In the second quarter of 2009, the number of B-2-B debt collections is still on the rise. Comparing to the same quarter last year, the number of cases has increased by 54%. Even compared to the first quarter of the year, the increase is noticeable - 9,4%. Nevertheless, the average value of a debt handed over for collection has dropped by 15% compared to last year. The most probable cause for this drop is the decreased trading activity of Dutch entrepreneurs and the lower average invoice amounts they generate. These are figures from the Atradius Collections Barometer – a quarterly industry publication of Atradius Collections. As Atradius is the largest B-2-B Collections agency in the Netherlands, the reported figures and conclusions are representative for the whole market.
While the number of cases handed for collections by Dutch companies has increased significantly (54%) compared to the second quarter of last year, the rise in total value of debt collections handed over was less dramatic - 22% in Q2 2009 compared to Q2 2008.
Due to high levels of international trade conducted by Dutch entrepreneurs, the international debt has a significant share of collection cases. Of all international debt collections in the Netherlands, France is heading the list with almost a 25% of all international cases, while Belgium and the UK account for 13%, Germany - 12% and Italy - 11%.
Atradius Collections, part of the Atradius Group, expects that the increase of debt collections will maintain during the second half of 2009. “We expect a dramatic situation for some companies after the summer holidays”, says Raymond van der Loos, Managing Director of Atradius Collections. “Debt Collections is always following the general economic trends with approximately three months’ delay, as companies try to collect the outstanding amounts themselves first before turning to professional collectors. The numbers of the first half of the year are still reflecting ‘normal economic trade’, and are therefore high. Due to the drop in (international) trade, less invoices are generated, and as a result we expect the increase in debt collections will level off.
Van der Loos: “We can also see that companies are more discerning about who they do business with, and they are more careful in supplying credit to their customers. On the other hand, entrepreneurs are handing over their outstanding amounts to external debt collections agencies because of the enormous increase in bankruptcies. They want to ensure that they get their money.”
Hardest times for automotive industry seem to be over
In the automotive industry there has been a shift since last quarter. Even though this sector was leading in the first quarter of 2009 with a 65% increase in collection cases compared to last year, we saw a decrease of 30% in the second quarter compared to the same period last year. “It seems that the hardest times for the automotive sector are over”, adds Van der Loos.
The construction industry shows a signification decrease of 80% in the number of debt collections cases compared to the first quarter of this, but this still represents an increase of almost 25% compared to the same quarter last year. With more and more large volume debts being handed over to professional collections agencies, Atradius notices that the construction industry is heading for rough times. As orders in hand are decreasing, construction companies are using their own available cash flow. This will lead to a further increase in insolvencies after the summer.
In the financial services the number of debt collections remains stable compared to last year. The average amount per case is decreasing, which can be accounted for by this sector’s focus on outstanding debts and an earlier involvement of professional collectors into the collections process.
In the chemicals industry we see the same development as we see for all of the Netherlands. The number of debt collections is increasing strongly compared to the second quarter of 2008 (66%). Nevertheless, we see a decrease of 14% compared to last quarter and a drop in the average amount per case.
The number of debt collections cases in the Food sector has decreased by 8%, but it is still 27% higher than the second quarter of 2008. The total debt value in the second quarter is 17% lower than last year’s.
Compared to the second quarter of 2008, the Dutch metals industry is going through really rough times. With an increase of 44% in the number of debt collections cases and 72% increase in the debt collections amount, the economic downturn is very evident in this sector, even though the metal industry is showing a decrease of 20% in bankruptcies compared to the first quarter. This sector is heavily hit by the worldwide downturn in construction and industrial activity. Prices and margins are under pressure and therefore a lot of companies are having troubles in paying the outstanding invoices.
More information
Guido Minnaert, telefoon 020 553 2978; mobiel: 06 20519170
guido.minnaert@atradius.com; www.atradiuscollections.com
Carlinda Lengkeek, telefoon 020 553 2394; mobiel: 06 22207494;
carlinda.lengkeek@atradius.com; www.atradius.nl
