Global Collections ReviewThe collections behaviour across countries

3rd edition – Summer 2010

Main sponsor:

Raymond van der LoosManaging Director

2

About us

Main sponsor:

• Atradius Collections is a business unit of Atradius Group and provides efficient, quick and flexible solution to recover international and domestic trade debts

• We serve over 14,000 customers handling on > 100,000 cases a year

• We collect international cases for local, domestic debt collections agencies

• Based in 20 countries, and work with a global network of collections specialists, lawyers and insolvency practitioners worldwide

• Over 80 years of worldwide credit management industry experience uniquely positions Atradius Collections as a global leader in B2B debt collections

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Overall Introduction & Background

• “Global Collections Review” survey was conducted to assess business requirements for outsourcing of collections across 22 countries all over the world

• The survey looked into 4 areas of interest:

1. Collection behaviour and usage of external collections agencies

2. Criteria businesses use to select a debt collections partner

3. Aspects that are likely to discourage businesses from outsourcing outstanding debts

4. Future development of First Party Collections

Main sponsor:

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Survey Methodology

Main sponsor:

• Basic population: companies from 22 countries were surveyed

Australia, Austria, Belgium, Canada, China*, Czech Republic, Denmark, Germany, Great Britain, France, Hong Kong*, Hungary, Ireland, Italy, Mexico*, Netherlands, Poland, Slovakia, Spain, Sweden, Switzerland, USA

• Sample: 3.971 companies participated (150 – 200 per country)

number %

Under € 1 million 1.479 37%

€ 1-10 million 1.105 27%

€ 10-100 million 888 22%

Over € 100 499 13%

Wholesale/Retail/Distribution 1.096 28%

Services 1.734 44%

Manufacturing 843 21%

Financial services 289 8%

* for these countries there is limited results.

Turnover division

Industry division

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Main Survey Results

Main sponsor:

• Consistent with results of previous editions Global Collections Review

• High usage of DCAs: around 30% at European and worldwide level with significant higher use in some countries

• Usage of a DCA: 55% use for international debts

• Success rate, Price and Debtor Relationship are the key drivers in selecting a DCA

• Strong focus on customer relationship, especially for not using agencies (fear to harm the relationship)

• First Party Collections: good expectations in selected group of countries

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Use of outsourced collections service

Main sponsor:

• On average approx. 30% of respondents use external debt coll. agency • NL and Sweden around 50% use external agencies and lower usage of other

external services

* China, Hong Kong and Mexico n.a.

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Collections behaviour:Domestic vs. International debts

Main sponsor:

• 55% of companies using external debt coll. agencies use for international debts

• Belgium, Switzerland, Ireland, Spain, UK, France: above average

* China, Hong Kong and Mexico n.a.

8Main sponsor:

Criteria businesses are likely to use to select a debt collections partner

• Success rate followed by Price and Debtor relationship most important selection

criteria across all countries• Additional services, Global expertise and Local knowledge remain least important

1: Success rate

Main sponsor:

• Importance of Success Rate across all countries

• Companies considered this criteria as the key driver in selecting DCAs with few exceptions

• Across economic sectors, Success Rate is equally important

2: Price

Main sponsor:

• Price is the second most important key driver in selecting a DCA

• Companies in Spain gave to it a significant lower importance

• Price was more important for companies in Manufacturing sector compared to Service sector

3: Relationship with debtors

Main sponsor:

• Ability to maintain positive relationship with debtors was a further important factor

• Companies in Denmark, Hungary, Ireland and USA considered it significantly more important than price

• It was the second factor of choice for larger companies with a turnover of more than €100 million

4: Reputation

Main sponsor:

• Reputation was not one of the main criterion in selecting DCAs

• Companies based in Canada ranked it as more important than Success rate

• It was ranked more important from companies with a turnover between €10-100 million

Main sponsor:

• It was not considered as an important criterion in driving the selection of an external debt collection agency

5: Easy access to up-to-date information

6: Additional services

Main sponsor:

• Additional services= Dunning, Early Collections, Invoice to Cash etc.

• This criterion is in many countries not important to select an agency

• Additional services were considered more important from companies in Italy and France

7: Local knowledge

Main sponsor:

• This criterion is not important in many countries

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8: Global expertise

Main sponsor:

• Global expertise was ranked least important

• However, companies in Hungary considered it as an important reason for choosing a DCA

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• Main reason not to outsource: ‘Use of internal resources’, ‘Customer relationships’, followed by ‘Cost’

• ‘Cost’ does not represent main reason for not outsourcing collection activities

• Main reasons for collecting internally, worries for damages at company image and small size of company were frequently cited*

Main sponsor:

Reasons for NOT outsourcing Collections

* Open question

First Party Collections: expectations

• Significantly higher likelihood in Italy, UK, Poland and USA

* China, Hong Kong and Mexico n.a.

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Success factors in outsourced debt collections market

Main sponsor:

• Success Rate:What do we mean with Success rate; definition?What do (potential) customers evaluate?

• Internationality:Higher integrationStreamline process

• Relationships with debtor:How to treat “live” customer

• First Party Collections:Large differences among countries

20Main sponsor:

Complete survey report to download on:www.atradiuscollections.com

Raymond van der Loos Managing Director, Atradius Collections

Raymond.van.der.loos@atradius.com