Snap-on Incorporated

Tax and financial reporting · Tax compliance and changes in tax law

The inability to successfully defend claims from taxing authorities and changes in tax laws and rules could adversely affect our financial condition, results of operations and cash flows. We conduct business in many countries, which requires us to interpret the income tax laws and rulings in each of those taxing jurisdictions. New tax laws, within the U.S. and the other jurisdictions in which we operate, such as Pillar Two of the Global Anti-Base Erosion Rules released by the Organisation for Economic Cooperation and Development (OECD), which, once adopted in various jurisdictions, will require a global minimum tax for multinational countries, could impact our operations.

Legal and litigation · Litigation and legal proceedings

Legal disputes could adversely affect our business, reputation, financial condition, results of operations and cash flows. In the ordinary course of our business, we are subject to legal disputes that are litigated and/or settled. Disputes or future lawsuits could result in the diversion of management's time and attention away from business operations.

Data and privacy · Data protection and privacy laws

Other potential future legislation and regulations, including the increasing global regulation of privacy rights and use of AI, may also adversely affect the customers to which, and the markets into which, we sell our products, and increase our costs and otherwise negatively affect our business, reputation, results of operations and financial condition.

Digital transformation and innovation · Technology implementation and upgrades

In association with initiatives to better integrate business units, optimize our operating footprint and improve responsiveness to franchisees and customers, Snap-on is continually enhancing its global Enterprise Resource Planning (ERP) management information systems. As we integrate, implement and deploy new information technology processes and enhance our information infrastructure across our global operations, we could experience disruptions that may have an adverse effect on our business, financial condition, results of operations and cash flows.

Cybersecurity and data protection · Third party data security and vendors

Our information systems, like those of other companies and our third-party service providers, are susceptible to malicious damage, intrusions and outages due to, among other events, viruses, cyber attacks, industrial espionage, phishing attempts, hacking, break-ins and similar events, as well as other breaches of security, natural disasters, power loss or telecommunications failures.

Core operations · Operational disruption and business continuity

Any prolonged disruption in the operations of our existing manufacturing facilities, whether due to technical or labor difficulties, facility expansion, consolidation or closure actions, lack of raw material or component availability, destruction of or damage to any facility (as a result of natural disasters, climate or weather events, use and storage of hazardous materials, armed conflicts, sabotage, terrorism, civil unrest, fire, flood or other events), or other reasons, including outbreaks of infectious diseases, could have a material adverse effect on our business, financial condition, results of operations and cash flows.

Project and contract management · Large contract concentration

Approximately 38% of our consolidated net revenues (net sales plus financial services revenue) in 2025 were generated by the Snap-on Tools Group, which consists of Snap-on's business operations primarily serving vehicle service and repair technicians through the company's multinational mobile tool distribution channel. Snap-on's success is dependent on its relationships with franchisees, individually and collectively, as they are the primary sales and service link between the company and vehicle service and repair technicians.

Supply chain and procurement · Transportation and logistics disruption

Energy price increases raise both our operating costs and the costs of our materials, and we may not be able to increase our prices enough to offset these costs. Higher prices also may reduce the level of future customer orders and our profitability.

Market and investment · Investment portfolio performance

Failure to achieve expected investment returns on pension plan assets, as well as changes in interest rates or plan demographics, could adversely impact our results of operations, financial condition and cash flows. Snap-on sponsors various defined benefit pension plans (the 'pension plans'). The assets of the pension plans are diversified in an attempt to mitigate the risk of a large loss.

Credit and liquidity · Access to capital and financing

An integral component of our business and profitability is our ability to offer competitive financing alternatives to franchisees and other end-user customers. The lack of our ability to offer such alternatives or obtain capital resources or other financing to support our receivables on terms that we believe are attractive, whether resulting from the state of the financial markets, our own operating performance, or other factors, would negatively affect our operating results and financial condition.

Capital structure and performance · Debt management and refinancing

Increasing our financial leverage could affect our operations and profitability. Our $900 million multicurrency revolving credit facility contains an accordion feature that, subject to certain customary conditions, may allow the maximum commitment to be increased by up to $450 million with the approval of the lenders providing additional commitments.

Customer and revenue · Changing customer preferences and behavior

The use of other methods of transportation, including more frequent use of public transportation in the future, could result in a decrease in the use of privately-operated vehicles. A decrease in the use of privately-operated vehicles may lead to fewer repairs and less demand for our products.

Innovation and product development · Product development and randd investment risks

While we believe that changes in vehicle technologies provide us with opportunities to develop innovative products and solutions for the vehicle repair market, if we are not able to effectively execute on those possibilities, our business and results of operations could suffer.

Strategic execution · Strategic transformation and turnaround risks

The steps taken to restructure operations, rationalize operating footprint, lower operating expenses and achieve greater efficiencies in the supply chain could disrupt business. We have taken steps in the past, and may take additional steps in the future, intended to improve customer service and drive further efficiencies as well as reduce costs, some of which could be disruptive to our business.

Market position and competition · Competitive pressure and market share loss

We face strong competition in all of our market segments. Price competition in our various industries is intense and pricing pressures from competitors and customers continue to increase. In general, as a manufacturer and marketer of premium products and services, the expectations of Snap-on's customers and its franchisees are high. Any inability to maintain customer satisfaction could diminish Snap-on's premium image and reputation and could result in a lessening of our ability to command premium pricing.

Market position and competition · Market cyclicality and demand volatility

The sales of many of our products are dependent on the general aging of vehicles, increases in vehicle complexity, changes in vehicle technologies and the number of vehicles on the road. These factors affect the frequency, type and amount of service and repair performed on vehicles by technicians, and therefore affect the demand for the number of technicians, the prosperity of technicians and, consequently, the demand technicians have for our tools, other products and services.

Geopolitical and trade · Regulatory and policy uncertainty

Regulations, such as the Corporate Sustainability Reporting Directive (CSRD) in the European Union, as well as various industry and third-party requirements or standards have been developed that are intended to address environmental or sustainability risks. New or increased regulatory requirements or standards may result in higher compliance or input costs, including those related to energy or raw materials, for us and our suppliers.

Economic and market conditions · Credit market conditions

Adverse developments in the credit and financial markets could negatively impact the availability of credit that we and our customers need to operate our businesses. From time to time we depend upon the availability of credit to operate our business, including the financing of receivables from end-user customers that are originated by our financial services businesses.

Economic and market conditions · Market volatility and financial crises

We, our franchisees and our customers, and the economy as a whole, also may be affected by future world or local events outside our control, such as tariffs, sanctions and other trade protection measures put in place by the United States or other countries, acts of terrorism, developments in the war on terrorism, armed conflicts (including the ongoing war in Ukraine, as well as conflicts in other regions), civil unrest, conflicts in international situations, supply chain inefficiencies, labor interruptions, weather events and natural disasters.

Geopolitical and trade · International conflicts and tensions

The Russian invasion of Ukraine and the ongoing conflict in the region has led to sanctions and actions taken against Russia and Belarus by the United States, the United Kingdom, the European Union and others. Expansion of the conflict or changes in governmental and/or third party responses or actions could adversely impact our business, results of operations and financial condition.