Leverage Still Relatively HighAlthough leverage has improved, a remaining elevated debt level is a structural constraint. High leverage increases interest and refinancing exposure, limits strategic flexibility and raises vulnerability to rate or funding shocks, reducing downside protection over the medium term.
Subpar Free Cash Flow ConversionFree cash flow below full conversion of reported earnings implies operational or working-capital inefficiencies. Persistently weak conversion reduces capacity to deleverage, invest organically or return capital, constraining balance sheet repair and long-term financial flexibility.
Margins Are Modest And Slightly CompressedA modest net margin (~6.4%) and a slight decline in gross margin indicate limited earnings buffer. Structural margin pressure reduces ability to absorb cost shocks or fund expansion from internal cash, making profitability more sensitive to cyclical or cost-side changes over the medium term.