High Leverage And Thin Equity CushionVery high leverage materially weakens balance-sheet resilience and raises refinancing and solvency risk if margins or demand deteriorate. A thin equity buffer constrains strategic optionality, increases interest burden sensitivity, and makes multi-year deleveraging dependent on sustained cash generation.
Tariff Exposure And North America Structural HeadwindsHeavy tariff exposure raises structural input costs in key supply chains and compresses margins where pass-through is limited. Combined with persistent North American promotional pressure and a negative regional EBIT, this creates a durable profitability headwind until sourcing or price dynamics change.
Weak And Inconsistent Cash GenerationVolatile and negative free cash flow limits ability to pay down debt, finance capex, or sustain buybacks/dividends. Reliance on episodic large quarterly inflows undermines predictability of internal funding, meaning structural deleveraging and investment plans are vulnerable without steady cash conversion.