End-market Weakness And Tariff ExposureDeclines in consumer electricals and medical end-markets, driven partly by tariffs and delayed orders, reveal exposure to cyclical and policy-driven demand swings. Persistent tariff uncertainty can alter sourcing economics and margins, pressuring revenue diversification and medium-term predictability.
Suboptimal Free Cash Flow ConversionA relatively low FCF-to-net-income ratio means earnings do not fully convert into free cash, limiting discretionary capital for buybacks, dividends or large investments. Improving working capital and conversion is necessary to sustainably finance growth without raising leverage.
Capital Intensity And Leverage SensitivityOngoing capacity expansion and capital deployment raise capital intensity; while leverage is moderate today, continued investment or slower demand could tighten covenant headroom. Managing reinvestment versus balance-sheet strength is a persistent execution risk over the medium term.