Anders Rydheimer, CMO

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3 Anders Rydheimer, CMO

4 Digital Transformation New types of Ownership Fuel Transformation Autonomous Driving Transformation of the Automotive Industry Care By Volvo Future Workshop demand Digital Services Consolidation of Workshops Private Leasing

5 Anders Rydheimer Per Avander Stefan Nordström Frode Hebnes Joel Graffman Kristina Franzén Welcome Bilia Bilia in Europe Bilia s business in a market with electrical vehicles Digital Transformation Private Leasing Questions & Answers Lunch and test drives

6 Per Avander, CEO

7 Jansep 2017 Number of new cars 41,250 41,100 48,000 39,600 Number of used cars 36,300 37,550 43,600 36,150 Turnover vehicles, SEK M 14,950 15,700 18,550 16,050 Turnover service, SEK M 4,250 4,500 5,300 4,300 Turnover fuels, SEK M 1,050 1,000 1, Number of employees 3,521 3,613 4,327 4,553 Turnover, SEK M 19,450 20,450 23,900 20,300 Balance sheet total, SEK M 7,000 7,450 10,150 10,550 Number of facilities

8 Number of new vehicles 27,873 25,720 Bilia s market share 8.7 % 8.3 % Bilia s market share per brand Volvo Renault Dacia BMW MINI Toyota Lexus Brand 25 % 25 % 17 % 28 % 26 % 21 % 43 %

9 Cars and l.c. vehicles Orders Deliveries Backlog Jan-Sep 2017 Change prev year Jan-Sep 2017 Change prev year Sep 2017 Sep 2016 Sweden 27,198 0 % 27,873 8 % 7,357 8,281 Norway 7, % 7, % 2,980 2,766 Germany 1, % 1, % Luxembourg 2, % 2, % Belgium 1,306 - % 1,284 - % Total 39,693 6 % 39, % 11,441 12,082

10 SEK M Q Q Jan-Sep 2017 Jan-Sep 2016 Sweden Norway Western Europe Total cars Bilia AB, others Operational earnings Operational margin, % Net profit for the period Earnings per share, SEK Operating cash flow

11 Turnover Operating profit Jan-Sep 2017 Jan-Sep 2016 % Jan-Sep 2017 Jan-Sep 2016 % Car Business 16,032 13, Service Business 4,303 3, Fuel Business

12 Turnover 2,884 2,919 2,858 3,137 3,755 4,303 Operating profit Operating profit (%)

13 Isolated quarter 3 Acc. January-September Change against prev. year Sweden Norway Total Sweden Norway Total Underlying turnover 12.8% 5.0% 10.5% 8.0% 4.4% 7.0% Calendrar effect 1.5% 1.5% 1.5% 0.5% 0.5% 0.5% Adjusted turnover 14.3% 6.5% 12.0% 8.5% 4.9% 7.5%

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17 Hedin Bil AB acquires Bavaria in Sweden and Norway

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27 Petrol? Diesel? (Euro 3, Euro 4) Pure electric vehicles? Plug-in hybrids? Hybrids? Hydrogen, fuel cells?

28 Best Partnership and Transparency with our manufacturers

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30 The best service company in the business

31 Strong leadership

32 Energy Benchmark 34% 70% 4% 22% 1% 3% Clarity

33 Strong leadership Happy employees

34 Benchmark Dedicated 37 % 43 % 26 % Satisfied 35 % 35 % 44 % Passengers 11 % 9 % 8 % Unfocused 7 % 6 % 11 % Bored 10 % 7 % 12 %

35 Strong leadership Happy employees Happy customers

36 Sales Service Sweden Bilia Sweden Bilia Sweden Volvo 80,6 77,5 65,7 61,6 BMW 94,5 92,5 86,5 83,3 Toyota 70, ,7 54,3 Norway Bilia Norway Bilia Norway Volvo 86,8 85,3 70,0 67,8 BMW 95,5 94,3 88,9 83,8 Toyota 96,4 92,9 88,0 86,7

37 Strong leadership Happy employees Happy customers Happy shareholders

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42 Service 37

43 Service subscriptions The goal is to tie the customer to Bilia Attractive car ownership for our customers 70,000 90,000 subscriptions Target: 100,000 subscriptions 38

44 Tyre hotels 39

45 Tyre hotels 221, ,000 tyres Target: 350,000 tyres 40

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47 Our advantage: Sells 100,000 new and used vehicles/year Our challenge: Tie the customer closer to Bilia in the tough competition Service subscriptions & tyre hotels The customer visits Bilia facilities 3-4 times/year 43

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49 Organic Acquisition Goal: 5-10 % per year

50 From a production organization to a sales organization approximately 600,000 unique workshop customers yearly Business development organic growth: Tyres Glass repair Change brake fluid

51 Big drive Increased focus on our glass centres in Sweden We changed 30,000 (27,000) windscreens during 2016 We repaired 29,000 (27,000) chips during 2016 We are 280 (260) educated glass repairers

52 Service Business only: Kungsbacka - BMW sales and workshop Nacka paint shop Lidingö - Volvo workshop Malmö, Limhamn - Volvo workshop Uppsala paint shop Malmö tyre centre Stockholm tyre centre Stockholm, Haninge BMW workshop

53 Brands - BMW - Volvo - Toyota - Lexus Countries - Sweden - Norway - Belgium - Luxembourg Service market - Workshop acquisition - Tyre retailer - Vehicle recycling plant Organic growth - Service market

54 Toyota Norway Trondheim and Tønsberg Kaiser Bil Lexus in Stockholm and Malmö Dörr & Hess BMW and MINI in Germany Hedbergs Bilskrot AB Auto salvage business in Västerås Arnold Kontz BMW and MINI in Luxembourg Philippe Emond BMW and MINI in Belgium Biva Bergslagen AB Toyota in Västerås and Bergslagen VRT Bil AB Toyota in Kristianstad ANA Bil AB BMW and MINI in Trollhättan and Uddevalla Schäfer BMW and MINI in Germany Metro Auto Toyota in Stockholm and Eskilstuna Allbildelar Huddinge AB Vehicle recycling plant in Stockholm Wölkes Bil BMW and MINI workshop in Gothenburg Bilsalongen AS BMW and Mini in Skien, Norway

55 Jan- Sep 2017 Net debt comp. to EBITDA, times Net debt / equity ratio, times , Bank loan, SEK M -1, Bond loan, SEK M ,000 Equity / assets ratio, %

56 Stefan Nordström, Deputy CEO

57 Large market share in Sweden and Norway

58 Large market share in Sweden and Norway BMW wanted a strong partner in Europe

59 Used cars sales Workshops Customer satisfaction Employee satisfaction

60 Large market share in Sweden and Norway BMW wanted a strong partner in Europe Growth strategy - brands

61 Brands BMW Volvo Toyota Lexus

62 Large market share in Sweden and Norway BMW wanted a strong partner in Europe Growth strategy - brands Ten countries eventually became three

63 Large market share in Sweden and Norway BMW wanted a strong partner in Europe Growth strategy - brands Ten countries eventually became three

64 Population 578,000 Cross border workers 177,000 High annual income per inhabitant, 100K BMW is number one in the premium segment BMW is number two in size after Volkswagen BMW has a market share of 9.5 %

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66 Turnover: SEK 1.1 bn New cars: 2,500 Used cars: 1,200 Employees: 150 7

67 Cars Jan-Sep 2017 Jan-Sep 2016 Change Number Change % Annualized 2017 Luxembourg 40,872 39,383 1, ,000

68 Luxembourg Jan-Sep 2017

69 At the time of the acquisition Today Cars in stock Turnover rate Cars in stock Turnover rate Luxembourg

70 Sales BMW Service BMW Sales MINI Service MINI Luxembourg

71 Response rate BM 100% 80% % 40% 20% 0% Bilia Luxembourg Bilia Belgium Bilia Germany BILIA-EMOND BE

72 2017 BM Team Efficiency Index Leadership index Engagement Index Net promoter score 8

73 Population 11.2 Mn Three official languages: French, Dutch and German Large market BMW is number one in the premium segment BMW has a market share of 7.9% Very close to Luxembourg

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75 Turnover: SEK 800 M New cars: 1,700 Used cars: 1,100 Employees: 110 8

76 Cars Jan-Sep 2017 Jan-Sep 2016 Change Number Change % Annualized 2017 Luxembourg 40,872 39,383 1, ,000 Belgium 435, ,382 10, ,000

77 Jan-Sep 2017 Luxembourg Belgium

78 At the time of the acquisition Today Cars in stock Turnover rate Cars in stock Turnover rate Luxembourg Belgium

79 Sales BMW Service BMW Sales MINI Service MINI Luxembourg Belgium

80 Response rate BM 100% 80% % 40% 20% 0% Bilia Luxembourg Bilia Belgium Bilia Germany BILIA-EMOND BE

81 2017 BM Team Efficiency Index Leadership index Engagement Index Net promoter score

82 Population 82.6 Mn Very large market The home market of BMW, Mercedes, Volkswagen and Audi A market in need of consolidation Frankfurt a new financial centre? BMW has a market share of 7.5%

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84 Turnover: SEK 1.1 bn New cars: 1,600 Used cars: 2,000 Employees: 260 6

85 Cars Jan-Sep 2017 Jan-Sep 2016 Change Number Change % Annualized 2017 Luxembourg 40,872 39,383 1, ,000 Belgium 435, ,382 10, ,000 Germany 2,611,821 2,555,783 56, ,430,000

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89 Jan-Sep 2017 Luxembourg Belgium Germany

90 At the time of the acquisition Today Cars in stock Turnover rate Cars in stock Turnover rate Luxembourg Belgium Germany

91 Sales BMW Service BMW Sales MINI Service MINI Luxembourg Belgium Germany 9,9 9,5 9,8 10,0

92 Response rate BM 100% 80% % 40% 20% 0% Bilia Luxembourg Bilia Belgium Bilia Germany BILIA-EMOND BE

93 BM Team Efficiency Index Leadership index Engagement Index Net promoter score -1

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95 Purchasing Marketing & communication IT Property Human Resources, pay role Delivery administration Finance department Customer service / Telephone switch Register maintenance and warranty management Digital transformation

96 Significantly fewer employees Centralized departments add higher quality and better efficiency Support to managers Managers have greater focus on sales of goods and services Managers have more time to coach their staff

97 Synergies between Belgium and Luxembourg On going Merging all companies in Germany Done IT migration Germany and Luxembourg Done Centralization finance Germany 2017 Centralization delivery department Germany 2017 Centralization switchboard, pilot Germany 2018

98 Bilia Europe Jan-Sep 2017

99 SEK 3 bn 2017

100 Present Markets Sweden Norway Luxembourg Belgium Germany Evaluation of potential markets England Finland France Switzerland Austria Poland

101 Frode Hebnes, CEO Bilia Norway

102 Number of new vehicles 7,138 6,492 Bilia s market share 5.0 % 4.6 % Bilia s market share per brand Volvo BMW Toyota Lexus Brand 34 % 29 % 7 % 18 % Cars Jan-Sep 2017 Jan-Sep 2016 Change Annualized 2017 Norway 116, , ,000

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111 Ev subsidies; Car tax; kr. 0,- VAT; kr. 0,- Toll; kr. 0,- Parking; kr. 0,- Charging; kr. 0,- Comp.car tax; 50% Bus & Taxi lane

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113 The Oslo market; - Gasolin; 21,4% - Diesel; 18,8% - EV 28,1% - PlugIn Hybrid; 19,1% - Hybrid; 12,1%

114 Tax ,- x cars = 22 bnok Tax ,- x cars = 14 bnok

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118 An American sedan with rear wheel drive!

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129 Norway YTD (Sep 17) BMW i3 BMW 3-series ( 14-17) Change in turnover Yearly decline until 2035 Total average service turnover per car ~23 NOK ~26 NOK -12% - ~1%

130 Norway YTD (Sep 17) BMW i3 BMW 3-series ( 14-17) Change in turnover Yearly decline until 2035 Total average service turnover per car ~23 NOK ~26 NOK -12% - ~1%

131 Norway YTD (Sep 17) BMW i3 BMW 3-series ( 14-17) Change in turnover Yearly decline until 2035 Total average service turnover per car ~23 NOK ~26 NOK -12% - ~1%

132 250 Results in msek from Bilia in Norway 100% % 62% 74% 77% 72% 72% 80% % 56% 60% % 40% % Q Annualized 17 Service Car Service %-share of EBIT 0%

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134 5 7 New BMW Service only by Bilia from August work stations Increased BMW service capacity with 4 work stations as from May

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136 Kristina Franzén, CFO

137 Question: How are leasing to consumers included in the financial reporting?

138 Bilia has agreements with finance companies to buy back cars at the end of a leasing period, at a residual value determined at the start of the leasing period This includes leasing to corporations, consumers and leasing of Bilia s own demo and rental cars - For corporations buy-back agreements exists in Sweden and Norway for Volvo, Renault, BMW and Toyota - For consumers buy-back agreements exists in Sweden for Volvo and Renault Total leasing stock to consumers (guaranteed residual value) is 8,700 cars as of September The stock consist of 65 % Volvo and 35 % Renault - The split between petrol and diesel in the Volvo stock is 50/50 - The split between petrol and diesel/electricity in the Renault stock is 90/10

139 1. A customer put an order for a car with a leasing agreement 2. Bilia delivers the car to the customer. 3. The transaction is reported as an operational lease by Bilia. What does it mean? The balance sheet increase with the value of the leased cars sold with a repurchasing condition at a pre-determined residual value. A monthly payment is calculated based on an expected residual value and interest rates. Bilia sells the car to a finance company and receives money. The finance company handles the future payments for the leasing, as long as the customer pays. Bilia reports the cars as an asset and the future leasing payments as a liability in the balance sheet. The sale and the profit is removed from the income statement and reported as a deferred income in the balance sheet. The realised profit of the sale of the car is not reflected in the income statement but instead deferred in the balance sheet.

140 Leased vehicles in the balance sheet 31 st of December 2016 The leased vehicles comprise of some ; Leased vehicles to coporations 1,300 SEKM Leased vehicles to consumers 1,200 SEKM Rental cars 240 SEKM

141 Future leasing payments (including residual values) for leased vehicles 31 st of December ,517 SEKM (Excl rental cars) This is profit deferred in the balance sheet for sale of leased cars with a predetermined residual

142 What does it mean? 4. The customer pays to the financing company during 6 months. 5. The leased vehicles are depreciated during 36 months down to the agreed residual value. 6. An impairment is made if the expected market price* is lower than the pre-determined residual value of the car. Sales and depreciation are reported in the income statement on a straight line basis during the leasing period. The leased vehicles and the liability for the future leasing payments are decreased accordingly. The deferred income is amortised into the income statement by 6/36 parts i.e.17% of the profit using the straight line method. Bilia depreciate the car to the pre-determind residual value on a straight line basis i.e. 6/36 part is included in the income statement. Ten times per year the residual value is compared to an expected market price* from an external source. If the market price is lower, an impairment is made. Impairment is made if the expected market price* is lower than the predetermined residual value. *Market price = Expected sales price less selling expenses of 8 %

143 The sale of the leased cars are amortised over the leasing period. This is the sale ( including rental cars ) amortised during The leased cars are depreciated to the predetermined residual value. The income on the sale of the leased cars are amortised over the leasing period. This is the depreciation and income amortised during Effect on profit was 59 SEKM.

144 Leased vehicles of 2,744 SEKM was impaired by 4 SEKM end of In some cases an impairment is made at the start of the leasing contract and supported by contributions from the car manufacturer impacting the deferred income. No impairment was made in 2016 or When an impairment is made; step 1 is to decrease the deferred gain in the balance sheet down to zero. step 2 is to take a cost in the income statement.

145 7. The finance company sells the car to Bilia at the predetermind residual value. Bilia sends a payment to the financing company. 8. The car is sold as a used car by Bilia. The value of the car does not exceed the market price* as impairments are made when needed. What does it mean? The car is bought from the finance company by Bilia at the residual value. This is already the book value in the balance sheet of Bilia as it has been depreciated during the leasing period. The leased vehicles are already included in the balance sheet. The car is reclassified from leased vehicles to used car. No liability remain in the balance sheet. The sale of the car is reported as a sale of a used car. The car is handled by the used car team and sold at market price.

146 If the market price for the car is lower then the residual value at the end of the leasing period Bilia has the price risk for the car Impairment analysis are made ten times a year. 1. The deferred income on the sale is reduced as a first step 2. When the total income on the sale is consumed the impairment is charged to the income statement as a cost

147 Leasing to consumers ties the customer closer to Bilia Customers get a package including; - Service agreements - Insurances - Financing We have a 100 % coverage for these customers versus around % in average for non leasing customers

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