Atradius reports EUR 113.3 million loss in 2009

 

Amsterdam, 23 March 2010 - Atradius, a global leader in trade credit insurance, debt collection and bonding, today reported a loss after tax of EUR 113.3 million. Extensive risk mitigation actions and effective assessment of the creditworthiness of buyers contributed to significant improvement in 2009 second half results.

Financial highlights

• Insurance revenues of EUR 1,589.3 million in 2009 compared to EUR 1,774.0 million in 2008
• Service result increased 14.5% to EUR 15.0 million (EUR 13.1 million in 2008)
• Net investment income grew 42.9% to EUR 68.3 million (EUR 47.8 million in 2008)
• Net loss improved 41.4% to EUR 113.3 million (loss of EUR 193.4 million in 2008)

Stronger second half

The improvement in the claims result was most notable in the second half of 2009 and was the driver behind the reduction in the net claims ratio. Expenses and investment income were better than budget 2009 contributing to the positive results Atradius achieved over the last six months of 2009, excluding restructuring costs. “Anticipating the economic crisis we took decisive actions in the second half of 2008 to minimise the impact of the global recession on the risks we share with our customers”, said Atradius CEO Isidoro Unda. “I recognise that the depth of the crisis resulted in some actions that were not always well communicated to our customers. We are committed to improving the information flow between Atradius, our customers and brokers.”

Insurance segment

Revenues from insurance operations in 2009 were 10.4% lower than in 2008 as a result of the reduced turnover of our customers and the risk mitigation measures we took. The focus in 2009 was to increase the quality and quantity of credit information on our customers’ buyers and to proactively manage the company’s capital position so that long term protection to customers could be guaranteed. A buyer rating service was introduced in most of our markets and additional communications tools were offered that provided customers with more information on the market conditions Atradius was responding to throughout the world.

During the second half of 2008 and first quarter of 2009, exposure to industries and markets with high default probabilities escalated Atradius’ claims ratio to over 125%. Exposure to high risk buyers was reduced allowing the company to maximise its ability to meet short term customer needs for cover of reasonable risks. At the same time this ensured customers could meet their long term needs for expanding cover as the economy improves and their businesses grow. The reductions in exposure resulted in an improvement in its net claims ratio to 77.1% for the year.

Mr. Unda added, “Our risk acceptance is now higher than that of a number of our competitors providing customers with the right assessment of risks and the right tools to manage exposure through the crisis.”

Service segment

Higher service revenues were driven by the debt collection business, which showed 19.8% revenue growth. Revenues from the export credit agency fees that Atradius receives from the Dutch state developed steadily and in line with expectations.

Markets

Market conditions began to improve in the second half of 2009 introducing more stability to the business environment. The global recession and its effect on our customers’ turnover and Atradius’ risk mitigation measures resulted in a decline in insurance revenues in all regions except Asia in the first half of 2009. Atradius’ largest market region, which includes; Spain, Portugal and Brazil, maintained the highest sales volumes with a less than 1% reduction in insurance revenue. Although market conditions were less secure than in 2007 and the first half of 2008, the business environment in most markets stabilised in the second half of 2009 resulting in improving business conditions. “We continue to take a cautious approach to our business but we are expanding our cover”, said Mr. Unda.

Outlook

Economic growth projections in 2010 are being led by the US where 2.9% GDP growth is projected. Most major European economies are expected to follow this lead, but at lower rates of GDP growth - Germany (1.8%), the UK (1.5%), France (1.4%), the Netherlands (1.2%), Italy (0.9%) and Spain (-0,4%). After a 12.3% slump in 2009, world trade volume of goods and services is anticipated to grow 5.8% in 2010. The increased business output is expected to produce growing insurable sales over the course of 2010 and into 2011.

“Throughout our major markets positive signs of recovery can be seen. Business sentiment across most of Europe is on the rise.  Recovery however is still fragile as availability of bank credit remains restricted across Europe and growth in markets like the Netherlands, Belgium and other export focused markets will be impacted by the recovery in larger economies like Germany, France, the UK and the US”, said Mr. Unda. “While the business environment calls for continued prudence, within responsible parameters we intend to pursue a more aggressive approach to our business development. The trend of positive results which began in the second half of 2009 has extended through the first two months of 2010. With continued improvement in economic conditions in our markets, we believe this trend in our performance will be sustainable.”

The numbers in this press release are unaudited.

Click here to view the Annual Report 2009.

 

About Atradius:

The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence through 160 offices in 42 countries. Atradius has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily. Its products and services aim to reduce its customers’ exposure to buyers who fail to pay for the products and services they buy. With total income of more than EUR 1.7 billion and a 31% share of the global trade credit insurance market, its products help protect companies throughout the world from payment risks associated with selling products and services on credit.

For further information:

Atradius Corporate Communications
Denise Hung
Tel.: +61 2 9201 2389
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
www.atradius.com.au

 

 

GCO acquires minority interests in Atradius NV

This marks the completion of the acquisition process initiated in 2003 of Atradius NV, the world’s second largest credit insurance company. As a consequence:

• Grupo Catalana Occidente and INOC,SA have entered into an agreement to acquire the 35.8% interest held by Swiss Re, Deutsche Bank and Sal Oppenheim in Atradius NV.
• Grupo Catalana Occidente will have an economic stake in Atradius NV post-acquisition of 74.09%, with control of 90.89% of the voting stock.
• Grupo Catalana Occidente has a call option on the pending 9.11% shares of Atradius NV hold by INOC, SA.

Barcelona, January 22, 2010 - As a fulfillment of the acquisition process initiated in 2003 of Atradius NV, the world’s second largest credit insurance company, Grupo Catalana Occidente and INOC,SA have entered into an agreement to acquire the 35.8% interest in Atradius NV held by Swiss Re, Deutsche Bank and Sal Oppenheim.

The agreed price is €18.87 per share that will be capitalized, in base of the euribor plus 200 basis points, until the payment date.

Pursuant to the terms of the agreement, Grupo Catalana Occidente will acquire the 26.66% of Atradius NV’s share capital for approximately €400 million. Meanwhile, INOC, SA, which holds, directly and indirectly, 56.71% of Grupo Catalana Occidente’s share capital, will acquire the 9.11% of Atradius capital, for approximately €137 million.

With this acquisition, Grupo Catalana Occidente will have an economic stake in Atradius NV of 74.09%, 26.66% direct and 47.43% indirect through Grupo Crédito y Caución, SL holding company, and control of 90.89% of the voting stock.

The transaction is contingent on regulatory approval by the supervisors in Spain (the Directorate General for Insurance and Pension Funds, DGSyFP), Ireland (the Irish Financial Services Regulatory Authority, IFSRA) and the Netherlands (De Nederlandsche Bank N.V, DNB).

In addition, Grupo Catalana Occidente and INOC, SA have arranged a call option whereby Grupo Catalana Occidente is entitled to purchase shares of Atradius owned by INOC, SA, all or part, in one or more times and within the next two years.

 

Atradius economic crisis survey

Business wants tax cuts and lower interest rates, not stimulus spending

Sydney, 8 Decmber 2009 - A surprising 59 per cent of Australian businesses believe the government stimulus incentives made no difference to their businesses, with the majority believing that tax cuts (77 per cent) and lower interest rates (54 per cent) would be a better option.

The Atradius Economic Crisis Survey also found that more than a third (35 per cent) of those surveyed say the financial stability of their company will improve by the end of the year while 66 per cent of Aussie businesses predict the economic crisis will be over in 12 months.

This new global survey of 3538 respondents in 20 countries also found that only Canadians were more positive than Australians when it came to looking at their company's future financial health.

And the good news doesn't stop there. Australian businesses have good reason to be optimistic with only 18 per cent reporting a decrease in cash flow during the crisis as a result of access to finance, the lowest rate of any country surveyed. This compares to a staggering 55 per cent of Spanish businesses whose cash flow was affected when finance became harder to access.

David Huey, Managing Director of Atradius, Australia and New Zealand said, "It's interesting that despite an optimistic future, almost half (47 per cent) of the Australian businesses surveyed deemed that the government's stimulus efforts were ineffective.

"While the stimulus package provided the economy with an immediate cash injection and one off tax breaks, time will tell if the incentives will have long-term lasting benefits on a company's cash flow."

The global survey revealed that companies throughout the world are strongly divided in their opinions about the steps their governments have taken to stimulate the local economy. Overall, Chinese companies were the most positive, while Irish, Spanish and Mexican companies are the most critical.

"This survey highlights that while Australian businesses are emerging relatively unscathed from the global financial crisis, there is a long way to go for some economies, which is worth keeping in mind when conducting business overseas and exploring potential new markets," added Mr Huey.

In fact, 54 per cent of Australian respondents say they increased their pursuit of new markets or sales channels during the economic crisis. However businesses are proceeding with caution with 42 per cent increasing credit checks of their buyers and 41 per cent changing the credit terms.

"There is still a strong insolvency risk for Australian businesses and it is increasingly important that companies protect themselves against bad debt and manage some of the financial risks inherent in world trade," said Mr Huey.

 

Other key findings of the survey include:

Australian companies report small changes in staffing levels

44 per cent of Australian companies reported no change in their staffing levels during the economic crisis. Meanwhile 31per cent reported a decrease, compared to a staggering 64 per cent of Irish companies surveyed.

China and Poland most optimistic, Spain, Ireland and Belgium most pessimistic

China and Poland are the most optimistic of recovery, with 26 per cent of respondents anticipating an end to the economic crisis by year end 2009, compared to 32 per cent of Australian businesses; Ireland and Spain and Belgium are the most pessimistic, with more than 50 per cent of respondents believing that the economic crisis will not end before 2011.

Increase in focus on customer service in an effort to retain customers

47 per cent of respondents in the countries surveyed increased their focus on customer service as a result of the economic crisis; China and Ireland had the biggest increases with 69 per cent and 68 per cent respectively, while 17 per cent of Hong Kong businesses decreased their focus on customer service.

 

About the Atradius Economic Crisis Survey

To get an indication of the current impact of the global economic crisis on businesses across the world, businesses in 20 countries around the world were asked about their impressions of the effect of the global economic crisis and their views on its current impact. 3,538 interviews were conducted in August 2009, with 168 Australian companies participating.

View the full Atradius Economic Crisis Survey report or the Core Results - Australia report.

 

About Atradius

The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence in 42 countries. Its products and services aim to reduce its customers' exposure to buyers who fail to pay for the products and services they buy. With total revenues of more than EUR 1.8 billion and a 31% share of the global trade credit insurance market, its products help protect companies throughout the world from payment risks associated with selling products and services on credit. With 160 offices, it has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily.

 

For further information please contact
Denise Hung
Marketing Manager
Tel.: +61 2 9201 2389
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Atradius white paper: sustainability and business

London, 12 November 2009 - A white paper, produced recently by leading global credit insurer Atradius, and launched today at the European Parliament in Brussels, contains strong recommendations for both governments and businesses.

The white paper, entitled ‘Is sustainability incompatible with business growth?’ concludes that the commercial benefits for businesses of adopting sustainable processes, as a central pillar of their business strategies, far outweigh the cost.

However, in the run-up to the UN climate change conference in Copenhagen next month, the paper is also critical of some of the measures that came out of the last conference, as laid down in the Kyoto Protocol, which, it says, will not change the behaviour of polluting industries but simply provide a get-out clause for them to continue to pollute.

In particular, Atradius describes carbon trading as a way for businesses to continue to pollute, for a fee, without addressing the real issue – the need for a real and lasting change in polluting behaviour.

Isidoro Unda, CEO of Atradius explains,
“The essential message of our white paper is that sustainability is not a barrier to commercial growth, but genuinely provides major commercial benefits. Our own experience has shown this, as has that of the leading businesses that have contributed their experience to our research.

“Even in its simplest form, sustainability results in substantial cost savings, as businesses reap the rewards of recycling and energy efficiency. But beyond that, as consumers become much more aware of the need to protect the environment, they are increasingly gravitating towards those suppliers who demonstrate their ‘green’ credentials, and that is good for sales and brand perception.”

The white paper and summary can be downloaded below:

• White paper
• Summary

 

About Atradius:
The Atradius Group provides trade credit insurance, surety and collections services worldwide, and has a presence in 42 countries. Its products and services aim to reduce its customers’ exposure to buyers who fail to pay for the products and services they buy. With total revenues of more than EUR 1.8 billion and a 31% share of the global trade credit insurance market, its products help protect companies throughout the world from payment risks associated with selling products and services on credit. With 160 offices, it has access to credit information on 52 million companies worldwide and makes more than 22,000 trade credit limit decisions daily.

For further information please contact
Denise Hung
Marketing Manager
Tel.:  +61 2 9201 2389
Email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it