S&P changes view on Daimler to negative

S&P said it revised its outlook for Daimler AG to negative from stable on weak profitability and cash flow. It also affirmed Daimler’s A long-term rating, A-1 short-term issuer credit ratings and A issue-level on the company’s unsecured debt.

“We now see Daimler’s profitability to decline to about 6%-7% – well below our previous expectations of about 10% EBITDA margin in 2019 – and believe cash flow after capital expenditure and dividends will remain negative in 2019-2020, the agency said.

The outlook revision reflects S&P’s concern that Daimler might not return to profitability in 2020 on weaker market circumstances, it said.

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