Bilia — Interim / Quarterly Report 2017

Oct 27, 2017

• Net turnover amounted to SEK 20,306 M (17,609).
• Profit for the period was SEK 507 M (463) and earnings per share SEK 4.95 (4.55).

• Operating cash flow amounted to SEK 302 M (731).

• Net turnover amounted to SEK 6,302 M (5,743).

• Operational earnings amounted to SEK 200 M (187).
• Profit for the period was SEK 143 M (127) and earnings per share SEK 1.40 (1.25).
• Operating cash flow amounted to SEK 116 M (308).

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

"Demand for service was better and demand for cars was on a level with last year. We reported the best operational earnings ever for a third quarter. The improvement was attributable to the Service Business, which improved its earnings by nearly 25 per cent compared with last year. The Car Business reported lower earnings, which was attributable to sales of used cars. Stocks of used cars are at a good level, with a continued high turnover rate. The operation in Germany is having a tough time, while the rest of Western Europe developed favourably. The order backlog of new cars increased during the quarter by 149 cars. We expect that demand for cars will be slightly lower during the fourth quarter of 2017, while demand for service will be slightly better compared with the same quarter last year."

	Third quarter		Nine months		Oct. 16 -	Full year
	2017	2016	2017	2016	Sept. 17	2016
Continuing operations
Net turnover, SEK M	6,302	5,743	20,306	17,609	26,603	23,906
Operational earnings, SEK M 1)	200	187	728	622	993	887
Operational margin, %	3.2	3.3	3.6	3.5	3.7	3.7
Operating profit, SEK M	181	163	665	589	917	841
Operating margin, %	2.9	2.8	3.3	3.3	3.4	3.5
Profit before tax, SEK M	176	162	644	586	891	833
Net profit for the period/year, SEK M	143	127	507	463	701	657
Earnings per share, SEK 2)	1.40	1.25	4.95	4.55	6.80	6.40
The Bilia Group
Loss from discontinued operation, net after tax (Denmark)	0	0	0	0	-21	-21
Net profit for the period/year, SEK M	143	127	507	463	680	636
Earnings per share, SEK 2)	1.40	1.25	4.95	4.55	6.60	6.20

1) For reconciliation of operational earnings with operating profit, see the table on page 4. 2) The number of shares used in the calculation is shown in the table on page 13.

See "Definitions and performance measures" on page 19.

Events after the end of the report period

• Bilia concluded an agreement to acquire Bilsalongen AS, a BMW and MINI dealer in Norway. The planned date of possession is 1 January 2018. Bilsalongen's turnover in 2016 amounted to about SEK 340 M, with an operating margin of 2.3 per cent. Bilsalongen's capital employed, plus agreed-on surplus values, amounts to about SEK 55 M.
• No other significant events have occurred after the end of the report period.

Third quarter

• Bilia's Board of Directors resolved to buy back the company's own shares. The maximum number of shares was 1,250,000 and the share buy-backs began on 8 August 2017. The buy-backs were concluded during the third quarter. 1,224,000 shares were repurchased at an average price of SEK 82.
• Departing CFO Gunnar Blomkvist was elected as a member of Bilia's Board of Directors at the extraordinary shareholders meeting of 4 September 2017.
• Bilia signed a new lease agreement with Fabege for a new, ultramodern full-service facility to house its operation at Haga Norra, Solna, just north of Stockholm. The lease agreement covers a term of 20 years, with an option for Bilia to terminate after 15 years.

First six months

• 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.
• On 7 March 2017, Bilia acquired an auto salvage business, Allbildelar Försäljning i Huddinge AB, plus a property company that owns the building in which the business is conducted.
• The 2017 Annual General Meeting resolved to split the company's outstanding shares. Due to the stock split, the calculation of basic and diluted earnings per share has been adjusted retroactively for the reported periods.
• On 1 June 2017, Bilia acquired Wölkes Bil AB, which operates a service and repair business for BMW and MINI cars in Gothenburg.
• Kristina Franzén was appointed the new CFO of Bilia and assumed office on 1 August 2017.
• Eva Cederbalk has decided to leave her seat on Bilia's Board of Directors before the end of her term to accept a position at a bank.

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

Demand for cars was on a par with the same quarter last year, while demand for service was better.

Net turnover amounted to SEK 6,302 M (5,743). For comparable operations and adjusted for exchange rate changes, net turnover increased by about SEK 380 M, or nearly 7 per cent.

Operating profit amounted to SEK 181 M (163). Adjusted for revenue and costs that affect comparability, operational earnings amounted to SEK 200 M (187). The improvement was attributable to the Service Business, which increased its operational earnings by SEK 25 M despite one less working day during the quarter compared with last year. The Car Business reported lower earnings compared with last year, which was attributable to sales of used cars. Underlying Group overheads increased by about 2 per cent compared with last year. Overheads amounted to 12.0 per cent in relation to net turnover, which was 0.2 percentage point higher compared with last year. In recognition of the earnings level and customer satisfaction during the quarter, provision was made for employee bonuses in Sweden of SEK 4 M (5).

Net financial items amounted to SEK -5 M (-1). The decrease is attributable to higher net debt, a higher average interest rate and exchange rate changes.

Tax for the period amounted to SEK -33 M (-35), and the effective tax rate was 19 per cent (22).

Profit for the period was SEK 143 M (127) and earnings per share SEK 1.40 (1.25). Exchange rate changes did not have any effect on earnings.

Total assets decreased by SEK 78 M during the quarter, and amounted to SEK 10,527 M.

Equity increased by SEK 44 M during the quarter, and amounted to SEK 2,486 M. 1,224,000 Bilia shares were repurchased during the quarter at an average price of SEK 82 per share, amounting to a total purchase consideration of SEK 100 M. The equity/assets ratio amounted to 24 per cent (25).

Acquisition of non-current assets amounted to SEK 51 M (86). Replacement investments represented SEK 17 M (52), expansion investments SEK 11 M (11), environmental investments SEK 1 M (1) and investments in new construction and additions to properties SEK 11 M (13), while finance leases amounted to SEK 11 M (9).

Operating cash flow amounted to SEK 116 M (308). After acquisitions and disposals of operations and change in financial assets, cash flow amounted to SEK 116 M (372). Net debt decreased by SEK 16 M during the quarter, amounting to SEK 1,298 M.

Specification of interest-bearing net debt/receivable

SEK M	30/9 2017	31/12 2016	30/9 2016
Current interest-bearing liabilities	659	334	388
Non-current interest-bearing liabilities	1,154	924	674
Pension liabilities	1	3	12
Cash and cash equivalents	-117	-104	-157
Interest-bearing assets	0	-1	0
Interests in associated companies	-399	-381	-372
Non-current leased assets	0	0	0
Net debt(+) / receivable(-) at end of year / period	1,298	775	545

Ratio of net debt to EBITDA

SEK M	30/9 2017	31/12 2016	30/9 2016
Operational earnings	728	887	622
Total depreciation/amortisation	476	520	374
-amortisation of surplus values	-54	-55	-39
-depreciation of leased vehicles with repurchase agreements	-263	-282	-204
Depreciation/amortisation added back	159	183	131
EBITDA	887	1,070	753
The ratio of net debt to EBITDA rolling 12 months, times	1.1	0.7	0.5

See "Definitions and performance measures" on page 19.

Liquidity remains good, and at the end of September a debt of SEK 9 M to the banks (Nordea and DNB) was reported. Repurchases of own shares during the third quarter amounted to SEK 100 M. Bilia's combined credit limit with Nordea and DNB amounts to SEK 1,500 M.

The number of employees increased by 20 during the quarter and amounted to 4,553 persons.

	Third quarter		Nine months		Oct. 16 -	Full year
Group, SEK M	2017	2016	2017	2016	Sept. 17	2016
Operational earnings	200	187	728	622	993	887
- Gain from sale of operation	0	0	8	21	8	21
- Redemption of pension liability	0	0	0	0	6	6
- Structural costs etc.	-1	-5	-14	-7	-14	-7
- Acquisition-related costs and value adjustments	-1	-2	-3	-8	-6	-11
- Amortisation of surplus values	-17	-17	-54	-39	-70	-55
Operating profit	181	163	665	589	917	841

See "Definitions and performance measures" on page 19.

"Gain from sale of operation" during 2017 pertains to the sale of the Ford operation in Stockholm. Structural costs during 2017 pertain mainly to the estimated cost of winding up the remaining Ford operation in Sweden and Norway.

Acquisition-related costs and value adjustments pertain to costs for the acquisition of operations and properties in Sweden.

			Order backlog
No. of new		Third quarter		Deliveries Nine months		Full year	30 Sept.
cars	2017	2016	2017	2016	Oct. 16 - Sept. 17	2016	2017	2016
Sweden 1)	8,000	7,308	27,873	25,720	37,049	34,896	7,357	8,281
Norway	2,137	2,168	7,138	6,492	9,743	9,097	2,980	2,766
Western Europe 2)	1,343	1,380	4,568	2,489	6,078	3,999	1,104	1,035
Total	11,480	10,856	39,579	34,701	52,870	47,992	11,441	12,082

1) MW Group is included in deliveries during the quarter with 635 (-) and during the first nine months with 1,982 (-) and with 278 (-) in order backlog. 2) Schäfer, Germany is included in deliveries during the quarter with 163 (145) and during the first nine months with 530 (145).

Luxembourg is included in deliveries during the first nine months with 2,107 (1,227). Belgium is included in deliveries during the first nine months with 1,284 (406).

			Net turnover									Operational earnings, margin
	Third quarter		Nine months		Oct. 16 - Full year			Third quarter				Nine months			Oct. 16 -	Full year
SEK M	2017	2016	2017		2016 Sept. 17	2016	2017	%	2016	%	2017	%			2016 % Sept. 17	2016	%
Sweden	3,972		3,554 12,812 11,748 16,827 15,763				154	3.9	147	4.1	560	4.4	496	4.2	783	719	4.6
Norway	1,680	1,570	5,273	4,633	6,918	6,278	51	3.1	45	2.9	176	3.3	149	3.2	227	200	3.2
Western Europe	649	618	2,215	1,224	2,849	1,858	4	0.5	2	0.4	29	1.3	15	1.2	44	30	1.6
Total	6,301		5,742 20,300 17,605 26,594 23,899				209	3.3	194	3.4	765	3.8	660	3.7	1,054	949	4.0
Parent Company, other	1	1	6	4	9	7	-9	-	-7	-	-37	-	-38	-	-61	-62	-
Total	6,302		5,743 20,306 17,609 26,603 23,906				200	3.2	187	3.3	728	3.6	622	3.5	993	887	3.7

See "Definitions and performance measures" on page 19.

Strong earnings in Sweden and Norway

Positive trend in Luxembourg and Belgium, but still tough in Germany

The market for new cars increased during the period by 3 per cent in Sweden and by 1 per cent in Norway, while it remained unchanged in Western Europe.

The Group reported operational earnings of SEK 200 M (187) and an operational margin of 3.2 per cent (3.3). There was one less working day in the third quarter compared with last year, which mainly affected the Service Business, which nevertheless reported SEK 25 M more in earnings. Earnings for the Car Business decreased by SEK 11 M, while they increased by SEK 1 M for the Fuel Business compared with last year. The order backlog increased by 149 cars during the quarter. amounting to 11,441 cars.

The operation in Sweden reported earnings of SEK 154 M (147), with a margin of 3.9 per cent (4.1). Underlying turnover in the Service Business increased by 12.8 per cent and earnings improved by SEK 24 M compared with last year. The number of mechanics increased during the quarter, but we still have a need to hire more mechanics. The Car Business reported lower earnings compared with last year, which was attributable to sales of used cars. Earnings from sales of used cars amounted to SEK 22 M (32). The turnover rate for used cars remains at a high level, and stocks of used cars declined slightly during the quarter.

Operational earnings in Bilia's Norwegian operation amounted to SEK 51 M (45), with a margin of 3.1 per cent (2.9). The Car and Service Businesses reported earnings that were SEK 4 M and SEK 2 M better, respectively, compared with last year. Sales of used cars developed positively during the quarter, and earnings amounted to SEK 8 M (8). Stocks of used cars declined substantially compared with last year and are now judged to be at a good level.

Operations in Western Europe reported earnings of SEK 4 M (2). Earnings during the third quarter are seasonally the poorest. The operations in Luxembourg and Belgium continued to develop positively, while Germany still faces a challenge in the market. The loss in the Car Business during the quarter amounted to SEK 3 M (loss: 6), while the Service Business showed a profit of SEK 7 M (8).

	Net turnover 1)					Operational earnings, margin
	Third quarter		Nine months			Oct. 16 - Full year	Third quarter		Nine months			Oct. 16 - Full year
SEK M	2017	2016	2017		2016 Sept. 17	2016	2017	2016	2017		2016 Sept. 17	2016
Service Business	1,317	1,171	4,303	3,755	5,867	5,319	128	103	469	389	680	600
- margin, %							9.7	8.7	10.9	10.3	11.6	11.3
Car Business	4,961	4,506	16,032	13,782	20,815	18,565	75	86	271	252	343	324
- margin, %							1.5	1.9	1.7	1.8	1.6	1.7
Fuel Business	284	263	848	760	1,119	1,031	6	5	25	19	31	25
- margin, %							2.3	1.8	2.9	2.5	2.8	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

		Third quarter		Nine months
Per cent	Sweden Norway Total			Sweden	Norway	Total
Change from last year
Underlying turnover	12.8	5.0	10.5	8.0	4.4	7.0
Calendar effect	1.5	1.5	1.5	0.5	0.5	0.5
Adjusted turnover	14.3	6.5	12.0	8.5	4.9	7.5

See "Definitions and performance measures" on page 19.

Continued strong earnings in the Service Business

Continued mechanic shortage in Sweden

The Service Business reported earnings during the third quarter that were SEK 25 M better compared with last year, and an improved margin of 9.7 per cent (8.7). Demand is very good, but we still have a shortage of mechanics, particularly in Sweden. Sweden's adjusted turnover increased by 14.3 per cent and Norway's by 6.5 per cent compared with last year. There was one less working day in both Sweden and Norway compared with the same quarter last year.

Deliveries of new cars in the Car Business increased by 3 per cent for comparable operations, while deliveries of used cars decreased by 1 per cent compared with last year. Underlying orders received for new cars declined by 11 per cent compared with last year. Orders received from corporate customers were on a level with last year, while orders received from private customers declined. Earnings from sales of new cars improved by SEK 3 M, due mainly to higher turnover. During the quarter earnings from used car sales were strong, amounting to SEK 24 M, compared with SEK 35 M for the first six months 2017. Earnings were, however, SEK 14 M lower compared with the third quarter last year. Stocks of used cars decreased slightly during the quarter and were at a good level. The turnover rate for used cars declined slightly, but remains at a high level of 10.2 times per year.

The Fuel Business is concentrated to Sweden, and earnings amounted to SEK 6 M (5).

All values in the above graphs pertain to isolated quarters.

On 3 January 2017, Bilia acquired the Toyota dealer MW Gruppen Stockholm AB plus three property companies, which together are deemed to constitute a business acquisition. 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. The operation has an annual turnover of around SEK 700 M and has reported an average operating profit of around SEK 28 M for the past two years. The purchase consideration was SEK 297 M. The entire purchase consideration was paid in cash. There is no contingent purchase consideration.

The acquisition provides opportunities for synergies with Bilia's other Toyota operation in Sweden.

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

Acquisition-related expenses amounting to SEK 0.5 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 fourth quarter of 2016 is shown in a separate column. The acquisition has the following effect on the Group's assets and liabilities.

	Carrying amounts in	Fair	Fair value	Difference versus
	MW Gruppen	value	recognised in	preliminary acquisi
MSEK	Stockholm	adjustment	Group	tion analysis
Intangible assets	0	88	88	0
Property, plant and equipment	164	95	259	2
Long-term investments	8		8	0
Deferred tax asset	1		1	0
Inventories	77	1	78	0
Trade receivables and other receivables	42		42	0
Cash and cash equivalents	17		17	0
Interest-bearing liabilities	44		44	-1
Trade payables and other liabilities	167		167	-7
Deferred tax liability	5	41	46	0
Net identifiable assets and liabilities	93	143	236	10
Consolidated goodwill			61	0
Purchase consideration paid			297	10
Less: Cash and cash equivalents in aquired operation			17	0
Net effect on cash and cash equivalents			280	10

Acquired customer relations totalling SEK 88 M are recognised as intangible assets. Customer relations will be amortised over 10 years.

The goodwill item is attributable in its entirety to synergies made available by the acquisition.

The acquisitions of Allbildelar Försäljning i Huddinge AB, a property company and a BMW- and MINIworkshop in 2017 do not have any essential impact on the Group, so the acquisition analysis is not presented.

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 third quarter amounted to SEK -12 M (loss: 10).

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

The operating risks include:

• Market trend for new cars, new technology and alternative sales channels.
• 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 2016 Annual Report.

This interim report has been prepared in accordance with International Financial Accounting Standards (IFRSs) IAS 34 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 IFRSs have not had any significant effect on the Group's or the Parent Company's financial reports during the year.

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 Annual General Meeting will be held on 10 April 2018 in Stockholm. Premises to be announced at a later time. Shareholders who wish to have a matter on the agenda at the AGM should contact Bilia no later than 20 February 2018 in order for the matter to be included in the notice of the meeting.

The annual report for 2017 will be published on Bilia's website on 20 March 2018.

The year-end report for 2017 will be published on 9 February 2018.

Gothenburg, 27 October 2017 Bilia AB (publ) Board of Directors

For further information, please contact Per Avander, Managing Director and CEO, or Kristina Franzén, CFO, telephone +46 10 497 70 00.

Bilia AB (publ) Box 9003, SE-400 91 Gothenburg, Sweden Visiting address: Norra Långebergsgatan 3, Västra Frölunda Telephone: +46 10 497 70 00 bilia.com Corporate ID No.: 556112-5690

To the Board of Directors of Bilia AB (publ), Corp. ID no. 556112-5690

We have reviewed the interim financial information in summary (the interim report) for Bilia AB (publ) as per 30 September 2017 and the nine-month period that ended on this date. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion regarding this interim financial information based on our review.

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, "Review of Interim Financial Information Performed by the Independent Auditor of the Entity". A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different aim and is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden, RS and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion expressed based on an audit.

Based on our review, nothing has come to our attention that causes us to believe that the accompanying interim financial information has not, in all material respects, been prepared in accordance with IAS 34 and the Annual Reports Act with regard to the Group and in accordance with the Annual Reports Act with regard to the Parent Company.

Gothenburg, 27 October 2017 KPMG AB

Johan Kratz Authorised Public Accountant

This is information that Bilia AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, on 27 October 2017, at 8:30 a.m.

Nine months

	Service		Car		Fuel		Total		Segment		Group
										reconciliation
SEK M	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016
Net turnover
External sales	3,420	3,063	16,032	13,782	848	760	20,300	17,605	6	4	20,306	17,609
Internal sales	883	692					883	692	-883	-692	-	-
Total net turnover	4,303	3,755	16,032	13,782	848	760	21,183	18,297	-877	-688	20,306	17,609
Depreciation/amortisation	-80	-60	-364	-287	-3	-3	-447	-350	-29	-24	-476	-374
Operational earnings/Operating profit/loss	469	389	271	252	25	19	765	660	-100	-71	665	589
Interest income											19	39
Interest expenses											-63	-64
Shares in profits of associated companies			23	22			23	22			23	22
Profit before tax											644	586
Tax expense for the period											-137	-123
Net profit for the period											507	463
Revenue and cost items that affect the comparability
of the Group's operating profit:
- Profit from sale of operation, other	6	15	2	6			8	21			8	21
- Structural costs etc.	-8	-2	-6	-5			-14	-7			-14	-7
- Acquisition-related costs and value adjustments	-2	-4	-1	-4			-3	-8			-3	-8
- Amortisation of surplus values	-27	-18	-27	-21			-54	-39			-54	-39
Total	-31	-9	-32	-24	-	-	-63	-33	-	-	-63	-33
Other items not affecting cash besides depreciation/amortisation	-40	-45	-7	-6	0	0	-47	-51	7	61	-40	10
Assets
Interests in associated companies			399	372			399	372			399	372
Deferred tax assets											82	140
Other assets											10,046	8,848
Total assets											10,527	9,360
Investments in non-current assets	112	81	1,215	1,129	6	11	1,333	1,221	49	49	1,382	1,270
Liabilities
Equity											2,486	2,327
Liabilities											8,041	7,033
Total liabilities and equity											10,527	9,360

	external customers	Revenue from	Non-current assets
SEK M	2017	2016	2017	2016
Geographical segments
Sweden	12,819	11,753	5,534	4,236
Norway	5,273	4,633	947	982
Germany	751	538	77	69
Luxembourg	885	530	593	604
Belgium	579	156	262	263
Segment reconciliation	-1	-1	-1,598	-1,345
Total	20,306	17,609	5,815	4,809

Nine months

	Service						Car
	Sweden		Norway			Western Europé 1)	Sweden			Norway	Western Europé 1)
SEK M	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016
Net turnover
External sales	2,308	2,085	779	747	333	231	9,661	8,907	4,489	3,882	1,882	993
Internal sales	545	426	300	247	38	19
Total net turnover	2,853	2,511	1,079	994	371	250	9,661	8,907	4,489	3,882	1,882	993
Depreciation/amortisation	-48	-37	-12	-11	-20	-12	-320	-253	-24	-22	-20	-12
Operational earnings/Operating profit/loss	326	272	127	102	16	15	209	205	49	47	13	0
Shares in profits of associated companies							23	22
Revenue and cost items that affect the comparability
of the Group's operating profit:
- Profit from sale of operation, other	6	15					2	6
- Structural costs etc.	-6	-1	-2	-1			-5	-1		-4	-1
- Acquisition-related costs and value adjustments	-2	-1				-3	-1	-1				-3
- Amortisation of surplus values	-10	-6	-6	-6	-11	-6	-9	-7	-6	-6	-12	-8
Total	-12	7	-8	-7	-11	-9	-13	-3	-6	-10	-13	-11
Other items not affecting cash besides depreciation/amortisation	-38	-42	-2	-3	0	0	-16	-7	9	1	0	0
Assets
Interests in associated companies							399	372
Investments in non-current assets	84	51	9	29	19	1	1,033	1,008	154	120	28	1

1) Schäfer, Germany is included as from 1 August 2016. Luxembourg is included as from 1 April 2016. Belgium is included as from 1 July 2016.

	Third quarter		Nine months		Oct. 16 -	Full year
SEK M	2017	2016	2017	2016	Sept. 17	2016
Continuing operations
Net turnover	6,302	5,743	20,306	17,609	26,603	23,906
Costs of goods sold	-5,362	-4,871	-17,174	-14,881	-22,362	-20,069
Gross profit	940	872	3,132	2,728	4,241	3,837
Other operating income	1	1	12	26	24	38
Selling expenses	-620	-573	-2,004	-1,753	-2,702	-2,451
Administrative expenses	-139	-130	-458	-394	-620	-556
Other operating expenses	-1	-7	-17	-18	-26	-27
Operating profit 1)	181	163	665	589	917	841
Financial income	-5	19	19	39	8	28
Financial expenses	-9	-28	-63	-64	-65	-66
Shares in profits of associated companies	9	8	23	22	31	30
Net financial items	-5	-1	-21	-3	-26	-8
Profit before tax	176	162	644	586	891	833
Tax	-33	-35	-137	-123	-190	-176
Profit for the period from continuing operations	143	127	507	463	701	657
Discontinued operation
Loss from discontinued operation,
net after tax	0	0	0	0	-21	-21
Net profit for the period	143	127	507	463	680	636
Other comprehensive income/loss
Items that can be reclassified to profit or loss
Translation differences attributable to foreign
operations	0	37	-18	64	-27	55
Translation differences transferred to the net profit for the year	0	0	0	0	20	20
Tax attributable to items that have been or may be
reclassified to profit or loss	0	0	0	0	0	0
	0	37	-18	64	-7	75
Other comprehensive income/loss after tax	0	37	-18	64	-7	75
Comprehensive income for the period	143	164	489	527	673	711
Net profit for the period attributable to:
Parent Company's shareholders	143	127	507	463	680	636
Comprehensive income for the period
attributable to:
Parent Company's shareholders	143	164	489	527	673	711
Weighted average number of shares, '000:
- before dilution	102,326	102,800	102,640	102,081	102,681	102,261
- after dilution	102,326	102,800	102,640	102,126	102,681	102,296
Basic earnings/loss per share, SEK	1.40	1.25	4.95	4.55	6.60	6.20
Diluted earnings/loss per share, SEK	1.40	1.25	4.95	4.55	6.60	6.20
Weighted average number of own shares, '000	474	-	160	-	119	-
Continuing operations
Basic earnings/loss per share, SEK	1.40	1.25	4.95	4.55	6.80	6.40
Diluted earnings/loss per share, SEK	1.40	1.25	4.95	4.55	6.80	6.40
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	-23	-21	-71	-52	-92	-73
- Land and buildings	-9	-6	-25	-15	-40	-30
- Equipment, tools, fixtures and fittings	-26	-23	-76	-65	-91	-80
- Leased vehicles	-106	-81	-304	-242	-399	-337
Total	-164	-131	-476	-374	-622	-520

SEK M	30/9 2017	31/12 2016	30/9 2016
Assets
Non-current assets
Intangible assets
Intellectual property	594	550	567
Goodwill	720	657	661
	1,314	1,207	1,228
Property, plant and equipment
Land and buildings	556	235	209
Construction in progress	28	19	21
Equipment, tools, fixtures and fittings	473	427	411
Leased vehicles 1)	3,038	2,744	2,560
	4,095	3,425	3,201
Long-term investments
Financial investments 1)	406	388	380
Long-term receivables 2)	0	1	0
	406	389	380
Deferred tax assets	82	84	140
Total non-current assets	5,897	5,105	4,949
Current assets
Inventories, merchandise	3,248	3,451	2,887
Current receivables
Other receivables 1)	1,265	1,472	1,367
Cash and cash equivalents 2)	117	104	157
Total current assets	4,630	5,027	4,411
Total assets	10,527	10,132	9,360
Equity and liabilities
Equity
Share capital	257	257	257
Other contributed capital	167	167	167
Reserves Retained earnings including net profit for the year	-42 2,104	-24 2,111	-35 1,938
Total equity	2,486	2,511	2,327
Non-current liabilities
Bond issue 3)	1,007	751	496
Interest-bearing liabilities 4)	154	174	174
Other liabilities and provisions 3)	2,239	2,077	2,091
	3,400	3,002	2,761
Current liabilities
Interest-bearing liabilities 4)	659	334	388
Other liabilities and provisions	3,982	4,285	3,884
	4,641	4,619	4,272
Total equity and liabilities	10,527	10,132	9,360
Assets
1) Of which interest-bearing	399	381	372
2) Interest-bearing	117	105	157
Liabilities
3) Of which interest-bearing	1,001	753	512
4) Interest-bearing	813	508	562

Interim report Bilia AB (publ) 1 January – 30 September 2017 14 (20)

SEK M	30/9 2017	31/12 2016	30/9 2016
Opening balance	2,511	2,056	2,056
Cash dividend to shareholders	-412	-380	-380
Exercised warrants/debenture loan	-	2	2
Sold warrants	-	1	1
New share issue	-	115	115
Discount/issue at discounted price	-	6	6
Buy-back of own shares	-100	-	-
Revaluation of put option	-2	-	-
Comprehensive income for the year	489	711	527
Closing balance	2,486	2,511	2,327

	Third quarter		Nine months		Oct. 16 -	Full year
SEK M	2017	2016	2017	2016	Sept. 17	2016
Operating activities
Profit before tax from continuing operations	176	162	644	586	891	833
Loss before tax from discontinued operation	0	0	0	0	-21	-21
Depreciation and impairment losses from continuing operations	164	131	476	374	624	522
Depreciation and impairment losses from discontinued operation	0	0	0	0	0	0
Other items not affecting cash	-24	4	-40	10	-48	2
Tax paid	-30	-24	-150	-103	-200	-153
Change in inventories	-56	73	215	199	-295	-311
Change in operating receivables	215	211	212	48	155	-9
Change in operating liabilities	-107	93	-265	461	65	791
Cash flow from operating activities	338	650	1,092	1,575	1,171	1,654
Investing activities
Acquisition of non-current assets (intangible and tangible)	-51	-86	-251	-202	-317	-268
Disposal of non-current assets (intangible and tangible)	0	0	4	15	8	19
Acquisition of leased vehicles	-372	-325	-1,131	-1,068	-1,743	-1,680
Disposal of leased vehicles	201	69	588	411	916	739
Operating cash flow	116	308	302	731	35	464
Investment in financial assets	-1	0	-3	-7	-5	-9
Disposal of financial assets	0	58	12	63	14	65
Acquisition of subsidiary/operation, net	1	6	-344	-243	-351	-250
Disposal of subsidiary/operation, net	0	0	54	42	59	47
Cash flow after net investments	116	372	21	586	-248	317
Financing activities
Borrowings	0	0	350	1,216	600	1,466
Repayment of loans	0	0	-100	-866	-100	-866
Change in overdraft facility	-27	-543	258	-506	226	-538
Exercised warrants/debenture loan	0	0	0	2	0	2
Sold warrants	0	0	0	1	0	1
Buy-back of own shares	-100	0	-100	0	-100	0
Revaluation of put option	2	0	-2	0	-2	0
Dividend paid to Parent Company's shareholders	-1	0	-412	-380	-412	-380
Cash flow from financing activities	-126	-543	-6	-533	212	-315
Change in cash and cash equivalents, excl. translation
differences	-10	-171	15	53	-36	2
Cash and cash equivalents recognised in assets held for sale	0	0	0	0	0	0
Exchange difference in cash and cash equivalents	-1	-3	-2	5	-4	3
Change in cash and cash equivalents	-11	-174	13	58	-40	5
Cash and cash equivalents at start of period	128	331	104	99	157	99
Cash and cash equivalents at end of period	117	157	117	157	117	104

Derivative instruments such as interest rate swaps and forward exchange contracts are used to control Bilia's interest rate risk. They may only be to meet the requirements on minimising risk in a cost-effective manner as prescribed by the finance policy.

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 in the Consolidated Statement of Financial Position. Measurement of the currency derivatives at fair value has resulted in revenue of SEK 3 M that is matched by a revaluation of assets in foreign currencies. The effect on the Group's profit is SEK 0 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.

	4/15	1/16	2/16	3/16	4/16	1/17	2/17	3/17
Continuing operations
Net turnover, SEK M	5,750	5,433	6,433	5,743	6,297	6,815	7,189	6,302
Operational earnings, SEK M	247	195	240	187	265	267	261	200
Operational margin, %	4.3	3.6	3.7	3.3	4.2	3.9	3.6	3.2
Operating profit, SEK M	234	185	241	163	252	244	240	181
Operating margin, %	4.1	3.4	3.7	2.8	4.0	3.6	3.3	2.9
Profit before tax, SEK M	234	183	241	162	247	234	234	176
The ratio of net debt to EBITDA, times 1)	0.4	0.8	0.7	0.5	0.7	0.7	1.1	1.1
The Bilia Group
Profit/loss for the period, SEK M	196	143	193	127	173	181	183	143
Return on capital employed, % 1)	36.2	35.6	29.7	28.8	26.4	26.1	25.2	24.1
Return on equity, % 1)	33.2	39.7	32.9	31.0	27.9	28.3	27.4	27.3
Equity/assets ratio, %	28	26	24	25	25	25	23	24
Data per share (SEK) 2)
Earnings/loss for the period	1.95 3)	1.40 5)	1.90 7)	1.25	1.65	1.75	1.80	1.40 8)
Equity	20 4)		22 6) 21	23	24	26	24	24 9)

See "Definitions and performance measures" on page 19.

1) Rolling 12 months.

• 2) Based on number of shares outstanding, 102,799,952.
• 3) Based on weighted average number of shares outstanding during fourth quarter, 100,861,530.
• 4) Based on number of shares outstanding at 31 December 2015, 100,872,104.
• 5) Based on weighted average number of shares outstanding during first quarter, 101,325,845.
• 6) Based on number of shares outstanding at 31 March 2016, 101,401,468.
• 7) Based on weighted average number of shares outstanding during second quarter, 102,108,394.
• 8) Based on weighted average number of shares outstanding during third quarter, 102,326,267.
• 9) Based on number of shares outstanding at 30 September 2017, 101,575,952.

	Third quarter		Nine months		Oct. 16 -	Full year
SEK M	2017	2016	2017	2016	Sept. 17	2016
Net turnover	108	95	315	297	403	385
Administrative expenses	-120	-105	-359	-337	-467	-445
Operating loss 1)	-12	-10	-44	-40	-64	-60
Result from financial items
Income from interests in Group companies	0	0	113	35	119	41
Interest income from Group companies	10	7	33	26	40	33
Other interest income and similar line items	-6	18	17	37	5	25
Interest expenses to Group companies	0	0	0	0	0	0
Interest expenses and similar line items	-2	-21	-40	-50	-33	-43
Loss after financial items	-10	-6	79	8	67	-4
Appropriations	0	0	0	0	683	683
Profit before tax	-10	-6	79	8	750	679
Tax	2	0	0	5	-138	-133
Net profit for the year	-8	-6	79	13	612	546
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	-1	0	-1	-5	-2	-6
- Buildings	-2	-1	-6	-3	-7	-4
- Equipment, tools, fixtures and fittings	0	0	0	-2	0	-2
Total	-3	-1	-7	-10	-9	-12

SEK M	30/9 2017	31/12 2016	30/9 2016
Assets
Non-current assets
Intangible assets
Intellectual property	1 1	2 2	2 2
Property, plant and equipment
Buildings	72	43	37
Construction in progress	17	15	17
Equipment, tools, fixtures and fittings	2	2	2
Long-term investments	91	60	56
Interests in Group companies	1,355	1,122	1,103
Other securities held as non-current assets	0	0	0
Deferred tax asset	46	46	103
	1,401	1,168	1,206
Total non-current assets	1,493	1,230	1,264
Current assets
Current receivables Receivables from Group companies	79	1,486	125
Other receivables	148	196	187
Cash on hand and accrued deposits	944	27	430
Total current assets	1,171	1,709	742
Total assets	2,664	2,939	2,006
Equity and liabilities Equity Restricted equity
Share capital	257	257	257
Statutory reserve	47	47	47
Non-restricted equity	304	304	304
Share premium reserve	167	167	167
Retained earnings including net profit for the year	499	931	398
	666	1,098	565
Total equity	970	1,402	869
Untaxed reserves	495	495	468
Provisions
Deferred tax liability	3	3	3
Non-current liabilities	3	3	3
Bond issue	1,007	751	496
Other liabilities	5	5	5
	1,012	756	501
Current liabilities
Liabilities to Group companies	10	21	7
Other liabilities	174	262	158
	184	283	165
Total equity and liabilities	2,664	2,939	2,006

.

Bilia applies the new guidelines from ESMA (European Securities and Markets Authority) concerning alternative performance measures (APMs). Even though these performance measures are not defined or specified by IFRSs, Bilia believes that they provide valuable information to investors and Bilia's management as a complement to IFRSs for assessing Bilia's performance

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, which are depreciated over the turnover rate of the asset.

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 and for calendar effect.

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.

Deliveries Cars that have been physically turned over to the customer and invoiced and are included in reported net turnover.

Liquidity Unutilised credit with Nordea and DNB and cash and cash equivalents.

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

The ratio of net debt to EBITDA Net debt in relation to EBITDA.

Operating cash flow Cash flow from operating activities plus investments in and disposals of intangible assets and property, plant and equipment.

Operational margin Operational earnings in relation to net turnover.

Operational earnings Operating profit, excluding revenues and costs that affect comparability between accounting periods and/or operating segments. They include, but are not limited to, acquisition-related expenses, value adjustments, restructurings and amortisation of surplus values.

Order backlog New cars ordered by the customer but not yet delivered.

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

Operating margin Operating profit in relation to net turnover.

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

Structual costs Costs that significantly alter the thrust and/or scope of the operation. 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.

Reconciliation of performance measures can be found at bilia.com/en//finance/finance/performancemeasures/.