Welcome to the Bilia Q3 report for 2023. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answer session, participants are able to ask questions by dialing star five on their telephone keypad. Now, I will hand the conference over to IR, Carl Fredrik Ewetz. Please go ahead.
Thank you very much for the introduction, and a warm welcome to Bilia's Q3 Results Presentation with CEO Per Avander and CFO Kristina Franzén and myself. As you might already have seen, we report stable results with an improved cash flow in the quarter. The agenda is similar to last quarter. We start describing the current market environment in the industry, and we're finishing off with an outlook for the quarter. So, let's start. I'll leave the word to Per Avander.
Thank you very much, Carl Fredrik. And we start with the current market situation in the car industry. There is a very good demand in service business with quite long booking times. New cars has a weaker demand in both Sweden and Norway, especially for pure electrical vehicles. The government in Sweden took off the climate bonus in the end of last year, and the government in Norway added VAT for electrical cars with a price over 500,000 NOK. The fleet business is much more stable with a better demand, and often the customer has a cycle of three years leasing contracts. We have a much better situation in Luxembourg, Belgium, with the demand on new cars at the same level as the last years. In a historical perspective, we have a really high order backlog in Sweden and Western Europe.
The market conditions in Norway are still challenging. High inflation with high interest rates, a lot of floating rate for the Norwegian household, VAT on new cars, fewer company cars, if you compare to Sweden. In Sweden, we had 50% of all new cars is company cars, and in Norway is around 25%. Energy prices is high, and so on. The demand for used cars are on a good level and a little bit better than last year. It's still a consolidation of dealers in the industry. Some brands started many years ago, for example, BMW, and other will follow as Toyota. But the trend is still clear, fewer and bigger dealers. Chinese brands. We see a lot of Chinese brands entering the Nordic market.
Some will succeed and some will lose, and we have now launched XPeng, both in Sweden and Norway, and we have a strong belief in the brand. I can say the start is it has been very, very good. Business models. Agency model. It's a lot of discussion of new business models, especially agency model. It's already introduced by Mercedes-Benz in Sweden, and from a dealer perspective, it works quite well. Lower risk in stock on new cars and demonstration cars, lower cost of marketing, and so on. Some brands as Toyota and Porsche have confirmed that they will not implement agency model. I'll take the next. Net turnover increased by 11% due to growth in the service business and higher deliveries on new, on cars, especially new cars.
We report a result of SEK 335 million and a margin of 3.8%. And as you can see on the right-hand side, it's SEK 1 million more than the last year. Sweden and Western Europe reported higher profitability, but lower result in Norway due to the car business. I'll take the next. On this slide, you can see the quarter three profitability from 2019 to 2023 in each country. Sweden, as I mentioned, is doing it well, SEK 44 million better, and Western Europe, SEK 26 million better than the last year, and it's a new record for a quarter in Western Europe. I will get back to the Norwegian result on the next slides. Service business.
Continued good demand in the service business with quite long booking times, much better compared to the same period last year. We have an organic growth of 11%, a historical strong figure. We report a profitability of SEK 205 million compared to SEK 192 million last year. It is one day less than last year, and both Norway and Western Europe reported a better profitability. And Sweden, it was close, the same level as last year. We see a slight improvement in Norway after we have taken a lot of action as cost reduction, business excellence team from Sweden, helping our manager with, for example, efficiency, processes, and so on in the workshops in Norway.
Car business. Deliveries on new and used cars adjusted for divested and acquired operations were 16% and 3% higher. We report a result of SEK 151 million, close the same level as the last year. Sweden and Western Europe reported a higher result, but lower in Norway. In the used cars business, we report a result of SEK 99 million, compared to SEK 112 million crown last year's. Sweden delivered a much better result, but Norway were far away from the last year's figure. It has been a challenging market in Norway due to Tesla's position as a market leader and their aggressive price reductions. We have a stable order intake in Western Europe compared to Sweden and Norway. For Bilia Group, the order intake were down 23%.
In Sweden, the fleet business is still on a good level, but the private consumers wait and see. The order backlog of new cars is still on a good level. Sweden and Western Europe continue high level in a historical perspective, and Norway at a lower level. Kristina?
Thank you, Per. When it comes to the financial position, I would say that stability is a good way, word to describe our position. We reported a solid cash flow amounting to SEK 269 million, which reflected a decrease in working capital during the quarter. If we compare to last year, it represents an improvement of around SEK 400 million. We have available credit limits with our banks of SEK 2.3 billion, of which around one- third, or SEK 844 million, was utilized at the end of the year.
If we move into the net debt, it also remained on the same level as we had previously during the year, so SEK 2.3 billion, which also then looking into the net debt/EBITDA, means that it remains on a stable level at 1.1 x, which has been the same throughout the year, which is then well below our financial target of 2.0x . Finally, during the quarter, we have made one payment of the four installments of dividends that's been paid, and it now remains two further installments in October and January to complete the dividend in a total of SEK 8.80 per share.
Perfect. Then to the outlook, starting with the service business. The continued interest for used car and new car deliveries and our own improvement, we see good demand and a solid outlook for the service business in Q4. Our customers continue to take care of their cars, even though in even tougher economic times, and we see that continue in Q4. And in Q3, the service business represented 62% of our operating profit. We foresee good demand for used cars in the coming quarter. Like we saw in last quarter, consumers choose to keep their own cars or buying a cheaper used cars. And when it comes to prices for used cars, we see a stable situation during the coming quarter.
Looking at the different types of clients, we see order intake from fleet customers or business customers continue at a stable level in Sweden, while private customers are still in a wait and see mood. This also explain the main weakness in Norway, where fleet business is not as widespread as in Sweden. Even though we have an underlying pent-up demand, we believe private customers will remain somewhat restrained also in Q4 when it comes to new cars in Sweden and Norway due to current uncertainty. On the other hand, Western Europe, we foresee continued stable demand for new cars in the coming quarter. Sustainability always high on the agenda. An increased focus on CSRD reporting requirements is ongoing and will continue in Q4.
And this is obviously an important and necessary operation to establish, to be able to show how well we live up to our ambitions within sustainability. Moving over to consolidation, we believe activity in the M&A market will increase slightly in the coming quarter, where higher financing cost is and will become a reality for many companies. This, in combination with lower new car sales, will most likely push some into uncomfortable territories. We continue to see slightly longer lead times, increased supply, and lower prices. Having said that, we would like to be part of the ongoing consolidation, but we're also prudent and humble in these uncertain times, and we will never put our balance sheet at risk. That finalizes our Q3 presentation, and we can now open up for questions.
If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Simen Aas from DNB Markets. Please go ahead.
Guys, so, so I have a, a few questions. And the first question I have is, is on order intake. So adjusted for M&A, it was down 33% in the quarter. Can you just say something about the trend throughout the quarter? And obviously, this is a big improvement from the first half of the year, and is this the, the rough level we should think about when we look at Q4, or, or how should we think about it?
Yeah. What we can see, as Carl Fredrik mentioned, in Western Europe, it's a stable order intake of new cars. In Sweden, we will see the same phenomenon what we have seen the last year now. And bear in mind that when you compare the figures, it's easier and easier in Q4 because it was a really bad demand in the new car market in Sweden last year, and the same in the Norwegian market. But we can't see the light in the tunnel yet, but what we mentioned, the fleet business, the customer, they take out the new leasing car in the fleet business. But still we see the private consumer, they wait and see, and instead they buy used cars for the moment now.
When you look at the figures, be careful because it was not a good market Q4 last year. It was a phenomenon in November when the government took off the climate bonus. So one week it was a huge order intake, but after that it was really silence for the new car.
Okay, that's very helpful. And then on the same topic, so do you have any visibility on the new car orders for 2024? Or is that too early?
I think that's too early to say, Simen.
There is not a forecast yet for 2024. So the forecast this year is 265,000 new cars, and I guess it will be at least a bit more than the 265,000 new cars. But what we see for our. If you say our forecast, we see a lower market in Sweden than 280,000 in new cars next year.
Okay. Then just one final.
At the recession, I have been in 2008, and the IT crash, 2000, and banking crisis, 1992. So when the private consumers see nothing more happen now, then they start. So we are early out from the recession. But now you don't know the inflation, the interest rates, will they be higher or not? So it's not a stable market for the private consumers yet.
No. Okay, and that's very clear. Then just one last one for me. So you talked about Tesla being very aggressive on pricing in Norway, especially. How do your brands react to that? Do you have any comments around how BMW and Volvo, et cetera, is reacting to that? Just to get a feel for the price levels.
Yeah. From the beginning, all other brands say, "We don't follow Tesla." But what you can see in the market now, and I guess, it's just because you had a lack of components, especially semiconductors, in the past, so you had a demand, but you don't, you didn't have the production. Now, it's the opposite. So what we can see now, the pure electrical vehicles is not increasing pricing for the moment. So it's more and more campaigns from all the other brands to follow Tesla's aggressive pricing in the market in both Sweden and Norway. But it hits us more in Norway because they are market leader there with a market share over 20%. It's not the same in the Swedish market.
Okay. That's very helpful. Okay, thank you, guys. And, I'll jump out and let others do some questions. So thank you.
Thank you, Simen.
As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Thank you very much for listening to our Q3 results. If you have further questions, do not hesitate to reach out to us, and have a good day. Thank you very much.
Thank you very much.