Bilia AB (publ)

Thank you for the introduction and welcome to Wilja's fourth quarter results presentation with CEO Per Havander, CFO Kristina Fransén and I Carl Fredrik Jeves. We also have our Jeopardy CEO Stefan Nordström attending today. We are happy to present a strong result with higher order intake for new cars, strong cash flow and even more solid financial position than last quarter. I will come back to our outlook at the end of the presentation. Here is our agenda. Per will start with the current situation in the industry, followed by Q4 numbers. Then Kristina will go through the financial situation, and I will conclude, like I said, with our outlook end of the presentation. So let's start, and I leave the word to Per Havander.

Okay, thank you, Carl Fredrik. Since Q3 in Sweden we have seen signs of better interest in new cars from private customers. In Norway we have had good demand from customers in the new car business, driven by good campaigns and new tax regulations, effective from 1 January this year. In Western Europe the demand remains stable. Most of our brands have strong campaigns, big discounts, attractive private leasing offers, especially in Sweden. The demand for used cars is on a slightly lower level in our countries, and we see some lower prices for all cars, especially for expensive plug-in hybrids and electrical vehicles. As we mentioned in the last report, the government in Sweden terminated all incentives for EVs approximately three years ago, and we expected a large number of incoming used electrical vehicles. Up until now, we have handled the situation in a good way. In Bilja, the stock of used car is on a good and balanced level in our countries. There is a good and strong demand in the service business in Norway and Western Europe with good booking times. In Sweden we see weaker activities with somewhat lower booking times. Part of the explanation is the last years of lower new cars sales and export of young used cars. The total car market in Sweden 2025 was almost 20% lower compared to an average market the last 10 years. During this period, there has been a shift in the car population to more older cars. Next, please. Net turnover was in line with last year. We report operating earnings of 450 million with a margin of 4.4% compared to 420 million last year. We report higher operational earnings for both the service business and the car business and higher profitability in Norway and Western Europe related mainly to new cars. Operating profit was 370 million compared to 351 million last year and included 23 million of costs related to our efficiency program that we launched during the quarter. This efficiency program is expected to generate savings of around 150 million. Earnings per share were 2.46 crowns compared to 2.10 last year. On this slide, you can see the quarter four profitability from 2019 to 2025 in each country. And in the middle, you can see Norway and a good improvement. On the right hand side, you can see Western Europe and its steady journey over the last years with a margin of 7.4% in the quarter. On this waterfall chart, you can see the different business areas. We have improved the earnings in the new car business and the service business and dropped a little bit in the used car business, but still on a good and profitable level. We are moving over to the important service business representing 78% of the earnings in the quarter. In all our countries, we see an improvement in profitability and with a better margin of 13.9% compared to 13.6 last year. We had a positive organic growth in the group driven by Norway and Western Europe. There were same number of working days in Sweden and Belgium, and one more in Norway and Luxembourg in the quarter. We report earnings of 395 million, which were 21 million higher than last year, and this was the best quarter ever. The order intake of new cars adjusted for acquired and divested operations was 30% higher compared to Q4 last year. As I mentioned, we have seen a little bit better activities in all our countries, especially Norway, which was impacted by the change in tax rules. However, also Sweden had a solid increase of order intake by 20% compared to last year. For the car business, we report operational earnings of 104 million compared to 80 million last year. The profitability from cars in Sweden was on a slightly lower level, and the higher result relates mainly to Norway. For used car, we report earnings of 41 million compared to 54 million last year. In historical perspectives, it's a good level. As I mentioned in the beginning, the stock of used car is on a good and balanced level in all our countries. The reason for the lower earnings was some more price pressure on used fully electric cars and some lower demand. We have increased our underlying backlog on new cars with 2,400 units, and today we have 13,500. Some of our brands have recently launched interesting new EV models, attracting lots of interest from our customers. For many of them, for example, the new BMW iX3 and the Volvo X16, we see a little bit longer delivery times due to the high demand.

So let's move into the financial position. During the fourth quarter, we reported a strong operating cash flow of 675 million kronor compared to just below 300 million kronor last year. It means that for the full year, we have created an operating cash flow of some 2.1 billion kronor. Cash flow is a key focus area for us and will continue to be so for the future as well. As a result of the strong cash flow during this quarter, but also during the year, our net debt excluding IFRS 16 at the end of the quarter amounted to some 2.2 billion kronor, which was almost 700 million kronor below our net debt at the end of the last year. Our ratio of net debt in relation to EBITDA excluding IFRS 16 was then 1.3 times compared to 1.7 times as at December 2024. Consequently, we are well in line with our financial target to have a ratio below 2.0 times. As of October 1st, we did repay our bond loan of 500 million kronor, which we refinanced during the first quarter this year by issuing a new bond amounting to 800 million kronor with a maturity term of five years. The repayment of the old bond was then made for our available credit lines. And at the end of the quarter, as a result of the strong cash flow, we utilized some 16 million kronor of our credit facilities amounting to 2.3 billion kronor in total. In November this year, the board of directors took a decision to repurchase own shares to a maximum of 1,250,000 shares at the maximum value of 150 million kronor. So during the fourth quarter, we did make repurchases of shares. In total, 446,000 shares at the value of 57 million kronor has been repurchased. So for the full year 2024, we had earnings per share of 8.22 kronor versus 7.19 last year. The financial target for the group is to distribute at least 50% of the earnings per share to the group. Our board of directors has made a proposal to the annual general meeting to increase the dividends from last year's 5.60 to 6 kronor per share, which is an increase by 7%. That also means that the proposed dividend comprises of 73% of the earnings per share for 2025. And the dividend will be made in four installments as we did last year. In the report for the fourth quarter, we also announced an update of our financial targets. Our service business that Per talked about previously and the car business is an integrated operations. Their operations are tied to each other and together they comprise our business strategy to be a full service supplier during the lifetime of the car. To further enhance strategic management and transparency, we have updated our financial targets for profitability. We have replaced our previous 5% operating margin target for the Group with two separate financial targets. For the service business, we have a profitability target that is a margin for operational earnings of 14%. And this is a target level that we have talked about earlier, both in our annual report, but also in different meetings such as our capital market days. For the car business, we have a new profitability target that is return on capital employed amounting to 8%. The return on capital employed that will be used will exclude IFRS 16 assets. This target is new and has been selected as it combines the focus on margin development with the focus on capital efficiency development. The car business is the segment within our business that takes most capital, typically cars, both new cars, used cars, leased cars and demo cars, where we target to have a return that equals our cost of capital. Information about the margin for operational earnings for the service division has been presented in our quarterly reports in the past. Information about return on capital employed for the car business together with the capital employed at the end of the quarter is included on page 28 in our report for the fourth quarter and will be reported on a quarterly basis going forward as well. Here you will also find a historical development for the last quarters as well. And combined, these two new financial profitability targets essentially correspond to our previous target of 5% operating margin for the group.