Payment Practices Barometer: Industries Special

UK companies offer one of the highest risks of payment default within Europe, according to Atradius study. 

Cardiff 30th August 2007 –  The latest Payment Practices Barometer from leading trade credit insurer Atradius shows that payment practices in many European industries deteriorated between summer 2006 and winter 2006/2007 with Britain showing clear signs that we are one of the highest scorers in payment default across sixteen main business sectors.

In eight of the sixteen sectors analysed, a percentage of respondents said that very frequently debts were not paid at all. Britain came second only to Italy where default occurred very frequently in 6 out of 11 sectors. Great Britain has been further shamed by the healthcare sector which has the highest recorded individual default rate, where 7% of respondents said that debts were very frequently not paid at all. This is followed by Italy ’s technology sector where 6% of debts were not paid at all. The government sector in Holland was least likely to not to pay at all with 85% saying they never default.

Shaun Purrington, Regional Director, Atradius UK and Ireland said:

“Current trading conditions across many sectors are bound to take their toll and ultimately this always shows up in the end payment schedule. Businesses wouldn’t survive without two things – risks and innovation- however we advise businesses to take every precaution to take calculated risks in well-considered areas of their businesses without jeopardising their revenues. No trader is exempt from the external factors which make all of us vulnerable.“

Payment practices in the transport industry in particular were rated more poorly by the 1,200 study participants throughout Europe than a year earlier. On average, businesses had to wait 53 days until their receivables due from this industry were settled – versus an earlier result of 43 days. The chemical and pharmaceutical industries also took significantly longer to honour their debts (59 versus 50 days). In the transport and finance sectors, the incidence of complete non-payment was higher in winter 2006/2007 than in summer 2006. The same applies to the manufacturing industry; however, the higher risk of bad debt loss in this sector contrasts with the considerably faster payment of outstanding accounts. On average, it took only 48 days (summer 2006: 60 days) for debts to be honoured .

The automotive industry showed the most distinct improvement with appreciably fewer defaults in payment and fewer bad debt losses than in summer 2006.

The industry special of the Atradius payment practice barometer is available free of charge at www.atradius.co.uk (Publications). The document contains detailed information on payment practices in the 16 most important European industries as well as country-specific analyses for Great Britain , Germany , France , Italy , Belgium and the Netherlands .

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About Atradius:

Atradius is a leading credit insurer with total revenues of around EUR 1.3 billion and a 24% share of the world credit insurance market. It insures more than EUR 400 billion of world trade annually against non-payment and provides a comprehensive range of risk transfer and trade receivables management services. With 3,500 staff and more than 90 offices in 40 countries, Atradius has access to credit information on 45 million companies world-wide and makes more than 12,000 credit limit decisions daily. It is “A” rated by Standard & Poor’s (outlook stable) and A2 by Moody’s (outlook stable).  For more information: www.atradius.com

For further information, please contact:

Atradius Corporate Communications

Jo Aaron, Senior Communications Manager,

029 2082 4873/07768 233338           

email: This e-mail address is being protected from spambots. You need JavaScript enabled to view it

Atradius N.V. Reports Record 2006 Earnings

Amsterdam, Thursday, 19 April, 2007. Atradius N.V., a global leader in credit insurance and collections, today reported a 27.9% increase in net profit from continuing operations to EUR 105.3 million in 2006 from EUR 82.3 million in 2005. Including discontinued operations, net profit in 2006 was 5% higher than in 2005. The improvement was driven by a 1.7% increase in gross earned premium to EUR 1,076.5 million from EUR 1,058.8 million in 2005 and a 7.8% decline in net operating expenses to EUR 315.0 million in 2006 from EUR 341.6 million in 2005.

Financial Highlights

• Net profit from continuing operations grew 27.9% to EUR 105.3 million (2005: EUR 82.3 million)
• Net profit increased 5.0% to EUR 105.3 million (2005: EUR 100.3 million)
• Net investment result expanded 20.9% to 55.5 million (2005: 45.9 million)
• Total income after reinsurance rose 2.6% to EUR 749.3 million (2005: EUR 730.2 million)
• Net expense ratio improved to 41.0% from 47.4% in 2005
• Net claims ratio of 45.8% compared to 43.9% in 2005
• Net combined ratio improved to 86.8% from 91.3% in 2005
• Return on average shareholders equity was 16.3% in 2006 compared to 18.1% in 2005 (2005: 15.1% excluding the net profit from discontinued operations)

Insurance Segment
Gross earned premiums increased 1.7% compared to 2005. Income from credit checking fees increased 2.4%. Traditional credit insurance revenues grew 3.4%, which was mainly driven by growth markets in Eastern Europe, the USA, and Australia. In addition the structured credit and political risk solutions of Special Products provided a EUR 19 million boost to insurance revenue. The continued success in new market development and expansion were partly offset by competitive pressure on pricing in mature markets.

Bonding revenues were EUR 10 million lower than last year, which reflects the portfolio optimisation efforts in order to return to profitability.

The reinsurance business whereby Atradius offers reinsurance solutions to third parties, reported less earned premium than last year. This is solely due to a change in the accounting estimate for revenue recognition, resulting in a shift in earned revenue of close to EUR 25 million to future years. Without this change in accounting assumptions, the insurance revenues would have shown growth of 3.9% compared to 2005.

Peter Ingenlath, Acting CEO of Atradius commented, “Our focus on developing new innovative credit insurance products that more effectively meet the needs of our customers along with improved customer service is helping drive our growth. Along with this we continue to make great strides in improving the performance of our Bonding unit through our focus on maintaining and building profitable revenues in Italy, France and Nordic.”

Service Segment
Service income increased 12.5% to EUR 55.0 million from EUR 48.9 million in 2005. The increase was driven by a 21.0% increase in Collections revenue.

Peter Ingenlath mentioned, “Collections and Information services continue to grow in importance and value. We are one of only a few companies that can offer an extensive international collections service. This is helping drive growth in revenues and spurring our continued expansion. In 2006 we opened new Collections offices in Poland and Australia and we anticipate adding new offices in Hungary, Mexico, Ireland and Hong Kong in 2007.

Markets
Revenue grew in all Atradius markets except for Germany and Belgium. In Germany, portfolio growth was offset by the positive claims environment which resulted in additional premium refunds. In Belgium premiums were down as a result of cancellations and slower new business development.

The Company’s Nordic and UK markets grew by 8.6% and 4.2% respectively over last year as strong product offerings resulted in solid new business development and customer retention. Revenues in Italy grew 3.6%, but most other Southern European markets averaged only marginal growth for the year. Eastern European markets grew, on average, more than 80% over last year while Australia (18%) and NAFTA (16%) also maintained strong growth in revenues as Atradius expanded coverage and further built brand and product recognition in these markets. The Global business unit, which provides service to multinational companies with credit insurance needs in different countries, grew 24% in 2006 benefiting from office expansions in new and emerging markets.

Geographic Expansion
In 2006, Atradius opened new offices in Hong Kong and China, entered into operating partnerships with China Continent Insurance Company, expanded its joint venture with Tokio Marine and Nichido Fire Insurance Company in Japan, developed a foothold in Brazil and early in 2007 opened an office in Singapore. In addition, the shareholders of Atradius have agreed on the terms of the combination of Atradius and Crédito y Caución. This combination is expected to be completed before year end pending various regulatory and anti-trust approvals.

Peter Ingenlath added; “Expansion into new and less developed credit insurance markets offers attractive growths opportunities through business with the local subsidiaries of customers from the core markets but also with local companies.”

Outlook
Peter Ingenlath concluded; “We are seeing indications of a tightening business environment in a number of our markets. As a result we anticipate a gradual deterioration of the credit environment over the course of the year which based on the current pricing developments may tighten margins.

As was the case in 2006, our primary goal in 2007 will be to maintain a sound risk portfolio while increasing turnover. We see continued opportunities to achieve this by building revenues in our core markets as well as our smaller and emerging markets by leveraging our recent geographic expansion and continuing to introduce relevant product upgrades. We will also support our growth through continued expansion of credit insurance and collections services in new markets like Turkey, Brazil, Russia, India and China, continued growth in the US and Canada and through our proposed business combination with Crédito y Caución. We are looking forward to completion of the combination by year end. This will substantially expand our coverage of Spain and Portugal and improve our ability to pursue business opportunities throughout South America.”

Download our Financial Statements for the year 2006 (PDF).

About Atradius:
Atradius is a leading credit insurer with total revenues of around EUR 1.3 billion and a 24% share of the world credit insurance market. It insures approximately EUR 400 billion of world trade annually against non-payment and provides a comprehensive range of risk transfer, financing and trade receivables management services. With 3,500 staff and more than 90 offices in 40 countries, Atradius has access to credit information on 45 million companies world-wide and makes more than 12,000 credit limit decisions daily. It is “A” rated by Standard & Poor’s (outlook stable) and A2 by Moody’s (outlook stable).

Further information:
Atradius Corporate Communications
Joanne Aaron 
Tel.: +44 (0)29 2082 4873
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
www.atradius.co.uk

Crédito y Caución and Atradius to combine their businesses

Amsterdam / Madrid, Monday, 2 April, 2007.Under the terms of the agreement, Crédito y Caución, based in Madrid, will become part of the new Atradius Group. The headquarters of the new Group will be based in Amsterdam. The transaction will create a global Group with 160 offices in over 40 countries and an insured trade turnover of over Euro 450,000 million. Its pro forma annual turnover will be over Euro 1,600 million and its equity over Euro 1,000 million. The combination is subject to the approval of various authorities, including insurance regulators and anti-trust authorities.

Peter Ingenlath, acting CEO of Atradius, commented: “Atradius and Crédito y Caución have long maintained an alliance that has strengthened both companies. The combination of these two organisations cements our commitments to profitable growth and will enable us to build up our global presence more effectively and enhance our market position. Together, we will become the most professional and attractive credit insurer in the industry.”

The shareholder structure of the new Group will change after the combination of Atradius and Crédito y Caución. On completion, all shares in Atradius currently held by Crédito y Caución and Seguros Catalana Occidente, S.A. will be transferred to a newly created holding company, Grupo Crédito y Caución. In addition, new shares in Atradius N.V. will be issued in consideration for the transfer of Crédito y Caución to Atradius N.V., as a result of which the Spanish holding company will become the largest shareholder of Atradius N.V. with a 64.2% stake. Swiss Re will have a 25.0% stake, Deutsche Bank a 9.1% stake and Sal. Oppenheim jr. & Cie. KGaA a 1.7% stake. Isidoro Unda, currently CEO of Crédito y Caución, will become the CEO of the new Group once the relevant approvals have been granted. After completion, the management of the new Group will prepare for an initial public offering of the combined Group in the medium term.

Isidoro Unda commented: “Together with my colleagues in the Management Board of Atradius, I am very much looking forward to the formation of the new Group. As the CEO, with the support of the people and the management teams of Atradius and Crédito y Caución, my ambition is to build the new Group based on the strength and growth potential of the companies which now join forces. The geographical and product diversification of our business is a first-order competitive advantage that directly reflects on the quality of customer service and on the stability of the new Group.”
Jesús Serra, Chairman of Crédito y Caución and of the new Spanish holding company, commented: “This is something that we have envisioned for a long time. The combination of both companies will enable us to provide the best quality service to our customers, compete more effectively for new business and expand into new markets.”

Paul-Henri Denieuil, Chairman of the Atradius Supervisory Board and of the future new Atradius Group, concluded: “Our businesses complement each other perfectly. Atradius is strong in most of Europe with a growing presence in North America and Asia and Crédito y Caución adds its strong presence in Spain and Portugal with great potential in Latin America. Together we will be able to build the best company to serve our customers worldwide.”

About Atradius:
Atradius is a leading credit insurer with total revenues of around EUR 1,300 million and a 24% share of the world credit insurance market. It insures approximately EUR 350,000 million of world trade annually against non-payment and provides a comprehensive range of risk transfer, financing and trade receivables management services. With 3,400 staff and more than 90 offices in over 40 countries, Atradius has access to credit information on 45 million companies worldwide and makes more than 12,000 credit limit decisions daily. It is “A” rated by Standard & Poor’s (outlook stable) and A2 by Moody’s (outlook stable).

About Crédito y Caución:
For over 75 years, through its credit and surety insurances, Crédito y Caución has contributed to the growth of companies offering them protection from insolvency and non-payment risks derived from credit sales of goods and services. With more than 70 offices, Crédito y Caución holds a global market share in Spain of nearly 60%. Furthermore, it ranks second in Portugal with a market share of 34%, being therefore leader in its sector in the Iberian Market. The company recently expanded into Brazil. The solvency is confirmed by the A and A1 Standard & Poor’s and Moody’s ratings, respectively.

Further information:
Atradius Corporate Communications
Joanne Aaron 
Tel.: +44 (0)29 2082 4873
E-mail: This e-mail address is being protected from spambots. You need JavaScript enabled to view it
www.atradius.co.uk

Andreas Tesch appointed Director Atradius Global