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18 Payment behaviour in Europe Although payment habits vary greatly in Europe, late payments affect everyone. A better understanding of these habits is the fi rst step to reducing business risk. Each year Intrum Justitia conducts an extensive survey in which thousands of European companies respond to questions on credit terms, payment habits and perceived business risks. The results are presented in a report and in the form of the European Payment Index. The purpose of the study is to offer European companies a unique instrument to compare payment patterns and assess the risks of doing business between regions, countries and industries. The study therefore falls well in line with Intrum Justitia’s business mission of helping clients improve their cash fl ow and increase profi tability. The public sector pays late In the latest survey 1 , conducted in February 2005, more than 6,500 companies in 23 countries responded. In summary, the results of the study show that: • Payment uncertainties are cited as a signifi cant obstacle to international trade and therefore to growth. Among smaller companies, late payments are considered a major threat to their future. • The economic cycle has only a limited impact on payment delays. Legal and cultural factors have a greater effect. • Public authorities are generally the slowest payers, despite the fact that in many countries they are granted the longest contractual payment terms. Business customers do not take as long to pay, while private customers are the fastest payers. • In the Nordic countries payments from public authorities are late by an average of nine days, slightly longer than the average payment delay from business customers. In many countries, particularly in Southern Europe, payment delays from the public sector are more than twice as long as for business and private customers. • Across Europe the average payment duration, i.e., the contractual payment term plus the payment delay, rose to 57.4 days, against 56.2 days in the previous year. • In a national comparison, Greece has the longest payment duration, averaging 105 days, followed by Italy (97 days), Cyprus (94), Portugal (87) and Spain (83). Although they apply relatively long credit terms, these countries still report average payment delays of three to four weeks. The slowest payer is Portugal, where the average payment does not arrive until 38 days after it is due. • The Nordic countries have the shortest payment duration, averaging 32 days. The average payment delay is shortest in Finland (just over 5 days), followed by Norway and Sweden (8 days). • On average, payment losses among European companies declined slightly, from 1.9 percent in the previous year to 1.7 percent. The greatest risk of payment losses is in the Baltic states, followed by the Poland, Czech Republic and Hungary region. 120–129 130–139 140–149 150–159 160–169 >170 European Payment Index By weighing a number of factors, an index has been calculated for estimated credit risks in each country. A value of 100 indicates a situation in which there are no payment risks, i.e., payments are made in cash, on time and without any credit. The higher a country’s value in the index, the greater the perceived credit risk. A value up to 129 indicates low to moderate risk. When doing business in these countries, it is recommended that preventive measures be taken in the form of credit checks and monitoring of established credit limits. A value between 130 and 150 indicates more substantial payment risk. In this case companies must pay greater attention and have much to gain by taking action to protect themselves against credit losses, e.g., by enlisting the services of a professional CMS provider. A value over 150 signals high credit risk with a strong need to take action and seek professional assistance. • The mean index value for all 23 countries in the study is 150, down from 152 in the previous year. • With an index value of 129, the Nordic countries noted the lowest payment risks. Risks are considered lowest in Finland (121). • The highest risk is in Portugal (184), followed by Czech Republic (174) and Greece (173). 1 The complete report – “European Payment Index – Spring 2005” contains additional information. The report can be ordered from Intrum Justitia or downloaded from www.intrum.com. A follow-up study will be presented in the spring of 2006.
Intrum Justitia in Europe With operations in 22 European countries and partners in a further 160 countries, we have a geographic coverage no other CMS company can match. EUROPE’S LEADING CMS COMPANY Intrum Justitia has operations in 22 European countries, grouped organizationally into seven regions. The Group’s strongest positions in national CMS markets are in Finland, Hungary, Sweden and Switzerland. In all these countries, its market share exceeds 30 percent. The Group’s weakest positions are in Austria, Germany and Italy, with market shares below 5 percent. Intrum Justitia also operates in Iceland, through a company in which it owns a 25-percent interest. Iceland is not included in the seven regions, however. Through a global network of partners, we can also provide clients with services in around 160 countries worldwide. Sweden, Norway & Denmark Intrum Justitia was founded in Sweden in 1923 and has long been the market leader. The CMS market is relatively fragmented, although in recent years the industry has consolidated among larger, more focused companies. Other major players are Aktiv Kapital, CIS Denmark and Lindorff. The market in Norway is distinguished by a high level of outsourcing and a number of small players. Intrum Justitia is among the fi ve largest CMS companies after Aktiv Kapital, Kredinor and Lindorff. OUR MARKET SHARES >25 % 10–25 %
Page 1 and 2: ANNUAL REPORT 2005
Page 3 and 4: Europe’s leading Credit Managemen
Page 5 and 6: Statement by the CEO Intrum Justiti
Page 7 and 8: Objectives and strategy BUSINESS MI
Page 9 and 10: While there is every reason to impr
Page 11 and 12: Credit information and decision In
Page 13 and 14: Each year we have700,000 700,000 in
Page 15 and 16: Higher indebtedness among household
Page 17 and 18: CUSTOMIZED SERVICE OFFERINGS Intrum
Page 19: Moreover, Intrum Justitia commented
Page 23 and 24: Switzerland, Austria & Italy When I
Page 25 and 26: The four-day program for the Group
Page 27 and 28: 2004 SEK M 2005 IFRS 1 2004 GAAP 1
Page 29 and 30: Principal shareholders and ownershi
Page 31 and 32: Board of Directors’ report The Bo
Page 33 and 34: DEPRECIATION/AMORTIZATION The Group
Page 35 and 36: ENVIRONMENTAL IMPACT The company ha
Page 37 and 38: Income statements Group Parent Comp
Page 39 and 40: Group Parent Company SEK M SHAREHOL
Page 41 and 42: Changes in shareholders’ equity N
Page 43 and 44: SEK at the average rate, which serv
Page 45 and 46: Classifi cation as a discontinued o
Page 47 and 48: are made at the portfolio level, si
Page 49 and 50: By service line SEK M Revenues Grou
Page 51 and 52: SEK M 2005 2004 Sweden 369.0 369.0
Page 53 and 54: NOTE 12 COMPANIES REPORTED ACCORDIN
Page 55 and 56: NOTE 19 OTHER PROVISIONS Group SEK
Page 57 and 58: NOTE 25 SALARIES AND OTHER REMUNERA
Page 59 and 60: NOTE 32 FINANCIAL INSTRUMENTS AND C
Page 61 and 62: Effects of acquisitions Acquisition
Page 63 and 64: Consolidated Balance Sheet, Group J
Page 65 and 66: Audit report To the annual meeting
Page 67 and 68: 1 2 3 4 5 6 7 1. Bo Ingemarson, age
Page 69 and 70: AUDIT COMMITTEE The purpose of the
Page 71 and 72:
Compensation principles and employm
Page 73 and 74:
Information for shareholders Annual
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