Weak Cash ConversionVolatile and weakening cash generation undermines the durability of the earnings recovery. Inconsistent operating/free cash flow limits self-funding of capex, dividends, and working capital needs, increasing reliance on external financing during stress periods.
Historical Leverage Spikes In DownturnsThe company’s history of higher leverage and negative returns in prior down cycles demonstrates sensitivity to demand shocks. Recurrence of such leverage patterns would pressure liquidity and restrict strategic options, making resilience conditional on sustained recovery.
Recovery Is Recent And Confidence Risk RemainsA recent return to profit after multiple loss years means the operational improvement has a short track record. If margins are not consistently observable and demand or costs reverse, earnings and cash flow could deteriorate quickly, highlighting execution risk.