UK Payment Practices Suffer in the Economic Downturn

AMSTERDAM - Latest Figures Show That UK Businesses Rate the Payment Practices of Their Foreign Business Partners in a More Positive Light Than Those of Their Domestic Counterparts.

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), conducted for Atradius by the market researcher Heliview, reveals:

Foreign companies rated highly for their payment practices

- About 70% of British companies evaluated their foreign business partners’ payment practices as being “good, “very good” or “excellent”. However, the difference between the payment duration of foreign customers and the British payment term is considerable (11 days). UK domestic payment practices have deteriorated - Around 57% of the companies interviewed assessed the domestic payment practices in Great Britain as being “fair” or “poor”. Conversely, in Sweden and Denmark, 62% or respondents rate domestic payment practices as “good”, “very good” or “excellent”. Significant differences in payment terms of countries surveyed - On average, British companies use a credit period of 32 days, in contrast to Germany with a credit term of just 24 days and Italy which averages a lengthy 67 days. Foreign payment delays increase compared to Summer 2008 - Foreign business partners evaluated the payment practices of British companies less positively than in summer 2008. The payment duration of British companies increased to 50 days from 46 days in summer 2008. British companies lead the way in taking steps to protect themselves - 70% of British companies are taking measures to protect themselves from payment risks, followed by 65% of French and 64% of Spanish. Only 58% of Swedish companies interviewed, planned to take similar action.

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.

Shaun Purrington, Regional Director of Atradius UK & Ireland, commented: Although the global economic downturn has negatively impacted payment practices in the UK and abroad, 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

Further information:

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 contribute to the growth of companies throughout the world by protecting them 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.

Atradius Corporate Communications: Jo Aaron, Tel: +44(0)2920-824873 / +44(0)7768-233338, E-mail: joanne.aaron at atradius.com; Polhill Communications, Gug Kyriacou / Michael Smith / Elizabeth Leach, Tel.: +44(0)20-7655-0550, E-mail: g_kyriacou at polhill.com / m_smith at polhill.com / e_leach at polhill.com