Results PPB the Americas October 2012

Press release

Amsterdam 2 October 2012 - Atradius survey finds that uncollectable receivables are on the rise in North America

The Atradius Payment Practices Barometer, a survey of B2B suppliers of products and services in North America found that, on average, 5.3% of the value of receivables of B2B companies is written off as uncollectable. This compared to 4.0% one year earlier.

The level of uncollectable receivables climbed in each of the three countries surveyed namely Canada, Mexico and the USA. In Canada from 2.9% in 2011 to 5.2% in 2012; in Mexico from 4.3 in 2011 to 5.2% in 2012 and in the USA from 4.6% in 2011 to 5.6% in 2012. In comparison, uncollectable B2B receivables in Europe in 2012 averaged 3.0% of the value of the receivables of survey respondents (stable in comparison to the same survey period in 2011).

In Mexico, the situation with regard to domestic receivables was more pronounced with 5.6% uncollectable compared to 4.1% of foreign receivables. In Canada and the USA foreign receivables represented a greater risk than did domestic receivables. The issue was more severe in the US with 5.1% of domestic and 6.6% of foreign receivables uncollected than in Canada where 4.8% of domestic and 5.8% of foreign receivables were uncollectable.

Overall the percentage of late receivables has not increased that much in North America in 2012 compared to 2011, but more of these overdue receivables are remaining outstanding longer and more are resulting in payment defaults. As a result the average Days Sales Outstanding (DSO) across the region has also been creeping up. Approximately 23.3% of the survey respondents experienced an increase in their DSO over the past 12 months compared to 7.8% for whom DSO decreased. The average DSO for the region was 42.7 days which exceeded the average payment term of 34.3 days by 8 days. Mexico had the highest average DSO, 50.7 days followed by the US, 38.0 days and Canada 36.8 days.

Richard Ariens, Regional Director of Atradius Credit Insurance commented, “The climbing rate of payment default highlights that this remains a very unstable period in the economic cycle. Business insolvencies remain at high levels as businesses often pursue growth too aggressively overestimating demand in the early stages of the recovery.”

Andreas Tesch, CMO of Atradius N.V. added, “Insolvencies in the United States have been declining for the past two years. The survey responses showing an increase in uncollectable receivables highlights the fact that lower insolvency rates do not necessarily translate into fewer payment defaults. To the contrary, it emphasizes the importance of due diligence and protection against payment defaults.”

About Atradius 
The Atradius Group provides trade credit insurance, surety and collections services worldwide. With a presence through 160 offices in 45 countries, it has a market share of approximately 31% of the global trade credit insurance market. Atradius has access to credit information on 100 million companies worldwide and makes more than 20,000 trade credit limit decisions daily. Its products help protect companies throughout the world from payment risks associated with selling products and services on credit.

For further information:
Atradius Corporate Communications
Christine Gerryn
Tel.: +31 20 553 2047


The statements made herein are provided solely for general informational purposes and should not be relied upon for any purpose. Please refer to the actual policy or the relevant product or services agreement for the governing terms. Nothing herein should be construed to create any right, obligation, advice or responsibility on the part of Atradius, including any obligation to conduct due diligence of buyers or on your behalf. If Atradius does conduct due diligence on any buyer it is for its own underwriting purposes and not for the benefit of the insured or any other person. Additionally, in no event shall Atradius and its related, affiliated and subsidiary companies be liable for any direct, indirect, special, incidental, or consequential damages arising out of the use of the statements made information herein.