rinted by: Strokirk-Landströms
BILIA
ANNUAL REPORT
08
Förvaltningsberättelse 1
Förslag till vinstdisposition 6
Resultaträkning för koncernen 7
Balansräkning för koncernen 9
Sammandrag avseende förändringar
i koncernens eget kapital 11
Kassafl ödesanalys för koncernen 12
Noter till de fi nansiella rapporterna koncernen 13
Resultaträkning för moderbolaget 53
Balansräkning för moderbolaget 54
Sammandrag avseende förändringar
i moderbolagets eget kapital 56
Kassafl ödesanalys för moderbolaget 57
Noter till de fi nansiella rapporterna moderbolaget 58
Underskrifter 68
Revisionsberättelse 69
Femårsöversikt 70
Defi nitioner 72
Bilia-aktien 73
Styrelse 77
Bolagsstyrningsrapport 79
Ledning 82
Årsstämmoinformation 84
Denna information har avlämnats enligt lag om Värdepappersmarknaden den XX mars 2009.
CONTENTS
08
Directors' Report 1
Consolidated Income Statement 7
Consolidated Balance Sheet 9
Report on changes in consolidated equity 11
Consolidated Cash Flow Statement 12
Notes to the consolidated fi nancial statements 13
Income Statement for Parent Company 53
Balance Sheet for Parent Company 54
Summary of changes in Parent Company equity 56 Cash Flow Statement for Parent Company 57 Notes to the Parent Company fi nancial statements 58
Signatures 68
Audit Report 69
Five-year review 70
Defi nitions 72
The Bilia share 73
Board of Directors 77
Corporate Governance Report 79
Management 82
Information on Annual General Meeting 84
This information has been furnished in accordance with the Securities Market Act of 17 March 2009.
Operations – general
Bilia is Scandinavia’s largest car chain, with a leading position in servicing and sales of cars and transport vehicles plus supp- lementary services. The Group has 101 facilities in Sweden, Norway and Denmark plus an online auction site, Netbil.
Bilia’s vision is to be the best service company in the business with the goal of having the most satisfi ed customers in our showrooms, our stores and our workshops. The customer should fi nd dealing with Bilia a pleasant experience. Bilia has a well-developed range of services and products in the Service Business, which includes workshop services, spare parts, store sales and fuel sales. Bilia is constantly developing new services and service concepts to simplify car ownership for our custo- mers. Our Car Business includes sales of new and used cars, transport vehicles, customer fi nancing and supplementary ser- vices. Bilia sells cars from Volvo, Renault, Ford, Land Rover, Hyundai, Nissan, Honda, BMW and Mini as well as transport vehicles from Renault, Ford, Hyundai and Nissan. Bilia will cease selling Land Rover and Mini during 2009.
Ownership
Bilia had 22,144 shareholders at the end of 2008, compared with 25,282 a year earlier. The proportion of institutional owner- ship amounted to 19.2 per cent (15.4), while the proportion of foreign ownership amounted to 10.0 per cent (14.7).
In 2007 Bilia bought back a total of 1,000,000 shares, equiva- lent to 4.7 per cent of the share capital, for a total of SEK 115 M.
As of 31 December 2008, the company’s holding of its own shares amounted to 1,000,000 shares (1,000,000).
The Bilia share
The total number of shares in the company is 21,459,255. All issued shares are of Series A. It is also possible to issue B shares according to the Articles of Association, but this has not been done. All issued shares have equal rights in the company and are entitled to one vote at the Annual General Meeting (AGM).
Bilia’s shares are listed on NASDAQ OMX Stockholm and can be transferred freely there, subject to the rules of the exchange.
Board members Mats Qviberg and Sven Hagströmer and their close family members control, directly and indirectly via Investment AB Öresund, approximately 41 per cent (39) of the shares in the company.
Bilia has no knowledge of any shareholders’ agreements be - tween Bilia’s shareholders.
There are no special rules in the Articles of Association con- cerning amendment of the same or appointment/dismissal of Board members. The 2008 AGM authorised the Board of Direct- ors to buy back Bilia shares equivalent to no more than 10 per cent of the total number of shares.
In the event of signifi cant changes in the company’s owner- ship structure that affect the conditions or content of their jobs, the MD and certain top executives are entitled to terminate their own employment and obtain 24 months’ salary, less any salary received by the employee from other service during the last 12 months. The same right to compensation also exists in the event of termination by the company. Bilia’s service and distribution agreements all contain clauses entailing that the agreement will be terminated if the company is transferred to a new owner who is not an authorised dealer or workshop for the same brand;
however, the clauses cannot be applied as long as Bilia is listed on the stock exchange.
The Board of Directors and Managing Director of Bilia AB (publ), Corp. ID no. 556112-5690, hereby submit their annual report and consolidated fi nancial statements for fi nancial year 2008.
Key fi gures
Group 2008 2007 2006
Net turnover, SEK M 14,280 15,402 14,056
Operating profi t/loss, excluding items affecting comparability, SEK M –16 177 130
Operating margin, excluding items affecting comparability, % –0.1 1.2 0.9
Operating profi t/loss, SEK M –57 169 109
Profi t/loss before tax, SEK M –139 150 118
Net profi t/loss for the year, SEK M –110 100 93
Return on capital employed, % –0.6 7.8 6.2
Return on equity, % –8.0 6.3 6.3
Net debt/equity, times 0.67 0.81 –0.02
DIRECTORS’ REPORT
Group and Parent Company
Notable events during the year
• Bilia sold a property in Västerås.
• Bilia acquired all shares in Bilforum AS and Bilforum Finans AS, which represent Volvo, Renault and Land Rover in the Stavanger area.
• On 20 February, Bilia’s subsidiary Säfveån won a longstand- ing dispute in the District Court of Gothenburg. The oppo- site party, Pacta, appealed the judgement on 11 March to the Court of Appeal for western Sweden.
• Bilia concluded an agreement on the sale of properties in Sweden to a subsidiary of Corem Property Group.
• Bilia acquired the real estate company A/S Selandia Ejen- domsselskab. At the same time one of the properties, Lyngby, was sold.
• Bilia concluded an agreement on the sale of four properties in Copenhagen to a subsidiary of Corem Property Group.
• The Market Court convicted Bilia and seven other Volvo dealers in Skåne and Blekinge of violating the competition rules. Bilia was ordered to pay a restraint-of-trade fi ne of SEK 6 M, which was just under 5 per cent of the Swedish Competition Authority’s original fi ne of SEK 122 M.
• An extraordinary shareholders’ meeting resolved to issue subordinated debentures in an amount of no more than SEK 107.3 M with an associated issue of no more than 5,364,813 warrants. The issue is secured up to an amount of SEK 100 M by a subscription commitment and guarantee from Invest- ment AB Öresund.
• The outcome of the new issue as per 31 December 2008 was to bring in SEK 87 M to Bilia, before issue expenses of SEK 6 M, by the issuance of subordinated debentures in an amount of SEK 87 M and an associated issue of 4,352,284 warrants. The warrants entitle holders to subscribe to an equal number of Series A Bilia shares for SEK 20 each.
Sales and earnings
Net turnover amounted to SEK 14,280 M (15,402). Adjusted for exchange rate changes and comparable operations, net turn- over decreased by SEK 2,158 million or 14 per cent. The decline is mainly attributable to lower sales of new cars.
Operating loss amounted to SEK 57 M (profi t: 169). Items affecting comparability affected the loss by a net of SEK –41 M (–8). The difference compared with last year, excluding items affecting comparability, was SEK –193 M.
The result from customer fi nancing, excluding gross profi t attributable to rental income from long-term leasing of cars sold with repurchase agreements, amounted to SEK 87 M (97).
Items affecting comparability amounted to SEK –41 M (–8) and consist of SEK 124 M (–) from the sale of property, SEK –124 M (–18) in costs for action programmes, SEK –29 M (–) in impairment of acquired surplus values, mainly goodwill, and SEK –12 M (–12) in costs for disputes. Last year includes a changed pension plan in Bilia’s Norwegian operation, which increased the profi t by SEK 22 M.
Net fi nancial items amounted to SEK –82 M (–19). The de - terioration is mainly attributable to increased net debt and a higher interest rate level. Net fi nancial items for the year have been charged with costs of SEK 10 M in connection with the signing of a new bank agreement and issue expenses of SEK 6 M. This includes a profi t share of SEK 22 M (22) from the indirect shareholding in Volvofi nans Bank AB.
Net loss for the year was SEK 110 M (profi t: 100) and loss per share SEK 5.35 (EPS: 4.75). Exchange rate changes reduced the profi t by SEK 5 M.
Performance analysis, Group
Group, SEK M 2008 2007
Operating profi t/loss, excluding
items affecting comparability –16 177 Items affecting comparability
Gain from sale of property 124 —
Structural costs etc. –124 –18
Impairment losses –29 —
Changed pension plan in Norway — 22
Disputes –12 –12
Operating profi t/loss –57 169
Profi t/loss before tax excluding
items affecting comparability –84 158 Items affecting comparability
Gain from sale of property/shares 126 —
Structural costs etc. –124 –18
Impairment losses –29 —
Changed pension plan in Norway — 22
Disputes –12 –12
New bank agreement, issue expense etc. –16 —
History of car sales
in Sweden, Norway and Denmark
05 03
96 97 98 99 00 01 02 04 06 07
400,000 300,000
200,000 100,000
0
Sweden Norway Denmark New cars
08
Key fi gures Net turnover, SEK M Operating profi t/loss, SEK M Operating margin, % Return on operational capital employed, %
2008 2007 2006 2008 2007 2006 2008 2007 2006 2008 2007 2006
Sweden 8,775 9,774 8,717 103 220 206 1.2 2.3 2.4 7.7 21.7 28.6
Norway 3,803 3,548 3,331 –28 15 –5 –0.7 0.4 –0.2 –3.6 2.3 –0.9
Denmark 1,687 2,065 1,997 –49 –7 –10 –2.9 –0.3 –0.5 –10.7 –2.6 –2.5
Total Cars 14,265 15,387 14,045 26 228 191 0.2 1.5 1.4 0.3 12.2 11.4
Number of new cars Deliveries 1) Order backlog 1) 2008 2007 2006 2008 2007 2006
Sweden 18,690 23,336 21,231 1,330 2,991 2,507
Norway 5,906 6,459 5,644 473 1,231 692
Denmark 4,749 6,719 6,909 171 514 475
Total Cars 29,345 36,514 33,784 1,974 4,736 3,674
1) As from 2007, transport vehicles are included in the reported number of units.
The comparative fi gures have also been adjusted for transport vehicles.
Cars divided into Service and Car Businesses
08 06 07 25 20 15 10 5 0
Growth, Service, % Growth, Car, %
08 06 07 25 20 15
0 –5 –10 –15 10 5 Share of Cars’
net turnover, %
Service, 33 (30) Car, 67 (70)
Share of Cars’
employees, %
Service, 80 (80) Car, 20 (20)
Cars
Service and Car Businesses
Net turnover, SEK M 2) Operating profi t/loss, SEK M Operating margin, %
2008 2007 2006 2008 2007 2006 2008 2007 2006
Service Business 1) 4,940 4,792 4,461 251 234 246 5.1 4.9 5.5
Car Business 1) 9,982 11,388 10,325 –225 –6 –55 –2.2 –0.1 –0.5
1) Service includes workshop services, spare parts, accessories and fuel in the car operation. The Car Business includes sales of new and used cars and customer fi nancing.
2) Net turnover does not include eliminations for internal sales.
4 Bilia Annual Report 2008
Investments and disposals
Investments and disposals amounted to SEK 49 M (–64). Re - placement investments represented SEK 39 M (52), expansion investments SEK 54 M (48), environmental investments SEK 5 M (4) and investments in new construction and additions to prop- erties SEK 14 M (31). Net investments in leased vehicles and fi nance leases amounted to SEK –63 M (–199).
Financial position
Total assets decreased by SEK 1,629 M to SEK 5,414 M (7,043).
The decline is mainly attributable to sales of properties, fewer cars with guaranteed residual values (leased vehicles), lower inventories and trade receivables.
Cash fl ow from operating activities amounted to SEK 383 M (–305). Cash fl ow after net investments amounted to SEK 581 M (–590). The cash fl ow for the year comes mainly from lower working capital (SEK 309 M) and sale of property (net about SEK 345 M). Net debt decreased by SEK 402 M to SEK 820 M.
Equity amounted to SEK 1,229 M (1,507).
The equity/assets ratio amounted to 23 per cent (21) at the end of the year.
Personnel
Skilled and motivated employees who are prepared to devel- op and step in when needed are a prerequisite for keeping Bilia’s customers satisfi ed and loyal, which is crucial for Bilia’s continued success.
The basis for the professional development of the employ- ees is the performance appraisal interview they have at least once a year with their immediate superior. The point of depart- ure for the employee interview is the individual’s existing knowledge, skills and needs. Together, the employee and his superior arrive at a plan that will promote personal develop- ment, job satisfaction and effi ciency in the day-to-day work.
Bilia Academy is the name of the Group’s internal training unit, which was started in 2001. Bilia Academy conducts regu- lar surveys of the training need. Tailored trainings are then put together aimed at target groups with different duties in Bilia.
The training is aimed at enhancing competencies within speci- fi c areas, strengthening the corporate culture with Bilia’s vision and core values, and at the same time contributing to an experi- ence exchange and a broadened contact network for Bilia’s employees.
Bilia works continuously to improve the working environ- ment at the Group’s facilities. A good working environment is a prerequisite for healthy, happy and motivated employees.
The ambition in the workshops is to create environments that are light, airy, clean and quiet.
The average number of employees in the Group during the year amounted to 3,304 (3,536), of whom 2,026 (2,287) work in Sweden. The number of employees at 31 December 2008 was 3,553 (3,961).
Key figures 2008 2007 2006
Average number of employees 3,304 3,536 3,063 Turnover per average number
of employees, SEK ’000 4,322 4,356 4,589 Value added per average
number of employees, SEK ’000 569 577 594 Profit/loss before tax per average
number of employees, SEK ’000 –42 42 38
Average age 42 42 41
Financial goals
Bilia’s overall fi nancial objectives are to achieve:
• an operating margin of at least 2.2 per cent
• a return on capital employed of at least 14 per cent
• a return on equity of at least 15 per cent.
10 15 20
0 –5
0 5 10
–5
06 07 08 –10 06 07 08 06 07 08
4 3 2 1 0
Goals and goal fulfilment Return on capital
employed, %
Return on equity, %
Operating margin, %
Goal: at least 14 per cent
Goal: at least 15 per cent
Goal: at least 2.2 per cent 5
15
–1
Distribution of employees by country, %
Sweden, 63 (66) Norway, 23 (20) Denmark, 14 (14)
Length of employment, %
0–9 years, 51 (51) 10–19 years, 20 (20) 20–29 years, 12 (12) 30–39 years, 13 (13)
≥40 years, 4 (4) Age structure, number
of employees, %
≤ 29 years, 21 (23) 30–49 years, 49 (47) 50–60 years, 22 (23)
≥61 years, 8 (7) Distribution of employees
by function, %
Andel av Personbilars nettoomsättning, %
Sales, 18 (18) Workshop, 58 (57) Spare parts, 16 (15) Administration, 8 (10)
Distribution of employees by education, %
Comprehensive school/upper secondary school, 85 (85) University education, 4 (4) Post-secondary educ., 11 (11)
Personnel
Guidelines for remuneration to senior offi cers
A fee decided on by the Annual General Meeting is paid to the Chairman and members of the Board.
The AGM for 2008 has decided on the following guidelines for compensation to the management.
Remuneration to the Managing Director and other senior offi cers consists of basic salary, variable remuneration, other benefi ts and pension. By “other senior offi cers” is meant the fi ve persons who, together with the Managing Director, make up the Group Management. For the composition of the Group Management, see Note 9, “Employees and personnel costs”.
The distribution between basic salary and variable salary should be commensurate with the individual’s powers and responsibilities. The Managing Director’s variable remunera- tion may not exceed 52 per cent of his basic salary. The vari- able remuneration of other senior offi cers should not exceed 38–43 per cent of their basic salary. The variable remuneration is based on performance goals and individual goals.
Premium-based pension benefi ts and other benefi ts for the Managing Director and other senior offi cers are payable as a part of the total remuneration.
The Board of Directors will propose to the 2009 AGM that the above compensation principles should apply for 2009.
Risks
Bilia’s business operations are associated with risks. Bilia can infl uence certain factors, while others are beyond the Group’s control. But the ambition is to identify threats and possibilities at an early stage so that steps can be taken quickly to avoid problems.
Market trend
Demand for Bilia’s products and services is infl uenced by fl uc- tuations in the business cycle. In recessionary periods, some customers choose to put off their car purchases. Factors that infl uence the market trend include the labour market situation, stock market performance, the ability of the customers to obtain fi nancing, interest rates and fuel prices. The positioning of Bilia as a service company stabilises earnings. Collaboration with Volvofi nans Bank AB and similar car fi nancing companies is positive for Bilia, even though the prevailing turbulence on the fi nancial market and the accelerating economic downturn are having a great impact on the car industry. The Service Business is less cyclical than the Car Business, since cars require service and repairs regardless of the state of the econ- omy. However, a deep recession will also affect the Service Business to some extent.
Representation
Bilia’s core business consists of distribution and servicing of
national regulations. The current rules, which entered into force on 1 October 2003, have been aimed at putting the con- sumer fi rst and encouraging greater competition in the distri- bution and aftermarket segment. This has been favourable for Bilia, which has, within the framework of applicable agreements with the manufacturers, systematically looked for ways to exploit its size and strong market position to gain business advantages, for example in purchasing and by seeking multi- brand representation. The European Commission has initiated an evaluation of the market effects of the current Block Exemption. If it is not extended when it expires on 31 May 2010, or if it is replaced by a different kind of regulation, this may change the competitive situation for Bilia. There is always a risk that a manufacturer or a general agent will decide to revoke the authorisation and cancel the agreements, or, in the prevailing tough market situation, even become insolvent, creating uncertainties on the market.
Competitiveness of the products
Bilia is dependent on the ability of the Group’s business part- ners to develop competitive products. Volvo, the single most important business partner for Bilia, launched a new model during the year, the XC60. All suppliers have developed and will develop new products with an environmental profi le and fuel-effi cient engines. Volvo has launched a new series of green cars designated DRIVe. The cars feature both low emis- sions and low fuel consumption.
Ford recently launched both a new Fiesta and a new Ka.
Ford has been a pioneer in the ethanol car sector in Sweden.
A new Focus is coming next year.
Renault is the only brand that has a light transport vehicle that is ethanol-powered: the new Renault Kangoo. A new Megane was launched in 2008 to positive reviews from the world’s motor press.
Hyundai is coming out with a brand new model, the i20, which will complement the smaller i10 green car.
BMW’s Effi cientDynamics range has attracted great atten- tion, and BMW has succeeded in combining a premium brand strategy with an environmental profi le.
Development of own services
To maintain and strengthen its competitiveness, Bilia must develop services that appeal to the customers. Bilia’s ability to develop new services also helps strengthen the suppliers’
brands. This development work requires resources. Bilia is con- fi dent that the Group has the size, structure and fi nancial strength that are required to remain in the forefront of service development.
Key persons
advancement by offering employees interesting work duties, individualised training programmes, bonus programmes and personal involvement in the development of the Group. There is no guarantee that Bilia will succeed in the future in recruiting or keeping the people they need to run and develop the com- pany.
For fi nancial risks see Note 30 “Financial risks and fi nance policies”.
Environment
Bilia’s environmental policy states that the Group’s services and products should have as little impact on nature as possible and thereby contribute to sustainable development. The envir- onmental work should be pursued within the framework of the business concept and be governed by a holistic approach in which technology, economics and ecology are weighed together.
Waste separation is another priority. Environmentally hazar- dous waste is managed in accordance with carefully planned procedures. Bilia also has systems, both proprietary and devel- oped together with its partners, for managing and recycling waste from service and residual products from repairs. Bilia’s employees are given training in environmental issues and receive environmental information regularly. All of Bilia’s Swe- dish and Norwegian companies and most of the facilities in Denmark are environmentally certifi ed to ISO 14001.
The Group conducts activities that are subject to notifi cation in accordance with the Environmental Code. In Sweden, 47 facilities are obligated to submit notifi cation to the authorities due to petrol sales where no emissions may occur, 12 car wash- es due to effl uents, and 9 facilities due to solvent emissions to the atmosphere. Activities requiring notifi cation represent a small portion of Bilia’s total operations.
Private placements
As of 31 December 2008 the new issue had brought in SEK 87 M to Bilia before issue expenses. The fi nal result of the new issue which was concluded in January 2009 was to bring in SEK 100 M to Bilia, before issue expenses of SEK 6 M, by the issu- ance of subordinated debentures in an amount of SEK 100 M and an associated issue of 5,000,000 warrants entitling the bearer to subscribe for an equal number of Series A Bilia shares at SEK 20 per share. Notifi cation of subscription of shares can be made up to and including 5 January 2016. If the warrants are fully exercised, the company’s share capital will increase by SEK 50 M to SEK 265 M. For further information see Note 1,
“Key accounting principles”, page 17.
Disclosure of acquisition, transfer and holding of own shares
The 2008 AGM also gave the Board of Directors a new authori-
The purpose of all buy-backs has been to optimise the company’s capital structure.
The work of the Board
One post-election meeting and fi ve ordinary Board meetings were held during 2008. In addition to the above meetings, the Board also met once by telephone and once by correspond- ence. An agenda, along with in-depth information on important matters, is sent to each Board member in good time before each Board meeting. The Board dealt with such items of busi- ness as strategy, fi nancial goals, follow-up of results, invest- ments, acquisitions and follow-up of disputes with the Swedish Competition Authority and Pacta.
During the year the Board decided to sell property in Swe- den and Denmark.
Corporate Governance
Information on corporate governance in Bilia is provided on pages 79–81.
Parent Company
Bilia AB is responsible for the Group’s management, strategic planning, fi nancing, accounting, public relations and business development. Furthermore, Bilia AB conducts training and IT activities, mainly for companies in the Group. The Parent Company’s operating loss amounted to SEK 49 M (loss: 50).
Future outlook
With great uncertainty in the fi nancial markets and layoffs being announced by many large employers, Bilia does not expect the economy to turn around in 2009. Bilia predicts that the total market in Sweden, Norway and Denmark during 2009 will decrease compared with 2008. Owing to the fact that Bilia’s earnings are affected by various factors beyond the company’s control, no earnings forecast is made. A review of the most important earnings-impacting factors is provided in the sensi- tivity analysis in note 30, “Financial risks and fi nance policies”.
Events after the balance sheet date The new issue was concluded in January.
Proposed treatment of unappropriated earnings The Board of Directors proposes that the earnings available for distribution, SEK 681 M, be disposed of as follows:
SEK M
To be carried forward 681
Total 681
Approval of the fi nancial statements
The fi nancial statements were approved for publication by the
SEK M Note 2008 2007
Continuing operations
Net turnover 2, 3, 6 14,280 15,402
Cost of goods sold 6, 20 –12,093 –13,026
Gross profi t 2,187 2,376
Other operating income 7 136 23
Selling expenses 11 –1,801 –1,766
Administrative expenses 10 –448 –442
Other operating expenses 8 –131 –22
Operating profi t/loss 3, 9, 11 –57 169
Financial income 133 97
Financial expenses –237 –138
Shares in profi ts of associated
companies 17 22 22
Net fi nancial items 12 –82 –19
Profi t/loss before tax –139 150
Tax 13 28 –44
Profi t/loss for the year from
continuing operations –111 106
Profi t/loss from discontinued
operation, net after tax 4 1 –6
Net profi t/loss for the year –110 100 Attributable to:
Parent Company’s shareholders –110 100
Earnings/loss per share, SEK 14
Group
Basic and diluted earnings/loss per share –5.35 4.75
Proposed dividend per share —
Continuing operations
Basic and diluted earnings/loss per share –5.35 4.75
Proposed dividend per share —
Performance analysis, Group
Operating profi t/loss Profi t/loss before tax
SEK M 2008 2007 2008 2007
Profi t/loss excluding items affecting comparability –16 177 –84 158
Items affecting comparability
Gain from sale of property/shares 124 — 126 —
08 06 07 15,000 10,000 5,000 0
Net turnover, SEK M
Net turnover decreased by 7 per cent to SEK 14,280 M (15,402). The decrease is mainly attributable to lower sales of new cars. Net turnover excluding acquisitions and currency effects decreased by 14 per cent or SEK 2,158 M.
08 06 07 0 –15
–45 15
–75 –30
–60
–90
Net fi nancial items, SEK M
Net fi nancial items decreased to SEK –82 M (–19). The decrease is due to higher interest rates, costs of SEK 10 M in connection with a new bank agreement and issue costs of SEK 6 M. The profi t share from the indirect holding in Volvofi nans Bank AB amounted to SEK 22 M (22).
Operating profi t/loss, excluding items affecting comparability, SEK M
SEK M
08 06 07 200 100 0 –100
% 2 1 0 –1
Operating loss excluding items affecting profi tability amounted to SEK 16 M (profi t:
177). Sweden decreased by SEK 108 M, Norway by SEK 43 M and Denmark by SEK 42 M. The operating margin decreased to –0.1 per cent from 1.2 per cent.
Operating profi t/loss, excluding items affecting comparability, SEK M Operating margin, %
Operating profi t/loss, excluding items affecting comparability per quarter, SEK M
Q 1 60
90
1 2 3
SEK M %
Q 2 Q 3 Q 4
07 07 07 07
06 08 06 08 06 08 06 08
30
0 0
–30 –1
Demand for new cars in particular declined during the year. All quar- terly earnings fi gures were at a lower level compared with the last two years. The Car Business has deteriorated considerably mainly due to lower sales of new cars and lower margins in sales of used cars.
Operating profi t/loss, excluding items affecting comparability, SEK M Operating margin, %
CONSOLIDATED INCOME STATEMENT
Net turnover
Net turnover amounted to SEK 14,280 M (15,402), a decline of 7 per cent. If net turnover is adjusted for acquisitions and exchange rate changes, the decrease was about SEK 2,158 M or 14 per cent. The main reason is lower sales of new cars.
Net turnover in the Service Business increased by 3 per cent (7) to SEK 4,940 M (4,792). Adjusted for acquisitions and exchange rate effects, net turnover decreased by 5 per cent.
The Swedish Service Business declined by 5 per cent (–). The Danish Service Business declined by 14 per cent (–2), while the Norwegian Service Business was unchanged (4).
Net turnover in the Car Business decreased by 12 per cent (10) to SEK 9,982 M (11,388). If the Car Business is adjusted for comparable units and exchange rate effects, net turnover decreased by 18 per cent (2). The Swedish Car Business de - clined by 23 per cent (–), the Norwegian declined by 5 per cent (4) and the Danish declined by 25 per cent (5).
Revenues from customer fi nancing declined by SEK 38 M to SEK 282 M (320). The decline is mainly due to lower revenues from long-term leases and commissions from fi nance compa- nies.
Operating profi t/loss
The operating loss for the Group amounted to SEK 57 M (pro- fi t: 169). The operating margin declined by 1.5 percentage points to –0.4 compared with 2007.
All markets in the Group diminished. Operating profi t in the Swedish operation declined by SEK 117 M to SEK 103 M. The operating loss in Norway amounted to SEK 28 M (profi t: 15), and in Denmark the operating loss increased to SEK 49 M (loss: 7).
In all countries, the decline was caused by falling car sales and lower margins on used cars. The operating loss in the Car Business increased by SEK 219 M to SEK 225 M. The Service Business showed a better result, however, with a profi t increase of SEK 17 M to SEK 251 M. The improvement is attributable to a lower cost level, especially in Sweden.
The margin in the Service Business increased from 4.9 per cent to 5.1 per cent, while the margin in the Car Business decreased to –2.2 per cent (–0.1). The Car Business’s deliveries declined by 20 per cent (8).
Items affecting comparability
Operating loss excluding items affecting comparability amounted to SEK 16 M (profi t: 177). The operating margin decreased to –0.1 per cent from 1.2 per cent.
Items affecting comparability reduced the profi t by SEK 41 M (reduction: 8). The items consist of SEK 124 M (–) from the sale of property in Sweden and Denmark, SEK –124 M (–18) in costs for action programmes, SEK –29 M (–) in impairment of acquired surplus values, mainly goodwill, and SEK –12 M (–12)
in costs for disputes (the Swedish Competition Authority and Pacta). Bilia’s Norwegian operation changed its pension plan in 2007, which increased the 2007 profi t by SEK 22 M.
Net fi nancial items
Net fi nancial items amounted to SEK –82 M (–19), a decrease of SEK 63 M. The deterioration is mainly attributable to increased average net debt and a higher interest rate level.
This year’s net fi nancial items were charged with SEK 6 M in issue expenses and SEK 10 M in costs for a new bank agree- ment. The profi t share from the indirect holding in Volvofi nans Bank AB is included in the amount of SEK 22 M (22).
Profi t/loss before tax
Loss before tax amounted to SEK 139 M (profi t: 150), a decrease of SEK 289 M.
Items affecting comparability
Items affecting comparability reduced the profi t before tax by SEK 55 M (reduction: 8). The items consist of SEK 126 M (–) from the sale of property and shares in Sweden, Norway and Denmark, SEK –124 M (–18) in costs for action programmes, SEK –29 M (–) in impairment of acquired surplus values, mainly goodwill, SEK –16 M (–) in costs for bank agreements and a new issue, and SEK –12 M (–12) in costs for disputes (the Swedish Competition Authority and Pacta). Bilia’s Norwegian operation changed its pension plan last year, which increased the 2007 profi t by SEK 22 M.
Net loss for the year
Net loss for the year amounted to SEK 110 M (profi t: 100). This is equivalent to a loss per share of SEK –5.35 (EPS: 4.90), based on the number of shares outstanding. Profi t from discontinued operation affected the result by SEK 1 M (–6).
The tax income amounted to SEK 28 M (expense: 44). Non- taxable revenue of SEK 110 M from the sale of property has been included in calculating this year’s tax. In addition, an impairment loss of SEK 45 M has been recognised in tax assets. There were deductible tax-loss carryforwards in foreign entities of about SEK 200 M, which is not offset by a recorded tax asset. Corporate tax is based on the tax expense in the relevant country.
Key ratios
Return on capital employed decreased to –0.6 per cent from 7.8 per cent. Return on equity decreased from 6.3 per cent to –8.0 per cent.
Items affecting comparability
Return on capital employed excluding items affecting compar- ability amounted to 1.4 per cent (8.2).
COMMENTS ON THE CONSOLIDATED INCOME STATEMENT
CONSOLIDATED BALANCE SHEET
SEK M Note 2008 2007
Assets 5, 29, 32
Non-current assets
Intangible assets 15
Intellectual property 115 133
Goodwill 89 124
204 257
Property, plant and equipment 16
Land and buildings 105 315
Construction in progress 4 15
Equipment, tools, fi xtures and fi ttings 393 357
Leased vehicles 1,512 1,811
2,014 2,498
Long-term investments
Interests in associated companies 17 257 238
Financial investments 18, 30 9 10
Long-term receivables 19 93 32
Deferred tax assets 13 64 92
423 372
Total non-current assets 2,641 3,127
Current assets Inventories
Merchandise 20 1,750 2,529
Current receivables
Current tax assets 13 26 23
Trade receivables 21 664 965
Deferred expenses and accrued income 22 115 111
Other receivables 19 99 92
Short-term investments 18, 30 21 99
Cash and cash equivalents 23 98 97
1,023 1,387
Total current assets 2,773 3,916
Total assets 3 5,414 7,043
CONSOLIDATED BALANCE SHEET
SEK M Note 2008 2007
Equity and liabilities 5, 29, 32
Equity
Share capital 215 215
Reserves 0 4
Retained earnings including net profi t/loss for the year 1,014 1,288
Total equity 1,229 1,507
Non-current liabilities
Debenture loan 24, 30 87 —
Non-current interest-bearing liabilities 24, 30 89 717
Other non-current liabilities 27 697 944
Provisions for pensions 25 319 297
Other provisions 26 11 7
Deferred tax liabilities 13 96 189
Total non-current liabilities 1,299 2,154
Current liabilities
Current interest-bearing liabilities 24, 30 761 669
Trade payables 640 1,167
Current tax liabilities 2 14
Other liabilities 27 968 972
Accrued expenses and deferred income 28 488 519
Other provisions 26 27 41
Total current liabilities 2,886 3,382
Total liabilities 4,185 5,536
Total equity and liabilities 3 5,414 7,043
Pledged assets and contingent liabilities for the Group
Pledged assets 33 1,409 277
Contingent liabilities 33 4,209 4,306
The Group’s balance sheet total decreased by SEK 1,629 M to SEK 5,414 M (7,043). Two operations were acquired during the year in Stavanger, Bilforum AS and Bilforum Finans AS, which increased the balance sheet total by about SEK 170 M.
The decrease is primarily attributable to reduced car stocks (about SEK 660 M), reduced trade receivables (SEK 300 M) and fewer cars sold with guaranteed residual values (about SEK 270 M). In addition, property sales reduced the balance sheet total by SEK 220 M.
Financing
Net debt decreased by SEK 402 M, amounting to SEK 820 M (1,222). The decrease is attributable to a decrease in interest- bearing liabilities by SEK 427 M, mainly bank loans.
The ratio of net debt to equity was 0.67, compared with 0.81
Equity
Equity amounted to SEK 1,229 M (1,507), a decrease of SEK 278 M (decrease: 177). A dividend was paid to the sharehold- ers in the amount of SEK 164 M (172). There was no buy-back of own shares (115). See the table on page 11 for details on the change in equity.
Key ratios
The rate of turnover of capital employed amounted to a mul- tiple of 5.0, compared with 5.8 last year, while the rate of turn- over of total capital was 2.3 (2.4).
The equity/assets ratio amounted to 23 per cent (21).
Equity per share amounted to SEK 60.10 (73.65), based on 20,459,255 shares (20,459,255).
COMMENTS ON THE CONSOLIDATED BALANCE SHEET
SEK M
Number of shares
Share capital
Translation reserve
Retained earnings incl. net profi t/loss for the year
Total equity
Opening equity 1 Jan. 2007 23,129,155 231 –6 1,459 1,684
Buy-back of own shares (1,000,000 shares) — — — –115 –115
Dividend (SEK 8.00 per share) — — — –172 –172
Reduction of share capital –1,669,900 –16 — 16 —
Exchange rate difference — — 10 — 10
Net profi t for the year — — — 100 100
Closing equity 31 Dec. 2007 21,459,255 215 4 1,288 1,507
Opening equity 1 Jan. 2008 21,459,255 215 4 1,288 1,507
Dividend (SEK 8.00 per share) — — — –164 –164
Exchange rate difference — — –4 — –4
Net loss for the year — — — –110 –110
Closing equity 31 Dec. 2008 21,459,255 215 0 1,014 1,229
REPORT ON CHANGES IN CONSOLIDATED EQUITY
Translation reserve
The translation reserve includes all exchange rate differences that arise when translating the fi nancial statements of foreign entities that have prepared their fi nancial statements in another currency than the currency in which the consolidated fi nancial statements are presented. The Parent Company and the Group present their fi nancial statements in Swedish kronor. The equity items in foreign entities are recognised at the historical rate.
Retained earnings/loss including net profi t/loss for the year
Retained earnings including net profi t/loss for the year include earnings in the Parent Company and its subsidiaries. Previous provision to the statutory reserve, including transferred share premium reserves, is included in this equity item.
Cash fl ow from operating activities
Cash fl ow from operating activities amounted to SEK 383 M, compared with SEK –305 M last year. Inventories decreased by SEK 852 M, compared with an increase of SEK 293 M last year, and operating liabilities decreased by SEK 904 M (–435).
Investing activities
Cash fl ow from investing activities amounted to SEK 198 M (–285). Investments and disposals in non-current assets, includ- ing leased assets, amounted to SEK 49 M (–64). Replacement investments amounted to SEK 39 M (52), expansion invest- ments to SEK 54 M (48) and environmental investments to SEK 5 M (4). Investments in new construction and additions to prop-
Remaining after net investments
Cash fl ow from operating activities was SEK 383 M (–305), while cash fl ow from investments in leasing and non-current assets, interest-bearing receivables and business combinations was SEK 198 M (–285), which means that cash fl ow after net investments amounts to SEK 581 M, compared with SEK –590 M last year.
Financing activities
Debts decreased by SEK 491 M (increase: 802). Dividends to shareholders amounted to SEK 164 M (172). There was no buy- back of own shares (115).
COMMENTS ON THE CONSOLIDATED CASH FLOW STATEMENT
SEK M Note 2008 2007
Operating activities 35
Profi t/loss before tax from continuing operations –139 150
Profi t/loss before tax from discontinued operation 2 –8
Depreciation/amortisation and impairment losses 343 295
Other items not affecting cash –125 18
Tax paid –7 –33
Cash fl ow from operating activities
before change in working capital 74 422
Change in inventories 852 –293
Change in operating receivables 361 1
Change in operating liabilities –904 –435
Cash fl ow from operating activities 383 –305
Investing activities
Acquisitions and disposals of non-current assets –49 64
Investments and disposals of fi nancial assets –34 3
Acquisition of subsidiary/operation, net –236 –352
Disposal of subsidiary/operation, net 43 —
Disposal of discontinued operation, net 474 —
Cash fl ow from investing activities 198 –285
Remaining after net investments 581 –590
Financing activities
Change in bank loans and other loans –491 802
Buy-back of own shares — –115
Dividend paid to Parent Company’s shareholders –164 –172
Cash flow from financing activities –655 515
Change in cash and cash equivalents, excluding translation differences –74 –75
Exchange difference in cash and cash equivalents 1 4
Change in cash and cash equivalents –73 –71
Cash and cash equivalents at start of year 187 258
Cash and cash equivalents at year-end 114 187
CONSOLIDATED CASH FLOW STATEMENT
