NWG // FINANCIAL INFORMATION // THE GROUP
Credit risks
Credit risk is defined as the Group ’ s exposure to losses in the event that one party to a financial instrument fails to discharge an obligation . The Group is exposed to credit risk from its operating activities , primarily from accounts receivable , and from financing activities which includes deposits at banks and financial institutions , currency futures and other financial instruments . The Group ' s total exposure to credit risk at year-end amounted to SEK 1,448.1 ( 1,627.6 ) million , which was based on the carrying value of all financial assets .
Accounts receivable
The risk that the Group ’ s customers will fail to meet their obligations , i . e . that New Wave Group ’ s accounts receivable will not be paid , constitutes a credit risk . New Wave Group has centrally adopted a risk policy and directives , based on which each company has drawn up a set of written procedures for credit control . Information from external credit reference agencies is also a stage of the process . Furthermore , companies in the Group , based on the risk policy , have the option , when needed , to insure accounts receivable which means that if the customer fails to meet its payment the company will be reimbursed by the insurance company . The credit risk in the Corporate operating segment is lower , as the resellers , which are New Wave Group ’ s customers , make purchases based on orders that have already been placed by the end customers . The resellers are relatively small and large in number . In 2020 , confirmed credit losses in Corporate represented 0.12 ( 0.06 ) % of sales . In the Gifts & Home Furnishings and Sports & Leisure operating segments sales are made to selected resellers , and credit losses are small , although there is a higher concentration to a smaller number of customers compared to the promo market . In 2020 , confirmed credit losses in these two operating segments represented 0.39 ( 0.48 ) % and 0.38 ( 0.09 ) % of net sales . The Group ' s customers have been affected by the negative effects of the COVID-19 pandemic , which has led to an increased credit risk . The companies within the Group attach great importance to monitoring the customers ' ability to pay and continuously make assessments regarding adequate credit risk reserve .
SEK million Accounts receivable |
2020 |
2019 |
Exposure |
1 121.3 |
1 253.5 |
Credit risk reserve |
-62.0 |
-60.6 |
Book value |
1 059.3 |
1 192.8 |
The table below shows the aging distribution of accounts receivable and the credit risk reserve .
SEK million 2020 2019 Age analysis
The reserve for expected credit risk in accounts receivable has been changed as follows :
A description of credit risk exposures is given in the table below :
As of 31 December 2020
Other financial assets
Other financial assets include derivatives , other receivables and liquid assets . Credit risk related to balances at banks and other financial institutions is managed by the Group ' s treasury center in accordance with the Group ' s risk policy . The Group deals only with well-established financial institutions . Other receivables , which represent 4.2 ( 5.0 )% of the total credit risk , are managed locally on an ongoing basis in accordance with the Group ' s risk policy and with support from the central finance function . No credit risk reserve has been recorded for other financial assets .
Number of customers
Percentage of total customers
Percentage of portfolio
Exposure < 1 SEK million |
27 539 |
99.5 % |
61.2 % |
Exposure 1 - 5 SEK million |
115 |
0.4 % |
20.4 % |
Exposure > 5 SEK million |
19 |
0.1 % |
18.4 % |
Total 27 673 100.0 % 100.0 %
As of 31 December 2019
Accounts receivable
SEK million Credit risk reserve for accounts receivable |
2020 |
2019 |
Credit risk reserve at the beginning of the year |
-60.6 |
-53.3 |
Recovered reserves during the year |
3.9 |
1.9 |
Reserve for expected credit risks |
-12.7 |
-17.7 |
Confirmed losses |
5.0 |
9.3 |
Translation differences |
2.4 |
-1.0 |
Credit risk reserve at year-end |
-62.0 |
-60.6 |
Number of customers
Credit risk reserve
Accounts receivable
Percentage of total customers
Credit risk reserve
< 30 days |
964.7 |
-2.5 |
1 087.9 |
-2.9 |
30 - 90 days |
52.9 |
-3.3 |
94.9 |
-6.9 |
> 90 days |
103.7 |
-56.3 |
70.7 |
-50.8 |
Total |
1 121.3 |
-62.0 |
1 253.5 |
-60.6 |
Percentage of portfolio
Exposure < 1 SEK million |
33 321 |
99.6 % |
64.3 % |
Exposure 1 - 5 SEK million |
117 |
0.4 % |
21.1 % |
Exposure > 5 SEK million |
13 |
0.0 % |
14.6 % |
Total 33 451 100.0 % 100.0 %
ANNUAL REPORT // 099