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Intrum: A third of European businesses practice late payment hypocrisy
- More than a third (37 per cent) of European businesses admit to increasingly paying their suppliers later than they would accept from their own clients and customers
- Half (54 per cent) would like to pay their suppliers faster, but don’t believe this is feasible in the current economic climate
- Reducing late payments would enable greater investment in product and expansion of services, according to 62 per cent of European businesses
STOCKHOLM, July 6, 2023 /PRNewswire/ — More than a third (37 per cent) of European businesses are increasingly paying their suppliers later than they would ever accept from their own clients and customers. This is according to the findings of Intrum’s 2023 European Payment Report. In the UK, this figure rises to 54 per cent, a significant spike compared with neighbouring European countries such as France (36 per cent), Germany (36 per cent) and Spain (33 per cent).
While companies promote on-time payments, most are not leading by example. Payment hypocrisy is becoming increasingly prevalent among businesses of all sizes. This means having to shoulder late payments is not just common but expected across all sectors.
That said, businesses show regret when making late payments; over half (54 per cent) of European businesses would like to pay their suppliers faster but don’t feel it is feasible in the current economic climate of high inflation, rising interest rates and increasing labour costs.
Accepting delayed payments to preserve good client relations
The European Payment Report reveals more than half (53 per cent) of businesses will accept longer payment terms than they are naturally comfortable with, because they do not want to damage client and customer relationships. Looking across sectors, construction firms (57 per cent) are the most likely to accept late payments to preserve good client relationships.They are closely followed by businesses in government and the public sector (56 per cent) along with transport and logistics (56 per cent).
Worryingly, 47 per cent of European businesses admitted that in the past year they have been forced to accept longer payment terms in order to avoid the risk of their clients and customers going bankrupt. And the bankruptcies have been visibly on the rise since mid-2022.(1)
Does size matter?
While larger companies have historically used their size and influence to gain favour and leniency, Intrum’s research shows a growing number of SMEs also asking for more flexibility around payment terms. Nearly two fifths (39 per cent) of SMEs said they would be more likely to request longer payment terms from suppliers or pay an invoice later than agreed, compared to 35 per cent of large businesses. This is likely because smaller businesses have relatively lower financial buffers and are therefore more susceptible to difficult economic environment.
In response to requests for longer payment terms, 53 per cent of businesses admitted they would accept this from large companies but are more reluctant to extend the same courtesy to SMEs. Just over a third (38 per cent) of businesses across Europe said they would accept longer payments to SMEs.
The cause and cost
When looking at the reasons for late payment hypocrisy, apart from difficult economic environment, half (50 per cent) of European businesses state that when they grow, they struggle to upgrade their processes and admin in a timely manner.
Furthermore, 50 per cent of businesses blame late payments on poor routines and processes, claiming these processes are not strong enough to support financial sustainability despite economic uncertainty. This highlights the growing pains involved with scaling up a business at pace in the current environment and the deep-rooted issues associated with late payments.
Earlier research from Intrum showed that businesses across Europe are spending more than a quarter of the working year, 74 working days, chasing late payments*. The time spent chasing late payments by European businesses costs the European economy €275bn**. This is more than the entire GDP [Gross Domestic Product] of Finland at approximately €272bn***.
Dealing with late payments helps businesses go for growth
If late payments became less commonplace this would enable businesses to instead invest this vital cashflow into other areas of their business, positioning them well for long-term growth. Two in three (65 per cent) European businesses said that faster payments from their clients and customers would enable their company to pay their own suppliers faster, enabling them to preserve client relationships. 62 per cent of businesses said having to shoulder less late payments would enable them to increase investment in products and expand their service offerings.
“An increasing number of businesses are pushing boundaries and taking risks when it comes to making payments to their suppliers, by failing to practice what they preach. This is a trend we are seeing across the board, from large businesses right the way through to SMEs and can have dangerous consequences for key working relationships.
“Not making payments on time has knock on effects and hinders all businesses’ ability to invest in long-term, sustainable growth. In extreme cases it can even mean businesses can’t pay their own staff on time or have to miss on their financial obligations while they wait to be paid, which could lead to bankruptcy. Balancing short-term cash flow pressures while continuing to prioritise making timely payments is crucial to ensure businesses maintain good client relationships and are viewed positively by both customers and suppliers.
“It is also vital that businesses have robust routines in place to manage late payments. Our research highlight a correlation between businesses that pay on time and those that have put codes of ethics in place. Businesses that make a public commitment to paying suppliers on time are more likely to do so”, said Anna Zabrodzka-Averianov, Senior Economist at Intrum.
Notes to Editors
*Businesses spend a quarter of the working year chasing late payments – 255 working days of the year. 74 as a percentage of 255 is 29%
** Figure based on Intrum survey findings extrapolated using OECD data on working hours and average salaries across European economies
*** https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?locations=FI
About The European Payment Report 2023
The European Payment Report 2023 is based on an external survey conducted by FT Longitude in 29 countries in Europe. In total, 10, 556 small, medium, and large companies across 15 industry sectors participated in the research. Respondents were CFOs or other persons with financial knowledge of the company they work for and the companies have been selected randomly from a B2B database. The fieldwork for the study was conducted between November 2022 and March 2023.
The full report is available via the following link https://www.intrum.com/epr2023/
For more information, please contact:
Karin Franck, Media Relations and Public Affairs Director
+46 70 978 72 74
[email protected]
Kristin Andersson, Media Relations and Public Affairs Director
+46 70 585 78 18
[email protected]
The following files are available for download:
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IAB_2023.07.06_European Payment Report #3 |
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Fintech PR
ewpartners Announces $50 Million Strategic Investment in Leshines to Localize Manufacturing in the Middle East
- Leshines is the supply chain solution provider of Lenovo Group, which ranks among the top ten on Gartner’s prestigious Top 25 supply chain list.
- The move reinforces ewpartners’ and Leshine’s commitment to fostering local industrial growth and empowering enterprises in Saudi Arabia.
RIYADH, Saudi Arabia, Nov. 5, 2024 /PRNewswire/ — ewpartners (formerly eWTP Arabia Capital), the first international investment firm to establish a Saudi-Asia cross border platform, has announced a USD $50 million investment in Leshines, the supply chain solutions arm of Chinese multinational tech company Lenovo at The Future Investment Initiative (FII), a premier global platform that drives transformative investments and fosters international partnerships for sustainable economic growth.
The investment accelerates the localization of Leshines capabilities in Saudi Arabia, further strengthening the Kingdom’s position as a vital player in sustainable global trade networks and supply chain operations.
Five months ago, Lenovo and PIF-backed company Alat announced a strategic collaboration, including a proposed US$2 billion investment. Today, this partnership is set to advance to the next step.
Leshines is also exploring the option of entering the KSA-Sino Logistics Special Economic Zone at King Salman International Airport in Riyadh, an initiative which was announced by the Saudi Ministry of Transport and Logistics earlier this month. Managed by ewpartners, the Zone will cover a total area of 4 square kilometres and consist of a logistics industrial park, an international commercial and business park, and corresponding living space and facilities. It will enable international companies to manufacture locally in Saudi and then springboard their distribution to other markets worldwide. It is expected to attract over 3,000 wholesalers and retailers and around 200 light industrial manufacturers from China and Asia.
Jerry Li, Founder and Managing Partner at ewpartners said the following on the announcement:
“This investment is a significant step towards building the future of Saudi Arabia that we all envision, and we are actively working to establish this goal. Our investment in Leshines underscores our commitment to this project and our determination to foster local industrial growth and the development of Saudi enterprises. By partnering with Leshines to bring advanced supply chain solutions to Saudi Arabia and the MENA markets, we further assist Chinese companies in exploring localized production and empower local enterprises, aligning with the Kingdom’s Vision 2030.”
Alan Zhou, COO of Leshines, commented on the announcement:
As Lenovo’s smart supply chain solution platform, Leshines will take this opportunity to establish roots in Saudi Arabia, focusing on the MENA region, and build the foundational strategic capabilities of an advanced digital supply chain. As a globally leading strategic fund, ewpartners’ strategic resources and unique advantages in KSA, the Middle East, and emerging markets perfectly match Leshines’ strategic vision and development roadmap. With solid support and a strong partnership with ewpartners, we are confident that Saudi Arabia will become an important node in the Smart Supply Chain Platform, contributing to the Kingdom’s Vision 2030.
The investment in Leshines marks the first transaction for ewpartners Fund II. Amid the growing synergy between China and the Middle East, ewpartners’ investment model has garnered recognition from key stakeholders in the region. Supported by Saudi Arabia’s sovereign wealth fund, ewpartners has also recently secured commitments from other GCC sovereign wealth funds, including USD 150 million from the Oman Investment Authority.
About ewpartners
ewpartners (formerly eWTP Arabia Capital) is an international investment firm specialising in cross-border investments between Asia and the MENA region. Backed by the Public Investment Fund (PIF), the firm has been active in Saudi Arabia since 2017 and was the first investment firm to launch a cross-border platform between the Kingdom and China.
Headquartered in Riyadh, ewpartners focuses on building value across borders by establishing strategic partnerships with exceptional companies. Our team’s expertise in shaping innovative conducive policy frameworks can support governments in fostering economic transformation and diversification driven by innovation and technology.
ewpartners is committed to investing in, supporting, and growing successful businesses across the Asia and MENA regions, with a focus on key industries and themes such as digital infrastructure & solutions, advanced manufacturing & energy transition, and logistics & consumer enablement.
About Leshines:
Lenovo Group is a global tech giant. For three consecutive years, Lenovo has ranked among the top ten on Gartner’s prestigious Top 25 supply chain list. As the strategic empowerment platform of Lenovo Global Supply Chain, Leshines is tasked with the important mission of driving supply chain transformation and upgrading through technological innovation. Drawing on Lenovo’s global industry strengths and management expertise, Leshines delivers digital international supply chain solutions tailored to the evolving needs of Chinese manufacturers expanding overseas.
About the KSA-Sino Logistics Special Economic Zone
The Special Economic Zone is a collaboration between ewpartners and the King Salman International Airport Development Company (KSIADC) and was announced on 13th of October 2024. The initiative is supported by the Ministry of Transport and Logistics and is one of several recently announced initiatives designed to strengthen supply chains and streamline trade, e-commerce and investment in line with the Kingdom’s Vision 2030. The project aims to create an integrated ecosystem that will encompass global enterprises, logistic facilities, supply chains, and high-end manufacturing, significantly bolstering Saudi Arabia’s regional and global distribution capabilities. International companies will establish manufacturing capabilities within the Zone and collaborate with Saudi enterprises to produce locally for distribution to markets around the world.
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Fintech PR
Xypex Chemical Corporation Expands Global Operations Acquires Xypex Australia and National Concrete Solutions
VANCOUVER, BC, Nov. 5, 2024 /PRNewswire/ — Xypex Chemical Corporation is pleased to announce that, effective November 1, 2024, Concrete Waterproofing Manufacturing Pty. Ltd. (CWM), trading as Xypex Australia, which also includes CWM’s subsidiary XMS (Thailand), and, National Concrete Solutions (NCS) will become wholly owned subsidiaries of Xypex Chemical Corporation, headquartered in Vancouver, Canada.
“This marks a significant step for Xypex in expanding and strengthening our global footprint,” said Mike Hardman – CEO of XCC. It will drive further growth and create more value for our customers, employees, and stakeholders. The new combined business will enhance our operations to deliver quality products and solutions to customers while optimizing costs and future investments.
About Xypex Chemical Corporation:
Xypex Chemical Corporation is a world leader in innovative waterproofing technology. For over 50 years, Xypex has developed advanced crystalline solutions for concrete waterproofing and protection. Xypex’s products are used in a wide range of applications, including infrastructure, and commercial construction projects in over 100 countries. www.xypex.com
For media inquiries, please contact: Chantell Segal, Marketing Director, Xypex Chemical Corporation, [email protected], 604-273-5265, www.xypex.com
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Fintech PR
Peritus Capital Secures Term Loan for Oberland Agriscience to Drive Sustainable Protein Production
NEW YORK, Nov. 5, 2024 /PRNewswire/ — Peritus Capital is pleased to announce a successful term loan arrangement for Oberland Agriscience Inc. The non-dilutive funding will support the Halifax-based company in scaling its production through equipment acquisitions and increased working capital.
Oberland Agriscience, a leader in sustainable protein, operates one of Canada’s largest Black Soldier Fly Larvae (BSFL) farms. It specializes in resilient, nutrient-rich ingredient solutions for aquaculture, pet food, poultry feed, and agriculture industries. The company leverages cutting-edge technology and automation, including machine learning and predictive analytics, to optimize its production processes, setting a new standard in the sustainable protein market.
“Black soldier fly larvae are extraordinary insects capable of transforming nearly any organic waste into valuable protein at a remarkable rate. Oberland’s rigorous, scientific approach positions it at the forefront of the sustainable protein revolution,” said Howard Tang, CEO of Peritus Capital.
The newly secured funding will help Oberland scale operations at its 108,000-square-foot Grassy Lake facility. This follows the success of its pilot farm, which operated for over seven years. The new production plant is projected to produce 3,500 tons of dry protein and 9,000 tons of frass annually, diverting 36,000 tons of pre-consumer waste from landfills and significantly reducing associated carbon dioxide emissions.
“Partnering with Peritus Capital to secure this investment is a tremendous win for us and the insect farming industry,” said Dr. Greg Wanger, Founder and CEO of Oberland Agriscience. “The global population continues to soar, and the food waste problem isn’t going away. Insects are natural to many animal diets, especially fish, and thus are an excellent ingredient in these feeds.”
About Peritus Capital
Peritus Capital is a boutique investment firm that invests in, supports, and finances the global development of ROI-generating, early-stage, and established corporates that integrate environmentally conscious practices in food production, focusing on the aquaculture sector. We are a global team with an extensive network of international investors able to invest across multiple geographies. Peritus Capital LLC is a broker-dealer registered with the U.S. Securities and Exchange Commission and a FINRA member.
Media Contact
Courtney Bosh
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Investor Contact
Ching Ryan
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