FINANCIAL INFORMATION THE GROUP
Accounts receivable( SEK million) |
2017 |
2016 |
Exposure |
1 016.0 |
944.0 |
Credit risk reserve |
33.2 |
37.8 |
Carrying amount |
982.8 |
906.2 |
A description of credit risk exposures is given in the table below:
As of 31 December |
Number of |
Percentage of |
Percentage of |
2017 |
customers total customers |
portfolio |
Exposure < 1 MSEK |
28 996 |
95.1 |
68.0 |
Exposure 1- 5 MSEK |
636 |
2.1 |
18.5 |
Exposure > 5 MSEK |
839 |
2.8 |
13.5 |
Total |
30 471 |
100.0 |
100.0 |
As of 31 December |
Number of |
Percentage of |
Percentage of |
2016 |
customers total customers |
portfolio |
Exposure < 1 MSEK |
28 808 |
93.1 |
66.2 |
Exposure 1- 5 MSEK |
763 |
2.5 |
22.4 |
Exposure > 5 MSEK |
1 389 |
4.5 |
11. 5 |
Total |
30 960 |
100.0 |
100.0 |
The provision for doubtful receivables has been changed as follows:
Provision for doubtful receivables( SEK million) |
2017 |
2016 |
Provision at the beginning of the year |
37.8 |
41.8 |
Reclassification |
0.0 |
0.0 |
Additional provision |
10.2 |
15.7 |
Confirmed losses |
-14.1 |
-20.9 |
Translation difference |
-0.7 |
1.2 |
Provision at year-end |
33.2 |
37.8 |
Apart from the provision for doubtful receivables, there is no impairment of financial instruments.
Age analysis |
2017 |
2016 |
SEK million < 30 days |
912.0 |
835.3 |
30 – 90 days |
59.5 |
48.5 |
> 90 days |
11. 3 |
22.5 |
Total |
982.8 |
906.2 |
OTHER ASSETS Other assets include loan receivables, derivatives and liquid assets. Credit risk related to balances at banks and other financial institutions is managed by the Treasury center in accordance with the Group ' s finance policy. The Group deals only with established financial institutions. Other receivables and accrued income, which represents 6.6( 4.4) % of the total credit risk, is managed locally on an ongoing basis in accordance with the finance policy and with support from the central finance function.
OTHER RISKS
PURCHASING MARKET New Wave Group’ s purchases are mainly made in China, Bangladesh, India and Vietnam. Political and socioeconomic changes could have an impact on New Wave Group. By maintaining a high level of preparedness and by making purchases in several different countries in Europe as well as Asia, New Wave Group limits the economic risk which would arise if purchases were made from a single country.
STRONG GROWTH The continued expansion planned by New Wave Group will put strong pressure on management and employees. Wrong recruitments, organizational problems, the departure of key individuals, etc could delay and affect the progress of the expansion. The crucial factor determining the pace of expansion is that earnings expand at the same pace, which could result in uneven growth rates. New Wave Group is allocating resources to internal management training programs, mentorship schemes and annual meetings of management to guarantee future leadership and spread New Wave Group’ s values.
FASHION TRENDS – CHANGES IN ECONOMIC CONDITIONS New Wave Group devotes significant resources to ensure good design and quality. Still, due to the rapid pace of change in the fashion industry, the company cannot exclude the possibility of temporary declines in sales for certain collections. However, New Wave Group has a limited risk, as the fashion content is lower in the Corporate Promo operating segment and the promo sales channel, while the Sports & Leisure operating segment is focused on areas that are less sensitive to changes in fashions, such as Craft functional underwear and Seger socks. New Wave Group’ s goal is to ensure that the promo sales channel continues to account for 60 – 80 % of total sales.
FOREIGN EXPANSION The Group intends to establish a presence in additional foreign countries only when previous foreign operations are generating satisfactory profits. The Board deems that this strategy represents a good compromise between growth and reduced risk. New Wave Group believes it is very hard to determine the exact timetables and budgets for new foreign ventures, which could entail a risk of initial losses. However, the Board deems that the company is well equipped for the new ventures that are being planned.
ENVIRONMENT The Group’ s operations may involve environmental commitments, but the Board’ s and the management’ s assessment is that these, to the extent that they may have an impact on the Group’ s financial position, have been considered in the present financial statement.
NWG 2017 | 85