Six in ten businessmen affected by the crisis believe their situation will improve within a year
One year is the maximum time calculated by Spanish companies for resuming activity in our country. Concretely, nearly 6 out of 10 entities affected by the health crisis (55%) make this estimate, according to the new edition of Intrum’s European Payment Report, presented this week at the international level. The study analyzes the financial health and economic forecasts of companies in 29 European countries.
Concretely, as shown by the analysis carried out by the leading company in credit management services, 38% of Spanish companies believe that the pandemic will stop having a negative impact on their activity during the first half of 2022, and the 17% The remainder believe that this situation will be reversed even earlier, by 2021. Others believe that the consequences of the crisis will continue to weigh on their finances beyond the next 12 months.
“After more than a year of pandemic, the Spanish commercial fabric is able to take stock of the impact that the health crisis has had on its activity and, although there is still great uncertainty about the future , vaccines and the gradual reactivation of activity are leading companies to start having a more optimistic outlook. In fact, nearly 6 out of 10 companies surveyed in Spain are sure that the situation will improve over the next twelve months “, says Jos Luis Bellosta, CEO of Intrum in Spain.
According to the analysis carried out by Intrum, of the 29 countries surveyed, Spanish companies are among the top ten in Europe that expect COVID-19 to have financial consequences for their business in a year or less (55%) , They are only exceeded by those of Greece (58%), Ireland (58%), Norway (57%), Switzerland (57%), Sweden (56%) and the United Kingdom. United (56%).
This optimism stems from the feeling of having overcome an unprecedented situation, which, as pointed out by almost half (46%) of the Spanish organizations consulted, were very lucky to overcome.
The vision towards recovery is also present in analyzes carried out by other official sources, such as the latest Bank of Spain Business Activity Survey (EBAE), which in March showed how Spanish companies expected improvement. short term. And it is that, for the first time since the end of 2020, companies with prospects for growth in their turnover (32.6%) have exceeded those which foresee an additional deterioration (23.2%).
“However, we cannot relax. We are still in a context of uncertainty, where the end of moratoria or state aid could affect the financial health of companies that have benefited from this aid, ”adds the CEO of Intrum in Spain.
Only 2 in 10 Spanish companies say they have not been negatively impacted by the crisis
The corporate sector maintained an expansionary trend in its activity between 2014 and 2019, experiencing positive developments in terms of profitability and liquidity, and a gradual decrease in the level of aggregate debt. However, March 2020 brought an unprecedented contraction that worsened the financial situation of a high percentage of organizations. An unfavorable situation which, as it has been proven, did not affect all entities in the same way. The results obtained by Intrum bear witness to this.
As the study shows, only two in ten Spanish companies say they haven’t seen their profit margins changed during this time. Concretely, 14% declare not to have undergone any variations in this direction and 5% even admit to having known an increase.
Alongside these organizations, there are those which, although they suffered a drop in their profits, returned to normal (8%) thanks to the gradual reactivation of activity and demand, recovering the figures before the pandemic.
Finally, and unlike the previous ones, there would be the largest group affected by the health crisis: the 73% of Spanish organizations that believe their profits will continue to be lower. This percentage would include companies that have experienced a decline in turnover, and have not yet recovered (48%), or those which, although they now recognize that their profits remain stable, expect a decline to short term (25%). ).
The risk of default, one of the main concerns of Spanish companies
According to the analysis carried out by Intrum, two out of three entities (63%) admit to being more concerned than ever about the payment capacity of customers with whom they have overdue accounts. Indeed, one of the main priorities of Spanish companies is to try to secure customer payments more quickly, especially in the case of SMEs (21%).
This fear of not being able to repay unpaid debts to its customers has led the corporate sector to be much stricter when it comes to accepting longer payment terms. So much so that the percentage of entities declaring that they do not negotiate the terms of payment rose from 9% to 28% in just a few months. Something that represents an increase of almost 20 percentage points.
In addition, if in the edition of the study at the end of last year, 80% of Spanish organizations admitted having accepted longer payment terms than they would like so as not to harm the relationship with their customers, this figure is now 46%, or 34 points lower.
It remains to be seen how the next few months will unfold, as the combination of tougher requirements and increased default possibilities could generate a domino effect across the rest of the corporate sector.