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 1,983.1 ( 2,260.5 ) 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 2023 confirmed credit losses in Corporate represented 0.17 ( 0.07 ) % 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 2023 confirmed credit losses in these two operating segments represented 0.08 ( 0.19 ) % and 0.06 ( 0.02 ) % of net sales . The companies within the Group attach great importance to monitoring the customers ' ability to pay and continuously make assessments regarding adequate credit risk reserve .
The following table shows the aging distribution of accounts receivable and the credit risk reserve .
SEK million Accounts receivable |
2023 |
2022 |
Exposure |
1 538.3 |
1 722.6 |
Credit risk reserve |
-63.1 |
-58.5 |
Book value |
1 475.2 |
1 664.1 |
SEK million 2023 2022 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 2023
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 6.5 ( 7.4 )% 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 |
29 027 |
99.2 % |
59.5 % |
Exposure 1 - 5 SEK million |
161 |
0.6 % |
23.6 % |
Exposure > 5 SEK million |
72 |
0.2 % |
16.8 % |
Total 29 260 100.0 % 100.0 %
As of 31 December 2022
Accounts receivable
SEK million Credit risk reserve for accounts receivable |
2023 |
2022 |
Credit risk reserve at the beginning of the year |
-58.5 |
-53.3 |
Recovered reserves during the year |
7.1 |
5.8 |
Reserve for expected credit risks |
-18.4 |
-10.4 |
Confirmed losses |
8.0 |
3.1 |
Translation differences |
-1.3 |
-3.7 |
Credit risk reserve at year-end |
-63.1 |
-58.5 |
Number of customers
Credit risk reserve
Accounts receivable
Percentage of total customers
Credit risk reserve
< 30 days |
1 370.6 |
-2.3 |
1 511.9 |
-3.2 |
30 - 90 days |
68.9 |
-10.1 |
102.4 |
-5.0 |
> 90 days |
98.8 |
-50.7 |
108.4 |
-50.4 |
Total |
1 538.3 |
-63.1 |
1 722.6 |
-58.5 |
Percentage of portfolio
Exposure < 1 SEK million |
31 064 |
99.4 % |
61.9 % |
Exposure 1 - 5 SEK million |
181 |
0.6 % |
23.9 % |
Exposure > 5 SEK million |
19 |
0.1 % |
14.2 % |
Total 31 264 100.0 % 100.0 %
ANNUAL REPORT // 103