...Not yet in the Clear: Fitch Ratings expects corporate management teams to remain cautious in 2015, despite a gradual economic recovery taking hold across Europe. Macro risks remain weighted to the downside, and even a slight delay in the expected upturn could hit already stretched corporates hard. Weaker growth, whilst not our current expectation, may affect profitability as many companies have already cut costs to the bone in recent years, leaving little headroom to absorb further significant shocks. M&A a Weapon of Choice: The rosier economic outlook will not, however, drive a sharp increase in capital investment in 2015 ¡ we expect capex to remain close to 2014 levels in the near term. Excess cash will be primarily employed to fund an increasing level of strategic mergers and acquisitions (M&A) ¡ increasingly the weapon of choice large strategic companies turn to in order to boost revenues in the face of weak demand. Cash-Flow Winners and Losers: The industrials sector is expected to...
