Rising LeverageLeverage increasing to roughly 1.49x equity materially heightens financial risk, making Loomis more sensitive to interest-rate moves and earnings swings. Higher debt constrains strategic flexibility, raises refinancing risk and could amplify stress if cash flows weaken further.
Cash Flow DecelerationA step-down in operating and free cash flow in 2025, with FCF growth at -3.1%, reduces the margin for error on debt servicing and reinvestment. If the deceleration persists, it could impair capacity for capex, working capital and deleveraging over the medium term.
Net Margin PressureA slip in net margin despite stable EBIT suggests rising financing, tax or non-operational costs are compressing bottom-line returns. Continued net margin pressure would weaken ROE and limit the company's ability to reduce leverage or increase shareholder distributions sustainably.