Nordea’s Working Capital Study 2020
Nordic companies have been heavily affected by COVID-19. When comparing 2020 second quarter results to 2019 second quarter the study finds that Nordic companies’ revenues have decreased with 7%. In addition to revenues operating profits are struggling as well, while net working capital levels are increasing. The increasing level of working capital is mainly caused by higher inventory levels in relation to sales.
When looking further into working capital performances, it is evident that low levels of net working capital support a higher Return on Capital Employed. Over the analysed period 2016–2019, with decreasing EBIT margins, on an aggregated level companies have been able to improve working capital which has mitigated the decrease in ROCE. Within the sample there are major differences between the performances and the study elaborates on best and worst performers across the sample.
Read the Working Capital Report 2020 here
Nordea’s Overdues Report 2020
Nordea’s Working Capital Management Advisory team analysed the 2018 and 2019 annual reports of 124 listed Nordic large cap companies in order to study the share and volume of overdue payments of accounts receivables. With a total aggregated amount of EUR 18.5 billion in overdue payments for the 124 companies included in the survey, the level of receivables exceeding the defined payment terms amounted to 22% of total accounts receivables.
The survey showed some differences between industries, with the ratio between overdues and accounts receivables varying from 15% to 36% depending on the sector. Industrials and Telecommunications proved to be the sectors with the highest late payment ratios. Consumer Goods and Utilities were the best performing sectors, receiving around one sixth of total payments later than the agreed payment terms.
Read the Nordea Overdues Report 2020 here
To hear more about robust supply chains at Nordea write to Richard at Richard.Hayes [at] nordea.com (Richard[dot]Hayes[at]nordea[dot]com).
Contact your Nordea Trade Finance advisor for further assistance or find out more about we.trade here.