I.A. Årsredovisning 2020 ENG 1
Key events during the year • On January 13, a For
dStore in Västerås was opened. • On January 20, a new dealership for Kia was opened in Trollhättan, a Red Cube facility. • On April 1, our new concept “Car Store” was launched. Car Store is a used car sales concept within the I.A. Hedin Bil Group. • On May 8, Hedin Automotive AS acquired the remaining shares in Conlogo AS, and now holds 100 percent. • On September 1, a new dealership including customer- VR experience was opened in Solna United. • On September 23, Bavaria opened a new dealership for BMW and Mini at Breivollveien in Oslo. • On October 8, a new dealership for Nissan and Kia was opened in Alingsås. In the present facility, the sales of Mercedes-Benz will continue as a single-brand. • On October 15, Bavaria Sverige inaugurated a new dealership for BMW in Kista. • On November 13, 60 percent of Koed A/S was acquired. The company is a Danish wholesaler of spare parts for BMW. • On December 1, Hedin Mölndal Bil AB signed an agreement for Callisma’s premises in Danderyd. • The construction of the new head office for Hedin Bil and Hedin Group started in the end of 2020. The location is in Eklanda, Mölndal and the building is approximately 15 000 square meters. It will be ready in the autumn 2022. This year has been characterized by uncertainty due to the development of Covid-19 and its impact on the market. Sales of new vehicles have shown a decline in all markets. In Norway and Sweden, the business has been conducted without high restrictions, and the measures have been to adapt the operations to the reduced volume through furloughing and fewer employees. In Belgium, the business has been temporarily closed due to government decisions. In all our markets, actions in the form of cost savings have meant that we have been able to quickly adapt our operations to the changed conditions. Events after the end of the financial year • Modins Bil AB was acquired on February 5. The company is a Ford dealer in Uppsala. • Hedin Bil will be authorized dealer for the Chinese electric vehicle brand MG, launching in April 2021. Expected future development The uncertainty due to Covid-19 persists. The business has been affected in different ways depending on the government restrictions om our markets, which also changes over time. We monitor the development continuously and are prepared for different scenarios. We are following the guidelines introduced by local governments in respective markets to limit the spread of the virus and to protect our personnel and our customers. Risks Car sales are dependent on the economic climate and this creates sensitivity in Group sales. Effective processes and control of the inventory situation are required with the purpose of reducing the sensitivity in profitability. Agreements with importers are on a rolling two-year or five-year term. This highlight even further the importance of maintaining a good relationship and to build long-term partnership between the importer and the dealer. I.A. Hedin Bil Group aims to be a strategic partner for each importer and strives to build up a strong sense of trust between the parties. The creation of a complete concept that includes financing, insurance, servicing, credit cards and different forms of ownership, is a key factor in promoting customer loyalty. Through a wide range of brands, the risks arising from excessive exposure on individual brands also decrease. At the same time, the expansion of recent years has mainly focused on the premium segment and in well-functioning markets, which reduces and spread the risks in a positive way. Opportunities are created to widen and spread the risks, through Group operations in several sectors of the automotive industry, including sales, service centres, car rental and spare parts. The Covid-19 outbreak has from March 2020 affected our operations. The uncertainty in the market is causing a decline in business activity and the long-term impact on the Group's operations is still uncertain. The most important risks associated with the uncertain situation are the following; - Demand: Although the impact so far has been limited compared to several other retail industries, there is a risk that consumption of capital goods, including vehicles, will decrease to a significantly lower level over a longer period of time. Cost saving packages has been submitted to meet the risk of such a development. - Inventory values: If there is an oversupply in the market, there is a risk of price adjustments downwards in the pricing of vehicles. We continuously analyse existing inventory and trade-in value to ensure that the inventory is competitive. - Ability to deliver: Most automotive factories in Europe were closed at the end of March and are expected to open again in April/May. This can affect our delivery capacity in the short-term. - Financing and liquidity: If the decline becomes prolonged, there is a risk that refinancing of the current credit portfolio will not be possible. There is an ongoing dialogue with our creditors to ensure long-term cooperation. In our current terms of lending, there are no special covenants that have a negative impact on financing. Corporate governance report The supreme decision-making body in I.A. Hedin Bil Group lies with the Shareholders General Meeting. The Shareholders General Meeting appoints the board, which has the ultimate responsibility to ensure that the internal control functions are working satisfactorily so that the quality of the financial reporting can be ensured. The Board of directors is responsible to ensure that the company's organization is designed in such a way that the accounting, funds management and the company's financial conditions are controlled in a satisfactory manner. The Board regularly evaluates the CEO's work. The CEO's task, together with the CFO, is to examine and ensure the quality of the financial reporting. Clear guidelines are communicated to the subsidiaries to ensure applied rules and principles are followed within the Group's companies. The Group's external auditors report to the Board if necessary, and at least once a year. Shareholders General Meeting The company's largest shareholder is Hedin Group AB, with a holding of 91 percent of the shares. Hedin Group AB is wholly owned by Anders Hedin, who is also President and CEO of I.A. Hedin Bil AB. The remaining 9 percent is owned by Ingemar Hedin. There are 100 shares of series A, each share entitling to ten votes, and 900 shares of series B, each share entitling to one vote. There are no restrictions on how many votes each shareholder can cast at a shareholders general meeting. All shares of series A are held by Hedin Group AB. There are no special regulations in the Articles of Association for the appointment or dismissal of Board members, or amendments to the Articles of Association. 48 I.A. HEDIN BIL AB / ANNUAL REPORT / 2020