Growth in a turbulent market

The most significant event for EKN happened when the year was drawing to an end. With demand for EKN’s guarantees rocketing, we quickly obtained an extended guarantee framework to allow us to respond to the rising demand.

Demand sky high

Evidence of increasing demand for our solutions can be seen in all our figures for 2008. The number of offers rose to 1,496 compared with 1,387 the previous year. The volume of offers increased to SEK 69 billion as against SEK 46 billion the previous year. The volume of guarantees issued during the year rose to SEK 33 billion from SEK 24 billion the previous year. At the end of the year, our total commitment, made up of offers and guarantees, was SEK 183 billion, compared with SEK 158 billion at the same point the previous year. We reported a result of SEK 820 million for the year. This strengthens our already stable position.

Small and medium-sized companies’ export activities play an important role in Sweden’s future success on the global markets. In recent years we have intensified our efforts to design guarantees which suit the needs of smaller companies. We have also worked to raise companies’ awareness of EKN. The pattern of more companies starting to use EKN’s guarantees to develop their exports has been in evidence for several years. Last year, 99 new customers joined our customer ranks, while this year the number was 100. All but a few are small and medium-sized companies.

With EKN’s involvement, export transactions in both established and new markets are still possible. Customers can see business potential more easily with EKN as their natural risk partner.

Risk means responsibility

At EKN, we bear an important responsibility to expand our activities in order to fill the empty space which materialises during restricted market capacity. At the same time, we must also maintain control over our risk exposure. Although this applies all the time, it is particularly important at the present time, in view of macro-economic trends. The very essence of our business is assessing risk. We do this every day in the transactions we assess. And our responsibility is founded on this core competence.

The second half of the year showed an increase in the number of payment arrears in many of the guaranteed transactions, although we still had a low level of indemnifications. We paid indemnifications totalling SEK 50 million during the year, compared with the record low SEK 12 million the previous year. With instability in the global economy, we expect to see an increase in suspended payments for transactions. In many cases, arrears are a sign of impending losses.

Taking even more responsibility

In the global economy, we as well as other players in the credit insurance market, face similar issues and challenges. When the export credit agencies’ association Berne Union held its annual meeting in Canada at the end of the year, the financial crisis was at the top of the agenda. Many agreed with us that lenders need better protection, and companies are increasingly viewing credit insurance as a means of strengthening their financial position. Another common issue was how export credit agencies around the world approach corporate social responsibility. We invited Atlas Copco’s CSR Manager to the meeting and gave a joint presentation of how we cooperate in the area of corporate social responsibility.

International contacts are also established when we participate in business delegations. When EKN’s employees visit various parts of the world together with companies, visiting their customers and subsidiaries, these companies are able to see more potential. We reach out to more companies and we can do more. At the moment, we have one employee based in Abu Dhabi. This gives us a presence in a region where it is very much in companies’ interests to conduct more transactions with EKN’s help. The Board of Directors too is committed to building up our international network, and visited OECD’s Export Credit Group in Paris and Swedish companies in the United Arab Emirates during the year.

And we can do more

EKN’s 75-year history guarantees Swedish export a constant partner. An influx of new customers, increasing numbers of applications, an extended framework and a strong financial position all provide a solid platform for promoting Swedish exports and the internationalisation of Swedish business – both in good times and bad.

Lennart Nilsson stood down as Chairman of the Board at the mid-year point, and I would like to extend special thanks to him for his teamwork and the commitment he has shown EKN over a large number of years. I would also like to take the opportunity of welcoming the new Chairman, Dag Klackenberg, and thanking him and the rest of the Board for their contribution during the year.

And finally, to EKN’s skilled and committed employees – a grateful thank you for the last year. Together we are ready to face a year of increasing demand combined with uncertainty in the global financial development.

Karin Apelman