...Profit, FCF Improvements: Fitch Ratings projects that Peugeot S.A.'s (PSA) core automotive operations' profitability will increase to around breakeven in 2014 and improve further to above 1% in 2015 and 2% in 2016, from a negative 2.9% in 2013 and a negative 3.9% in 2012. We expect earnings to benefit from the improved cost structure and recovering sales in 2014, albeit burdened by further FX volatility and continuously challenging market conditions. Part of the cash inflow from the capital increase in May 2014 and stronger funds from operations (FFO) will be absorbed by higher capex and a reversal of working capital. However, Fitch expects that industrial free cash flow (FCF) will become positive in 2014, following three years of substantial free cash absorption. Consequently, the Outlook on PSA's IDR was revised to Positive from Stable in October 2014. Expected Sales Recovery: Fitch expects revenue growth in 2014 to be supported by the combination of a strengthening product portfolio,...
