Bilia AB (publ)

Thank you for the introduction and welcome to Bilja's fourth quarter results presentation with CEO Per Wander, CFO Kristina Franzén, Deputy CEO Stefan Nordström and I, Carl Fredrik Jevets. Despite the current tough economic situation, especially in the car industry, we're proud to present a solid result and a satisfactory cash flow. And moving to the agenda. Same procedure as last quarter. Per will start by going through the current situation in the car industry, followed by Q4 numbers. Then Kristina will go through the financial situation and I will conclude with an outlook. So let's start. I'll leave the word to Per Havande.

Okay, thank you Carl Fredrik. And we go to the slide, the current market situation in the car industry. There is a good and strong demand in the service business with good booking times. Our customers take care of their cars both for service and repairs regardless of the financial situation. The fleet business has still a stable demand for new cars in Sweden with a market share around 60%. The private consumers are still in a wait and see mode, but we can see some better activities when we measure, for example, floor traffic in showrooms and credit requests. Many brands have started strong campaigns, big discounts and attractive private leasing offers. In Norway, we see and feel signs of a better business climate. The demand for new cars are growing, good booking times in workshops, households' confidence is on a better level. Our brands have, for the moment, strong campaigns in the Norwegian market. The demand for used cars are on a good level in Sweden and Norway, and we see stable prices for all cars, except fully electrical vehicles. In the same time, we see lower prices of fully electric and new cars. The prices of used fully electric cars are declining. The stock of used cars is on a slightly high level in Sweden and Norway, and in Western Europe, it's on a normal level. There has been lots of discussion of different business models. Four or five years ago, it was really popular to test subscription car sharing agency model. One example is Lincoln Co. They only sold the cars through a subscription model in the past, and now they are going over to traditional wholesale model. Still, we see agency models from some manufacturers, but the feeling is more that we are going back to what we had in the past. Some manufacturers hesitating and pushed the introduction of agency model into the future. Next slide, please. Net turnover increased organically by 1%, explained by higher deliveries of used cars and growth in the service business. We report a result of 420 million with a margin of 4.1%. We had better earnings in the service business with a higher margin. We had lower profitability for new cars, especially in Sweden and Norway. Next, please. On this waterfall chart you can see the different business areas. All the earnings improvement is coming from the service business and less result for both new and used cars. On this slide, you can see the quarter four profitability from 2020 to 2024 in each country. And in the middle, we have Norway, and there you can see some improvements. On the right hand side, you can see Western Europe delivering at a stable and high level. Sweden deliver lower earnings due to the car business. Next, please. We are moving over to the important service business. As I mentioned, there is still a stable demand in the service business in all countries, our countries, especially for body and paint jobs. We have an organic growth for the group in the quarter of 7% and in Norway as much as 17%. For the full year, we have an organic growth of 7%. We report a profitability of 374 million. It's 81% of the group earnings. As you can see on the right hand side, it's 54 million better than the last year and one of the best quarter four result ever. There are several reasons why we report a higher result. One is good booking times in all countries. Another is much better efficiency and solid improvements in the Norwegian workshops. The third, we had a strong underlying growth and a better profitability in the Swedish body and paint shops. This higher result comes despite one working day less in Sweden and Norway for the quarter. go over to the car business. Deliveries on new and used cars adjusted for acquired operations were 1% lower for new and 9% higher for used cars compared to Q4 last year. For the car business, we report a result of 80 million compared to 144 million last year. and the profitability for new cars in sweden and norway were on the louvre level the main explanation for that is louvre gross profit bargain and fewer deliveries for used cars we report a profitability of 54 million compared to 71 million last year in a historically perspective it's a good level As I mentioned in the beginning, the stock of used cars is a little bit high in Sweden and Norway, but we have started some campaigns, which means we will quickly reduce the stock in quarter one. The order intake on new cars adjusted for acquired divested operations were 20% higher compared to last year. As I mentioned, we feel and see a little bit better activities in all our countries. The order backlog on new cars is a bit on the low side, especially Sweden and Norway. Having said this, our manufacturers currently have shorter production time, meaning we will see a lower backlog for the rest of the year. Kristina.

Thank you, Per. So let's then move into our financial position. As we pointed out earlier during the year, cash flow is one of our focus areas and that is still the case. During the fourth quarter, we did generate a stable operational cash flow of 290 million kronor. And for the full year, we have generated an operational cash flow of some 1.6 billion kronor compared to some 600 million kronor last year. We will continue to work on inventory management. Our prime focus is turnover rate of use as well as of new cars. But we do also focus on other parts of working capital to be as efficient as possible in these times when financing cost is still on a high level compared to historical levels. During the fourth quarter, we have paid out our third installment of the dividend from last year, totaling 6.60 kr per share, which means that we have paid some 150 million kr to our shareholders. The fourth and last installment of this dividend has been paid out in January this year, 2025. During the quarter, we have also added a BMW dealer in Luxembourg to the Bilia family. It's Carlos Schmitz, where we are now then in Luxembourg running two facilities, which we expect to generate synergies in the future. The payment for this acquisition was partly made in cash, around 240 million kroner, and partly in own Belia share, which was valued at 60 million kronor as part of the purchase price. In total for the year, we have invested some 650 million kronor in acquisitions of new operation that includes Jaguar and Land Rover dealer in Sweden, a Volkswagen dealer in Sweden, and additional Xpeng operations in Sweden and Norway. We have also started up an importer business related to Jaguar and Land Rover for the Swedish and Norwegian operations. And these importer business are then operated as a joint venture and included in our financial statements based on the equity method. At the end of the quarter, we utilized around 1.6 billion SEK of our total credit limit of 2.3 billion SEK. This credit limit is what was renewed during the first quarter this year and matures in March 2029. Our net debt at the end of the fourth quarter amounted to 2.9 billion SEK, which was some 450 million kronor higher than last year and also some 400 million kronor higher than the third quarter. The increase compared to the third quarter was primarily caused by acquisitions in the quarter, as well as the dividend paid. Our target is to have a ratio for net debt with the excluding IFRS 16 below 2.0 times. And at the end of the fourth quarter, this ratio was 1.7 times, so well below our target of 2.0. And then at last, the Board of Directors of BILIA proposed a dividend of 5.60 kr per share for the annual general meeting to be held in April this year. The proposed dividend represents 78% of the earnings per share for the year. This is a higher level than the historical dividend that's been distributed. And as in previous years, the dividend will be paid out in four installments.