Bulletin: Daimler?s Strong Second-Quarter Cash Flow Reduces Near-Term Risks To The Rating

FRANKFURT (S&P Global Ratings) July 24, 2020--S&P Global Ratings today said that German carmaker Daimler AG (BBB+/Negative/A-2)'s strong free cash flow in the second quarter increases rating headroom in the near term. However, longer-term challenges remain. The revenue and EBIT in Daimler's industrial business were generally in line with our March forecasts. The company's cash-preservation measures during the peak of the COVID-19-related lockdown resulted in about €1.8 billion of cash inflows from working capital in the first half of this year. We think the bulk of this cash inflow can be sustained, outperforming our previous assumption of a working capital cash outflow of €1 billion in 2020. In addition to the positive development in working capital, in 2020 we expect

...July 24, 2020 FRANKFURT (S&P Global Ratings) July 24, 2020--S&P Global Ratings today said that German carmaker Daimler AG (###+/Negative/A-2)'s strong free cash flow in the second quarter increases rating headroom in the near term. However, longer-term challenges remain. The revenue and EBIT in Daimler's industrial business were generally in line with our March forecasts. The company's cash-preservation measures during the peak of the COVID-19-related lockdown resulted in about 1.8 billion of cash inflows from working capital in the first half of this year. We think the bulk of this cash inflow can be sustained, outperforming our previous assumption of a working capital cash outflow of 1 billion in 2020. In addition to the positive development in working capital, in 2020 we expect Daimler's metrics will benefit from a different schedule linked to provisions for diesel litigation, warranty claims, and restructuring. We now assume these provisions will trigger cash outflows of 4 billion-6...

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