Solar — Earnings Release 2016

Oct 28, 2016

We adjust our outlook for 2016 revenue from around DKK 10.9bn to around DKK
11bn and reconfirm our outlook for 2016 EBITA, although Q3 EBITA was slightly
below our expectations.

CEO Anders Wilhjelm says:
”Costs from innovation and business development impacted our Q3 results and we
also saw some non-recurring costs. However, we are determined to invest in our
digital platforms to strengthen the customer experience, just as we are
investing in growth in our new businesses MAG45 and EBS. We believe in
networked development, and an outcome of this belief is our recent investment
in two digital start-ups, GenieBelt and Minuba.”

Financial highlights (DKK million)* Q3 2016 Q3 2015 Q1-Q3 Q1-Q3
2016 2015

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Revenue 2,595 2,449 8,062 7,768

EBITA 67 89 176 197

Earnings before tax 44 65 109 135

Cash flow from operating activities -7 -68 -218 -193

Financial ratios (%)

Organic growth adj. for number of 3.1 3.8 0.9 6.6
working days

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EBITA margin 2.6 3.6 2.2 2.5

Net working capital, period-end/revenue 12.2 13.3 12.2 13.3
(LTM)

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Net working capital, average/revenue 10.9 12.2 10.9 12.2
(LTM)**

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Gearing (NIBD/EBITDA), no. of times 1.4 1.0 1.4 1.0

Return on invested capital (ROIC) 7.5 2.0 7.5 2.0

• Due to our divestment of the assets of Solar Deutschland GmbH, 2015 and 2016
  figures in this announcement relate to our continuing operations.
  ** Calculated as an average of the past four quarters’ inventories, trade
  receivables and trade payables.

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Q3 2016 revenue

-- Organic growth was 3.1% against 3.8% in Q3 2015, adjusted for the number of
working days.

Q3 2016 EBITA

-- Q3 EBITA was slightly below our expectations.
-- Compared to Q3 2015, the increase in both external operating costs and
staff costs was mainly related to the acquisitions of MAG45 and EBS,
innovation and development, as well as non-recurring costs.
-- In addition, MAG45’s strategy of identifying growth opportunities was
brought forward, which means that costs relating to recruitment and
restructuring were also brought forward.

2016 outlook

-- In Q3 2016, organic growth amounted to 3.1% with a better performance in
the last part of the quarter. However, sales mix in Denmark was somewhat
unfavourable from a margin perspective. This trend is expected to continue
into Q4.
-- Consequently, we now expect both modest market growth and organic revenue
growth in 2016, giving us a revenue outlook of around DKK 11bn whereas we
previously expected revenue of around DKK 10.9bn.
-- We reconfirm our outlook for EBITA, expecting EBITA to remain at 2015
levels less the positive one-off of DKK 9m from a change in pension plans
in the Netherlands that we saw in 2015, giving us an EBITA outlook of
around DKK 287m.
-- As previously announced, we are investing in our digital platforms to
strengthen the customer experience, and we are investing in growth in our
new businesses MAG45 and EBS. Together, this will have a negative impact on
our profitability for 2016.

Audio webcast and teleconference today

The presentation of Quarterly Report Q3 2016 will be made in English on 28
October 2016 at 11:00 CET. The presentation will be transmitted as an audio
webcast and accessible via www.solar.eu. Participation will be possible via a
teleconference.

Teleconference call-in numbers:

DK: tel. +45 354 455 83
UK: tel. +44 203 194 0544
US: tel. +1 855 269 2604

Yours faithfully

Solar A/S

Anders Wilhjelm

Enclosure: Quarterly Report Q3 2016, pages 1-28.

Facts about Solar

Solar Group is a leading European sourcing and services company, operating
primarily within the electrical, heating and plumbing, and ventilation
technology sectors. Our core business centres on product sourcing, value-adding
services and optimisation of our customers’ businesses.

Being a sourcing and services company, we focus on each individual customer. We
always strive to understand our customers’ unique and genuine needs in order to
provide relevant, personal and value-adding services, turning our customers
into winners.

Solar Group is headquartered in Denmark, generated revenue of approximately DKK
10.6bn in 2015 and has some 3,000 employees. Solar has been listed on Nasdaq
Copenhagen since 1953, and operates under the short designation SOLAR B. For
more information, please visit www.solar.eu.

Disclaimer

This announcement was published in English and Danish today via Nasdaq
Copenhagen. In the event of any inconsistency between the two versions, the
English version shall prevail.