...Pressure on Earnings: Fitch Ratings expects further losses in Europe in 2014-2015 and a declining contribution from the usually very profitable Latin American market. This should be mitigated by Chryslers solid performance and by that of other divisions too, including its luxury brands. However, from a cash-flow perspective, improving funds from operations (FFO) will be absorbed by rising investment to make up for the cuts made in past years. Poor Credit Metrics: Fiat S.p.A.s standalone key credit metrics are more commensurate with the ,,B rating category, including FFO gross adjusted leverage at more than 7.5x at end-2013, cash from operations/adjusted debt below 15%. However, this is mitigated by better metrics on a net basis, in light of Fiats healthy liquidity, even pro forma for the Chrysler acquisition. Revised Strategic Plan: Fiats revised strategy to reposition its brands more up market and make Italy a production hub for export makes sense, but will take time and carries significant...
