The Managing Director’s comments

Higher result for both Service Business and Car Business

Second quarter

Our operational earnings for the second quarter amounted to MSEK 411, which was MSEK 63 higher than in the previous year. The margin was 3.8 per cent, which was 0.5 percentage points higher. The higher operational earnings were attributable primarily to the Service Business, which reported earnings of MSEK 323, representing an increase of MSEK 71 compared with the previous year. The Car Business reported earnings that were slightly higher, attributable to both used and new car sales.

Underlying order intake for new cars was 29 per cent higher than in the previous year. The order backlog at the end of the period amounted to 16,621 vehicles, which is a good level from a historical perspective and on an underlying basis, 40 per cent higher than in the previous year. Operating cash flow for the second quarter amounted to MSEK 546. Net debt in relation to EBITDA at the end of the quarter was 1.3 times. During the quarter, we secured an additional credit facility with our banks of MSEK 800, providing increased financial flexibility.

Growth and higher margin in the Service Business

The Service Business remained stable and during the second quarter it accounted for 70 per cent of the Group’s operational earnings. The margin for the second quarter was 12.0 per cent compared with 10.4 per cent in the previous year. The margini in our Service Business was also higher for the first half of the year than in the previous year, amounting to 12.2 per cent compared with 11.4 per cent.

Demand during the quarter remained stable across our countries and organic growth in our Service Business was 5 per cent. We continuously work to improve efficiency and systematically benchmark our workshops against one another in order to implement best practices. In particular, we focus on our newly acquired and newly established operations, which historically have taken an average of three years to fully implement Bilia’s ways of
working.

Carefully selected car brands for our customers

Order intake during the second quarter was 29 per cent higher than in the previous year, attributable to our well-positioned portfolio of car brands with attractive models meet ing our customers’ needs. We are pleased and proud to welcome the Kia brand to the Bilia family in the future. During the second quarter, we entered into a dealer agreement with Kia Sweden AB to become a full-service partner for servicing and sales of new and used passenger cars as well as light commercial vehicles. From June 2028, we will offer car sales and servicing ati approximately seven facilities in Stockholm and Western Sweden. Through this agreement, Bilia will become Kia’s largest partner in Sweden, representing approximately 15 per cent of its sales. Kia’s market share in Sweden this year is 7.9 per cent. Our establishment will primarily take place at Bilia’s existing facilities and potentially at one or two new facilities.

Continued uncertainty in the external environment, with signs of gradual improvement

Despite continued geopolitical uncertainty, we observed signs of higher demand for new vehicles across our car brands. In particular, interest in new electric cars increased in Sweden, Belgium and Luxembourg. Demand for used cars remained somewhat weak, although pricing became more stable. In Norway, demand for electric vehicles continued to dominate, with electric vehicles accounting for 98 per cent of registered cars. For the coming quarters, we expect continued stable demand within the Service Business and some improvement in the Car Business. With a strong financial posi
tion, attractive and well-established automotive brands, and a focus on profitability,we are well positioned to create value for our customers and shareholders.

Per Avander, Managing Director and CEO