Bilia AB (publ)

Thank you for the introduction and welcome all to BILIA's first quarter results presentation with CEO Per Havander, CFO Christina Fransén and I, Carl Fredrik Jeves. In addition to releasing our Q1 report today, we're also holding our annual general meeting this afternoon, and therefore we have the pleasure of having both our Jeopardy CEO Stefan Nordström and our managing director of our Norwegian operation, Frode Hebnes. joining us today for the Q&A session. We're happy to present a good result and a solid financial position. And here is our agenda. Per will start with the current situation in the industry, followed by Q1 numbers. Then Kristina will go through the financial situation and I will conclude with our outlook. So by that, I leave the word to our CEO, Per Havande.

Thank you, Carl Fredrik. The quarter started with low demand of new cars in Sweden, but improved later in the quarter. We also saw signs of better interest in new cars from private customers. In Norway, we had a strong finish in quarter four due to the changes of the tax situation. January and February this year had a weak order intake of new cars, while March was much better. In Western Europe, the demand remained stable throughout the quarter. Currently, many of our brands have strong campaigns, big discounts and attractive private leasing offers in all our countries. The demand for used car in our countries was slow in the beginning of the quarter. But we saw signs in March of slightly better activity. Prices for used electrical cars have stabilized on a slightly lower level, and therefore we saw better demand in Sweden for fully electrical used cars. As I have mentioned in the last two reports, the Swedish government terminated all incentives for electrical vehicles approximately three years ago, and we expected a huge number of incoming used electrical vehicles in quarter four and quarter one. Now we have passed the peak and we can conclude 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. When it comes to the service business, this quarter is similar to the previous quarter. There was a good and strong demand in the service business in Norway and Western Europe. with good booking times. In Sweden, we saw slightly weaker activities with somewhat lower booking times. Part of the explanation is some years of lower new car 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 slide, please. Net turnover was somewhat lower compared to last year. We reported a result of 382 million with a margin of 4% compared to 344 million last year. We had higher profitability in Sweden and Norway. In Western Europe, touched lower results related to the service business, but still a good margin of 6.1%. The main reason for the high results in Sweden relates to the service business and for Norway, the new car business. Earnings per share were 2.11 crowns compared to 1.61 last year. Next slide please. On this slide, you can see the quarter one profitability from 2020 to 2026 in each country. On the left hand side, you can see the strong performance in Sweden. And on the right hand side, you can see Western Europe still on a very strong level. In the middle, you can see Norway performing better since a couple of years ago. Next slide, please. On this waterfall chart, you can see the different business areas. We improved the earnings in the service business and within the new car business. I would also like to mention the improvement in the fuel business, which relates to quick change in the oil price during the period. Next slide, please. We are moving over to the important service business. Our service business represented 79% of the earnings in the quarter and we improved the result and the margin. This was the best quarter one ever in the history. We reported a result of 328 million compared to 310 million in the same period last year, and the margin increased from 12.2% to 12.4%. The main reason for this is Sweden, with an improvement of profitability and with a high margin of 14.2%. We also had a positive organic growth in the group driven by Norway. There were some same number of working days in all our countries during the quarter. There are several reasons why we report a higher result. One is higher efficiency. Another is more deliveries of new cars. And the third is better performance for our tire and wheel storage operation. Next one. The order intake of new cars adjusted for acquired and divested operations was 14% higher compared to Q1 last year. As I mentioned, we have seen a slightly better activity in all our countries, especially towards the end of the quarter. For the car business, we reported a result of 65 million compared to 57 last year. The profitability for cars was related mainly to Western Europe, and Norway had the best improvement in the quarter. For used cars, we report earnings of 38 million compared to 55 million last year. As I mentioned in the beginning, the stock of used cars is on a good and balanced level in all our countries. The reason for the lower earnings was due to lower deliveries of used cars during the quarter. Prices of fully electric cars have stabilized and we could see an increased demand going forward. We have increased our underlying backlog on new cars by approximately 3,000 units. And today we have 17,500. This is a historic perspective in a high level. As we mentioned in quarter four, some of our brands have launched interesting new electrical models with long range, attracting lots of interest from our customers. Just be nice.

Thank you, Per. So during the quarter, we reported a lower than normal operating cash flow of 20 million kronor. This lower cash flow was explained by an increase in inventory of new cars and an increase of trade receivables compared to year-end. We consider this increase to be a normal fluctuation in working capital for our businesses and expect that operational cash flow for the coming quarters will be on a normalized level again. Looking at the past six months, the operating cash flow was in line with last year, amounting to just below 700 million kronor compared to around 750 million kronor last year. As said in previous quarters, cash flow is a key focus area for us and will continue to be so for the future as well. In November last 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. During this first quarter, around 470,000 shares at the value of 59 million kroner has been repurchased. For the program in total, we have reached 917,500 shares at the total value of 106 million kroners, which equals around 126 kroner per shares. And with that, we are also concluding the program, which ends before the annual January meeting. At the end of this quarter, we utilized around 1 billion kronor of our credit facilities, which in total amounts to 2.3 billion kronor. Our financial net amounted to 78 million kronor, which was 22 million kronor lower compared to last year. This improvement related to lower interest expenses attributable to interest bearing debt. At the end of the quarter, our net debt, excluding IFRS 16, amounted to just below 2.6 billion kronor, which was some 300 million kronor above our net debt at the end of last year. This increase relates to the increase in inventory of new cars and trade receivable, as I talked about earlier. Still, our ratio of net debt in relation to EBITDA, excluding IFRS 16, was 1.4 times compared to 1.3 times at December 2025. Consequently, that means that we are well in line with our financial target to have a ratio not exceeding 2.0 times. And we do have a stable financial position at the end of the quarter and going forward. During this quarter, we have made the fourth and last payment in relation to the dividend for 2025, which was 5.60 kr per share. The dividend has been paid in four installments, where the final fourth installment was made in January. In this afternoon, we will, as Carl Fredrik mentioned in the beginning, have the annual general meeting for BEAB. The financial target for the group is to distribute at least 50% of the earnings per share to the shareholders. And the proposal from our board of directors to the annual general meeting is to have a dividend of 6 kronor per share. for 2026, that is an increase with 7% compared to the dividend proposed paid for last year. And the proposed dividend comprised of 73% of the earnings per share for 2025. And likewise last year, its proposal is that it should be paid in full installment for the last day. So let's see what the decision will be from the annual general meeting in the afternoon. So I believe that summarizes our financial position. And I will leave the word to you then, Carl Fredrik.

Thank you for that, Kristina. And we're moving over to the outlook. And first of all, I want to emphasize that we continue to focus on improving both profitability and operational efficiency in our existing operations. Our efficiency program implemented last year is going according to plan and will be fully achieved as we have earlier communicated. Profitability, cost discipline and capital allocation are always core priorities across the entire organization. Then moving over to the car business, as Per mentioned, the demand for used cars was slow in the beginning of Q1, but showed a pickup towards the end of the quarter. We expect demand for used cars to remain at a rather stable level in the coming quarter. Also prices for used electrical cars have stabilized on an attractive level, while demand in Sweden for fully electrical used cars should be slightly better the coming quarter. Our used car inventories are at healthy levels and our intention is to keep that status in the coming quarter. Looking at new car sales, while purchasing activity among corporate customers has been stable for long and will remain so, we believe, interest from private customers picked up during the late Q1 and into Q2, supported by a strong and increasingly competitive market offering from some of our brands. Especially some new level electrical vehicle introductions with long ranges are expected to support volumes and provide attractive new alternatives for customers in the coming quarters. So to conclude, we do see some light at the end of the tunnel and hope we will be able to slightly up the deliveries of new cars in the coming quarter. When it comes to the service business, I repeat what Per said, our service business represented 79% of our operating profit in Q1 and we see good opportunities and action plans for further efficiency in our service business and through that improve customer satisfaction. In addition, as new car sales increase, this typically translates into higher volumes in the service workshops over time as the car population grows. We expect demand will remain stable in the coming quarter. Then briefly on consolidation and capital allocation. Q1 was a quiet quarter in terms of acquisitions activity in the sector. We have a strong track record when it comes to acquisition and remain disciplined and flexible in our capital allocation. We continuously assess acquisitions alongside share buybacks, dividends and the leveraging with the clear objective of maximizing shareholder value. While valuations are generally stable and occasionally demanding, our strong balance sheet and efficient operations leave us well positioned for continued growth when the opportunity might appear. This finalizes our first quarter presentation and we can now open up for questions.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Alexander Silgestrom from Pareto Securities. Please go ahead.

Good morning, guys, and congrats to us from quarter. My first question is on sort of the demand impact on the geopolitical turmoil and higher oil prices. I guess you alluded to it here at the end of the presentation that you've seen strong exit rates in March and a strong start in April. Could you discuss that and maybe with emphasis on new cars and also used cars?

You said the oil price. Yeah, we can see if we go to the used cars, we can see better demand for fully electrical cars now because you have the prices of petrol and diesel. So there we can see a little bit of a shift for the movement now. So it's easier. But what we have mentioned today here, it's a low lever, the price. We have stabilized the price for fully electric cars. So we think it's good for us. When you say new cars, Fully electrical cars is driven by the fleet business companies. They have policies for their employees to take a fully electric vehicle. Private consumers, they are a little bit more hybrids for the moment. So if we have really good private leasing offers in the market for fully electrical for private consumers, we sell them.

Stefan? I think so far we can see that the fleet market seems stable. The fleet customers are not hesitating yet. That's good. We can also see in the heavy truck business still going well with the sales with the new trucks. So no stop there. I think, as Per mentioned, perhaps in the future we will see with the customers, private consumers, but not on the fleet business.

Okay, thanks. That's very clear. And then also a question on Norway. The service business reported strong organic growth, but margins were down a little bit here year over year. If you could discuss that dynamic as well would be very helpful.

I'll leave that to Frode to reply.

Yes, thank you for that question. We had a somewhat lower margin in the quarter, which is also caused by a one-off cost in the quarter, which in total, if we just collect, that's 3 million, then the margin would be the same level as in quarter one last year.

And if you look at our core business, we call it the service workshops and spare parts, we have a little bit better margin in this business, but a little bit lower in this dismantling business for the first quarter this year, as compared to the last year.

Okay, that's very helpful as well. And then just a final one from my side. on the savings program if you could talk a bit about the the progress that you're seeing and also if you could share some run rate numbers on the the progress progression to the 150 million Christina

The program is running as planned, so I think what we have communicated earlier is that we expect to have a full year saving, including in the fourth quarter this year, and that is still the plan or the assumption that that will happen. Nothing indicates anything else. When it comes to the run rate, I don't think we have given a specific number what is in there. But you can probably make a guesstimate based on how far we have come as such.

Yeah, and would you say that you are sort of halfway through now or is that a good approximation or maybe just 25% considering that we're in Q1?

Yeah, no, we are not halfway through as always with savings programs, right? You get in an accelerating at the end, right? So it's not half, more like 25% in that sense.

Okay, yeah, perfect. That's very clear. That's it from my side. Many thanks.

Thank you. Thank you.

The next question comes from Andreas Lundberg from SEB. Please go ahead.

Yeah, good morning. Thank you. On the orders and backlog and taking into consideration the extremely high orders you had in the end of 25, especially Norway, what does that imply?

Yes, as you mentioned, we had a very strong finish of 2025 and we saw one in total quarter one was nine percent below last year first quarter but it decreased during the the quarter so march isolated was 11 better than march last year and we see an increasing pace in the new car business

You can say it's in line with our expectations we had because we had a strong order intake and you can maybe say something about the tax situation.

Absolutely. We had a record year in Norway last year with almost 180,000 passenger cars, but the pace last year was towards 150,000, and then we get the lift-up after the proposed taxes for 2026, which then resulted in 180,000. Now we see that the market year-to-date is 13% lower, meaning that we pace towards flat pace towards 135 000 units but we are quite confident that we will have the same lift up maybe not as strong as last year that they lift up so our expectations for 2026 is the total power market or about 108 160 000 cars which is still a strong market and we will have a change From the beginning of this year, we started to have tax on BEVs from 300,000 NOK instead of 500,000 NOK. And now from 2027, we will have VAT as from 150,000 NOK. giving a benefit for the customer of 37 500 to buy the car this year compared to next year and actually 75 000 in benefit taking the car out this year instead of in 2028 so we are confident historically that this kind of tax changes gives a strong push in the market and for quarter four last year then the tax benefit was 50 000 uh even then the volume increased so we think we will have good market conditions if nothing happens in the in the macro picture we think we'll have good market positions in norway both in in 26 and 27 actually thank you

But are you surprised that Q1 seems to keep up well given the dynamic with the big orders ahead of the new year?

I think that we got a lot of initiatives at the end of last year where you have tax protection and what have you. So I think that the competitiveness in the Norwegian car market maybe stronger today than probably not say ever, but for a long, long time. And if you look at the price for a family car today compared to the average income, I think a new car has is cheaper relatively than for many many years so we have a strong push and and actually xpeng our chinese brand was our biggest brand in the first quarter giving some strong volume support And of course, Tesla was 25% of the market, also having extremely attractive push campaigns in the marketplace. So the competition in the new car market is extremely strong at the moment. And luckily, we have strong brands to participate in the competition with.

Okay, cool. Thank you. And on the models you mentioned in high demand, if you're referring to specific ones uh how do you think that would play out during 2026 given your lead times waiting times and then how much of is that still already in the backlog thank you yeah is it specific for norway

In general. But then we can say, I think when you talk about BMW iX3, still there are capacity. And now we have started the deliveries of the iX3. And I think also the signs we get from the factory, that still is capacity for the Swedish market. And then with the iX660, the deliveries will start, I think, during the summer or after the summer. And I think also still the capacity is well in line there. So for the moment, No, we will not miss the customer out of that respect.

Volvo is talking about to deliver a little bit over 7,000 EX60 cars after the summer. So in quarter three and quarter four, we will start to deliver them.

Cool. And a different question on the top line that was down a little bit. Is that due to the... agent model or why is net sales down thank you

I think that is one part of the explanation. And then Andreas, if you compare perhaps with the number of delivered cars, if that is the reason why you're asking, we also had a little bit more of cars that are subject to repurchasing commitments. And hence that means that sales is reversed and instead allocated over the leasing period of normally 36 months. So if those are adjusted for it, we're done.

Okay, cool. Thank you so much.

Thank you, Andreas.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Matt's list from Kepler Shoebrew. Please go ahead.

Hi, thank you. A couple of questions. First, I mean, looking at service, there is a quite good improvement there in Sweden. Is it more related to deliveries of new cars and the demand in the sort of existing car fleet is still somewhat hesitant?

Stefan? Yeah, but I think it's a mix. We can see when we see the result, you can see that the turnover is higher, the efficiency, we can see that the efficiency is higher. And we can also see that the delivery workshop are going on a higher pace. And also we have a better, you can say, tire business this year. So I think it's a mix of these different elements.

Great and well we had an early Easter there this year so it's a well tougher comes year over year quarter one compared to quarter one so should we expect sort of well some delayed service demand to pick up In the second quarter, I mean, Norway is normally a Easter.

I think it's quite similar to the previous year. I don't see any big differences when we come to customer behavior during when we talk about Easter and things like that. I think we see that we are well in line with the tire change. I think like 80% is done with the wheel changes. And the customer behavior is quite similar to previous years.

And the working days in April is the same as we had in the last year. And for them, your way in the Eastern can be sometimes complicated because You have a red day for Thursday.

My bad.

And then looking at car sales, I mean earnings in Sweden was quite soft there in the quarter. Is that sort of a temporary impact or should we expect a similar development in the second quarter there? Looking at cars, I mean, earnings there, if you look at the geographical mix there, we had... You mean sales or profitability? Operational earnings there in Sweden was 3 million.

But it was related to it, I think it was an improvement. We've reduced the loss in new cars and I think it was still quite stable in used cars. I think 3 million less compared to last year. So I think on a quite good level. And as Per mentioned, we think the used car market has stabilized and the pricing has stabilized also for fully electric. So I don't think it was that big changes compared to last year.

But hopefully we will deliver a bit more new cars in the quarter too, compared to the last year.

Yeah, maybe improving from these levels. So we will see a sequential improvement then. I mean, Sweden is the largest market, so normally it should provide more than this, I guess. Yeah. Okay. Thank you. Great. Thank you, Mads.

Thank you. The next question comes from Jacob Mower-Anonson from Bill Forlaget as Billnit.no. Please go ahead.

Hello. Good morning. We have a question regarding BMW market share. So if Hedin Automotive's BMW dealerships were to be sold, would Bilia be interested in increasing its BMW representation in Norway and Sweden?

For us it's only speculations. And we have not heard a rumor about they will sell their business. So we have our BMW business and we are really big already. I think the order intake in Sweden is 35% in Norway is quite the same. So we are really big in the business.

Okay, thank you. And then we have a question regarding Xpeng. If the opportunity comes up, would Bilia consider becoming an Xpeng importer in Sweden and Norway?

We actually think that the setup that we have today is very good. We have a setup with the agent model where both the NSE and the OEM is taking a greater responsibility and for a brand which is in an attacking mode to expand and really build up the business. we think that is a good setup. So we are happy as agents on expanding and are expanding that business as agents. Okay, thank you. That's it.

Thank you.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

thank you very much for listening and if you have further questions please reach out to us and we wish you all a great day and a good weekend when it comes thank you very much thank you thank you