Margin VolatilityLarge, persistent swings in margins reduce earnings predictability and impair the reliability of reported profitability. Such volatility complicates capital allocation and forecasting, making it harder to sustain investment plans or dividend policies if margins re-compress in future reporting periods.
Cash Flow VariabilityDespite generally positive cash conversion, episodic negative operating cash flow and recent FCF declines indicate variability in liquidity generation. This intermittency can force reliance on balance sheet buffers or external funding in downturns, limiting consistent reinvestment or distributions.
Signs Of Profitability NormalizationThe step down in ROE from prior year highs suggests prior elevated profitability may have been cyclical. If returns continue to normalize, the company could face pressure on retained-earnings growth and on the pace of capital reinvestment, constraining medium-term expansion.