Bilia — Interim / Quarterly Report 2014

Jul 24, 2014

Everything to do with our finances. And then some.

Report for the first six months of 2014

2)

1 )

2 )

Notable events during 2014

• On 20 January 2014, Bilia concluded an agreement with Toyota Sweden Holding AB to acquire a property company and Toyota's operation in Malmö, Trelleborg and Lund. The date of possession was 1 March 2014. The purchase consideration totalled SEK 77 M, of which the dealership operation accounted for SEK 43 M and the property company SEK 34 M. On the date of possession, an interest-bearing loan in the property company of SEK 27 M was settled, which means that the Bilia Group's capital employed and net debt increased by SEK 104 M as an effect of the acquisition.

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

Second quarter 2014

Demand for cars and service was on a level with the first quarter of 2014, but better compared with the same quarter the previous year.

Net turnover amounted to SEK 5,077 M (4,575). For comparable operations and adjusted for exchange rate changes, net turnover increased by about SEK 460 M or 10 per cent. The increase is mainly attributable to car sales.

Operating profit amounted to SEK 115 M (90). If items affecting comparability are excluded, the profit was SEK 121 M (95). The improvement is entirely attributable to the Car Business, which reported a profit that was SEK 23 M better than last year. The Service Business reported slightly better earnings than last year. Underlying Group overheads increased by about 4 per cent compared with last year. Overheads amounted to 12.9 per cent in relation to net turnover, which was 0.5 percentage point lower compared with last year. In view of the earnings level during the quarter, provision was made for employee bonuses of SEK 5 M (2).

Net financial items amounted to $SEK - 5$ M $(-5)$ .

Tax for the period amounted to SEK-23 M (-21). The tax corresponds to a tax rate of 22 per cent (26) if the tax-free portion of the earnings of the associated companies is excluded.

Net profit for the period was SEK 87 M (64) and earnings per share SEK 3.45 (2.60). Exchange rate changes reduced the profit by SEK 1 M.

Total assets increased by SEK 198 M to SEK 6,274 M. The increase is mainly attributable to more cars sold with guaranteed residual values (leased vehicles) and higher trade receivables.

Equity decreased by SEK 165 M, amounting to SEK 1,740 M. Dividends of SEK 226 M (148) were paid to shareholders. The equity/assets ratio amounted to 28 per cent (27).

Acquisition of non-current assets amounted to SEK 33 M (22). Replacement investments represented SEK 10 M (7), expansion investments SEK 12 M (13), environmental investments SEK 0 M (0) and investments in new construction and additions to properties SEK 6 M (0), while finance leases amounted to SEK 5 M (2).

Operating cash flow amounted to SEK 118 M (138). After acquisition of operations and change in interest-bearing receivables, cash flow amounted to SEK 104 M (127). Net debt increased by SEK 170 M during the quarter, amounting to SEK 571 M.

Liquidity remains good, and at the end of June a debt to the banks of SEK 8 M was reported. The combined credit limit with Nordea and DNB amounts to SEK 900 M.

The number of employees increased by 36 during the quarter and amounts to 3,532 persons.

First six month 2014

Net turnover amounted to SEK 9,624 M (8,623). For comparable operations and adjusted for exchange rate changes, net turnover increased by about SEK 1,040 M or 12 per cent. The increase is attributable to sales of both cars and service.

Operating profit amounted to SEK 209 M (135). If items affecting comparability are excluded, the profit was SEK 215 M (140). Both the Service Business and the Car Business reported better earnings compared with last year. Underlying Group overheads increased by 4 per cent compared with last year. Overheads amounted to 13.2 per cent in relation to net turnover, which was 0.8 percentage point lower compared with last year. In view of the earnings level during the first six months, provision was made for employee bonuses of SEK 9 M (4).

Net financial items amounted to SEK-11 M (4). Last year included SEK 14 M more in earnings from associated companies due to a change in the company tax rate in Sweden to 22 per cent.

Tax for the period amounted to SEK-37 M (-31). The tax expense for the quarter was reduced by SEK 6 M due to a booked tax asset attributable to value increases on endowment policies. At the same time, operating profit has been charged with just over SEK 5 M in special payroll tax.

Net profit for the period was SEK 161 M (108) and earnings per share SEK 6.40 (4.40). Exchange rate changes reduced the profit by SEK 3 M.

Acquisition of non-current assets amounted to SEK 125 M (55). Replacement investments represented SEK 26 M (19), expansion investments SEK 22 M (19), environmental investments SEK 0 M (0) and investments in new construction and additions to properties SEK 71 M (11), while finance leases amounted to SEK 6 M (6).

Operating cash flow amounted to SEK 142 M (228). After acquisition of operations and change in interest-bearing receivables, cash flow amounted to SEK 103 M (226). The acquisition of Toyota (the operation and the property company) reduced the cash flow after net investments by a total of SEK 103 M, whereby the operating cash flow was reduced by SEK 61 M. Net debt increased by SEK 162 M during the first six months, amounting to SEK 571 M.

Items affecting comparability

	Second quarter		First six months		July 13 -	Full year
Group, SEK M	2014	2013	2014	2013	June 14	2013
Operating profit excl. items affecting comparability Items affecting comparability	121	95	215	140	470	395
- Gain from sale of operation, other	0		0
- Structural costs etc.	-6	$-7$	-6	-7	$-24$	$-25$
- Impairment of land					-4	-4
Operating profit	115	90	209	135	442	368
Profit before tax excl. items affecting comparability Items affecting comparability	116	90	204	144	454	394
- Gain from sale of operation, other	0		0
- Structural costs etc.	-6	$-7$	-6	$-7$	$-24$	$-25$
- Impairment of land	Ω		0		-4
Profit before tax	110	85	198	139	426	367

Structural costs for the year pertain to measures to reduce future costs in Denmark by about SEK 13 M per year, with full effect from the second half of 2014.

Group

Group
			Deliveries				Order backlog
No. of new	Second quarter		First six months		July 13 -	Full year	30 June
cars	2014	2013	2014	2013	June 14	2013	2014	2013
Sweden 1	8,666	6,182	14,829	11,391	27,711	24,273	5,045	4,477
Norway	2,255	1,976	3,968	3,503	8,261	7,796	1,389	1,335
Denmark	909	1,024	1,761	1,729	3,590	3,558	462	603
Total	11,830	9,182	20,558	16,623	39,562	35,627	6,896	6,415

¹⁾ Toyota is included in deliveries during the quarter with 263 (-) and during the first six months with 319 (-), and in order backlog with 115 (-).

			Net turnover									Operating profit/loss excl. items affecting comparability, operating margin
	Second quarter		First six months		July $13 -$	Full year		Second quarter				First six months			July 13 -	Full year
SEKM	2014	2013	2014	2013	June 14	2013	2014	$\%$	2013	$\frac{9}{6}$	2014	%	2013	$\%$	June 14	2013	$\%$
Sweden	3.505	3,008	6.538	5,691	12.414	11,567	107	3.0	79	2.6	188	2.9	131	2.3	399	342	3.0
Norway	1.315	.281	2.573	2,452	5,208	5,087	32	2.5	29	2.3	64	2.5	43	1.8	137	116	2.3
Denmark	259	286	514	479	.,032	997	-6	$-2.2$	$-$	. . 1.1	$-13$	$-2.5$	$-10$	$-2.2$	$-23$	$-20$	$-2.0$
Total Cars	5.079	4,575	9.625	8,622	18,654	17,651	133	2.6	106	2.3	239	2.5	164	1.9	513	438	2.5
Parent Company, other	$-2$						$-12$		-11		$-24$		$-24$		$-4^2$	$-43$
Total	5.077	4,575	9.624	8.623	18,657	17,656	121	2.4	95	2.1	215	2.2	140	1.6	470	395	2.2

• Strong earnings in Sweden

• New savings plan in Denmark

The market for new cars increased during the quarter by 15 per cent in Sweden and 2 per cent in Denmark, while it decreased by 3 per cent in Norway.

The Group reported an operating profit, excluding items affecting comparability, of SEK 121 M $(95)$ and an operating margin of 2.4 per cent $(2.1)$ during the second quarter. The Service Business reported a profit that was SEK 4 M better, while the Car Business reported a profit that was SEK 23 M better, compared with last year's. Easter fell during the second quarter this year (as opposed to the first quarter last year), which had a negative impact on earnings in the Service Business. The order backlog declined during the quarter by 1,227 cars to 6,896 cars, but it is still higher compared with last year.

The operation in Sweden reported an operating profit of SEK 107 M (79), with an operating margin of 3.0 per cent (2.6). The Car Business reported a profit that was SEK 22 M better than last year's. The improvement is mainly attributable to sales of both new and used cars and to lower relative costs. The Service Business reported a profit that was SEK 7 M better than last year's. The improvement is mainly attributable to higher turnover.

Operating profit in Bilia's Norwegian operation amounted to SEK 32 M (29) and the operating margin to 2.5 per cent (2.3). The Service Business reported earnings that were SEK 1 M lower compared with last year. The decrease is attributable to the fact that Easter fell during the second guarter of the year. The Car Business reported a profit that was SEK 3 M better than last year's. Earnings from sales of new cars increased by SEK 2 M, while earnings from sales of used cars increased by SEK 1 M. The stock of used cars was on a good level and the gross profit margin was strengthened during the quarter.

The Danish operation reported an operating loss of SEK 6 M (loss: 2). The poorer result compared with last year is mainly attributable to the Car Business. Lower sales of new and used cars and a lower gross profit margin depressed earnings in the Car Business. Turnover in the Service Business declined by 14 per cent and earnings by SEK 2 M. A new savings programme was implemented during the quarter, which is expected to reduce costs by about SEK 13 M per year.

Operations – divided into Service, Car and Fuel businesses

• Improved earnings in Car Business

Increased deliveries of new and used car

			Net turnover 1)						Operating profit/loss, operating margin
	Second quarter		First six months		July $13 -$	Full year	Second quarter		First six months		July $13 -$	Full year
SEKM	2014	2013	2014	2013	June 14	2013	2014	2013	2014	2013	June 14	2013
Service Business	1.077	1.037	2,116	2.021	4.145	4.050	78	741	171	1391	383	351
- margin, %							7.2	7.1	8.1	6.9	9.21	8.7
Car Business	3,928	3.449	7.378	6.428	14,204	13.254	52	29	60	16	111	67
- margin, %							1.3	0.8	0.8	0.3	0.8	0.5
Fuel Business	284	274	527	539	1,055	1.067					19	20
$-marain$ $0/2$							12	$\cap$ $\cap$	16	7 6	70	70

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

		Second quarter			First six months
Per cent	Sweden	Norway	Denmark	Totall	Sweden	Norway	Denmark	Total
Change from last year Underlying turnover	3.1	2.6	$-13.8$	1.9	4.5	5.6	$-9.6$	3.9
Calendar effect	1.7	1.7		1.7	0.8	$-0.8$	$-0.8$	0.31
Adjusted turnover	4.8	4.3	$-12.1$	3.6	5.3	4.8	$-10.4$	4.2l

The trend in the Service Business was positive last year and has been positive during the current year as well. Slightly improved demand, along with a focus on older cars, service agreements and add-on sales, as well as more new-car deliveries are reasons for the increase in Sweden and Norway. Repair operations, which account for approximately 20 per cent of the total Service Business, reported a slight decline in turnover during the quarter, however. The decline is attributable in part to the mild winter, leading to short appointment times at the start of the quarter, and in part to the fact that the car fleet is gradually becoming equipped with better safety systems, leading to fewer accidents. The decline in turnover in Denmark is mainly attributable to increased competition in the Copenhagen area. The quarter contained one less working day in all countries.

The Car Business's deliveries of new cars increased during the quarter for comparable operations by 26 per cent and deliveries of used cars by 6 per cent. Orders received for new cars increased by 15 per cent compared with last year. Earnings from sales of new cars improved by SEK 23 M. Higher turnover and lower relative costs had a positive impact on earnings. Earnings from sales of used cars showed considerable improvement compared with the first quarter of the year and were on a level with the same quarter last year. Used-car sales reported a profit of SEK 15 M during the quarter.

Stocks of used cars increased marginally during the quarter and are at good levels. The turnover rate for used cars increased slightly to 9.5 times per year.

The Fuel Business is concentrated to Sweden, and earnings amounted to SEK 3 M (3).

All values in the above graphs pertain to isolated quarters.

Acquisition of operation 2014

Toyota's dealership operation in Malmö, Trelleborg and Lund

On 1 March 2014, Bilia acquired Toyota's dealership operation in Malmö, Trelleborg and Lund. The business generates an annual turnover of about SEK 350 M a year, with an average operating margin of 1.1 per cent. The purchase consideration amounted to SEK 43 M. The entire purchase consideration was paid in cash. There is no contingent purchase consideration.

Through the acquisition Bilia can enlarge its offer with the Toyota brand, belonging to one of the world's most successful automakers. It is further hoped that the acquisition will create opportunities for Bilia to grow with Toyota in the countries where Bilia does business.

The acquisition is expected to give rise to synergies valued at about SEK 3 M per year, with full effect from 2015. The business has 77 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

The acquisition has the following effects on the Group's assets and liabilities.

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

	Carrying amounts in Fair		Fair value
	Toyota's dealer-	value	recognised in
SEKM	ship operation	ladjustment	Group
Intangible assets	13		13
Property, plant and equipment	11	27	38
Long-term investments			0
Deferred tax asset			0
Inventories	39		39
Trade receivables and other receivables	11		11
Cash and cash equivalents
Trade payables and other liabilities	32	27	59
Net identifiable assets and liabilities	43		43
Consolidated goodwill			$\Omega$
Purchase consideration paid, cash			43
Less: Cash and cash equivalents in aquired operation
Net effect on cash and cash equivalents			42

Acquired customer relations totalling SEK 13 M are recognized as intangible assets. These customer relations will be amortized over 10 years.

Parent Company

Bilia AB is responsible for the Group's management, strategic planning, purchasing, public relations, business development, accounting and financing. Furthermore, Bilia AB conducts real estate and IT activities, mainly for companies in the Group.

The Parent Company's operating loss for the second quarter amounted to SEK-12 M (loss: 11).

Risks and uncertainties

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 2013 Annual Report.

Accounting principles

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. 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.

Events after the end of the report period

No significant events have occurred after the end of the report period.

Audit

This interim report has not been subjected to special examination by the auditors.

Next report

The interim report for the third quarter of 2014 will be published on 24 October 2014.

This interim report provides a true and fair summary of the Group's and the Parent Company's activities, financial position and results of operations while describing significant risks and uncertainties faced by the Parent Company and the companies included in the Group.

Gothenburg, 24 July 2014

Mats Qviberg Chairman

Jan Pettersson Deputy chairman Ingrid Jonasson Blank Board member

Jack Forsgren Board member

Svante Paulsson

Board member

Fredrik Grevelius Board member

Jon Risfelt

Board member

Mats Holgerson Board member

Anna Engebretsen

Board member

Patrik Nordvall Board member appointed by employee organisation

Tommy Strandhäll Board member appointed by employee organisation

Per Avander Managing Director, CEO and Board member

Gothenburg, 24 July 2014 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 www.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 24 July 2014 at 08:30 a.m..

Group's operating segments

First six months

First six months
	Service		Car			Fuel		Total		Segment	Group
								Cars		reconciliation
SEKM	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013
Net turnover
External sales	1,720	1,655	7,378	6,428	527	539	9,625	8,622	$-1$	1	9,624	8,623
Internal sales	396	366					396	366	$-396$	$-366$
Total net turnover	2,116	2,021	7,378	6,428	527	539	10,021	8,988	$-397$	$-365$	9,624	8,623
Depreciation/amortisation	27	35	125	126	$\overline{c}$	3	154	164	11	9	165	173
Operating profit/loss	171	139	60	16	8	$\mathbf{Q}$	239	164	$-30$	$-29$	209	135
Interest income											4	5
Interest expenses											$-26$	$-24$
Shares in profits of associated companies			11	23			11	23			11	23
Profit before tax											198	139
Tax expense for the period											$-37$	$-31$
Net profit for the period											$\overline{161}$	108
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		$\overline{\mathbf{c}}$		$\mathbf 0$			$\overline{0}$	2			0	$\overline{\mathbf{c}}$
- Structural costs etc.	-5	$-6$	-1	-1			-6	$-7$			-6	$^{\rm -7}$
Items of non-recurring nature	$-5$	-4	-1	$\overline{\mathbf{1}}$			-6	$-5$			$-6$	$\frac{1}{5}$
Material items not affecting cash besides
depreciation/amortisation:
- Other	$-26$	$-18$	$-14$	$-36$	$\Omega$	0	$-40$	$-54$	-2	$-1$	$-42$	$-55$
Total	$-26$	$-18$	$-14$	$-36$	$\Omega$	0	$-40$	$-54$	$-2$	$\overline{\mathbf{1}}$	$-42$	$-55$
Assets
Interests in associated companies			355	336			355	336			355	336
Deferred tax assets											88	84
Other assets											5,831	5,293
Total assets			355	336			355	336			6,274	5,713
Investments in non-current assets	70	26	575	358	$\overline{2}$	$\mathbf 0$	647	384	13	21	660	405
Liabilities
Equity											1,740	1,532
Liabilities											4,534	4,181
Total liabilities and equity											6,274	5,713

	Revenue from external customers		Non-current assets
SEKM	2014	2013	2014	2013
Geographical segments
Sweden	6,540	5,693	3,031	2,698
Norway	2,573	2,452	500	629
Denmark	514	479	83	87
Segment reconciliation		-1	$-750$	$-724$
Total	9.624	8.623	2.864	2.690

Group's operating segments con'd.
First six months

			Service						Car
	Sweden		Norway		Denmark		Sweden			Norway	Denmark
SEKM	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013	2014	2013
Net turnover
External sales	1,198	1,142	415	401	107	112	4,813	4,021	2,158	2.040	407	367
Internal sales	247	223	120	112	29	31
Total net turnover	1,445	1,365	535	513	136	143	4,813	4,021	2,158	2,040	407	367
Depreciation/amortisation	20	29	5	4	$\overline{c}$	$\overline{c}$	111	112	11	12		$\overline{c}$
Operating profit/loss	132	108	36	28	3		48	14	28	15	$-16$	$-13$
Shares in profits of associated companies							11	23
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				2						$\mathbf 0$
- Structural costs etc.		$-5$			$-5$	-1					-1	0
Items of non-recurring nature		$-5$		$\overline{c}$	$-5$	$-1$		-1		$\Omega$	-1	$\Omega$
Material items not affecting cash besides
depreciation/amortisation:
- Other	$-22$	$-16$	-1	$-1$	$-3$	$-1$	$-12$	$-15$		-1	$-3$	$-20$
Total	$-22$	$-16$	-1	$-1$	$-3$	-1	$-12$	$-15$		-1	-3	$-20$
Assets
Interests in associated companies							355	336
Investments in non-current assets	64	13		12			490	310	14	3	71	45

Consolidated Statement of Income and Other Comprehensive Income

	Second quarter		First six months		July 13 -	Full year
SEKM	2014	2013	2014	2013	June 14	2013
Net turnover	5,077	4,575	9,624	8,623	18,657	17,656
Costs of goods sold	$-4,304$	$-3,868$	$-8,147$	$-7,281$	$-15,749$	$-14,883$
Gross profit	773	707	1,477	1,342	2,908	2,773
Other operating income	$\overline{2}$	3	4	$\overline{7}$	8	11
Selling expenses	$-538$	$-505$	$-1,034$	$-987$	$-2,005$	$-1,958$
Administrative expenses	$-115$	$-108$	$-231$	$-219$	$-440$	$-428$
Other operating expenses	$-7$	-7	$-7$	-8	$-29$	$-30$
Operating profit 1)	115	90	209	135	442	368
Financial income	$\overline{c}$	2	4	5	33	34
Financial expenses	$-13$	-11	$-26$	$-24$	$-72$	$-70$
Shares in profits of associated companies Net financial items	6 $-5$	4 $-5$	11 $-11$	23 4	23 $-16$	35 $^{\rm -1}$
Profit before tax	110	85	198	139	426	367
Tax	$-23$	-21	$-37$	$-31$	$-83$	$-77$
Net profit for the period	87	64	161	108	343	290
Other comprehensive income/loss
Items that cannot be reclassified to profit or loss
Revaluation of defined-benefit pension plans	-44	$\mathbf 0$	-44	$\mathbf 0$	31	75
Tax attributable to items that cannot be reclassified
to profit or loss	10 $-34$	0 $\overline{0}$	10 $-34$	$\mathbf 0$ 0	-7 24	-17 58
Items that can be reclassified to profit or loss
Translation differences attributable to foreign
operations	8	1	16	$-14$	-1	-31
Tax attributable to items that have been or may be
reclassified to profit or loss	0	0	0	0	0
	$\overline{8}$	ı	16	$-14$	$-1$	$-31$
Other comprehensive income/loss after tax	$-26$	1	$-18$	$-14$	23	27
Comprehensive income for the period	61	65	143	94	366	317
Net profit for the period attributable to:
Parent Company's shareholders	87	64	161	108	343	290
Comprehensive income for the period attributable to:
Parent Company's shareholders	61	65	143	94	213	164
Weighted average number of shares, '000:
- before dilution	25,151	24,671	25,146	24,667	25,002	24,765
- after dilution	25,459	25,003	25,459	25,003	25,322	25,096
Basic earnings/loss per share, SEK	3.45	2.60	6.40	4.40	13.70	11.70
Diluted earnings/loss per share, SEK	3.40	2.55	6.35	4.35	13.55	11.55
Weighted average number of own shares, '000		456		456	137	363
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	$-10$	$-10$	$-20$	$-20$	$-38$	$-38$
- Land and buildings	-4	$-3$	$-7$	$-5$	$-19$	$-17$
- Equipment, tools, fixtures and fittings	$-18$	$-17$	$-34$	$-34$	$-61$	$-61$
- Leased vehicles	$-52$ $-84$	$-59$	$-104$ $-165$	$-114$	$-200$	$-210$
Total		$-89$		$-173$	$-318$	$-326$

Consolidated Statement of Financial Position, Summary

SEKM	30/6 2014	31/12 2013	30/6 2013
Assets
Non-current assets
Intangible assets
Intellectual property	191	190	220
Goodwill	264	259	275
	455	449	495
Property, plant and equipment
Land and buildings	157	94	97
Construction in progress		8	6
Equipment, tools, fixtures and fittings	316	297	304
Leased vehicles 1)	1,534	1,389	1,395
	2,009	1,788	1,802
Long-term investments Financial investments	369	362	350
Long-term receivables 2)	31 400	27 389	43 393
Deferred tax assets	88	66	84
Total non-current assets	2,952	2,692	2,774
Current assets
Inventories, merchandise	2,123	2,268	1,938
Current receivables
Other receivables 1)	1,084	980	866
Cash and cash equivalents 2)	115	155	135
Total current assets	3,322	3,403	2,939
Total assets	6,274	6,095	5,713
Equity and liabilities
Equity
Share capital	251	251	251
Other contributed capital Reserves	47 $-37$	47 $-53$	47 $-36$
Retained earnings including net profit for the year	1,479	1,578	1,270
Total equity	1,740	1,823	1,532
Non-current liabilities
Debenture loan 3)	28	28	28
Interest-bearing liabilities 3)	80	122	113
Other liabilities and provisions 4)	1,472	1,261	1,425
	1,580	1,411	1,566
Current liabilities
Interest-bearing liabilities 3)	268	162	144
Other liabilities and provisions	2,686	2,699	2,471
	2,954	2,861	2,615
Total equity and liabilities	6,274	6,095	5,713
Assets
1) Of which interest-bearing	225	228	192
2) Interest-bearing	146	182	178
Liabilities
3) Interest-bearing	376	312	285
4) Of which interest-bearing	566	507	560

Statement of Changes in Group Equity, Summary

SEKM	30/6 2014	31/12 2013	30/6 2013
Opening balance	1,823	1,586	1,586
Cash dividend to shareholders	$-226$	$-148$
Exercised warrants			01
Disposal of own shares		68
Comprehensive income for the year	143	317	29
Closing balance	1.740	1,823	1,615

Consolidated Statement of Cash Flows

	Second quarter		First six months		July 13 -	Full year
SEKM	2014	2013	2014	2013	June 14	2013
Operating activities
Profit before tax	110	85	198	139	426	367
Depreciation/amortisation and impairment losses	84	89	165	173	322	330
Other items not affecting cash	10	$-15$	4	$-48$	22	$-30$
Tax paid	$-37$	$-24$	-91	$-14$	$-142$	$-65$
Change in inventories	121	$-88$	213	116	$-189$	$-286$
Change in operating receivables	$-129$	$-19$	$-68$	87	$-213$	$-58$
Change in operating liabilities	174	223	50	$-78$	243	115
Cash flow from operating activities	333	251	471	375	469	373
Investing activities
Acquisition of non-current assets (intangible and tangible)	-33	$-22$	-125	-55	$-175$	$-105$
Disposal of non-current assets (intangible and tangible)	4	$\mathbf 0$	4	$\Omega$	8
Acquisition of leased vehicles	$-384$	$-175$	$-535$	$-350$	$-885$	$-700$
Disposal of leased vehicles	198	84	327	258	580	511
	118		142	228
Operating cash flow		138			-3	83
Investment in financial assets	-5	$\mathbf 0$	-5	$\mathbf{0}$	-5	$\mathbf 0$
Disposal of financial assets	$-4$	4	0	13	14	27
Acquisition of subsidiary/operation, net	-13	$-25$	-42	$-25$	$-44$	$-27$
Disposal of subsidiary/operation, net	8	10	8	10	33	35
Cash flow after net investments	104	127	103	226	$-5$	118
Financing activities
Borrowings	300	$\mathbf 0$	400	0	400	$\Omega$
Repayment of loans	$-200$	0	$-300$	$\mathbf 0$	$-300$	0
Change in overdraft facility	33	65	-17	$-3$	41	55
Exercised warrants	0	$\mathbf 0$	0	$\mathbf 0$	$\mathbf 0$	$\Omega$
Disposal of own shares	0	$\Omega$	$\mathbf 0$	$\Omega$	68	68
Dividend paid to Parent Company's shareholders	-226	$-148$	$-226$	$-148$	$-226$	$-148$
Cash flow from financing activities	$-93$	$-83$	$-143$	$-151$	$-17$	$-25$
Change in cash and cash equivalents, excl. translation
differences	11 0	44	$-40$ 0	75	$-22$ $\overline{2}$	93 $\Omega$
Exchange difference in cash and cash equivalents Change in cash and cash equivalents	11	-1 43	$-40$	$-2$ 73	$-20$	93
Cash and cash equivalents at start of period	104	92	155	62	135	62
Cash and cash equivalents at end of period	115	135	115	135	115	155

Fair value of financial instruments

The carrving amount of financial instruments corresponds to the fair value, with the exception of debenture loans. The fair value of debenture loans amounts to SEK 28 M.

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 per year-end been valuated to fair value. The value of the currency derivatives is not material and does not constitute an significant item. Fair value measurement has reduced earnings by SEK 1 M.

Calculation of fair value

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.

Quarterly review

Group	3/12	4/12	1/13	2/13	3/13	4/13	1/14	2/14
Net turnover, SEK M	3,824	4,534	4,048	4,575	4,155	4,878	4,547	5,077
Operating profit excl. items affecting
comparability, SEK M	53	139	45	95	96	159	94	121
Operating margin excl. items affecting
comparability, %	1.4	3.0	1.1	2.1	2.3	3.2	2.1	2.4
Operating profit, SEK M	22	112	45	90	76	157	94	115
Operating margin, %	0.6	2.5	1.1	2.0	1.8	3.2	2.1	2.3
Profit before tax, SEK M	18	108	54	85	73	155	88	110
Profit/loss for the period, SEK M	-8	76	44	64	54	128	74	87
Rate of capital turnover, times 1)	3.22	3.12	3.04	3.03	3.07	3.06	3.12	3.12
Return on capital employed, $% ^{1}$	13.9	12.3	11.6	13.0	15.3	17.7	18.7	19.4
Return on equity, $% ^{1}$	10.8	9.1	9.4	11.4	15.2	17.0	18.9	20.0
Net debt/equity, times	0.34	0.36	0.30	0.31	0.23	0.22	0.21	0.32
Equity/assets ratio, %	28	27	30	27	28	30	31	28
Interest coverage ratio, times 1)	6.8	6.4	5.9	6.6	7.5	6.3	6.7	6.9
Data per share (SEK)
Earnings/loss for the period	$\overline{c}$ $-0.35$	$3.10^{-4}$	$1.80^{-6}$	8) 2.60	$2.15^{10}$	$5.15$ 12)	$2.95^{14}$	3.45 $^{16)}$
Equity	3) 61	5) 64	$65^{7}$	9) 62	$64^{11}$	$72^{13}$	$76^{15}$	$69^{17}$
Operating cash flow	2) 1.25	4) $-0.75$	6) 3.65	8) 5.55	$1.20^{10}$	$-7.05$ 12)	$0.95^{14}$	4.70 $^{16)}$

$1)$ Rolling 12 months.

$2)$ Based on weighted average number of shares outstanding during third quarter, 24,663,161.

$3)$ Based on number of shares outstanding at 30 September 2012, 24,546,644.

$4)$ Based on weighted average number of shares outstanding during fourth quarter, 24,566,868.

$5$ ) Based on number of shares outstanding at 31 December 2012, 24,657,606.

$^{6)}$ Based on weighted average number of shares outstanding during first quarter, 24,662,698.

$7$ Based on number of shares outstanding at 31 March 2013, 24,667,096.

$8)$ Based on weighted average number of shares outstanding during second quarter, 24,670,763.

$9)$ Based on number of shares outstanding at 30 June 2013, 24,671,552.

$100$ Based on weighted average number of shares outstanding during third quarter, 24,684,972.

$111$ Based on number of shares outstanding at 30 September 2013, 24,841,194.

$122$ Based on weighted average number of shares outstanding during fourth quarter, 25,036,534.

$13)$ Based on number of shares outstanding at 31 December 2013, 25,139,592.

$14$ ¹⁴ Based on weighted average number of shares outstanding during first quarter, 25,141,384.

$15$ ) Based on number of shares outstanding at 31 March 2014, 25,145,051.

$16$ ) Based on weighted average number of shares outstanding during second quarter, 25,150,843.

$17$ ) Based on number of shares outstanding at 30 June 2014, 25,156,163.

Income Statement for Parent Company

	Second quarter		First six months		July 13 -	Full year
SEKM	2014	2013	2014	2013	June 14	2013
Net turnover	105	98	217	197	421	401
Administrative expenses	-117	$-109$	$-241$	$-223$	$-464$	$-446$
Operating loss 1)	$-12$	$-11$	$-24$	$-26$	$-43$	$-45$
Result from financial items
Income from interests in Group companies	55	0	55	$\Omega$	14	$-41$
Interest income from Group companies		6	15	13	26	24
Other interest income and similar line items			2		28	29
Interest expenses to Group companies	0	0	0		$\Omega$	$\mathbf 0$
Interest expenses and similar line items	$-3$	$-4$	-6	-9	$-37$	$-40$
Loss after financial items	48	$-8$	42	$-19$	$-12$	$-73$
Appropriations	0	0	0	$\Omega$	272	272
Profit/loss before tax	48	-8	42	$-19$	260	199
Tax		0	6		$-51$	$-55$
Net profit/loss for the period	49	$-8$	48	$-17$	209	144
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	$-4$	$-3$	$-7$	$-7$	$-12$	$-12$
- Buildings	$-1$	$\Omega$	-1	$\Omega$	$-1$	$\Omega$
- Equipment, tools, fixtures and fittings	0	$-1$	-1	$-1$	$-2$	$-2$
Total	$-5$	$-4$	-9	$-8$	$-15$	$-14$

Balance Sheet for Parent Company, Summary

SEKM	30/6 2014	31/12 2013	30/6 2013
Assets
Non-current assets
Intangible assets
Intellectual property	45	46	46
	45	46	46
Property, plant and equipment
Buildings	20	11	8
Construction in progress	$\overline{2}$	8	$\overline{\mathbf{3}}$
Equipment, tools, fixtures and fittings	9	9	9
	31	28	20
Long-term investments
Interests in Group companies	750	716	724
Other securities held as non-current assets	0	0	0
Other non-current receivables	25	20	29
Deferred tax asset	29	24	22
	804	760	775
Total non-current assets	880	834	841
Current assets
Current receivables Receivables from Group companies	24
Other receivables	123	715 94	19 96
Cash on hand and accrued deposits	546	83	404
Total current assets	693	892	519
Total assets	1,573	1,726	1,360
Equity and liabilities
Equity
Restricted equity
Share capital	251	251	251
Statutory reserve	47	47	47
	298	298	298
Non-restricted equity
Share premium reserve	47	47	47
Retained earnings including net profit for the year	651	829	601
	698	876	648
Total equity	996	1,174	946
Untaxed reserves	277	277	227
Provisions
Provisions for pensions and similar obligations	21	19	18
Deferred tax liability	ı 22	1 20	0 18
Non-current liabilities
Debenture loan	28	28	28
Other liabilities	5	5	5
	33	33	33
Current liabilities
Liabilities to credit institutes	100	32
Liabilities to Group companies		24
Other liabilities	145	166	136
	245	222	136
Total equity and liabilities	1,573	1,726	1,360
Pledged assets and contingent liabilities for Parent Company
Pledged assets	552	534	447
Contingent liabilities	1,249	1,356	1,252