The Managing Director’s comments

Strong result in the Service Business 

The Service Business’ operating result of  SEK 395 M in the fourth quarter represented 78 per cent of the Group’s earnings. This was the highest quarterly result ever reported for the Service Business. The margin increased to 13.9 per cent, up from 13.6 per cent last year. Organic growth in the Service Business during the quarter was 2 per cent, primarily driven by the Norwegian operations, which benefited from increased new car deliveries.

 

Update of Financial targets

Our Service Business and Car Business  are integrated operations that together  support our strategy of being a full service  provider throughout the vehicle life cycle.  To enable effective strategic management and increased transparency, we are  now dividing our previous Group profitability target of a 5 per cent operating margin into two separate financial targets:

1. Operating margin of 14 per cent for the Service Business

2. Return on capital employed excluding IFRS 16 of 8 per cent for the Car Business.

The Service Business focuses on efficiency and represents a stable and significant share of the Group’s earnings, which  makes a margin target appropriate. The  Car Business ties up more capital than the  Service Business, primarily through inventory of cars. The new target for the Car Business strengthens our focus on capital  employed while we continue to work on improving the operating margin. Combined, these two financial profitability targets essentially correspond to our previous target of a 5 per cent operating margin for the Group.

Brighter times ahead for our customers
Market conditions remained challenging despite a slight improvement in the macroeconomic environment. The geopolitical situation continues to contribute to a generally cautious approach to purchasing capital goods. Nevertheless, we observe a gradually increasing interest in car purchases among private customers, while demand  from corporate customers remains stable. We anticipate a moderately positive trend in demand for new passenger cars, supported by the introduction of new models and attractive campaigns. In the used car market, we expect the  beginning of 2026 to remain competitive, and we remain somewhat cautious regarding the development of the demand for electrical vehicles in Sweden. Our used car inventory is at a healthy level. We expect stable demand for our Service Business during the first half of 2026.

 

The customer’s market when buying a car

For used car sales, we believe the remainder of 2025 will be characterized by a large supply of electric cars in the market. We currently have low stocks of used cars in Sweden and are well prepared. For sales of new cars, we continue to believe in increased activity from private customers and to some extent also from corporate customers.

In combination with assessments of a gradually improving economic situation, we see a cautiously positive development for demand for new cars during the remainder of 2025.