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 2,295.7( 1,983.1) 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 2024 confirmed credit losses in Corporate represented 0.04( 0.17) % 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 2024 confirmed credit losses in these two operating segments represented 0.28( 0.08) % and 0.01( 0.06) % 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 |
2024 |
2023 |
Exposure |
1,680.5 |
1,538.3 |
Credit risk reserve |
-83.8 |
-63.1 |
Book value |
1,596.7 |
1,475.2 |
SEK million 2024 2023 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 2024
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 6.2( 6.5)% 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 |
36,907 |
99.5 % |
56.9 % |
Exposure 1- 5 SEK million |
165 |
0.4 % |
21.1 % |
Exposure > 5 SEK million |
24 |
0.1 % |
22.0 % |
Total 37,096 100.0 % 100.0 %
As of 31 December 2023
Accounts receivable
SEK million Credit risk reserve for accounts receivable |
2024 |
2023 |
Credit risk reserve at the beginning of the year |
-63.1 |
-58.5 |
Recovered reserves during the year |
9.2 |
7.1 |
Reserve for expected credit risks |
-34.3 |
-18.4 |
Confirmed losses |
6.2 |
8.0 |
Translation differences |
-1.9 |
-1.3 |
Credit risk reserve at year-end |
-83.8 |
-63.1 |
Number of customers
Credit risk reserve
Accounts receivable
Percentage of total customers
Credit risk reserve
< 30 days |
1,490.0 |
-4.0 |
1,370.6 |
-2.3 |
30- 90 days |
91.6 |
-6.9 |
68.9 |
-10.1 |
> 90 days |
98.9 |
-72.9 |
98.8 |
-50.7 |
Total |
1,680.5 |
-83.8 |
1,538.3 |
-63.1 |
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 %
ANNUAL REPORT // 121