Bilia — Audit Report / Information 2016

Feb 14, 2017

• Net turnover amounted to SEK 23,906 M (20,443).
• Operational earnings amounted to SEK 887 M (765).
• The Group's net profit for the year was SEK 636 M (647) and earnings per share SEK 12.45 (12.85).
• Operating cash flow amounted to SEK 464 M (212).
• The Board proposes a regular dividend of SEK 8.00 (7.50).

• The Board proposes a 2-for-1 stock split.

• Net turnover amounted to SEK 6,297 M (5,750).

• Operational earnings amounted to SEK 265 M (247).
• The Group's net profit for the period was SEK 173 M (196) and earnings per share SEK 3.35 (3.90).
• Operating cash flow amounted to SEK -267 M (-230).

In a comment on the fourth quarter, Bilia's Managing Director Per Avander says:

"Demand for both cars and service was slightly better compared with last year, and we reported better operational earnings. The improvement is attributable to the Service Business, which boosted underlying turnover by about 7 per cent. The order backlog of new cars declined during the quarter, but was underlying more than 1,000 cars higher than last year. The financial position of the Group remains strong. We believe that demand for cars and service during the first quarter of 2017 will be slightly better compared with the corresponding quarter last year."

	Fourth quarter		Full year
	2016	2015	2016	2015
Continuing operations
Net turnover, SEK M	6,297	5,750	23,906	20,443
Operational earnings, SEK M 1)	265	247	887	765
Operational margin, %	4.2	4.3	3.7	3.7
Operating profit, SEK M	252	234	841	929
Operating margin, %	4.0	4.1	3.5	4.5
Oiperational profit before tax, SEK M 1)	260	247	879	769
Profit before tax, SEK M	247	234	833	933
Net profit for the period / year, SEK M	194	179	657	731
Earnings per share, SEK 2)	3.75	3.55	12.85	14.50
The Bilia Group
Loss from discontinued operation, net after tax (Denmark)	-21	17	-21	-84
Net profit for the period / year, SEK M	173	196	636	647
Earnings per share, SEK 2)	3.35	3.90	12.45	12.85

1) Items affecting comparability are shown in the table on page 6.

2) The number of shares used in the calculation is shown in the table on page 19.

The Bilia Group reported a gain on redemption of the PRI liability in 2015, see page 6.

Fourth quarter

• Notice of termination of the distribution agreements with Hyundai in Sweden was given on 8 November 2016. Hyundai is represented at four facilities in Stockholm, one in Eskilstuna and one in Köping. Annual turnover amounts to about SEK 200 M. The period of notice of termination is 2 years, and turnover is expected to decline gradually during this period, ceasing entirely by the end of 2018. This decision is expected to have a marginal positive impact on Bilia's earnings per share.
• On 28 November 2016, Bilia concluded an agreement to acquire Metro Auto Group's Toyota operation in Sweden, MW Gruppen Stockholm AB. The business is run from five facilities: three just south of Stockholm in Nacka, Haninge and Kungens Kurva, one in Södertälje and one in Eskilstuna. Annual turnover amounts to about SEK 700 M and operating profit has averaged SEK 28 M for the past two years. The operation's capital employed, plus agreed-on surplus values, amounts to about SEK 170 M. The agreement also includes acquisition of the five properties housing the business, worth a total of about SEK 165 M. The deal will increase the Bilia Group's capital employed and net debt by a total of about SEK 335 M.
• In December, Bilia issued unsecured bonds worth SEK 250 M. The bond issue carries a floating interest rate of STIBOR (3 months) plus 150 basis points and has a final maturity date in March 2021.

Events earlier during the year

• On 28 January 2016, Bilia concluded an agreement to acquire three car dealerships that conduct BMW, MINI and Toyota operations in Sweden. The date of possession was 1 March 2016.
• On 11 March 2016, Bilia concluded an agreement to sell its Ford operations in Gothenburg, Kungsbacka and Stockholm to Hedin Bil. The date of possession for the operations in Gothenburg and Kungsbacka was 1 May 2016, and for the Stockholm operation not later than 31 December 2017.
• In March, Bilia issued unsecured bonds worth SEK 500 M with a term to maturity of five years. The bond issue carries a floating interest rate of STIBOR (3 months) plus 220 basis points and has a final maturity date in March 2021.
• On 9 May 2016, Bilia concluded an agreement to acquire Philippe Emond, a BMW and MINI dealer in Belgium located near the border with Luxembourg. The date of possession was 1 July 2016.

• On 27 May 2016, Bilia sold 94 000 warrants to senior officers, mainly in Sweden. The warrants give their holders the option of purchasing a Bilia share for SEK 231 during the period 1 March 2019 to 26 March 2019. The price of the warrants was SEK 12 apiece, which was the market value for the warrants.

• On 31 May 2016, Bilia issued 699,242 new shares to the seller of the BMW and MINI operation in Luxembourg as partial payment of the purchase consideration. Bilia's share capital increased by SEK 3,496,210 as an effect of the new issue, and the number of outstanding shares amounts to 51,399,976 after the issue.

• On 15 August 2016, Bilia concluded an agreement to acquire Schäfer GmbH Automobile, a dealer for BMW and MINI in Germany. The business is run from four facilities that are concentrated northwest of Frankfurt and border on Bilia's operation in Germany. The operation has been a part of the Bilia Group since 1 August 2016.
• On 7 October 2016, Bilia's Board of Directors decided to supplement the financial goals with a goal for net debt. The ratio of net debt to EBITDA shall not exceed 2.0 over the long term.

Events after the end of the period

In January, Bilia issued unsecured bonds worth SEK 250 M. The bond issue carries a floating interest rate of STIBOR (3 months) plus 140 basis points and has a final maturity date in March 2021.

Further information on the above events and other press information is available at bilia.com.

Demand for cars and service was slightly better compared with the same quarter last year.

Net turnover amounted to SEK 6,297 M (5,750). For comparable operations and adjusted for exchange rate changes, net turnover decreased by about SEK 200 M or 4 per cent. The decrease is mainly attributable to sales of new Volvo cars, which decreased during the quarter due to the model change from V70/S80 to V/S90. Orders received has been strong, however, and Bilia's order backlog of Volvo cars in Sweden reached an all-time high at yearend.

Operating profit amounted to SEK 252 M (234). Adjusted for structural and acquisition costs, operational earnings amounted to SEK 265 M (247). The improvement is attributable to the Service Business, which boosted underlying turnover by about 7 per cent. Underlying Group overheads decreased by about 1 per cent compared with last year. Overheads amounted to 13.7 per cent in relation to net turnover, which was 0.3 percentage point higher compared with last year. In view of the earnings level and customer satisfaction during the quarter, provision was made for employee bonuses of SEK 4 M (7).

Net financial items amounted to SEK -5 M (0). The decrease is mainly attributable to higher net debt and lower income from interests in associated companies.

Tax for the period amounted to SEK -53 M (-55), and the effective tax rate was 23 per cent (24).

Loss from discontinued operation, net after tax (Denmark) amounted to SEK 21 M (profit: 17) and stems partly from a loss from the sale of a site of SEK 1 M and partly from SEK 20 M in accumulated exchange losses. The operation was liquidated in December 2016, which means that accumulated exchange losses are reversed as a positive translation difference in other comprehensive income, while the exchange loss is charged to loss from discontinued operation.

Net profit for the period was SEK 173 M (196) and earnings per share SEK 3.35 (3.90). Exchange rate changes increased the profit by about SEK 6 M.

Total assets increased by SEK 772 M during the quarter, amounting to SEK 10,132 M. The increase is mainly attributable to leased vehicles and to stocks of new and used cars.

Equity increased by SEK 184 M during the quarter, amounting to SEK 2,511 M. The equity/assets ratio amounted to 25 per cent (28).

Acquisition of non-current assets amounted to SEK 66 M (27). Replacement investments represented SEK 5 M (1), expansion investments SEK 14 M (13), environmental investments SEK 0 M (0) and investments in new construction and additions to properties SEK 38 M (8), while finance leases amounted to SEK 9 M (5).

Operating cash flow amounted to SEK -267 M (-230). After acquisitions and disposals of operations and change in interest-bearing receivables, cash flow amounted to SEK -269 M (316). Net debt increased by SEK 230 M during the quarter, amounting to SEK 775 M.

Liquidity remains good, and at the end of December a positive bank balance (in Nordea and DNB) of SEK 27 M was reported. Bilia's combined credit limit with Nordea and DNB amounts to SEK 1,500 M.

The number of employees increased by 107 during the quarter and amounts to 4,327 persons. The increase is mainly attributable to Sweden and to more employees in the Service Business.

Demand for cars and service was slightly better compared with last year.

Net turnover amounted to SEK 23,906 M (20,443). For comparable operations and adjusted for exchange rate changes, net turnover increased by about SEK 900 M or 4 per cent. The increase is attributable to both car sales and service.

Operating profit amounted to SEK 841 M (929). Adjusted for structural and acquisition costs, operational earnings amounted to SEK 887 M (765). The improvement is mainly attributable to the Service Business, which boosted underlying turnover by about 7 per cent. Underlying Group overheads increased by about 2 per cent compared with last year. Overheads amounted to 12.6 per cent in relation to net turnover, which was 0.3 percentage point lower compared with last year. In view of the earnings level and customer satisfaction during the year, provision was made for employee bonuses of SEK 19 M (25).

Net financial items amounted to SEK -8 M (4). The decrease is mainly attributable to higher net debt.

Tax for the year amounted to SEK -176 M (-202), and the effective tax rate was 22 per cent (22).

Loss from discontinued operation, net after tax (Denmark) amounted to SEK 21 M (loss: 84) and stems partly from a loss from the sale of a site of SEK 1 M and partly from SEK 20 M in accumulated exchange losses. The operation was liquidated in December 2016, which means that accumulated exchange losses are reversed as a positive translation difference in other comprehensive income, while the exchange loss is charged to loss from discontinued operation.

Net profit for the year was SEK 636 M (647) and earnings per share SEK 12.45 (12.85). Exchange rate changes affected the profit marginally.

Total assets increased by SEK 2,703 M during the year, amounting to SEK 10,132 M. The increase is mainly attributable to acquisitions of operations and leased vehicles.

Equity increased by SEK 455 M during the year, amounting to SEK 2,511 M. The equity/assets ratio amounted to 25 per cent (28).

Bilia's financial goals were fulfilled as follows: Operating margin 3.5 per cent (goal 2.5), return on capital employed 26.4 per cent (goal 17.0), return on equity 27.9 per cent (goal 18.0), ratio of net debt to EBITDA 0.7 (goal not over 2.0) and growth 16.9 per cent (goal 5-10).

Acquisition of non-current assets amounted to SEK 268 M (164). Replacement investments represented SEK 75 M (57), expansion investments SEK 50 M (37), environmental investments SEK 2 M (3) and investments in new construction and additions to properties SEK 112 M (58), while finance leases amounted to SEK 29 M (9).

Operating cash flow amounted to SEK 464 M (212). After acquisitions and disposals of operations and change in interest-bearing receivables, cash flow amounted to SEK 317 M (-11). Net debt increased by SEK 452 M during the year, amounting to SEK 775 M.

The number of employees increased by 714 during the year, amounting to 4,327 persons. Acquisitions of operations have increased the number of employees by 535.

	Fourth quarter		Full year
Group, SEK M	2016	2015	2016	2015
Operational earnings	265	247	887	765
Items affecting comparability
- Gain from sale of operation, other	0	2	21	6
- Redemption of pension liability	6	0	6	197
- Structural costs etc.	0	-5	-7	-5
Acquisition costs
- Acquisition-related costs and value adjustments	-3	-1	-11	-2
- Amortisation of surplus values	-16	-9	-55	-32
Operating profit	252	234	841	929
Operational profit before tax	260	247	879	769
Items affecting comparability
- Gain from sale of operation, other	0	2	21	6
- Redemption of pension liability	6	0	6	197
- Structural costs etc.	0	-5	-7	-5
Acquisition costs
- Acquisition-related costs and value adjustments	-3	-1	-11	-2
- Amortisation of surplus values	-16	-9	-55	-32
Profit before tax	247	234	833	933

The quarter's redemption of pension liability pertains to a gain of SEK 6 M that was reported when Bilia's Norwegian operation changed the rules for employees who had previously not switched from a defined-benefit to a defined-contribution pension plan.

Gain from sale of operation, other, during the full year pertains to the sale of the Ford operations in Gothenburg and Kungsbacka that took place during the second quarter. The structural costs pertain to provisions for rent in Sweden and Norway.

Last year's redemption of pension liability pertains to the earnings effect before tax of the transfer of the Swedish pension liability to Alecta.

Acquisition-related costs and value adjustments pertain to costs for the acquisitions of the businesses in Sweden, Germany, Luxembourg and Belgium.

	Deliveries			Order backlog
No. of new	Fourth quarter		Full year		31 Dec.
cars	2016	2015	2016	2015	2016	2015
Sweden 1)	9,176	9,392	34,896	32,546	8,032	6,692
Norway	2,605	2,487	9,097	8,311	2,278	2,488
Western Europe 2)	1,510	245	3,999	245	1,017	124
Total	13,291	12,124	47,992	41,102	11,327	9,304

1) Kaiser Bil is included in deliveries during the quarter with 156 (160) and during the year with 653 (160) and with 153 (137) in order backlog.

BMW-, MINI- and Toyota acquisitions is included in deliveries during the quarter with 378 (-) and during the year with 1,262 (-) and with 168 (-) in order backlog.

2) Germany is included in deliveries during the quarter with 395 (245) and during the year with 1,251 (245) and with 160 (124) in order backlog.

Luxembourg is included in deliveries during the quarter with 699 (-) and during the year with 1,926 (-) and with 609 (-) in order backlog. Belgium is included in deliveries during the quarter with 416 (-) and during the year with 822 (-) and with 248 (-) in order backlog.

		Net turnover							Operational earnings, operating margin
	Fourth quarter		Full year			Fourth quarter				Full year
SEK M	2016	2015	2016	2015	2016	%	2015	%	2016	%	2015	%
Sweden	4,015	4,065	15,763	14,513	223	5.6	215	5.3	719	4.6	644	4.4
Norway	1,645	1,511	6,278	5,738	51	3.1	49	3.3	200	3.2	177	3.1
Western Europe	634	173	1,858	173	15	2.4	2	1.2	30	1.6	2	1.2
Total Cars	6,294	5,749	23,899	20,424	289	4.6	266	4.6	949	4.0	823	4.0
Parent Company, other	3	1	7	19	-24	-	-19	-	-62	-	-58	-
Total	6,297	5,750	23,906	20,443	265	4.2	247	4.3	887	3.7	765	3.7

Strong earnings in Sweden

Big order backlog

The market for new cars increased during the quarter by 5 per cent in Sweden and 1 per cent in our markets in Western Europe, while the market in Norway was unchanged.

The Group reported operational earnings of SEK 265 M (247) and an operating margin of 4.2 per cent (4.3). The Service Business reported a profit that was SEK 24 M better, while the Car Business reported a profit that was unchanged, compared with last year. The order backlog decreased by 755 cars during the quarter and amounted to 11,327 cars.

The operation in Sweden reported an operating profit of SEK 223 M (215), with an operating margin of 5.6 per cent (5.3). Volvo's total deliveries of new cars in Sweden declined by 10 per cent during the quarter (and by -13 per cent during the third quarter) due to the model change from V70/S80 to V/S90, which also affected Bilia's deliveries of Volvo cars. Bilia's orders received for Volvo cars has been strong, however, and the order backlog reached an all-time high at year-end. The Car Business reported a profit that was SEK 10 M worse than last year. The decline is mainly attributable to a lower gross profit margin in used car sales. Stocks of used cars increased during the quarter, but were at a good level at year-end. Underlying turnover in the Service Business increased by 4 per cent and earnings improved by SEK 19 M compared with last year. The number of mechanics increased slightly during quarter, but we still have a shortage of mechanics.

Operating profit in Bilia's Norwegian operation amounted to SEK 51 M (49), with an operating margin of 3.1 per cent (3.3). The Service Business continues to develop favourably. Earnings were SEK 1 M better compared with last year, with an operating margin of 12.5 per cent. Underlying turnover increased by 12 per cent, while the gross profit margin declined by 2 percentage points. Earnings from sales of new cars improved by SEK 4 M, while earnings from sales of used cars decreased by SEK 3 M. The decline is mainly attributable to a slightly lower gross profit margin and higher costs. Stocks of used cars increased during the quarter and were slightly too high at year-end.

Operations in Western Europe reported a profit of SEK 15 M (2). Earnings were significantly better compared with the outcome for the third quarter. The change of business management systems in Luxembourg affected the operation during the fourth quarter as well, but to a lesser extent compared to the situation in the previous quarter. Profit in the Car Business during the quarter amounted to SEK 5 M, and in the Service Business to SEK 10 M.

		Net turnover 1)					Operational profit, operating margin
	Fourth quarter		Full year		Fourth quarter		Full year
SEK M	2016	2015	2016	2015	2016	2015	2016	2015
Service Business	1,564	1,354	5,319	4,491	211	187	600	496
- margin, %					13.5	13.8	11.3	11.0
Car Business	4,783	4,365	18,565	15,694	72	72	324	303
- margin, %					1.5	1.7	1.7	1.9
Fuel Business	271	253	1,031	1,021	6	7	25	24
- margin, %					2.3	2.8	2.4	2.4

Service includes workshop services, spare parts and accessories.

The Car Business includes sales of new and used cars and customer financing.

1) Net turnover does not include eliminations for internal sales.

Growth in the Service Business

	Fourth quarter Full year
Per cent	Sweden	Norway	Total	Sweden	Norway	Total
Change from last year
Underlying turnover	4.3	12.3	6.6	5.8	11.3	7.4
Calendar effect	-1.6	-1.6	-1.6	-0.8	-0.8	-0.8
Adjusted turnover	2.7	10.7	5.0	5.0	10.5	6.6

Continued mechanic shortage in Sweden

Improved earnings in the Service Business

The Service Business reported a profit that was SEK 24 M better than last year, with an operating margin of 13.5 per cent (13.8). The earnings improvement is attributable to higher underlying turnover and the new operations in Western Europe. Demand is good, but we still have a shortage of mechanics, particularly in Sweden. Adjusted turnover in Sweden increased by 3 per cent and in Norway by 11 per cent. There was one more working day in both Sweden and Norway compared with the same quarter last year.

In the Car Business, deliveries of new cars decreased by 1 per cent for comparable operations during the quarter, while deliveries of used cars decreased by 3 per cent compared with last year. Orders received for new cars decreased by 7 per cent compared with last year. The decrease is mainly attributable to the termination of the sales agreements for Ford that took place at the end of 2015. Earnings from sales of new cars improved by SEK 16 M, attributable mainly to a higher gross profit margin and the new operations in Western Europe. The profit from sales of used cars declined by SEK 16 M to SEK 5 M. The decrease is mainly attributable to a lower gross profit margin. Stocks of used cars increased for comparable operations during the quarter but are at good levels overall. The turnover rate for used cars amounted to 10.3 times per year.

The Fuel Business is concentrated to Sweden, and earnings amounted to SEK 6 M (7).

All values in the above graphs pertain to isolated quarters.

On 1 March 2016, Bilia acquired three car dealerships that conduct BMW, MINI and Toyota operations in Sweden. The dealerships are located in the following towns:

BMW – Trollhättan, Uddevalla and Strömstad

MINI – Trollhättan

Toyota – Kristianstad, Västerås, Enköping, Borlänge, Falun and Ludvika

The companies have a combined annual turnover of about SEK 750 M and operating profit is estimated at about SEK 14 M per year. The purchase consideration was SEK 58 M. The entire purchase consideration was paid in cash. There is no contingent purchase consideration.

Synergies can be found in a higher inventory turnover rate, which is expected to reduce capital employed by about SEK 30 M.

The businesses have about 115 employees and will continue to be operated from the present-day facilities.

There are no external transaction costs or acquisition-related expenses attributable to the acquisition.

Effects of the acquisitions

Below is the final acquisition analysis, and the difference between the final acquisition analysis and the preliminary version that was presented during the second quarter of 2016 is shown in a separate column. The acquisitions have the following effects on the Group's assets and liabilities.

	Carrying amounts in BMW, MINI, Toyota	Fair value	Fair value recognised in	Difference versus preliminary acquisi
SEK M	dealership operations adjustment Group			tion analysis
Intangible assets	2	9	11	0
Property, plant and equipment	24	11	35	0
Deferred tax asset	3		3	3
Inventories	146	2	148	-6
Trade receivables and other receivables	31		31	7
Cash and cash equivalents	4		4	0
Interest-bearing liabilities	103		103	0
Trade payables and other liabilities	98	11	109	1
Deferred tax liability		2	2	0
Net identifiable assets and liabilities	9	9	18	3
Consolidated goodwill			40	-3
Purchase consideration paid, cash			58	0
Less: Cash and cash equivalents in aquired operations			4	0
Net effect on cash and cash equivalents			54	0

Acquired customer relations totalling SEK 9 M are recognised as intangible assets. Customer relations will be amortised over 10 years.

On 31 March 2016, Bilia took possession of Arnold Kontz's BMW and MINI operation in Luxembourg. The operation, which is centrally located in Luxembourg, accounts for about 50 per cent of total BMW sales in Luxembourg. The operation has an annual turnover of about SEK 1.1 bn with an operating profit of about SEK 45 M per year. The purchase consideration was SEK 389 M. Of the total purchase consideration, SEK 273 M was paid in cash and the remaining SEK 116 M was paid in the form of newly issued Bilia shares. The exercise price was set at 95 per cent of the price of a Bilia share during the period 18-22 April 2016. The value of the discount, SEK 6 M, has increased the value of consolidated goodwill. Payment with the new shares was effected by offsetting of the debt to the seller. There is no contingent purchase consideration.

The acquisition gives Bilia a good platform for increasing the Group's presence in the region.

The business has about 145 employees and will continue to be operated from the presentday facilities.

Acquisition-related expenses amounting to SEK 1.0 M consist of fees to consultants for due diligence and have been recognized as "Other operating expenses".

Effects of the acquisition

Below is the final acquisition analysis, and the difference between the final acquisition analysis and the preliminary version that was presented during the third quarter of 2016 is shown in a separate column. The acquisition has the following effects on the Group's assets and liabilities.

	Carrying amounts in	Fair	Fair value	Difference versus
	Arnold Kontz dealer-	value	recognised in	preliminary acquisi
SEK M	ship operation	adjustment	Group	tion analysis
Intangible assets		188	188	0
Property, plant and equipment	20		20	-21
Inventories	112	3	115	-20
Trade receivables and other receivables	134	-1	133	68
Cash and cash equivalents	23		23	13
Interest-bearing liabilities			0	-55
Trade payables and other liabilities	161	7	168	24
Deferred tax liability		57	57	0
Net identifiable assets and liabilities	128	126	254	71
Consolidated goodwill			135	4
Purchase consideration paid			389	75
Less: Payment in the form of newly issued Bilia shares			116	0
Less: Cash and cash equivalents in aquired operation			23	13
Net effect on cash and cash equivalents			250	62

Acquired customer relations totalling SEK 188 M are recognised as intangible assets. Customer relations will be amortised over 10 years.

On 1 July 2016, Bilia acquired Philippe Emond SA's BMW and MINI dealership in Belgium. The business is situated close to the border with Luxembourg, which is expected to result in synergies worth about SEK 6 M per year. The synergies are mainly attributable to cost reductions and efficiency improvements. The business has an annual turnover of about SEK 730 M and has reported an average operating profit of SEK 24 M during the past two years. The purchase consideration was SEK 249 M. Of this amount, SEK 66 M was paid in cash and the remainder, SEK 183 M, in the form of newly issued shares in Bilia AB's subsidiary Bilia Holding S.à r.l.. After the acquisition, Bilia Holding S.à r.l. will own 100 per cent of the shares in the newly acquired company Philippe Emond SA. There is no contingent purchase consideration. Due to the fact that part of the purchase consideration was paid in the form of shares in Bilia AB's subsidiary Bilia Holding S.à r.l., Bilia Holding S.à r.l. will be 66.2 per cent owned (previously 100 per cent) by Bilia AB and 33.8 per cent owned by the seller of Philippe Emond. Since the acquisition also includes the issuance of a put option to the seller combined with a call option for Bilia, a liability of EUR 12.8 M converted to SEK has been recognised, equivalent to the present value of the estimated future exercise price of Bilia's put option. The exercise prices for the put and call options are variable as determined by a formula stipulated in the purchase agreement based mainly on future results in the Bilia Holding Group. The liability recognised for the obligation under the put option replaces the item "non-controlling interests" in the Group's total equity (according to the principles of the Anticipated Acquisition Method). The business has about 105 employees and will continue to be operated from the present-day facilities.

Acquisition-related expenses amounting to SEK 2.4 M consist of fees to consultants for due diligence and have been recognized as "Other operating expenses".

Effects of the acquisition

Below is the final acquisition analysis, and the difference between the final acquisition analysis and the preliminary version that was presented during the third quarter of 2016 is shown in a separate column. The acquisition has the following effects on the Group's assets and liabilities.

	Carrying amounts in Philippe Emonds	Fair value	Fair value recognised in	Difference versus preliminary acquisi
SEK M	dealership operation	adjustment	Group	tion analysis
Intangible assets		97	97	0
Property, plant and equipment	68	5	73	0
Inventories	95	2	97	-1
Trade receivables and other receivables	122	-2	120	-1
Cash and cash equivalents	19		19	0
Interest-bearing liabilities	32		32	-1
Trade payables and other liabilities	179	-2	177	-1
Deferred tax liability		36	36	0
Net identifiable assets and liabilities	93	68	161	0
Consolidated goodwill			88	0
Purchase consideration paid			249	0
Less: Payment in the form of newly issued Bilia Holding-shares			183	0
Less: Cash and cash equivalents in aquired operation			19	0
Net effect on cash and cash equivalents			47	0

Acquired customer relations totalling SEK 97 M are recognised as intangible assets. Customer relations will be amortised over 10 years.

Bilia acquired Schäfer GmbH Automobile's BMW and MINI dealership in Germany. The operation has been a part of the Bilia Group since 1 August 2016. The business is run from four facilities that are concentrated northwest of Frankfurt and border on Bilia's operation in Germany. The business has an annual turnover of about SEK 590 M, with an operating profit of about SEK 7 M per year. The purchase consideration was SEK 26 M. The entire purchase consideration was paid in cash. There is no contingent purchase consideration.

The acquisition gives Bilia a good platform for increasing the Group's presence in the region.

The acquisition is expected to result in synergies, mainly cost reductions of approximately SEK 13 M per year and reductions in tied-up capital, mainly in inventories, of nearly SEK 20 M. The synergies are expected to be fully realised by the 3rd quarter of 2017.

The business has about 120 employees and will continue to be operated from the presentday facilities.

Acquisition-related expenses amounting to SEK 1.5 M consist of fees to consultants for due diligence and have been recognized as "Other operating expenses".

Effects of the acquisition

Below is the final acquisition analysis, and the difference between the final acquisition analysis and the preliminary version that was presented during the third quarter of 2016 is shown in a separate column. The acquisition has the following effects on the Group's assets and liabilities.

	Carrying amounts in	Fair	Fair value	Difference versus
	Schäfers dealer-	value	recognised in	preliminary acquisi
SEK M	ship operation	adjustment	Group	tion analysis
Property, plant and equipment	8		8	4
Inventories	111		111	18
Trade receivables and other receivables	37		37	-3
Cash and cash equivalents	10		10	-4
Interest-bearing liabilities	27		27	-76
Trade payables and other liabilities	114	-1	113	91
Net identifiable assets and liabilities	25	1	26	0
Consolidated goodwill			0	0
Purchase consideration paid, cash			26	0
Less: Cash and cash equivalents in aquired operation			10	-4
Net effect on cash and cash equivalents			16	4

Bilia decided in March 2015 to discontinue its entire operation in Denmark. As per 31 December 2015, all five facilities have been disposed of.

Loss from discontinued operation during 2016 stems partly from a loss from the sale of a site in Denmark of SEK 1 M and partly from SEK 20 M in accumulated exchange losses in Denmark. The operation in Denmark was liquidated in December 2016, which means that accumulated exchange losses are reversed as a positive translation difference in other comprehensive income, while the exchange loss is charged to loss from discontinued operation. Comprehensive income for the year for the Bilia Group is thus unaffected by the above accumulated exchange losses Denmark.

	Full year
SEK M	2016	2015
Revenues	-	468
Expenses	-21	-609
Loss before tax	-21	-141
Tax	-	57
Loss after tax from dicontinued operation	-21	-84
Discontinued operation
Basic earnings/loss per share, SEK	-0.40	-1.65
Diluted earnings/loss per share, SEK	-0.40	-1.65

SEK M	31/12 2016	31/12 2015
Property, plant and equipment	-	-
Inventories	-	-
Trade receivables and other receivables	-	-
Cash and cash equivalents	-	-
Total assets	-	-

SEK M	31/12 2016	31/12 2015
Trade payables and other liabilities Deferred tax liability	- -	- -
Total liabilities	-	-

	Full year
SEK M	2016	2015
Cash flows from operating activities	-	-137
Cash flows from investing activities	-	146
Cash flows from financing activities	-	-4
Net cash flows from discontinued operation	-	5

Bilia AB is responsible for the Group's management, strategic planning, purchasing, public relations, business development, marketing, HR, real estate activities, accounting and financing.

The Parent Company's operating loss for the fourth quarter amounted to SEK -20 M (loss: 19).

As a result of its operations, the Bilia Group is exposed to both operating risks and financial risks.

The operating risks include:

• Development of the market for new cars.
• Diminished demand for cars can also affect the value of stock in hand and guaranteed residual values.
• Reduced demand for service and repairs.
• Increased competition in the markets where Bilia is active.
• The ability of suppliers to offer competitive products.
• Automotive suppliers become insolvent or terminate retailer agreements with Bilia.
• Regulatory decisions that lead to changes in taxes and charges on the products Bilia sells can influence both demand for and the valuation of cars in stock and cars sold with guaranteed residual values.

The financial risks include liquidity risks, interest rate risks, credit risks and currency risks.

Bilia works continuously with risk identification and risk assessment. For further information about the risks that affect the Group, please refer to the 2015 Annual Report.

The board of directors proposes that the number of shares be increased by dividing each share into two shares (2-for-1 stock split) for the purpose of increasing trade in the share. Subject to AGM decisions the estimated record date will be at turn of the month May-June 2017.

The 2016 Annual General Meeting resolved to authorise the Board of Directors to increase the company's share capital and to issue new shares to be transferred to Société de Participations Financiéres Groupe Arnold Kontz (the company). The background is an agreement where Bilia acquires Arnold Kontz's BMW and MINI operation in Luxembourg, for which partial payment will be made with shares in Bilia. Payment will be made for the new shares by offsetting of the debt to the company of EUR 12,500,000. The debt was converted to SEK and the exercise price will be set at 95 per cent of the average price of the Bilia share during the period 18-22 April 2016. On 31 May 2016, 699,242 new shares were issued, after which the total number of outstanding shares amounts to 51,399,976. At the same time, the share capital increased by SEK 3,496,210 to SEK 256,999,880.

This interim report in summary for the Group has been prepared in accordance with IAS 34 "Interim Financial Reporting" and applicable provisions of the Annual Accounts Act. The interim report for the Parent Company has been prepared in accordance with Chapter 9 of

the Annual Accounts Act, "Interim Reports". The same accounting policies and calculation methods have been applied for the Group and the Parent Company as in the most recent annual report.

Non-controlling interests in the Group's total equity are recognised in an amount equivalent to the minority shareholders' share of the identifiable net assets in concerned subsidiaries, i.e. excluding goodwill. In certain acquisitions, non-controlling interests are instead recognised initially at fair value, i.e. including goodwill, according to the full goodwill method. Put options issued for shares held by parties without a controlling interest are recognised as a financial liability equivalent to the present value of the estimated exercise price. Bilia has opted to apply the principles of the Anticipated Acquisition Method when recognising the liability. Under this method, a non-controlling interest is not recognised in the Group's total equity, but is instead replaced by a liability to the holder of the non-controlling interest equivalent to the present value of the exercise price for the shares according to the put option.

New IFRS's that became effective during the year have not had any significant effect on the Group's or the Parent Company's financial reports.

Disclosures in accordance with IAS 34, paragraph 16, are made not only in the financial statements and notes, but also in other parts of the interim report.

The ESMA's (European Securities and Markets Authority) "Guidelines on Alternative Performance Measures (APMs)" is applied for financial reports submitted after 3 July 2016. As a result, additional information is disclosed regarding financial performance measures not defined in the IFRS standards. Alternative performance measures published in this report should not be regarded as a substitute for financial measures defined in accordance with IFRS standards, but rather as a complement, and they do not have to be comparable with similarly entitled performance measures or key ratios presented by other companies.

The Annual General Meeting will be held on 19 April 2017 11:30 a.m. at the Biograf Sture cinema, Birger Jarlsgatan 41 A, in Stockholm. Shareholders who wish to have a matter on the agenda at the AGM should contact Bilia no later than 1 March 2017 in order for the matter to be included in the notice of the meeting.

The annual report for 2016 will be published on Bilia's website on 24 March 2017.

On 3 January 2017, Bilia acquired the Toyota dealer in Sweden MW Gruppen Stockholm AB plus three property companies. The business is run from five facilities, three of which are situated just south of Stockholm.

Effects of the acquisition

The acquisition has the following effects on the Group's assets and liabilities. The following figures for acquired net assets and purchase consideration are preliminary.

The acquired operation's preliminary net assets at the acquisition date:

	Carrying amounts in MW Gruppen	Fair value	Fair value recognised in
MSEK	Stockholm	adjustment	Group
Intangible assets	0	88	88
Property, plant and equipment	164	93	257
Long-term investments	8		8
Deferred tax asset	1		1
Inventories	77	1	78
Trade receivables and other receivables	42		42
Cash and cash equivalents	17		17
Interest-bearing liabilities	45		45
Trade payables and other liabilities	174		174
Deferred tax liability	6	40	46
Net identifiable assets and liabilities	84	142	226
Consolidated goodwill			61
Purchase consideration paid			287
Less: Cash and cash equivalents in aquired operation			17
Net effect on cash and cash equivalents			270

This year-end report has not been subjected to special examination by the auditors.

The interim report for the first quarter of 2017 will be published on 2 May 2017.

Gothenburg, 14 February 2017 Bilia AB (publ) Board of Directors

For further information, please contact Per Avander, Managing Director and CEO, or Gunnar Blomkvist, CFO, telephone +46 31 709 55 00.

Bilia AB (publ) Box 9003, SE-400 91 Gothenburg, Sweden Visiting address: Norra Långebergsgatan 3, Västra Frölunda Telephone: +46 31 709 55 00 bilia.com Corporate ID No.: 556112-5690

This report is being published by Bilia AB in compliance with the Securities Market Act. The information was submitted for publication on 14 February 2017 at 13:00 p.m..

Full year
	Service		Car			Fuel	Total		Segment			Group
SEK M	2016	2015	2016	2015	2016	2015	Cars 2016	2015	2016	reconciliation 2015	2016	2015
Net turnover
External sales	4,303	3,709	18,565	15,694	1,031	1,021	23,899	20,424	7	19	23,906	20,443
Internal sales	1,016	782					1,016	782	-1,016	-782	-	-
Total net turnover	5,319	4,491	18,565	15,694	1,031	1,021	24,915	21,206	-1,009	-763	23,906	20,443
Depreciation/amortisation	-83	-53	-402	-277	-4	-4	-489	-334	-31	-58	-520	-392
Operating profit/loss	600	496	324	303	25	24	949	823	-108	106	841	929
Interest income											28	4
Interest expenses											-66	-30
Shares in profits of associated companies			30	30			30	30			30	30
Profit before tax											833	933
Tax expense for the year											-176	-202
Profit for the year from continuing operations											657	731
Loss from discontinued operation,
net after tax											-21	-84
Net profit for the year											636	647
Material items of income and expense of a non-re
curring nature recognised in the Statement of
Income and Other Comprehensive Income:
Items affecting comparability
- Profit from sale of operation, other	15	3	6	3			21	6			21	6
- Redemption of pension liability	2	13	4	52			6	65		132	6	197
- Structural costs etc.	-1		-6	-5			-7	-5			-7	-5
Items of non-recurring nature	16	16	4	50	-	-	20	66	-	132	20	198
Acquisition costs
- Acquisition-related costs and value adjustments	-6	-1	-5	-1			-11	-2			-11	-2
- Amortisation of surplus values	-26	-16	-29	-16			-55	-32			-55	-32
Acquisition costs	-32	-17	-34	-17	-	-	-66	-34	-	-	-66	-34
Material items not affecting cash besides
depreciation/amortisation:
- Other	-51	-47	-6	-6	0	0	-57	-53	59	-5	2	-58
Total	-51	-47	-6	-6	0	0	-57	-53	59	-5	2	-58
Assets
Interests in associated companies			381	377			381	377			381	377
Deferred tax assets											84	128
Other assets											9,667	6,924
Total assets			381	377			381	377			10,132	7,429
Investments in non-current assets	103	64	1,765	1,205	13	3	1,881	1,272	67	48	1,948	1,320
Liabilities
Equity											2,511	2,056
Liabilities											7,621	5,373
Total liabilities and equity											10,132	7,429

		Revenue from	Non-current
		external customers	assets
SEK M	2016	2015	2016	2015
Geographical segments
Sweden	15,772	14,535	4,457	3,459
Norway	6,278	5,738	985	815
Germany	819	173	63	53
Luxembourg	730	-	615	-
Belgium	309	-	271	-
Segment reconciliation	-2	-3	-1,370	-786
Total	23,906	20,443	5,021	3,541

Full year

Western Europé 1) Western Europé 1) Sweden Norway Sweden Norway SEK M 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 Net turnover External sales 2,889 2,575 1,042 1,034 372 100 11,849 10,938 5,230 4,683 1,486 73 Internal sales 615 565 358 215 43 2 Total net turnover 3,504 3,140 1,400 1,249 415 102 11,849 10,938 5,230 4,683 1,486 73 Depreciation/amortisation -51 -39 -13 -13 -19 -1 -350 -263 -32 -14 -20 0 Operating profit/loss 422 358 153 132 25 6 272 261 47 46 5 -4 Shares in profits of associated companies 30 30 Material items of income and expense of a non-re curring nature recognised in the Statement of Income and Other Comprehensive Income: Items affecting comparability - Profit from sale of operation, other 15 3 6 3 - Redemption of pension liability 13 2 52 4 - Structural costs etc. 1 -2 -2 -5 -4 Items of non-recurring nature 16 13 0 3 - - 4 47 0 3 - - Acquisition costs - Acquisition-related costs and value adjustments -1 -1 -5 -1 -4 -1 - Amortisation of surplus values -9 -7 -8 -9 -9 -9 -8 -8 -8 -12 Acquisition costs -10 -7 -8 -10 -14 - -10 -8 -8 -8 -16 -1 Material items not affecting cash besides depreciation/amortisation: - Other -48 -45 -3 -2 0 0 -11 -11 5 5 0 0 Total -48 -45 -3 -2 0 0 -11 -11 5 5 0 0 Assets Interests in associated companies 381 377 Investments in non-current assets 62 33 37 31 4 1,471 1,046 242 159 52	Service						Car

1) Germany is included as from 1 October 2015. Luxembourg is included as from 1 April 2016. Belgium is included as from 1 July 2016.

	Fourth quarter		Full year
SEK M	2016	2015	2016	2015
Continuing operations
Net turnover Costs of goods sold	6,297 -5,188	5,750 -4,745	23,906 -20,069	20,443 -17,076
Gross profit	1,109	1,005	3,837	3,367
Other operating income	12	11	38	217
Selling expenses	-698	-622	-2,451	-2,144
Administrative expenses	-162	-146	-556	-493
Other operating expenses	-9	-14	-27	-18
Operating profit 1)	252	234	841	929
Financial income	-11	2	28	4
Financial expenses	-2	-11	-66	-30
Shares in profits of associated companies	8	9	30	30
Net financial items	-5	0	-8	4
Profit before tax	247	234	833	933
Tax Profit for the year from continuing operations	-53 194	-55 179	-176 657	-202 731
Discontinued operation
Loss from discontinued operation,
net after tax	-21	17	-21	-84
Net profit for the year	173	196	636	647
Other comprehensive income/loss
Items that cannot be reclassified to profit or loss
Revaluation of defined-benefit pension plans	0	5	0	-120
Tax attributable to items that cannot be reclassified
to profit or loss	0	-2	0	26
	0	3	0	-94
Items that can be reclassified to profit or loss
Translation differences attributable to foreign
operations	-9	-16	55	-45
Translation differences transferred to the net profit for the year	20	0	20	0
Tax attributable to items that have been or may be
reclassified to profit or loss	0	0	0	0
	11	-16	75	-45
Other comprehensive income/loss after tax	11	-13	75	-139
Comprehensive income for the year	184	183	711	508
Net profit for the year attributable to: Parent Company's shareholders	173	196	636	647
Comprehensive income for the year
attributable to:
Parent Company's shareholders	184	183	711	508
Weighted average number of shares, '000:
- before dilution	51,400	50,431	51,131	50,406
- after dilution	51,400	50,919	51,148	50,919
Basic earnings/loss per share, SEK	3.35	3.90	12.45	12.85
Diluted earnings/loss per share, SEK	3.35	3.90	12.45	12.75
Continuing operations Basic earnings/loss per share, SEK	3.75	3.55	12.85	14.50
Diluted earnings/loss per share, SEK	3.75	3.55	12.85	14.40
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	-21	-13	-73	-48
- Land and buildings	-15	-13	-30	-24
- Equipment, tools, fixtures and fittings	-15	-11	-80	-66
- Leased vehicles	-95	-76	-337	-254
Total	-146	-113	-520	-392

SEK M	31/12 2016	31/12 2015
Assets
Non-current assets
Intangible assets
Intellectual property	550	271
Goodwill	657	368
	1,207	639
Property, plant and equipment
Land and buildings	235	131
Construction in progress	19	8
Equipment, tools, fixtures and fittings	427	331
Leased vehicles 1)	2,744	2,048
	3,425	2,518
Long-term investments
Financial investments 1)	388	384
Long-term receivables 2)	1	0
	389	384
Deferred tax assets Total non-current assets	84 5,105	128 3,669
Current assets
Inventories, merchandise	3,451	2,564
Current receivables
Other receivables 1)	1,472	1,097
Cash and cash equivalents 2)	104	99
Total current assets	5,027	3,760
Total assets	10,132	7,429
Equity and liabilities
Equity
Share capital	257	252
Other contributed capital Reserves	167 -24	48 -99
Retained earnings including net profit for the year	2,111	1,855
Total equity	2,511	2,056
Non-current liabilities
Bond issue 3)	744	-
Interest-bearing liabilities 4)	174	75
Other liabilities and provisions 3)	2,077	1,438
	2,995	1,513
Current liabilities
Debenture loan 4)	-	28
Interest-bearing liabilities 4)	334	688
Other liabilities and provisions	4,292	3,144
	4,626	3,860
Total equity and liabilities	10,132	7,429
Assets
1) Of which interest-bearing	381	377
2) Interest-bearing Liabilities	105	9 9
3) Of which interest-bearing	753	8
4) Interest-bearing	508	791

SEK M	31/12 2016	31/12 2015
Opening balance	2,056	1,849
Cash dividend to shareholders	-380	-302
Exercised warrants / debenture loan	2	1
Sold warrants	1	-
New share issue	115	-
Discount / issue at discounted price	6	-
Comprehensive income for the year	711	508
Closing balance	2,511	2,056

	Fourth quarter		Full year
SEK M	2016	2015	2016	2015
Operating activities
Profit before tax from continuing operations	247	234	833	933
Loss before tax from discontinued operation	-21	23	-21	-141
Depreciation and impairment losses from continuing operations	148	125	522	404
Depreciation and impairment losses from discontinued operation	0	0	0	2
Other items not affecting cash	-8	-41	2	-58
Tax paid	-50	0	-153	-59
Change in inventories	-510	-536	-311	-496
Change in operating receivables	-57	-160	-9	-9
Change in operating liabilities	330	321	791	259
Cash flow from operating activities	79	-34	1,654	835
Investing activities
Acquisition of non-current assets (intangible and tangible)	-66	-27	-268	-164
Disposal of non-current assets (intangible and tangible)	4	10	19	44
Acquisition of leased vehicles	-612	-395	-1,680	-1,156
Disposal of leased vehicles	328	216	739	653
Operating cash flow	-267	-230	464	212
Investment in financial assets	-2	0	-9	-26
Disposal of financial assets	2	2	65	27
Acquisition of subsidiary/operation, net	-7	-89	-250	-284
Disposal of subsidiary/operation, net	5	0	47	55
Disposal of discontinued operation, net	0	1	0	5
Cash flow after net investments	-269	-316	317	-11
Financing activities Borrowings	250	200	1,466	1,000
Repayment of loans	0	-100	-866	-900
Change in overdraft facility	-32	206	-538	-304
Exercised warrants / debenture loan	0	1	2	1
Sold warrants	0	0	1
Dividend paid to Parent Company's shareholders	0	0	-380	-302
Cash flow from financing activities	218	307	-315	-505
Change in cash and cash equivalents, excl. translation
differences	-51	-9	2	-516
Cash and cash equivalents recognised in assets held for sale	0	0	0	0
Exchange difference in cash and cash equivalents	-2	-1	3	-1
Change in cash and cash equivalents	-53	-10	5	-517
Cash and cash equivalents at start of year	157	109	99	616
Cash and cash equivalents at year-end	104	99	104	99

The carrying amount of financial instruments is a reasonable approximation of fair value.

Fair value is determined on the basis of the following three levels:

• Level 1: according to prices quoted on an active market for the same instrument.
• Level 2: based on directly or indirectly observable market inputs other than those included in level 1.
• Level 3: according to inputs not based on observable market data.

Currency derivatives that belong to financial assets and liabilities, valuation level 2, have been valuated to fair value. The value of the currency derivatives is not material and does not constitute a significant item. Fair value measurement has affected earnings positive by SEK 1 M.

The fair value of currency derivatives is determined on the basis of market rates. If such rates are not available, the fair value is calculated by discounting the difference between the contracted forward rate and the forward rate that can be obtained on the balance sheet date for the remaining contract period.

	1/15	2/15	3/15		4/15	1/16	2/16	3/16	4/16
Continuing operations
Net turnover, SEK M	4,715	5,381	4,597		5,750	5,433	6,433	5,743	6,297
Operational earnings, SEK M	161	195	162		247	195	240	187	265
Operational margin, %	3.4	3.6	3.5		4.3	3.6	3.7	3.3	4.2
Operating profit, SEK M	157	384	154		234	185	241	163	252
Operating margin, %	3.3	7.1	3.4		4.1	3.4	3.7	2.8	4.0
Profit before tax, SEK M	154	383	162		234	183	241	162	247
The ratio of net debt to EBITDA, times 1)	0.1	0.1	-0.1		0.4	0.8	0.7	0.5	0.7
Interest coverage ratio, times 1)	17.8	30.9	41.3		32.9	28.6	16.9	12.1	13.6
The Bilia Group
Profit/loss for the period, SEK M	23	297	131		196	143	193	127	173
Rate of capital turnover, times 1)	2.99	2.99	2.98		2.96	2.93	2.93	2.87	2.70
Return on capital employed, % 1)	21.8	31.7	33.8		36.2	35.6	29.7	28.8	26.4
Return on equity, % 1)	18.5	30.5	31.6		33.2	39.7	32.9	31.0	27.9
Net debt/equity, times	0.05	0.04	-0.05		0.16	0.33	0.31	0.23	0.31
Equity/assets ratio, %	24	25	29		28	26	24	25	25
Data per share (SEK) 2)
Earnings/loss for the period	0.45 3)	5.90 5)	2.60 7)		3.90 9)	2.80 11)	3.80 13)	2.50	3.35
Equity	35 4)		35 6)	37 8)	41 10)	44 12)	42	45	49
Operating cash flow	2.40 3)	3.90 5)	2.45 7)		-4.55 9)	2.15 11)	6.15 13)	6.05	-5.25

1) Rolling 12 months.

2) Based on number of shares outstanding, 51,399,976.

• 3) Based on weighted average number of shares outstanding during first quarter, 50,366,845.
• 4) Based on number of shares outstanding at 31 March 2015, 50,393,016.
• 5) Based on weighted average number of shares outstanding during second quarter, 50,405,884.
• 6) Based on number of shares outstanding at 30 June 2015, 50,418,122.
• 7) Based on weighted average number of shares outstanding during third quarter, 50,419,599.
• 8) Based on number of shares outstanding at 30 September 2015, 50,424,016.
• 9) Based on weighted average number of shares outstanding during fourth quarter, 50,430,765.
• 10) Based on number of shares outstanding at 31 December 2015, 50,436,052.
• 11) Based on weighted average number of shares outstanding during first quarter, 50,662,922.
• 12) Based on number of shares outstanding at 31 March 2016, 50,700,734.
• 13) Based on weighted average number of shares outstanding during second quarter, 51,054,197.

	Fourth quarter		Full year
SEK M	2016	2015	2016	2015
Net turnover	88	101	385	439
Administrative expenses	-108	-120	-445	-508
Operating loss 1)	-20	-19	-60	-69
Result from financial items
Income from interests in Group companies	6	-23	41	-23
Interest income from Group companies	7	6	33	22
Other interest income and similar line items	-12	1	25	2
Interest expenses to Group companies	0	0	0	0
Interest expenses and similar line items	7	-5	-43	-13
Loss after financial items	-12	-40	-4	-81
Appropriations	683	345	683	345
Profit before tax	671	305	679	264
Tax	-138	-8	-133	0
Net profit for the year	533	297	546	264
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	-1	-4	-6	-16
- Buildings	-1	-2	-4	-4
- Equipment, tools, fixtures and fittings	0	0	-2	-3
Total	-2	-6	-12	-23

Year-end report 2016 Bilia AB (publ) 24 (27)

SEK M	31/12 2016	31/12 2015
Assets
Non-current assets
Intangible assets
Intellectual property	2	54
Property, plant and equipment	2	54
Buildings	43	33
Construction in progress	15	8
Equipment, tools, fixtures and fittings	2	14
	60	55
Long-term investments
Interests in Group companies	1,122	793
Other securities held as non-current assets	0	0
Deferred tax asset	46	99
	1,168	892
Total non-current assets	1,230	1,001
Current assets Current receivables
Receivables from Group companies	1,486	1,179
Other receivables	196	117
Cash on hand and accrued deposits	27	1
Total current assets	1,709	1,297
Total assets	2,939	2,298
Equity and liabilities
Equity Restricted equity
Share capital	257	252
Statutory reserve	47	47
	304	299
Non-restricted equity
Share premium reserve	167	48
Retained earnings including net profit for the year	931	765
	1,098	813
Total equity	1,402	1,112
Untaxed reserves	495	468
Provisions
Deferred tax liability	3	3
Non-current liabilities	3	3
Bond issue	744	-
Other liabilities	5	5
	749	5
Current liabilities
Debenture loan	-	28
Liabilities to Group companies	21	52
Other loans	-	432
Other liabilities	269	198
	290	710
Total equity and liabilities	2,939	2,298
Pledged assets and contingent liabilities for Parent Company
Pledged assets	615	601
Contingent liabilities	1,086	986

Return on equity Net profit for the year in relation to average equity.

Return on capital employed Operating profit plus interest expense included in the business and financial income in relation to average capital employed.

Amortisation of surplus values Occurs in connection with acquisitions of operations and is recognised under intangible assets. Normally these surplus values are amortised over a 10-year period.

EBITDA Operational earnings plus total depreciation/amortisation less amortisation of surplus values and depreciation of leased vehicles with repurchase agreements.

Acquisition-related costs and value adjustments Pertains to costs for legal consultants and other external costs associated directly with an acquisition, and value adjustments regarding acquired inventory assets, that are depreciated over a 3-month period.

Adjusted turnover Net turnover is adjusted for operations that have been acquired or disposed of during one of the periods. Adjustment is also made for exchange rate differences.

Comparable operations Financial information and number of units that are adjusted for operations that have been acquired or disposed of during one of the periods.

Items affecting comparability Pertains to significant revenues or expenses that are non-recurring or attributable to operational activities. Examples of items affecting comparability may be restructuring costs, costs for disputes, impairment of goodwill and losses or gains in connection with disposal of operations or assets.

Rate of capital turnover Net turnover in relation to average balance sheet total.

Liquidity Unutilised credit with the banks, Nordea and DNB, and cash and cash equivalents. Liquidity amounted to SEK 1,527 M at the end of the year.

Net debt Net debt consists of interest-bearing liabilities less cash and cash equivalents, interest-bearing current and long-term receivables, interests in associated companies and leased vehicles, long-term.

SEK M	31/12 2016	31/12 2015
Current interest-bearing liabilities	334	716
Non-current interest-bearing liabilities	924	75
Pension liabilities	3	8
Cash and cash equivalents	-104	-99
Interest-bearing assets	-1	0
Interests in associated companies	-381	-377
Non-current leased assets	0	0
Net debt(+) / receivable(-) at year-end	775	323

The ratio of net debt to EBITDA

SEK M	31/12 2016	31/12 2015
Operating earnings	887	765
Total depreciation / amortisation	520	392
-amortisation of surplus values	-55	-32
-depreciation of leased vehicles with repurchase agreements	-282	-214
Depreciation / amortisation added back	183	146
EBITDA	1,070	911
The ratio of net debt to EBITDA rolling 12 months, times	0.7	0.4

Operational margin Operational earnings in relation to net turnover.

Operational profit before tax Profit before tax adjusted for items affecting comparability, acquisition-related costs and value adjustments as well as amortisation of surplus values.

Operational earnings Operating profit adjusted for items affecting comparability, acquisitionrelated costs and value adjustments as well as amortisation of surplus values.

Gain from sale of operation Difference between purchase consideration and the operation's consolidated carrying amount, less selling costs.

Interest coverage ratio Operating profit plus interest expense included in the business and financial income in relation to financial expenses plus interest expense included in operating expenses.

Operating margin Operating profit in relation to net turnover.

Equity/assets ratio Equity in relation to balance sheet total.

Structual costs Expenses that are significant and non-recurring. Examples of structural costs may be costs for reducing the number of employees and costs for vacating a leased facility before the expiration of the lease.

Capital employed Balance sheet total less non-interest-bearing current liabilities and provisions as well as deferred tax liabilities.

Growth Increase or decrease of net turnover in relation to the preceding year.

Underlying values Values that are adjusted for operations that have been acquired or disposed of during one of the periods. Adjustment is made for exchange rate differences, where applicable.