...Relative Resilience of Profitability: The Positive Outlook reflects the relative resilience of Renault SAs earnings and cash flows in a difficult environment. Operating margin declined in 2012, but recovered to 3% in 2013. Automotive operations profitability has remained positive since 2009. Fitch Ratings expects a further strengthening of group margins towards 5% by 2016 and of automotive margins towards 3.5%. The cost base benefits from increased synergies with Nissan, cost-cutting measures and higher production outside western Europe. Improved Credit Metrics: Net financial debt has fallen substantially since 2009 as a result of positive FCF and asset sales, while earnings and funds from operations (FFO) rebounded in the same period. Fitch assumes Renaults FFO adjusted net leverage will remain broadly unchanged at 0.2x at end-2014, after decreasing from 0.7x at end-2011 and 4.8x at end-2009, and cash from operations (CFO) on adjusted debt will stabilise around 35% at end-2014 in line...
