Business insolvency worldwide euler hermes solunion oct-nov14

Business Insolvency Worldwide

Economic Outlookno. 1211-1212October-November 2014

www.eulerhermes.com

A rotten applecan spoil the barrelPayment terms, past dues, non-paymentsand insolvencies: What to expect in 2015?

Economic Research

Economic Outlook no. 1211-1212 | October-November 2014 | Business Insolvency Worldwide Euler Hermes

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Economic Research Euler Hermes Group

Economic Outlookno. 1211-1212business Insolvency Worldwide

Contents

the Economic Outlook is a monthlypublication released by the EconomicResearch Department of Euler HermesGroup. This publication is for the clientsof Euler Hermes Group and available onsubscription for other businesses andorganizations. Reproduction is authorised,so long as mention of source is made.Contact the Economic Research Depart-ment publication Director and Chief Eco-nomist: Ludovic Subran Macroeconomic Research and CountryRisk: David Semmens (Head), FrédéricAndres, Andrew Atkinson, Ana Boata,Mahamoud Islam, Dan North, DanielaOrdóñez, Manfred Stamer (Country Econ-omists)Sector and Insolvency Research:Maxime Lemerle (Head), Farah Allouche,Yann Lacroix, Marc Livinec, Didier Moizo(Sector Advisors) Support: Lætitia Giordanella (Office Man-ager), Sarah Bosse-Platière, Claudia Huis-man, Sergey Zuev (Research Assistants)Editor: Martine Benhadj Graphic Design: Claire Mabille photo credit: AllianzFor further information, contact theEconomic Research Department ofEuler Hermes Group at 1, place desSaisons 92048 Paris La Défense Cedex– Tel.: +33 (0) 1 84 11 50 46 – e-mail:[email protected] > EulerHermes Group is a limited companywith a Directoire and SupervisoryBoard, with a capital of EUR 14 509 497,RCS Paris B 388 236 853 Photoengraving: Imprimerie Adelinet –Permit October-November 2014; issn1 162–2 881 ◾ November 18, 2014

3 EDItORIAL

4 OVERVIEW

10 buSINESS INSOLVENCY OutLOOK WORLDWIDE IN 2015

12 CHINA◼ Cracks in the “Great Wall”

13 RuSSIA◼ Prepare for the worst, hope fort the best

14 GERMANY◼ All clear! So far…

15 pOLAND◼ Between a rock and a hard place

16 FRANCE◼ Work in progress

17 ItALY◼ Time for the show

18 tHE NEtHERLANDS ◼ Dancing to the beat of world trade

19 SpAIN◼ It is not time to let up

20 uNItED KINGDOM◼ Keeping faith

21 uNItED StAtES◼ Inch by inch

22 MAJOR INSOLVENCIES WORLDWIDE

24 OuR pubLICAtIONS

26 SubSIDIARIES

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Euler Hermes Economic Outlook no. 1211-1212 | October-November 2014 | Business Insolvency Worldwide

EDItORIAL

The devil is in the detailLuDOVIC SubRAN

As we are all closing our books for 2014, it is time to takestock on what has happened for businesses around the world,especially when it comes to past dues, non-payments andinsolvencies. We have good news: worldwide, insolvenciesdecreased by -12% this year and past dues have also de-creased for the first time since 2011 by almost -30%. However,we also have concerns. The false start for the global economycaused company turnovers to remain flat in too many coun-tries. If you add to that political hotspots where short-termfinancing is constrained and sluggish structural reforms inseveral advanced and emerging economies, we unfortu-nately continue to see bankruptcies around the world stand-ing 12% above their pre-crisis levels. Turbulence is still onand companies cannot afford to be taken off guard. Whatdoes it mean for 2015? Well, the second half of this yearoffers a mixed picture as payment terms continue to increaseby 1 day every year since 2010, reaching 73 days by year-end, and non-payments went up by +23%, mainly becauseof China and Russia. We therefore expect insolvencies tocontinue to decrease in 2015 but only by -3% this time asgrowth, trade and financing will only be picking up moder-ately, and potential headwinds on demand, liquidity and pol-itics are still looming ahead. When you break down theseresults by industry, you understand why the devil is in thedetail: stories differ quite a lot across sectors or countries.The continued severity of bankruptcies in the commodities

sector because of low oil prices causing margins to fall veryrapidly, the restored confidence in the UK offering solace tothe retail industry after years of painful restructuring, andthe protracted domestic crisis in Italy are good examples ofhow details matter. Understanding what is really risky andwhat is not is essential. Overreaction or generalizations aredangerous in today’s bewildering world. This global mess isnot new unfortunately, but we are better informed and moreand more connected to one another. An average businesscan operate from the UK with American shareholders, Chi-nese providers and Russian clients, making the life of theChief Financial Officer much more interesting than before.It is all about differentiating the signal from the noise, andenriching the toolbox to be prepared for adversity. We alllike weather analogies – and economists are similar to theweathermen when it comes to accuracy! These days, youunfortunately wake up and it is raining (or the newspapersays it will rain). What should you do? Stay in or go out there?Umbrellas are here for a reason and it would be foolish tomiss out on sunny intervals because you did not go out,wouldn’t it?

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OVERVIEW

A rotten apple can spoilthe barrelPayment terms, past dues, non-payments and insolvencies:What to expect in 2015?

FARAH ALLOuCHE, MAXIME LEMERLE, MARC LIVINEC, DIDIER MOIzO, SERGEY zuEV

While a decline in insolvencies isapparent worldwide, financialpressures and counterparty risksremain, with high variationamong different world regionsand sectors.

+ In 2014, business insolvencies will decreaseby -12%, as expected;+This year also, past dues will register theirfirst drop since 2011 (-30%);+However, our Global Insolvency Index willremain 12% above pre-crisis levels as growthand financing are still constrained in severalcountries;+ In addition, payment terms - as measured byDSO - posted a further deterioration in the firsthalf of 2014: The global average should reach


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73 days this year, compared toless than 69 days in 2010;+ Last, the number of non-payments globally shouldincrease by +23% in 2014,mainly because of Russia andChina; + As a result, insolvencies areexpected to decrease by -3%only in 2015, as turbulenceswill continue to affect the realeconomy.

Subdued and volatile macrodevelopments, as well asfinancing constraintsremain a drag oncompanies’ profitability andcash Global recovery remains fragile, without any bigacceleration in sight. World GDP growth expec-tations have been revised downward for 2015to +2.9% in real terms (after +2.6% in 2014),standing below +3% for the fourth consecutiveyear and well under pre-crisis trends, whileworld trade should only slightly pick up, onepercentage point at a time, from +3.7% in 2014to +4.5% in 2015 (compared to +7.5% averagefrom 2002-2007). Moreover, recovery remainsunevenly spread around regions and countries.The UK and U.S. carry global growth on theirshoulders, while having challenges of their ownto stand up to: most American companies stillprefer issuing dividends and doing share buybacks to investing capital. Now that quantative

16 countriesto record

an increase or stabilizationin insolvencies in 2015

▶


DSO

Past dues

Non-payments

INSOLVENCIES

A vicious circle?

Source: Euler Hermes

15141312111009080706050403020100

100 11

0 114

105

100 104

8894

115

144

135

129

128

125

110

107

forecasts

Euler Hermes GlobalInsolvency Index(Yearly level, basis100=2000)



6

easing has drawn to a close and markets havestarted to show signs of increased uncertainty,U.S. companies may be less willing to invest. TheGerman economy, once the motor of economicgrowth for the region, has shown troubling signsin the last 2 quarters, adding to the gloomy out-look for the Eurozone (GDP at only +1.0% in 2015from +0.7% in 2014). In addition, the latter seemsto be leaning against the ever-increasing defla-tionary winds: the inflation rate is way below the2% target set by the ECB and the sharp drop inoil prices this year 2014 is only making the matterworse. The decreasing price of oil is in itself asign of weakness in the global economy. China,the second largest oil consumer, marks a “newnormal” of slower economic growth, which is inline with a general trend for other emergingmarkets. In this context, global recovery remainsat the mercy of downside risks, from the credit-crunch in China to disorderly monetary tighte-ning in the U.S. or geopolitical risks. On the cor-porate side, this means that turnovers are oftenvolatile or flat or not growing as fast as expected.This points to fiercer price competition, newpressures on profitability and additional needsfor financing, for working capital requirementas well as for investment. Credit remains de factounder restriction in several countries, becauseof new regulations on the supply side or becauseof levels of indebtedness (too high) or profitabi-lity (too low) on the demand side. In that context,DSO is increasingly used again as a financingtool, raising the risk of a domino effect.

the average DSO worldwidehas started deterioratingagain after a seven year lowin 2010

According to our panel, it seems like the averageDSON worldwide has remained more or lesssteady between 69 and 72 days over the lasteight years. Notably, the global panel DSO star-ted to deteriorate in 2012 and levelled off at ahigh of 72 days in 2013. This year, Euler Hermesexpects to see the DSO trend of 2012 repeat it-self due to the hike in our panel average duringthe first semester, increasing by roughly oneadditional day to 73 days. This trend is partlydue to a lingering slowdown of European eco-nomies, which deteriorates local companies’ability to negotiate better payment terms. Ano-ther interesting point revealed by our panel isthat ratcheted up economic growth in the U.S.does not translate into an improvement of pay-ment terms for American companies (it doesslightly in UK, for example).

There is still some good news. DSO in EasternEurope (Poland and Russia) has remained belowour global panel average since 2010. Russia haseven succeeded in maintaining its average DSOunder two-months, at 53 days. Among matureeconomies, Germany, the Netherlands, UK andthe U.S. have also been able to keep their res-pective DSO under the average. The Netherlands

30

40

50

60

70

80

90

Saudi Arabia

Poland

China

India

Russia

Brazil

14f13121110090807

forecasts

Global panel

Evolution of the average DSOin emerging countries (in number of days)

Sources: Bloomberg, Euler Hermes

30

50

70

90

110

130

Global panel

U.S.

UK

Spain

The Netherlands

Italy

Germany

France

Belgium

1413121110090807

forecasts

Evolution of the average DSOin advanced economies(in number of days)


▶


7

had the best rank in 2013 with average DSOamounting to less than 52 days.

To see the forest for the trees, individual impro-vements in DSO must not conceal a general de-terioration. Italy appears then as disappointing,with average yearly DSO consistently above 110days. France and Spain break away slightly fromthe stubborn Italian trend but remain high. Notto be overlooked is the ongoing deterioration ofChina's DSO over the last four years, revealingproblems with the new ways which Chinesecompanies are being funded as banks have beenspurred into tightening their corporate creditconditions.

Russia and China suffer fromhigher number of non-payments in 2014

After several years of consecutive growth, theGlobal Past due IndexN and the Global Non-payment IndexN reached a peak in 2012, thelatter hitting most countries in our panel thehardest. Spain, for example, saw an almost five-fold increase in the total number of past duesand the unweighted average performance ofour panel stood at +32% for non-payments and+60% for past dues. Last year brought sensibleimprovement in the number of payment inci-dentsN around the world, with a stabilizationof the Past due Index and a -15% drop of theNon-payment Index. The correlation betweenpast-dues and non-payments remain unevenfrom one country to another, partly coming from

the differences in business practices and legalsystems in each country. All in all, the 2013 po-sitive global performance may turn out to beonly temporary, as the ratio of non-paymentsto past dues is expected to return back to 2011levels in 2014 (65%).

On the past dues side, the continuing positivedynamic already registered in the first half ofthe year will lead to another great performancefor the full year 2014. Our Global Past due Indexshould decline by -30%, thanks to an ameliora-tion for the entire panel - except Russia. Never-theless, this progress will not be enough to erasethe 2011 and 2012 increases, and our GlobalPast due Index will remain slightly above 2010level (+2%), while the very latest trends in DSOraise concerns about 2015 past-dues and non-payments.

On the non-payments side, our Global Index isexpected to increase by +23% in 2014. The mainunderlying causes being the 2014 estimates forincidents for China (+103%), which is the secondlargest economy in our panel, and Russia(+161%). However, the negative dynamics inChina and Russia are not the only worryingtrends. The improvement in the number of non-payments has already shown evidence of slo-wing down on the first half of 2014 in some ofthe world's major economies. Notably, the U.S.and UK will see a decrease by -3% and -9% res-pectively compared to -20% and -21% last year,while France should post a trend reversal (from-5% in 2013 to +1% in 2014), limiting the declinein insolvencies.


Non-payments 2011 2012 2013 2014f

Russsia -14% 132% 105% 161%

China 78% 64% -43% 103%

Global Non-payment Index 16% 9% -15% 23%

France 9% -5% -5% 1%

United States 6% -38% -20% -3%

United Kingdom 5% 20% -21% -9%

Spain 5% 52% 27% -11%

Germany -31% -15% -15% -21%

Italy 23% 34% -22% -26%

The Netherlands -16% 49% -30% -31%

Poland -3% 23% 25% -35%

past dues 2011 2012 2013 2014f

Russia -33% 39% 72% 45%

China 51% -5% 15% -22%

France -36% -22% -20% -25%

Global past due Index 15% 27% -0.3% -30%

United Kingdom -5% -7% -28% -34%

United States -2% 23% -1% -37%

The Netherlands -5% 10% -17% -38%

Poland 30% 48% -41% -40%

Germany 7% 7% -16% -41%

Spain 131% 476% -12% -44%

Italy 85% 26% -20% -53%

GlobalNon-payment Index

GlobalPast dueIndex

14131211

estimates

15 16

27

9

-0.3

-15

-30

23

Euler Hermes Global Past dueand Global Non-payment indices(Yearly change in %)


N DSO - for Days SalesOutstanding measures of the average time ittakes in days to collect the cashfrom sales; data are extractedfrom more than 12,300 listedcompanies in 11 sectors and 15countries representing 65% of2014 world GDP (U.S., China,Germany, France, UK, Brazil,Italy, Russia, India, Spain, Turkey,the Netherlands, Saudi Arabia,Poland and Belgium).

N payments incidents measures two kinds of incidents:past dues (extension period,rescheduling) and non-payments (unpaid, claims).Payment Incidents are basedupon Euler Hermes internal datarecorded daily for 17 sectors in10 countries representing 55%of 2014 world GDP (U.S., China,Germany, France, UK, Italy,Russia, Spain, the Netherlandsand Poland).

N Global past due Index reports the yearly weightedaverage in variation of past duesrecorded within Euler Hermespanel, each country beingweighted according to the sizeof its GDP.

N Global Non-paymentIndex reports the yearly weightedaverage in variation of non-payments recorded within EulerHermes panel, each countrybeing weighted according to thesize of its GDP.

▶

▶

Evolution of past dues and non-payments(Yearly changes, in %)


8

Global Insolvencies:historical lows, historicalhighs and a softening globaltempoIn 2014, business insolvencies have confirmedtheir expected downside trend. The total num-ber of insolvencies in our sample of 42 countriesshould register a decline of -4%, with roughly335,200 bankruptcies over the course of theyear. More significantly, our Global InsolvencyIndexN, which factors in the heterogeneity of

national statistics and business environments,and the weights of each country, should finallyregister a drop of -12% (after -2% in 2013). Bydoing so, our Global Insolvencies Index will postthe strongest improvement in recent years, mar-king 5 years of continuous decline and a signifi-cant recovery since 2009 (-23%). Nevertheless,this is not sufficient enough to erase the surgein insolvencies registered during the 2008/2009crisis (+54% between 2007 and 2009). The glo-bal statistics mask huge differences betweenprivate sectors around the globe; 6 out of 10sample countries will register a drop in insol-

DenmarkSouth Africa

PortugalUnited States

EstoniaSpain

SingaporeTaiwanTurkey

SwedenIreland

New ZealandLithuaniaHungary

The NetherlandsGreece

South KoreaLatvia

SwitzerlandNorway

Global Insolvency IndexJapan

ItalyRomania

United KingdomCanada

AustraliaFrance

BelgiumPolandFinland

GermanyAustria

SlovakiaChina

LuxembourgChile

Hong KongCzech Republic

BrazilMorocco

RussiaColombia 13

10109855544322110

-1-1-1-1-2-2-3-3-3-3-4-4-4-4-4-4-5-5-5-6-6-6-6-6-7-10-10

Insolvencies in 2015(Yearly change in %)

Sources: national figures, Euler Hermes forecasts

SpainPortugal

DenmarkLuxembourg

The NetherlandsAustralia

South KoreaColombia

United StatesTaiwanTurkey

Global Insolvency IndexSouth Africa

PolandIreland

New ZealandJapan

SwedenBelgium

GermanyUnited Kingdom

SwitzerlandLithuania

CanadaFinland

ChinaHong Kong

FranceAustriaGreece

ChileBrazil

EstoniaRomaniaSlovakiaNorway

RussiaLatvia

Czech RepublicMorocco

ItalyHungary

Singapore

-1-4-5-5-6-7-8-8-9-9-10-11-12-12-14-15-15-15-17-18-20-20-23-27

2512101010

77665543331000

Insolvencies in 2014(Yearly change in %)


24 countrieswill have more

insolvencies in 2015 than thepre-crisis average (2003-2007)

▶


9

vencies, meaning that 4 out of 10 will recordan increase or stabilization. More often than notmost of the highest drops are observed in coun-tries that have been previously seen the highestincreases in insolvencies.

For 2015, the macroeconomic and financialcontext remains conducive to a further decreasein business insolvencies worldwide, with aslightly higher number of countries posting adecline (+2 countries to 26). However, this willbe to a lesser extent (-3%) and still uneven. Re-gionally, the unbalanced drop in insolvencies is

South KoreaTaiwan

Hong KongCanada

RussiaBrazil

South AfricaChina

GermanyJapanLatvia

PolandAustria

United KingdomUnited States

ChileSingapore

SwitzerlandSwedenSlovakia

Global Insolvency IndexThe Netherlands

NorwayLuxembourg

EstoniaFrance

FinlandBelgium

ItalyColombiaAustraliaDenmarkHungary

TurkeyLithuaniaRomania

New ZealandPortugalMorocco

GreeceIreland

Czech RepublicSpain 586

371244195180126125123115857666605954413735282828271293

-6-8-8-9-10-12-16-18-29-31-37-38-42-56-58-68-70-76

Insolvencies in a post-crisis world(2014 level versus 2003-2007 average, in %)


N Global Insolvency Index is the weighted sum of nationalindices, each country beingweighted by the share of its GDPwithin the countries used in thesample (42 countriesrepresenting 83% of global GDPin 2014). National indices arebased upon national sourcesand Euler Hermes internal dataon insolvencies, using a base of100 in 2000.

expected to: (i) diminish gradually reaching -6%in 2015 in North America (after -14% en 2014);(ii) decelerate in Western Europe (from -14%in 2014 to -3% in 2015) and in Central and Eas-tern Europe (-2% in 2015, after -7% in 2014) ;and (iii) hit pause in Asia Pacific (0% in 2015after -9% in 2014). Conversely, bankruptcies willrebound in Latin America (+9% for 2015).

The challenge is to distinguish today's riskycountries from strong countries with higherrisks of weakening. In this respect, here are thefive groups of countries that should be moni-tored separately:

GROup 1Countries with insolvencies at a (record) lowlevel, but with factors limiting insolvencies thatmay not continued be extrapolated: U.S., Ca-nada, UK, Japan, South Korea, Taiwan, SouthAfrica, and to a lesser extent Sweden.

GROup 2Countries with insolvencies at a (record) lowlevel in 2014, but expected in rebound in 2015:Germany, Austria and Hong Kong.

GROup 3Countries with (huge) progress but where risksare still very present, because the decreases ininsolvencies take place after major surges: Den-mark, Ireland, Lithuania, the Netherlands, Por-tugal, Spain, Turkey and to a lesser extent Swit-zerland; or because a rebound is expected in2015: Belgium and Luxembourg

GROup 4Countries with a (record) high level of insol-vencies and are struggling to stabilize: France,Italy, Finland, Greece, Norway, Hungary, CzechRepublic, Slovakia, Romania and Morocco.

GROup 5Emerging economies already facing uncertain-ties or a deteriorating trend: China, Russia, Brazil,Chile, Colombia and Poland. ◼

▶

Insolvencies down:more than -5 %

Insolvencies down: between -5% and 0%

Insolvencies on the rise:between 0 % and +5 %

Strong rise in insolvencies:more than + 5%

*Regional Index basis 100=2000

North America

Latin America

Western Europe


10

FORECAStS2015

GlobalinsolvencyindexChange in 2015:

-3%

Business Insolvency Outlook

Changein 2014:

-12%

2013 Change Change Number Change 2014 2015 211 5% -14% -3% 25,995 -8% -6% 2% 62,848 3% 1% 0% 25,462 -15% -5% -1% 14,086 12% 10% -2% 8,903 14% -27% -6% 9,431 13% -18% -4% 4,570 1% -5% -3% 7,701 3% -8% -5% 4,564 20% 6% -3% 11,740 11% -7% 1% 5,459 -10% 3% 3% 4,993 -8% -20% -10% 3,702 7% 0% 2% 1,540 10% 3% -4% 6,030 -10% -23% -7%

1,365 -19% -9% -5% 1,049 0% -20% 5%

2013 Change Change Number Change 2014 2015 47 14% -1% 9% 1,680 12% 4% 9% 352 21% -15% 13% 143 11% 3% 5%

2013 Change Change Number Change 2014 2015 87 -17% -14% -6% 33,212 -17% -15% -6% 3,187 -2% -1% -1%

Regional Index*United StatesCanada

Regional Index*BrazilColombiaChile

Regional Index*GermanyFranceUnited KingdomItalySpainThe NetherlandsSwitzerlandSwedenNorwayBelgiumAustriaDenmarkFinlandGreecePortugalIrelandLuxembourg

Asia Pacific

Africa & Middle East

Central & Eastern Europe


11

worldwide in 2015

Change in 2013:

-2%

2013 Change Change Number Change 2014 2015 265 4% -7% -2% 8,983 -13% 7% 10% 17,400 8% -12% -5% 926 -2% -10% 1% 5,902 57% 10% 8% 29,997 1% 5% -1% 13,420 -40% 12% -4% 1,321 25% 6% 4% 1,552 11% -4% -4% 820 -7% 7% -3% 459 -7% 5% -6%

2013 Change Change Number Change 2014 2015 101 1% 0% 1% 2,374 -13% -11% -10% 4,397 18% 10% 10%

2013 Change Change Number Change 2014 2015 67 -4% -9% 0% 2,555 -4% 0% 5% 10,855 -10% -8% -2% 8,124 3% -17% -1% 1,001 -18% -15% -4% 209 -18% -14% -6% 126 -17% 25% -6% 274 -12% 0% 5% 373 -14% -9% -4%

Regional Index*ChinaJapanAustraliaSouth KoreaTaiwanSingaporeHong KongNew Zealand

Regional Index*South AfricaMorocco

Regional Index*RussiaTurkeyPolandCzech RepublicRomaniaHungarySlovakiaLithuaniaLatviaEstonia


12

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

151413121110

+0%

+5%

forecasts

-60

-40

-20

0

20

40

60

80

100

120

Non-payments (y/y in %)

DSO (in numberof days)

14131211

forecasts

DSO and non-payments(2011-2014)


Corporate insolvencies(2010-2015)

Sources: China Court, Sinotrust, Euler Hermes

+7 days Expected increase

in Chinese DSOin 2014

N Information andCommunicationsTechnology (ICT)

Chinese GDp growth isexpected to decelerate to+7.4% in 2014 and +7.3% in2015Government efforts to rebalancegrowth away from investment to-ward consumption are underway.Investment is expected to slowdown reflecting the tightening oflending rules to limit shadow bankactivities, overcapacity issues in theproperty market and more fiscaldiscipline for local governments.Macro-policy will likely support theeconomy in the short term, servingto avoid a sharp deceleration in ac-tivity. This includes targeted fiscalstimulus (tax cuts for SMEs, tax re-bates for exporters) and targetedmonetary easing (lower cost ofcredit for SMEs and rural compa-nies). Exports will likely act as acushion with an increase ofUSD300 bn in 2014-15 benefittingfrom rising global demand.

Insolvencies to stabilize in 2014and increase in 2015Following 4 years of consecutivedecline, the total number of insol-vencies has been stable since 2012.In 2014, Euler Hermes expects thetotal number of insolvencies tocontinue to stay at a decade-lowlevel (2,555 cases). However, theofficial statistics probably mask thetrue picture and this trend may beworse in reality. Insolvency proce-dures in PRC jurisdiction are com-plicated and expensive, so a signif-icant number of Chineseenterprises find alternative solu-tions to avoid filing for bankruptcy.Given the issues that the Chineseeconomy is facing right now, EHexpects to see a +5% increase intotal number of insolvencies in2015.

Indeed, Chinese companiestend to use longer paymentterms to finance their workingcapital requirement Chinese DSO is underperforming,despite the improvement as awhole in other emergingeconomies. In 2011, Chinese DSOwas roughly the same as our panelaverage at 69 days. Four years later,China is expected to be around 90days, namely 15 days higher thanthe global panel average. The ex-planation likely lies in the strongnew credit restrictions which arepart of the government’s effort tocurb shadow banking. It appearsthat the ICTN and Industrial goodssectors in China have suffered themost from lengthening paymentterms. Their global DSO rose by 1.5times between 2007 and H1 2014,

at the end of this year it will exceedfour-months. The increase in latepayments compounds the situa-tion, raising the amount of DSO asa whole.

As a result, non-payments areexpected to increase sharply by+103% in 2014 Deteriorating payment terms areunsurprisingly impacting compa-nies’ ability to fulfil commitments.The sectors suffering most fromthe increase of non-payments areFood (+473%), Chemicals (+214%)and Electronics (+54%). Althoughpast dues in China have declinedin 2014 (-22%), their frequency hasbeen 33% higher than non-pay-ments’, with significant deteriora-tion for Construction (+36%). Elec-tronics is traditionally the Chineseflagship, but is showing loss of im-petus with a +10% increase in pastdues. The Chinese market is unde-niably presenting warning signalsat every level, from macro to micro,and requires close monitoring in2015.

ChinaCracks in the Great Wall


13

Geopolitics interferes with eco-nomic performanceTensions with the West over theconflict in Ukraine, including sanc-tions and counter-sanctions, havetaken a heavy toll on the economy.Against the background of strongcapital outflows, an acceleratingdepreciation of the RUB (down 30%against the USD year-to-date), in-creasing borrowing costs for Russ-ian companies, reduced trade withthe West and rising inflation(reaching a 39-month peak of 8.4%y/y in October), economic activityis likely to decline markedly in H2after +0.8% growth in H1. Sharplyfalling global oil prices since mid-2014 add to problems as thebudget balance will deteriorate,leaving less room for fiscal stimu-lus. Euler Hermes expects full-yearGDP to contract by -0.6% in 2014,

followed by modest growth of+0.5% in 2015. Risks to this forecastare firmly on the downside, espe-cially as further sanctions could de-rail the economy even more.

Company longevity is threat-ened by economic difficulties 2013 final insolvency figures wererevised upward to almost 9,000cases instead of 8,100 cases,meaning that total number of in-solvencies decreased by -13% in-stead of -22%. This year, the positivedynamic started in 2013 will not re-peat itself. Based on the latest avail-able insolvency statistics, Euler Her-mes expects to see 9,600 cases(+7%) in 2014. Partly, the negativetrend is due to ongoing crisis in theRussian tourism industry, which hasalready provoked pay outs of morethan 90 million USD by Russian in-surers according to RossiyskayaGazeta. EH expects this negativetrend to continue in 2015 (+10%).

Russia succeeded in maintain-ing short payment terms Contrary to China, Russia kept DSOunder a two-month period (55days on average), even if it wors-ened overall when compared to the2007 level of around 40 days. As aresult, DSO remains below theglobal panel average. In 2007, itwas around 30 days below theworldwide average, while in 2010Russian DSO was 15 days under theaverage DSO of our global panel.

In 2014, we expect it to be around20 days lower than the DSO of ourglobal panel. Russian listed com-panies are seeking to improve theirmanagement skills and paymentreputation in order to gain favourin the eyes of businesses abroad,especially from potential investorsrequired for new financing. A focuson Russian sectors shows thatChemicals and ICT perform verywell in terms of DSO (scoring lessthan one month) as opposed to thehealth sector, which suffers fromlengthening DSO (+40% since2007).

tough year ahead for non-pay-ments and past duesPayment incidents have been in-creasing, especially unpaid debts,which have experienced triple digitgrowth since 2012, reaching theirpeak at +161% this year. Mean-while, past dues recorded a mere+45% increase. The deterioratedenvironment in 2014 explains thisunfortunate performance and fore-tells a tough year ahead. Food andRetail, bearing the largest numberof payment incidents, reports re-spectively +42% and +63% of pastdues and +107% and +264% fornon-payments. These are likely tocontinue over 2015 as a result ofthe ban on agri-food imports andtheir consequences on retailing ac-tivities, whose volumes will un-doubtedly suffer.

Russia Prepare for the worst, hope for the best

30

40

50

60

70

80

Average DSO

Russian DSO

1413121110

forecasts

Average DSO evolution(2010-2014, in number of days)


-50

0

50

100

150

200

Past dues

Non-payments

14131211

forecasts

Non-payments and past dues(2011-2014, y/y%)

Source: Euler Hermes+10%Expected insolvenciesin 2015


14

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

151413121110

-6% +2%

forecasts


Sources: DeStatis, Euler Hermes

-40 -30 -20 -10 +10 +20 +30

Construction

Retail

Healthcare

Automotive

Chemicals

Industrial goods

Food

ICT

Household goods

Oil and gas +29

+7

-4

-11

-13

-16

-25

-25

-32

-3871days

Average DSO by sector in 2014(Spread to the national average)

Sources: Bloomberg, Euler Hermes-1.7%Decrease in operatingprofit of Germancompanies in 2014

Internal and external factorsthreaten German wealthFollowing very strong real GDPgrowth of +0.7% q/q in Q1, theeconomy has lost momentum asreflected in the -0.2% q/q GDP con-traction in Q2 as well as in monthlyfigures for industrial productionand economic sentiment indicatorsfor H2. The sharp slowdown waspartly due to a mild winter whichled to considerable frontloading ofconstruction activity in Q1, but isalso a result of modest external de-mand stemming from the weaker-than-expected recovery in majorEurozone trading partners as well

as reduced trade activity with Rus-sia. Going forward, domestic de-mand is likely to remain solid whileany potential recovery of externaldemand will be moderate. EulerHermes expects full-year real GDPgrowth of +1.4% in 2014 and +1.2%in 2015, with ongoing geopoliticaltensions posing some downsiderisk to this outlook.

Increased cost of insolvenciescasts doubt on the presumedrespite of business failures The total number of insolvencies isforecasted to decrease in 2014 (-6%)to 24,490 cases, the lowest levelsince 2000. However, the increasein the amount of legacy liabilitiesis alarming (to 1.3 million euros perbankruptcy in average in 2014compared to 0.8 million euros in2008). Another worrying trend in2014 is the halt in the growth inoperating profits of German busi-nesses that started in 2012, leadingto a plunge of profit expectationsin major German industries (Auto-mobile, Electronics, Machinery andChemicals). In 2015, Euler Hermesexpects to see a +2% increase inthe total number of insolvencies.

DSO has not been as low asexpected in GermanyOn average, DSO in Germany re-mains underneath that of our

global panel by a tiny two-day mar-gin. By sector, Germany succeedsin maintaining DSO under a two-month level in all sectors exceptICT and Oil & Gas. Close businessties between Russia and Germanyrelated to the energy sector mightprovide an explanation. This yearthings may be about to change, asthe average DSO in Germany is ex-pected to rise by nearly 10 days in2014. The growing DSO might re-flect the underrated risks posed bythe ongoing European slump.

payment reputation is upheldby satisfactory payment indica-tors Between 2013 and 2014 pastdues nearly halved, with the blueribbon being granted to Construc-tion (-48%). Simultaneously, non-payments have decreased by -21%,driven by a decrease in Construc-tion, Metals and Household Equip-ment, the three being interdepend-ent. However, this hard earnedperformance may hide an under-lying threat. After four years of con-tinuously raising the bar, certainsectors such as paper or transporthave reached their limit and arenow experiencing a reversal trend,with the number of non-paymentsincreasing by +9% and +8% respec-tively.

GermanyAll clear! So far…


15

Exports to Russia

Exports to Germany

Exports toother countries

4%

70%

26%

Polish exports in 2013

Sources: ITC, Euler Hermes

30

40

50

60

70

80

Food

All sectors

14131207

forecasts

Average DSO in Agri-foodvs. country average DSO(2012-2014, in number of days)


USD13bnPolish exportsto Germany and Russiaat-risk in 2015

the star performer among thelarge Eu economies postedstrong growth of +3.4% y/y inH1 2014 This was driven by soaring fixed in-vestment (+14.8% y/y) and a largepositive contribution of inventories(+0.8pps). Private and public con-sumption also grew (+2.7% and+0.7% y/y, respectively) while netexports subtracted -0.5pps from H1growth as the increase in exports(+6.7% y/y) was outpaced by im-ports (+8.4% y/y). However, earlyindicators for H2 point to a moder-ation of growth, signaled by slow-ing expansion of industrial produc-tion, construction and retail sales.The Central Bank lowered its policyinterest rate in October to supportthe economy and to fight deflation-ary pressures (inflation has beennegative since July 2014). EulerHermes forecasts full-year GDPgrowth to remain robust at about+3% in both 2014 and 2015.

After a -10% decrease in 2014,insolvencies could increase by+1% in 2015Fuelled by robust economic growththis year, the total number of insol-vencies is expected to get down to

830 cases. The overall improve-ment could have been even betterif it were not for the deteriorationseen in some sectors in Septemberthis year. Notably, the beginning ofautumn recorded a sharp increasein insolvencies in the agri-food sec-tor, with 11 companies filing forbankruptcy (4 producers and 7wholesalers). EH expects the neg-ative trend to continue into 2015for several reasons. Although,macroeconomic fundamentals areexpected to stay solid, the conflictwith Russia and the slowdown ofthe German economy is expectedto be painful for Polish exports in2015. Another possible headwindis the disease identified in pigs thissummer, which will certainly resultin a slowdown of domestic de-mand for certain meat productsnext year. Due to these factors,Euler Hermes expects to see a slightincrease in insolvencies in 2015(+1%).

poland has kept control over itsDSODSO in Poland has consistentlybeen beneath the average of ourglobal panel. In 2012, for example,polish DSO was a whole 3 dayslower. Poland has succeeded in notslipping up since then and is ontrend to hit a seven-year low for itsDSO at the end of 2014. Two sec-tors stand out for their contributionin pushing down the average: retailand energy. Poland ensures quickpayment for strategic suppliers inthese sectors, especially consider-

ing a heavy dependence on Russiangas supply. Its short DSO in the en-ergy sector may stem from its de-sire to keep the Russian oil & gasflow open.

Efforts on payment terms paidoff in past dues and non-pay-mentsWhile past due events decreasedby -35% (except for Services, theonly sector to record growth), non-payments fell by -40%. The exem-plary payment behavior towardsRussia did not spare Poland fromthe EU food ban, a key market forPolish agri-food exports. The im-provement achieved during thefirst three quarters of 2014 couldbe hampered in 2015 by the highvolatility of business conditions inPoland and the dampening situa-tion of strategic trading partners;Russia and Germany, whose de-mand has been slowly decreasing.

PolandBetween a rock and a hard place

+2 daysExpected increase

in average DSOin France in 2014


16

FranceWork in progress

France continues to stagnateand drags on Eu economicrecovery While most of the euro-zoneeconomies are expected to accel-erate in 2014, France will mostlikely repeat last year’s growth fig-ure (+0.4%), at best. The govern-ment still has a lot of work to do toaddress chronically high unem-ployment, lackluster investmentand deteriorating competitiveness.Recent measures, such as the Re-sponsibility and Solidarity Pacts, are,however, a step in the right direc-tion. As such, moderating laborcosts (even in non-tradable sec-tors), a lower Euro and rising worldtrade will benefit French exportersin 2015. In conjunction with a mod-erate rebound in corporate invest-ment, this should allow French GDPgrowth to double in 2015, to +0.8%.

the sluggish economic back-ground does not help drivedown insolvencies The total number of French com-panies filing for insolvency proce-dures has been increasing since2012, despite improvement in2010 and 2011. The cumulative fig-ures in the 12-months leading upto September 2014 reveal a newhigh of insolvencies since 2009(63,313 cases). After this negativeperformance in the first part of theyear, the overall figure for 2014 isexpected to be marginally higher(+1%) than 2013. Compared toprevious years (+2% in 2012 and+3% in 2013), this could mean adeceleration in the growth of totalnumber of insolvencies. Conse-quently, Euler Hermes forecastsstabilization in 2015.

Stabilizing insolvencies go handin hand with an almost stablenumber of non-paymentsThe inertia of the French economyis accurately reflected by the non-payment indicator, neither deteri-orating nor improving substantially,standing at a mere +1%. This sta-bilization is mainly attributable toTextile and Paper having made ma-jor progress with -24% and -34% re-spectively. This apparent peaceful-ness is fragile with some sectorsalready showing early warnings. Forinstance, Metals, Automotive,Transport and IT Services haverecorded an average +13% increasein non-payments. Caution is alsonecessary for Construction. Thesector’s reporting a +1% increasein non-payments is a striking dif-ference compared to other euro-

zone economies, as even Italy ex-perienced a -39% drop this year. Onthe other hand, past dues have notremained stable showing a -25%improvement this year. Textilestands out once again posting arecord level of improvement in 4years (-50%).

Improvement in payment termshas reached its limitFrom 2008 and up until now,French companies have been ableto consistently negotiate betterpayment terms with their cus-tomers. The Law for Modernizationof the Economy, enacted in 2008,has undeniably contributed to thisperformance. It enabled an im-proved cash position amongstcompanies, thanks to lower work-ing capital requirements. However,over the last 2 years the averageDSO of listed companies in Francehas started to loosen up, weighingon company cash situations. In2014, Euler Hermes expects theDSO figure to climb by 2 days toreach a national average of 83 days.

58,000

59,000

60,000

61,000

62,000

63,000

64,000

151413121110

+1%

+0%

forecasts



Italy

Spain

Germany

United Kingdom

France +1%

-7%

-30%

-35%

-39%

Non-payments in Construction (2014/2013, in %)



17

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

16,000

18,000

151413121110

+10%

-2%

forecasts

Corporate Insolvencies (2010-2015)

Sources: Istat, Cerved, Euler Hermes

14f131211

85%

26%

-20%

-53%

Past dues(y/y, in %)


-26%Decrease in non-

payments in 2014

2015: End of the recession?Growth is nonetheless expected toremain very weak at +0.3% (after -0.3% in 2014). Exports will expandat a stronger pace in 2015 (+2%)helped by the lower euro, but op-portunities could be limited by theslow competitiveness adjustmentwhen compared to peers. In-creased confidence by Italians andabroad would help consumptionpick up slightly and private invest-ment to stabilize after four years ofcontraction. The latter will still re-main 20% below the Q1 2008 peak.Indeed, the credit crunch remainssevere and credit should only sta-bilize in 2015, helped by ECB meas-ures. Days Sales Outstanding areexpected to remain elevated, at100 days in 2014. Activity continues

to be hindered by weak domesticdemand and downside pressureson prices continue to drag onturnover which fell by -2% since thestart of the year in the manufac-turing sector.

After a +10% increase in 2014,insolvencies could start torecedeEuler Hermes expects to see 15,600insolvency cases this year (+10%).The gloomy trend is mostly due tothe weak economic environment,which weighs on corporate mar-gins. The country’s average oper-ating margin will continue to de-cline steadily this year (-0.3%). EulerHermes expects this negative trendto finally end in 2015. The forecastfor next year includes a slight de-crease in insolvencies (-2%),boosted by the recovery.

payment in Italy is traditionallylongItalian DSO falls far behind Europe,exceeding 100 days on averageevery year. It seems Italian busi-nesses have become accustomedto bearing high DSO, with few Ital-ian sectors managing to keep their

average below three months. Theautomotive sector is surprisinglyone of them, along with retail andthe agri-food sectors (48, 87 and75 days respectively). The first sec-tor is even below a two-month pe-riod; a performance in itself! On thecontrary, since the beginning of thedecade Chemicals and, more so,Construction and ICT are burdenedwith the highest levels of DSO. ICTis expected to reach a high of 130days in 2014.

Longer DSO do not necessarilyimply poor payment behaviorIn regards to payment behavior,Italy has achieved a remarkableyear in 2014, with past dues andnon-payments decreasing by -53%and -26% respectively. Construc-tion, a traditionally difficult sector,even broke the record with a 65%drop in past dues. This perform-ance was achieved in an unfavor-able environment – weak domes-tic demand, difficult access tocredit, unsufficient business con-fidence. This may indicate Italy ison the verge of getting back ontrack, with a healthier business en-vironment.

ItalyTime for the show


18

0

2,000

4,000

6,000

8,000

10,000

151413121110

-18%

-4%

forecasts



-38%Decreasein past duesin 2014

to growth their topline. Further, theweak state of the banking sectorcontinues to weigh on credit (-3.2%y/y in September).

After record high level of insol-vencies last year, 2014 will bearmore positive newsEuler Hermes expects the totalnumber of insolvencies to decreasedown to 7,690(-18% in 2014; +27%2014/2007). The positive improve-ment is in sync with expected eco-nomic recovery. Yet, the good newsshould be taken with the pinch ofsalt, the countries strong export ori-entation is both a strength and aweakness. Going forward, keepingan eye on what is happening inGermany, the Netherlands maintrade partner is crucial. If there isno external shock to the economy,Euler Hermes expects to see a con-tinued decrease in insolvencies in2015 (-4%).

Good DSO managementexplains the insolvency trendreversalThe Dutch succeeded in reducingDSO by around 10 days between2007 and 2014, now tallying 20days below the average of ourglobal panel. It should be noted thatthe Netherlands perform particu-larly well in abiding by terms of pay-ment. No doubt Dutch companieshave set strict business rules inmaking DSO evolve within a solidframework. Additionally, being inthe middle of the worldwide value

the Netherlands is slowly exit-ing two consecutive years ofrecessionGrowth, albeit weak, is predicted torebound in 2014 (+0.6%) with netexports being the highest contrib-utor to GDP growth (+0.8pp). In2015, economic activity is expectedto gain momentum (+0.9%) on theback of a pick-up in private con-sumption and stabilizing private in-vestment. Although the outlook forexports has deteriorated lately,given the soft economic momen-tum in the Netherlands’ main Eu-ropean trade partners and the ex-pected recession in Russia, netexports will contribute by +0.3ppto GDP growth in 2015. Yet, GDPgrowth remains low compared topre-crisis levels and weak domesticand external demand, on top ofdownside pressures on prices, willmake it complicated for businesses

chain means many sectors are paidfaster. When looking at each sector,only one falls short; health sectorwith DSO (a little) above two-months. In the Netherlands, noother sector posts DSO above 60days, with the shortest delay attrib-uted to the retail sector at 10 days.

Computer & telecom, textileand transport sectors to postgrowth in non-paymentsPast dues and non-payments drewback by -38% and -31% respec-tively. Overall, since 2012, thereduction of non-payments hasbeen faster than that of past dues.This was made possible, despitethe listless economy, through goodpayment terms and a drawback ininsolvencies. That being said, a setof outliers must be monitoredcarefully. Computers & Telecoms,Textiles and Transport sectors haveposted a record growth in unpaiddebt (non-payments respectively+38%, +15% and +18%). Thesesectors often lack competitivenessbecause of heavy fixed costs(expensive raw materials, energy,wages, etc…) and are particularlysensitive to foreign competition.

The NetherlandsDancing to the beat of world trade

-50 -40 -30 -20 -10 +10 +20 +30

Retail

Healthcare

Oil and gas

Household goods

ICT

Food

Industrial goods

Chemicals

Construction +27

+16

0

-1

-6

-8

-10

-17

-48

54days

Average DSO by sector in 2014(Spread to the national average)



19

CommoditiesPaper

Household EquipmentElectronics

ConstructionMachinery & Equipment

IT ServicesTransportChemical

FoodMetal

AutomotiveTextileRetailTotal

Computer & TelecomServices

-8-11-22-22-26-27-29-31-32-33-34-35-39-41-43-46

42


Non-payments by sector(2014/2013, in %)

30

45

60

75

90

105

120

Average DSO

Spain DSO

14f13121110090807

forecasts

DSO evolution for Spain and average(2007-2014, in number of days)


-6%Decrease in

expectedinsolvencies in

2015

the Spanish economy is recov-ering but Euler Hermes does notexpect it to accelerate signifi-cantly in 2015Nevertheless, less austere fiscal pol-icy and a continued strengtheningof investment should supportgrowth, while private consumptionshould moderate as consumer con-fidence softens. Export growth willbe capped by the subdued outlookof Spain’s main trading partners.Euler Hermes expects Spain togrow by +1.2% in 2014 and by+1.3% in 2015. Several bottleneckspersist and prevent real accelera-tion of activity. Notably, deflationarypressures are still very strong andfinancing conditions for corpora-

tions are stretched. Moreover, in-terest rates on banking loans re-main relatively high despite thecuts in the key rate of the ECB. Thecurrent political risk related to Cat-alonia’s independence needs to bereduced if Spain wants to retrievea growth pace firmly above 1% inthe medium-term.

2014 marks a turning pointwith a first decrease in insolven-cies in 4 yearsEuler Hermes expects to see insol-vencies fall to 6,500 cases in 2014(-27%). However, there is a spoonof tar in the barrel of honey. Thenumber of insolvencies remains farabove the pre-crisis levels (close to1,000 cases) or above the start ofthe crisis in 2008 (less than 3,000cases). What is more, the uncer-tainty surrounding Spain’s maintrading partners (France and Ger-many account for more than 30%of Spanish exports) is adding doubtabout next year’s performance. EHexpects insolvencies to continue toimprove in 2015, but at a slowerpace (-6%).

Hard work successfully reducedDSO, but it is not settled yetSpain has succeeded in reducingits global DSO by around 10 days

since 2007, despite having sufferedgreatly from the 2009 crisis. As theSpanish economy seems closer tobeing back on track, its DSO hasstarted loosening up. We expect itto be close to 100 days in 2014. Theblame is to be taken by Construc-tion and Industrial goods, the latterhaving increased by 13 days in2014. The outlook is not positive,especially considering lagging Eu-rozone growth.

Continued increase in non-pay-ments in Services is the scars ofthe 2009 crisisAfter a terrible year in 2012 (havingexperienced a fivefold increase inpast dues, +52% in non-payments)and lackluster 2013 performance,figures are finally reporting a long-awaited improvement. Past duesnearly halved, by -44%, mostlythanks to Retail and Food sectors.In parallel, non-payment reducedby -11%, with all sectors reportingimprovement except Services, forwhich special care is still required(+42% in non-payments). Apartfrom services, this generally satis-factory performance is expected tocontinue in 2015, supporting theforecast drawback in bankruptcies.

SpainIt is not time to let up


20

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

151413121110

-5%

-1%

forecasts


Sources: DTI, Euler Hermes

+2.5%Expected GDPgrowthin 2015

ductivity continues to fall in themanufacturing sector.

In 2014 Euler Hermes expectsthe total number of insolvenciesto fall to 24,100 cases (-5%)The positive dynamics in recentyears is not surprising givenBritain’s rapid economic recovery.However, in 2015 EH expects theimprovement to slow down to -1%for several reasons. The country isalso likely to be affected by externalfactors, such as economic woes ofFrance and Germany, its majortrading partners. What is more, in-solvencies in UK are down to the2007 level, reinforcing the idea thatthe insolvency figures are likely tohit a plateau in 2015.

DSO up by 5 days in 2014Having remained 7 days below thatof our global panel by in 2007 andimproving to 16 days below in2012, the UK rode the wave of eco-nomic recovery and managed tokeep control of its average DSO.But, as the economy has gottenback on track, British companiesnow allow more time in paymentterms, which is why Euler Hermesexpects the British DSO to be at 65days in 2014 (+18% from 2013).However, the United Kingdom will

the united Kingdom willremain the fastest growingWestern European economy in2015Growth is expected to slow to+2.5% after +3.0% in 2014. Privateconsumption will remain one ofthe main drivers of growth, sup-ported by an adjustment in savingsand the ongoing labor market re-covery, with unemployment rateexpected to reach 5.8% in 2015. Ac-tivity in the services sector is likelyto remain strong as suggested bythe business confidence surveys.Interest rates will normally stay atrecord low levels until Q2 2015given low inflation and subduedwages growth. Firms’ fiscal pres-sure is significantly less high whencompared to peers and the corpo-rate tax rate will be again loweredin April 2015 by 1pp to 20%, thelowest level in the G-20. However,profitability is still fragile with mar-gins down 3pp since 2007 and pro-

manage to stay under the globalaverage (of 74 days in 2014). Cau-tion should be taken in certain in-dustrial sectors to not loosen up toomuch. According to our forecast,the health sector may see its DSOrise by 20 days in 2014 due to se-vere reorganization within its publichealth insurance scheme, theNHSD. The ICT sector is also to bemonitored, as its DSO may be upby 13 days over the ongoing year.

Fewer past dues but beware ofpockets of payment riskCashing in on a sound business en-vironment and positive GDPprospects, the United Kingdom hasexperienced its fourth consecutiveyear of decline in past dues. The in-dicator reports -34% on average,from -16% for Paper and, at the top,-49% in the Electronic segment.Companies’ margins remain fragileand still require careful manage-ment, especially in the automotivesector. Although this sector faredbest among European countries,even experiencing strong momen-tum, it reports a +38% increase ofnon-payments. This could becaused by a strained cash positionin light of additional business ac-tivity, but in any case, requires mon-itoring in 2015.

United KingdomKeeping faith

Retail

Telecoms

Automobiles and parts

Food and beverages

Household goods

Total

Construction

Industrial goods

Oil and gas

Chemicals

Technology

Healthcare 93

82

81

69

69

65

65

51

50

41

26

55

Average DSO by sector in 2014(in %)



21

CommoditiesIT Services

AutomotiveRetail

Computer & TelecomTextile

ConstructionUnknown

TotalElectronics

Machinery & EquipmentFood

Household EquipmentMetal

TransportServices

PaperChemical -14

-26-28-29-29-32-33-36-36-37-37-37-37-37-44-45-47-50


Past dues by sector in 2014(2014/2013, in %)

0

10

20

30

40

50

60

2013

2007

ICT

Reta

il

Hous

ehol

d go

ods

Oil a

nd g

as

Indu

stria

l goo

ds

Heal

thca

re

Food

Cons

truct

ion

Chem

icals

Auto

mot

ive

Average DSO in the U.S. in 2013

Average DSO by sector(2013/2007, in number of days)


28,350Registered insolvencies

in 2014

the u.S. economy has contin-ued to send positive signals thisyearUnemployment was down to 5.9%in September and the 2014 GDPgrowth forecast is +2.1%. The dy-namics seem to have created apositive environment for the endof the U.S. Federal Reserve’s quan-titative easing program howeverthere is trouble beneath the sur-face. The average real hourly wagein the U.S. declined in the first partof 2014 and housing market datais still disappointing. EH expects theU.S. economy to grow by +2.6% in2015.

the number of companies filingfor bankruptcy has been dwin-dling since 2010Continuing the trend in 2014, thetotal number of insolvencies is ex-pected to drop by -14% down to28,350 cases, the lowest level since2009. Corporate profit marginshave reached a new high in nomi-nal terms and have fully recoveredto the pre-crisis levels (10% of gross

value added). Considering the sta-ble decrease in insolvencies andhealthy corporate profits, Euler Her-mes expects insolvencies figures tocontinue improving but at a slowerrate in 2015 (-6%). This expectationis supported by the analysis of therecent data of payment incidents.

the past dues have decreasedunevenlyThe number of payment incidentsrecorded is at its lowest level in fouryears. Supported by a favorableeconomic and business environ-ment, the U.S. has succeeded in de-creasing past dues by -37% thisyear. Sectors have positively con-tributed to this performance. How-ever, Chemicals, Paper and Metalhave seen past dues declined lessthan other sectors (-14%, -26% and-29%). Automotive sector is alsoraising concerns. Although, in Oc-tober the industry registered arecord high since 2004 with 1.27million vehicles sold, there was asimultaneous increase of non-pay-ments (+32%). 2015 prospects aredefinitely encouraging, but thisdoes not exclude a certain degreeof risk.

Higher-than-average DSO inHealth and ICt: the end of abubble?The U.S. succeeds in keeping itsglobal DSO at the steady level of 55days a year over time, i.e. 15 days

on average below the DSO of ourglobal panel. Euler Hermes expectsAmerican DSO to maintain its pre-vious level once again for 2014, nosmall feat considering its stabilityover such long a period. In 2013,two sectors experienced longerthan the average DSO, Health (69days) and ICT (64 days). The ele-vated DSO in the American health-care industry might be a sign of on-going adjustment of the industryto the medical care reform enactedin 2010.

United StatesInch by inch


22

Date Country Company Last known turnover (in EUR millions) Activity

Taiwan Wintek Corporation 1 910 Manufacture of consumer electronicsSouth Korea Moneual Inc. 910 Manufacture of consumer electronicsSouth Korea Ultra Construction & Engineering Co.,Ltd 450 Construction of residential and non-residential buildingsUnited States Endeavour International Corporation 266 Extraction of crude petroleumUnited States Gt Advanced Technologies Inc. 235 Manufacture of electronic components and boardsNetherlands Nedstaal B.V. 98 Manufacture of basic iron and steel and of ferro-alloysCzech Republic Tatra, A.S. 71 Manufacture of motor vehiclesNetherlands Halfords 65 Retail sale of other goods in specialised storesItaly Migliore S.P.A. 64 Retail sale in non-specialised storesNetherlands Brema-Air Ii B.V. 35 Manufacture of products of wood, cork, straw and plaiting materialsPoland Spółdzielcza Kasa Oszczędnościowo-Kredytowa Wspólnota 26 Other financial service activities, except insurance and pension fundingRussia Paraman Ooo 3 Wholesale of household goodsRussia Ehnergomash Zao 2 Manufacture of steam generators, except central heating hot water boilersSouth Africa Apollo Tyres Africa n.a. Manufacture of rubber productsIreland Fosset Brothers Circus Limited n.a. Amusement and recreation activitiesUnited States NII Holdings, Inc. 3 754 Wireless telecommunications activitiesUnited Kingdom Phones 4U Limited 1 205 Retail sale of information and communication equipment China Zhongjie Holding Company 709 Manufacture of domestic appliancesNetherlands Swets 550 Trusts, funds and similar financial entitiesSouth Africa Ellerine Furnishers 307 Retail sale of other household equipment in specialised storesUnited Kingdom Mcarthur Group Limited 94 Wholesale of other machinery, equipment and suppliesRomania Elit Srl 87 Processing and preserving of meat and production of meat productsPoland Elektrotechnika "Mors" S.Z.O. Odp. 67 Non-specialised wholesale tradeNew Zealand Postie Plus Group Ltd 58 Retail sale of other goods in specialised storesNetherlands Van Hattem Vlees B.V. 46 Manufacture of beveragesPoland Pol-Dróg Piła S.Z.O. Odp. 36 Construction of roads and railwaysSweden Byggentreprenör M. Sundström Aktiebolag 22 Construction of residential and non-residential buildingsSweden Ga Sverige Ab 20 Wholesale of household goodsCzech Republic Unis Steel Cz S.R.O. 19 Specialised wholesaleFinland Teljän Kuljetus Oy 18 Freight transport by road and removal servicesRussia Nvisk Ooo 15 Construction of other civil engineering projectsPoland Wojciech Lamperski Przedsiębiorstwo Korona 13 Non-specialised wholesale tradeCanada U. S. Steel Canada Inc n.a. Manufacture of basic iron and steel and of ferro-alloysSouth Korea Pantech Co Ltd 1 003 Manufacture of communication equipmentNetherlands Koops Furness 463 Activities of head officesFrance Groupe Altia 413 Forging, pressing, stamping and roll-forming of metalUnited States Eagle Bulk Shipping Inc. 159 Sea and coastal water transportJapan Orches 77 Wholesale of household goodsFrance Smpa 68 Manufacture of plastics productsCzech Republic Sky-Soft Spol. S R.O. 23 AdvertisingPortugal Fagor Lda 20 Manufacture of domestic appliancesPoland Pbo "Anioła" S.A. 14 Construction of residential and non-residential buildingsPoland Ampli S.A. 13 Non-specialised wholesale tradeIreland William Carr & Sons Limited 7 FishingRussia Akkord Ooo 1 Non-specialised wholesale tradeCanada Martin Ross Group Inc n.a. Manufacture of jewellery, bijouterie and related articlesRussia Strojjtorg Ooo n.a. Construction of other civil engineering projectsCanada Bombay & Co. Inc n.a. Retail sale of other household equipment in specialised storesCanada Benix & Co. Inc n.a. Retail sale of other goods in specialised storesCanada Bowring & Co Inc n.a. Retail sale of other goods in specialised storesTurkey Mos n.a. Specialised wholesaleTurkey N-T Grup n.a. Manufacture of other special-purpose machineryTurkey Tinarsoy Elektrik Tic. San. Ltd. Sti. n.a. Specialised wholesaleChina Chuanwei Group 3 273 Manufacture of basic iron and steel and of ferro-alloysSpain Grupo Condesa 439 Manufacture of tubes, pipes, hollow profiles and related fittings, of steelSpain Grupo Ros Casares Sl 299 Manufacture of basic iron and steel and of ferro-alloysUnited Kingdom Unipart Automotive Limited 254 Sale of motor vehicle parts and accessoriesMexico Oceanografia 225 Sea and coastal freight water transportNetherlands Estro Groep B.V. 222 Provision of services to the community as a wholeGermany Hansa Group Ag 180 Wholesale of other machinery, equipment and suppliesArgentina Rasic Hermanos Sa 177 Animal productionChina Guangdong Smith Home Heavy Industry 99 Manufacture of other products of first processing of steelSpain Tubos Y Hierros Industriales Sa 82 Manufacture of tubes, pipes, hollow profiles and related fittings, of steelFrance ATM 76 Manufacture of prepared animal feedsItaly Cedis Izzi S.P.A. Centro Distribuzione Organizzata 62 Renting and operating of own or leased real estateItaly Costruttori Riuniti Meccanici Italiani S.P.A. 62 Manufacture of structural metal productsCzech Republic Vokd, A.S. 57 Construction of other civil engineering projectsHungary Budafer Zrt. 47 Specialised wholesaleCzech Republic Plynostav - Regulace Plynu, A.S. 44 Construction of utility projectsSweden Kentaro Ab 32 Professional, scientific and technical activities n.e.c.Ireland Dan Morrissey (Irl) Limited 26 Demolition and site preparationSweden Aktiebolaget Wahlquists Verkstäder 21 Manufacture of other general-purpose machineryAustralia Focus Press Pty Ltd 20 Manufacture of articles of paper and paperboardPortugal Faiart S.A. 20 Manufacture of other porcelain and ceramic productsRomania Selina Srl 16 Construction of roads and railwaysRussia Astorija-Grupp Zao 0 Financial service activities, except insurance and pension fundingRussia Specfinans Ooo n.a. Non-specialised wholesale tradeTurkey Guleryuzler n.a. Construction of residential and non-residential buildingsMexico Desarrolladora Homex 1 075 Construction of residential and non-residential buildingsFrance Groupe Fly Atlas 717 Retail sale of other household equipment in specialised storesRomania Planoil Srl 138 Retail sale of automotive fuel in specialised storesCanada Veris Gold Corp 156 Mining and quarrying n.e.c.Netherlands Neckermann 106 Retail trade not in stores, stalls or marketsFrance Commodities And Products Industries 76 Non-specialised wholesale tradeSouth Korea Chonhaiji Co.,Ltd 73 Building of ships and boatsItaly Consta Spa 64 Construction of residential and non-residential buildingsSouth Korea Js Chem Corporation 55 Manufacture of paints, varnishes and similar coatings, printing ink and masticsRomania Synergy Invest Srl 45 Renting and operating of own or leased real estateRomania Electrocentrale Galati Sa 44 Electric power generation, transmission and distributionPoland Wrocławskie Przedsiębiorstwo Budownictwa Przemysłowego Nr 2 S.A. 41 Construction of residential and non-residential buildingsPortugal Pimenta & Rendeiro S.A. 23 Construction of residential and non-residential buildingsFinland Erätukku Oy 21 Non-specialised wholesale tradePoland Wzmms S.Z.O. Odp. 12 Other information service activitiesRussia Uralkord Zao 3 Manufacture of other products of first processing of steelTurkey Pehlivanoglu n.a. Construction of residential and non-residential buildingsSpain Arturo Cantoblanco Sa (Group) n.a. Event catering and other food service activities

ANNEX

Majorinsolvencies worldwide in 2014*

SOuRCE:EuLER HERMES

* Chronological (nonexhaustive, in descendingorder) of the biggest knowninsolvencies in terms ofannual turnover andidentified by Euler Hermesin the fist 10 months of 2014for the following countries:Argentina, Australia, Canada,Chile, China, Colombia,Czech Republic, Finland,France, Germany, Greece,Hungary, Italy, Ireland, Japan,Mexico, Netherlands, NewZealand, Poland, Portugal,Romania, Russia, SouthAfrica, South Korea, Spain,Sweden, Taiwan, Thailand,Turkey, UK and U.S.

SEpt

EMbE

RJu

LYO

CtO

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Au

Gu

StJu

NE

Euler Hermes Economic Outlook no. 1211 October 2014 | Business Insolvency Worldwide

23


Poland Domex S.Z.O. Odp. 347 Computer programming, consultancy and related activitiesJapan Hakugen 235 Manufacture of other chemical productsRomania Vegetal Trading Srl 115 Processing and preserving of meat and production of meat productsRomania Marex Sa 110 Processing and preserving of meat and production of meat productsUnited Kingdom Solus Garden And Leisure Limited 105 Specialised wholesaleFrance Societe Nice Matin 97 Publishing of books, periodicals and other publishing activitiesGreece Seios Euronics Hellas S.A. 67 Wholesale of household goodsItaly Predieri Metalli S.R.L. 58 Specialised wholesaleGreece Shelman Wood Product Manufacturers S.A. 47 Support activities to agriculture and post-harvest crop activitiesSweden Reroc Finance Ab 42 Financial service activities, except insurance and pension fundingRomania Pro Meat Fresh Srl 41 Processing and preserving of meat and production of meat productsCzech Republic Příbramská Uzenina A.S. 27 Processing and preserving of meat and production of meat productsFinland Cencei Oy 23 Wholesale of household goodsSweden Lockarp Försäljning Ab 19 Manufacture of bakery and farinaceous productsRussia Ilekneft' Oao 4 Extraction of crude petroleumRussia Astrakhan'Regiongaz n.a. Specialised wholesaleIreland Mount Wolsely Hotel, Golf & Country Club n.a. HotelsUnited States Energy Future Holdings Corp 4 650 Electric power generation, transmission and distributionUnited States Momentive Performance Materials Holdings 1 887 Manufacture of plastics productsMexico Corporación Geo 1 090 Construction of residential and non-residential buildingsUnited States James River Coal Company 865 Mining of hard coalCzech Republic Less & Forest S.R.O. 239 Silviculture and other forestry activitiesUnited States Genco Shipping & Trading Limited 179 Sea and coastal water transportUnited Kingdom Sit-Up Limited 164 Retail trade not in stores, stalls or marketsCanada Cash Store Financial Services Inc, The 152 Financial service activities, except insurance and pension fundingGermany 3 Y Logistic Und Projektbetreuung Gmbh 135 Support activities for transportationSpain Alier Sa 92 Manufacture of pulp, paper and paperboardSouth Korea Namkwang Construction Co.,Ltd. 88 Construction of residential and non-residential buildingsFrance Airwell France Sas 85 Wholesale of other machinery, equipment and suppliesFrance Francaise De Roues 73 Casting of metalsSpain Ferroiberica Sal 69 Manufacture of structural metal productsUnited Kingdom Paul Simon (London) Limited 64 Retail sale of textiles, clothing, footware and leather goods in specialised storesItaly Ittierre S.P.A. 60 Manufacture of wearing apparel, except fur apparelUnited Kingdom Farnrise Construction Limited 59 Construction of residential and non-residential buildingsSouth Korea Uni Metal Co., Ltd 51 Manufacture of basic iron and steel and of ferro-alloysArgentina Guido Guidi Sa 49 Sale of motor vehiclesGreece Neoset S.A. 42 Manufacture of furnitureSweden Kmw Energi Ab 36 Manufacture of other general-purpose machinerySweden Blekinge Metall Ab 22 Specialised wholesaleFinland Paakkola Conveyors Oy 18 Manufacture of structural metal productsNew Zealand Christchurch Yarns Nz Ltd 7 Preparation and spinning of textile fibresChile Pesca Chile Sa n.a. FishingUnited States Usec Inc. 1 029 Mining of non-ferrous metal oresFrance Ascometal 732 Manufacture of basic iron and steel and of ferro-alloysSouth Korea Kt Ens Corporation 409 Manufacture of communication equipmentNetherlands Pouw Automotive Groep 386 Activities of holding companiesGermany Kunststoff-Technik Scherer & Trier Gmbh & Co. Kg 238 Manufacture of plastics productsNetherlands Kruidenier Groep B.V. 228 Non-specialised wholesale tradeGermany Rena Gmbh 228 Manufacture of other general-purpose machineryUnited Kingdom Albemarle & Bond Holdings Plc 147 Retail trade not in stores, stalls or marketsSpain Celaya Emparanza Y Galdos Sa 123 Manufacture of batteries and accumulatorsColombia Comercializadora Internacional Banacol S A 117 Wholesale of agricultural raw materials and live animalsColombia Campollo S.A. 103 Animal productionItaly Termosanitari Corradini - S.P.A. 88 Other specialised wholesaleItaly Apomercato S.P.A. 63 Retail sale in non-specialised storesItaly Satinox Tubi Inox S.P.A. 61 Manufacture of tubes, pipes, hollow profiles and related fittings, of steelSouth Korea Kwangsung High-Tech Co.,Ltd. 55 Tanning and dressing of leatherColombia Agricola El Retiro S.A. 46 Mixed farmingColombia Energia Integral Andina S.A 40 Electric power generation, transmission and distributionRomania Agroli Group Srl 33 Wholesale of agricultural raw materials and live animalsFinland Ecostream Oy 24 Specialised wholesaleFinland L&T Recoil Oy 23 Specialised wholesaleFinland Maanrakennusliike Powerman Oy 21 Demolition and site preparationCzech Republic Moravia Sport Group Spol. S R. O. 16 Wholesale of household goodsChile Establecimientos De La Fuente 16 Retail sale of non-food products (including fuel)Portugal Rui Ribeiro S.A. 14 Construction of residential and non-residential buildingsNew Zealand Mediaweb Ltd n.a. Publishing of books, periodicals and other publishing activitiesGermany Wellmann Bauteile Gmbh 300 Manufacture of furnitureThailand Soon Hua Seng Group 296 Support activities to agriculture and post-harvest crop activitiesSpain Grupo Husa 123 Event catering and other food service activitiesFrance Groupe Vial 77 Specialised wholesaleRomania Avicola Crevedia Sa 72 Mixed farmingUnited Kingdom Jane Norman Limited 64 Retail sale of textiles, clothing, footware and leather goods in specialised storesItaly Servola S.P.A. 55 Specialised wholesaleIreland Staunton Sports T/A Elverys (In Examinership) 53 Retail sale in non-specialised storesUnited States First Mariner Bancorp 49 Financial service activitiesCzech Republic Liberty Cz Group A.S. 28 Wholesale of information and communication equipmentIreland Irish Driver-Harris Company, Limited 27 Wholesale of other machinery, equipment and suppliesFinland Tammet Oy 27 Manufacture of other fabricated metal productsSweden Malmströms/Camilla Ab 21 Retail sale of textiles, clothing, footware and leather goods in specialised storesSweden Spiritbeklädnads Ab 18 Retail sale of other goods in specialised storesColombia Ci Comergroup S.A. 17 Wholesale of agricultural raw materials and live animalsPortugal Grupo-Gel S.A. 17 Processing and preserving of fish, crustaceans and molluscsPortugal Raplus S.A. 14 Manufacture of basic precious and other non-ferrous metalsPortugal M.Coutinho Litoral S.A. 14 Sale of motor vehiclesChile Acuinova Chile S.A. n.a. FishingGermany Verlagsgruppe Weltbild Gmbh 616 Publishing of books, periodicals and other publishing activitiesNetherlands Heiploeg Holding B.V. 269 Mining of ligniteGermany Strauss Innovation Gmbh & Co. Kg 168 Retail sale in non-specialised storesGermany Sggt Maschinen- Und Anlagenbau Gmbh & Co. Kg 164 Treatment and coating of metalsNetherlands Rasenberg Holding B.V. 149 Construction of other civil engineering projectsPoland Nomi S.A.kcyjna 112 Retail sale of other goods in specialised storesFinland Fenestra Oy 99 Manufacture of products of wood, cork, straw and plaiting materialsUnited Kingdom Mivan (Uk) Limited 76 Construction of residential and non-residential buildingsPortugal Evicar S.A. 67 Sale of motor vehiclesCzech Republic Nelumbo Spol. S R.O. 65 Construction of utility projectsPortugal Ponto Fresco S.A. 49 Retail sale of food, beverages and tobacco in specialised storesFinland Casatino Production Oy 27 Construction of residential and non-residential buildingsPortugal Ficacém S.A. 15 Sale of motor vehiclesChile Patroll Internacional S.A. n.a. Private security activities

ApR

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Date Country Company Last known turnover (in EUR millions) Activity

24


Economic ResearchEuler Hermes Group

Economic Outlookand otherpublications

Already issued:

no. 1193 ◽ Macroeconomic, Risk and Insolvency Outlook Europe: Still looking for a second wind

no. 1194 ◽ business Insolvency Worldwide Corporate insolvencies:The true nature of the eurozone crisis

no. 1195-1196 ◽ Macroeconomic, Risk and Insolvency Outlook The world at a crossroads

no. 1197 ◽ Global Sector Outlook Reconciling economic (dis)illusions and financial risks

no. 1198 ◽ Special Report The Mediterranean: Turning the tide

no. 1199 ◽ Macroeconomic and Country Risk Outlook Half-baked recovery

no. 1200-1201 ◽ business Insolvency Worldwide Patching things up: Fewer insolvencies, except in Europe

no. 1202-1203 ◽ Macroeconomic and Country Risk Outlook Top Ten Game Changers in 2014: Getting back in the game

no. 1204 ◽ Global Sector Outlook All things come to those who wait: Green shoots for one out of four sectors

no. 1205-1206 ◽ Macroeconomic and Country Risk Outlook Hot, bright and soft spots: Who could make or break global growth?

no. 1207 ◽ business Insolvency Worldwide Insolvency World Cup 2014: Who will score fewer insolvencies?

no. 1208-1209 ◽ Macroeconomic, Country Risk and Global Sector Outlook Growth: A giant with feet of clay

no. 1210 ◽ Special Report The global automotive market: Back on four wheels

no. 1211-1212 ◽ business Insolvency Worldwide A rotten apple can spoil the barrel Payment terms, past dues, non-payments and insolvencies: What to expect in 2015?

To come:

no. 1213 ◽ Special Report

Economic Outlookno.1210 August September 2014

Special Reportwww.eulerhermes.com

The globalautomotive marketBack on four wheels

Economic Research

Business Insolvency Worldwide

Economic Outlookno. 1207May 2014

www.eulerhermes.com

InsolvencyWorld Cup 2014: Who will score fewer insolvencies?

Economic Research

Macroeconomicand Country Risk Outlook

EconomicOutlook no. 1205-1206March-April 2014

www.eulerhermes.com

Hot, brightand soft spots:Who could make or breakglobal growth?

Economic Research

Macroeconomic, Country Riskand Global Sector Outlook

Economic Outlookno. 1208-1209June-July 2014

www.eulerhermes.com

Growth: A giantwith feet of clay10 industry short stories exposemacroeconomic fragility

Economic Research

25


◽Spain: Cautiously taking the bull by the horns > 2014-10-08 (En)◽Chinese exports 2014-2015: Another US300bn > 2014-10-07(En)◽Russia and the West: Tough Love? > 2014-09-12 (En)◽Non-payments in Italy: It’s not over… yet! > 2014-09-04 (En)◽Don’t cry too much for Argentina > 2018-08-08 (En)◽ Fertilizer: The seed growing secretly > 2014-08-05 (En, Fr)◽ Road transport: Labor costs explain the large gap in profitability inEurope > 2014-07-08 (En, Fr)◽The European electricity market under strong pressure > 2014-07-05(En, Fr)◽Thailand: Another coup challenges the country’s economicresiliencel > 2014-06-06 (En)◽2014 World Cup : more inflation than growth in Brazil > 2014-06-06(En)◽Tire industry on a roll >2014-04-17(En, Fr)◽Putinomics: Tightrope walking > 2014-04-10(En)◽Renzimania: Will charm survive tough reforms? >2014-04-09 (En)◽The reindustrialization of the U.S.: A 2014 update > 2014-04-02 (En)

EconomicInsight

◽Angola > 2014-09-25◽Australia > 2014-09-25◽Austria > 2014-09-25◽Bahrein > 2014-09-25◽Belarus > 2014-09-25◽Bolivia > 2014-09-25◽Bosnia & H. > 2014-09-25◽Brazil > 2014-09-25◽Cameroon > 2014-09-25◽Congo PR > 2014-09-25◽Costa Rica > 2014-09-25◽Dominican Republic>2014-09-25◽Ecuador > 2014-09-25

◽Estonia > 2014-09-25◽Finland > 2014-09-25◽Guatemala > 2014-09-25◽Hong Kong > 2014-09-25◽Indonesia > 2014-09-25◽Jordan > 2014-09-25◽Kazakhstan > 2014-09-25◽Lebanon > 2014-09-25◽Mongolia > 2014-09-25◽The Netherlands > 2014-09-25◽Pakistan > 2014-09-25◽Qatar > 2014-09-25◽Russia > 2014-09-25◽Vietnam > 2014-09-25

CountryReport

WeeklyExport RiskOutlook

◽Textile & Clothing in Germany: A two-geared reality > 2014-10-31 (En)◽Textile & Clothing in Italy: Bronze medal on the international podium, but facing obstacles > 2014-10-31 (En)◽Italian car sector: Time to do an oil change > 2014-10-22 (En)◽U.S Automotive > 2014-10-03 (En)◽U.S. Construction > 2014-10-03 (En)◽Italian steel at a crossroads > 2014-09-30 (En)◽Der Automobilweltmarkt: Wieder auf allen vier Rädern > 2014-09-19 (De)◽Agrifood in the Netherlands The bumpy road continues > 2014-09-18 (En)◽Construction in Germany: Betongold at a turning point? > 2014-08-07 (En, De)◽Construction in South Korea: not out of the woods yet > 2014-08-07 (En)◽Machinery and Equipment in Italy: Preparing its comeback > 2014-06-23(En)◽Pharmaceuticals in China: At full volume > 2014-06-24 (En, Fr)

IndustryReport

http://www.eulerhermes.com/economic-research/economic-publi-cations/Pages/Weekly-Export-Risk-Outlook.aspxN

TheEconomictalk

https://www.youtube.com/watch?v=DoWFmCW0v3cN

https://www.youtube.com/watch?v=DoWFmCW0v3c

https://www.youtube.com/watch?v=DoWFmCW0v3c

http://www.eulerhermes.com/economic-research/economic-publications/Pages/Weekly-Export-Risk-Outlook.aspx

26


> ArgentinaSolunionAv. Corrientes 299 C1043AAC CBA,Buenos AiresPhone: + 54 11 4320 9048

> AustraliaEuler Hermes Australia Pty LtdLevel 9, Forecourt Building2 Market StreetSydney, NSW 2000Phone: + 61 2 8258 5108

> AustriaAcredia Versicherung AGHimmelpfortgasse 291010 ViennaPhone: + 43 5 01 02-1111

Euler Hermes Collections GmbHZweigniederlassung ÖsterreichHandelskai 3881020 ViennaPhone: + 43 1 90 227 14000

> bahrainPlease contact United Arab Emirates

> belgiumEuler Hermes Europe SA (NV) Avenue des Arts — Kunstlaan, 56 1000 BrusselsPhone: + 32 2 289 3111

> brazilEuler Hermes Seguros de Crédito SAAvenida Paulista, 2.421 — 3° andarJardim PaulistaSão Paulo / SP 01311-300Phone: + 55 11 3065 2260

> CanadaEuler Hermes North America InsuranceCompany1155, René-Lévesque Blvd WestBureau 2810Montréal Québec H3B 2L2Phone: +1 514 876 9656 / +1 877 509 3224

> ChileSolunion Av. Isidora Goyenechea, 3520SantiagoPhone: + 56 2 2410 5400

> ChinaEuler Hermes Consulting(Shanghai) Co., Ltd. Unit 2103, Taiping Finance Tower, No. 488 Middle Yincheng Road, Pudong New Area, Shanghai, 200120Phone: + 86 21 6030 5900

> ColombiaSolunionCalle 7 Sur No. 42-70Edificio Fórum II Piso 8MedellinPhone : +57 4 444 01 45

SubsidiariesRegistered office:Euler Hermes Group 1, place des Saisons 92078 Paris La Défense - FrancePhone: + 33 (0) 1 84 11 50 50

www.eulerhermes.com

> Czech RepublicEuler Hermes Europe SA organizacni slozkaMolákova 576/11186 00 Prague 8Phone: + 420 266 109 511

> DenmarkEuler Hermes Danmark,filial of Euler Hermes Europe SA, BelgienAmerika Plads 192100 Copenhagen OPhone: + 45 88 33 33 88

> EstoniaPlease contact Finland

> FinlandEuler Hermes Europe SASuomen sivuliikeMannerheimintie 10500280 HelsinkiPhone: + 358 10 850 8500

> FranceEuler Hermes France SAEuler Hermes CollectionEuler Hermes World Agency1, place des SaisonsF-92048 Paris-La-Défense CedexPhone: + 33 1 84 11 50 50

> GermanyEuler Hermes Deutschland AGFriedensallee 25422763 HamburgPhone: + 49 40 8834 0

Euler Hermes AktiengesellschaftGaastraße 2722761 HamburgPhone: + 49 40 8834 9000

Euler Hermes Collections GmbHZeppelinstr. 4814471 PostdamPhone: + 49 331 27890 000

Euler Hermes Rating GmbHFriedensallee 25422763 HambourgPhone: + 49 40 8 34 640

Euler Hermes Liaison Office at AGCSAllianz Global Coroporate & Specialty AGFritz-Schäffer-Straße 981737 MünchenPhone: + 49 89 38 00 12 159

> GreeceEuler Hermes HellasCredit Insurance SA16 Laodikias Street & 1-3 Nymfeou StreetAthens Greece 11528 Phone: + 30 210 69 00 000

> Hong KongEuler Hermes Hong Kong Services LtdSuites 403-11, 4/F Cityplaza 412 Taikoo Wan Road Island EastHong KongPhone: + 852 3665 8901

> HungaryEuler Hermes Europe SAMagyarrorszagi FioktelepeEuler Hermes Magyar Követeléskezelõ Kft.(trade debt collection)Kiscelli u. 1041037 BudapestPhone: +36 1 453 9000

> IndiaEuler Hermes India Pvt.Ltd5th Floor, Vaibhav Chambers Opposite Income Tax OfficeBandra Kurla ComplexBandra (East)Mumbai 400 051Phone: +91 22 6623 2525

> IndonesiaPT Asuransi Allianz Utama IndonesiaSummitmas II. Building, 9th FloorJl. Jenderal Sudirman Kav 61-62Jakarta 12190Phone: +62 21 252 2470 ext. 6100

> IrelandEuler Hermes IrelandAllianz HouseElm ParkMerrion RoadDublin 4Phone: +353 (0)1 518 7900

> IsraelICIC2, Shenkar Street68010 Tel AvivPhone: +97 23 796 2444

> ItalyEuler Hermes Europe SARappresentanza generale per l’ItaliaVia Raffaello Matarazzo, 1900139 RomePhone: + 39 06 8700 1

> JapanEuler Hermes Deutschland AG, Japan BranchKyobashi Nisshoku Bldg. 7th floor8-7, Kyobashi, 1-chome,Chuo-KuTokyo 104-0031Phone: + 81 3 35 38 5403

> KuwaitPlease contact United Arab Emirates

> LatviaPlease contact Sweden

27


> LithuaniaPlease contact Denmark

> MalaysiaEuler Hermes Singapore Services Pte Ltd.,Malaysia BranchSuite 3B-13-7, Level 13, Block 3BPlaza Sentral, Jalan Stesen Sentral 550470 Kuala LumpurPhone: +603 2264 8556 (or 8599)

> MexicoSolunionTorre PolancoMariano Escobedo 476, Piso 15Colonia Nueva Anzures11590 Mexico D.F.Phone: +52 55 52 01 79 00

> MoroccoEuler Hermes Acmar37, bd Abdelatiff Ben Kaddour20 050 CasablancaPhone: + 212 5 22 79 03 30

> the NetherlandsEuler Hermes NederlandPettelaarpark 20P.O. Box 707515201CZ’s-HertogenboschPhone: + 31 (0) 73 688 99 99 / 0800 385 37 65

Euler Hermes BondingDe Entree 67 (Alpha Tower)P.O. Box 124731100 AL AmsterdamPhone: +31 (0) 20 696 39 41

> New zealandEuler Hermes New Zeland LtdLevel 1, 152 Fanshawe StreetAuckland 1010Phone: + 64 9 354 2995

> NorwayEuler Hermes NorgeHolbergsgate 21 P.O. Box 6 875St. Olavs Plass0130 OsloPhone: + 47 2 325 60 00

> OmanPlease contact United Arab Emirates

> philippinesPlease contact Singapore

> polandTowarzystwo Ubezpieczen Euler Hermes SAul. Domaniewska 50 B02-672 VarsawPhone: + 48 22 363 6363

> portugalCOSEC Companhia de Seguro deCréditos, S.A.Avenida da República, nº 581069-057 LisbonPhone: + 351 21 791 3700

> QatarPlease contact United Arab Emirates

> RomaniaEuler Hermes Europe SA BruxellesSucursala BucurestiStr. Petru Maior Nr.6Sector 1 011264 BucarestPhone: + 40 21 302 0300

> RussiaEuler Hermes Credit Management OOOOffice C08, 4-th Dobryninskiy per., 8,Moscow, 119049Phone: + 7 495 9812 8 33 ext. 4000

> Saudi ArabiaPlease contact United Arab Emirates

> SingaporeEuler Hermes Singapore Services Pte Ltd12 Marina View#14-01 Asia Square Tower 2Singapore 018961Phone: + 65 6297 8802

> SlovakiaEuler Hermes Europe SA, pobokapoist’ovne z ineho clenskeho statu2012: Plynárenská 7/A82109 BratislavaPhone: + 421 2 582 80 911

> South AfricaPlease contact Italy

> South KoreaEuler Hermes Hong Kong ServicesKorea Liaison OfficeRm 1411, 14/F, SayongPlatinum Bldg.156, Cheokseon-dong,Chongro-ku,Seoul 110-052Phone: + 82 2 733 8813

> SpainSolunionAvda. General Perón, 40Edificio Moda ShoppingPortal C, 3a planta28020 MadridPhone: +34 91 581 34 00

> Sri LankaPlease contact Singapore

> SwedenEuler Hermes Sverige filialKlarabergsviadukten 90P.O. Box 729101 64 StockholmPhone: + 46 8 5551 36 00

> SwitzerlandEuler Hermes Deutschland AG,Zweigniederlassung ZürichEuler Hermes Reinsurance AGRichtiplatz 1Postfach8304 WallisellenPhone: + 41 44 283 65 65Phone: + 41 44 283 65 85 (Reinsurance)

> taiwanPlease contact Hong Kong

> thailandAllianz C.P. General Insurance Co., Ltd323 United Center Building30 th FloorSilom RoadBangrak, Bangkok 10500Phone: + 66 2638 9000

> tunisiaPlease contact Italy

> turkeyEuler Hermes Sigorta A.S.Büyükdere Cad. No:100-102Maya Akar Center Kat: 7 Esentepe34394 Şișli/ IstanbulPhone: +90 212 2907610

> united Arab EmiratesEuler Hermesc/o Alliance Insurance (PSC)Warba Center 4th Floor Office 405PO Box 183957DubaiPhone: + 971 4 211 6005

> united KingdomEuler Hermes UK1 Canada SquareLondon E14 5DXPhone: + 44 20 7 512 9333

> united StatesEuler Hermes North AmericaInsurance Company800 Red Brook BoulevardOwings Mills, MD 21117Phone: + 1 877 883 3224

> VietnamPlease contact Singapore

Euler Hermes EconomicOutlookis published monthly by the Economic Research Departmentof Euler Hermes Group1, place des Saisons, F-92048 Paris La Défense Cedex e-mail: [email protected] - Tel. : +33 (0) 1 84 11 50 50

This document reflects the opinion of the Economic Research Department of Euler Hermes Group.

The information, analyses and forecasts contained herein are based on the Department's current

hypotheses and viewpoints and are of a prospective nature. In this regard, the Economic Research

Department of Euler Hermes Group has no responsibility for the consequences hereof and no

liability. Moreover, these analyses are subject to modification at any time.

www.eulerhermes.com

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Economy & Finance

Business insolvency worldwide euler hermes solunion oct-nov14