5 unchanged sentences
• If we fail to innovate and develop new products in a timely and cost-effective manner for our new and existing product categories, our business and operating results could be adversely affected.
−Removed: • Our future growth will depend on our diversified product growth opportunities, and if we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results could be adversely affected.
+Added: • If we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results and future growth could be adversely affected.
• We purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.
• Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations.
−Removed: • If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales.
+Added: • If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales and our business and operating results could be adversely affected.
• If we are not able to maintain and enhance our brands, or if our brands or reputation are damaged, our reputation, business and operating results could be adversely affected.
• If we do not compete effectively, demand for our products could decline and our business and operating results could be adversely affected.
−Removed: • The full effect of the COVID-19 pandemic is still uncertain and cannot be predicted, and could adversely affect our business, results of operations and financial condition.
• We rely on third parties to sell and distribute our products, and we rely on their information to manage our business.
1 unchanged sentence
• If we do not accurately forecast market demand for our products, our business and operating results could be adversely affected.
−Removed: • Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.
+Added: • Our business depends in part on access to third-party platforms or technologies, and if access thereto is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.
+Added: • Our success largely depends on our ability to manage, hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior leadership.
+Added: Our strategy and our ability to innovate, design
Logitech International S.A.
| Fiscal 2023 Form 10-K | 14
−Removed: • Our success largely depends on our ability to hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior management.
−Removed: Our strategy and our ability to innovate, design and produce new products, sell products, maintain operating margins and control expenses depend on key personnel that may be difficult to replace.
−Removed: • As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories and pursuing strategic acquisitions and investments, which could have an adverse impact on our business.
+Added: and produce new products, sell products, maintain operating margins and control expenses depend on key personnel that may be difficult to replace.
+Added: • As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories, or pursuing strategic acquisitions and investments, which could have an adverse impact on our business.
+Added: • As we continue our efforts to lower our costs and improve our operational efficiency, we may not fully realize our goals.
• Product quality issues could adversely affect our reputation, business and operating results.
Risks Related to Global Nature of our Operations and Regulatory Environment
+Added: • Adverse global and regional economic and geopolitical conditions can materially adversely affect our business, results of operations and financial condition.
• We conduct operations in a number of countries and have invested significantly in growing our sales and marketing activities in China, and the effect of business, legal and political risks associated with international operations could adversely affect us.
1 unchanged sentence
• Our financial performance is subject to risks associated with fluctuations in currency exchange rates.
−Removed: • We are subject to risks related to our environmental, social and governance activities and disclosures.
+Added: • We are subject to risks related to our environmental, social and governance ("ESG") activities and disclosures.
• As a company operating in many markets and jurisdictions, expanding into new growth categories, and engaging in acquisitions, and as a Swiss, dual-listed company, we are subject to risks associated with new, existing and potential future laws and regulations.
• As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase, which could adversely affect our net income and cash flows.
−Removed: Risks Related to Cyber Security, Privacy, and Intellectual Property
−Removed: • Significant disruptions in, or breaches in security of, our websites or information technology systems could adversely affect our business.
−Removed: • The collection, storage, transmission, use and distribution of user data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.
+Added: • We maintain cash and cash equivalents at financial institutions and are exposed to credit risk in the event of default by such financial institutions.
+Added: Risks Related to Confidential Information, Cybersecurity, Privacy, and Intellectual Property
+Added: • Losses or unauthorized access to or releases of confidential information could adversely affect our business and result in significant reputational, financial and legal consequences.
+Added: • The collection, storage, transmission, use and distribution of personal data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.
• Claims by others that we infringe their proprietary technology could adversely affect our business.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 15
• We may be unable to protect our proprietary rights.
2 unchanged sentences
• Our operating results are difficult to predict and fluctuations in results may cause volatility in the price of our shares.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 17
• Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.
−Removed: • We cannot ensure that our current share repurchase program will be fully utilized or that it will enhance long-term shareholder value.
+Added: • We cannot ensure that our share repurchase programs will be fully utilized or that it will enhance long-term shareholder value.
Share repurchases may also increase the volatility of the trading price of our shares.
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• Offer our products at prices and on terms that are attractive to our customers and consumers.
−Removed: If we do not execute on these factors successfully, products that we introduce or technologies or standards that we adopt may not gain widespread commercial acceptance, and our business and operating results could suffer.
−Removed: In addition, if we do not continue to differentiate our products through distinctive, technologically advanced features, designs, and services that are appealing to our customers and consumers, as well as continue to build and strengthen our brand recognition and our access to distribution channels, our business could be adversely affected.
The development of new products and services can be very difficult and requires high levels of innovation.
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Our failure to manage the transition to new products and services or the integration of new technology into new or existing products and services could adversely affect our business, results of operations, operating cash flows and financial condition.
−Removed: Our future growth will depend on our diversified product growth opportunities, and if we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results could be adversely affected.
−Removed: We have historically targeted peripherals for the PC platform and in recent years, have expanded the categories of products we sell and entered new markets.
−Removed: Our sales of our products might be less than we expect due to a decline in business or economic conditions in one or more of the countries or regions, a greater decline than we expect in demand for our products, our inability to successfully execute our sales and marketing plans, or for other reasons.
−Removed: Global economic concerns, such as the ongoing COVID-19 pandemic, Russia’s invasion of Ukraine and the varying pace of global economic recovery, tariffs and policies that inhibit trade, the impact of sovereign debt issues in Europe, the impact of oil prices from Russia and other countries, conflicts with either local or global financial implications and economic slowdown in China, create unpredictability and add risk to our future outlook.
−Removed: In particular, there are a number of factors worldwide contributing to supply chain challenges, which are due in large part to the COVID-19 pandemic and the resulting economic disruption, rising prices, labor and material shortages, and most recently Russia’s invasion of Ukraine.
−Removed: As a result, we are attempting to diversify our product category portfolio.
−Removed: We also are focusing more of our attention, which may include personnel, financial resources and management attention, on product innovations and growth opportunities, including products and services for gaming, for video collaboration, for the consumption of digital music, and on other potential growth opportunities in addition to our PC peripherals product categories.
−Removed: Our investments may not result in the growth we expect, or when we expect it, for a variety of reasons, including but not limited to, changes in growth trends, evolving and changing market and increasing competition, market opportunities, and product innovation.
−Removed: Trends and opportunities in each of our product categories are rapidly evolving, declining in some categories and increasing in others, and may also be different by region, as a result of which we are constantly required to adapt to such changing markets, increased competition, and new challenges and opportunities.
−Removed: If we don’t allocate our resources in line with the market and new opportunities, our business and results of operations could be adversely affected.
−Removed: In addition to our current growth opportunities, our future growth may be reliant on our ability to identify and develop potential new growth opportunities.
−Removed: This process is inherently risky and will result in investments in time and resources for which we do not achieve any return or value.
+Added: If we do not successfully execute on our growth opportunities, or if our growth opportunities are more limited than we expect, our operating results and future growth could be adversely affected.
+Added: Our future growth depends on growth opportunities and as a result, we are attempting to diversify our product category portfolio.
+Added: Our investments may not result in the growth we expect, or when we expect it, for a variety of reasons, including but not limited to, changes in growth trends, evolving and changing markets and increasing competition, market opportunities, and product innovation.
Our growth opportunities and those we may pursue are subject to constant and rapidly changing and evolving technologies and evolving industry standards and may be replaced by new technology concepts or platforms.
3 unchanged sentences
If we do not develop innovative and reliable product offerings and enhancements in a cost-effective and timely manner that are attractive to consumers in these markets, if we are otherwise unsuccessful entering and competing in these growth categories or responding to our many competitors and to the rapidly changing conditions in these growth categories, if the growth categories in which we invest our limited resources do not emerge as the opportunities or do not produce the growth or profitability we expect, or when we expect it, or if we do not correctly anticipate changes and evolutions in technology and platforms, our business and results of operations could be adversely affected.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 19
+Added: In addition, we rely on our go-to-market capability to leverage on those growth opportunities, market our products and compete effectively with a goal of strengthening our sales.
+Added: If we are not able to develop and maintain our go-to-market capabilities and processes, in particular the continued development of our enterprise salesforce and strategy, our business and results of operations could be adversely affected.
We purchase key components and products from a limited number of sources, and our business and operating results could be adversely affected if supply were delayed or constrained or if there were shortages of required components.
1 unchanged sentence
If the supply of these products or key components were to be delayed or constrained, impacted by global shortages of semiconductor chips, or if one or more of our single-source suppliers experience disruptions or go out of business as a result of adverse global economic conditions, natural disasters or regional or global pandemics, including COVID-19, we might be unable to find a new supplier on acceptable terms, or at all, and our product shipments to our customers could be delayed, which could adversely affect our business, financial condition and operating results.
−Removed: In particular, there are a number of factors worldwide contributing to supply chain challenges, which are due in large part to the COVID-19 pandemic and the resulting economic disruption, rising prices, labor and material shortages, and most recently Russia’s invasion of Ukraine.
Lead times for materials, components and products ordered by us or by our contract manufacturers can vary significantly and depend on factors such as contract terms, demand for a component, and supplier capacity.
1 unchanged sentence
Shortages or interruptions in the supply of components or subcontracted products, or our inability to procure these components or products from alternate sources at acceptable prices in a timely manner, could delay shipment of our products or increase our production costs, which could adversely affect our business and operating results.
−Removed: Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse tax consequences and pressure to move or diversify our manufacturing locations.
−Removed: We produce approximately half of our products at the facilities we own in China.
−Removed: The majority of our other production is performed by third-party contract manufacturers, including original design manufacturers, in China, Taiwan, Hong Kong, Malaysia, and Vietnam.
−Removed: Our manufacturing operations in China could be adversely affected by changes in the interpretation and enforcement of legal standards, strains on China’s available labor pool, changes in labor costs and other employment dynamics, high turnover among Chinese employees, infrastructure issues, import-export issues, cross-border intellectual property and technology restrictions, currency transfer restrictions, natural disasters, regional or global pandemics, conflicts or disagreements between China and Taiwan or China and the United States, labor unrest, and other trade customs and practices that are dissimilar to those in the United States and Europe.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 17
+Added: Our principal manufacturing operations and third-party contract manufacturers are located in China and Southeast Asia, which exposes us to risks associated with doing business in that geographic area as well as potential tariffs, adverse trade regulations, adverse tax consequences and pressure to move or diversify our manufacturing locations.
+Added: We produce approximately 40% of our products at the facilities we own in China.
+Added: The majority of our other production is performed by third-party contract manufacturers, including original design manufacturers, in China, Taiwan, Hong Kong, Malaysia, Thailand, Mexico, and Vietnam.
+Added: Our manufacturing operations in China have been in the past and could in the future be adversely affected by the COVID-19 pandemic, changes in the interpretation and enforcement of legal standards, strains on China’s available labor pool, changes in labor costs and other employment dynamics, high turnover among Chinese employees, infrastructure issues, import-export issues, cross-border intellectual property and technology restrictions, currency transfer restrictions, natural disasters, regional or global pandemics, conflicts or disagreements between China and Taiwan or China and the United States, labor unrest, and other trade customs and practices that are dissimilar to those in the United States and Europe.
Interpretation and enforcement of China’s laws and regulations continue to evolve, and we expect differences in interpretation and enforcement to continue in the foreseeable future.
4 unchanged sentences
These conditions could adversely affect our financial results.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 20
−Removed: If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales.
−Removed: Our business requires us to coordinate the manufacture and distribution of our products over much of the world.
−Removed: We rely on third parties to manufacture many of our products, manage centralized distribution centers, and transport our products.
−Removed: If we do not successfully coordinate the timely manufacturing and distribution of our products, if our manufacturers, distribution logistics providers or transport providers are not able to successfully and timely process our business or if we do not receive timely and accurate information from such providers, and especially if we expand into new product categories or our business grows in volume, we may have an insufficient supply of products to meet customer demand, we could lose sales, we may experience a build-up in inventory, we may incur additional costs, and our financial performance and reporting may be adversely affected.
+Added: If we do not successfully coordinate the worldwide manufacturing and distribution of our products, we could lose sales and our business and operating results could be adversely affected.
+Added: If we do not successfully coordinate the timely manufacturing and distribution of our products, if our manufacturers, distribution logistics providers or transport providers are not able to successfully and timely process our business or if we do not receive timely and accurate information from such providers, and especially if we expand into new product categories or our business grows in volume, we may have an insufficient supply of products to meet customer demand or experience a build-up in inventory.
+Added: As a result, we could lose sales or incur additional costs which could adversely affect our financial performance.
By locating our manufacturing in China and Southeast Asia, we are reliant on third parties to get our products to distributors around the world.
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Maintaining and enhancing our brands will require significant investments and will depend largely on our future design, products and marketing, which may not be successful and may damage our brands.
−Removed: Our brands and reputation are also dependent on third parties, such as suppliers, manufacturers, distributors, retailers, product reviewers and the media as well as online consumer product reviews, consumer recommendations and referrals.
+Added: Our brands and reputation are also dependent on third parties, such as suppliers, manufacturers, distributors, retailers, product
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 18
+Added: reviewers and the media as well as online consumer product reviews, consumer recommendations and referrals.
It can take significant time, resources and expense to overcome negative publicity, reviews or perception.
3 unchanged sentences
Most of our product categories are characterized by large, well-financed competitors with strong brand names and highly effective research and development, marketing and sales capabilities, short product life cycles, continual performance enhancements, and rapid adoption of technological and product advancements by competitors in our product markets.
−Removed: Many of our competitors have broad product portfolios across several of our product categories and are able to use the strength of their brands to move into adjacent categories.
−Removed: Our competitors have the ability to bring new products to market quickly and at competitive prices.
−Removed: We experience aggressive price competition and other promotional activities from our primary competitors and from less-established brands, including brands owned by retail customers known as house brands.
+Added: We also experience aggressive price competition and other promotional activities from our primary competitors and from less-established brands, including brands owned by retail customers known as house brands.
As we shift the focus of our marketing efforts in certain categories from a push model to a demand-generating pull model, the pressures from this competition and from our distribution channels, combined with the implementation risks of such a strategy shift, could adversely affect our competitive position, market share and business.
In addition, our competitors may offer customers terms and conditions that may be more favorable than our terms and conditions and may require us to take actions to maintain or increase our customer incentive programs, which could impact our revenues and operating margins.
−Removed: We have historically expanded the categories of products we sell and entered new markets.
−Removed: We remain alert to opportunities in new categories and markets.
−Removed: As we do so, we are confronting new competitors, many of which have more experience in the categories or markets and have greater marketing resources and brand name recognition than we have.
−Removed: In addition, because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater competition in the future from well-established consumer electronics
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 21
−Removed: companies in our developing categories as well as in future categories we might enter.
−Removed: Many of these companies, such as Microsoft, Apple, Google, Cisco, Sony, Samsung, Amazon and others, have greater financial, technical, sales, marketing and other resources than we have.
+Added: In addition, because of the continuing convergence of the markets for computing devices and consumer electronics, we expect greater competition in the future from well-established consumer electronics companies in our developing categories as well as in future categories we might enter.
Microsoft, Apple, Google and Amazon are leading producers of operating systems, hardware, platforms and applications with which our mice, keyboards, wireless speakers and other products are designed to operate.
−Removed: In addition, Microsoft, Apple, Google and Amazon each has significantly greater financial, technical, sales, marketing and other resources than Logitech, as well as greater name recognition and a larger customer base.
As a result, Microsoft, Apple, Google and Amazon each may be able to improve the functionality of its products, if any, or may choose to show preference to our competitors' products, to correspond with ongoing enhancements to its operating systems, hardware and software applications before we are able to make such improvements.
2 unchanged sentences
For additional information, see "Competition” in Item 1 of this Annual Report on Form 10-K.
−Removed: The full effect of the COVID-19 pandemic is still uncertain and cannot be predicted, and could adversely affect our business, results of operations and financial condition.
−Removed: COVID-19 has spread rapidly throughout the world, causing volatility and disruption in financial markets, curtailing global economic activity, raising the prospect of an extended global recession, and prompting governments and businesses to take unprecedented measures in response.
−Removed: Such measures have included restrictions on travel and business operations, quarantines and shelter-at-home orders, and often resulted in indefinite business closures.
−Removed: The full effects of the COVID-19 pandemic cannot be predicted as a result of uncertainties, including if and how the extent and rate of the spread continue to fluctuate in different parts of the world, the gravity and transmissibility level of the current and future variants, the availability and effectiveness of treatments and vaccines, and vaccination progress.
−Removed: The impact of different variants cannot be predicted at this time, and could depend on numerous factors, including the effectiveness of COVID-19 vaccines against such variants and the response by governmental bodies and regulators.
−Removed: The COVID-19 pandemic and the measures taken by many countries in response have contributed to a general slowdown in the global economy and had a mixed effect and could in the future have a mixed or adverse effect on our business and operations, our customers and our partners.
−Removed: We have experienced and may continue to experience disruptions and higher costs in our manufacturing, supply chain and logistics operations and outsourced services, resulting in shortages of our products in our distribution channels and loss of market share and opportunities.
−Removed: We have also incurred additional costs related to business continuity.
−Removed: Most recently, Shanghai, China, began a lockdown in late March 2022 due to another outbreak of COVID-19, resulting in a lockdown of the city, closures of ports and airports, and disruption of commercial activities.
−Removed: If the Shanghai lockdown is extended, including to our Suzhou manufacturing facility, and to other places where our suppliers and partners are located, such measures, depending on their duration, could cause additional negative impact on our business and results of operation.
−Removed: While we believe that the pandemic has accelerated certain trends that are favorable to us, its effects on the use patterns and demand for our products has been evolving and may lead to increased competition in certain of our product markets.
−Removed: The COVID-19 pandemic also may have the effect of heightening many of the other risks described under this heading “Risk Factors.” We continue to monitor the situation and attempt to take appropriate actions in accordance with the recommendations and requirements of relevant authorities.
−Removed: The full extent of the impact of the COVID-19 pandemic on our business and on our operational and financial performance and condition is still uncertain and will depend on many factors outside our control, including but not limited to the timing, extent, duration and effects of the virus and any of its mutations and variants, the further development and availability of effective treatments and vaccines and the vaccination progress, the imposition of effective public safety and other protective measures, the impact of COVID-19 on the global economy and demand for our products and services, and the impact of the virus on the business, operations and financial condition of our partners and customers.
−Removed: Should the COVID-19 situation or global economic slowdown not improve or worsen, or if our attempts to mitigate its impact on our operations and costs are not successful, our business, results of operations, financial condition and prospects may be adversely affected.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 22
We rely on third parties to sell and distribute our products, and we rely on their information to manage our business.
Disruption of our relationship with these channel partners, changes in or issues with their business practices, their failure to provide timely and accurate information, changes in distribution partners, practices or models, conflicts among our channels of distribution, or failure to build and scale our own sales force for certain product categories and enterprise channel partners could adversely affect our business, results of operations, operating cash flows and financial condition.
−Removed: We primarily sell our products to a network of distributors, retailers and e-tailers (together with our direct sales channel partners).
+Added: We primarily sell our products to a network of distributors, retailers, e-tailers and enterprise customers (together with our direct sales channel partners).
We are dependent on those direct sales channel partners to distribute and sell our products to indirect sales channel partners and ultimately to consumers.
The sales and business practices of all such sales channel partners, their compliance with laws and regulations, and their reputations - of which we may or may not be aware - may affect our business and our reputation.
−Removed: While our overall distribution relationships are diffuse, in fiscal year 2022 our gross sales were concentrated with three customers - Amazon Inc., Ingram Micro and TD Synnex - and their affiliated entities.
+Added: While our overall distribution relationships are diffuse, in fiscal year 2023 and 2022 our gross sales were concentrated with three customers - Amazon Inc., Ingram Micro and TD Synnex - and their affiliated entities.
We do not have long-term commitments with those customers.
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The impact of economic conditions, labor issues, natural disasters, regional or global pandemics, evolving consumer preferences, and purchasing patterns on our distribution partners, or competition between our sales channels, could result in sales channel disruption.
−Removed: For example, if sales at large retail stores are displaced as a result of bankruptcy, competition from Internet sales channels or otherwise, our product sales could be adversely affected and our product mix could change, which could adversely affect our operating costs and gross margins.
−Removed: Any loss of a major partner or distribution channel or other channel disruption could make us more dependent on alternate channels, increase pricing and promotional pressures from other partners and distribution channels, increase our marketing costs, or adversely impact buying and inventory patterns, payment terms or other contractual terms, sell-through or delivery of our products to consumers, our reputation and brand equity, or our market share.
+Added: Any loss of a major partner or distribution channel or other
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 19
+Added: channel disruption could make us more dependent on alternate channels, increase pricing and promotional pressures from other partners and distribution channels, increase our marketing costs, or adversely impact buying and inventory patterns, payment terms or other contractual terms, sell-through or delivery of our products to consumers, our reputation and brand equity, or our market share.
Our sales channel partners also sell products offered by our competitors and, in the case of retailer house brands, may also be our competitors.
4 unchanged sentences
These new partners, practices and models may require significant management attention and operational resources and may affect our accounting, including revenue recognition, gross margins, and the ability to make comparisons from period to period.
−Removed: Entrenched and more experienced competitors will make these transitions difficult.
−Removed: Certain product categories, such as Video Collaboration, may also require that we further build and scale our own enterprise sales force.
+Added: Certain product categories, such as Video Collaboration, also require that we further build and scale our own enterprise sales force.
Several of our competitors already have large enterprise sales forces and experience and success with that sales model.
4 unchanged sentences
We use sell-through data, which represents sales of our products by our direct retailer and e-tailer customers to consumers, and by our distributor customers to their customers, along with other metrics, to assess consumer demand for our products.
−Removed: Sell-through data is subject to limitations due to collection methods and the third-party
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 23
−Removed: nature of the data and thus may not be an accurate indicator of actual consumer demand for our products.
+Added: Sell-through data is subject to limitations due to collection methods and the third-party nature of the data and thus may not be an accurate indicator of actual consumer demand for our products.
The customers supplying sell-through data vary by geographic region and from period to period, but typically represent a majority of our retail sales.
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In addition, our products have short product life cycles, so a failure to accurately predict high demand for a product can result in lost sales that we may not recover in subsequent periods, or higher product costs if we meet demand by paying higher costs for materials, production and delivery.
−Removed: We could also frustrate our customers and lose shelf space and market share.
Our failure to predict low demand for a product can result in excess inventory, lower cash flows and lower margins if we are required to reduce product prices in order to reduce inventories.
If our sales channel partners have excess inventory of our products or decide to decrease their inventories for any reason, they may decrease the number of products they acquire in subsequent periods, which could cause disruption in our business and adversely affect our forecasts and sales.
−Removed: Over the past few years, we have expanded the types of products we sell and the geographic markets in which we sell them.
−Removed: The changes in our product portfolio and the expansion of our sales markets have increased the difficulty of accurately forecasting product demand.
−Removed: We are also utilizing sea shipments more extensively than air delivery, which will cause us to build and ship products to our distribution centers earlier and will also result in increases in inventory.
−Removed: These operational shifts increase the risk that we have excess or obsolete inventory if we do not accurately forecast product demand.
−Removed: In addition, market demand remains less predictable and more volatile than pre-COVID-19.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 20
+Added: In addition, market demand remains less predictable and more volatile than pre-COVID-19, partially due to the current macroeconomic and geopolitical conditions.
As a result, we have experienced in the past and may continue experiencing large differences between our forecasts and actual demand for our products that may result in excess inventory or product unavailability, inventory and restructuring reserves, increases in operational logistics and other costs, damaged relationships with suppliers or customers, opportunities for our competitors, and lost market share and revenue.
If we do not accurately predict product demand, our business and operating results could be adversely affected.
−Removed: Our business depends in part on access to third-party platforms or technologies, and if the access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.
−Removed: Our peripherals business has historically been built largely around the PC platform, which over time became relatively open, and its inputs and operating system standardized.
−Removed: With the growth of mobile, tablet, gaming and other computer devices, digital music and personal voice assistants, the number of platforms has grown, and with it the complexity and increased need for us to have business and contractual relationships with the platform owners in order to produce products compatible with these platforms.
+Added: Our business depends in part on access to third-party platforms or technologies, and if access thereto is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies change without notice to us, our business and operating results could be adversely affected.
Our product portfolio includes current and future products designed for use with third-party platforms or software, such as the Apple iPad, iPod, iPhone and Siri, Android phones and tablets, Google Assistant and Amazon Alexa .
3 unchanged sentences
Our access to third-party platforms may require paying a royalty, which lowers our product margins or may otherwise be on terms that are not acceptable to us.
−Removed: In addition, the third-party platforms or technologies used to
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 24
−Removed: interact with our product portfolio can be delayed in production or can change without prior notice to us, which can result in our having excess inventory, lower margins, lost investment in time and expense, or lost opportunity cost.
+Added: In addition, the third-party platforms or technologies used to interact with our product portfolio can be delayed in production or can change without prior notice to us, which can result in our having excess inventory, lower margins, lost investment in time and expense, or lost opportunity cost.
If we are unable to access third-party platforms or technologies, or if our access is withdrawn, denied, or is not available on terms acceptable to us, or if the platforms or technologies are delayed or changed without notice to us, our business and operating results could be adversely affected.
−Removed: Our success largely depends on our ability to hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior leadership.
+Added: Our success largely depends on our ability to manage, hire, retain, integrate and motivate sufficient numbers of qualified personnel, including senior leadership.
Our strategy and our ability to innovate, design and produce new products, sell products, maintain operating margins and control expenses depend on key personnel that may be difficult to replace.
3 unchanged sentences
Recruiting and retaining skilled personnel, including software and hardware engineers, is highly competitive.
−Removed: The pandemic and hybrid work environment have driven acute competition for talent, increased employee burnout and attrition, increased employment litigation and wage inflation across multiple industries.
−Removed: If we fail to provide competitive compensation to our employees, it will be difficult to retain, hire and integrate qualified employees and contractors, and we may not be able to maintain and expand our business.
−Removed: If we do not retain or maintain the continuity of our senior leaders or other key employees for any reason, including voluntary or involuntary departure, death or permanent or temporary disability (the risk of which has been underscored during the COVID-19 pandemic), we risk losing institutional knowledge, experience, expertise and other benefits of continuity as well as the ability to attract and retain other key employees.
+Added: If we fail to provide an attractive working environment and competitive compensation to our employees, it will be difficult to retain, hire and integrate qualified employees and contractors, and we may not be able to maintain and expand our business.
+Added: If we do not retain or maintain the continuity of our senior leaders or other key employees for any reason, including voluntary or involuntary departure, death or permanent or temporary disability, we risk losing institutional knowledge, experience, expertise and other benefits of continuity as well as the ability to attract and retain other key employees.
In addition, we must carefully balance the size of our employee base with our current infrastructure, management resources and anticipated operating cash flows.
−Removed: If we are unable to manage the size of our employee base, particularly engineers, we may fail to develop and introduce new products successfully and in a cost-effective and timely manner.
+Added: If we are unable to manage the size of our employee base, including but not limited to our engineers, product managers and designers and other functions, we may fail to achieve our strategic and operational goals, including developing and introducing new products successfully and in a cost-effective and timely manner.
If our revenue growth or employee levels vary significantly, our operating cash flows and financial condition could be adversely affected.
Volatility or lack of positive performance in our stock price may also affect our ability to retain key employees, many of whom have been granted equity incentives.
−Removed: Logitech’s practice has been to provide equity incentives to its employees, but the number of shares available for equity grants is limited.
We may find it difficult to provide competitive equity incentives, and our ability to hire, retain and motivate key personnel may suffer.
−Removed: As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories and pursuing strategic acquisitions and investments, which could have an adverse impact on our business.
−Removed: We continue to review our product portfolio and update our non-strategic product categories and products.
−Removed: During the third quarter of fiscal year 2022, we ceased future product launches under the Jaybird brand within our Audio & Wearables product category and during the fourth quarter of fiscal 2021, we discontinued our Harmony line of home entertainment controllers within our Smart Home product category.
−Removed: If we are unable to effect sales on favorable terms or if realignment is more costly or distracting than we expect or has a negative effect on our organization, employees and retention, then our business and operating results may be adversely affected.
−Removed: Discontinuing products with service components may also cause us to continue to incur expenses to maintain services within the product life cycle or may adversely affect our customer and consumer relationships and brand.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 21
+Added: As we focus on growth opportunities, we are divesting or discontinuing non-strategic product categories, or pursuing strategic acquisitions and investments, which could have an adverse impact on our business.
+Added: We regularly review our product portfolio and update our non-strategic product categories and products.
+Added: Discontinuing products with service components may cause us to continue to incur expenses to maintain services within the product life cycle or may adversely affect our customer and consumer relationships and brand.
Divestitures may also involve warranties, indemnification or covenants that could restrict our business or result in litigation, additional expenses or liabilities.
In addition, discontinuing product categories, even categories that we consider non-strategic, reduces the size and diversification of our business and causes us to be more dependent on a smaller number of product categories.
−Removed: As we attempt to grow our business in strategic product categories and emerging market geographies, we will consider growth through acquisition or investment.
−Removed: We will evaluate acquisition opportunities that could provide us with additional product or service offerings or with additional industry expertise, assets and capabilities.
−Removed: For example, we acquired ASTRO Gaming to expand into the console gaming market, we acquired Saitek to expand into the gaming simulation and controller markets, we acquired Blue Microphones to expand into the microphones market, we acquired General Workings, Inc.
−Removed: ("Streamlabs") to expand our software and service capabilities and tools for the streaming market, and we acquired Mevo Inc.
−Removed: to expand our camera hardware and software for live streaming and video conferencing.
+Added: As we attempt to grow our business in strategic product categories and emerging market geographies, we evaluate acquisition opportunities that could provide us with additional product or service offerings or with additional industry expertise, assets and capabilities.
Acquisitions could result in difficulties integrating acquired operations, products, technology, internal controls, personnel and management teams and result in the diversion of capital and management’s attention away from other business issues and opportunities.
−Removed: If we fail to successfully integrate
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 25
−Removed: acquisitions, our business could be harmed.
+Added: If we fail to successfully integrate acquisitions, our business could be harmed.
Acquisitions could also result in the assumption of known and unknown liabilities, product, regulatory and other compliance issues, dilutive issuances of our equity securities, the incurrence of debt, disputes over earn-outs or other litigation, and adverse effects on relationships with our and our target’s employees, customers and suppliers.
Moreover, our acquisitions may not be successful in achieving our desired strategy, product, financial or other objectives or expectations, which would also cause our business to suffer.
−Removed: Acquisitions can also lead to large non-cash charges that can have an adverse effect on our results of operations as a result of write-offs for items such as future impairments of intangible assets and goodwill or the recording of share-based compensation.
+Added: Acquisitions can also lead to large non-cash charges that can have an adverse effect on our results of operations as a result of write-offs for items such as future impairments of intangible assets and goodwill, restructuring charges, inventory write downs or the recording of share-based compensation.
If we divest or discontinue product categories or products that we previously acquired, or if the value of those parts of our business become impaired, we may need to evaluate the carrying value of our goodwill.
4 unchanged sentences
If these investments are unsuccessful, this could have an adverse impact on our results of operations, operating cash flows and financial condition.
+Added: As we continue our efforts to lower our costs and improve our operational efficiency, we may not fully realize our goals.
+Added: Our ability to achieve the desired and anticipated cost savings and other benefits from simplification, cost-cutting and restructuring activities, and within our desired and expected timeframes, are subject to many estimates and assumptions, and the actual savings and timing for those savings may vary materially based on factors such as local labor regulations, negotiations with third parties, and operational requirements.
+Added: These estimates and assumptions are also subject to significant economic, competitive and other uncertainties, some of which are beyond our control.
+Added: There can be no assurance that we will fully realize the desired and anticipated benefits from these activities.
+Added: To the extent that we are unable to improve our operational efficiency, further restructuring measures may be required in the future.
+Added: Furthermore, we are expecting to be able to use the anticipated cost savings from these activities to fund and support our current growth opportunities and incremental investments for future growth.
+Added: If the cost-savings and other benefits from restructuring activities do not materialize as anticipated, or within our expected timeframes, our ability to invest in growth may be limited and our business and operating results may be adversely affected.
Product quality issues could adversely affect our reputation, business and operating results.
−Removed: The market for our products is characterized by rapidly changing technology and evolving industry standards.
−Removed: To remain competitive, we must continually introduce new products and technologies.
−Removed: The products that we sell could contain defects in design or manufacture.
−Removed: Defects could also occur in the products or components that are supplied to us.
+Added: The products that we sell or third-party components included therein could contain defects in design or manufacture.
There can be no assurance we will be able to detect and remedy all defects in the hardware and software we sell.
Failure to do so could result in product recalls, product liability claims and litigation, product redesign efforts, lost revenue, loss of reputation, and significant warranty and other expenses to remedy.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 22
While we maintain reserves for reasonably estimable liabilities and purchase liability insurance, our reserves may not be adequate to cover such claims and liabilities and our insurance is subject to deductibles and may not be adequate to cover such claims and liabilities.
Furthermore, our contracts with distributors and retailers may contain warranty, indemnification and other provisions related to product quality issues, and claims under those provisions may adversely affect our business and operating results.
−Removed: Risks Related to our Global Operations and Regulatory Environment
+Added: Risks Related to Global Nature of our Operations and Regulatory Environment
+Added: Adverse global and regional economic and geopolitical conditions can materially adversely affect our business, results of operations and financial condition.
+Added: We conduct operations internationally and as a result, adverse global and regional economic and geopolitical conditions have in the past and can in the future materially adversely affect our business, results of operations and financial condition.
+Added: Such conditions, including but not limited to inflation, slower growth or recession, new or increased tariffs, trade restrictions, changes to fiscal and monetary policy, higher interest rates and currency fluctuations, and other conditions that are susceptible to impact consumer confidence and spending could adversely affect demand for our products.
+Added: In fiscal year 2023, we were impacted by adverse mac roeconomic and geopolitical conditions including but not limited to inflation, foreign currency fluctuations, and slowdown of economic activity around the world, in part due to changes in interest rates, and lower consumer and enterprise spending.
+Added: In addition, the war in Ukraine increased global supply chain, logistics, and inflationary challenges.
+Added: In the fourth quarter of fiscal year 2022, we indefinitely ceased all sales and shipments to Russia.
+Added: Our sales in Ukraine have also been halted due to the ongoing military operations on the Ukrainian territory.
+Added: We had no revenues from Russia and Ukraine in fiscal year 2023.
+Added: Global or regional economic and political conditions also have an impact on our suppliers, contract manufacturers, logistics providers, and distributors, causing volatility in cost of materials and shipping and transportation rates, and as a result impacting the pricing of our products.
+Added: Price increases may not successfully offset cost increases or may cause us to lose market share and in turn adversely impact our operations.
+Added: All these and other global and regional economic and geopolitical factors can materially adversely affect our business, results of operations and financial condition.
We conduct operations in a number of countries and have invested significantly in growing our sales and marketing activities in China, and the effect of business, legal and political risks associated with international operations could adversely affect us.
6 unchanged sentences
• Varying accounting, auditing and financial reporting standards, accountability and protections, including risks related to the lack of access by the Public Company Accounting Oversight Board (United States) ("PCAOB") to inspect PCAOB-registered accounting firms in emerging market countries such as China;
+Added: • Exposure to political, economic and financial instability, including due to the uncertainty associated with the ongoing sovereign debt issues in certain Euro zone countries, which may lead to reduced sales, currency exchange losses and collection difficulties or other losses;
Logitech International S.A.
| Fiscal 2023 Form 10-K | 23
−Removed: • Exposure to political and financial instability, especially with the uncertainty associated with the ongoing sovereign debt crisis in certain Euro zone countries and the stability of the European Union, which may lead to reduced sales, currency exchange losses and collection difficulties or other losses;
−Removed: • Political and economic uncertainty around the world.
−Removed: For example, Russia’s invasion of Ukraine in February 2022 resulted in a sharp increase of commodity prices, sanctions and trade restrictions have been imposed on Russian banks, businesses, and individuals, and the conflict has sparked a massive refugee crisis.
−Removed: This conflict has driven and could continue to drive economic uncertainty, including inflation and restricted component availability, among other things;
• Import or export restrictions or licensing requirements that could affect some of our products, including those with encryption technology;
17 unchanged sentences
As previously disclosed, we have invested significantly in manufacturing facilities in China and Southeast Asia.
−Removed: Given our manufacturing in those countries, and our lack of manufacturing elsewhere, policy or regulations changes in the United States or other countries present particular risks for us.
+Added: Given our manufacturing principally in those countries, and our lack of manufacturing elsewhere, policy or regulations changes in the United States or other countries present particular risks for us.
+Added: We are constantly evaluating our manufacturing footprint globally including beyond Asia.
In addition, the current Chinese administration has imposed an increased volume of regulation creating a more challenging environment for non-Chinese companies operating in the region, including in the areas of intellectual property, trade, contract enforcement, data privacy, capital markets and human rights.
−Removed: As a result, such regulations
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 27
−Removed: may have the effect of limiting our growth and market share in China, and disrupting manufacturing and operations in the region.
+Added: As a result, such regulations may have the effect of limiting our growth and market share in China, and disrupting manufacturing and operations in the region.
For example, on June 10, 2021, the National People’s Congress Standing Committee of the People’s Republic of China passed China's new Anti-Foreign Sanctions Law.
The Anti-Foreign Sanctions Law took immediate effect and allows China to take “retaliatory action” against any “discriminatorily restrictive measures” imposed by foreign countries against Chinese organizations and citizens.
−Removed: As a result, China may impose countermeasures against government and private entities and/or persons that formulate, implement or comply with any regulation deemed a “discriminatorily restrictive measure.” Penalties may include denial of entry to China, prohibition of doing business in or with China, freezing of assets and “any other necessary measures.”
+Added: As a result, China may impose countermeasures against government and private entities and/or persons that formulate, implement or comply with any regulation deemed a
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 24
+Added: “discriminatorily restrictive measure.” Penalties may include denial of entry to China, prohibition of doing business in or with China, freezing of assets and “any other necessary measures.”
New or increased tariffs could adversely affect more or all of our products.
34 unchanged sentences
We use derivative instruments to hedge certain exposures to fluctuations in currency exchange rates.
−Removed: The use of such hedging activities may not offset any, or more than a portion, of the adverse financial effects of unfavorable
+Added: The use of such hedging activities may not offset any, or more than a portion, of the adverse financial effects of unfavorable movements in currency exchange rates over the limited time the hedges are in place and do not protect us from long term shifts in currency exchange rates.
+Added: As a result, fluctuations in currency exchange rates could affect and have in the past adversely affected our business, operating results and financial condition.
+Added: Moreover, these exposures may change over time.
Logitech International S.A.
| Fiscal 2023 Form 10-K | 25
−Removed: movements in currency exchange rates over the limited time the hedges are in place and do not protect us from long term shifts in currency exchange rates.
−Removed: As a result, fluctuations in currency exchange rates could and have in the past adversely affect our business, operating results and financial condition.
−Removed: Moreover, these exposures may change over time.
−Removed: We are subject to risks related to our environmental, social and governance activities and disclosures.
−Removed: Concern over climate change may result in new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation and other cost increases that could adversely affect our business.
−Removed: Compliance with such requirements could also require additional expenditures by us or our suppliers, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
+Added: We are subject to risks related to our environmental, social and governance ("ESG") activities and disclosures.
+Added: Concerns over climate change have resulted and may in the future result in new or additional legal, legislative and regulatory requirements to reduce or mitigate the effects of climate change on the environment, which could result in future tax, transportation and other cost increases that could adversely affect our business.
+Added: Compliance with such requirements will also require additional expenditures by us or our suppliers, which could have a material adverse effect on our business, results of operations, financial condition and cash flows.
In addition, ESG reporting and disclosure requirements continue to evolve, with increasing global regulation and heightened investor expectations.
2 unchanged sentences
As a company operating in many markets and jurisdictions, expanding into new growth categories, and engaging in acquisitions, and as a Swiss, dual-listed company, we are subject to risks associated with new, existing and potential future laws and regulations.
−Removed: Based on our current business model and as we expand into new markets and product categories and acquire companies, businesses and assets, we must comply with a wide variety of laws, standards and other requirements governing, among other things, health and safety, hazardous materials usage, product-related energy consumption, conflict minerals, packaging, recycling, environmental and human rights matters.
+Added: As we expand into new markets and product categories and acquire companies, businesses and assets, we must comply with a wide variety of laws, standards and other requirements governing, among other things, health and safety, hazardous materials usage, product-related energy consumption, conflict minerals, packaging, recycling, sustainability, environmental, child labor and human rights matters.
Our products may be required to obtain regulatory approvals and satisfy other regulatory concerns in the various jurisdictions where they are manufactured, sold or both.
6 unchanged sentences
In addition to the extra costs and regulatory burdens of our dual regulatory obligations, the two regulatory regimes may not always be compatible and may impose disclosure obligations, operating restrictions or tax effects on our business to which our competitors and other companies are not subject.
−Removed: For example, on January 1, 2014, subject to certain transitional provisions, the Swiss Federal Council Ordinance Against Excessive Compensation at Public Companies ("Ordinance") became effective in connection with the Minder initiative approved by Swiss voters during 2013.
−Removed: The Ordinance, among other things, (a) requires a binding shareholder “say on pay” vote with respect to the compensation of members of our executive management and Board of Directors, (b) generally prohibits the making of severance, advance, transaction premiums and similar payments to members of our executive management and Board of Directors, (c) imposes other restrictive compensation practices, and (d) requires that our articles of incorporation specify various compensation-related matters.
−Removed: In addition, during 2013, Swiss voters considered an initiative to limit pay for a chief executive officer to a multiple of no more than twelve times the salary of the lowest-paid employee.
−Removed: Although voters rejected that initiative, it did receive substantial voter support.
−Removed: The Ordinance, potential future initiatives relating to corporate governance or executive compensation, and Swiss voter sentiment in favor of such regulations may increase our non-operating costs and adversely affect our ability to attract and retain executive management and members of our Board of Directors.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 29
+Added: For example, on January 1, 2023, subject to certain transitional provisions, the revised Swiss Corporate Law incorporating the Swiss Federal Council Ordinance Against Excessive Compensation at Public Companies, became effective.
+Added: The revised Swiss Corporate Law among other things, (a) requires a binding shareholder “say on pay” vote with respect to the compensation of members of our executive management and Board of Directors, (b) generally prohibits the making of severance, advance, transaction premiums and similar payments to members of our executive management and Board of Directors, (c) imposes other restrictive compensation practices, and (d) requires that our articles of incorporation specify various compensation-related matters.
+Added: Potential future initiatives relating to corporate governance or executive compensation, and Swiss voter sentiment in favor of such regulations may increase our non-operating costs and adversely affect our ability to attract and retain executive management and members of our Board of Directors.
We prepare our consolidated financial statements in accordance with accounting principles generally accepted in the U.S.
1 unchanged sentence
New accounting pronouncements and changes in accounting principles have occurred in the past and are expected to occur in the future which may have a significant effect on our financial results or our compliance with regulations.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 26
As a result of changes in tax laws, treaties, rulings, regulations or agreements, or their interpretation, of Switzerland or any other country in which we operate, the loss of a major tax dispute or a successful challenge to our operating structure, intercompany pricing policies or the taxable presence of our key subsidiaries in certain countries, or other factors, our effective income tax rates may increase, which could adversely affect our net income and cash flows.
−Removed: We are incorporated in the canton of Vaud in Switzerland, and our effective income tax rate benefited from a longstanding ruling from the canton of Vaud through December 31, 2019.
−Removed: As a result of the Federal Act on the Tax Reform and AHV Financing (“TRAF”), the canton of Vaud enacted tax reforms on March 10, 2020 that took effect as of January 1, 2020.
+Added: As a result of the Federal Act on the Tax Reform and AHV Financing (“TRAF”), the canton of Vaud in Switzerland, where we are incorporated, enacted tax reforms on March 10, 2020 that took effect as of January 1, 2020.
As a result of the reform, Logitech will incur cash income taxes that will increase over time as the deferred income tax benefit established in connection with the reform diminishes.
13 unchanged sentences
If our effective income tax rate increases in future periods, our net income and cash flows could be adversely affected.
−Removed: Risks Related to Cyber Security, Privacy, and Intellectual Property
−Removed: Significant disruptions in, or breaches in security of, our websites, or information technology systems, or our products could adversely affect our business.
−Removed: As a consumer electronics company, our websites are an important presentation of our company, identity and brands and an important means of interaction with and source of information for consumers of our products.
−Removed: We also rely on our centralized information technology systems for product-related information and to store intellectual property, forecast our business, maintain financial records, manage operations and inventory, and operate other critical functions.
−Removed: We allocate significant resources to maintain our information technology systems and deploy network security, data encryption, training and other measures to protect against unauthorized access or misuse.
−Removed: Nevertheless, our websites and information technology systems have been and could continue to be subject to or
+Added: We maintain cash and cash equivalents at financial institutions and are exposed to credit risk in the event of default by such financial institutions.
+Added: We maintain cash and cash equivalents with various creditworthy financial institutions and while we have a policy to limit exposure with any one financial institution, we are exposed to credit risk in the event of default by financial institutions to the extent that cash balances with individual financial institutions are in excess of amounts that are insured.
+Added: If such institutions were to fail, we could lose all or a portion of amounts held in excess of such insurance limits.
+Added: Any material loss that we may experience in the future as a result could additionally have an adverse effect on our ability to pay or could delay payments of our operational expenses and other payments, including in connection with our dividend, share repurchases, payments to our vendors and employees and cause other operational impacts.
+Added: Risks Related to Confidential Information, Cybersecurity, Privacy, and Intellectual Property
+Added: Losses or unauthorized access to or releases of confidential information could adversely affect our business and result in significant reputational, financial and legal consequences.
+Added: We use and store confidential information, including but not limited to our business, financial, legal and governance information, as well as personal information about our employees, members of our Board of Directors and customers.
+Added: In addition, as a consumer electronics company, our websites are an important presentation of our company, identity and brands and an important means of interaction with and source of information for consumers
Logitech International S.A.
| Fiscal 2023 Form 10-K | 27
−Removed: threatened with, and are susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, structural or operational failures, computer viruses, attacks by computer hackers, other data security issues, telecommunication failures, user error, malfeasance, catastrophes, system or software upgrades, integration or migration, or other foreseeable and unforeseen events.
−Removed: From time to time, we and our suppliers have identified vulnerabilities or other issues that we believe have been addressed, and we expect such issues to continue to arise.
−Removed: None of such disruptions or issues has individually or in the aggregate resulted in security incidents with a material impact on us.
−Removed: Moreover, due to the COVID-19 pandemic, there is an increased risk that we may experience security breach related incidents as a result of our employees, service providers, and third parties working remotely on less secure systems.
−Removed: In addition, our growth, and increased frequency and sophistication of cyber and product security attacks may increase the likelihood of the Company becoming a target of increasingly complex and damaging attacks that substantially disrupt operations and expose sensitive data.
−Removed: Further, the U.S.
−Removed: Cybersecurity and Infrastructure Security Agency and the European Central Bank have both issued warnings about potential Russian cyberattacks as a result of Russia’s invasion of Ukraine and sanctions imposed on Russia.
−Removed: Breaches or disruptions of our websites or information technology systems, breaches of confidential information, data corruption or other data security issues could adversely affect our brands, reputation, relationships with customers or business partners, or consumer or investor perception of our company, business or products or result in disruptions of our operations, loss of intellectual property or our customers’ or our business partners’ data, reduced value of our investments in our brands, design, research and development or engineering, or costs to address regulatory inquiries or actions or private litigation, to respond to customers or partners or to rebuild or restore our websites or information technology systems.
−Removed: The collection, storage, transmission, use and distribution of user data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.
−Removed: In connection with our operations, we collect personal data, including that of our consumers.
−Removed: This information is increasingly subject to legislation, regulations and enforcement in numerous jurisdictions around the world.
+Added: of our products.
+Added: We also rely on our centralized information technology systems for product-related information and to store intellectual property and data, forecast our business, maintain financial records, manage operations and inventory, and operate other critical functions.
+Added: We allocate significant resources to maintain our information technology systems and deploy network security, data encryption, training and other measures to protect against unauthorized access or misuse.
+Added: Nevertheless, our websites and information technology systems have been and could continue to be subject to or threatened with, and are susceptible to damage, disruptions or shutdowns due to power outages, hardware failures, structural or operational failures, computer viruses, ransomware and other malware, attacks by computer hackers and other third parties, employee error or malfeasance, phishing and other means of social engineering, other data security issues, telecommunication failures, user error, employee or contractor negligence or malfeasance, catastrophes, downtime due to system or software upgrades, integration or migration, or other foreseeable and unforeseen events.
+Added: Such risks extend not only to our own products, services, systems and networks, but also to those of customers, suppliers, contractors, business partners, vendors, and other third parties, particularly as all parties increasingly digitize their operations.
+Added: To date, we are not aware of any such disruptions or issues impacting our systems or products having resulted in security incidents with a material impact on us, individually or in the aggregate.
+Added: Moreover, there is an increased risk that we may experience security breaches or incidents as a result of our employees, service providers and third parties working remotely.
+Added: In addition, our growth and increased frequency and sophistication of cyber and product security attacks may increase the likelihood of our becoming a target of complex and damaging attacks that substantially disrupt operations and expose sensitive data.
+Added: While we have developed and implemented security measures and processes designed to protect against cyber and other security threats, such measures cannot provide absolute security and may not be successful in preventing future security breaches.
+Added: Moreover, we may need to implement additional protective measures to reduce the risk of potential security breaches and security incidents, which could cause us to incur significant additional expenses.
+Added: Security incidents or breaches impacting the information we or our third-party service providers process or maintain, or our products, websites or information technology systems may result in loss, unavailability, corruption, or unauthorized collection, use, disclosure or other processing of personal data and other confidential information that we and our service providers maintain and otherwise process.
+Added: Any such incidents or breaches, or the belief or perception that any such matters have occurred could result in disruptions of our operations, loss of intellectual property and loss, corruption, unavailability or other unauthorized processing of data.
+Added: Any such event could also damage our brand and reputation or otherwise harm our business, and could result in government enforcement actions, litigation and potential liability for us.
+Added: Any of these may adversely affect our business, results of operations and financial condition, potentially in a material manner.
+Added: In addition, while we carry cyber insurance, we cannot be certain that our insurance will be sufficient to cover losses and liabilities resulting from cyberattacks, security breaches and incidents, or other interruptions, that insurance will continue to be available to us on economically reasonable terms, or at all, or that any insurer will not deny coverage as to any future claim, any of which could have a material adverse effect on our business, including our financial condition, results of operations and reputation.
+Added: The collection, storage, transmission, use and distribution of personal data could give rise to liabilities and additional costs of operation as a result of laws, governmental regulation and risks of data breaches and security incidents.
+Added: In connection with our operations, we collect and otherwise process personal data, including that of our consumers.
+Added: The processing of this information is increasingly subject to legislation, regulations and enforcement in numerous jurisdictions around the world.
Global data privacy regulation is increasingly fragmented, with increasing enforcement efforts and penalties.
1 unchanged sentence
For example, the General Data Protection Regulation ("GDPR"), which is applicable to us and to all companies processing data of people in the European Union, imposes significant fines and sanctions for violation of the Regulation.
−Removed: Compliance with the GDPR's international transfer rules has been made more difficult by the invalidation of the U.S.
−Removed: European Union Privacy Shield and we are now required to put in place additional privacy protective measures for transfer of data of people in the European Union to certain countries outside of the European Economic Area.
−Removed: In the United States, California and Virginia have already adopted privacy laws and other legislations may follow, at states and federal levels.
−Removed: Such laws and regulations are typically intended to protect the privacy and security of personal information and its collection, storage, transmission, use and distribution in or from the governing jurisdiction.
−Removed: In addition, because various jurisdictions have different laws and regulations concerning the use, storage and transmission of such information, we may face requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter.
−Removed: The collection of user data heightens the risk of security breaches and other data security issues related to our IT systems and the systems of third-party data storage and other service and IT providers.
−Removed: Such laws and regulations, and the variation between jurisdictions, as well as additional security measures and risk, could subject us to increased costs, allocation of additional resources, financial penalties or other liabilities or negative publicity that could adversely affect our business.
+Added: Compliance with the GDPR's international transfer rules has been made more difficult by the invalidation of the European Union-U.S.
+Added: Privacy Shield and we are now required to put in place additional privacy
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 28
+Added: protective measures for transfer of data of people in the European Union to certain countries outside of the European Economic Area.
+Added: In the United States, several states have adopted broad privacy laws.
+Added: Such laws and regulations are typically intended to protect the privacy and security of personal information and its collection, storage, transmission, use, disclosure and other processing.
+Added: For example, California has enacted the California Consumer Privacy Act (the “CCPA”), which, among other things, requires covered companies to provide disclosures to California consumers and afford such consumers abilities to opt-out of certain sales of personal information.
+Added: Additionally, the California Privacy Rights Act (the “CPRA”), was approved by California voters in November 2020.
+Added: The CPRA significantly modifies the CCPA and has made compliance more uncertain and complex.
+Added: Additionally, other U.S.
+Added: states continue to propose, and in certain cases adopt, privacy-focused legislation.
+Added: Other laws and regulations may follow, at state and federal levels.
+Added: In addition, because various jurisdictions have different laws and regulations concerning the use, storage, transmission and other processing of such information, we may face requirements that pose compliance challenges in existing markets as well as new international markets that we seek to enter.
+Added: The collection and processing of personal data also heightens the risk of security breaches and other data security issues related to our IT systems and the systems of third-party data storage and other service and IT providers.
+Added: Such laws and regulations, variation between jurisdictions and risks presented by our processing of personal data could limit our ability to use data and develop new features and services, subject us to increased costs, require allocation of additional resources and changes to our policies and practices, which may be difficult to achieve in a commercially reasonable manner or at all.
+Added: Any actual or perceived failure by us to comply with these laws, regulations, or other actual or asserted obligations relating to privacy or the collection, use or other processing of personal data may lead to significant fines, penalties, regulatory investigations, lawsuits, significant costs for remediation, damage to our reputation, or other liabilities, all of which could adversely affect our business.
Claims by others that we infringe their proprietary technology could adversely affect our business.
−Removed: We have been expanding the categories of products we sell, such as entering new markets and introducing products for tablets, other mobile devices, digital music, and video collaboration.
+Added: We have been expanding the categories of products we sell.
We expect to continue to enter new categories and markets.
As we do so, we face an increased risk that claims alleging we infringe the patent or other intellectual property rights of others, regardless of the merit of the claims, may increase in number and significance.
−Removed: Infringement claims against us may also increase as the functionality of video, voice, data and conferencing products begin to overlap.
−Removed: This risk is heightened by the increase in lawsuits brought by holders of patents that do not have an operating business or are attempting to license broad patent portfolios and by the increasing attempts by companies in the technology industries to enjoin their competitors from selling products that they claim infringe their intellectual property rights.
−Removed: Intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, and we cannot be certain that we will be successful in
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 31
−Removed: defending ourselves against intellectual property claims.
+Added: This risk is heightened by the persistent lawsuits brought by holders of patents that do not have an operating business or are attempting to license broad patent portfolios Intellectual property lawsuits are subject to inherent uncertainties due to the complexity of the technical issues involved, and we cannot be certain that we will be successful in defending ourselves against intellectual property claims.
A successful claimant could secure a judgment that requires us to pay substantial damages or prevents us from distributing certain products or performing certain services.
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Any of these events could adversely affect our business, financial condition and operating results.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 29
Risks Related to our Financial Results
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• A significant portion of our quarterly retail sales typically occurs in the last weeks of each quarter, further increasing the difficulty in predicting quarterly revenues and profitability.
−Removed: • Our sales are impacted by consumer demand and current and future global economic and political conditions, including trade restrictions and tariffs, and can, therefore, fluctuate abruptly and significantly during periods of uncertain economic conditions or geographic distress, as well as from shifts in distributor inventory practices and consumer buying patterns.
+Added: • Our sales are impacted by consumer demand and current and future global economic and political conditions, including inflation, foreign currency fluctuations, slowdown of economic activity around the world, in part due to rising interest rates, and lower consumer and enterprise spending, trade restrictions and tariffs, and can, therefore, fluctuate abruptly and significantly during periods of uncertain economic conditions or geographic distress, as well as from shifts in distributor inventory practices and consumer buying patterns.
• We must incur a large portion of our costs in advance of sales orders because we must plan research and production, order components, buy tooling equipment, and enter into development, sales and marketing, and other operating commitments prior to obtaining firm commitments from our customers.
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The effectiveness of our marketing and sales efforts is uncertain and it is difficult to predict whether our marketing and sales efforts will result in increased sales.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 32
−Removed: • The COVID-19 pandemic has led to evolving changes in our supply, operations, logistics and related expenses and use patterns and demand for certain of our products that may not recur or be sustainable in future periods, as well as uncertainty in global macroeconomic conditions.
+Added: • The COVID-19 pandemic has led to evolving changes in our supply, operations, logistics and related expenses and use patterns and demand for certain of our products that may not recur or be sustainable in future periods.
• We engage in acquisitions and divestitures, and such activity varies from period to period.
Such variance may affect our growth, our previous outlook and expectations, and comparisons of our operating results and financial statements between periods.
−Removed: • We are continuously attempting to simplify our organization, to control operating costs through expense and global workforce management, to reduce the complexity of our product portfolio, and to better align costs with our current business as we expand from PC accessories and provide leverage for growth opportunities in accessories and other products and services for creativity and productivity, gaming, video collaboration, mobile devices, music, digital home and other product categories.
+Added: • We are continuously attempting to simplify our organization, to control operating costs through expense and global workforce management, to reduce the complexity of our product portfolio, and to better align costs with our current business.
We may not achieve the cost savings or other anticipated benefits from these efforts, and the success or failure of such efforts may cause our operating results to fluctuate and to be difficult to predict.
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Because our operating results are difficult to predict, our results may be below the expectations of financial analysts and investors, which could cause the price of our shares to decline.
+Added: Logitech International S.A.
+Added: | Fiscal 2023 Form 10-K | 30
Our gross margins can vary significantly depending on multiple factors, which can result in unanticipated fluctuations in our operating results.
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The impact of these factors on gross margins can create unanticipated fluctuations in our operating results, which may cause volatility in the price of our shares.
−Removed: Logitech International S.A.
−Removed: | Fiscal 2022 Form 10-K | 33
−Removed: We cannot ensure that our current share repurchase program will be fully utilized or that it will enhance long-term shareholder value.
+Added: We cannot ensure that our share repurchase programs will be fully utilized or that it will enhance long-term shareholder value.
Share repurchases may also increase the volatility of the trading price of our shares.
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Share repurchases and dividends diminish our cash reserves.
−Removed: In April 2021, our Board of Directors increased our current repurchase program of our registered shares to $1.0billion.
+Added: In July 2022, our Board of Directors approved a $500 million increase to our current 2020 repurchase program of our registered shares up to $1.5 billion.
+Added: The Swiss Takeover Board approved this increase and it became effective on August 19, 2022.
+Added: As of March 31, 2023, $505.8 million was available for repurchase under the 2020 repurchase program.
We have also paid cash dividends and increased the size of our dividend, each year since fiscal year 2013.
−Removed: Our share repurchase program and dividend policy may be affected by many factors, including general business and economic conditions, our financial condition and operating results, our views on potential future capital requirements, restrictions imposed in any future debt agreements, the emergence of alternative investment or acquisition opportunities, changes in our business strategy, legal requirements, changes in tax laws, and other factors.
−Removed: Our share repurchase program does not obligate us to repurchase all or any of the dollar value of shares authorized for repurchase.
−Removed: The program could also increase the volatility of the trading price of our shares.
+Added: Our share repurchase programs and dividend policy may be affected by many factors, including general business and economic conditions, our financial condition and operating results, our views on potential future capital requirements, restrictions imposed in any future debt agreements, the emergence of alternative investment or acquisition opportunities, changes in our business strategy, legal requirements, changes in tax laws, and other factors.
+Added: Our share repurchase programs do not obligate us to repurchase all or any of the dollar value of shares authorized for repurchase.
+Added: The programs could also increase the volatility of the trading price of our shares.
Similarly, we are not obligated to pay dividends on our registered shares.
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If we do not pay a regular dividend, we may lose the interest of investors that focus their investments on dividend-paying companies, which could create downward pressure on our share price.
−Removed: Any announcement of termination or suspension of our share repurchase program or dividend may result in a decrease in our share price.
−Removed: The share repurchase program and payment of cash dividends could also diminish our cash reserves that may be needed for investments in our business, acquisitions or other purposes.
+Added: Any announcement of termination or suspension of our share repurchase programs or dividend may result in a decrease in our share price.
+Added: The share repurchase programs and payment of cash dividends could also diminish our cash reserves that may be needed for investments in our business, acquisitions or other purposes.
Without dividends, the trading price of our shares must appreciate for investors to realize a gain on their investment.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.