ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

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28 EPI 2010 European Payment Index (EPI) 2010 – on the right path Since 1998 Intrum Justitia has conducted an annual survey of changes in payment behavior in Europe. The results are used to gain a better understanding of how European companies view payment behavior in their country and how an entire nation’s economy is negatively affected by late payments. The 2010 survey revealed that many of the 3,900 or so small and medium-sized enterprises included in the survey are still having financial problems, despite political pledges about recovery. European banks are still cautious in granting credit, which is mainly affecting small businesses. The increasing percentage of bankruptcies in 2009 in Europe gave rise to an increase in write-downs. In 2009 169,000 European companies filed for bankruptcy. The European Commission’s small and medium-sized enterprises section predicted that this figure would grow to 200,000 in 2010, which represents an increase of 18 percent. The unwillingness of banks to extend more credit to small and medium-sized enterprises is probably driving this trend. SLOW RECOVERY Despite the fact that growth in Europe is modest, there are signs today of a slow recovery in several European countries. The conclusion from the European Payment Index is that the late payment situation has stabilized since 2009, but that the future for European businesses is still uncertain. In the countries hit the hardest by the financial crisis in 2008 and 2009, there are still few signs of improvement in terms of getting paid on time for products and services. Pessimism is highest among companies in the countries hit the hardest by the financial crisis. SHORTER LATE PAYMENT PERIODS BUT INCREASE IN WRITTEN-Off RECEIVABLES One piece of good news from the 2010 EPI is that the average late payment period for payments in Europe, i.e. the period after an invoice falls due for payment, has gone down by one day, from 19 NO. OF DAYS 15.1 16.3 16.8 16.0 17.0 04 05 06 07 08 09 10 LATE PAYMENT IN EUROPE, average 19.0 18.0 days in 2009 to 18 days in 2010. This means that companies are waiting for a shorter period for payment compared to just over a year ago. This good news is counteracted by the fact that the average percentage of receivables that are written off has risen to 2.6 percent, from 2.4 percent the previous year – a figure that was 1.9 percent in 2007. This means that the percentage of invoices that are never paid and ultimately written off has increased every year since 2007. Somewhat surprisingly, companies tend to react slowly when it comes to handling late payments. Despite the obvious drawback of getting paid late or not at all, close to 65 percent of companies wait an average of 85 days before sending a case to a credit management company. BETTER LEGISLATION IS NEEDED Outside the Nordic countries most respondents in the survey want better legislation to enable them to collect reminder fees and penalty interest as this is difficult when it is not the normal practice in their country. In the Nordic region this is supported by local regulations and payment patterns here are much healthier compared with countries in, for example, Southern Europe. An obvious consequence of late payments is lost income and lower liquidity for companies. This, combined with a lack of confidence that banks will provide businesses with financial support to generate growth, makes for a challenging situation for many small and medium-sized enterprises. The results of the European Payment Index emphasize the need for better credit management by many European companies. Analyzing the creditworthiness of prospective clients and thereby being able to offer several payment options is a step in the right direction. € € € 1.7% 1.9% 1.8% 04 05 06 07 08 09 10 CREDIT LOSSES IN EUROPE, average 1.9% 2.0% 2.4% 2.6% PERCENTAGE OF TOTAL TURNOVER
Regions Intrum Justitia has operations in 22 countries organized into three regions. Northern Europe Sweden 1923 Market leader Finland 1910 Market leader Denmark 1977 Top 5 Norway 1982 Top 5 Estonia 1996 Market leader Latvia 2002 Top 5 Lithuania 2000 Market leader Poland 1998 Top 5 Central Europe Established Market position Switzerland 1971 Market leader Germany 1978 Top 10 Austria 1995 Top 5 Czech Republic 1996 Top 5 Slovakia 2005 Market leader Hungary 1993 Market leader Western Europe Established Established Market position Market position United Kingdom 1989 Top 10 Ireland 1999 Market leader Netherlands 1983 Market leader Belgium 1988 Market leader France 1987 Market leader Spain 1994 Market leader Portugal 1997 Market leader Italy 1985 Top 10 % of sales 39% % of sales 24% % of sales 37% % of profit 44% % of profit 27% % of profit 29% Revaluations of purchased debt are excluded from Group revenues. Group profit is operating earnings (EBIT) excluding purchased debt revaluations. % of employees 39% % of employees 17% % of employees 44% Northern Europe 2010 2009 % fx %* Revenues 1 434 1 432 0,1 5,9 Operating earnings 322 354 –9,2 –3,3 Operating margin (%) 22,4 24,7 –2.3 ppt Central Europe 2010 2009 % fx %* Revenues 926 1 039 –10,9 –5,5 Operating earnings 198 207 –4,4 –0,2 Operating margin (%) 21,4 20,0 1.4 ppt Western Europe 2010 2009 % fx %* Revenues 1 403 1 692 –17,1 –7,9 Operating earnings 209 196 6,3 18,2 Operating margin (%) 14,9 11,6 3.3 ppt The operating result in 2009 is adjusted for costs of SEK –54.1 M attributable to the UK. * Change adjusted for currency effects in 2010.
Page 1 and 2: INTRUM JUSTITIA ANNUAL REPORT
Page 3 and 4: Net earnings amounted to SEK 452 M
Page 5 and 6: We are working to promote healthy p
Page 7 and 8: ity will increase in these countrie
Page 9 and 10: In addition to being present in 22
Page 11 and 12: We are the market-leading credit ma
Page 13 and 14: Our services Respectful credit mana
Page 15 and 16: insight to feed innovation We are a
Page 17 and 18: Payment services Information is imp
Page 19 and 20: Payment guarantee Many of our custo
Page 21 and 22: Committing to challenge We are ofte
Page 23 and 24: Credit institutions, private and pu
Page 25 and 26: Our goal is to be the employer of c
Page 27: Benefits of credit management Sound
Page 31 and 32: No. of shares traded Intrum Justiti
Page 33 and 34: financial overview Income statement
Page 35 and 36: There are several attractive commer
Page 37 and 38: NET fINANCIAL ITEMS The net financi
Page 39 and 40: GOODWILL The Group’s goodwill amo
Page 41 and 42: PROPOSED APPROPRIATION Of PROfIT Th
Page 43 and 44: Consolidated balance sheet SEK M NO
Page 45 and 46: Consolidated cash flow statement SE
Page 47 and 48: Parent Company income statement SEK
Page 49 and 50: Parent Company balance sheet SEK M
Page 51 and 52: Condensed statement of changes in s
Page 53 and 54: NOTE 1 SIGNIfICANT ACCOUNTING AND V
Page 55 and 56: Legal outlays The Group incurs outl
Page 57 and 58: iod of employment of the employees
Page 59 and 60: GROUP Tangible and intangible fixed
Page 61 and 62: GROUP 2010 2009 Reconciliation SEK
Page 63 and 64: NOTE 11 TANGIBLE fIXED ASSETS GROUP
Page 65 and 66: NOTE 13 JOINT VENTURES Intrum Justi
Page 67 and 68: NOTE 21 LIQUID ASSETS GROUP PARENT
Page 69 and 70: ity amounted to SEK 168.7 M (849.7)
Page 71 and 72: SEK Base salary/fee Variable comp-
Page 73 and 74: 2010 PARENT COMPANY SEK M At fair v
Page 75 and 76: Accounts receivable The Group’s a
Page 77 and 78: Audit Report We have audited the an
Page 79 and 80:
CHARLOTTE STRÖMBERG Age 51 Directo
Page 81 and 82:
PER CHRISTOFFERSON Age 42, Director
Page 83 and 84:
ATTENDANCE AT BOARD MEETINGS IN 201
Page 85 and 86:
The Board of Directors’ report on
Page 87 and 88:
able on the intranet and ongoing em
Page 89 and 90:
Information for shareholderst Annua
Page 91 and 92:
Intrum Justitia’s annual report 2
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ANNUAL REPORT INTRUM JUSTITIA A N N U A L R EP O R T 2 0 ...

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