Weak Cash ConversionConsistent negative OCF and FCF indicate profits are not converting to cash, raising structural liquidity and refinancing risk. Persistent cash deficits constrain self-funding for inventory and capex, increase dependence on external financing, and can threaten long-term sustainability if not reversed.
Elevated LeverageRising absolute debt and sustained leverage raise interest and refinancing exposure, reducing financial flexibility. In a sector sensitive to working-capital swings, higher leverage increases vulnerability to funding-cost increases and could force slower expansion or asset sales in stress scenarios.
Uneven Profitability HistoryHistoric margin volatility suggests sensitivity to raw material prices, product mix and seasonality. This undermines predictability of future earnings and cash flow, making it harder to rely on recent margin gains for long-term capital planning and increasing execution risk for durable margin improvement.