...Improving Cash Flows: Airbus Group SE improved its funds from operations (FFO) margins in 2014 to 8.1% from 6.8% in 2013, largely as a result of operational improvements and lower development costs. At 30 June 2015, the last 12 months (LTM) FFO margin declined slightly to 7.5% as A350 deliveries began. The margins remain low for the 'A-' rating and may improve only gradually in the coming two to three years. Fitch Ratings expects Airbus to demonstrate the ability to improve its FFO margin to over 9% in order to maintain the rating. Free cash flow (FCF) for the LTM to 30 June 2015 improved to EUR773m (2013: -EUR1558m, 2014: -EUR577m), driven by an improvement in working-capital flows. Nevertheless, FCF is expected to be around breakeven in 2015 as the company is likely to see a rise in inventory levels related to the A350 and A320NEO programmes, and a lower level of customer advances from new orders relative to recent years. To maintain the 'A-' rating, Fitch expects Airbus to demonstrate...
