Good afternoon. I wish you all welcome to the telephone conference about Telia's First Quarter Results for 2021. May I ask you all to mute your phones while we have the presentation? And then you will be able to put some questions. My name is Kristina Fransen, and I'm the CFO of BBIA.
And together with me, I have
Pera Vander, Managing Director for BBIA AB. And we would like to start with some highlights. And of that, as Kristina said, we can have Q and A. And I will start. We reported operating profit of SEK 528,000,000 compared to SEK 279,000,000 last year.
It's an improvement of close 90%. It's the highest result and margin for the 1st quarter And the 2nd highest quarter ever. The margin in the business, it was 5.6 percent compared to the last year, 3.7%. Norway stands out in the report. The profitability was SEK 206,000,000 compared to SEK 52,000,000 the last year.
It's a new record quarter for Norway. We divide our business in 3 business areas. We have the service business, car business and we have the fuel business. And today, we We'd like to have information about the service and the car business. If we start with the service business, We had a profitability of SEK 390,000,000 compared to SEK 263,000,000 last year.
We have an improvement of the profitability in all countries, but we can say Norway stands out In a positive way in the service business as well. We had one day less In all our countries for the quarter. If we talk about the growth in the service business, We had in the BLEA Group 7% in the group. Norway improved 26%, Sweden, minus 1% due to our body and paint shop. The demand in the body and paint shop in the quarter was a little bit weak.
A lot of inhabitants in Sweden, they are working from their homes. So there is not the Q in the traffic and it's less accident. We have talked to the insurance companies. So We don't what you say in English. Reduce our market share in the body and paint shops.
If we go to the car business, we had the profitability of SEK 220 SEK 5,000,000 compared to SEK 80,000,000 last year. In the new car business, We have an improvement of the profitability of a little bit over SEK 100,000,000. And for the used cars, it was close €100,000,000 in improvement. The used car business, the demand in the quarter was Strong, and we had a really good margin. And we sold much more exclusive And more expensive cars in the quarter if you compare to the year the last year.
New car business, the turnover improved 36% due to changing in the tax system for new cars in Sweden. The government, you can say they support or they move some money from plug in hybrids to pure electrical vehicles. So in the end of March, we delivered a lot Of diesel and petrol engine and plug in hybrids. And I guess now in Q2, we will deliver More pure electrical vehicles. In order taking, we improved 11% compared to the last year.
Sweden, 8% Norway, 30% and West Europe, only 2%. In Germany, we have closed all our showrooms for in the quarter. So we had a lot of minus when we talk Germany. It is a bit better in Luxembourg and Valeo. In Norway, we launched pure electrical vehicles from BMW and Volvo in the quarter.
So the order taking has been very strong in Norway. The backlog, It's a little bit over 13,500 cars compared to the last year, it was 160 less cars. The backlog in Norway improved 55% compared to the last year. It's enough.
If we look at operational cash flow, we had a slightly negative operational cash flow that primarily came from a higher working capital. That's related primarily to accounts receivable because there were very high deliveries of cars both in Sweden and Norway by the end of the year. We also had a somewhat higher level of inventory. However, given that we were on running on very low levels by the year end, we believe that was even good and actually means that we have a good level of inventory as of today. If we look at our financial position, even if we had a slightly negative cash flow for the period, we still have a receivable towards the bank announced almost SEK 1,400,000,000 compared to the SEK 1,800,000,000 we had at year end.
It means when we look at the net debt that now for the Q1, we actually had a little bit of a net debt amounting to SEK 40. Some of you might know that we actually have a positive net debt by year end. It also means that net Debt EBITDA is now more or less on 0 compared to being on the positive side of this period. If you look at the net debt and include the IFRS SEEN liabilities. There were an increase of around SEEN 900,000,000 and out of that actually SEEN 600,000,000 came from the new leasing contracts for the new facility in Stockholm, which is one of the biggest we have and is now then newly built and a very fresh facility for us to use?
Yes. We have acquired a lot In the quarter one, one example is rim repair. The company's name is Celltechnik, I as in Norway. And we took over the business in January. In Sweden, we will start rim repair as well.
In Jan Koping and in Stockholm. We have acquired a poor company in South Sweden, Helsingborg and Malmo, and we will take over it in May this year. The same for Fundermaj, Toyota business in you can say the west southwest From Oslo area in Norway, and we will take over it as well in May. And we announced last Friday, We will acquire a Mercedes dealer in Stockholm with 4 outlets. And we see we can take over it the 1st July.
And one question can be why we acquire more of other brands into our portfolio. But what we can see, Porsche is a strong brand. And today, Porsche is not only a sports car. Today, they sell a lot of SUV to company as a company cars. Mercedes, a premium brand, really strong brand in both in Sweden and in Europe.
So we like it a lot. We had a discussion with Volvo. They terminated our contract in November last year. And what I can see today and let's say and see today, we have a really good dialogue with Volvo both in Sweden and Norway. And when we acquired Mercedes, We have a new business area, trucks.
Many, many years ago, around 20 years ago, Velia had Volvo trucks in the portfolio at that time. But now we acquire Mercedes and we will start to sell trucks. It's a stable business, and we see really loyal customer, Big service business, but we can see a lack of concepts And some processes. And if we can do what we have done in the passenger cars, The same in the service business for trucks. It can be really, really good.
If we go to the total market, in Sweden, Last year, it was close to 300,000 new cars registered. And this year, the forecast is 300,000. The Q1, it's improvement of the new cars into the market. But There is a discussion for the moment now. What will happen with the tax of company cars?
The government will take a decision in the beginning of June, and maybe it will be a little bit cheaper for It will be cheaper for exclusive cars. And for cheap cars, the tax For the driver will go up. So let us see what happened with the new car market in Sweden. In Norway, we sold 140,000 last year and the forecast is the same level. It's a really good backlog for Belia, our competitors or colleagues as well.
So I guess it's a little bit too low figure. In West Europe, there is no official forecast for the total market of new cars. But I guess, Germany, there is a lockdown for the moment. So it will be a weak new car market. Luxembourg, a little bit better And Belgium, a little bit better if you compare to the last year.
A few words about COVID-nineteen, the pandemic and what has happened during the quarter. We have actually had Some COVID-nineteen restrictions have been closed down our facilities in all our countries with the exception of Sweden. It has been to a different extent in the different countries. And I think the overall assessment is that it has affected the less than it did last year. For example, the sales business was closed.
However, we could still have customers into the facility on a one to one basis. Given the spreading of the virus, of course, safety for the customers as well as our personnel has been the highest priority, and we continue to learn how to develop those safety measures all along the development of the pandemic, of course. When it comes to the cost aspects, we are still focusing on cost. However, we are also running the business on a more normalized level, what is less off compared to before is perhaps primarily travels, some educations and events where there is a lot of people gathered together. If we look at recruitments, we have increased the number of people compared to the year end.
But if you would compare with the same time last year, we are actually a little bit about 300 persons less in the group than we were 1 year ago. When it comes to financial support from governments For the pandemic, we have used that to a very limited extent during the Q1. It's DKK 2,000,000 and that has been a positive or a lower cost compared to normal business. And those money was referring to Western Europe. So when it comes to Sweden and Norway, there are no financial support from government at all included in the results.
Okay. If we are looking forward to quarter 2, we see we will have a good demand in the Service business and still have a good demand for used cars and good demand for new cars in Norway And Luxembourg and Belgium. But what I said before, let us see what happened With the taxation system for company cars in Sweden in the beginning of June. And after that, we can see better what happened with the demand for new cars in Sweden. Yes, Kristina.
I think it was all from us now. Maybe we
have some
questions. Is there any questions from anyone?
Hi, this is Miguel from Handelsbank. Can you hear me?
Yes, we hear you, Miguel.
Yes. Could you open up the situation in the used car business a bit more market by market? What kind of inventory levels do you have there? And then the sort of Pricing environment in the used car business, are the prices still on the rise? Or what's happening there?
The inventory levels for used cars in the different countries and the pricing position?
Yes. We see The level of used car in our stocks is in a normal level. So we have a good situation. If you go back 1 quarter, we had a lack of used cars, and we were a little bit afraid we had less used car in the business. We see we have much more cars today in our outlet, 1,000,000 outlet for older used cars.
Norway, we have a better situation as well. And we see the demand is really good. And often In the spring, we have a good demand for used cars because and I see this summer A lot of inhabitants, both in Sweden, Norway, Belgium, Luxembourg, they will have holiday at home. So they will use their cars a lot in the summer and then they invest for a newer car. So what we can see now, we will have a good demand.
We will have a good margin as well in the used car business. Something more
about the pricing in the market generally, how the prices came up?
We see we will have the same pricing as we have today and maybe the same level No, in quarter 2. We are often afraid and see When we take some of the margin to have a high turnover rate when we see in the total market it's too much Used car in the market. We don't like it. But now we see it's a normal market For our competitors as well, it's a good level of pricing. It will be a good level of margin in quarter 2.
Okay, good. Thank you very much.
Are there any other questions?
About Norway there, I mean, it's a very strong earnings performance in Norway. And I guess, Is it sort of boosted by the used car and new car deliveries? Or is it more that Norway had sort of come into another sort of Situation that you have a structure now that are Yes.
Yes. One reason is the cost side because you have, as Christina said, Less of education. We stopped lots of projects. The cost level maybe will increase a little bit In the rest of the year for Norway. And we have had a really strong situation.
We launched, as I said, BMW I4 now and we have a really good order taking of the car. We have launched Pure electrical vehicles from Volvo. So we have a really good momentum, you can say, in the new car business For the moment and the Norwegian people, they invest a lot in cars for the moment in Norway. To go to the south for holidays, they are standing in Norway. So it's not easy to say if we have this level the rest of the year.
And the demand in the Service business has been very strong as well. And one reason there is we had a contract now with Polestar. We don't sell Polestar in Norway, but we help them to deliver the cars And we have a sort of, you can say, delivery service and we sell accessories to the car, winter tires And other accessories.
So we
had employed more mechanics in the Norwegian business It's one reason as well. So it's not easy to say we will have the same In the end of this year, the same level of profitability. I don't think so. When I talk about the cost side, I see we will increase a little bit there.
And quarter over quarter, I think we had the Polestar services added on the second half of last year. So year over year that will not make a difference by the end of the year.
But Costa, is that sort of a long term contract for you? Or is it sort of
year by year? Yes. No, It's a normal contract as we have with all our brands. And Why are we talking about it? We had if you remember, we had Ford in Okkern, 1 of the biggest Outlets we have in the middle of in the city, Norway.
And we closed down And terminated the contract for the sales and the workshop for Ford maybe 6 years ago. And there, we have opened up now. So we paid the rent already and we paid the heat, everything we are paying it and we have employed some more mechanics. So it's a really good business for the moment.
No extra fixed costs. No. Yes, some smaller variables.
Yes.
Okay. Thank you.
Thank you, Matt. Any other questions from anyone? Okay. If there are no other questions, I think we end here now. And if there is anything that comes up, You're of course welcome to contact either myself or Per Avanti, if there is anything we should clarify.
Yes. Thank you very much and goodbye.
Thank you, Julien. Have a nice day.