EDC AT A GLANCE APRIL 2015

Transcription

1 EDC AT A GLANCE APRIL 2015

2 OUTLINE About EDC mandate, locations, solutions 2014 Performance Highlights A few definitions EDC solutions, applied 2

3 ABOUT EDC Canada s Export Credit Agency Crown corporation wholly owned by Government of Canada Financially self-sustaining Operates on commercial principles 3

4 EDC S ROLE To support and develop Canada s export trade and international business efforts Financing and insurance solutions for Canadian exporters and investors 4

5 EDC'S OVERARCHING PRINCIPLES Partnership-Preferred Philosophy Leverage our financial capacity to complement the activities of the private-sector financial institutions to ensure that customers can access financial solutions best suited to their needs 5

6 EDC'S OVERARCHING PRINCIPLES Corporate Social Responsibility CSR is more than just compliance with policy or regulation; it is the integration of values such as honesty, respect, fairness and integrity into our daily business practices 6

7 EDC S FOREIGN REPRESENTATION North America $54.5B (55%) Asia-Pacific $17.9B (18%) Europe $13.5B (14%) South / Central America $8.4B (9%) Africa / Middle East $4.5B (5%) 7

8 CONNECTING WITH CANADIAN BUSINESSES ACROSS CANADA 8

9 2014 PERFORMANCE HIGHLIGHTS Facilitated $99.0 billion in business carried out by Canadian companies Served about 7,400 customers Supported business in 198 countries Facilitated $29 billion in emerging markets Contributed to 4% of GDP, supporting 719,200 jobs 9

10 EDC SOLUTIONS Exporters risks to be mitigated or needs to be met: 2014 CAD Billion Risk of not getting paid CI 67 (68%) Need financing for themselves or their buyer FIN 22 (22%) Need to guarantee their performance CIB 7 (7%) Risk of losing their investment abroad PRI 3 (3%) 99 CI: Credit Insurance FIN: Financing CIB: Contract Insurance and Bonding PRI: Political Risk Insurance 10

11 $ Billions BUSINESS FACILITATED BY SECTOR TEAM (IN BILLIONS) Infrastructure and Resources Extractive Transportation Information and Light Environment Communication Manufacturing Technology Sector Source: EDC Data 2013, as of December

12 EXPORTER MARKETPLACE Med/Large Exporters (export sales >$25M) 1,200 Established Exporters ($5M < export sales < $25M) 2,600 Growth Exporters ($1M < export sales < $5M) 5,300 ($100K < export sales < $1M) 12,000 Evolving Exporters (export sales > $100K) 17,300 5,000 10,000 Pre-exporters 38,400 total exporters, based on export sales [ + 20,000 (est.) indirect exporters] Sources: - Statistics Canada, International Trade Division, 2010 Exporter Register Database - Industry Canada, Small Business Branch, Survey on financing and growth of SMEs,

13 DIRECT VS INDIRECT EXPORTS Aerospace sector supply chain Foreign operators Airlines, couriers, governments, private corp., etc. Aftermarket Service/Parts Canadian & Int l suppliers & vendors Canadian OEM (e.g. Bombardier Aerospace) Foreign OEM (e.g. Airbus, Boeing, Embraer) Cdn tier 1 Integrators Major components: turbines, avionics, airframe, landing gear, etc. Foreign tier 1 Major components: turbines, avionics, airframe, landing gear, etc. Cdn tier 2 supplier Minor components: e.g. Interiors Foreign tier 2 Minor components: e.g. Interiors Cdn tier 3 suppliers Generic equipment, metal work, toolers, composites, carpeting, etc. 13

14 HOW WE FULFILL OUR ROLE Commercial focus Credit risks Performance risks International Guidelines WTO Consensus Arrangement Berne Union EDC Policies Canadian Benefits Corporate Social Responsibility 14

15 STORY EXPORTER INC. Exporter Inc. is a Canadian company Started locally and now sells across Canada Domestic market saturated and sales have been flat Considering changing business model to include exporting 15

16 EXPORTER INC. LOOKING TO GROW Situation: Contract in Mexico Need: worried about non-payment Solution: EDC insures single contract Benefit: Risk of not getting paid covered 16

17 PAYMENT RISK COVERED EDC Single Buyer Policy Contract Exporter Foreign Buyer 17

18 MEXICO SALES GROWING Situation: exporting business growing Need: additional financing Solution: CI to free up security under operating line Benefit: Risks covered and more short term financing available to grow business 18

19 INSURANCE FREES UP OPERATING LINE Assigned EDC Canadian Bank AR Policy Contract Exporter Foreign Buyer 19

20 EDC SOLUTIONS Exporters risks to be mitigated or needs to be met: 2014 CAD Billion Risk of not getting paid CI 67 (68%) Need financing for themselves or their buyer FIN 22 (22%) Need to guarantee their performance CIB 7 (7%) Risk of losing their investment abroad PRI 3 (3%) 99 CI: Credit Insurance FIN: Financing CIB: Contract Insurance and Bonding PRI: Political Risk Insurance 20

21 COMPANY TAKING OFF IN MEXICO Situation: New buyers want financial or performance guarantees Need: Operating line tied up by guarantees Solution: EDC backstops performance and financial risk for bank Benefit: Operating line not tied up by guarantee 21

22 EDC BACKSTOPS PERFORMANCE Guarantee Advise EDC X Security Letter of Credit Foreign Bank Confirm Contract Exporter Foreign Buyer 22

23 EDC SOLUTIONS Exporters risks to be mitigated or needs to be met: 2014 CAD Billion Risk of not getting paid CI 67 (68%) Need financing for themselves or their buyer FIN 22 (22%) Need to guarantee their performance CIB 7 (7%) Risk of losing their investment abroad PRI 3 (3%) 99 CI: Credit Insurance FIN: Financing CIB: Contract Insurance and Bonding PRI: Political Risk Insurance 23

24 LARGE ORDER Situation: Financial capacity constraint to take on new contract Need: Additional inventory, staff and sub-contractors Solution: EDC backstops bank s contract specific, one-off or bulge facility to specifically support Work in Progress Benefit: Work in Progress is supported until delivery & payment 24

25 GUARANTEE IN SUPPORT OF INTERNATIONAL SALES Guarantee EDC Canadian Bank Contract Exporter Foreign Buyer 25

26 BUYER ASKS FOR FINANCING Situation: The RFP includes a financing requirement Need: Term financing for the buyer Solution: EDC buyer loan Benefit: Exporter gets paid by EDC upon delivery, buyer has additional source of financing 26

27 DIRECT LOAN TO BUYER EDC Contract Exporter Foreign Buyer Loan 27

28 EDC SOLUTIONS Exporters risks to be mitigated or needs to be met: 2014 CAD Billion Risk of not getting paid CI 67 (68%) Need financing for themselves or their buyer FIN 22 (22%) Need to guarantee their performance CIB 7 (7%) Risk of losing their investment abroad PRI 3 (3%) 99 CI: Credit Insurance FIN: Financing CIB: Contract Insurance and Bonding PRI: Political Risk Insurance 28

29 LOCAL MANUFACTURING FACILITY NEEDED Situation: Demand outstripping domestic capacity Need: Require financing to build new plant Solution: EDC uses financial network to arrange loan and insure foreign affiliate s receivables Benefit: additional financing to expand business 29

30 EDC and CDIA Guarantee EDC Canadian Bank Contract AR Policy Exporter Foreign Subsidiary Foreign Buyer Guarantee Foreign Bank Loan 30

31 EDC SOLUTIONS Exporters risks to be mitigated or needs to be met: 2014 CAD Billion Risk of not getting paid CI 67 (68%) Need financing for themselves or their buyer FIN 22 (22%) Need to guarantee their performance CIB 7 (7%) Risk of losing their investment abroad PRI 3 (3%) 99 CI: Credit Insurance FIN: Financing CIB: Contract Insurance and Bonding PRI: Political Risk Insurance 31

32 BUILDING ON SUCCESSFUL MODEL Looking to repeat model in India Access EDC s extensive network: banks, government, buyers Help Exporter Inc. build successful market entrance strategy (new plant, intro to buyers, market info) Exporter Inc. s success is EDC s success 32

33 EDC s PULL transactions EDC Contract Exporter Foreign Buyer Loan 33

34 EDC SOLUTIONS Exporters risks to be mitigated or needs to be met: 2014 CAD Billion Risk of not getting paid CI 67 (68%) Need financing for themselves or their buyer FIN 22 (22%) Need to guarantee their performance CIB 7 (7%) Risk of losing their investment abroad PRI 3 (3%) 99 CI: Credit Insurance FIN: Financing CIB: Contract Insurance and Bonding PRI: Political Risk Insurance 34

35 35 QUESTIONS?