S&P boosts CNH Industrial

S&P said it raised its ratings on CNH Industrial NV (CNHI) and its debt to BBB+ from BBB.

“CNHI's increased profitability and low capital intensity have improved the resilience of its free operating cash flow (FOCF). Since the disposal of Iveco, the group has continuously worked on its cost structure, supporting the expected S&P Global Ratings-adjusted EBITDA margin improvement to 14.5%. These measures should have also improved its resilience in the upcoming down cycle. We understand that the group continues to optimize its cost structure, like with the recently announced efficiency program to reduce overhead costs,” S&P said in a press release.

The agency said it expects FOCF of about $800 million-$1 billion per year, supported by working capital releases of $300 million annually, and still-healthy EBITDA margins of about 12.5% in both years.

The outlook is stable.

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