Intrum Justitia: European business community misses out on 250 billion euro - Record amount of outstanding invoices reinforces the effects of the credit crunch

Intrum Justitia: European business community misses out on 250 billion euro -
Record amount of outstanding invoices reinforces the effects of the credit
crunch

Stockholm 21 May 2008 - In 2007 the European business community missed out on a
record amount of 250 billion Euro as a consequence of outstanding invoices. This
amount is almost equal to the domestic product of Belgium. Southern Europe heads
the league of payment defaulters, while the Scandinavian countries are the best
payers overall. These figures are shown in the European Payment Index compiled
by Intrum Justitia, the largest European credit management bureau. The annual
barometer assesses payment behaviour in the member states of the European Union.


•	Late payment of invoices 55.5 days on average
•	Government worst payer; Portuguese government waits more than 137.8 days
before paying
•	Speedier debt collection crucial to the survival of the business community

Intrum Justitia fears that the European sum of outstanding invoices will
continue to increase in response to the credit crunch and the high food and oil
prices. “This is a worrying development”, says Michael Wolf, President and CEO
of Intrum Justitia.  “This poor payment behaviour has a strong inhibiting effect
on the development of the European economy.”
It was not only the total sum of outstanding invoices that rose to record
heights, the percentage of unpaid invoices was also at its highest level ever
(2%, compared to 1.9% in 2007). The average number of days before an invoice was
paid in Europe rose to 55.5 - almost 4 weeks too late. Once more the European
government bodies proved to be the worst payers, taking an average of 65 days to
pay an invoice. The corresponding figure is 55 days for the business community
and 40 days for the consumer.

Inadequate routines
The most important reasons for non payment or late payment lay in inadequate
routines and lack of competence of the business community itself when it comes
to collecting invoice payments. Michael Wolf finds this incomprehensible.
“Businesses are allowing themselves to be blinded by the good economic situation
of the past years. They are doing well and making good profits. In addition they
find it awkward to address their customers on the subject of their payment
behaviour. They have lost sight of the fact that the banks are responding to the
credit crunch by becoming more difficult and expensive when it comes to
providing loans. This really has to change.”


Higher risk in Southern Europe
Greece, Cyprus and Portugal are the countries where invoices wait longest to be
paid, while the Scandinavian countries pose the smallest risk. Payment times
rose slightly in Switzerland, Spain, Italy, Ireland and France, while the United
Kingdom remained the same.
Intrum Justitia finds that it is absolutely crucial for the business community
to take a much stronger line on implementing credit management. This is not just
a case of phoning late payers but also, and especially, of analysing possible
risks, checking the financial status of consumers and making intensive contact
with creditors before the due date of an invoice has expired. Michael Wolf :
“You can see the emergence of a vicious circle, in which the large businesses
are the first to start to pay more slowly. Smaller businesses are forced to
follow suit. This has dramatic effects on economic development; forward
propulsion is lost because investments are postponed. Company cash is ‘frozen'
in unpaid invoices and borrowing from banks continues to be difficult and
costly. All of this can be avoided by good credit management.” 
Intrum Justitia argues in favour of a cultural change. The principles of the
Scandinavian countries should serve as an example. In these countries an average
of three out of four invoices are paid on time and only 1% of all invoices
remain unpaid.


For further information, please contact: 
Sophie Hammarskjöld, Chief Communications Officer
Tel: +46 8 546 102 03. Mobile: +46 76 768 52 63 
E-mail: s.hammarskjold@intrum.com


Intrum Justitia is Europe's leading Credit Management Services (CMS) group, with
revenues of approximately SEK 3.2 billion and around 3,100 employees in 24
markets. Intrum Justitia strives to measurably improve its customers' cash flows
and long-term profitability by offering high quality in relationships with both
customers and debtors in each local market. The group offers a wide range of
services to manage commercial and consumer receivables. Intrum Justitia AB
(ticker IJ) is listed on the OMX Nordic Exchange in Stockholm, Mid Cap list. For
more information, please visit www.intrum.com