AI Annual Report 2019 1
principles are followed within the Group's compan
ies. 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 Anders Hedin Invest AB, with a holding of 91 percent of the shares. Anders Hedin Invest 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 Anders Hedin Invest 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. SUSTAINABILITY REPORT The I.A. Hedin Bil Group has many employees and several business areas in different geographical locations. It is therefore important to share fundamental values on how the business should be conducted. The approach is essential for the business and guides on the challenges faced at work. The commitment, without compromise, is to act within proper ethical guidelines. This is a crucial ingredient to gain trust and confidence from customers, suppliers and financiers. We have set up guidelines and standards to help our employees to have a professional approach in solving ethical issues that may arise at work. This guidance is described in our Code of Conduct, as part of the Sustainability Report. The Swedish operations of I.A. Hedin Bil has an overall Quality and Environment policy which, together with the qualityand management system, meets the requirements of ISO 9001 & ISO 14001. The environmental certification Miljøfyrtån is implemented in parts of the Norwegian business. Guidelines, other policies and Code of Conduct are published and easily accessible to all employees within the Group. I.A. Hedin Bil is an automotive retailer that does not manufacture the products it distributes. Manufacturing and developing of vehicles are the responsibility of the car manufacturers. As a retailer in the automotive industry, there is limited ability to influence the car manufacturers. However, the Hedin Group is constantly committed to its own environmental policy in order to limit the impact from facilities and workshops. In 2019, I.A. Hedin Bil continued to acquire and build new dealerships. The ambition is to implement the same sustainability guidelines to the newly added facilities. To ensure a long-term sustainability approach, the Hedin Group work actively to create the right conditions to reduce environmental impact. Within the organization we are constantly working to improve the leadership and to develop the company forward to strengthen our brand as an employer. Through these efforts we are creating a secure and efficient organization, where our employees are characterized by their sense of satisfaction and professional skills. The basis of all our work is Reliability, Trustworthy and Availability. During the year, the focus has also been educational efforts for our managers and employees to meet new technologies and digital trends, development of our introductory program for different kinds of positions, continuous monitoring and efforts to reduce staff turnover and also to continue the work of clarifying both structure and culture. The purpose is to strengthen the customer focus within the organization and to have quality and competitiveness in a fast and changeable market. In accordance with chapter 6, section 11 of the Annual Accounts Act, the Sustainability Report is prepared as a separate report from the annual report. The Sustainability Report is available from the company, or on the website www.hedinbil.se. REVENUE AND EARNINGS Net sales in 2019 increased by 6 percent to kSEK 22,301,382 (kSEK 21,043,340). Net sales excluding acquired businesses decreased by 4 percent. The business model of Mercedes-Benz passenger cars has switched into an agent model, meaning that invoicing to end customers are made directly from the importer. Adjusted for this change, net sales are in line with the previous year. Operating profit for the year amounted to MSEK 360 (MSEK 227), with an operating margin of 1.6 percent (1.1 percent). Excluding effects from IFRS16 the operating profit amounted to MSEK 324, and an operating margin of 1.5 percent. The operating margin in vehicle sales amounted to 0.8 percent (0.6 percent). The sales of new cars decreased by 5 percent during the year, excluding acquired businesses, of which most of the decline is due to the change in Mercedes-Benz into an agent model. At the same time, sales of used cars have increased by 11 percent, where also the profitability for used cars has improved gradually since the launch of Hedin Certified at the end of last year. The operating margin in After sales was 3.5 percent (3.0 percent). Earnings have improved during the year through efficiency improvements. . The operating profit in Hedin Bil has improved compared to last year. A lower profitability in sale of new cars, are offset by increased sales and profitability in used cars. The profitability in after sales has also improved by cost savings. Operating profit in Bavaria increased compared to last year, mainly due to efficiency improvements in after sales. Operations in Belgium started last year and are proceeding as planned. In August and September this year, another three dealerships were added. The profit after financial items amounted to kSEK 147,954 (kSEK 112,964). Excluding the effects of IFRS 16 the profit amounted to kSEK 179,133. FINANCIAL POSITION As of December 31, 2019, cash and cash equivalents amounted to kSEK 157,329 (kSEK 99,724). Together with the unused overdraft facilities, there was a payment readiness of MSEK 359 (MSEK 234). The Group's total assets amounted to kSEK 14,322,954 (kSEK 7,681,509) at balance sheet date. Investments during the year in fixed assets and businesses amounted to kSEK 1,484,796 (kSEK 1,247,729). PARENT COMPANY I.A. Hedin Bil AB operations consist primarily of managing and developing its existing subsidiaries, as well as providing intracompany services. The profit after financial items amounted to kSEK -36,718 (kSEK -45,870) and net profit for the year amounted to kSEK 63,297 (kSEK 40,296). PROPOSED DISTRIBUTION OF UNAPPROPRIATED EARNINGS The Board of Directors proposes that unappropriated earnings of kSEK 413,825, be distributed as follows: Carried forward Total Amount in thousand SEK (kSEK) 413,825 413,825 I.A. HEDIN BIL AB / ANNUAL REPORT / 2019 47