Risk Management
Risks and risk management
In its operations, Pricer is exposed to various types of operating, market and financial risks. The company’s risk management aims to identify, control and prevent these risks in the operations. Most the company’s risks are continuously being managed by the Parent Company through its responsibility for product and project development, sourcing of goods, sales and customer support. The Group’s financial risks are managed by the Parent Company. The subsidiaries within the Group are currently managing on an ongoing basis market and business risks primarily related to their respective customers and markets.
Insurance
Pricer has Group-wide insurance policies that are revised annually by an independent external party. The insurance policies cover property, interruptions, product responsibility, cyber threats, transport, and liability insurance for Board members and senior executives.
SUSTAINABILITY RISKS
| RISK | DESCRIPTION | MANAGEMENT |
|---|---|---|
| Environmental impact | For Pricer, environmental risks arise primarily from rules and requirements regarding carbon dioxide emissions and that these rules and requirements are continuously being tightened. | The company is working continuously to improve its deliveries and its supply chain. Effective warehousing makes it possible to better meet market requirements with a lower impact on the environment. |
| Work environment, health and safety |
There is a risk that Pricer will not achieve its targets regarding diversity and zero-tolerance with regard to discrimination and harassment. There is also a risk that the company may be negatively impacted by accidents or incidents in connection with installations on a customer's premises that are carried out by the company or its partners. | Pricer educates and informs all employees about the company’s policy on these questions. Work-related accidents that may primarily occur are fall from height accidents during installation of the company’s equipment at a customer. In order to reduce the risk of such accidents occurring, the company has initiated a training program. |
| Supply chain | According to Amnesty International, there are a number of countries where there is a high risk of violation of human rights such as child labor or forced labor. Pricer has suppliers in a number of these countries. | For Pricer, it is vital that human rights are respected. The company places the same requirements on its suppliers. Pricer carries out regular controls and follows up on any short-comings to ensure that they are addressed. |
| Regulatory compliance | Corruption and bribery exist in a number of markets where Pricer is active through sales and/or purchase of goods. There is a risk that employees carry out corrupt activities. | Pricer is working to actively distribute the company’s Code of Conduct and the value the company sees in compliance with it. There are internal control routines to detect and prevent deviations. The company has established the possibility for employees to anonymously report any irregularities (whistleblowing). |
BUSINESS RISKS
| RISK | DESCRIPTION | MANAGEMENT |
|---|---|---|
| Customers | A large share of Pricer’s sales come from a small number of customers and markets. | The company is working actively to widen its customer base and geographic spread. |
| Suppliers | Pricer has a need for stable and competent suppliers to ensure the supply of products on time and with high quality. With regard to the situation in Russia and Ukraine, Pricer has a very limited exposure to the affected markets and sees no direct impact on the business. | The company divides its production between a number of suppliers to create a flexible production solution. The company also uses standard components as much as possible. The company has maintained in 2023 its strategy to hold inventory to secure deliveries to customers. |
| Skills and manpower |
Strong growth and profitability require access to key skills in a number of areas. | Pricer is working actively to make the company an attractive workplace based on knowledge, experience sharing and diversity. Through knowledge transfer and work processes, Pricer is taking steps to ensure that expertise is retained within the company. |
| IT & information security |
Pricer’s operations are highly dependent on a well-functioning IT environment. Interruptions and disruptions in IT systems can have an impact on these operations. Furthermore, intrusions into the IT environment or deficiencies in the processing of customer or employee information or business-critical data handled in the IT environment can lead to lower confidence in the company and have a negative impact on the Group’s bottom line. | Pricer works continuously to streamline and digitalize its operations. With regard to information security, Pricer became ISO 27001 certified in 2021. An ISO audit was performed in 2023. Pricer regularly reviews what can be done to further mitigate its risks by utilizing new technologies to more effectively prevent virus attacks and intrusions and provide training for employees. |
MARKET RISKS
| RISK | DESCRIPTION | MANAGEMENT |
|---|---|---|
| Competitors | Today there are only a few companies and smaller regional businesses that have similar products and compete with Pricer. If the sector were to undergo a restructuring, for example if one or more competitors were to enter into an alliance with a strong partner, this could constitute a threat to other players in the market. | Pricer has a strong market presence through a large installed base and a recognized brand in a number of its key markets. Pricer’s local presence is supplemented with a wide partner network, which enables close collaboration with both existing and new customers. |
| Competing technologies |
Pricer uses near-infrared light technology in its ESL systems, which ensures more secure and faster transmission than the competing radio technology. New competing technologies could constitute a threat in the future. | The infrared technology used by Pricer ensures more secure and faster transmission than the competing radio technology. However, the company closely monitors activities among the competitors to stay abreast of any new technological advances. |
| Development projects |
There is a risk that newly developed products will not fulfill the technical functionality requirements or meet expectations, which could lead to a risk of impairment of capitalized development projects and higher warranty costs. | Pricer continuously monitors demand for the company's various products to ensure that the need for impairment does not arise. The company offers customary warranties for customer installations. |
FINANCIAL RISKS
| RISK | DESCRIPTION | MANAGEMENT |
|---|---|---|
| Foreign currencies |
Changes in exchange rates can have a negative impact on profit, the balance sheet and cash flow. Pricer is exposed to currency risk primarily through sales in EUR and USD and purchasing in USD. | Pricer continuously monitors its net exposure in each currency. In some cases, the company uses currency clauses in price quotations and agreements. The company strives to match income and expenses in the same currency to the greatest extent possible, particularly through increased sales in USD. The company also has the option of currency hedging if necessary. |
| Interest rates | Changes in market rates can have a negative impact on the income statement, balance sheet and cash flows. Exposure to interest rate risk arises mainly from outstanding external loans. | The company’s financial policy requires the company has a low risk profile and for financial investments to have a maximum maturity of one year. |
| Credit/ Counterparty risk |
This risk entails that a counterparty in a transaction will fail to meet its financial obligations, and that collateral, if any, will not be sufficient to cover the company’s receivable. | Pricer's credit risk refers primarily to trade receivables. A credit limit is set for the counterparty, and this limit contains an assessment of how trade receivable losses can be minimized. Pricer also cooperates with factoring partners, which further reduces credit risk. |
| Refinancing risk and liquidity risk |
The risk is associated with the limited access to financing possibilities when loans fall due and that it will not be possible to meet payment obligations as a result of insufficient liquidity. | During the year, Pricer met the criteria regarding a new issue specified in connection with the loan from Ture Invest in December 2022. This means equity was strengthened by SEK 281 M. The company also has overdraft facilities of SEK 48 M. |
For financial risks, see further information in the annual report, note 20.