Intrum Justitia: New European payments survey: Payments r...

New European payments survey: Payments risks on the rise · €250 billion in overdue receivables across Europe · Unfair payment practices disrupt trade · Small firms and entrepreneurs risk credit squeeze · Governments set the worst example as late payers Billions of euros get missed in European businesses, money which could be used for investments, growth and jobs but is instead halted or even lost through incorrect payment practices. Each year around one billion invoices default in Europe and turn into debt collection cases. The total amount of overdue receivables in the EU25 is as much as about €250 billion, which equals the entire GDP of a country the size of for example Austria. The increase of European payment delay, from 2004 (15.1 days) to 2006 (16.8 days), equals itself a worth of €25 billion or just about the GDP of Luxembourg. "The size of the problem is awesome and calls for stronger action by companies themselves and by legislators", said Leif Hallberg, public affairs director at Intrum Justitia Group, when he presented the results from the 2006 European Payment Survey in Brussels today. "Late payments and long delays will not help the economy grow, on the contrary. Fact is that payment habits damage business and disrupts trade between the EU's member states and therefore hinders economic growth", he added. Some of the survey findings: - The new pan-European payments survey carried out by Intrum Justitia, Europe's leading credit management services company, reveals that the European Payment Risk Index has again increased. Average payment duration, the effective time between an invoice is sent to the time it has been settled, was 59.2 days compared to 58.7 days in 2005 and 57.3 days in 2004. Average payment delay, time after the contracted payment date, increased to 16.8 days from 16.3 days in 2005 and 15.1 days in 2004. - Payment habits across Europe still show great variations between countries. Portugal, the Czech Republic and Greece are still at the bottom of the European payment `league', while the best improvement is shown in the Baltic region. The Nordic countries, esp. Finland and Sweden, are still the best payers in Europe. - Governments are not setting a good example when it comes to paying contractors on time, thereby putting many supply companies at a large risk. In an across Europe average, consumers settled their payments at 42.5 days and corporates at 59.9 days while the public sector settled their payments only at 69.8 days. - An astonishing result of the payment survey, in which 6,500 European business managers participated, is that a more prompt payment by a company's own customers will not automatically have a positive effect on the company's own payment behaviour. From an amount of €100 in additional cash availability, as a result of more prompt payment by own customers, the company would use only €12.50 for more promptly settling the bills from its own suppliers. - As in previous European payment surveys, the 2006 report demonstrates that small and medium-sized enterprises (SMEs) are particularly hard hit by late payment. They are more vulnerable to variations in cash flow, they often rely on a limited number of customers, and they are frequently suppliers to large firms who are known to delay payments to a greater extent than smaller companies do. The complete European Payment Index Report 2006 can be obtained by order from Intrum Justitia AB, SE-105 24 Stockholm, Sweden, or by telephone +46 8 546 10 214. Additional information is equally available on www.europeanpayment.com For further information, please contact: Leif Hallberg, Director of Public Affairs Tel: +46 8 546 102 07 Mobile: +46 70 234 02 07 E-mail: l.hallberg@intrum.com Stefan Schär, European Payment Index Project Manager Tel: +41 1 8065307 Mobile: +41 78 7945689 E-mail: s.schaer@ch.intrum.com Intrum Justitia is Europe's leading Credit Management Services (CMS) group. The group has revenues of approximately SEK 2.8 billion and has about 2,800 employees in 22 European countries. Intrum Justitia's objective is to measurably improve its clients' cash flow and long-term profitability by offering high quality in relations with both clients and debtors in each local market. The group offers a wide range of CMS for commercial and consumer receivables. Intrum Justitia has a growth strategy that involves taking an active part in the industry's consolidation. Intrum Justitia, ticker IJ, has been listed on the O-list of the Stockholm Exchange (Stockholmsbörsen), since 7 June 2002. As of July 2004 the share is listed on the Attract40 section. For more information, please visit www.intrum.com ------------------------------------------------------------ This information was brought to you by Waymaker http://www.waymaker.net The following files are available for download: http://wpy.waymaker.net/client/waymaker1/f.aspx?id=232509&fn=wkr0001.pdf