July MarketMonitor

marketmonitor
adapting to the challenging
economic environment

July 2009

The immediate outlook for key markets and sectors

Every month, Atradius brings you an up to the minute snapshot report on a range of export markets
and key trade sectors. Our underwriters have a specialist view of the world economy – and the
industries that make that economy tick - that you won’t find in the general press coverage of events,
so we hope that you will find our summary reviews a useful addition to your Atradius credit
insurance.

Even more importantly, our underwriters use their expertise and experience to look to the future. In
each edition of Atradius Market Monitor you’ll find our outlook for a number of key market
economies.

In this issue…

…we feature the following markets:

Spain – with a spotlight on the food distribution and construction industry sectors
Germany – with a spotlight on the food and chemicals sectors
United Kingdom
Slovenia
Turkey
Mexico
South Korea

and advice from Atradius Collections on dealing with late payment excuses

1

Expected default in Western Europe and USA

One of the most important factors that any business needs to know is the trend of insolvencies in their
markets. The following Expected Default Frequency (EDF) chart is based on listed companies in the
markets referred to, and the likelihood of default across all sectors within the next year. In this context,
default is defined as a failure to make a scheduled payment, or the initiation of bankruptcy proceedings.
Probability of default is calculated from three factors: market value of a company’s assets, its volatility and its
current capital structure. As a guide, the probability of one firm in a hundred defaulting on payment is shown
as 1%

Source: Atradius Economic
Research and KMV Credit
Monitor

The deteriorating global economic environment has translated into an increase in insolvencies, while the
heightened default expectation has been evident since mid-2007 (see chart above). In May 2009, the
median EDF of all major Western economies dropped again compared to the previous month, albeit that the
decrease has slowed in comparison to March and April. Again the US shows the steepest decrease month-
on-month compared with the other markets, while the positive development in the UK has levelled off in May.
Modest decreases are once more recorded for France, Germany and the Netherlands.

This ongoing moderation is explained by the fact that most national stock indices have rebounded since the
beginning of March: the general stock price level has increased across most markets and volatility has
decreased. While this development is positive in principle, it still remains to be seen if this is simply a short-
term trend or indicates the seeds of a long-term improvement. And, despite the overall decreases, the levels
remain high.

On the following pages, we assess the impact of expected default in key markets

2

Spain

The current business environment

After an increase of 1.2% in 2008, Spanish GDP contracted by 2.9% in Q1 of 2009, according to the Spanish
Statistics Office. Although this implies that the economic down-swing has accelerated since the last quarter
of 2008, it is important to emphasise that Spain’s year-on-year GDP-contraction in the first three months of
2009 was still lower than the slump registered in the EU (-4.4%) and the euro zone (-4.6%).

Spain’s GDP contraction results mainly from a fall in domestic demand, which has been reducing since Q3 of
2008 and decreased by 5.4% in Q1 of 2009. The steepest decline was in private consumption (4.1%) and
gross fixed capital investments (13.1%). In the latter case, construction (-12.4) and investment goods
(-18.6%) suffered the most significant decline.

Public spending rose again by 5.4% in Q1 of 2009, albeit that the increase is less than in previous quarters.
Both exports and imports decreased: by 22.3% and 19% respectively. While imports declined more steeply
than exports, external demand provided a positive contribution of 2.3 points to GDP in Q1 of 2009.

The outlook for Spain

During the first three months of 2009 there were signs that the rising tide of company payment delays,
triggered by the overall economic deterioration, was slowing. For the first time since September 2007, when
the Atradius default indicator began to reflect a turn in the tide, the increase in payment delays has levelled
off. This reflects how Spanish businesses are adapting to the adverse environment and implementing tighter
credit management controls.

For the time being, we do not foresee a marked recovery of growth before 2010. As a result, companies
have to tighten up their risk selection and collections processes.

3

Spotlight on industries Spain

Food distribution

How has the global economic downturn impacted the food distribution industry?
The sector has been affected mainly by decreasing disposable household income and subsequent shrinking
consumption. Therefore, price levels have indisputably become the key issue in the market: currently
companies are paying particular attention to factors such as special offers and prices fixed at lower levels to
attract consumers.

The effects of the downturn are mitigated by the nature of the products, as demand for food is much less
elastic than in other sectors. In general, this means that for companies in the food distribution sector the
volatility of margins is lower than in other industries, and therefore adapting to the current economic cycle
may be less painful.

What is the current trend in payment delays, payment default and insolvencies and why?
In this respect, this sector has shown some resilience and stability since the change in the economic climate.
Nevertheless, taking into account the overall corporate insolvency figures for food distribution and production,
it is estimated that both numbers and volumes have increased in the first five months of 2009.

What should companies selling products into the food wholesale sector pay particular attention to?
In the current economic environment, it is vital to analyse customers´ solvency and their payment behaviour.
Any changes in this should be read as a sign for potential difficulties or liquidity problems.

What is Atradius’ short term (6 months outlook) for the food distribution industry?
Overall, the ongoing price war between suppliers will increase pressure on margins. Additionally, the main
players in this sector will be affected by stagnating sales. They may reduce their investments and, in some
cases, postpone planned business expansion. However, for some companies with sufficient financial means
or access to external financing, there may be growth opportunities through acquisitions.

4

Spotlight on industries in Spain

Construction

How has the global economic downturn impacted the construction industry?
Since Q3 of 2007 investments in the construction industry have been negatively affected by the deterioration
in the real estate sector and by global financial problems. During 2008, production decreased by 16.3% as a
consequence of lower activity in the residential building subsector, resulting from the lack of new building
projects.

So far, civil engineering and related investments in infrastructure projects have served as a stabilising factor.
In 2008, total investments in this area reached a notable 38,265 million Euros, and investments will remain
stable in 2009.

In the first five months of 2009 insolvencies in the construction sector increased by 13% year-on-year. Non-
payment is still rising, but nevertheless there are signs that the rate of increase has slowed a little.

What should companies selling products into the construction sector pay particular attention to?
Suppliers should assess not just their clients’ solvency, but also their payment capacity relative to their ability
to generate liquidity in their operating cycle. This liquidity generation depends on the kind of construction
business the company is in. For instance, in civil engineering and public construction, payment practice is
usually better than in the private sector, as the customers are public authorities. Nevertheless, it has to be
borne in mind that even public authorities frequently delay their payments.

What is Atradius’ short term (6 months outlook) for the construction industry?
The current economic figures show no signs of a recovery yet for the residential building subsector. At the
end of Q1 of 2009, apartment inspections had decreased by 56.5%, concrete consumption in the industry
had fallen by 17.9%, and unemployment in the industry had increased by 9.3%. But local and state
government have introduced measures to increase public construction, mainly in the subsectors of civil
engineering and repair and renovations, and to counter the contraction in the construction sector and the
overall economy. The main emphasis is on infrastructure investment.

Those measures are contained in the Strategic Plan for Infrastructure and Transport (PEIT), which will last
until 2020 and encompasses, in total, planned investments of 248,892 million euros. Additionally, a so-called
“Plan E” has been launched to increase activity in public construction, with an investment fund of 8,000
million euros. Some projects have already been approved and are ongoing.

5

Germany


Despite some signs of recovery, Germany’s economic situation is still tense. In Q1 of 2008 GDP contracted
by 3.8% compared to the previous quarter. It is estimated that the second quarter will show another –albeit
lower - slump of about 1%. It seems that the decline has levelled off for now at least, and the German
Central Bank and leading economists expect a stabilisation of the economic situation for Q3 of 2009– albeit
at a low level. As a positive sign, in May, German industry registered the third consecutive monthly increase
in incoming orders 4.4% compared to previous month). However, a real recovery for Germany, with its highly
dependency on key export industries, is still distant, as the global recovery proceeds only slowly.

The Ifo-Business Climate Index varies between industries. While there has been a recovery in the wholesale
and retail sectors, it has levelled off for services and deteriorated for construction.

Currently private consumption is sustaining the economy, driven by a flat inflation rate close to zero and
stimulus packages such as the car scrapping scheme, which has boosted new car sales. But the expected
rise in unemployment to 4 million by the end of the year will hamper consumption in H2 of 2009.

Although we still have not experienced an all-encompassing credit crunch in Germany, many companies
complain of a lack of refinancing availability from reluctant banks. After launching a “Bad Bank” scheme to
help financial institutions to recover from the credit crisis, the German government is exerting further
pressure on banks to grant more loans and to pass on the very low base rates.

The outlook for Germany

In Q1 of 2009 corporate insolvencies increased by 10%, to 7,717 year-on-year. For the whole year we
expect about 35.000 companies to become insolvent. Until now, banks have concentrated on restructuring
schemes for ailing businesses, but we expect the banks to clean-up their credit portfolios in the second half
of 2009 and early next year. Many bank analysts predict a wave of depreciations in the corporate lending
sector, and this may negatively affect the insolvency rate.

After the deterioration in Q1 of 2009, the German economy may have bottomed-out, and there are some
indicators for that it will at least level off. But there are still uncertain factors: the short-term future
development of consumption, unemployment, credit supply and external demand. The governmental
stimulus packages will support and sustain certain industries (eg construction) but – at least not for the rest
of this year – this will not result in an overall economic recovery.

6

Spotlight on industries in Germany

Food

How has the global economic downturn impacted the food industry?
The German food sector is highly concentrated, especially in the food retail subsector. The whole industry
has had a nominal growth of 5.6% and 155 billion euro turnover, largely due to price increases. Without
rising prices, turnover would have decreased by about 1%. The situation is increasingly difficult in the
domestic market: while in Germany itself turnover grew by only 2.5%, exports generated a 15% increase.

During the current recession, discounters increased their market share to 44%, while the share of
supermarkets decreased to 23%.

In the first half of 2009 we have seen a considerable increase in payment defaults and insolvencies, mainly
affecting smaller companies, while so far no major companies have failed. The price struggle and pressure
on margins, especially in the discount sector, will increase pressure on smaller companies, and so we expect
more insolvencies in the coming months.

What is Atradius’ short term (6 months outlook) for the food industry?
For 2009, turnover in the food industry is expected to level off or increase only modestly. The sector will
remain a stabilising factor for the economy, but one destabilising factor may be developments in the labour
market. In the event of sharply increasing unemployment in the coming months, the negative consequences
for private consumption overall would affect the food industry.

7

Spotlight on industries in Germany

Chemicals

How has the global economic downturn impacted the chemicals industry?
The downturn of the German chemical industry has continued in H1 of 2009, affecting almost all subsectors.
According to the German chemical industry association VCI, chemical production dropped by 15% and
turnover decreased by 15.5% compared to H1 of 2008. Capacity utilisation shrank to about 72%, as many
facilities have been cut off due to weak global demand. In Q1 of 2009 producer prices deteriorated further
compared to the previous quarter.

Producers of basic chemicals have been hit hardest by the adverse economic development, while consumer
chemicals (body care and detergents) have been less affected. Least affected are pharmaceuticals, with a
production decrease of 1.5% in Q1 of 2009. The agrochemicals subsector has remained stable.

In the first half of 2009 we have registered a marked increase in payment defaults in numbers and volumes
compared to the same period last year. Nevertheless, there have been no major insolvencies so far.

What should companies selling products into the chemicals sector pay particular attention to?
Besides analysing customers current balance sheets and liquidity plans, suppliers should also take into
account their clients’ subsectors, as the basic chemicals and plastics subsectors are very negatively affected
by the crisis, while pharmaceuticals is still a healthy subsector. Additionally, suppliers should ensure that
they include a retention of title clause in their contracts.

What is Atradius’ short term (6 months outlook) for the chemicals industry?
According to the VCI, the German chemicals industry has reached the bottom of the recession and is
expected to pick up slightly in the second half of 2009. For the year as a whole it is expecting a decrease in
production by 10% and a decline in turnover by 12%.

As the chemicals sector delivers 80% of its production to industrial customers, any improvement depends on
the recovery of major industries in general. After enjoying years of profitable business, most chemicals
companies have cut production, introduced short-time work, and postponed investments in order to cope
with the crisis. The longer we have to wait for a general upswing, the stronger will be the structural
consequences for the industry in terms of increasing payment delays, defaults and insolvencies.

8

United Kingdom


GDP in Q1 of 2009 contracted by 2.4%: the largest contraction since 1958. The main contributors to this
were construction, with output falling by 6.9% compared to 5% in Q4 of 2008; production industries, down by
5.1%; and services by 1.6%. However, even the most pessimistic of analysts do not believe that this will
lead to an annualised GDP contraction of 10%. The Treasury is predicting that GDP will contract by 3.5%
during 2009, while the Atradius view is that it is more likely to be around 5%.

Exports fell by 6.9% and imports by 6.7%. All this continues to have a significant impact on insolvency levels.
In Q1 there were 4,941 compulsory liquidations and creditors’ voluntary liquidations in England and Wales:
up on the previous quarter and an increase of 56% year on year. We expect a further rise throughout 2009.
Individual insolvencies also increased: up 19% on the same period last year. We may see a temporary
slowdown in insolvency for Q2, but this should not be seen as an improvement in the underlying trend. It is
more likely to be a result of the high take up of the HMRC Business Payment Support Service, under which
businesses can postpone tax payments. However, while helping in the short term, once payments fall due
this is likely to result in more business failures at the end of 2009/early 2010

Short Term Outlook

While confidence is improving, any recovery is likely to be slow and we will be well into 2010 before there are
any significant positive signs. The Organisation for Economic Cooperation and Development (OECD) has
warned that unemployment could rise to around 10%, and has revised its 2009 GDP contraction figure from -
3.5% to -4.3%. Despite government pressure on banks, lending to private sector businesses slipped in May,
although this was offset by increased lending to public sector bodies. The Government’s quantitative easing
programme has resulted in an increase in bank reserves, but banks still appear to be risk averse. May
figures show that lending to the wholesale, retail and manufacturing sectors was flat and that unsurprisingly
lending to the construction sector fell. Lending to private non financial companies with the UK market has
now fallen by an average of £1 billion over each of the past six months. It is worth noting seasonal trends in
the funding requirements of many businesses. Many retailers will require additional external funding to build
up stock for the key Christmas trading period. In construction-related businesses the winter months tend to
be quiet and funding levels may be increased due to the inability to generate sufficient cash from normal
operating activities. It is during these peak periods that we will really get a better understanding for the
availability/flexibility of bank facilities within the UK market.

The latest KMV EDF information actually shows an improvement in the Expected Default Frequency for the
UK. While this is good news, the improvement relates predominantly to the improvement in share prices over
the last quarter, and is unlikely to continue at the same rate over the next 3-6 months.

9

Slovenia


Slovenia has over the past two years been the fastest growing euro zone member. It exports 70 percent of
its production, mainly to other EU states: especially Germany, Italy, Austria and France.

In 2008 real GDP grew by 3.5 percent, with a budget deficit of only 0.3%. The country has however
experienced a significant downturn in 2009 due to the global crisis. GDP is forecast to fall by 4% in 2009 and
the budget deficit is expected to reach 4.8% of GDP, exceeding the EU-mandated limits for member states.
Unemployment is increasing rapidly. In the first quarter of 2009 the unemployment rate was 5.4%, compared
to 4.3% in the previous quarter. Those out of work rose by 10,000 in Q1 of 2009, 21% up on the previous
quarter. Industrial output contracted by 19.5% year-on-year in the first quarter, as the recession slashed
demand for Slovenian exports. More than 670 companies have reduced their working hours, and the
economy contracted by 8.5% in the first quarter.

Slovenian banks are still in good shape, but could take a turn for the worse later this year. The number of
bad loans is expected to rise. The growth of bank loans to the non-financial sector slowed to 14 % in March
2009 from 38 percent in the whole of 2007. Growth of loans to private individuals reached 10 percent in
March, compared to 27 percent for the whole of 2007. The government last year offered state guarantees for
bank loans and bond issues in order to ease the credit crunch.

The general business environment has become more difficult in 2009 due to the significant contraction in
exports and decreasing domestic demand. There is also a tendency towards high short term bank financing
of Slovenian companies, which could result in a liquidity shortage if the banking sector experiences a
downturn towards the end of the year.

The outlook for Slovenia

Atradius have experienced an increase in reported payment problems over the last six months, showing a
deteriorating picture, but still with no clear pattern emerging with regard to sectors. It is however important to
be extra careful when dealing with companies in the automotive industry, construction or construction
materials, engineering, ICT, iron, steel and metal manufacturing, textiles, timber and transport. These
industries are especially geared towards export and/or sensitive to the global and domestic slowdown.
Domestic demand growth will weaken sharply in 2009 as businesses and households cut back on
investments and consumption. When dealing with Slovenian companies, it is important to pay attention to
the buyer’s activity level if the line of business is considered to have a higher than average risk. Suppliers
should avoid financially weak companies, and those with a high short term gearing or poor 2008 results, as
these will be more likely to default in the current climate.

10

Turkey


Negative growth in the Q4 of 2008 was followed by GDP contraction of 13.8% in the first quarter of 2009 -
the highest for the last 50 years. The high current deficit and inflation, traditionally areas of concern, are less
so now as a result of a slow down in consumption and investment, and the devaluation of the Turkish Lira by
more than 30%. Now emerging as the major threats to a quick recovery are unemployment, standing at
16.1%, and low consumer confidence. However, capacity utilisation and consumption data for the Q2 of
2009 show slight improvements. The banking sector is still strong, with a high capital adequacy ratio of over
18%, high profitability and transparent loan portfolio which does not involve mortgage products. Non-
performing loans rose to 3.8% in March and ‘bounced’ cheques increased by 43% in the first five months of
the year: both indications of a deterioration in the payment cycle.

All sectors are affected by the economic downturn, especially those connected to retail. Textile, Automotive,
Electronics, Chemicals and Construction look to be relatively higher-risk sectors at the moment due to the
dramatic fall in consumption trends, shrinkage in borrowing opportunities and worsening liquidity conditions.
Textiles: This sector is particularly vulnerable, due to a combination of excess capacity, lack of branded
production, low capitalisation, diminishing domestic and export demand, Far East competition, and non-
performing bank loans of around 11%.
Automotive: As Turkey’s 2nd largest export sector and an important customer of several other sectors, both
the global and domestic outlook for automotive is negative - almost all the main manufacturers have
periodically suspended production during recent months.
Electronics: As consumer confidence falls, manufacturers, distributors and retailers all face liquidity
problems and suffer from narrowing margins as a result of fierce competition in a shrinking market.
Metals: As an important supplier to machinery, automotive, construction and durables sectors, the downturn
in these sectors has led to decreased production, postponed investments and falling prices. Nevertheless,
metals are not yet considered among the Turkish high-risk sectors.

The outlook for Turkey

In the light of deteriorating expectations, the companies and sectors which provide goods and services with
low demand elasticity and the ones most dependent on external financing will be particularly exposed.

Negotiations with the IMF for a new stand-by programme are continuing, but cannot yet be finalised due to
the required strict control on public expenditures. In the event of a failure to reach agreement, Turkey may
face difficulties in revolving the external debt carried by its private sector.

11

Mexico


Due to Mexico’s dependence on the US economy and the price of oil, the economy has been hit sharply by
the worldwide downturn. After growth of just 1.3% in 2008, less then half the rate in 2007, GDP shrank by
5.9% in Q1 2009. The unemployment rate has jumped as economic activity was interrupted by the flu
outbreak, rising from 3.6% to 5.3% over the past year. In the mid-term elections, the opposition (PRI) won
effective control of the lower house of Congress, weakening the government’s mandate. This may lead to a
downgrade by the rating agencies if Mexico fails to pass the tax legislation required to improve its finances –
dependent greatly on sagging oil revenues.

Exports to USA, which constitute a fifth of Mexico’s GDP, have fallen by 36% in the past year as US demand
collapses. Consumer confidence is at its lowest since 2001, down 16.8% year on year. Remittances (the
funds that expatriate workers send back to Mexico and which feed into the economy) are negative to flat,
compared to an annual average growth of 16% over the last 10 years. Bank consumer credit growth is also
shrinking after averaging 35% growth since 2001. Both of these factors take considerable liquidity out of the
economy. All of this has had an immediate impact on companies’ payment behaviour, reflected in the steady
increase in the Expected Default Frequency score since September 2008. This indicator peaked at the end
of Q1 of 2009 and showed a slight improvement in May, but remains high.

The outlook for Mexico

Expectations for 2009 are for a GDP contraction of around -6.2%: the sharpest fall since the 1995 Tequila
Crisis. Insolvencies will continue high, despite the peso-US$ exchange rate showing less volatility than in
previous periods. The Retail sector has experienced restricted access to credit, falling household incomes
and low consumer confidence. The Automotive sector has proved to be a cost-effective producer of parts
and components to the auto sector, but the Maquiladora (the industry that imports materials and equipment
duty / tariff free and re-exports finished product to the originating country) is feeling the effects of the
slowdown in the global automotive industry. The Construction / Construction Materials sector has been
impacted with significant default, as projects are frozen and / or budgetary allocation is not available. In the
Chemical sector we can see negative trends in production, domestic sales and exports in 2009, especially in
adhesives, chemical fibres and pigments. As a capital intensive sector, debt levels are high and the overdue
reports have increased. Tourism has suffered from the influenza outbreak and media coverage of gang-
related violence in parts of the country, as the government seeks to crack down on the narcotics trade.Highly
geared companies with risky capital structures have a higher probability of default as the Mexican financial
system has tightened its credit policies. Companies that import or borrow in hard currencies are also
suffering due to the weakness in the Peso.

12

South Korea


South Korea is Asia’s fourth, and the world’s 15th largest economy. The country is very export oriented, with
its major sectors - electronics, automotive and shipbuilding – all heavily impacted by the economic downturn.

The South Korean economy as a whole has been severely impacted by the global crisis. In Q4 of 2008 GDP
contracted by 5.1%, compared to Q3 2008, and by more than 20% year-on-year, as demand from its export
markets faded dramatically. In 2008 the Korean Stockmarket Price Index (KOSPI) lost over 30% of its value
and the Korean Won depreciated sharply against all major currencies. The Bank of Korea (BOK) had to seek
a US-$ 30 billion swap agreement with the US Federal Reserve in November 2008 as its foreign exchange
liquidity was tight. The BOK injected US-$46 billion in local banks to combat the effects of the credit crunch,
as many of those banks hold high overseas short-term borrowings. The shortage of foreign exchange
liquidity sparked concerns that Korean banks may face difficulties in meeting their foreign debt-servicing
obligations.

The outlook for South Korea

Performance, in terms of GDP, was stable in Q1 of 2009 compared to Q4 of 2008. However, on and
annualised rate, it contracted by 4.3%. GDP forecasts for the whole of 2009 vary between a 2.2% (OECD)
and 4% (IMF) contraction.

The loan : deposit ratio of South Korean banks is high compared to the other major Asian economies. This,
and the fact that we expect to see an increase in non-performing loans, may reduce the willingness of the
banks to renew or extend funding. Currently many SMEs are also under review by creditor banks. Those
companies may face a tough 2009 as a result of the potential impact of this credit assessment.

At the same time, the South Korean government has launched a large-scale credit assessment of the
countries´ largest conglomerates (chaeblos), active in construction, shipbuilding, and shipping. There are
rumours that some of these large companies have failed the credit test and, as such, will be forced to
restructure or, even worse, be put into liquidation. Liquidation of one of these large players would certainly
have a knock-on effect on the rest of the economy and lead to more supplier insolvencies.

We hope that we have seen the bottom of the recession, as forecasts for 2010 are more positive. But that
depends on a worldwide recovery, as South Korea is heavily export-focused.

13

Atradius Collections

Dealing with late payment excuses

In the last edition of the Market Monitor, we shared with you some tips on steering clear of potential debt,
including:
Assessing your customers’ creditworthiness
Clearly communicating terms of delivery and payment
Shorter credit periods
Confirming delivery and customer’s satisfaction
Persistently following up with payment reminders

These actions will certainly reduce your risk, but, in the current economic climate, they won’t guarantee that
you’ll be paid on time – if at all. It’s therefore vital that you look for the signs that your customer may be
using delaying tactics: including excuses for non-payment. Some of those excuses may be reasonable, but
many will not, so be prepared to respond immediately to speed up payment.

“We’ve lost/not received your invoice”
Find out if this is the only reason for late payment and offer to fax or e-mail a copy for immediate payment

“Our payment conditions are 30 (60, 90 etc.) days”
Remind the customer of your payment terms and their prior agreement to these

“The next payments will be sent out at the end of the month”
Ask for the proof of the payment order

“The person in charge isn’t available right now”
Ask when this person will be available and make sure you call them

“We didn’t receive the product, or the order was cancelled”
Have proof of delivery documents ready

“The products/services did not meet our expectations”
Have proof or delivery ready and refer to your earlier correspondence with the customer over the delivered
product

14

Atradius Collections

“The invoice has already been paid”
Ask for proof of payment

“The invoice wasn’t correct, and we are waiting for a credit note”
Make sure your internal ‘dispute’ process works and ask the customer to send evidence

“The delivered products aren’t sold yet, and we need these revenues to pay you”
Show that you understand but claim the payment as agreed

“Our buyer went bankrupt”
Show that you understand but claim the payment as agreed

Most customers are worth retaining, even if they have to be continually prompted to settle their accounts. So
always keep your cool, acknowledge their problem or point of view and seek solutions rather than conflict.
However, if your efforts prove unsuccessful, hand the case over to a professional debt collection agency –
one that understands the value of your business relationship with the customer – allowing you to focus on
future sales.

Atradius Copyright. While we have made every attempt to ensure that
the information contained in this report has been obtained from reliable
sources, Atradius is not responsible for any errors or omissions, or for
the results obtained from the use of this information. All information in
this document is provided ’as is’, with no guarantee of completeness,
accuracy, timeliness or of the results obtained from the use of this
information, and without warranty of any kind, express or implied. In no
event will Atradius, its related partnerships or corporations, or the
partners, agents or employees thereof be liable to you or anyone else
for any decision made or action taken in reliance on the information in
this report or for any consequential, special or similar damages, even if
advised of the possibility of such damages.

15

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