Bilia — Interim / Quarterly Report 2017

Jul 27, 2017

• Net turnover amounted to SEK 14,004 M (11,866).
• Profit for the period was SEK 364 M (336) and earnings per share SEK 3.55 (3.30).

• Operating cash flow amounted to SEK 186 M (423).

• Net turnover amounted to SEK 7,189 M (6,433).

• Operational earnings amounted to SEK 261 M (240).
• Profit for the period was SEK 183 M (193) and earnings per share SEK 1.80 (1.90).

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

"Demand for both cars and service was on par with last year, and we reported better operational earnings. The improvement was mainly attributable to the Car Business. The Service Business also reported a strong profit, considering that the Easter holiday fell during the second quarter this year. It is gratifying to report that, after a weak start of the year, operations in Western Europe are now showing earnings on a par with our expectations. The order backlog of new cars declined seasonally during the quarter, but was underlying more than 550 cars higher than last year. The Group's operating cash flow was at a lower level compared with previous quarters, but its financial position remains

strong. We expect that demand for our cars will be at the same level during the third quarter of 2017, while demand for service will be slightly better compared with the same quarter last year."

	Second quarter		First six months		July 16 -	Full year
	2017	2016	2017	2016	June 17	2016
Continuing operations
Net turnover, SEK M	7,189	6,433	14,004	11,866	26,044	23,906
Operational earnings, SEK M 1)	261	240	528	435	980	887
Operational margin, %	3.6	3.7	3.8	3.7	3.8	3.7
Operating profit, SEK M	240	241	484	426	899	841
Operating margin, %	3.3	3.7	3.5	3.6	3.5	3.5
Profit before tax, SEK M	234	241	468	424	877	833
Net profit for the period/year, SEK M	183	193	364	336	685	657
Earnings per share, SEK 2)	1.80	1.90	3.55	3.30	6.65	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	183	193	364	336	664	636
Earnings per share, SEK 2)	1.80	1.90	3.55	3.30	6.45	6.20

1) Items affecting comparability are shown in the table on page 5.

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.

Second quarter

• Bilia concluded an agreement with Wölkes Bil AB to acquire the company's service and repair business for BMW and MINI cars in Gothenburg. Turnover in 2016 amounted to SEK 29 M and operating profit was SEK 0.3 M. The company has 19 employees, and the date of possession was 1 June 2017.
• The 2017 Annual General Meeting resolved to split the company's outstanding shares, so that the number of shares doubled during the month of June from 51,399,976 to 102,799,952 shares. Due to the stock split, the calculation of basic and diluted earnings per share has been adjusted retroactively for the reported periods.
• Eva Cederbalk has decided to leave her seat on Bilia's Board of Directors before the end of her term, due to too many commitments following an appointment to the board of a bank. The Board has decided to convene an extraordinary shareholders meeting on 4 September 2017 to elect a replacement. The Nominating Committee proposes Bilia's departing CFO Gunnar Blomkvist as a new Board member.

First quarter

• 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.
• Kristina Franzén has been appointed the new CFO of Bilia and will assume office on 1 August 2017.
• 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.

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

Demand for cars and service was on a par with the same quarter last year.

Net turnover amounted to SEK 7,189 M (6,433). For comparable operations and adjusted for exchange rate changes, net turnover increased by about SEK 180 M or 3 per cent.

Operating profit amounted to SEK 240 M (241). Adjusted for revenue and costs that affect comparability, operational earnings amounted to SEK 261 M (240). The improvement was mainly attributable to the Car Business, which boosted operational earnings by SEK 19 M. The Service Business also reported a strong profit, on a par with last year, considering that the Easter holiday fell during the second quarter this year. Underlying Group overheads increased by about 4 per cent compared with last year. Overheads amounted to 12.1 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 7 M (5).

Net financial items amounted to SEK -6 M (0). The decrease is attributable to higher net debt, a higher average interest rate and exchange rate changes.

Tax for the period amounted to SEK -51 M (-48), and the effective tax rate was 22 per cent (20).

Profit for the period was SEK 183 M (193) and earnings per share SEK 1.80 (1.90). Exchange rate changes increased the profit by about SEK 1 M.

Total assets decreased by SEK 147 M during the quarter, amounting to SEK 10,605 M.

Equity decreased by SEK 242 M during the quarter, amounting to SEK 2,442 M. Dividends of SEK 411 M were paid to the shareholders. The equity/assets ratio amounted to 23 per cent (24).

Acquisition of non-current assets amounted to SEK 124 M (56). Replacement investments represented SEK 16 M (7), expansion investments SEK 23 M (17), environmental investments SEK 1 M (1) and investments in new construction and additions to properties SEK 77 M (25), while finance leases amounted to SEK 7 M (6).

Operating cash flow amounted to SEK -98 M (313). Cash flow during the quarter was affected by the acquisition of a property in Trollhättan (SEK 49 M) and poorer payment terms for new cars in Norway (SEK 110 M). After acquisitions and disposals of operations and change in financial assets, cash flow amounted to SEK -102 M (357). Net debt increased by SEK 505 M during the quarter, amounting to SEK 1,314 M.

Specification of interest-bearing net debt/receivable

SEK M	30/6 2017	31/12 2016	30/6 2016
Current interest-bearing liabilities	687	334	692
Non-current interest-bearing liabilities	1,145	924	657
Pension liabilities	0	3	11
Cash and cash equivalents	-128	-104	-331
Interest-bearing assets	0	-1	-2
Interests in associated companies	-390	-381	-364
Non-current leased assets	0	0	0
Net debt(+) / receivable(-) at end of year / period	1,314	775	663

Ratio of net debt to EBITDA

SEK M	30/6 2017	31/12 2016	30/6 2016
Operational earnings	528	887	435
Total depreciation/amortisation	312	520	243
-amortisation of surplus values	-37	-55	-22
-depreciation of leased vehicles with repurchase agreements	-171	-282	-132
Depreciation/amortisation added back	104	183	89
EBITDA	632	1,070	524
The ratio of net debt to EBITDA rolling 12 months, times	1.1	0.7	0.7

See "Definitions and performance measures" on page 19.

Liquidity remains good, and at the end of June a debt of SEK 77 M to the banks (Nordea and DNB) was reported. Bilia's combined credit limit with Nordea and DNB amounts to SEK 1,500 M.

The number of employees increased by 40 during the quarter and amounted to 4,533 persons. The increase is mainly attributable to acquisitions of operations and slightly more employees in the Service Business.

Net turnover amounted to SEK 14,004 M (11,866). For comparable operations and adjusted for exchange rate changes, net turnover increased by about SEK 650 M or 6 per cent.

Operating profit amounted to SEK 484 M (426). Adjusted for revenue and costs that affect comparability, operational earnings amounted to SEK 528 M (435). The improvement is mainly attributable to the Service Business, which boosted the underlying turnover by about 5 per cent and the profit by SEK 55 M. The Car Business improved earnings by SEK 30 M, and the improvement was attributable to sales of new cars. Underlying Group overheads increased by about 3 per cent compared with last year. Overheads amounted to 12.2 per cent in relation to net turnover, which was unchanged compared with last year. In recognition of the earnings level and customer satisfaction during the first six months, provision was made for employee bonuses of SEK 13 M (10).

Net financial items amounted to SEK -16 M (-2). The decrease is attributable to higher net debt, a higher average interest rate and exchange rate changes.

Tax for the period amounted to SEK -104 M (-88), and the effective tax rate was 22 per cent (21).

Profit for the period was SEK 364 M (336) and earnings per share SEK 3.55 (3.30). Exchange rate changes increased the profit by about SEK 5 M.

Acquisition of non-current assets amounted to SEK 200 M (116). Replacement investments represented SEK 25 M (18), expansion investments SEK 49 M (25), environmental investments SEK 1 M (1) and investments in new construction and additions to properties SEK 110 M (61), while finance leases amounted to SEK 15 M (11).

Operating cash flow amounted to SEK 186 M (423). Cash flow was affected by the acquisition of a property in Trollhättan (SEK 49 M) and poorer payment terms for new cars in Norway (SEK 110 M). After acquisitions and disposals of operations and change in financial assets, cash flow amounted to SEK -95 M (214). Net debt increased by SEK 539 M during the first six months, amounting to SEK 1,314 M.

		Second quarter First six months			July 16 -	Full year
Group, SEK M	2017	2016	2017	2016	June 17	2016
Operational earnings	261	240	528	435	980	887
- Gain from sale of operation	0	21	8	21	8	21
- Redemption of pension liability	0	0	0	0	6	6
- Structural costs etc.	-2	-2	-13	-2	-18	-7
- Acquisition-related costs and value adjustments	-1	-5	-2	-6	-7	-11
- Amortisation of surplus values	-18	-13	-37	-22	-70	-55
Operating profit	240	241	484	426	899	841

See "Definitions and performance measures" on page 19.

Gain from sale of operation during the first six months of 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	Second quarter		Deliveries First six months		July 16 -	Full year	30 June
cars	2017	2016	2017			2016 June 17		2016	2017	2016
Sweden 1)	10,834	10,204	19,873	18,412	36,357	34,896	7,457	6,797
Norway	2,364	2,279	5,001	4,324	9,774	9,097	2,651	2,726
Western Europe 2)	1,760	878	3,225	1,109	6,115	3,999	1,184	796
Total	14,958	13,361	28,099	23,845	52,246	47,992	11,292	10,319

1) MW Group is included in deliveries during the quarter with 823 (-) and during the first six months with 1 347 (-) and with 275 (-) in order backlog. 2) Schäfer, Germany is included in deliveries during the quarter with 188 (-) and during the first six months with 367 (-) and with 137 (-) in order backlog. Belgium is included in deliveries during the quarter with 567 (-) and during the first six months with 914 (-) and with 327 (-) in order backlog.

	Net turnover					Operational earnings, margin
	Second quarter		First six months		July 16 - Full year			Second quarter					First six months		July 16 -	Full year
SEK M	2017	2016	2017		2016 June 17	2016	2017	%	2016	%	2017	%			2016 % June 17	2016	%
Sweden	4,604	4,341	8,840		8,194 16,409 15,763		206	4.5	189	4.4	406	4.6	349	4.3	776	719	4.6
Norway	1,723	1,622	3,593	3,063	6,808	6,278	50	2.9	60	3.7	125	3.5	104	3.4	221	200	3.2
Western Europe	859	469	1,566	606	2,818	1,858	22	2.6	11	2.3	25	1.6	13	2.1	42	30	1.6
Total Cars	7,186		6,432 13,999 11,863 26,035 23,899				278	3.9	260	4.0	556	4.0	466	3.9	1,039	949	4.0
Parent Company, other	3	1	5	3	9	7	-17	-	-20	-	-28	-	-31	-	-59	-62	-
Total	7,189		6,433 14,004 11,866 26,044 23,906				261	3.6	240	3.7	528	3.8	435	3.7	980	887	3.7

See "Definitions and performance measures" on page 19.

Strong earnings in Sweden

Positive trend in Western Europe

The market for new cars was unchanged during the quarter in Sweden and Western Europe, while it decreased by 2 per cent in Norway.

The Group reported an operational earnings of SEK 261 M (240) and an operational margin of 3.6 per cent (3.7). Earnings were negatively affected by the fact that the Easter holiday fell during the second quarter this year. Fewer working days mainly affects the Service Business, which reported a profit that was SEK 3 M less than last year. Earnings for the Car Business were SEK 19 M better, and for the Fuel Business SEK 2 M better compared with last year. The order backlog decreased by 1,589 cars during the quarter and amounted to 11,292 cars.

The operation in Sweden reported a profit of SEK 206 M (189), with a margin of 4.5 per cent (4.4). The Car Business reported a profit that was SEK 13 M better than last year. Deliveries of new Volvo cars increased during the quarter, which had a positive effect on earnings from new car sales. Earnings from used car sales were strong, amounting to SEK 25 M (24). Stocks of used cars increased slightly during the quarter, but remain at a good level. Underlying turnover in the Service Business increased by nearly 3 per cent, while earnings improved by SEK 3 M compared with last year. The number of mechanics increased slightly during the quarter, but we still have a shortage of mechanics. The MW Group, which was acquired at the start of 2017, has got off to a good start and reported strong earnings for the second quarter as well.

The profit in Bilia's Norwegian operation amounted to SEK 50 M (60), with a margin of 2.9 per cent (3.7). The decrease compared with last year is mainly attributable to the fact that the Easter holiday fell during the second quarter this year. The Car and Service Businesses reported earnings that were SEK 6 M and SEK 5 M lower, respectively, compared with last year. Sales of used cars developed positively during the quarter, and earnings amounted to SEK 3 M (4). Stocks of used cars were unchanged compared with the preceding quarter and remain at too high a level.

Operations in Western Europe reported a profit of SEK 22 M (11). The operations in Luxembourg and Belgium developed positively, while Germany was still affected by the downward price pressure on new cars in the market. Profit in the Car Business was SEK 18 M (6) for the quarter, while the Service Business showed a profit of SEK 4 M (5). Compared with the first quarter of 2017, earnings improved by SEK 19 M, with all countries contributing to the improvement.

	Net turnover 1)						Operational earnings, margin
	Second quarter		First six months			July 16 - Full year	Second quarter		First six months			July 16 - Full year
SEK M	2017	2016	2017	2016	June 17	2016	2017	2016	2017	2016	June 17	2016
Service Business	1,486	1,361	2,986	2,584	5,721	5,319	148	151	341	286	655	600
- margin, %							10.0	11.1	11.4	11.0	11.4	11.3
Car Business	5,640	5,057	11,071	9,276	20,360	18,565	122	103	196	166	354	324
- margin, %							2.2	2.0	1.8	1.8	1.7	1.7
Fuel Business	299	273	564	497	1,098	1,031	8	6	19	14	30	25
- margin, %							2.6	2.3	3.3	2.9	2.7	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

		Second quarter		First six months
Per cent	Sweden Norway Total			Sweden	Norway	Total
Change from last year
Underlying turnover	2.5	-2.0	1.3	6.1	4.2	5.6
Calendar effect	4.8	6.5	5.3	0.0	0.0	0.0
Adjusted turnover	7.3	4.5	6.6	6.1	4.2	5.6

See "Definitions and performance measures" on page 19.

Strong earnings in the Service Business

Continued mechanic shortage in Sweden

The Service Business reported a second quarter profit that was SEK 3 M lower compared with last year, with a margin of 10.0 per cent (11.1). The profit was negatively affected by the fact that Easter fell during the second quarter this year. Demand is good, but we still have a shortage of mechanics, particularly in Sweden. Sweden's adjusted turnover increased by 7 per cent and Norway's by 5 per cent year compared with last year. There were 3 fewer working days in Sweden and 4 fewer working days in Norway compared with the same quarter last year.

Deliveries of new cars in the Car Business increased by 3 per cent for comparable operations, and deliveries of used cars increased by 2 per cent compared with last year. Orders received for new cars decreased by 1 per cent compared with last year. Earnings from sales of new cars improved by SEK 23 M, due mainly to higher turnover and a slightly higher gross profit margin. Earnings from sales of used cars declined by SEK 4 M to SEK 23 M. The decrease is mainly attributable to a lower gross profit margin. Stocks of used cars increased slightly during the quarter, but are at acceptable levels, except in Norway. The turnover rate for used cars decreased slightly, amounting to 10.4 times per year.

The Fuel Business is concentrated to Sweden, and earnings amounted to SEK 8 M (6).

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 BMWand MINI-workshop 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 second quarter amounted to SEK -18 M (loss: 21).

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.

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

The interim report for the third quarter of 2017 will be published on 27 October 2017.

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, 27 July 2017

Mats Qviberg Chairman

Jan Pettersson Ingrid Jonasson Blank Eva Cederbalk Deputy chairman Board member Board member

Anna Engebretsen Jack Forsgren Laila Freivalds Board member Board member Board member

Mats Holgerson Gustav Lindner Jon Risfelt Board member Board member Board member

Dragan Mitrasinovic Patrik Nordvall Board member appointed Board member appointed by employee organisation by employee organisation

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

For further information, please contact Per Avander, Managing Director and CEO, or Gunnar Blomkvist, 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

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

Interim report Bilia AB (publ) 1 January – 30 June 2017 10 (20)

First six months

	Service		Car		Fuel		Total		Segment		Group
							Cars			reconciliation
SEK M	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016	2017	2016
Net turnover
External sales	2,364	2,090	11,071	9,276	564	497	13,999	11,863	5	3	14,004	11,866
Internal sales	622	494					622	494	-622	-494	-	-
Total net turnover	2,986	2,584	11,071	9,276	564	497	14,621	12,357	-617	-491	14,004	11,866
Depreciation/amortisation	-52	-29	-239	-174	-2	-2	-293	-205	-19	-38	-312	-243
Operational earnings/Operating profit/loss	341	286	196	166	19	14	556	466	-72	-40	484	426
Interest income											24	20
Interest expenses											-54	-36
Shares in profits of associated companies			14	14			14	14			14	14
Profit before tax											468	424
Tax expense for the period											-104	-88
Net profit for the period											364	336
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.	-7	-1	-6	-1			-13	-2			-13	-2
- Acquisition-related costs and value adjustments	-1	-3	-1	-3			-2	-6			-2	-6
- Amortisation of surplus values	-19	-10	-18	-12			-37	-22			-37	-22
Total	-21	1	-23	-10	0	0	-44	-9	0	0	-44	-9
Other items not affecting cash besides depreciation/amortisation	-29	-31	-4	-5	0	0	-33	-36	17	42	-16	6
Assets
Interests in associated companies			390	364			390	364			390	364
Deferred tax assets											81	137
Other assets											10,134	8,355
Total assets											10,605	8,856
Investments in non-current assets	91	47	829	777	5	2	925	826	34	33	959	859
Liabilities
Equity											2,442	2,163
Liabilities											8,163	6,693
Total liabilities and equity											10,605	8,856

		Revenue from	Non-current
		external customers	assets
SEK M	2017	2016	2017	2016
Geographical segments
Sweden	8,845 8,198		5,507	4,229
Norway	3,593	3,063	891	842
Germany	501	304	73	56
Luxembourg	638	302	608	342
Belgium	427 -		270	-
Segment reconciliation	0 -1		-1,605	-1,184
Total	14,004	11,866	5,744	4,285

First six 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	1,600	1,467	541	506	223	117	6,679	6,233	3,049	2,554	1,343	489
Internal sales	389	316	206	171	27	7
Total net turnover	1,989	1,783	747	677	250	124	6,679	6,233	3,049	2,554	1,343	489
Depreciation/amortisation	-31	-21	-8	-3	-13	-5	-209	-159	-17	-10	-13	-5
Operational earnings/Operating profit/loss	235	205	97	74	9	7	153	131	27	29	16	6
Shares in profits of associated companies							14	14
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	-1				-5	-1	-1
- Acquisition-related costs and value adjustments	-1	-1				-2	-1	-1				-2
- Amortisation of surplus values	-7	-4	-4	-4	-8	-2	-6	-5	-4	-4	-8	-3
Total	-8	9	-5	-4	-8	-4	-10	-1	-5	-4	-8	-5
Other items not affecting cash besides depreciation/amortisation	-28	-30	-1	-1	0	0	-16	-7	12	2	0	0
Assets
Interests in associated companies							390	364
Investments in non-current assets	67	31	10	16	14	0	778	703	28	74	23	0

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.

	Second quarter		First six months		July 16 -	Full year
SEK M	2017	2016	2017	2016	June 17	2016
Continuing operations
Net turnover	7,189	6,433	14,004	11,866	26,044	23,906
Costs of goods sold Gross profit	-6,074 1,115	-5,443 990	-11,812 2,192	-10,010 1,856	-21,871 4,173	-20,069 3,837
Other operating income	1	24	11	25	24	38
Selling expenses	-705	-621	-1,384	-1,180	-2,655	-2,451
Administrative expenses	-167	-144	-319	-264	-611	-556
Other operating expenses	-4	-8	-16	-11	-32	-27
Operating profit 1)	240	241	484	426	899	841
Financial income	18	13	24	20	32	28
Financial expenses	-33	-22	-54	-36	-84	-66
Shares in profits of associated companies	9	9	14	14	30	30
Net financial items	-6	0	-16	-2	-22	-8
Profit before tax	234	241	468	424	877	833
Tax	-51	-48	-104	-88	-192	-176
Profit for the period from continuing operations	183	193	364	336	685	657
Discontinued operation
Loss from discontinued operation,
net after tax	0	0	0	0	-21	-21
Net profit for the period	183	193	364	336	664	636
Other comprehensive income/loss
Items that can be reclassified to profit or loss
Translation differences attributable to foreign
operations	-10	17	-18	27	10	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
	-10	17	-18	27	30	75
Other comprehensive income/loss after tax	-10	17	-18	27	30	75
Comprehensive income for the period	173	210	346	363	694	711
Net profit for the period attributable to:
Parent Company's shareholders	183	193	364	336	664	636
Comprehensive income for the period
attributable to:
Parent Company's shareholders	173	210	346	363	694	711
Weighted average number of shares, '000:
- before dilution	102,800	102,108	102,800	101,717	102,800	102,261
- after dilution Basic earnings/loss per share, SEK	102,800 1.80	102,108 1.90	102,800 3.55	101,786 3.30	102,800 6.45	102,296 6.20
Diluted earnings/loss per share, SEK	1.80	1.90	3.55	3.30	6.45	6.20
Continuing operations
Basic earnings/loss per share, SEK	1.80	1.90	3.55	3.30	6.65	6.40
Diluted earnings/loss per share, SEK	1.80	1.90	3.55	3.30	6.65	6.40
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	-24	-18	-48	-31	-90	-73
- Land and buildings	-8	-5	-16	-9	-37	-30
- Equipment, tools, fixtures and fittings	-25	-22	-50	-42	-88	-80
- Leased vehicles	-101	-87	-198	-161	-374	-337
Total	-158	-132	-312	-243	-589	-520

SEK M	30/6 2017	31/12 2016	30/6 2016
Assets
Non-current assets
Intangible assets
Intellectual property	614	550	474
Goodwill	720	657	556
	1,334	1,207	1,030
Property, plant and equipment
Land and buildings	562	235	135
Construction in progress	24	19	17
Equipment, tools, fixtures and fittings	458	427	373
Leased vehicles 1)	2,969	2,744	2,357
Long-term investments	4,013	3,425	2,882
Financial investments 1)	397	388	372
Long-term receivables 2)
	0 397	1 389	1 373
Deferred tax assets	81	84	137
Total non-current assets	5,825	5,105	4,422
Current assets
Inventories, merchandise	3,185	3,451	2,744
Current receivables
Other receivables 1)	1,467	1,472	1,359
Cash and cash equivalents 2)	128	104	331
Total current assets	4,780	5,027	4,434
Total assets	10,605	10,132	8,856
Equity and liabilities Equity
Share capital	257	257	257
Other contributed capital	167	167	167
Reserves	-42	-24	-72
Retained earnings including net profit for the year	2,060	2,111	1,811
Total equity	2,442	2,511	2,163
Non-current liabilities
Bond issue 3)	1,007	751	496
Interest-bearing liabilities 4)	145	174	157
Other liabilities and provisions 3)	2,263	2,077	1,736
	3,415	3,002	2,389
Current liabilities
Interest-bearing liabilities 4)	687	334	692
Other liabilities and provisions	4,061	4,285	3,612
Total equity and liabilities	4,748 10,605	4,619 10,132	4,304 8,856
Assets
1) Of which interest-bearing	390	381	365
2) Interest-bearing	128	105	332
Liabilities
3) Of which interest-bearing	1,000	753	511
4) Interest-bearing	832	508	849

SEK M	30/6 2017	31/12 2016	30/6 2016
Opening balance	2,511	2,056	2,056
Cash dividend to shareholders	-411	-380	-380
Exercised warrants/debenture loan	-	2	2
Sold warrants	-	1	1
New share issue	-	115	115
Discount/issue at discounted price	-	6	6
Revaluation of put option	-4	-	-
Comprehensive income for the year	346	711	363
Closing balance	2,442	2,511	2,163

	Second quarter		First six months		July 16 -	Full year
SEK M	2017	2016	2017	2016	June 17	2016
Operating activities
Profit before tax from continuing operations	234	241	468	424	877	833
Loss before tax from discontinued operation	0	0	0	0	-21	-21
Depreciation and impairment losses from continuing operations	158	132	312	243	591	522
Depreciation and impairment losses from discontinued operation	0	0	0	0	0	0
Other items not affecting cash	-7	6	-16	6	-20	2
Tax paid	-48	-28	-120	-79	-194	-153
Change in inventories	385	227	271	126	-166	-311
Change in operating receivables	-109	-192	-3	-163	151	-9
Change in operating liabilities	-307	238	-158	368	265	791
Cash flow from operating activities	306	624	754	925	1,483	1,654
Investing activities
Acquisition of non-current assets (intangible and tangible)	-124	-56	-200	-116	-352	-268
Disposal of non-current assets (intangible and tangible)	3	15	4	15	8	19
Acquisition of leased vehicles	-466	-458	-759	-743	-1,696	-1,680
Disposal of leased vehicles	183	188	387	342	784	739
Operating cash flow	-98	313	186	423	227	464
Investment in financial assets	-2	-3	-2	-7	-4	-9
Disposal of financial assets	2	5	12	5	72	65
Acquisition of subsidiary/operation, net	-5	0	-345	-249	-346	-250
Disposal of subsidiary/operation, net	1	42	54	42	59	47
Disposal of discontinued operation, net	0	0	0	0	0	0
Cash flow after net investments	-102	357	-95	214	8	317
Financing activities
Borrowings	0	100	350	1,216	600	1,466
Repayment of loans	0	-216	-100	-866	-100	-866
Change in overdraft facility	424	288	285	37	-290	-538
Exercised warrants/debenture loan	0	0	0	2	0	2
Sold warrants	0	1	0	1	0	1
Revaluation of put option	-4	0	-4	0	-4	0
Dividend paid to Parent Company's shareholders	-411	-380	-411	-380	-411	-380
Cash flow from financing activities	9	-207	120	10	-205	-315
Change in cash and cash equivalents, excl. translation
differences	-93	150	25	224	-197	2
Cash and cash equivalents recognised in assets held for sale	0	0	0	0	0	0
Exchange difference in cash and cash equivalents	0	8	-1	8	-6	3
Change in cash and cash equivalents	-93	158	24	232	-203	5
Cash and cash equivalents at start of period	221	173	104	99	331	99
Cash and cash equivalents at end of period	128	331	128	331	128	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 an asset item of SEK 10 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.

	3/15	4/15	1/16	2/16	3/16	4/16	1/17	2/17
Continuing operations
Net turnover, SEK M	4,597	5,750	5,433	6,433	5,743	6,297	6,815	7,189
Operational earnings, SEK M	162	247	195	240	187	265	267	261
Operational margin, %	3.5	4.3	3.6	3.7	3.3	4.2	3.9	3.6
Operating profit, SEK M	154	234	185	241	163	252	244	240
Operating margin, %	3.4	4.1	3.4	3.7	2.8	4.0	3.6	3.3
Profit before tax, SEK M	162	234	183	241	162	247	234	234
The ratio of net debt to EBITDA, times 1)	-0.1	0.4	0.8	0.7	0.5	0.7	0.7	1.1
The Bilia Group
Profit/loss for the period, SEK M	131	196	143	193	127	173	181	183
Return on capital employed, % 1)	33.8	36.2	35.6	29.7	28.8	26.4	26.1	25.2
Return on equity, % 1)	31.6	33.2	39.7	32.9	31.0	27.9	28.3	27.4
Equity/assets ratio, %	29	28	26	24	25	25	25	23
Data per share (SEK) 2)
Earnings/loss for the period	1.30 3)	1.95 5)	1.40 7)	1.90 9)	1.25	1.65	1.75	1.80
Equity	19 4)	20 6)	22 8)	21	23	24	26	24

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 third quarter, 100,839,198.

4) Based on number of shares outstanding at 30 September 2015, 100,848,032.

5) Based on weighted average number of shares outstanding during fourth quarter, 100,861,530.

6) Based on number of shares outstanding at 31 December 2015, 100,872,104.

7) Based on weighted average number of shares outstanding during first quarter, 101,325,845.

8) Based on number of shares outstanding at 31 March 2016, 101,401,468.

9) Based on weighted average number of shares outstanding during second quarter, 102,108,394.

	Second quarter		First six months		July 16 -	Full year
SEK M	2017	2016	2017	2016	June 17	2016
Net turnover	105	80	207	202	390	385
Administrative expenses	-123	-101	-239	-232	-452	-445
Operating loss 1)	-18	-21	-32	-30	-62	-60
Result from financial items
Income from interests in Group companies	113	109	113	35	119	41
Interest income from Group companies	11	10	23	19	37	33
Other interest income and similar line items	17	12	23	19	29	25
Interest expenses to Group companies	0	0	0	0	0	0
Interest expenses and similar line items	-25	-18	-38	-29	-52	-43
Loss after financial items	98	92	89	14	71	-4
Appropriations	0	0	0	0	683	683
Profit before tax	98	92	89	14	754	679
Tax	0	5	-2	5	-140	-133
Net profit for the year	98	97	87	19	614	546
1) Straight-line amortisation/depreciation by asset class:
- Intellectual property	0	0	0	-5	-1	-6
- Buildings	-2	-1	-4	-2	-6	-4
- Equipment, tools, fixtures and fittings	0	-1	0	-2	0	-2
Total	-2	-2	-4	-9	-7	-12

SEK M	30/6 2017	31/12 2016	30/6 2016
Assets
Non-current assets
Intangible assets
Intellectual property	2	2	3
	2	2	3
Property, plant and equipment
Buildings	73	43	35
Construction in progress	13	15	17
Equipment, tools, fixtures and fittings	2 88	2 60	2 54
Long-term investments
Interests in Group companies	1,355	1,122	1,192
Other securities held as non-current assets	0	0	0
Deferred tax asset	44	46	104
	1,399	1,168	1,296
Total non-current assets	1,489	1,230	1,353
Current assets
Current receivables
Receivables from Group companies	88	1,486	66
Other receivables	135	196	157
Cash on hand and accrued deposits	1,057	27	416
Total current assets	1,280	1,709	639
Total assets	2,769	2,939	1,992
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	161
Retained earnings including net profit for the year	607	931	404
	774	1,098	565
Total equity	1,078	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	15	21	-
Other loans	-	-	1
Other liabilities	166 181	262 283	150 151
Total equity and liabilities	2,769	2,939	1,992

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 the banks, Nordea and DNB, and cash and cash equivalents.

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.

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

Operational margin Operational earnings in relation to net turnover.

Operational earnings Operating profit, excluding revenue 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/.