The Managing Director’s comments

Stable Service Business and good demand for used cars 

Operational earnings for the quarter amounted to SEK 333 M, with a margin of 3.6 per cent. The result for the Service Business was stable and amounted to SEK 281 M, which was on a par with the previous year considering there were fewer working days. The Car Business reported a result of SEK 76 M, of which sales of used cars accounted for SEK 69 M. Order intake were higher than in the previous year, and the order backlog for new cars was at a normal level historically speaking. Operating cash flow improved on the previous year and amounted to SEK 400 M for the quarter.

Our Service Business is stable across business cycles, and previous year represented 62 per cent of our operational earnings. We are focusing on expansion of ser- vicing for all car brands in our MobiliaCare operational area, in order to extend and diversify our existing service offering. We are responsive to the kind of services customers require, and ensuring our customers are satisfied is a sustainability goal we are working on in all parts of the operation.

We have diversified our brand portfolio and currently work with almost 20 attractive car brands when it comes to servicing and sales of new and used cars, transport vehicles and trucks.

We are also diversifying our business with what is a new role for us, official importers in Sweden and Nor- way of the Jaguar and Land Rover brands Range Rover, Defender and Discovery. By establishing a new area of expertise, we want to be a potential partner for future collaborations. The new importer business began on 2 April.

During the quarter, we signed an agreement to acquire another full-service operation for Volkswagen Group car brands: Bil AB Ove Olofsson with five facilities in

Stockholm. The acquisition doubles our market share in Volkswagen Group in Sweden, and we look forward to evolving this company moving forward.

Furthermore, at the beginning of the year we took over B MotorGroup Stockholm AB, thus complementing our Swedish dealer operations with Jaguar and Land Rover car brands. We conduct operations at two facilities in Stockholm, where we will offer customers high-quality servicing and sales of new and used cars.

During the quarter we expanded our operations with XPENG in Sweden and Norway, and during the second quarter we are continuing to open new sales points in our existing facilities in response to customers’ interests.

Signals of a better economy

During the quarter, private individuals remained cautious in buying new cars bearing in mind high interest rates.

Demand for used cars, however, was stable at a good level. The used car market is one of our focus areas, and we are actively working to boost our range. Demand for servicing remained stable, as our customers continue to maintain their cars even in these tough times.

We believe we can discern some positive signals among our customers based on lower inflation and anticipated interest rate reductions in the future. Bilia’s order intake for new cars have historically been impacted negatively early on in times of recession, but have also been quick to improve once the economy recovers.

Per Avander, Managing Director and CEO