TRESU Q3 2023 Financial Report

TRESU Risk factors (continued) 4.15. Risk of failures of IT-systems and security breaches IT is an important part of the Group's business operations and the Group increasingly rely on IT-systems to monitor and track the production process and logistics assets, manage business data and increase efficiencies in the production and inventory management processes. The Group also uses IT to process financial information and results of operations for internal reporting purposes and to comply with legal and regulatory requirements as well as applicable tax laws and regulations. In addition, the Group depends on IT for electronic communications between the facilities, personnel, customers and suppliers. IT-systems may be vulnerable to a variety of interruptions, including during the process of upgrading or replacing software, databases or components thereof, natural disasters, terrorist attacks, telecommunications failures, computer viruses, cyber-attacks, hackers, accounting fraud, organized unauthorized access attempts and other security issues. The IT-security initiatives and disaster recovery plans implemented by the Group to address these concerns may not be adequate. Any significant failure of the IT-systems, including failures that prevent IT-systems from functioning as intended, could cause transaction errors, processing inefficiencies, loss of customers and sales and have a negative impact on the operations or business reputation of the Group. In addition, if the Group is unable to prevent security breaches, the Group may suffer financial and reputational damage or penalties because of the unauthorized disclosure of confidential information or personal data belonging to it or to its customers, suppliers or employees. The occurrence of any of the above could have a material adverse effect on the Group's business, financial condition and results of operations and could result in a loss for each Bondholder of part or all of each Bondholder's investment in the Bonds. 4.16. Credit risk The Group is exposed to credit risks on its receivables. The maximum credit risk is the sum of receivables recognised, and outstanding receivables are followed-up upon on a recurring basis in accordance with internal procedures. If it is uncertain whether a customer is able or willing to pay, and the receivable is deemed doubtful, the receivable is written down. If, for any reason or at any time, a customer is not able or willing to pay the respective receivables, the business, results of operations, financial condition and/or prospects of the Group may be materially adversely affected and could result in a loss for each Bondholder of part or all of each Bondholder's investment in the Bonds. 4.17. Currency risk As the Group operates and have sales in multiple jurisdictions, including EU, China, Japan and the USA, the Group may be exposed to currency risk. Currently most of the customer agreements are denominated in Euro (EUR) or Danish kroner (DKK). As a large part of the Group's turnover is generated in countries outside the EU any change in the denomination of the customer agreements from EUR or DKK may increase the currency risk, which could have a material adverse effect on the Group's business, results of operations or financial condition. The Group currently aims to hedge contracts in other currencies than DKK and EUR in excess of USD 1,000,000 via hedging agreements. In addition, should the Danish Central Bank, for any reason or at any time, cease to maintain a fixed exchange rate for Danish kroner relative to Euro (EUR), the business, results of operations, financial condition and/or prospects of the Group may be materially adversely affected and could result in a loss for each Bondholder of part or all of each Bondholder's investment in the Bonds. 4.18. Interest rate risk The Group's credit facilities including the Bonds are floating rate credits, thus exposing it to interest rate fluctuations. All financing of working capital via the Super Senior Revolving Credit Facility and investments in fixed assets are made on floating-rate terms. No financial instruments are currently used to hedge interest rate risks. If, for any reason or at any time, the interest rate on any of the credit facilities of the Group increases significantly, the business, results of operations, financial condition and/or prospects of the Group may be adversely affected. However, it should be noted that there will be no cash interest paid to the Bondholders unless the liquidity of the Group exceeds a certain threshold reducing the interest rate risk for the Issuer. If the liquidity is below the relevant threshold and no interest is being paid to the Bondholders, this could result in a loss for each Bondholder of part or all of each Bondholder's investment in the Bonds. 55

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