European Payment Practices Worsen

AMSTERDAM - European businesses rate the payment practices of their domestic and foreign business partners less positively in early 2009 than in summer 2008, and receive a negative evaluation of their own payment practices from their international business partners. Despite a substantial worsening of the European and international payment landscape over the past six months, notable differences between countries remain.

The “Atradius Payment Practices Barometer”, a twice-yearly survey amongst 1,800 firms in nine European countries (Belgium, Denmark, France, Germany, Great Britain, Italy, the Netherlands, Spain and Sweden):

- Significant differences in payment terms of countries surveyed - German companies set the shortest term of payment, 24 days on average, followed by Swedish companies with 30 days. Companies in Spain set the longest term of payment with 75 days, followed by Italy with 67 days. - Southern European countries have worst payment practices - Italy (76% of respondents), France (74%) and Spain (64%) rate domestic payment practices as “poor” or “fair”. Sweden and Denmark (62% of respondents in both Countries) rate domestic payment practices as “good”, “very good” or “excellent”. - Domestic payment duration increased in only half of countries compared to summer 2008, but except for Belgium, does not exceed the average of winter 2007/2008 - Compared to summer 2008, domestic payment duration is 14 days longer in Spain, (average of 80 days compared to 66 days in summer 2008) and 6 days shorter in Italy (average of 78 days compared to 84 days in summer 2008). - Domestic payment delays were mostly down compared to Summer 2008, but mostly up compared to winter 2007/2008 - Companies in Great Britain, Spain and Sweden experienced domestic payment delays “very infrequently” or “rather infrequently” and domestic non-payments “very infrequently”, compared to summer 2008. - In general, foreign payment practices rated better than domestic payment practices - Great Britain (70% of companies surveyed) and Sweden (59%) rate foreign payment practices as “good”, “very good” or “excellent”; France (56%) and Spain (57%) rate foreign payment practices as “poor” or “fair”. Sweden and Denmark only countries surveyed that rated domestic payment practices higher than foreign payment practices. - Foreign payment delays down compared to Summer 2008 - Compared to summer 2008, Dutch, French and German companies experienced foreign payment delays “very infrequently” or “rather infrequently”, whereas British and Swedish companies experienced foreign non-payments “very infrequently”. - Payment defaults up compared to winter 2007/2008 - Both domestic and foreign payment defaults rose in winter 2008/2009 compared to winter 2007/2008 in all markets surveyed in both periods. This contrasts with a predominant decline in foreign payment defaults and balanced mix of rising versus declining domestic payment defaults compared to summer 2008. - Nordic countries considered to have best payment practices by international business partners - The payment practices of Danish and Swedish companies are rated good to excellent by an average of 70% of their international business partners. Payment practices of Italian and Spanish companies are rated “poor” or “fair” by respectively 62% and 56% of the international business partners interviewed. - By country, only 56% to 70% of all European companies interviewed take steps to protect themselves from payment risks: - 70% of British companies take steps to protect from payment risks, followed by 65% of French and 64% of Spanish companies.

The most notable finding of the survey may be that despite the poor economic conditions and rising default rates throughout the world, the majority of respondents reported no meaningful deterioration in payment practices, particularly when comparing winter 2008/2009 to summer 2008. This result somewhat contrasts respondents’ reports of increasing payment defaults.

Responses that cash flow, sales volume and access to financing are now believed to have the strongest impact on the ability of customers to pay their invoices however, are expected in view of current economic conditions.

Isidoro Unda, CEO of Atradius N.V. commented: “Although the global economic downturn has negatively impacted payment practices worldwide, this impact has varied from country to country. It is essential for businesses to understand and thoroughly evaluate the payment landscape and different credit risks in the markets they are doing business, as miscalculation may result in serious cash flow problems.”

The full “Atradius Payment Practices Barometer” survey which is designed to track companies’ perceptions of payment practice and culture can be downloaded from www.atradius.com

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.

www.atradius.com

Source: Atradius N.V.

For further information: Atradius Corporate Communications, Christine Gerryn, Tel.: +31-20-553-2047, E-mail: christine.gerryn at atradius.com