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