...Fitch Ratings has affirmed MTU Aero Engines AG's (MTU) Long-Term Issuer Default Rating (IDR) at `BBB' with a Stable Outlook. The Short-Term IDR has also been affirmed at `F2'. The ratings reflect consistently stable, aftermarket driven earnings performance of the group, alongside improving profitability and capital structure. Fitch believes that the company's substantial investment phase peaked in 2019, which, along with the continued ramp up of its new GTF engines, should lead to a material improvement in free cash flow (FCF) generation in the near term. We believe that over the next five years, MTU should be able to achieve and maintain its increase in its earnings and cash flow generation ability, which was already evident by a stronger-than-expected 2019 performance. Following the strong and consistent financial performance, we believe that MTU is set to deliver sustainable positive FCF, which was not the case historically. In terms of leverage, the company has displayed a marked improvement,...
