Risks and risk management

Risks associated with the implementation of the company's transformation plan.

The financial result may not improve to the extent that Fingerprints expects.

Clear governance, regular risk analyses and flexible adaptation of the strategy.

Delivery capacity of contracted suppliers.

Financial damage as a result of delivery disruption.

Maintaining a diversified supplier base of hardware and input materials.

Risks related to outsourcing

Delivery capacity can be negatively affected.

Thorough supplier validation, clear agreements and ongoing quality follow-up.

Reduced technological leadership.

Loss of competence.

Continuous product development and understanding of customer demands, increased R&D collaboration with customers.

Risks related to the general perception of biometric sensors.

Reduced demand.

Transparent communication about security and privacy, as well as communication activities to increase understanding of the benefits of technology.

The company is dependent on its key employees.

The loss of key employees or difficulties in attracting new qualified personnel may adversely affect the Group's operations.

Competitive terms, clear career paths and a strong corporate culture.

Leaks and infringements regarding business secrets.

Financial consequences and loss of reputation in connection with leaks of development information.

Implement IT Policy through training and integration in management system. Develop procedures for platforms, systems and cloud when managing high risk data.

IT and cybersecurity risks, as well as risks related to system failures, downtime and other interruptions

Supply disruptions, leakage of confidential information, and other negative impact on business.

Robust security systems, regular updates and monitoring.

Internal scalability.

Growing pains when the company’s infrastructure and work methods are not involved to the same extent as the financial development.

Investments made in Management system, processes development is ongoing. Investment in HR system, implementation is ongoing.

Geopolitical instability.

Loss of business opportunities for local/regional political reasons. Political developments, including increased trade tensions, tariffs, or trade restrictions, may impact our operations and supply chains. Fingerprints’ current assessment is that the company is not materially impacted directly by the war between Russia and Ukraine, nor by any other ongoing armed conflicts.

Differentiate Fingerprints biometric solutions vis-à-vis low cost products with low biometric integrity. We closely monitor developments related to increased trade tensions and maintain readiness to take appropriate action to mitigate potential negative effects.

Supplier costs.

Reduced margins due to increase in supplier costs.

Ensure market-aligned pricing by using several suppliers. Continuous reviews of suppliers' pricing and market analysis.

Economic fluctuations.

Reduced demand that impacts the company’s profits, inventories and the valuation of intangible assets.

Reduce cyclicality through diversifying to new markets and continuously analyze the whole value chain to foresee demand fluctuations. Broaden the product portfolio and customer base.

Currency risk.

Negative financial impacts from currency fluctuations.

Fingerprints has elected not to hedge its net exposure in USD, since hedging may itself be viewed as currency speculation.

Loss of customers and price pressure due to increased competition.

Sales revenues and market shares decline due to price pressure and customer requirements for a number of suppliers.

Aim to be a full solution provider. Increased focus on customer satisfaction, service, quality and quick response time. Maintain direct customer contacts. Cultivate new customers in new markets. Develop strategic partnerships.

Credit risk.

The counterparty does not fulfil his/her payment obligations.

Compliance with credit policy and established process for credit assessment and setting limits. Use of credit insurance.

Financing.

Financing of capital requirements is made more difficult or more expensive.

Communicate proactively with the capital market and create conditions for implementing the necessary capital acquisition measures if required.

Competitor IP.

Patents held by others impede the applications of Fingerprints’ technology.

Patent strategy and active patent monitoring. Close cooperation between patent manager and development department.

Value of Patent IP.

Loss of revenue and earnings due to patent infringements.

Maintain well-protected patents and work actively to leverage proprietary IP.

Products defects and product liability.

Financial consequences and impact on customer satisfaction.

Ensure the right product design and that all of Fingerprints’ hardware products are tested prior to delivery. Work actively on resolving faults and product returns within the quality organization. Fingerprints has product liability insurance.

Risks related to the processing of personal data.

Fines and/or other legal sanctions.

Compliance with data protection laws, clear policies, and security systems.

Fingerprints' operations are subject to a number of regulatory compliance risks.

Negative impact on Fingerprints' business and reputation.

Continuous regulatory monitoring, internal controls and employee training.

Risks related to judicial and administrative proceedings.

Economic, reputational and legal consequences.

Proactive legal monitoring, clear agreements and compliance with legal requirements.