AI Q2 engelska 3 1
INTERIM REPORT 2020 | I.A. HEDIN BIL AB | APRIL 1
ST - JUNE 30TH CEO comment Hedin Bil delivers a strong quarter with focus on cost savings and liquidity - Increased profitability in both car sales and the after market business - Partially closed markets - Strong cash flow and liquidity Results for the second quarter Operating profit during the second quarter was 108 MSEK, which was an improvement of 137 percent compared to last year’s second quarter. Net sales in comparable units decreased by 3 percent compared to the same period last year. The operations in Hedin Bil and Bavaria, the latter also including the Norwegian business, improved both operating profit and operating margin. The Belgian operations showed a loss due to the temporary close down of the Belgian market, while still producing positive cash flows. New car sales decreased by 16 percent in comparable units while the gross margin improved. Sales of used cars increased by 13 percent, initially with lower gross margins that recovered during the quarter. In total, car sales contributed with increased profits and increased margins compared to the second quarter last year. The after market business also performed stronger than last year with higher profits and margins. Market development The market impact in the second quarter from Covid-19 was exceptional and has affected both supply and demand. In Belgium, the market closed for six weeks, Norway was affected by closed schools and restaurants, while Sweden did not introduce any formal lock downs, but the market activity was still considerably lower than usual. New passenger car registrations in Sweden decreased by 37 percent compared to the second quarter of 2019. Corresponding figures for the Norwegian market was -32 percent and -42 percent for Belgium. The market for used cars, as well as the after market, has been less affected. Savings program due to Covid-19 A savings program was launched early March. Measures include temporary and permanent staff reductions, and a freeze on recruitments, purchases and travels. Where possible, we have used financial support packages for furloughing. During the second quarter, up to 900 of staff were on furlough and the decrease in staff was 300 persons. In Belgium, the state took over most of the personnel cost when the business was shut, which decreased cost by 28 MSEK. We have also used government support in Sweden and Norway, which has reduced personnel cost by 15 MSEK in Sweden and 6 MSEK in Norway. We follow the guidelines introduced by local governments in all our markets to limit the spread of the virus and to protect our personnel and customers. I am proud of the efforts made by our employees under these challenging circumstances, which has led to a strong result. Together with a focus on decreasing the working capital, it has contributed to a very strong cash position. I really want to emphasize the importance of both profitability and liquidity management throughout the organization under the current circumstances. It gives us the opportunity to work on the right things with a long-term focus. Anders Hedin 7