Snap-on

“Business Risks The sales of many of our products are dependent on the health of the vehicle repair market and the changing requirements of vehicle repair. We believe 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, as well as the value technicians place on those products and services.”

Annual report 2026A · The company itself

“In addition, the development of emerging vehicle drivetrains and advanced driver assistance systems (ADAS) has increased in recent years, and further innovation is expected to continue in the future. 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.”

Annual report 2026A · The company itself

“Mobile Van Channel In the United States, a significant portion of sales to the vehicle service and repair sector is conducted through Snap‑on’s mobile franchise van channel. Snap-on’s franchisees primarily serve vehicle repair technicians and vehicle service shop owners, generally providing weekly contact at the customer’s place of business. Franchisees’ sales are concentrated in hand and power tools, tool storage products, shop equipment, diagnostics, and repair information products, which can be transported in a van or trailer and demonstrated during a sales call. Franchisees purchase Snap-on’s products at a discount from suggested list prices and resell them at prices established by the franchisee.”

Annual report 2026A · The company itself

“The company began with the development of the original Snap-on interchangeable socket set and subsequently pioneered mobile tool distribution in the automotive repair market, where well-stocked vans sell to professional vehicle technicians at their place of business. Since that time, our principal value-creating mechanism has been to observe work and translate the insights gained into creative solutions that make essential tasks easier, meeting the needs of rapidly-evolving workplaces. Today, Snap-on extends its reach “beyond the garage,” and the company’s “coherent growth” strategy focuses on developing and expanding its professional customer base in its legacy automotive market, as well as in adjacent markets, additional geographies and other areas, including in critical industries, where the cost and penalties for failure are high.”

Annual report 2026A · The company itself

“The diagnostics, information and management systems product category includes handheld and computer-based diagnostic products, service and repair information products, diagnostic software solutions, electronic parts catalogs, business management systems and services, point-of-sale systems, integrated systems for vehicle service shops, OEM purchasing facilitation services, and warranty management systems and analytics to help OEM dealerships manage and track performance.”

Annual report 2026A · The company itself

“The equipment product category includes solutions for the service of vehicles and industrial equipment. Products include wheel alignment equipment, wheel balancers, tire changers, vehicle lifts, test lane equipment, collision repair equipment, vehicle air conditioning service equipment, brake service equipment, fluid exchange equipment, transmission troubleshooting equipment, safety testing equipment, battery chargers and hoists.”

Annual report 2026A · The company itself

“Snap-on is a leading manufacturer and distributor of professional tools, tool storage, diagnostics, equipment products, and repair software and solutions, offering a broad line of these products to both vehicle service and industrial marketplaces.”

Annual report 2026A · The company itself

“Snap-on’s primary customer segments include: (i) commercial and industrial customers, including professionals in critical industries and in emerging markets; (ii) professional vehicle repair technicians who purchase products through the company’s multinational mobile tool distribution network; and (iii) other professional customers related to vehicle repair, including owners and managers of independent service and repair shops, as well as original equipment manufacturer (“OEM”) dealership service and repair shops (“OEM dealerships”).”

Annual report 2026A · The company itself

“Additionally, as a government contractor, purchasing regulations contain many operational requirements and a failure to comply with such requirements could result in civil and criminal penalties or other actions that could have a material adverse effect on the company’s reputation, business, financial condition and results of operations.”

Annual report 2026A · The company itself

“Significant changes to legislative and regulatory activity, and compliance burdens, including those associated with: (i) sales to our government, military and defense contractor customers; and (ii) classification of third parties, including our franchisees, as independent from the company, as well as the manner in which they are applied, could significantly impact our business and the economy as a whole.”

Annual report 2026A · The company itself

“Snap-on’s primary customer segments include: (i) commercial and industrial customers, including professionals in critical industries and in emerging markets; (ii) professional vehicle repair technicians who purchase products through the company’s multinational mobile tool distribution network; and (iii) other professional customers related to vehicle repair, including owners and managers of independent service and repair shops, as well as original equipment manufacturer (“OEM”) dealership service and repair shops (“OEM dealerships”).”

Annual report 2026A · The company itself

“Financial Risks Our inability to provide acceptable financing alternatives to franchisees and other end-user customers could adversely impact our operating results. 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.”

Annual report 2026A · The company itself

“Adverse fluctuations in interest rates and/or our ability to provide competitive financing programs could also have an adverse impact on our revenue and profitability.”

Annual report 2026A · The company itself

“Significant fluctuations in market interest rates have added, and may further add, volatility to our pension plan obligations. In periods of declining market interest rates, our pension plan obligations generally increase; in periods of increasing market interest rates, our pension plan obligations generally decrease. While our plan assets are broadly diversified, there are inherent market risks associated with investments; if adverse market conditions occur, our plan assets could incur significant or material losses. Since we may need to make additional contributions to address changes in obligations and/or a loss in plan assets, the combination of declining market interest rates, past or future plan asset investment losses, and/or changes in plan demographics could adversely impact our results of operations, financial condition and cash flows.”

Annual report 2026A · The company itself

“A significant decrease in market interest rates and a decrease in the fair value of plan assets would increase net pension expense and may adversely affect the company’s future financial results.”

Annual report 2026A · The company itself

“Data security and information technology infrastructure and security are critical to supporting business objectives; failure of our systems, as well as those of third parties with which we do business, to operate effectively could adversely affect our business and reputation. We depend heavily on information technology infrastructure to achieve our business objectives and to protect sensitive data, and we continually invest in improving such systems. In the ordinary course of business, we collect and store sensitive data and information, including personally identifiable information about our employees and the company’s proprietary and regulated business information, as well as that of our customers, suppliers and business partners.”

Annual report 2026A · The company itself

“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. Techniques used to breach information technology systems are growing in sophistication from emerging technologies, such as advanced forms of AI, and increasingly come from threat actors of all types, including individuals, criminal organizations and state-sponsored operatives.”

Annual report 2026A · The company itself

“The company has experienced and responded to cyber incidents. No event has had a significant impact on the results of our operations. Cyber events, however, could cause us to lose customers and/or revenue and could require us to incur significant expense to remediate, including as a result of legal or regulatory claims, proceedings, fines or penalties, and could also damage our reputation.”

Annual report 2026A · The company itself

“Resources Raw Materials and Purchased Product Snap-on’s supply of raw materials, including steel, and purchased components are generally available from numerous suppliers and the company continuously works to expand and enhance supplier relationships to meet its supply needs. Snap-on believes it has secured sufficient raw materials and purchased components for the near future to meet the expected general sales demand.”

Annual report 2026A · The company itself

“The principal raw material used in the manufacture of our products is steel, which we purchase in competitive, price-sensitive markets.”

Annual report 2026A · The company itself

“To meet Snap-on’s high quality standards, a portion of our steel needs include specialized alloys, which are available only from a limited group of approved suppliers.”

Annual report 2026A · The company itself

“Future growth rates and success of our business depends in large part on continued growth in our non-U.S. operations, including growth in emerging markets and critical industries. Numerous risks and uncertainties affect our non-U.S. operations. These include political, economic and social instability, such as acts of war, armed conflicts, civil disturbance or acts of terrorism, local labor conditions, and adverse changes in trade relations with China, Canada, the European Union and other nations.”

Annual report 2026A · The company itself

“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. Risks related to this situation include supply chain inefficiencies, price increases and shortages of raw materials and components, increased trade sanctions, exchange rate volatility, energy shortages in Europe, an increase in cybersecurity incidents, and potential impairment of certain assets.”

Annual report 2026A · The company itself

“The market for vehicle service and repair is driven by an accelerating rate of technological change, car and truck population growth and increasing unit age, and the resulting effects of these changes on both our suppliers and customers. Snap-on has historically benefited from the increasing complexity of car and truck fleets and the changing tools, technologies and data needed to monitor, calibrate, service and repair evolving vehicle platforms. While new technologies, including those associated with alternative energy drivetrains and greater vehicle autonomy, may alter the nature of certain service and repair for particular vehicle types, we believe many of these new technologies provide opportunities to fulfill requirements for enhanced solutions or greater precision.”

Annual report 2026A · The company itself

“The market for vehicle service and repair is driven by an accelerating rate of technological change, car and truck population growth and increasing unit age, and the resulting effects of these changes on both our suppliers and customers. Snap-on has historically benefited from the increasing complexity of car and truck fleets and the changing tools, technologies and data needed to monitor, calibrate, service and repair evolving vehicle platforms. While new technologies, including those associated with alternative energy drivetrains and greater vehicle autonomy, may alter the nature of certain service and repair for particular vehicle types, we believe many of these new technologies provide opportunities to fulfill requirements for enhanced solutions or greater precision.”

Annual report 2026A · The company itself

“However, the global focus on climate change is resulting in new and/or more stringent environmental or sustainability-related regulations or standards. While such regulations have historically created select opportunities for our business operations, the company continually monitors developments in this area.”

Annual report 2026A · The company itself

“These also include changes in government policies and regulations, including those intended to address climate change and other sustainability-related factors, imposition of, or increases in withholding and other taxes on remittances and other payments by international subsidiaries, increases in trade sanctions, tariffs and other related measures, as well as exposure to liabilities under anti-bribery and anti-corruption laws in various countries, such as the U.S.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“Future growth rates and success of our business depends in large part on continued growth in our non-U.S. operations, including growth in emerging markets and critical industries. Numerous risks and uncertainties affect our non-U.S. operations. These include political, economic and social instability, such as acts of war, armed conflicts, civil disturbance or acts of terrorism, local labor conditions, and adverse changes in trade relations with China, Canada, the European Union and other nations.”

Annual report 2026A · The company itself

“These also include changes in government policies and regulations, including those intended to address climate change and other sustainability-related factors, imposition of, or increases in withholding and other taxes on remittances and other payments by international subsidiaries, increases in trade sanctions, tariffs and other related measures, as well as exposure to liabilities under anti-bribery and anti-corruption laws in various countries, such as the U.S.”

Annual report 2026A · The company itself

“Starting in the first quarter of 2025, the United States government announced additional tariffs on goods imported into the U.S. from numerous countries and multiple nations countered with reciprocal tariffs and other actions in response. While Snap-on is relatively advantaged in the tariff environment, generally manufacturing products in the markets where they are sold, the company’s costs can be affected by trade policies. Unexpected variability associated with these and other factors has resulted, and in the future could result, in an increase in product costs and require Snap-on to increase prices or reduce costs to maintain margins.”

Annual report 2026A · The company itself

“In addition, technological developments and enhancements of products and service offerings in our industry may require our expanded use of artificial intelligence (“AI”); if we are unable to keep pace with the rate of these and other developments, our ability to effectively compete could be adversely affected.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“While we believe we will have the ability to service our debt and obtain additional financial resources in the future if and when needed, that will depend upon our results of operations and financial position at the time, the then-current state of the credit and financial markets, and other factors that may be beyond our control. Therefore, we cannot give assurances that credit will be available on terms that we consider attractive, or at all, if and when necessary or beneficial to us.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“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.”

Annual report 2026A · The company itself

“Problems that impair or compromise the company’s information technology infrastructure, or that of our third party service providers, including those due to natural disasters, power outages, major network failures, security breaches or malicious attacks, or those occurring during system upgrades and/or new system implementations could impede our operations. Such impacts could interfere with our ability to record or process orders, manufacture and ship in a timely manner, manage our financial services operations including originating, processing, accounting for and collecting receivables, protect sensitive data of the company, our customers, our suppliers and business partners, or otherwise carry on business in the normal course.”

Annual report 2026A · The company itself

“Human Capital Management As of January 3, 2026, Snap-on employed approximately 13,000 people worldwide, of which approximately 7,300 were employed in the United States and approximately 5,700 were outside the United States.”

Annual report 2026A · The company itself

“We use various energy sources to transport, produce and distribute products, and some of our products have components that are petroleum based. Petroleum and energy prices have periodically increased significantly over short periods of time; future volatility and changes may be caused by market fluctuations, supply and demand imbalances (including due to the proliferation of AI data centers), currency variabilities, production and transportation disruptions, climate change regulations, world events, including armed conflicts, and governmental actions.”

Annual report 2026A · The company itself

“We use various energy sources to transport, produce and distribute products, and some of our products have components that are petroleum based. Petroleum and energy prices have periodically increased significantly over short periods of time; future volatility and changes may be caused by market fluctuations, supply and demand imbalances (including due to the proliferation of AI data centers), currency variabilities, production and transportation disruptions, climate change regulations, world events, including armed conflicts, and governmental actions.”

Annual report 2026A · The company itself

“Resources Raw Materials and Purchased Product Snap-on’s supply of raw materials, including steel, and purchased components are generally available from numerous suppliers and the company continuously works to expand and enhance supplier relationships to meet its supply needs. Snap-on believes it has secured sufficient raw materials and purchased components for the near future to meet the expected general sales demand.”

Annual report 2026A · The company itself

“Additionally, certain electronic components are sourced from a finite set of suppliers. Some of these specialized materials and components have been, and in the future may be, in short supply, particularly in the event of mill shutdowns or production cut backs.”

Annual report 2026A · The company itself

“Changes in plan demographics, including an increase in the number of retirements or changes in life expectancy assumptions, may also increase the costs and funding requirements of the obligations related to the company’s pension plans.”

Annual report 2026A · The company itself

“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, including in ways that cannot yet be foreseen.”

Annual report 2026A · The company itself

“Approximately 29% of our revenues in 2025 were generated outside of the United States.”

Annual report 2026A · The company itself