A BETTER DEAL WITH

biliA Bilia AB (publ) | Box 9003, SE-400 91 Göteborg, Sweden | Telephone: +46 31 709 55 00

| Fax: +46 31 709 55 50 | www.bilia.com

Solberg | Printed by: Strokirk-Landströms | Photo: Anna Hult | Translated by: Richard Nord Translations AB

COMPANY PRESENTATION

2007

CONTENTS

Ownership by categories at year-end 2007, % Öresund, 25 (21) Swedish private > 500, 23 (18) Swedish private < 500, 9 (9) Swedish unit trusts, 13 (21)

1 Scandinavia’s largest car chain

Foreign owners, 15 (13)

2 Statement by the Managing Director

Bilia’s biggest shareholders in 2007

4 Vision, concept, goals and strategies 6 Market with fierce competition 8 The market’s broadest range of service and cars on offer 10 Brand ever more important 16 Financial overview

Swedish institutions, 15 (18)

1. Investment AB Öresund 25.0 per cent 2. HQ fonder 8.6 per cent 3. Mats Qviberg with family 4.9 per cent 4. Bilia AB repurchased shares 4.7 per cent 5. Nordea ODIN funds, Norway 4.3 per cent 6. Arne Bergström 2.8 per cent 7. Lannebo funds 2.6 per cent 8. Second AP Fund 1.4 per cent 9. SEB Private Bank 1.3 per cent 10. Fourth AP Fund 1.1 per cent

Annual General Meeting 2008 The 2008 Annual General Meeting will be held on 17 April 2008 at the Elite Park Avenue Hotel in Göteborg. Notice of the AGM will be published in Post- och Inrikes Tidningar (the official Swedish gazette) and in Dagens Industri. Further information on the AGM can also be found under the Corporate Governance tab at www.bilia.com. Notification can be made by e-mail at [email protected]

Important dates Annual General Meeting 2008:

17 April

17 Group overview

Report for the first three months of 2008:

6 May

Report for the first six months of 2008:

30 July

23 Share and shareholders

Report for the first nine months of 2008:

24 October

SCANDINAVIA’S LARGEST CAR CHAIN Bilia is Scandinavia’s largest car chain, with a leading position in servicing and sales of cars and transport vehicles plus supplementary services. Our vision is to be the best service company in the business. Our goal is to have the most satisfied customers in our showrooms, our stores and our workshops. The customers should find dealing with Bilia a pleasant experience. Bilia has 111 facilities in Sweden, Norway and Denmark plus an online auction site, Netbil. In Sweden, our dealerships are found in the three major metropolitan regions, in Mälardalen and in Skaraborg. In Norway, Bilia is established in the southeastern part of the country, with a concentration in the Oslo area, and in Stavanger. In Denmark, we are located in and around Copenhagen. Our facilities are modern, with good locations and generous opening hours – we want it to be easy for our customers to visit us. Availability is one of our three core values. The other two are Interest and Simple car ownership. Just as it should be easy to visit us, it should also be easy to own a car purchased from Bilia. That’s why we offer a wide range of supplementary services that simplify car ownership: financing, insurance, workshop services, accessories and fuel. Our

07 NOTABLE EVENTS

Finances Bilia’s net turnover rose by 10 per cent to SEK 15,405 M (14,056). Operating profit rose by 54 per cent to SEK 168 M (109). Earnings per share amounted to SEK 4.75 (4.15). Operations January – An agreement was reached on the acquisition of the Hans Persson Group, one of Sweden’s largest distributors of Volvo, Ford and Renault.

core values guide us and say that we exist for our customers and should always treat them with genuine interest and service-mindedness. Our range consists of services and products in our Service Business, which includes workshops, spare parts, store sales and fuel sales. We are constantly developing new services and service concepts that simplify car ownership. Our Car Business includes sales of new and used cars, transport vehicles, customer financing and supplementary services. We sell cars from Volvo, Renault, Ford, Land Rover, Hyundai, Nissan, Honda, BMW and Mini as well as transport vehicles from Renault, Ford, Hyundai and Nissan. We posted a turnover of SEK 15 billion in 2007 and had 3,961 employees at the end of the year. The Bilia share has been listed on OMX Nordiska Börs since 1984.

March – Bilia acquired the operation of Bilgruppen, which sells Ford in Enköping, Kungsängen and Sala, and established Bilia Lease in Norway. April – Bilia started Ford operations in Nacka and Segeltorp in Stockholm. May – The Swedish Competition Authority approved the acquisitions of the Hans Persson Group and Bilgruppen.

Miscellaneous August – Buy-back of own shares commenced. December – An agreement was signed on the acquisition of Bilforum AS and Bilforum Finans AS, distributors of Volvo, Renault and Land Rover in Stavanger, Norway. February 2008 – Bilia’s subsidiary Säfveån AB won a longstanding dispute in the District Court of Gothenburg. Read more under the heading Investor Relations at www.bilia.com

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WE OFFER THE CUSTOMER A BETTER DEAL Now we have put another year behind us on our way towards becoming Scandinavia’s best retail car chain. Best for us is not the same thing as biggest! Best for us is having the most satisfied car customers.

“We aim to create growth with profitability.”

3 Best for us is having the lowest unit costs per car sold and workshop-hour. Best for us is having the best competitiveness and being able to offer the most attractive terms and deals to our customers. We offer the customer “a better deal”. Now we are also Scandinavia’s largest retail car chain. Being big has many advantages – but also certain disadvantages. I am convinced the advantages outweigh the disadvantages. We can offer our customers many attractive facilities for car sales and service, as well as more brands and supplementary services that smaller companies have difficulty offering. We have resources that are of both benefit and convenience to our customers. By creating long-term added value for our customers, we create conditions for increased profitability and thereby increased value for our shareholders. We have received more and more appreciation from our suppliers for our customer treatment and our new organisation. When we decide to run a weekend campaign, we get noticeable results. Our size also gives us purchasing advantages. We are proud of the Bilia brand. Our new common image in all of Scandinavia has attracted great attention. It has been a busy year for Bilia, with high activity in both the Car and the Service Business. In Sweden we strengthened our position in Mälardalen and southern Dalarna by the acquisitions of the Hans Persson Group, one of Sweden’s largest distributors of Volvo, Renault and Ford, and Bilgruppen, which sells Ford. The two operations have a combined annual turnover of about SEK 1.5 billion. We have also decided to make organisational changes in Sweden aimed at further increasing our efficiency and competitiveness. Responsibility for the car brands will be clari-

fied for one thing. In Norway and Denmark, the year has been characterised by the restructuring of our facilities and measures to increase efficiency in our workshops. At the end of the year we signed an agreement to acquire Bilforum AS, which represents Volvo, Renault and Land Rover in Stavanger, Norway. The company has an annual turnover of nearly SEK 400 M and has both satisfied customers and good profitability. The Group’s operating profit improved during the year, increasing by SEK 59 M to SEK 168 M. The Swedish operation achieved an operating margin of 2.3 per cent, which is equivalent to SEK 222 M (206). In Norway, operating profit was improved by SEK 20 M to SEK 15 M, and in Denmark the loss was at the same level as 2006: SEK 11 M. The Swedish operation is achieving satisfactory results, while we still face challenges in Norway and Denmark. In both markets we are optimising our facility structure and working intensively to improve efficiency in the workshops. Moreover, we have weak profitability in our sales of used cars in both Norway and Denmark. We aim at creating growth with profitability. We are always interested in acquiring new car operations that can give us and our customers additional advantages. The latter is crucial, since we never compromise on the most important part of our business concept: to offer car service, car sales and supplementary services that give our customers added value. That is how we will realise our vision of being the best service company in the business. Göteborg, February 2008 Jan Pettersson Managing Director and CEO

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VISION, CONCEPT, GOALS AND STRATEGIES Our business concept entails offering car service, car sales and supplementary services that give the customers lasting added value. Our brand promise to the customer is: A better deal. It is this customer benefit that is the foundation of our ability to grow with profitability and thereby create value for our shareholders.

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Financial goals Bilia’s overall financial goals are to achieve an operating margin of at least 2.2 per cent, a return on capital employed of at least 14 per cent and a return on equity of at least 15 per cent. In 2007 our operating margin was 1.1 per cent, return on capital employed was 7.8 per cent and return on equity was 6.3 per cent.

Operating margin

Return on capital employed

Per cent

Per cent

Per cent

4

20

20

3

15 Goal 2.2 per cent

2

Return on equity

Goal 14.0 per cent

10

15

1

5

5

0

0

0

05 06

07

Bilia’s goal is an operating margin of 2.2 per cent. The operating margin improved in 2007 compared with 2006, from 0.8 per cent to 1.1 per cent.

05 06

07

The goal is to achieve a return on capital employed of 14 per cent. ROCE in 2007 was 7.8 per cent, compared with 6.2 per cent the year before.

Vision Bilia’s vision is to be the best service company in the business. Overall strategy Our overall goal is to be a leading retail chain in the Nordic region and a world-class car retailer. Our overall strategy is to create growth with profitability. The overall strategy in turn rests on a number of component strategies, which together are crucial for strengthening profitability: • increased customer focus • strengthen the Bilia brand • continued development of leadership and personnel • cost-cutting measures • further developed used car business • constantly increasing efficiency in the workshops • continued development of new service concept

Goal 15.0 per cent

10

05 06

07

Return on equity in 2007 was 6.3 per cent, the same as in 2006. Bilia’s goal is to achieve a ROE of 15 per cent.

• more efficient exploitation of the economies of scale. Competitive advantages We have several competitive advantages that serve as a platform for further development of our business: • we have a clear customer focus and are constantly improving our service • our employees are highly qualified and willing to develop to give the customers the best possible service • we have sales and service facilities with high accessibility and strong positions on each market • Bilia is a strong brand and we have access to strong product ranges and brands in both the Service Business and the Car Business • our size permits economies of scale to be achieved in such areas as administration, purchasing and logistics.

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MARKET WITH FIERCE COMPETITION Today’s car market is characterised by fierce competition with regard to both sales and service. In the face of an increasingly wide variety of products on offer in the market, customers have become more flexible in their choice of car make. This trend means that the dealer’s brand has become increasingly important.

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Consolidation in the business The fierce competition for car buyers means that the manufacturers are being forced to launch more and more models in a neverending stream. This leads to increased development costs and makes it necessary to spread the costs over larger volumes, which has led to mergers and acquisitions. EU’s competition rules for the car industry’s Block Exemption was changed in the autumn of 2003. The new rules were instituted to stimulate competition and give the consumers better prices for service and cars by opening up the industry, which had previously been strictly regulated. Under the new rules, multibrand representation is possible in both sales and service. It has also become possible to buy a larger proportion of spare parts from other suppliers than the manufacturers. Furthermore the acquisition possibilities have increased, which has led to a consolidation of the industry, where large players have acquired smaller dealers.

Customer-driven trend The trend on both the car and the service side is clearly customer-driven. Today’s car buyers are knowledgeable customers who strive for total quality in relation to costs. But at the same time it is important to appeal to both heart and mind. A survey by Capgemini shows that customers ranked responses such as “fits my needs”, “wanted to try something new” or “enjoyment of the vehicle” higher than factors such as fuel economy and safety. Good followup and well developed aftermarket sales are important for building good customer relations. As is the case in many sectors, the Internet has grown in importance. The Internet serves both as a source of information – nearly 80 per cent of the customers gather information via the Web before they buy a car – and as a sales channel for used cars in particular.

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THE MARKET’S BROADEST range of SERVICE AND CARs on OFFER Bilia has attractive products, a wide range of competitive services and service-minded personnel. We have everything associated with car ownership and for those who want them we have comprehensive solutions covering all the customer’s needs throughout the cars lifecycle. We stand well equipped to continue developing together with our customers.

Service Business

Car Business

The Service Business – Bilia’s added value Within our Service Business we have a well developed assortment of services and products aimed at fostering simple car ownership that provides added value for our customers. We know that time is a scarce resource for most people. The Service Business is Bilia’s very own part of its core business and includes workshop services, spare parts, store sales and fuel sales. We are constantly developing new services and service concepts aimed at simplifying car ownership. We have different types of service agreements, security packages, tyre storage depots and, not least, the Personal Service Technician concept, where the customer always has contact with the same service technician. Bilia differentiates itself by a combination of price, quality, availability and security rather than by always offering the lowest price. In recent years we have increased the price differentiation of our products on offer. We do this not least in order to attract customer groups that have not previously chosen us, mainly owners of older cars.

The Car Business – a wide range We cooperate with manufacturers that have strong brands and attractive product ranges. We work hard so that our suppliers will find us to be their best partner when it comes to customer satisfaction and market position. Our Car Business includes sales of new and used cars, transport vehicles, customer financing, insurance and supplementary services. We sell cars from Volvo, Renault, Ford, Land Rover, Hyundai, Nissan, Honda, BMW and Mini as well as transport vehicles from Renault, Ford, Hyundai and Nissan. Thanks to these strong brands, we are able to attract many different customer groups with products on offer that cover their car needs through life’s different phases and varying circumstances.

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BRAND EVER MORE IMPORTANT Since the former Block Exemption from the EU’s competition rules was abolished in the autumn of 2003, the car industry has undergone a transformation. An industry that was previously heavily regulated was opened up to greater competition.

11

Bilia has been given an opportunity to develop its leading position in car service and sales, thanks in part to the fact that car dealers are now allowed to represent multiple brands. Another consequence of this change is that Bilia has been able to make several important acquisitions in recent years in Sweden as well as in Norway and Denmark. One of the strongest brands in the business Changes in the industry with increased competition between car makes, increased pressure on car manufacturers, stricter demands on authorisation and tighter margins in car retailing have led to a situation where the dealers have to grow in size, represent more brands and develop new concepts in order to attract customers. The market situation today also requires the dealers to have a strong brand that stands out in the crowd. Bilia has a clear brand promise – A better deal – which has helped make Bilia one of the strongest brands in car retailing. Strong brands attract more customers and have a higher proportion of loyal buyers.

We have invested in a number of measures aimed at strengthening our customer relations and thereby Bilia as a brand. We are constantly developing new service concepts. We have MaxiTrygg for used cars, Bilia Premium Plus for business customers and the latest concepts are Bilia Miljöbil (Bilia Green Car) and Bilia Lease, which we launched in Norway during the year. We are convinced that the future belongs to those who have the capacity and knowledge required to develop with the market and offer customers appealing solutions that simplify their car ownership. Our websites are an important part of our customer relations, since the Internet is the most important information channel when buying a car. We strive to build good websites that are easy to access and navigate and provide the desired information. In Norway there is a concept called e-dialogue, where customers can chat with Bilia’s personnel up until ten in the evening about everything having to do with car ownership.

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BILIA REPRESENTS several BRANDS

In recent years, Bilia has gone from selling cars from two manufacturers to being a dealer with a large number of car makes in its portfolio. Today Bilia sells nine different car brands and four transport vehicle brands. The same trend exists in other retail sectors where chains are growing ever stronger. Old structure Previously the dealers were closely associated with one or possibly two car makes. In the latter case, both car makes often had the same owner. Most customers have long wanted to have access to many brands at one and the same dealership. The new Block Exemption in the EU made multi-brand retailing a possibility. With its size and focus on the customers, Bilia is an attractive partner for the manufacturers, and we declared early on that we were open to cooperation with multiple car manufacturers. In recent years, Bilia has been a leader of the industry trend towards multi-brand retailing.

New structure Thanks to its size and expertise, Bilia is able to derive maximum benefit from a structure with multiple brands. It is a question of being able to focus on the strengths of the individual car makes and strengthen their brands at the same time as we build the Bilia brand. Regardless of which make the customer is interested in, he or she wants to be noticed and treated well by well trained and service-minded personnel. Thanks to its size, Bilia is able to develop common underlying systems and concepts that can be offered under the Bilia brand. This creates economies of scale for Bilia and benefits the customers in the form of attractive supplementary services and efficient handling. The trend in the car industry is clear: the importance of the dealer is increasing and Bilia’s strong brand will contribute towards building lasting customer relationships.

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ADVANTAGES OF COORDINATION

By increasing coordination in several areas, we want to introduce the best work practices throughout the company. We think that the winners on the car market are those dealers who can both differentiate themselves and maintain high internal efficiency. Common processes One of the most important projects is RACE: Routines, A way of working, Charm and Efficiency. The purpose of RACE is to improve procedures (routines) in both the Service Business and the Car Business. RACE includes an exact description of the organisation’s way of working, a service manual that tells how Bilia’s employees should behave towards the customers, as well as follow-up and constant improvement. Cost-effective solutions There are a number of administrative areas that can be streamlined by increased coordination and centralisation. Purchasing, legal affairs, insurance, salaries, marketing, environment, quality and property management are a few functions that should be examined to make sure we have the most cost-effective solutions.

Workshop Radar

New Car Radar

Per cent 100

Per cent 100

90

90

80

80

70

70

60

60

0

05 06

07

Bilia (Volvo, Renault) Other Volvo retailers

0

05 06

07

Bilia (Volvo, Renault) Other Volvo retailers

The graphs show the percentage of satisfied customers. Satisfied customers are those who have indicated a rating of four or five on a five-point scale.

Focus on quality It is the skills and dedication of our employees that determine whether our customers will experience Bilia as a quality-driven company. We also work with established quality systems such as Green Light, ISO 9001 and environmental certification according to ISO 14001. These systems can be regarded as proof that we keep our promises. But the most important thing is to keep our customers satisfied. We continuously measure their satisfaction with both car sales and service – in Sweden by something we call Radar and in Norway and Denmark by Customer for Life. We keep careful track of any changes in customer satisfaction and feed back the results to the concerned employees. Satisfied customers are so important to us that the results of the customer satisfaction surveys serve as a basis for calculating employee bonuses.

Bilia’s Ford operation wins several awards Bilia’s Ford sales are constantly moving their positions forward. During the year, Bilia Fordon got the Chairman’s Award for best performance among the major Ford dealers in Sweden. Bilgruppen got the prize for mid-sized retailers regarding service and sales. In Norway we got the gold medal from service customers in Hønefoss. Bilia Norway also got a gold medal for sales of the new Ford S-Max.

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MORE EFFICIENT PURCHASING LOWERS COSTS

With 111 facilities and SEK 15 billion in annual turnover, Bilia is big enough to broaden its purchasing to include more suppliers so that price and quality can constantly be optimised. Large purchases every year A new purchasing organisation with responsibility for coordinating the Group’s purchases was established during the year. The intention is naturally to keep costs down and thereby strengthen Bilia’s competitiveness. Aside from car purchases, Bilia’s total purchases amount to approximately SEK 1.5 billion annually. A five per cent saving would mean SEK 75 M in lower costs – every year. The purchasing organisation started by analysing which products had the greatest potential for savings. Procedures were also standardised in a number of areas where the different facilities previously applied their own solutions. An example is cleaning. By reassessing and adapting the cleaning procedures to actual needs – cleaning more often where necessary and less often in rooms less exposed – a potential cost reduction of 30 per cent was identified.

Great savings potential Examples of other areas that are being re-examined are waste management, security, car hoists, car washes, tyres, electricity, air travel, insurance, hotels, energy conservation, coffee machines, copying machines, oil and telephony. During the latter part of the year, three large central agreements were signed for electricity, telephony and oil. A Nordic electricity agreement was signed with Statoil. Telephony was coordinated first in Sweden and then in Norway and Denmark by agreements with Song and Tele2. A Nordic agreement was signed with Castrol for oil for engines, gearboxes and transmissions. In addition to lower prices, centralised purchasing will also result in simpler admini­ stration and better service. This includes, for example, copying machines and other office equipment. The work has had several positive consequential effects. At one facility, coordinated purchasing of compressors led to an energy saving of SEK 30,000 per year. The potential may not be equally great at all facilities, but the outcome shows that there is money to be saved. Bilia has only come a short distance down this road, but the results so far show that there are great potential savings to be made.

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EMPLOYEES WITH CUSTOMER FOCUS

Our employees are the most important bearers of the Bilia brand. It is their skills and service-mindedness that guarantee increased customer benefit and Bilia’s continued success. That’s why we invest considerable resources in the further development of their knowledge. We have never previously carried out as much training as we are doing now. Bilia Academy One of the most important tools for professional development is our own training unit, Bilia Academy, which constantly monitors the need for training and tailors training packages for our employees and leaders. All trainings are based on Bilia’s core values: Accessibility, Interest and Simple car ownership. In addition to the trainings, Bilia Academy also fosters a consensus on goals and strategies, reinforces the Bilia culture and creates a contact network between employees, which stimulates the exchange of new ideas. Leadership is important in all companies. Good leaders create a working climate where the employees can develop. In order to

strengthen its leaders, Bilia Academy runs two leadership trainings: “New as manager” and “SLII, Situational Leadership”. The latter is for more experienced leaders, and approximately 200 mid-level managers in all three countries have undergone the training. A new training programme begun during the year for personal service technicians, along with the training “Customer in Focus”, which is about building good customer relations. It is aimed at everyone who has customer contact: salesmen, sales support personnel, cashiers, customer receptionists and personal service technicians. Bilia Academy also offers trainings in business simulation, business economics, presentation technique and stress management. Staff Radar follow-up Bilia’s personnel survey, Staff Radar, polls employees on their views regarding their jobs and the company leadership, among other things. Results are obtained for all levels – Parent Company, subsidiaries and managers with five or more subordinates. Areas of improvement are identified and the results are fed back along with action plans aimed at improvement.

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FINANCIAL OVERVIEW Income Statement SEK M

Operating profit improved in 2007 to SEK 168 M (109).

Net turnover Costs of goods sold Gross profit Operating profit Net financial items Profit before tax Profit for the year from continuing operations Profit from discontinued operation, net after tax Net profit for the year

Net profit for the year amounted to SEK 100 M (93) and earnings per share to SEK 4.75 (4.15).

Earnings per share, SEK Number of shares at end of period, ’000 Earnings per share, SEK Weighted average number of shares, ’000

2007

2006

2005

15,405 –13,021 2,384 168 –26

14,056 –11,869 2,187 109 9

12,074 –10,094 1,980 194 –4

142 100 — 100

118 88 5 93

190 133 57 190

4.90 20,459 4.75 21,064

4.35 21,459 4.15 22,462

8.20 23,129 8.20 23,129

2007

2006

2005

1.1 7.8 6.3 –305 21.4 73.65 8.00 3,961

0.8 6.2 6.3 446 27.8 78.45 8.00 3,458

1.6 10.0 15.8 185 21.6 55.60 8.00 3,231

Return on capital employed amounted to 7.8 per cent (6.2).

Key figures

Return on equity amounted to 6.3 per cent (6.3).

The Board of Directors proposes a dividend of SEK 8.00 per share, equivalent to SEK 164 M (172). The proposed dividend amounts to 164 per cent (185) of the net profit for the year. Bilia’s dividend policy prescribes that at least 50 per cent of the net profit for the year be distributed to the shareholders.

Operating margin, % Return on capital employed, % Return on equity, % Cash flow from operating activities, SEK M Equity/assets ratio, % Equity per share, SEK Dividend per share, SEK* Number of employees, 31 December *Figure for 2007 refers to proposed dividend

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KUNDCASE:

GROUP OVERVIEW The market for new cars continues to increase in Sweden as well as in Norway and Denmark. The work of merging acquired operations continued according to plan during the year and further restructurings are planned to boost efficiency.

We delivered a total of 36,514 new cars in 2007, an increase of 8 per cent compared with 2006. Several acquisitions have been carried out during the year, further strengthening Bilia’s position on the market. In Sweden, all shares were acquired in the trading subsidiaries of Hans Persson Bil AB and Bilgruppen in Enköping, Sala and Kungsängen. In Norway, an agreement was signed on the acquisition of Bilforum AS and Bilforum Finans AS. A new working method, “RACE-Workshop”, was introduced in Denmark and Norway during the year. The method, which has been developed in Sweden with very good results in terms of customer satisfaction and workshop efficiency, shows that there is considerable potential for selling more workshop hours. As an effect of the increase in sales of new cars during the latter part of the year, the stock level of used cars increased. Steps have been taken to quickly bring this level down to a normal stock level.

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SWEDEN New cars Sweden Total market

Bilia’s sales

Bilia’s market share

Quantity 300,000

Quantity 25,000

Per cent 8

200,000

15,000

100,000 0

05 06 07

5,000 0

6 4 2 05 06 07

0

Strengthened position by acquisitions in Sweden In Sweden, Bilia has 76 facilities in the Stockholm, Mälardalen, Göteborg, Malmö and Skaraborg regions. This is 14 more than last year, since we acquired two dealers in 2007. We sell and service cars from Volvo, Renault, Ford and Hyundai. The Swedish car market grew by over 8 per cent in 2007 to a total of 306,799 new cars (282,766). Bilia is Sweden’s biggest car retailer, with a new car market share of 7.1 per cent (7.1). During the year we delivered 21,923 new cars (20,036), 19,031 used cars (17,702), 1,413 new transport vehicles (1,195) and 820 used transport vehicles (878). We strengthened our position in the expansive Mälardalen region and southern Dalarna during the year by the acquisitions of

05 06 07

Bilgruppen, which sells Ford in Enköping, Kungsängen and Sala, and the Hans Persson companies, which represent Volvo, Renault and Ford and have dealerships in Avesta, Fagersta, Hedemora, Hallstahammar, Köping, Sala and Västerås. We also expanded our sales of Ford to southern and eastern Stockholm. In 2007, net turnover in Sweden increased to SEK 9,783 M (8,717), which is equivalent to 64 per cent of the Group’s total net turnover. Operating profit amounted to SEK 222 M (206). The Service Business did not come up to last year’s good level towards the end of the year, due to slightly lower margins and higher costs. The work of merging existing and acquired operations continued according to plan during the year and is expected to be completed during the first part of 2008.

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NORWAY New cars Norway Total market

Bilia’s sales

Bilia’s market share

Quantity 150,000

Quantity 6,000

Per cent 5

120,000

4,500

4

90,000

3

3,000

60,000 30,000

1,500

0

0

05 06 07

2 1 05 06 07

0

Increased volume and fewer facilities in Norway Bilia has 23 facilities in southeastern Norway, with a concentration in the Oslo area, and two facilities in Stavanger. We sell and service cars from Volvo, Renault, Ford, Land Rover, Hyundai, Nissan, Honda, BMW and Mini. The Norwegian car market increased by 18 per cent during 2007 to 129,195 new cars (109,164). Bilia is one of Norway’s biggest car dealers with a new car market share of 4.5 per cent (4.7). We delivered 5,782 new cars (5,171), 5,301 used cars (5,317) and 677 new transport vehicles (473) during the year. The work of integrating Tronrud Bil continued during the year, with considerable changes in structure and a concentration to fewer facilities

05 06 07

in Oslo. The concentration of operations in Oslo will reduce costs starting in 2008 by about SEK 12 M per annum, at the same time as the new structure is expected to boost revenues due mainly to increased sales of new cars. Bilia Lease – a total concept for administration of new cars for companies in Norway – was introduced during the year. In 2007, net turnover in Norway increased to SEK 3,548 (3,331), which is equivalent to 23 per cent of the Group’s total net turnover. Operating profit amounted to SEK 15 M (loss: 5). The Car Business continued to develop favourably during the year and improved by SEK 27 M compared with last year, mainly due to increased volume and a higher margin in new and used car sales.

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dEnmark New cars Denmark Total market

Bilia’s sales

Bilia’s market share

Quantity 200,000

Quantity 5,000

Per cent 4

150,000

3,750

3

100,000

2,500

2

50,000

1,250

1

0

05 06 07

0

05 06 07

0

New structure will reduce costs Bilia’s operation in Denmark includes 12 facilities in the Copenhagen area. Bilia sells and services cars from Volvo, Renault and Ford and also services cars from Mazda. During 2007 the Danish car market increased by 4 per cent to 159,252 new cars (153,760). Bilia is one of Denmark’s biggest car dealers with a new car market share of 2.9 per cent (3.3). During the year we delivered 4,577 new cars (5,091), 3,280 used cars (3,228), 2,142 new transport vehicles (1,818) and 313 used transport vehicles (176). The facility structure will undergo consider­ able change over a three-year period. Car sales and repair operations will be concentrated to fewer facilities. In the first stage, a facility was converted into a central spare parts depot and repair workshop.

05 06 07

Net turnover in Denmark increased during the year to SEK 2,065 M (1,997), which was 13 per cent of the Group’s total net turnover. Operating loss amounted to SEK 11 M (loss: 10). The Service Business improved during the year after a slow start, and continued measures will further boost workshop efficiency. The Car Business in Denmark has been unprofitable, mainly due to the tax system, which squeezes the dealers’ margins. The planned changes in the facility structure are being carried out to boost efficiency and reduce the cost per car sold.

NetBil EXPANDS

Netbil, Bilia’s online auction site, has been operating since February 2006 and has developed into an important channel for supplementing Bilia’s used car business. Netbil has also established cooperation with outside companies and started brokering sales of private cars. Netbil’s main facility is in Kungsbacka south of Göteborg. During the autumn of 2007, new holding and delivery depots were established, one adjacent to the Bilia-owned Hyundai dealership Bilia Fordon Stockholm AB, and one in cooperation with Atteviks Personvagnar in Jönköping. Atteviks thereby became the first car retailer with online auctions in Jönköping. Netbil is the only retailer in Sweden to allow private persons to auction their car on the Internet for a fixed fee. Also new are Netbil Service, an all-make repair shop that refines the offering and strengthens the customer relationship, a changed auction model that attracts more bids, and not least the fact that Netbil has had more cars for sale. In 2007 Netbil brokered 1,415 car sales, compared with 871 last year.

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22

23

SHARE AND SHAREHOLDERS Bilia’s A-share has been listed on OMX Nordiska Börs since 1984. The share is traded under the ticker code BILI A and is included in the SX 25 Consumer Discretionary index. One round lot is 100 shares. At year-end 2007, Bilia had 25,282 shareholders (26,497).

Dividend policy Over a business cycle, Bilia’s dividend should provide the shareholders with a competitive direct yield in comparison with similar listed companies. Good dividend growth is also striven for. The Board of Directors has decided that the dividend should amount to at least 50 per cent of the net profit for the year. Bilia’s sustained earning capacity, cash flow, investment needs, and overall financial position, are also taken into account when determining the size of the dividend. An effort is also made to ensure that Bilia has an optimal capital structure at any given time.

Share options to senior officers In September 2007, Investment AB Öresund issued share options for 210,000 shares in Bilia. The options have a term of three years and the exercise price is SEK 120 per share. The price per option was SEK 5. The participants in the option programme are Board members, members of the Group Management and a number of key employees. The participants purchased between 2,000 and 10,000 share options each. The option programme does not entail any dilution for Bilia’s shareholders.

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SHARE AND SHAREHOLDERS Price and development of Bilia share

160 140 120

4,000

3,000

100 80

The highest price quoted during the year was SEK 144.50 on 18 April, and the lowest was SEK 92.25 on 22 October. In April 2006, Bilia spun off Catena AB. The terms were that two Bilia shares entitled the bearer to one Catena share, which was equivalent to a price change of about SEK 45 per share.

2,000 60 1,000

40 30

0 03

04

05

Series A share, SEK

06

07

OMX Stockholm PI

Number of shares traded, ‘000 (incl. after-hours trading) Source: OMX

Total yield The Bilia share outperformed the SIX Return Index during the year. The volatility on the stock market has, however, also been reflected in the price of the Bilia share, and the price of the share went down towards the end of the year.

350 300 250 200 150 100 75 03

04

05

Series A share, SEK

06

07

SIX Return Index Source: OMX

CONTENTS

Ownership by categories at year-end 2007, % Öresund, 25 (21) Swedish private > 500, 23 (18) Swedish private < 500, 9 (9) Swedish unit trusts, 13 (21)

1 Scandinavia’s largest car chain

Foreign owners, 15 (13)

2 Statement by the Managing Director

Bilia’s biggest shareholders in 2007

4 Vision, concept, goals and strategies 6 Market with fierce competition 8 The market’s broadest range of service and cars on offer 10 Brand ever more important 16 Financial overview

Swedish institutions, 15 (18)

1. Investment AB Öresund 25.0 per cent 2. HQ fonder 8.6 per cent 3. Mats Qviberg with family 4.9 per cent 4. Bilia AB repurchased shares 4.7 per cent 5. Nordea ODIN funds, Norway 4.3 per cent 6. Arne Bergström 2.8 per cent 7. Lannebo funds 2.6 per cent 8. Second AP Fund 1.4 per cent 9. SEB Private Bank 1.3 per cent 10. Fourth AP Fund 1.1 per cent

Annual General Meeting 2008 The 2008 Annual General Meeting will be held on 17 April 2008 at the Elite Park Avenue Hotel in Göteborg. Notice of the AGM will be published in Post- och Inrikes Tidningar (the official Swedish gazette) and in Dagens Industri. Further information on the AGM can also be found under the Corporate Governance tab at www.bilia.com. Notification can be made by e-mail at [email protected]

Important dates Annual General Meeting 2008:

17 April

17 Group overview

Report for the first three months of 2008:

6 May

Report for the first six months of 2008:

30 July

23 Share and shareholders

Report for the first nine months of 2008:

24 October

A BETTER DEAL WITH

biliA Bilia AB (publ) | Box 9003, SE-400 91 Göteborg, Sweden | Telephone: +46 31 709 55 00

| Fax: +46 31 709 55 50 | www.bilia.com

Solberg | Printed by: Strokirk-Landströms | Photo: Anna Hult | Translated by: Richard Nord Translations AB

COMPANY PRESENTATION

2007