- This is Bilia
- Statement by the Managing Director
- Concept, Vision, Goals and Strategies
- Market with Green Cars in Focus
- Bilia gets Equipped for the Future
- The Market's Driving Forces
- Focus on the Customer
- Bilia's Core Values
- Bilia Academy Strengthens the Brand
- Financial Overview
- Group Overview
- Share and Shareholders
- Annual General Meeting 2009
GROUP OVERVIEW
During the year we experienced a slumping new car market in Sweden, Norway and Denmark. Demand for service also declined during the year. Bilia has to adapt to this lower demand in order to become profitable once again.
We delivered a total of 29,345 new cars in 2008, a decrease of 20 per cent compared with 2007. Acquisitions were made in Norway during the year to strengthen Bilia’s position on the market. Bilia acquired all shares in Bilforum AS and Bilforum Finans AS, which represent Volvo and Renault in the Stavanger area.
During the year, Bilia disposed of properties that formed part of previously acquired car operations. Six properties in Copenhagen and eight properties in Sweden were sold during the year.
Sweden
In Sweden, Bilia has 71 facilities in the Stockholm, Mälardalen, Göteborg, Malmö and Skaraborg regions. We sell and service cars from Volvo, Renault, Ford and Hyundai.
The Swedish market for new cars declined by 17 per cent in 2008 to a total of 253,982 cars (306,799). Bilia is Sweden’s largest car retailer, with a new car market share of 6.9 per cent (7.1). During the year we delivered 17,457 new cars (21,923), 17,508 used cars (19,031), 1,233 new transport vehicles (1,413) and 1,038 used transport vehicles (820).
Bilia Sweden initiated a SEK 20 M savings programme at the start of 2008. At the end of the year another savings programme of just under SEK 100 M was implemented. Personnel costs in particular have been reduced. The workforce is being cut by about 180 persons via natural attrition, regular retirement and an offer of early retirement pension to employees over 60 years of age. As a final measure, there have also been dismissals in certain regions.
Bilia’s aim to become a leading retail chain enables us to take advantage of our size and potential for savings by centralisation of marketing, salaries, purchasing and stocks.
In Sweden Bilia has a new organisation with brand managers for Volvo, Renault, Ford and Hyundai. The purpose of these new functions is to guarantee expertise within the different product brands.
In 2008, net turnover in Sweden decreased to SEK 8,775 M (9,774), which is equivalent to 61 per cent of the Group’s total net turnover. Operating profit amounted to SEK 103 M (220). The difference compared with last year is attributable to considerably lower sales of new and used cars and lower margins in used car sales. Volvo’s drive to stimulate new car sales has resulted in large stocks of newer used cars, putting a strain on the profitability of Bilia’s and other Volvo dealers’ used car business. Earnings were charged with SEK 13 M in value adjustment of cars in stock and increased provision for cars sold previously with guaranteed residual values. The Service Business reports higher earnings than last year. The improvement is attributable to a lower cost level.
Norway
Bilia has 20 facilities in southeastern Norway, with a concentration in the Oslo area, and 2 facilities in the Stavanger area. We sell and service cars from Volvo, Renault, Ford, Nissan, Honda and BMW. The focus during 2008 has been on developing business for the core brands: Volvo, Ford and BMW.
Our contracts for Land Rover, Nissan and Honda were terminated during the year, along with our sales contract for Renault, except in Stavanger.
We are also discontinuing our sales of Mini.
The Norwegian market for new cars declined during the year by 14 per cent to 110,617 cars (129,195). Bilia is one of Norway’s biggest car dealers with a new car market share of 4.9 per cent (4.5). We delivered 5,408 new cars (5,782), 5,844 used cars (5,301) and 498 new transport vehicles (677) during the year.
In order to adapt costs to the lower sales, a SEK 20 M savings programme was started in the spring of 2008. It was supplemented during the second half of the year with an additional savings programme of SEK 30 M. These programmes entail personnel cutbacks, lower expenses and reduced stocks. Efforts to reduce capital tied up in the company are very intensive.
In 2008, net turnover in Norway increased to SEK 3,803 M (3,548), which is equivalent to 27 per cent of the Group’s total net turnover. Operating loss amounted to SEK 28 M (profit: 15). The Service Business developed favourably and earnings were considerably better than last year. The Car Business is under pressure and reports lower turnover and margin in new and used car sales.
Denmark
Bilia’s operation in Denmark includes 8 facilities in the Copenhagen area. Bilia sells and services cars from Volvo, Renault and Ford.
In 2008 the Danish market for new cars decreased by 7 per cent to 148,742 cars (159,252).
Bilia is one of Denmark’s biggest car dealers with a new car market share of 2.3 per cent (2.9). During the year we delivered 3,463 new cars (4,577), 2,388 used cars (3,280), 1,286 new transport vehicles (2,142) and 266 used transport vehicles (313).
To cope with diminishing demand, the Danish operation will save SEK 70 M by cutting costs, in particular by personnel cutbacks and fewer facilities. During the year, Bilia changed its facility structure and reduced the number of facilities in the Copenhagen area from 12 to 8. Two of them are solely service facilities.
Net turnover in Denmark decreased during the year to SEK 1,687 M (2,065), which was 12 per cent of the Group’s total net turnover. Operating loss amounted to SEK 49 M (loss: 7). The poorer operating result is attributable to lower sales of new cars and lower earnings in the Service Business. The action programme has yielded results, and costs were about 4 per cent lower than last year.