BCG Perspectives
Facts, scenarios, and actions for leaders
Publication #8 with a focus on
Galvanizing nations for the new reality
Version: 02 June 2020

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

COVID-19

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 wellbeing 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

1

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

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 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

2

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

FlattenExecutive Summary | COVID-19 BCG Perspectives• COVID-19 is a global societal crisis, threatening lives and the wellbeing of our global community• Governments across the globe are racing to respond to the human suffering and economic loss; announced stimulus packages are unprecedented• As governments plan for the new reality, they need to 1) enhance social and economic resilience; 2) build and strengthen capabilities required for the future;3) deploy equitable and forward-looking financial support• To ensure effectiveness of stimulus packages, government leaders need to follow best practices in aim, design, channel mix, and governance• Business leaders need to actively engage with governments. Stepping up on social responsibility is critical
Across countries, efforts to flatten the curve and ramp-up testing continue. The impact on economy and businesses persists• Globally, 2.5 million patients have recovered from COVID-19 and the case-doubling rate has improved to 37 days
• As countries move into the 'Fight' phase, several have started to see a decline in daily case while some emerging economies continue to see an increase• Many governments have started to relax lockdown measures; continued testing capacity ramp-up is critical in many countries• Economic forecasts are deteriorating; rebound of global GDP not expected before 2021; 20-45%+ of employees in major economies affected• Multiple sectors continue to be stressed; 11 sectors with a number of companies have more than 15% probability of default

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

Source: BCG

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

Thinking multi-timescale ina Flatten-Fight-Future logic

3

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Governments are actively responding to the societal crisis that is threatening lives and livelihoods. Need to further prepare for the new reality

1

Guide for leaders
Building and strengthening capabilities for the future
Deploying equitable and forward-looking financial support

2

Updated epidemic progression and impact
Epidemic progression and virus monitoring
Economic and business impact
Government response

4

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Enhancing social and economic resilience

COVID-19: Impact dashboard
As of 29 May 2020

Economic Impact

5.9M

2.5M

365K

GDP forecasts [%]# of cases# of recoveries# of fatalities

2020# of days of casedoubling1# of reported recoveries
as % of total cases

15 May29 May

26

33

37

US

42%

Japan

32%

36%

# of countries with
1k+ cases

87

98

112

# of tests / case2

11

14

17

16k

24K

44K

# of tests / million2

-5.9%
-5.2%

8 10

20 Mar vs 21 Feb -31%

-30%

-34%

-10%

-9%

-18%

-15%

-6%

S&P500

FTSE100DAX

CHN SSE

29 May vs 21 Feb

0.7%

Total Shareholder Returns11
6.0%

First column: 21 Feb to 20 Mar; Second column: 21 Feb to 29 May

1.9% 5.8%

India

Stock market performance11

2.0%

1.2%

China

Banks

Estimated current employment impact9% of employees
Total employment
Employees
impacted
2019 (M)
impacted10 (M)Americas

EuropeAsia

Pharma-19% 4%-20%-5-22% 8%F&B12-26% -12%-24% -13%-12% -2%

Telecom-17% -11%-20% -17%-14% -12%

Software-30% -2%-32% -10%-28% -10%

US

~159

~41

~26%

Retailing-42% -13%-36% -16%-24% 7%

UK

~33

~8

~25%

Capital goods -38% -15%

-35% -20%-29% -9%

Germany

~45

~10

~23%

Auto

-47% -24%-45% -21%-32% -12%52

France

~28

~13

~46%

Real Estate-42% -31%-26% -27%-22% -20%

6-24

Italy

~23

~8

~32%

Energy-56% -31%-45% -31%-41% -28%

Spain

~20

~4

~22%

Banks

-41% -31%-44% -40%-26% -15%

VaccineTreatment

Trials in pre-clinicalstage and beyond3

144

125

Trials in Phase 1 andbeyond49Current est. timeline
for approval & scale-up

12-36

months5

IMF-10 -8 -6 -4 -2 0 2 4 6-7.5%7
Baseline 1.3%8

Europe1 May

Business Impact

months6

1. No. of doubling days based on 7 day CAGR; 2. Median of values for top 15 countries by nominal GDP (except China); 3. Ongoing trials including pre-clinical, Phase 1 (first trial in humans), Phase 2, Phase 3, Phase 4 ; 4. Ongoing trials including Phase 1(first trial in humans), Phase 2, Phase 3, Phase 4; 5. 12 monthdevelopment "best case", then likely to require time to scale across population; 6. Remdesivir is approved now, could be more widely available by Jul '20. For the next wave, estimated timeline is Oct '20 – April '22 (6-24 months). If first round of drugs being tested succeeds – then 6-9 months; if not – substantially longer; 7. For
India, forecast is for financial year; for others, it is for calendar year; IMF April 2020 forecast; YoY forecasts; Range from forecasts (where available) of International Monetary Fund, JP Morgan Chase; Goldman Sachs, Morgan Stanley; Bank of America; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; As ofreports dated 12 April 2020 to 29 May 2020; 8. IMF January 2020 forecast; 9. Available data as of May 15; figures are changing rapidly and often being reported with a lag from the current date; 10. Includes increase in unemployment and employees covered by government's wage support programs 11. Performance istracked 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 22 May 2020;12. Food & Beverage. Source: WHO, World Bank, JHU CSSE, Our World in Data, IMF, Bloomberg, BCG, Eurostat (Europe), Gov't Wage
Support figures & comments: UK Govt 5/12 & Bloomberg 5/19 (UK), Reuters.com 4/30 & FitchRatings 5/18 (Italy), U.S. Department of Labor 5/21 (US), Ministerio de Trabajo 6/2 (Spain), Ministere du Travail 5/27 (France), Arbeitsagentur 4/30 (Germany)5

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Epidemic Progression

COVID-19 is a societal crisis, threatening lives, livelihoods, and the wellbeing ofour global community
As of 22 May 2020

Employment
impactStructural
starvation

Povertyaggravation

Domestic
violence-3%

20–46%

66%

86M

60%

Decline in global
GDP forecast for
2020, rebound topre-crisis level not
expected until endof 2021

Of employees in US
and Europe impacted
by unemployment
and/or support
programs

Of African people
run out of food andwater after 14 daysof stay-at-homeorder2

Children worldwide
at risk of slipping
into poverty throughend of 2020

Increase inemergency calls by
women subjected
to violence by theirpartners

(IMF)

(BCG)

(PERC)(Save the Children)(WHO)

1. Pharma, Telecom, Retailing, Materials, Transport, Media, Capital Goods, Auto, Real Estate, Energy, Hospitality with > 10% of companies with probability of default > 15%
as of 15 May 2020 2. Study conducted on 20,990 adults across 28 cities in 20 African Union member states (March 29 to April 17, 2020)
Source: BCG

6

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Economic recession

Governments across countries are racing to respond to the human suffering andeconomic loss

Singapore government ramps up
reskilling efforts for sectors hardest
hit by COVID-19

Australian federal government
unveils $1.8 billion stimulus for local
job growth

Small-Business Loan Terms Eased
Under U.S. House-Passed Bill
7

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

As of 29 May 2020

Announced stimulus packages are unprecedented,
and already dwarf Global Financial Crisis scale
As of 29 May 2020

UK
Germany$556 Bn$1,390 Bn
20.1% of GDP 37.0% of GDP

Canada$207 Bn
11.9% of GDP

Russia$47 Bn
2.7% of GDP

France$494 Bn
18.2% of GDP

US$2,756 Bn
12.9% of GDP
Mexico$11 Bn0.9% of GDP

EU5$820 Bn; 5.4% of GDP

Italy$912 Bn
45.6% of GDP

Turkey$51 Bn
6.8% of GDP

USD

TrillionJapan$2,200 Bn
42.2% of GDP

stimulus packages announced
progressively by countries3 aspart of current crisis

S Korea$182 Bn
11.1% of GDP

Brazil$147 Bn
8.0% of GDP
Argentina$18 Bn
4.0% of GDP

~10

China
$887 Bn
6.2% of GDP~14%
S Africa$29 Bn
9.8% of GDP

of GDP
Saudi
Arabia2$20 Bn
2.6% of GDP

Indonesia$45 Bn
4.0% of GDP

Australia$110 Bn
8.5% of GDP

Average COVID
stimulus
package3

vs~4%
of GDP

Average GFC4
stimulus
package3$xx Bn Approx. Nominal Value of COVID-19 stimulus package in US dollars
1. Numbers may differ from total stimulus announced by various countries due to composition including fiscal as well as monetary measures. Also, different methodologies used across countries in assessing thesize of the stimulus e.g. inclusion of guarantees or value of tax deferrals; 2. Saudi Arabia total stimulus figure takes into account budget rationalization of ~40B announced by the Ministry of Finance on March 19thand May 11th; 3. Data is represented for G20 countries, excluding India; Total figure of USD10 trillion & 14% of GDP excludes EU figure as it is still pending member state approval 4. Global Financial Crisis 5.
Pending approval of member states; GDP figure excludes the UK; Note: stimulus packages inclusive of loans and loan guarantees; figures include preliminary estimates from IMF as additional stimulus measures
are being announced or details of individual measures being finalized; Sources: IMF, Reuters, Australian Treasury, Italy MEF, BMWI, OBR; BCG

8

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Data shown only for fiscal stimulus andexclude monetary policy measures1

In addition to responding to the human suffering and economic loss,
governments also need to plan for the new reality
Flatten... to the new reality

Improve health care capacity(test, track and trace, treat)1

Enhance social and economic resilience

Lockdown and restart approach(plan when and how)2

Build and strengthen capabilities for the future

Protect the most vulnerable

3

Deploy equitable and forward-looking financial support

Source: BCG

Future9

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

From crisis response ...

FightSocial and economic resilience | Almost all countries acceleratesocial protection initiatives; continued efforts necessary

As of 29 May 2020

Leaders need to continue the progress made…

~$570B

Institutionalize
selected new
programs, use
crisis as catalyst
to close gaps

has been pledged
globally toward social
protection initiatives(0.7% of 2019 World GDP)1… and think holistically about how social protection can enhance resilience
Key pillars

55%
of measures are new
benefits or programs
recently deployedby the governments

Engineerfinancialsustainability ofbasic protection
measures beyond
one-off stimulus

HealthEnsure tripartite
approach among
government,
business, andemployees

Leverage digitaldelivery channels
that are fast andcost-effective

Basic needs

Preserve agile
and crossgovernment
working mode

Income security

Need based on life-cycle and risks
EffectivenessLeversfor design

Sustainability and funding
Coherence of programs
Delivery models for businesses and beneficiaries

1. Preliminary estimates on total global social protection spend since not all countries report on cost figuresand some are planned volumes, 2019 Global GDP: 86.6 trillion from IMF; Source: OECD, ILO, World Bank, BCG

10

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

1,046 measures in
188 countries
announced so far

1Building capabilities for the future | Skills mismatch could cost ~$18 trillion
in unrealized GDP by 2025; mitigation measures need to be intensified

2

Existing skills mismatch have been exacerbated by COVID19 crisis; due to increased need for high-skilled jobs, forexampleGovernments have taken
actions to address skills

Global Labor Productivity (US $ K)1

Improve access and fill gaps

47

Expected potential
GDP loss46$18.4 Trillion

45
44

1%

43

Current
GDP loss

42$7.9 Trillion

8%Additional potential
new job/business
opportunities from COVID19, e.g. in IT/Tech/Digital
Potential productivity
11%
if skills mismatch
eliminated
ХХ% Productivity gap
due to skills mismatch
Base casefull rebound to preCOVID-19 growth rates

41
40
39

6%

10%

38
37
36

2019

2020

2021

…

2025

Negative casepersistent skills mismatch
imbalances due to COVID-19,
e.g. higher need for skilledworkers and/or restrictedavailability of trainings

Australia promotes labor-sharing platforms to access staffing opportunities

Support up-/reskilling
Singapore subsidizes trainings to address structural labor market changes

Support critical services
Ireland reallocates workers to sectors
low on capacity, for example, to health care

Further reading
Governments Must Fix the Skills
Mismatch for a Post-COVID World

1. GDP per capita, Purchasing Power Parity exchange rate, real, US dollars at 2015 prices
Source: Oxford Economics; BCG

11

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

As of 18 May 2020

Building capabilities for the future | Counter-cyclical investments required;
governments need to double down on innovation and digital2

EU example from Global Financial Crisis

Invest counter-cyclically in innovation …

… while building a conducive environment

140%

Sweden, Denmark,Germany, Finland, UK, etc.

Leaders1…invested moreduring unstable times

Prioritize
projects with
future needs• Stimulate digitization and innovation• Focus on environmentally sustainableindustries and maximize social
returns2

Establish
complementarypolicies• Invest in supporting infrastructure• Ensure that regulation keeps pace withtechnology and scientific advances

Drivecollaborationand foster
ecosystem• Promote international partnerships• Foster collaboration between academia
and business

120%

EU 28
100%

80%

Followers

Laggards…invested less during
last crisis
2007

2008

2009

2010

2011

2012

2013

1. Based on EU's Innovation Union Scorecard indicator for innovative performance pre-crisis (2007) 2. E.g. healthcare R&D, smart diagnostics, public health awarenessSource: Public Investment in R&D in Reaction to Economic Crises – Longitudinal OECD Study

12

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Share of R&D in Total Government Expenditure (%)

Financial support | Stimulus packages essential for sustainable recovery;
multiple waves may be required

3

Positive economic impact

Context and goals shapestimulus design

Multiple waves

Speed of deployment

Stimulus measures havehistorically demonstrated
positive impact in accelerating
economic reboundAnnounced stimulus size andcomposition varies acrosscountries based on context,
priorities and objectives

Largest stimulus historically multiple waves expected tohelp navigate crisis andaddress growing constituencies

COVID-19 stimulus funds to be
fully deployed soon– execution
and timely disbursal critical

Example: US emergency
funding (2009 to 2011) raised
the country’s GDP by 2% to
2.5%

Example: Canada andFrance among few countries
to have linked stimulus toclimate actions

Example: US stimulus of $2
trillion revised to $3trillion.
Japan added $1trillion to
COVID response

E.g. Germany government
disbursed €500M to freelancers
within 4 days of launching grant
program

Source: IMF, International Labor Organization, Congressional Budget Office, US, Department of Finance, Reuters, BMWI, OBR, OECD, Eurostat Database; CNBS; St. Louis Fed; O*NET; American Community
Survey, National Authorities, Oxford Economics, Johns Hopkins CSSE; BCG

13

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

As of 17 May 2020

Financial support | Four principles emerge to ensure effective
design and implementation

3

As of 29 May 2020

Determine an optimal
stimulus design

Select the right channel for
disbursement

Deploy inclusive
governance structure

Focus on the most vulnerable
sectors

Communicate consistently to all
audiences

Leverage digital to boost
productivity and reachSet clear mandates and engage
necessary stakeholders

South Korea employment security
scheme for hardest hit sectors

Singapore shares infographics via
social media and official websites

Brazil provided unbanked withsmartphone based savings accountTarget systemically critical sectors & social/econ. multipliers

Tailor stimulus to the target
groups, define eligibility criteria

Use existing channels where
possible

Germany's MOF provides oversightand clear allocation of
responsibilities to agencies andStatesCoordination between oversightand fiscal authority

France, UK offer compensation
schemes1 to partially cover payroll

Australia has guardrails & compliance checks for wage subsidies

Switzerland unveiled CHF60 B for
SMEs via bank network

UK's Treasury and Bank of Englandmonitor overall stimulus execution

Invest in new reality andembrace sustainability

Balance short- and long-term
impact, have clear exit strategy

Build for the future, e.g. use ofdigital & fintech

Monitor and provide
transparency

Canada creates Emissions
Reduction Fund

Germany’s economic stabilization
fund guarantees loans for 60 months

US launched My Payment App
for the direct deposit of stimulus

Germany has KfW tracker on loan
requests
Further reading
Generating the Right Returns
from Stimulus Packages

1. Applied by ~90% of G20 & OECD countries 2. Bank of England
Source: BCG

14

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Aim for equitable &sustainable growth

Critical for governments and businesses to track andunderstand long-term shifts
As of 21 May 2020

Supply chain ecosystems
will be very disrupted

Competitive landscapewill change dramatically

Need for digital engagement
has shifted consumer behavior,preference, and choice

Supply chains interrupted
by uneven movement
restrictions across nations

Pushed-out companies may
generate attractive acquisition
targets

Ex.: 48% of consumers
plan to maintain theirchanged habits1

Ex.: 20-30% decline inglobal trade expected
as result2

Ex.: -4 to +6 p.p. market
share for video-conferencing
companies in two months3

New government andcommunity expectations will
emergeShift in balance of public
and private mandates andneed for social license-tooperate
Ex.: Auto OEM produces
30,000 respirators under
Defense Production Act4

1. BCG COVID-19 Consumer Sentiment Survey, April 20, 2020 (N= 1,584, unweighted, representative within ±3% of German census) 2. UN Contrade, OECD, IHS, WTO, IMF, BCG Trade Finance Model 2020 3.
Delta between Jan and March 2020; RBC Capital Markets Zoom Analyst Report (March 2020), Steam Hardware Survey, 2020 4. Manager Magazine, March 2020
Source: 'New Normal' Scenarios by BCG CFS; BCG

15

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Consumption patterns
will be altered in a
non-linear way

Business leaders need to actively engage with governments
Implications for business leaders
Support decision making

Benefit and give backCreate an understanding ofstarting situation of countries
you operate in (impact on
industries and society)

Monitor the current stage ofstimulus package (design phase,
sector allocation, company breakdown, deployment)

Build and evaluate options forbold strategic moves arisingfrom economic agenda of
relevant governments

Monitor the outcomes
governments are pursuing(short-term liquidity vs. long-term
growth), and plan accordingly

Track and provide inputs on
next steps government officials
are thinking through (such as
criteria to apply for companies)

Actively pursue viable
diversification into other(and potentially more beneficial)businesses or geographies

Estimate the expected impact ofstimulus packages on your sector
and company, locally and abroad

Engage with stakeholders directlyor via associations to explain
context and critical needs

Create an action plan to benefit
from targeted future growth andalso give back to society

Source: BCG

16

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Generate transparency

Many companies already stepping up on social responsibility;
which also positively impacts customer preferences

Help local communities
Mining company provides
services to local communities—food, supplies, andtraining to 70 clinics

As of 20 April 2020

Support the weakest
Mask manufacturer
prioritizes customers
according to theirvulnerability+35% of shoppers net1 likely to buy from brands that stoodout positively during the crisis (%)
+47%
+40%
+36%

Ø +35%+32%
Step up for your people
Airline company supported
evacuation efforts for~90,000 people frommultiple locations+22%

Find quick/creative solutions
Natural resources company
accelerates ~$60 million
liquidity to small suppliers by
reducing payment terms
US

Source: BCG

UK

Germany

Italy

China

1. Difference between people who are likely to increase and people who are likely todecrease; Source: BCG-COVID-19 Consumer Sentiment Survey, April 17-20, 2020 (N =5728 across US, UK, Germany, Italy, and China; unweighted); BCG

17

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

As of 29 May 2020

1

Guide for leaders
Building and strengthening capabilities for the future
Deploying equitable and forward-looking financial support

2

Updated epidemic progression and impact
Epidemic progression and virus monitoring
Economic and business impact
Government response

18

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Enhancing social and economic resilienceApproximately 2.5 million reported recoveries1 globally so far;case-doubling rate improves to 37 days

EPIDEMIC PROGRESSION &VIRUS MONITORING

As of 29 May 2020

UK

USA

China
Iran

Days of doubling cases:

Countries with cases3

29 May'20

26
8
days

33
12
days

18
37
days
days

# of days of case doubling2 globally

Brazil185

15 May'20

Japan
South
Korea

India

0-3 days

1 May'20
Italy

1.1M

1.6M

2.5M

(32%)

(36%)

(42%)

Total # of recoveries (as % of confirmed cases)
3-6 days

6-14 days

5.9M[∆1.9%]4

Confirmed cases globally

14-30 days

365k

>30 days
49
55

69

79
67

[∆1.1%]4

Fatalities globally# of countries with community transmission5

Note: Continued cases and fatalities are subject to different testing, propensity, reporting standards, hence are imperfect measures
1. Refers to total reported recoveries as a percentage of total reported infections (cases) 2. No. of doubling days based on 7-day CAGR 3. Basis Johns Hopkins CSSE 4. Daily growth rate basis 7-day CAGR;
5. Community transmission defined basis WHO - Countries experiencing larger outbreaks of local transmission on basis of decided factors
Sources: Johns Hopkins CSSE; Our world in data; WHO situation reports; BCG

19

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

FranceSpain

As countries move into Fight phase, several have started to see
decline in number of daily cases

EPIDEMIC PROGRESSION &VIRUS MONITORING

As of 29 May 2020

Non-exhaustive

Several countries improving doubling rate...

Fight

Daily cases (seven-day moving average)
for countries2 with doubling rate > 21 days

Daily growth rate of total cases (seven-day average)
7%

70,000

6%
Kenya

5%
4%

Argentina

Chile

S Africa
Egypt
Colombia
MexicoNigeria

Cases doubling:
14 daysIndia Brazil
Cases doubling:
21 days

3%

1%
0%
1,000

50,000US

40,000
Canada30,000Singapore
Canada Iran
Ghana
SwedenUK
S Korea
MoroccoGermany
FranceJapan Belgium
Italy
China
Australia
Austria
Spain

North America

Asia1South America

US

Africa1. Includes Middle East and Australia 2. Countries selected from the chart on the left
Source: Johns Hopkins CSSE; Our World in data; BCG

Spain

20,00010,000100,000
1,000,000
Cumulative number of confirmed cases (log scale)
EuropeUK

RussiaAlgeria2%

60,000

Italy
FranceGermany

10,000001 MarRussiaIran

15 Mar

01 AprNorth America

15 Apr

01 May15 MayEuropeAsia1

Africa29 May20

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Rates improving from top to bottom

Flatten...driven by decline in number of daily cases

Some countries currently have cases doubling under 21 days;
strong monitoring essential in the next few weeks

EPIDEMIC PROGRESSION &VIRUS MONITORING

As of 29 May 2020

Non-exhaustive

Some countries currently have high case growth rate...

Fight

Daily cases (seven-day moving average)
for countries2 with doubling rate < 21 days

Daily growth rate of total cases (seven-day average)
7%

70,000

6%
Kenya

5%
4%

Argentina

Chile

S Africa
Egypt
Colombia
MexicoNigeria

Cases doubling:
14 daysIndia Brazil
Cases doubling:
21 days

3%

1%
0%
1,000

50,00040,000
Mexico30,000India

RussiaAlgeria2%

60,000Singapore
Canada Iran
Ghana
SwedenUK
S Korea
MoroccoGermany
FranceJapan Belgium
Italy
China
Australia
Austria
Spain

North America

20,000US

10,000100,000
1,000,000
Cumulative number of confirmed cases (log scale)
EuropeAsia1South America

Africa1. Includes Middle East and Australia 2. Countries selected from the chart on the left
Source: Johns Hopkins CSSE; Our World in data; BCG

Brazil

10,000Chile

001 Mar

15 Mar

01 AprNorth America

15 AprAsia1

01 MaySouth America

15 May29 MayAfrica21

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Rates improving from top to bottom

Flatten...driven by increase in number of daily cases

Governments have started to relax lockdown measures
As of 29 May 2020

Non-exhaustive

Total
Current status of measures implemented bycases (K) various governments

Change in lockdown restrictions basis
stringency index1

North
America

Asia

May

UK

273

Lockdown easing started from 13 May; outdoor exercise, travel to work allowed

Spain

239

Phase 2 of lockdown easing started from 25 May; shops, restaurants reopened

Italy

232

France187

Factories, wholesale trade, parks opened; bars and restaurants reopened on 15
May

Germany

183

Sweden

36

US

1,746

Canada

91

India

174
2

China

84

Japan

16

S. Korea

11

Lockdown started
Index

April

Restrictions without lockdown

Min restrictions

Shops, primary schools, beaches began opening; restaurants, bars remain closed
Cautious exit in coordination with states; shops reopened, select borders eased
Restaurants, schools, businesses remained opened; gatherings of 50+ banned
Restrictions eased in all states except two; measures vary across states
Several provinces started to ease restrictions on non-essential businesses
Non-essential shops, e-com. restarted; restrictions on outside movement eased
Renewed restrictions in Northeast region starting from 10 May
Started lifting emergency from 14 May; lifted across the nation on 25 May
Avoided lockdown (except schools); schools also reopened from 20 May

Re-entry started

Max restrictions

1. Stringency index is calculated using 8 govt. policy indicators (School closing, workplace closing, public events cancellation, gatherings restriction, public transport closure, stay at home requirements, internal
movement restrictions, international travel controls) and public information campaigns; represented for selected countries; Data as of 24t May,2020. 2: In China, lockdown has been started only in Northeast
22
region; Note: Lockdown is defined as "stay at home" orders from govt. People are allowed to go out only for essential activities like medical, grocery shopping, etc. following certain restrictions. Lockdown measures
can differ across countries; Source: Oxford covid-19 Government response tracker; Our world in Data, News articles

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

March

EuropeEPIDEMIC PROGRESSION &VIRUS MONITORINGAs countries further relax lockdown measures,continued testing capacity ramp-up is critical

EPIDEMIC PROGRESSION &VIRUS MONITORING

As of 29 May 2020

As countries ramp-up testing capacity...

..they must plan to move beyond testing symptomaticpatients to greater degrees of population monitoring

Daily new cases per million population1

Overall testing level required

100
Brazil

Bubble size represents
total cumulative cases/M(Here 2,000 cases/M)

Singapore

80

Highestimmediatepriority

Sweden40

United Kingdom
Mexico Belgium
Spain

20

FranceCanadaItaly India
Japan

Switzerland

0

10
North America

Fight

FutureCritical toadvance in fight stage

United States

60

0FlattenSouth Africa
Germany

20
EuropeIsrael Iceland South Korea
Malaysia Australia

30
Asia2

Diagnose
symptomaticpatients

Test allcontacts ofpositive
cases

Surveillanceof high risk andmost vulnerable
populations

200
Total tests / Total cases

South America

Broadpopulation
surveillance

Futurepriority
Test3 forimmunity invaccinatedpatients

Time

Africa

1. Taken as 7-day moving average; 2. Includes Middle East and Australia; 3. Tests for testing immune response to vaccines may be different from current ones to test
infection
Source: Our World in Data, Worldometer, BCG Analysis

23

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

Non-exhaustiveEconomic forecasts point towards severe downturn in 2020;
rebound of global GDP not expected before 2021

ECONOMIC & BUSINESSIMPACT

As of 29 May 2020

GDP level forecast1

GDP growth forecast vs. baseline

EOY 2021 vs. EOY 20192021

-10% -8% -6% -4% -2% 0%
Forecast -5.9%

2%

4%

6%

8% 10%-10% -8% -6% -4% -2% 0%Baseline 2.0%

2%

4%

6%

1.7%

4.7%

8% 10%

US

96-100%
Forecast range
-7.5%

1.3%

1.4%

4.7%

Europe95-99%
1.2%

6.0%

5.8%

9.2%

China

107-112%
-5.2%

0.7%

0.5%

3.0%

Japan

95-99%
1.9%

5.8%

6.5% 7.4%

India2101-108%
Forecast IMF (Apr 2020)

Baseline IMF (Jan 2020)

Forecast range Banks3

Last week's forecast range (onlyshown if change is significant)Note: As of reports dated 31 March 2020 to 29 May 2020, YoY forecasts 1. Range calculated with 25th & 75th percentile values of forecast range 2. For India, forecast is for financial year (last week's forecast
adjusted like for like); for other countries, the forecast is for calendar year; 3. Range from forecasts (where available) of International Monetary Fund, Goldman Sachs, JP Morgan Chase; Morgan Stanley; Bank ofAmerica; Fitch Solutions; Credit Suisse; Danske Bank; ING Group; HSBC; Source: Bloomberg; IMF; BCG

24

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

2020

Multiple sectors continue to be stressed; 9 sectors with a number ofcompanies with high1 probability of default

ECONOMIC & BUSINESSIMPACT

As of 29 May 2020

Decline reflects economic scenario and consumer sentiment
21 Feb 2020
- 20 Mar 2020

Healthier sectors

Pressured sectors

Vulnerable sectors

PharmaHousehold Products
Food/staples Retail
Health Equipment
Semiconductors
Tech Hardware
Retailing
SoftwareFood & Beverage
Materials
Prof. Services
Telecom
Transport
Capital Goods
Financials
Media
Utilities
Auto
Durable Goods
Insurance
Hospitality
Real Estate
Energy
Banks

-20%
-16%
-10%
-31%
-30%
-26%
-40%
-30%
-23%
-32%
-30%
-17%
-34%
-35%
-35%
-36%
-30%
-41%
-39%
-39%
-44%
-39%
-52%
-39%

21 Feb 2020
- 29May 2020
1%
-3%
-5%
-6%
-7%
-7%
-8%
-8%
-9%
-11%
-11%
-11%
-13%
-15%
-15%
-15%
-16%
-17%
-19%
-26%
-28%
-29%
-31%
-31%

Companies with probability of default >15%3
15 May 2020- 29 May 2020

21 Feb 2020

29 May 2020

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

5%
0%
0%
0%
0%
0%
41%
8%
0%
13%
0%
12%
36%
11%
0%
15%
0%
33%
5%
0%
36%
17%
21%
4%

Note: As of 6 May 2020; Based on top S&P Global 1200 companies; Sectors are based on GICS definitions; 1. Companies with probability of default >15%;
2. 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 29 May 2020 based on median; 3. Implied by 5-year Credit Default Swap based on median Source: S&P Capital IQ; BCG ValueScience® Center; BCG

15 May 2020- 29 May 2020

Pos. trend >= 2%
No sig. change
Neg. trend >= 2%

25

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

TSR performance2

Governments face different starting points for stimulus response
As of 26 May 2020

As of 05 May 2020

Americas

Asia

Interest rates1(yearly change)

Debt to GDP2
(in %)

Tourism,
Grocers and health Legal,software, Auto,care providers, etc.
etc.
mining, etc.restaurants, etc.

69

Germany

53,567-0.45%(-0.29%)France47,223-0.01%(-0.27%)115

UK

46,8270.19%(-0.73%)

96

68%

Spain

41,5920.68%(-0.11%)

113

67%

7%

11%

15%

Italy

40,4701.55%(-1.14%)

66%

8%

14%

12%

US

65,1120.68%(-1.58%)Mexico20,868

6.13%(-1.84%)

Brazil

16,462

7.06%(-1.58%)

Japan

45,5460.00%(0.07%)

China

19,5042.72%(-0.65%)

65

India

8,378

5.98%

(-1.17%)

74

65%
54%

156
131

12%

53%

61

11%

11%

62%

53%
65%

1. 10 year government bond yield 2. 2020 number per IMF Fiscal Monitor April 2020 3. Purchasing power parity
Note: European figures reflect gross output by sector, which is analogous to revenue by sector. US figures directly reflect revenue by sector.
Source: Eurostat Database; CNBS; Statistics Bureau of Japan; St. Louis Fed; O*NET; American Community Survey; other country-specific sources on request; BCG

7%

19%

11%

29%

4%
Limited
Low

13%

11%

LimitedMedium

18%
12%

25%

71%
Open
Under stay-at-home
Low to HighContact intensity

12%

9% 1%
5%

9%

23%
8%

71%

252

22%

13%

98

16%

10%
19%

6%
LimitedHigh
26

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

GDP per capita(in $, 2019, PPP3)

Preliminary figures

Revenue by sector (%)

Macro Indicators

EuropeGOVERNMENT RESPONSE

Due to different starting points,
governments have opted for a different mix of measures

GOVERNMENT RESPONSE

As of 28 May 2020

Select countries' stimulus breakdown by types of measure (%)

16

207

1,390
0

556
0

494

912

3

4

46
8
2

24

20

2

10

4

4
66

8
6

10

70

4

4
58

11
8
9

31
24
1 1
USA

3
7

1

2 2

9

Canada Germany

11

39

5

Revenue & expenditure
Income support

29

41

42

4

2
4

5

3

7

8

2

UK

France

Italy

3

23

12
Russia5
10

KSA

Direct payout/
welfare allowance
Fiscal relief(tax relief, fees relief)

10

8Loans/equity injection
Equity injections
Loans

5

1

Public information not available
Guarantee
Guarantees

9

40

33

13

12

11
2

49
74

~65%

110
100%

3

18
26

2,200

19

Japan Australia

Germany, UK, and Japan's
stimulus spend targeted atbusinesses~40%
Australian stimulus funding
targeted at workers via wage
subsidy program~2-9%
UK, US, and Germany funding
dedicated to health care

Wage subsidy to businesses
Grants/subsidies

Canada and France have linked
stimulus support to climate actions1

1. Canada linked CA$1.7B support for the oil & gas sector to cleaning up orphan and inactive oil and gas wells, and set up CA$750M Emission Reduction Fund; France has set green conditions for the €7bn
state loan to Air France and work toward being the world's "most environmentally friendly" airline
Note: Figures include preliminary estimates from IMF as additional stimulus measures are being announced or details of individual measures being finalized
Source: IMF, National Authorities, Oxford Economics, Bruegel, Press research; BCG analysis

27

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

2,756
0

Additional perspectives on COVID-19
Selected general publications

Selected sector publications

Edition #7

Edition #6

People & organization

Climate & Environment

Public Sector

Public Sector

Sensing Consumer
Behavior & seizing
Demand Shifts

Restructuring Costs, andmanaging Cash andLiquidity

Governments Must Fix
the Skills Mismatch for a
Post-COVID World

Climate Should Not Be theVirus’s Next Victim

Start Reimagining
Government Now Beyond the Curve

Generating the Right
Returns from Stimulus
Packages

Edition #5

Edition #4

Diversity & Inclusion

Leadership

Public Sector

Public Sector

Revamping
Organizations for the
New Reality

Accelerating Digital &Technology
Transformation

Easing the COVID-19
Burden on Working
Parents

Is Leadership Your Agile
Blindspot?

Three Paths to the
FutureHow Governments Can
Galvanize Their Nations
for the ReboundEdition #3

Edition #2

EconomyEconomics & Society

Healthcare

Agriculture

Emerging stronger fromthe Crisis

Preparing for the RestartCompanies Need to
Prepare for the Next
Economic Downturn

How Chinese Companies
Have Responded toCoronavirus

Restoring Patients’Confidence in Elective
Health Care

Signs of ReboundForecast a New Era for
Agriculture

Source: BCG

28

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

COVID-19 BCG Perspectives

Disclaimer

The materials contained in this presentation are designed for the sole use by the board of directors or senior management of
the Client and solely for the limited purposes described in the presentation. The materials shall not be copied or given to any
person or entity other than the Client (“Third Party”) without the prior written consent of BCG. These materials serve only as
the focus for discussion; they are incomplete without the accompanying oral commentary and may not be relied on as astand-alone document. Further, Third Parties may not, and it is unreasonable for any Third Party to, rely on these materials
for any purpose whatsoever. To the fullest extent permitted by law (and except to the extent otherwise agreed in a signed
writing by BCG), BCG shall have no liability whatsoever to any Third Party, and any Third Party hereby waives any rights andclaims it may have at any time against BCG with regard to the services, this presentation, or other materials, including theaccuracy or completeness thereof. Receipt and review of this document shall be deemed agreement with and consideration
for the foregoing.
BCG does not provide fairness opinions or valuations of market transactions, and these materials should not be relied on orconstrued as such. Further, the financial evaluations, projected market and financial information, and conclusions containedin these materials are based upon standard valuation methodologies, are not definitive forecasts, and are not guaranteed by
BCG. BCG has used public and/or confidential data and assumptions provided to BCG by the Client. BCG has notindependently verified the data and assumptions used in these analyses. Changes in the underlying data or operating
assumptions will clearly impact the analyses and conclusions.
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
to: (i) constitute medical or safety advice, nor be a substitute for the same; nor (ii) be seen as a formal endorsement or
recommendation of a particular response. As such you are advised to make your own assessment as to the appropriate
course of action to take, using this presentation as guidance. Please carefully consider local laws and guidance in your area,
particularly the most recent advice issued by your local (and national) health authorities, before making any decision.

29

Copyright © 2020 by Boston Consulting Group. All rights reserved. Updated 2 June 2020 Version 8.1.

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
to update these materials after the date hereof, notwithstanding that such information may become outdated
or inaccurate.

THANK YOU
Contact

BCGRapidResponseNetwork@bcg.com