I/II
BIPB1 & SinopharmOxford Univ. & AstraZeneca

BioNTech & Pfizer

Phase III recruitment underway;
planned supply build-up of 400M+
doses by end of year (if approved)

Phase I/II data exp. by July 2020,
Phase II trial in June 2020;
with start of Phase III; distribution expected completion of final
possible by Dec 2020 (if approved) trials by Nov 2021

8

Phase I

Anhui Zhifei3
Chinese AMS4
Clover, GSK, Dynavax5
CureVac62

Phase II

CanSino Biologics
Phase II advancement sinceApr 2020; follow-up expectedby Oct 2020

Imperial College London7
Novavax

Sinovac

Inovio8

Phase I/II started in May 2020;
data expected in July 2020 andfinal completion by Nov 2021

Phase II trial in June 2020;
expected completion by
Aug 2020

Gamaleya Institute9
Genexine10

Moderna

WIPB2 & Sinopharm156

Pre-clinical

FDA fast track designation in May
2020; Phase III on 30,000 patientsplanned for July 2020

Phase I/II started in May 2020;
Phase III trial approved (in June2020) to start in UAE

172

Total

1. Beijing Institute of Biological Products; 2. Wuhan Institute of Biological Products; 3. Anhui Zhifei Longcom Biopharmaceutical & Institute of Microbiology, Chinese Academyof Sciences; Phase I started in China in June 2020; 4. Institute of Medical Biology, Chinese Academy of Medical Sciences; Phase II recruitment in June 2020 with final completion
expected by Apr 2021; 5. Phase I trial started June 2020, preliminary results expected Aug 2020; 6. Phase I starting in June 2020; 7. Phase I funded by UK government started inJune 2020; 8. Phase I initial data expected in June 2020; Phase II/III trials to start July/August 2020; 9. Called Gamaleya Research Institute; trial started in June 2020 on 76
patients in Russia; 10. Trial started in June 2020 in South Korea; Source: WHO (June 24th), Citeline Pharma Project (June 26th), Milken Institute (June 23th), Bloomberg, BCG

Movement across phases, or update on
on-going trial; in the last two weeks

24

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

1

COVID-19 is likely to push ~70-100M people into extreme poverty;
South Asia and sub-Saharan Africa to be most impacted

ECONOMIC, BUSINESS,& SOCIETAL IMPACT

As of 08 June 2020

People in extreme poverty (millions)
750

Distribution of COVID-19-induced increase1 of extreme
poverty (million people)
101

700

42

71

650

32

600

39
26

550
500
2015 2016 2017 2018 2019 2020 2021

(World Bank)

4

6

3

10
4

5

1

Baseline scenario3

Downside scenario4

Pre-COVID-19 projection

South Asia

Latin America & Caribbean

Baseline scenario3

Sub-Saharan Africa

Middle East & North Africa

Downside scenario4

East Asia & Pacific

Europe & Central Asia

Increase of
extreme poverty
likely to persist
beyond 2020 since
the most impacted
regions are also
expected to have
low per capita GDP
growth rates5(World Bank)

1. COVID-19 induced increase defined as 2020 difference between scenarios and pre-COVID-19 projection minus 2019 difference between scenarios and pre-COVID-19 projection (as 2019 GDP
estimates changed for non-COVID-19 reasons for some countries); 2. Extreme poverty is measured as the number of people living on less than $1.90 per day; 3. Baseline scenario assumes theoutbreak remains at levels currently expected and activity recovers later; 4. Downside scenario assumes outbreak to persist longer than expected, forcing lockdown measures to be maintained orreintroduced; 5. Nigeria, India, and the Democratic Republic of Congo, home to >1/3 of the world’s poor, are predicted to have per capita growth rates in real GDP of –0.8%, 2.1%, and 0.3%,
respectively
Source: Lakner et al (2020), PovcalNet, Global Economic Prospects, World Bank, BCG

25

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

COVID-19 crisis expected to increase1 number Largest increase in number of extreme poor inof extreme poor2 in 2020 by 70 to 100 million
South Asia and sub-Saharan Africa

Economic forecasts point toward severe downturn in 2020;
rebound of global GDP not expected before 2021

ECONOMIC, BUSINESS,& SOCIETAL IMPACT

As of 26 June 2020

GDP level forecast1

GDP growth forecast vs. baseline(Global forecast: -4.9%)4-10% -8% -6% -4% -2% 0%
Forecast -8.0%

2%

4%

6%

8% 10%

2021(Global forecast: 5.4%)4-10% -8% -6% -4% -2% 0%Baseline 2.0%

2%

4%

6%

1.7%

4.5%

EOY 2021 vs. EOY 20198% 10%

US

97-100%
4.0%-6.1%-10.2%

1.3%

1.4%

6.0%

Europe96-99%
4.5%

-9.1%
1.0%

6.0%

5.8%

8.2%

China

107-112%
6.9%

1.0%
0.7%

-5.8%

0.5% 2.4%

Japan

96-99%
-6.1%

2.5%

-4.5%

5.8%

6.0% 6.5%

India2101-108%-3.2%

Forecast IMF (Jun 24, 2020)

Forecast World Bank (Jun 8, 2020)

Baseline IMF (Jan 20, 2020)

3.1%
Forecast range banks3

Note: As of reports dated 31 March 2020 to 24 June 2020, YoY forecasts; 1. Range calculated with 25th & 75th percentile values of forecast range; 2. For India, forecast is for financial year; for other countries, theforecast is for calendar year; 3. Range from forecasts (where available) of Goldman Sachs, JP Morgan Chase; Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; 4.
Based on IMF forecast 24 June 2020; Source: Bloomberg; World Bank; IMF; BCG

26

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

2020

Only pharma is currently at pre-crisis TSR level;
8 sectors have a significant share1 of companies with >15% default risk

Based on top S&P
Global 1200 companies

As of 26 June 2020

Categories based on TSR & net debt/enterprise value2

Healthier sectors

Pressured sectors

Vulnerable sectors

Pharm aSem iconductors
Household Products
Retailing
SoftwareFood/staples Retail
Tech Hardware
Materials
Health Equipm ent
Food & Beverage
TelecomProf. Services
Financials
Capital Goods
Transport
Utilities
Auto
Media
Durable Goods
Insurance
Real Estate
Banks
EnergyHospitality

21 Feb 2020
- 26 June 2020
0%
-2%
-3%
-4%
-5%
-6%
-7%
-10%
-10%
-11%
-12%
-13%
-15%
-16%
-16%
-17%
-17%
-19%
-20%
-23%
-29%
-31%
-32%
-35%

Companies with probability of default >15%4
12 June 2020
- 26 June 2020

21 Feb 2020

26 June 2020

0%
0%
0%
0%
9%
0%
0%
4%
0%
0%
0%
0%
0%
2%
0%
0%
0%
0%
0%
0%
0%
0%
0%
7%

11%
0%
0%
41%
8%
0%
0%
13%
0%
0%
8%
0%
0%
7%
36%
3%
29%
8%
0%
0%
17%
4%
21%
36%

Note: Based on top S&P Global 1200 companies; Sectors are based on GICS definitions; 1. Retailing, Materials, Transport, Auto, Real Estate, Energy, Hospitality with > 10% of companies with probabilityof default > 15%; 2.Net debt & enterprise value from latest available balance sheet; Categories defined based on comparison with S&P Global 1200 median: healthy = TSR & debt/EV > median,pressured = TSR or debt/EV < median, vulnerable = TSR & debt/EV < median; 3. Performance is tracked for two periods, first from 21 February 2020 (before international acceleration of outbreak) to 20
March 2020 (trough of the market) and from 21 February 2020 through 26 June 2020 based on median; 4. Implied by 5-year Credit Default Swap based on median
Source: S&P Capital IQ; BCG ValueScience Center; BCG

12 June 2020
- 26 June 2020

Pos. trend ≥ 2%
No sig. change
Neg. trend ≥ 2%27

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

TSR performance3
21 Feb 2020
- 20 Mar 2020
-20%
-30%
-16%
-40%
-30%
-10%
-26%
-32%
-31%
-23%
-17%
-30%
-35%
-35%
-34%
-30%
-41%
-36%
-39%
-39%
-39%
-39%
-52%
-44%

ECONOMIC, BUSINESS,& SOCIETAL IMPACT

Additional perspectives on COVID-19
Selected publications

Edition #11

Edition #10

Edition #9

Social Impact

Social Impact

Social Impact

Accelerating Climate
Actions in the New
Reality

Value Protection &Acceleration Roadmap to
Win in the New Reality

Future of Global Tradeand Supply ChainsProtect the Vulnerable –Protect Us All

ESG Commitments Are
Here to Stay

A Recipe to Reduce Food
Loss and Waste

Edition #8

Edition #7

Edition #6

Public Sector

Public Sector

Climate & Environment

Galvanizing Nations for
the New Reality

Sensing Consumer
Behavior & Seizing
Demand Shifts

Restructuring Costs, andManaging Cash andLiquidity

Border Biosecurity Must Be
Reinvented to Restart
Economies

Learning from COVID-19 toTransform Global Health
Systems

Climate Should Not Be theVirus's Next Victim

Edition #5

Edition #4

Edition #3

People & Organization

Strategy

Health Care

Revamping
Organizations for the
New Reality

Accelerating Digital &Technology
Transformation

Emerging Stronger fromthe Crisis

Restarting Work Safely
and Under Control

Why Do Most Business
Ecosystems Fail?

The Promise and the Perilsof Contact Tracing

Source: BCG

28

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 30 June 2020 Version 12.1.

COVID-19 BCG Perspectives

Disclaimer

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the Client and solely for the limited purposes described in the presentation. The materials shall not be copied or given to any
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The situation surrounding COVID-19 is dynamic and rapidly evolving, on a daily basis. Although we have taken great careprior to producing this presentation, it represents BCG’s view at a particular point in time. This presentation is not intended
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particularly the most recent advice issued by your local (and national) health authorities, before making any decision.

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The services and materials provided by Boston Consulting Group (BCG) are subject to BCG's Standard Terms(a copy of which is available upon request) or such other agreement as may have been previously executed by BCG.
BCG does not provide legal, accounting, or tax advice. The Client is responsible for obtaining independent advice concerningthese matters. This advice may affect the guidance given by BCG. Further, BCG has made no undertaking
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or inaccurate.

BCGRapidResponseNetwork@bcg.com

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