Solar — Interim / Quarterly Report 2021

Aug 12, 2021

Untitled Solar A/S LEI: 21380031XTLI9X5MTY92 Industrivej Vest 43, DK-6600 Vejen, Denmark Tel. +45 79 30 00 00 CVR no. 15 90 84 16 www.solar.eu IN Q2 SOLAR DELIVERED AN EBITDA INCREASE OF 66% In July, revenue and EBITDA guidance were revised upwards by DKK 350m and DKK 100m to DKK 12,100m and DKK 825m, respectively, see announcement no. 15. CEO Jens Andersen says: "We delivered our second upward guidance revision just six months into our Core+ strategy period. All our four strategic focus areas are showing traction across markets and have contributed significantly to the strong results. We see strong performance within all our segments. We are particularly satisfied with our Industry segment where OEM and MRO are picking up. At the same time, our concept share of revenue has increased to a new all-time high of 22%. We see strong performance in all our markets especially in Solar Nederland that achieved a concept share increase of more than 2%-points. We distributed extraordinary dividends of DKK 110m to our shareholders, whereby the total dividend payment year to date was DKK 314m corresponding to DKK 43 per share of DKK 100. The impressive results could not have been achieved without the dedicated and hard work by our employees, whom I want to thank – they are the foundation for our success.” Q2 key financial messages • EBITDA margin up by 2.2%-points, almost 50% increase • One-off price effects resulted in a positive impact of approx. DKK 30m of the gross profit, corresponding to a gross profit margin improvement of approx. 1%-point • 2021 guidance: Revenue of DKK 12,100m and EBITDA of DKK 825m • Return on invested capital (ROIC) increased to 21% from 10% Financial highlights (DKK million) Q2 2021 Q2 2020 H1 2021 H1 2020 Revenue 3,098 2,745 6,102 5,790 EBITDA 211 127 415 269 Cash flow from operating activities 351 282 263 239 Financial ratios (%) Organic growth adj. for number of working days 8.6 -1.6 3.8 0.0 EBITDA margin 6.8 4.6 6.8 4.6 Net working capital, end of period/revenue (LTM) 10.9 11.9 10.9 11.9 Gearing (NIBD/EBITDA), no. of times 0.4 1.5 0.4 1.5 Return on invested capital (ROIC) 21.0 10.2 21.0 10.2 12 August 2021 Announcement no. 16 2021 Solar A/S LEI: 21380031XTLI9X5MTY92 Industrivej Vest 43, DK-6600 Vejen, Denmark Tel. +45 79 30 00 00 CVR no. 15 90 84 16 www.solar.eu 12 August 2021 Announcement no. 16 2021 Audio webcast and teleconference today The presentation of Quarterly Report Q2 2021 will be made in English on 12 August 2021 at 11:00 CET. The presentation will be transmitted as an audio webcast and will be available at www.solar.eu. Participation will be possible via a teleconference. Teleconference call-in numbers: DK: tel. +45 787 232 50 UK: tel. +44 333 300 9035 US: tel. +1 646 722 4956 Contacts CEO Jens Andersen - tel. +45 79 30 02 01 CFO Michael H. Jeppesen - tel. +45 79 30 02 62 IR Director Dennis Callesen - tel. +45 29 92 18 11 FACTS ABOUT SOLAR Solar is a leading European sourcing and services company mainly within electrical, heating and plumbing, ventilation and climate and energy solutions. Our core business centres on product sourcing, value-adding services and optimisation of our customers’ businesses. We facilitate efficiency improvement and provide digital tools that turn our customers into winners. We drive the green transition and provide best in class solutions to ensure sustainable use of resources. Solar Group is headquartered in Denmark, generated revenue of approx. DKK 11.5bn in 2020 and has approx. 2,900 employees. Solar is listed on Nasdaq Copenhagen and operates under the short designation SOLAR B. For more information, please visit www.solar.eu . Disclaimer This announcement was published in Danish and English today via Nasdaq Copenhagen. In the event of any inconsistency between the two versions, the Danish version shall prevail. Solar A/S CVR no. 15 90 84 16 Q2 2021 MANAGEMENT REVIEW 3 Financial highlights 4 Business update 10 Financial review 13 Guidance 14 Shareholder information We are a leading European sourcing and services company mainly within electrical, heating & plumbing, ventilation, and climate & energy solutions. A DIGITAL COMPANY >60% e-business share OUR MARKETS Denmark, Norway, Sweden, the Netherlands, Poland & the Faroe Islands OUR 20212023 STRATEGY IS ENTITLED CORE+ AND HAS FOUR STRATEGIC FOCUS AREAS TRADE CLIMATE & ENERGY INDUSTRY CONTENTS CONCEPTS FINANCIAL STATEMENTS 16 Statement of comprehensive income 17 Balance sheet 18 Cash flow statement 19 Statement of changes in equity 21 Notes 26 Quarterly figures 29 Statement by the Executive Board and the Board of Directors SOLAR Q2 2021 2 MANAGEMENT’S REVIEW Q2 FINANCIAL MESSAGES • With 8.6% in organic growth, we realised stronger growth rates than anticipated in all markets. • Project Better Business and a strong ongoing development in concept sales contributed to a gross profit margin of 22.0%. The gross profit margin increase attributes to all markets. • One-o price eects resulted in a positive impact of approx. DKK 30m of the gross profit, corresponding to a gross profit margin improvement of approx. 1 percentage point. • Return on invested capital (ROIC) increased to 21% from 10%. Q2 H1 Year Consolidated (DKK million) 2021 2020 2021 2020 2020 Revenue 3,098 2,745 6,102 5,790 11,465 Earnings before interest, tax, depreciation and amortisation (EBITDA) 211 127 415 269 637 Earnings before interest, tax and amortisation (EBITA) 166 81 323 178 455 Earnings before interest and tax (EBIT) 153 65 296 147 248 Earnings before tax (EBT) 156 153 279 198 300 Net profit for the year 148 141 248 171 222 Balance sheet total 4,954 5,002 4,954 5,002 4,607 Equity 1,661 1,614 1,661 1,614 1,696 Interest-bearing liabilities, net 329 845 329 845 128 Cash flow from operating activities 351 282 263 239 813 Net investments in property, plant and equipment -47 -4 -39 -17 -25 Employees Number of employees (FTE), end of period 2,899 2,934 2,899 2,934 2,864 Average number of employees (FTEs) 2,889 3,024 2,889 3,024 2,935 Financial ratios (% unless otherwise stated) Organic growth adjusted for number of working days 8.6 -1.6 3.8 0.0 -2.0 Gross profit margin 22.0 20.5 21.9 20.5 21.0 EBITDA margin 6.8 4.6 6.8 4.6 5.6 EBITA margin 5.4 3.0 5.3 3.1 4.0 Net working capital (end of period NWC)/revenue (LTM) 10.9 11.9 10.9 11.9 9.7 Gearing (net interest-bearing liabilities/EBITDA), no. of times 0.4 1.5 0.4 1.5 0.2 Return on equity (ROE) 18.2 13.6 18.2 13.6 13.5 Equity ratio 33.5 32.3 33.5 32.3 36.8 Share ratios (DKK) Earnings per share outstanding (EPS) 20.27 19.32 33.97 23.43 30.42 In general, financial ratios are calculated in accordance with the Danish Finance Society’s ”Recommendations & Financial Ratios”. FINANCIAL HIGHLIGHTS SOLAR Q2 2021 3 MANAGEMENT’S REVIEW CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE SHARE OF REVENUE CAGR FOR OUR STRATEGIC PERIOD SHARE OF CORE REVENUE CAGR FOR OUR STRATEGIC PERIOD 25% Core+ is the name of our strategy toward 2023. Our strategy focuses on four strategic areas; Concepts, Climate & Energy, Industry and Trade. The first six months of our strategy period have already delivered Core+’s first positive results. Our target is to increase our share of revenue in Sweden, Norway and the Netherlands. Ultimately, targetting a concept share of 25% of revenue for the core business, up from 21%. We aim to increase our Industry share of revenue, particularly in Sweden and the Nether- lands, which supports our ambition of an Industry share of 30% of core revenue, up from 27%. With a starting point of DKK 600m for 2020, we are targetting a CAGR of 5% for the strategic period. Our ambition is to introduce Trade to more of our markets and aim for a CAGR of 5% over the coming three years with a starting point of DKK 874m for 2020. BUSINESS UPDATE  STRATEGY STRATEGIC PROGRESS 2023 TARGETS FOR OUR CORE+ FOCUS AREAS 5% 30% 5% Increasing concept share across markets, with Solar Nederland leading the way by delivering a +2%-point share increase. Big Data & Machine Learning taken to the next level thereby increasing our sales opportunities within Concepts. New partnerships with strategic suppliers. Transformation from black to green energy solutions in Solar Danmark with strong two-digit growth rate. Establishment of a Marine/oshore branch in Solar Nederland. Increased level of activity for Solar Sverige with strong two-digit growth rate, particularly driven by MRO and OEM. Establishment of trade organisation in Solar Sverige and Solar Norge. Onboarding new customers every month in all markets. OUR CURRENT ACHIEVEMENTS SOLAR Q2 2021 4 MANAGEMENT’S REVIEW BUSINESS UPDATE  CONCEPTS ADAPTING TO MARKET CHANGES AND CUSTOMER NEEDS In each of the quarterly reports, we will examine Core+’s strategic focus areas. While the Q1 report focused on Industry, the Q3 report will focus on Climate & Energy. This Q2 report focuses on Concepts and Trade. Customers, markets and the demands presented to us are constantly changing. As a sourcing and services company, we have to be ready to adapt to shiing circumstances. Trade and concepts are good examples of how we do this. Based on our customers’ needs, Solar has devel- oped seven concepts, each with a dierent DNA. They embody five elements: price, quality, assort- ment, availability and delivery. Installation and Industry customers are the target group. Although more than 22% of core revenue derives from concepts, we aim for 25% by 2023. We par- ticularly aim to increase our share of revenue in Sweden, Norway and the Netherlands. Solar Plus, our oldest and most important con- cept, continues to develop. New concepts such as Solar Tools, Heat and Cable, however, are growing rapidly and are now starting to contribute quite significantly to the overall concept share. Combining our concepts with guidance from in- house specialists underlines our expertise. It also rearms our pledge: we are ready to assist with the right products and oer guidance on how to use them to the best advantage. CORE + STRATEGY SOLAR Q2 2021 5 MANAGEMENT’S REVIEW BUSINESS UPDATE  CONCEPTS SEVEN BENEFICIAL CONCEPTS FOR OUR CUSTOMERS Solar Light oers solutions for lighting projects and our experts are well experienced at providing our customers with customised and sustainable solutions. Their expertise combined with our range of high-quality products lies at the heart of Solar Light. Solar Plus oers an assortment that covers up to 80% of the materials required on a daily basis by Installation and Maintenance, Repair & Operations (MRO). The products are always in stock, and can be delivered right away, which contributes to our customers’ eciency. Solar Heat was developed in our Dutch market and comprises a wide range of high-quality heat- ing-related products. As a responsible sourcing and services company, our focus is firmly on sustainability and green energy. Our customers know they can rely on us for product knowledge and support. Solar Tools covers tools and related products. Our Smart Supply service is linked to this concept in that our inventory solutions enable our cus- tomers to find the right tools and articles more easily. Solar Cable involves collaborating with a number of suppliers across Europe, which benefits our customers. Solar oers more than 6,000 dierent types of cables and wires and is one of the larg- est suppliers of these items in Northern Europe. We produce – and label - more than 1,200 cable cuts daily so that our customers can handle and install their specific orders more easily. Solar Netto is our most price-eective oering. In other words, a basic assortment where quality meets standard requirements. Our customers are guaranteed low prices and products that match expectations. Solar Project, which covers the full project scope, aims to ensure that the purchasing process is smooth and ecient and that planning and assembly are seamless. The assortment is also available as BIM objects, which means that customers can reduce the time spent on planning and choice of materials. * Building Information Modelling Object SOLAR Q2 2021 6 MANAGEMENT’S REVIEW BUSINESS UPDATE  CONCEPTS EL:CON, AARHUS, DENMARK EL:CON is a Danish electrical installation contractor founded in Aarhus. The company has more than 800 employees across Denmark. Our new inventory solution is extremely eective. With Solar’s help, we structured our inventory to ensure that we always have the right products in stock, which is a crucial time-saver OPTIMISED INVENTORY WITH SMART SUPPLY AND SOLAR PLUS A well-organised stockroom means that EL:CON, a Danish electrical installation contractor, avoids having to commit unnecessary resources. With Solar Smart Supply, EL:CON’s stockroom has an inventory at their disposal that is always stocked with the right products, including those from Solar Plus. When EL:CON in the town of Fredericia in Den- mark, grew out of their premises, they built a new, larger and upgraded unit on the same site. For the new storage facility, they decided to in- stall Solar Smart Supply, which has provided them with a better overview and resulted in substantial savings. "Our new inventory solution is extremely eective. With Solar’s help, we structured our inventory to ensure that we always have the right products in stock, which is a crucial time-saver," explains EL:CON’s unit manager. Prior to the change, EL:CON wasted a great deal of time in the stockroom searching for products which turned out to be out of stock. "Basically, we were wasting time on product searches - time that we can now spend on serv- ing our customers more eciently," explains the unit manager. AVAILABILITY MAKES SOLAR PLUS THE OBVIOUS CHOICE The new storage facility in Fredericia comprises crates of various electrical installation products labelled with the relevant data. A Solar employee handles restocking, which means the business is never short of key products and components. "The Solar Smart Supply concept structures in- ventory so that products are always in the correct crates and assigned to the same place on the rack. We assist in organising the storage facility, ensure that the crates are correctly labelled, and help with restocking," says Jesper Grøning Ander- sen, Customer Logistics Manager at Solar. Around half the products in the inventory are from Solar Plus because they are always avail- able and can be restocked immediately, Jesper Grøning Andersen points out. "An industrial customer may have an urgent need for a certain product in the event of a break- down, so it’s of critical importance that EL:CON always has the required item in stock. Naturally, Solar Plus’ competitive pricing is also an import- ant factor.” With a better overview, the EL:CON inventory team no longer need to spend time ordering items and restocking as this is now handled by Solar. It also minimises inventory write-os as fewer items are destroyed, lost, scratched, be- come outdated or otherwise lose value. SOLAR Q2 2021 7 MANAGEMENT’S REVIEW BUSINESS UPDATE  TRADE UNDERSTANDING CUSTOMER NEEDS With increasing digitalisation and demand for one-stop shopping, we have established Trade as a segment. Trade is our most recent strategic area. It targets customers who do not fit into the installation and industry segments, typically DIY/retailers, webshops and smaller independent B2B-custom- ers. Unlike the majority of our customers, they do not request visits from sales team or technical support. However, they require a business partner with a strong digital mindset. We introduced Trade in 2018 with the intention of providing this customer group with services unavailable elsewhere. Availability and a wide assortment are para- mount. We oer a great webshop where cus- tomers can gain a quick overview and receive deliveries through our flexible logistics solutions, sourcing all their products from Solar means that customers can cut back on suppliers, deliveries and administration, which saves time and money. It is a win-win situation for our customers and for Solar – and makes good business sense all round. We have customised our storage facilitation, inventory management and logistics solutions. Together with a wide assortment, this has helped us to position ourselves as the preferred partner among many companies across various industries. Trade is currently an active part of our proposi- tion in Denmark and the Netherlands. Both Nor- way and Sweden have spent the first six months of 2021 developing the local organisation, supported by the Danish trade organisation. The organisation and structure are now in place in all Solar markets, and the sales teams are onboard- ing new customers every month. SOLAR Q2 2021 8 MANAGEMENT’S REVIEW BUSINESS UPDATE  TRADE EFFICIENT SUPPLIES OF HEAT PUMPS TO THE END USER Bauhaus has selected Solar as their heat pump partner. This means fast and ecient supplies of the market’s leading heat pump brands. Bauhaus’ stores and webshop contain heat pumps and accessories from the likes of Panasonic, Haier, etc. With overall responsibility for logistics, Solar handles both the storage and delivery of heat pumps and ships them directly to customers. "Reliability of supply is a crucial factor for us. What makes Solar dierent is the speed at which they can deliver. In some cases – within the hour,” explains Holger Jepsen, Head of Procurement at Bauhaus. He explains that Bauhaus has become aware of a growing interest in heat pumps, which is why they decided to expand the range. So far, there are heat pump displays in five warehouses and everything is available online. "Solar focuses on sustainable solutions. It’s there- fore obvious for us to oer green and energy-sav- ing products. Our collaboration with Bauhaus also includes charging stations for electric cars for which there is a huge market,” explains Carsten Antonisen, Senior Vice President, Solar. A TECHNICALLY SKILLED LOGISTICS PARTNER According to Holger Jepsen, another benefit is the technical support that Solar is able to provide. "We have an enormous number of products, and it would be impossible for our sta to know every detail about all of them. A technically skilled partner who can oer support when specific questions arise is important,” he explains. As Bauhaus was quite specific about what it need- ed from Solar in terms of logistics and branding, a customised solution was required. "It’s imperative that we provide the best cus- tomer experience from start to finish. Solar has adapted their set-up to meet our wishes and requirements,” says Holger Jepsen from Bauhaus. Reliability of supply is a crucial factor for us. What makes Solar dierent is the speed at which they can deliver. In some cases – within the hour. SOLAR Q2 2021 9 MANAGEMENT’S REVIEW Q2 EBITDA exceeded expectations. We delivered an EBITDA increase of 66%. Core+ focus areas are already paying o with substantial gross profit margin improvements combined with adjusted organic growth of 8.6% as the main drivers behind the DKK 84m EBITDA increase. Q2 2021 REVENUE In Q2, adjusted organic growth at group level amounted to 8.6% (-1.6%). All entities except Solar Nederland saw positive adjusted organic growth. Revenue increased to DKK 3.1bn (DKK 2.7bn). Solar’s overall adjusted organic growth for Installation amounted to around 4% driven by Solar Danmark, Solar Norge and Solar Polska. Our Core+ strategy continues to focus on the Better Business project, which aims to supply the right products to the right customers. Part of this project involves product pruning of low-margin business, which has caused negative growth for Installation in Solar Nederland. All entities saw positive growth in the Industry segment, primarily within MRO and OEM. Overall, organic growth within this segment amounted to around 12%. The trade segment also delivered two-digit growth rates in Q2. GROSS PROFIT Gross profit margin increased to 22.0% (20.5%) which, combined with revenue growth, resulted in a gross profit increase of DKK 119m. One-o price eects resulted in a positive impact of approx. DKK 30m on gross profit, corresponding to a gross profit margin improvement of approx. 1 percentage point. In addition, we saw continuous positive develop- ment in concept sales. This, together with the Better Business project, is part of the Core+ strategy and focuses on increasing gross profit margin. EBITDA EBITDA increased to DKK 211m (DKK 127m) and exceeded our expectations. The EBITDA margin increased to 6.8% (4.6%). We succeeded in increasing EBITDA by DKK 84m due to a combination of a high Q2 growth level, sub- stantial improvements in the gross profit margin and positive one-o price eects. The results from the individual countries are given on page 23. IMPAIRMENT ON ASSOCIATES Impairment on associates was DKK 0m (DKK 97m). In Q2 2020, the market value of Solar’s Q2 EBITDA INCREASED BY DKK 84M TO DKK 211M EXCEEDING OUR EXPECTATIONS (Figures in brackets are figures from the corresponding period in 2020) Our comments on core and related business and disclosures in the note, Segment information, should be regarded as supplementary information. Information on the following segments - Installation, Industry and Trade - is included in the note, Segment information. FINANCIAL REVIEW GROSS PROFIT MARGIN % EBITDA DKKm = 22.0 211 Q2Q1 Q3 Q4 19.5 2021 20.0 20.5 21.0 21.5 22.0 2020 22.5 Q2Q1 Q3 Q4 0 2021 50 100 150 200 250 2020 SOLAR Q2 2021 10 MANAGEMENT’S REVIEW EARNINGS BEFORE TAX Earnings before tax were up at DKK 279m (DKK 198m) and when adjusted - as illustrated in the table below - earnings before tax were up at DKK 279m (DKK 125m). DKK million H1 2021 H1 2020 FY 2020 Earnings before tax 279 198 300 Impact due to market value changes in BIMobject: Impairment on associates 0 -73 -104 Earnings before tax, adjusted for impact from associates 279 125 196 Impairment loss, other intangible assets 0 0 10 Impairment loss, goodwill and customer lists 0 0 129 Adjusted earnings before tax 279 125 335 NET PROFIT Net profit increased to DKK 248m (DKK 171m). CASH FLOWS Net working capital calculated as an average of the previous four quarters amounted to 10.8% (11.9%) of revenue. Net working capital at the end of Q2 2021 was 10.9% (11.9%). In H1, cash flow from operating activities totalled DKK 263m (DKK 239m). Changes in inventories and changes in non-interest-bearing liabilities had a DKK 24m (DKK 85m) and a DKK 315m (DKK 17m) impact on cash flow respectively, while changes in receivables had an impact of DKK -433m (DKK -91m). Cash flow from receivables was aected shareholding in BIMobject increased to DKK 204m. Hence the reversal of a previously performed write-down amounted to DKK 97m. In Q4 2020, we divested our shareholding in BIMobject for a total cash consideration of DKK 237m. The shares were acquired at DKK 172m in H1 2017. FINANCIALS Net financials amounted to DKK 3m (DKK -6m). Interest compensation related to a ruling from the Danish Tax Authorities amounts to DKK 11m with a positive impact on net financials in Q2 2021, see section on income tax. EARNINGS BEFORE TAX Earnings before tax were up at DKK 156m (DKK 153m) and when adjusted, earnings before tax total DKK 156m (DKK 56m), as illustrated below. DKK million Q2 2021 Q2 2020 Year 2020 Earnings before tax 156 153 300 Impact due to market value changes in BIMobject: Impairment on associates 0 -97 -104 Earnings before tax, adjusted for impact from associates 156 56 196 Impairment loss, other intangible assets 0 0 10 Impairment loss, goodwill and customer lists 0 0 129 Adjusted earnings before tax 156 56 335 INCOME TAX Income tax amounted to DKK -8m (DKK -12m). In June, we received a ruling from the Danish Tax Authorities approving a reduction in Danish taxable income in 2012 with a tax loss of DKK 74m related to divested activities. The tax value of the loss amounts to approx. DKK 19m, see the 2020 Annual Report, note 19 for additional information. NET PROFIT Net profit came to DKK 148m (DKK 141m). H1 2021 REVENUE In H1, adjusted organic growth at group level increased to 3.8% (0.0%) and revenue was up at DKK 6.1bn (DKK 5.8bn). Solar’s overall adjusted organic growth for In- stallation amounted to around 2% while Industry showed growth of around 6%. We saw positive adjusted organic growth in all entities apart from Solar Nederland. GROSS PROFIT Gross profit increased by DKK 154m with contin- uous improvement in the gross profit margin, which increased to 21.9% (20.5%) in H1 2021. OTHER INCOME Other income amounted to DKK 6m (DKK 10m) including profit from the disposal of a property in Denmark of DKK 3m and one-o compensation of DKK 3m. In Q1 2020, other income primarily included the outcome of a settlement with the former share- holder of MAG45, which amounted to DKK 7m. EBITDA EBITDA increased by DKK 146m to DKK 415m cor- responding to an EBITDA margin of 6.8% (4.6%) of revenue. All entities saw substantial improve- ments in EBITDA, with Solar Danmark, Solar Norge and Solar Nederland making a significant contribution. The results of the individual countries are shown on pages 23-24. IMPAIRMENT ON ASSOCIATES Impairment on associates was DKK 0m (DKK 73m). In H1 2020, the market value of Solar’s sharehold- ing in BIMobject increased to DKK 204m. Hence the reversal of a previously performed write-down amounted to DKK 73m. FINANCIALS Net financials amounted to DKK -17m (DKK -14m) negatively aected by DKK 14m due to the early redemption of an interest swap. A similar, positive amount is reported under other comprehensive income. Furthermore, net financials were positively aect- ed by DKK 11m regarding interest compensation related to a ruling by the Danish Tax Authorities, see Q2 financials on this page. Adjusted for these items, net financials total an unchanged DKK -14m. FINANCIAL REVIEW SOLAR Q2 2021 11 MANAGEMENT’S REVIEW NET INTERESTBEARING DEBT DKKm 31 December 2020 Operating act. -128 -67 -6 -314 -28 -49 -329 263 Leasing & misc. CAPEX 30 June 2021 Other investm. Dividends Oth. fin. act. 200 100 0 -100 -200 -300 -400 by the increased growth level in Q2 2021. As at 30 June 2021, COVID-19 financial support packages amounted to DKK 102m and aected cash flow from non-interest-bearing debt positively. Cash flow from investing activities totalled DKK -73m (DKK -43m). The disposal of a property in Denmark had a positive impact of DKK 18m while DKK -35m related to investment in the expansion and upgrade of our central warehouse in Den- mark, c.f. page 9 in the 2020 Annual Report. Cash flow from financing activities amounted to DKK -342m (DKK -114m), mainly aected by ordinary and extraordinary dividend distributions totalling DKK 314m (DKK 102m). Consequently, total cash flow totalled DKK -152m (DKK 82m). Net interest-bearing liabilities were down at DKK 329m (DKK 845m). As at 30 June 2021, gearing was 0.4 (1.5) times EBITDA. Calculated as an average, our gearing was 0.5 (1.7) times EBITDA. Our gearing target is 1.5-3.0 times EBITDA. As at 30 June 2021, Solar had undrawn credit facil- ities of DKK 426m (DKK 469m). INVESTED CAPITAL Invested capital for the Solar Group totalled DKK 1,921m (DKK 2,178m). ROIC amounted to 21.0% (10.2%). ROIC for core business amounted to 22.6% (12.3%). Activities with a Solar equity interest of less than 50% and discontinued activities are not included in the ROIC calculation. Invested capital only includes operating assets and liabilities. KEY RISKS AND MITIGATION Like other international companies, Solar is af- fected by both global trends and local conditions in the markets where we operate. The COVID-19 pandemic has impacted the entire world and Solar is also aected by the challenges this has brought about. Solar has adopted a number of initiatives to limit the risk of infection, safeguard the health of em- ployees, preserve business continuity and protect earnings. Commercial and financial risks relating to our ac- tivities are detailed in Solar’s 2020 Annual Report. FINANCIAL REVIEW RELATED BUSINESS Revenue from related business amounts to approx. 5% of our total revenue. In Q2 2021, we continued to see positive development. MAG45 saw adjusted organic growth of 20.5% (-0.7%) and EBITDA of DKK 7m (DKK 3m). MAG45, therefore, delivered ad- justed organic growth of 13.5% (-0.9%) and EBITDA of DKK 13m (DKK 7m) for H1 2021. Due to a reduced COVID-19 risk, we have re-initiated the strategic review of MAG45. Related business (MAG45 and Solar Polaris) showed adjusted organic growth of 12.7% (-0.7%) while EBITDA was up at DKK 13m (DKK 7m) in H1 2021. SOLAR Q2 2021 12 MANAGEMENT’S REVIEW GUIDANCE FOR 2021 REVISED UPWARDS TO REVENUE OF DKK 12.1BN AND EBITDA OF DKK 825M On 9 July, Solar upgraded its EBITDA guidance for 2021 by DKK 100m to DKK 825m. 2021 revenue was revised upwards to a total of DKK 12.1bn, up by DKK 0.35bn, and corresponding to organic growth of approx. 4%, see announcement no. 15 2021. MARKET OUTLOOK FOR SOLAR’S SEGMENTS Overall, we expect Installation, Industry, and Trade to deliver growth in 2021 across all our markets. Installation We expect the Installation market to continue to show growth as compared to 2020, positively aected by electrification, which is one of the important megatrends. Industry The guidance is based on the assumption that sales to OEM and MRO continue to grow compared to 2020. Infrastructure is expected to remain at least at current levels for the rest of the year. Trade We expect growth in Special Sales, which is the primary activity in the trade segment. FINANCIAL OUTLOOK 2021 Revenue guidance We expect revenue of DKK 12.1bn, correspond- ing to organic growth of approx. 4%. The Better Business project is an integral part of the Core+ strategy and is expected to reduce revenue by DKK 200m compared to 2020. Adjusted for this, we expect organic growth of approx. 6%. EBITDA guidance We expect EBITDA of DKK 825m to be achieved by our strategic focus areas delivering continuous improvement in earnings, combined with approx. DKK 50m from positive one-o price eects. Investments As announced on 11 February 2021, we have initiated an expansion and upgrade of our central warehouse in Denmark, cf. page 9 in the 2020 An- nual Report. The investment is expected to total approx. DKK 250m and to be finalised in 2022. GUIDANCE 2021 EBITDA DKKm * not adjusted for IFRS16 impact ** including one-o income of DKK 56m 2018 2017 2019 2020 Guidance 2021 Feb. Guidance increase Guidance 2021 April 650 637 538 379 362 100 900 850 800 750 700 650 600 550 500 450 400 350 300 75 725 Guidance 2021 July* 825 Guidance increase = SOLAR Q2 2021 13 MANAGEMENT’S REVIEW SHARE AND WEBCAST INFORMATION Solar’s share capital is divided into nominal value DKK 90 million A shares and nominal value DKK 646 million B shares. Holdings of 5% or more of share capital Share capital in % Votes in % The Fund of 20th December, Vejen, Denmark 17.0 60.5 Nordea Funds Ltd., Helsinki, Finland 10.4 5.0 RWC asset management LLP, London, England 10.0 4.7 Investeringsforeningen Nordea Invest, Copenhagen, Denmark 5.0 2.4 DISTRIBUTION OF SHARE CAPITAL AND VOTES IN % BASED ON THE LATEST PUBLIC INFORMATION FINANCIAL CALENDAR 2021 4 October - 4 November IR quiet period 4 November Quarterly Report Q3 2021 The A shares are not listed. The B shares are listed on Nasdaq Copenhagen under the ID code DK0010274844, and are designated SOLAR B. They form part of the MidCap index and MidCap on Nasdaq Nordic. The share capital includes 900,000 A shares and 6,460,000 B shares. Solar’s portfolio of treasury shares totals 56,813 B shares or 0.8% of share capital. A shares have 10 votes per share amount of DKK 100, while B shares have 1 vote per share amount of DKK 100. TOTAL SHAREHOLDER RETURN The total shareholder return on the Solar B share during the holding period 1 January 2021 - 30 June 2021 was DKK 228.00 (63%) as DKK 43.00 was paid out in dividend and the increase in share price amounted to DKK 185.00 in H1 2021. AUDIO WEBCAST The presentation of the Q2 2021 Quarterly Report will be conducted in English on 12 August 2021 at 11:00 CET. The presentation will be transmitted as an audio webcast and will be available at : SHAREHOLDER INFORMATION WWW.SOLAR.EU SOLAR Q2 2021 14 MANAGEMENT’S REVIEW Solar A/S CVR no. 15 90 84 16 CONSOLIDATED FINANCIAL STATEMENTS Q2 2021 15 STATEMENT OF COMPREHENSIVE INCOME Income statement Q2 H1 Year DKK million 2021 2020 2021 2020 2020 Revenue 3,098 2,745 6,102 5,790 11,465 Cost of sales -2,417 -2,183 -4,763 -4,605 -9,060 Gross profit 681 562 1,339 1,185 2,405 Other operating income and costs 3 2 6 10 8 External operating costs -68 -61 -143 -153 -288 Sta costs -400 -372 -776 -763 -1,465 Loss on trade receivables -5 -4 -11 -10 -23 Earnings before interest, tax, depreciation and amortisation (EBITDA) 211 127 415 269 637 Depreciation and write-down on property, plant and equipment -45 -46 -92 -91 -182 Earnings before interest, tax and amortisation (EBITA) 166 81 323 178 455 Amortisation and impairment of intangible assets -13 -16 -27 -31 -207 Earnings before interest and tax (EBIT) 153 65 296 147 248 Share of net profit from associates 0 -3 0 -8 -12 Impairment and gain from divestment of associates 0 97 0 73 104 Financial income 14 6 22 15 24 Financial expenses -11 -12 -39 -29 -64 Earnings before tax (EBT) 156 153 279 198 300 Income tax -8 -12 -31 -27 -78 Net profit for the period 148 141 248 171 222 Earnings in DKK per share outstanding (EPS) 20.27 19.32 33.97 23.43 30.42 Diluted earnings in DKK per share outstanding (EPS-D) 20.22 19.31 33.90 23.42 30.38 Other comprehensive income Q2 H1 Year DKK million 2021 2020 2021 2020 2020 Net profit for the period 148 141 248 171 222 Other income and costs recognised: Items that can be reclassified for the income statement Foreign currency translation adjustments of foreign subsidiaries -1 33 11 -42 -22 Fair value adjustments of hedging instruments before tax 6 -2 23 -7 7 Tax on fair value adjustments of hedging instruments -1 1 -5 2 -1 Other income and costs recognised aer tax 4 32 29 -47 -16 Total comprehensive income for the period 152 173 277 124 206 16 SOLAR Q2 2021 FINANCIAL STATEMENTS 30.06 31.12 DKK million 2021 2020 2020 ASSETS Intangible assets 157 307 157 Property, plant and equipment 831 836 818 Right-of-use assets 317 292 288 Deferred tax asset 3 10 3 Investments in associates 5 215 2 Other non-current assets 72 75 71 Non-current assets 1,385 1,735 1,339 Inventories 1,513 1,551 1,531 Trade receivables 1,701 1,496 1,271 Income tax receivable 33 19 13 Other receivables 18 9 8 Prepayments 52 54 41 Cash at bank and in hand 252 138 404 Current assets 3,569 3,267 3,268 Total assets 4,954 5,002 4,607 30.06 31.12 DKK million 2021 2020 2020 EQUITY AND LIABILITIES Share capital 736 736 736 Reserves -166 -226 -195 Retained earnings 1,091 1,104 951 Proposed dividends for the financial year 0 0 204 Equity 1,661 1,614 1,696 Interest-bearing liabilities 124 151 199 Lease liabilities 217 193 189 Provision for deferred tax 103 100 98 Other provisions 13 13 12 Non-current liabilities 457 457 498 Interest-bearing liabilities 135 539 41 Lease liabilities 105 100 103 Trade payables 1,934 1,664 1,693 Income tax payable 46 26 21 Other payables 607 590 544 Prepayments 4 5 2 Other provisions 5 7 9 Current liabilities 2,836 2,931 2,413 Liabilities 3,293 3,388 2,911 Total equity and liabilities 4,954 5,002 4,607 BALANCE SHEET 17 SOLAR Q2 2021 FINANCIAL STATEMENTS CASH FLOW STATEMENT Q2 H1 Year DKK million 2021 2020 2021 2020 2020 Net profit or loss of continuing operations for the period 148 141 248 171 222 Depreciation, write-down and amortisation 58 62 119 122 389 Impairment and gain from divestment of associates 0 -97 0 -73 -104 Changes to provisions and other adjustments 3 -1 -2 -9 -3 Share of net profit from associates 0 3 0 8 12 Financials, net -3 6 17 14 40 Income tax 8 12 31 27 78 Financial income, received 2 1 3 3 7 Financial expenses, settled -9 -9 -33 -18 -47 Income tax, settled -9 -4 -26 -17 -65 Cash flow before working capital changes 198 114 357 228 529 Working capital changes Inventory changes 60 0 24 85 126 Receivables changes -79 212 -433 -91 173 Non-interest-bearing liabilities changes 172 -44 315 17 -15 Cash flow from operating activities 351 282 263 239 813 Q2 H1 Year DKK million 2021 2020 2021 2020 2020 Investing activities Purchase of intangible assets -15 -12 -28 -24 -50 Purchase of property, plant and equipment -47 -4 -57 -18 -33 Disposal of property, plant and equipment 0 0 18 1 8 Acquisition of associates -1 -2 -3 -2 -2 Divestment of associates 0 0 0 0 240 Other financial investments 0 0 -3 0 -1 Cash flow from investing activities -63 -18 -73 -43 162 Financing activities Repayment of non-current interest-bearing debt -2 -3 -22 -5 -252 Raising of non-current interest-bearing liabilities 0 0 0 0 53 Change in current interest-bearing debt -130 -166 49 54 -205 Instalment on lease liabilities -29 -29 -57 -61 -121 Dividends distributed -110 0 -314 -102 -102 Sale of treasury shares 0 0 2 0 0 Cash flow from financing activities -271 -198 -342 -114 -627 Total cash flow 17 66 -152 82 348 Cash at bank and in hand at the beginning of period 235 72 404 56 56 Cash at bank and in hand at the end of period 252 138 252 138 404 Cash at bank and in hand at the end of the period Cash at bank and in hand 252 138 252 138 404 Cash at bank and in hand at the end of the period 252 138 252 138 404 18 SOLAR Q2 2021 FINANCIAL STATEMENTS STATEMENT OF CHANGES IN EQUITY DKK million Share capital Reserves for hedging transactions 1 Reserves for foreign currency translation adjustments 1 Retained earnings Proposed dividends Total 2021 Equity as at 1 January 736 -60 -135 951 204 1,696 Foreign currency translation adjustments of foreign subsidiaries 11 11 Fair value adjustments of hedging instruments before tax 23 23 Tax on fair value adjustments -5 -5 Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0 18 11 0 0 29 Net profit for the period 248 248 Comprehensive income 0 18 11 248 0 277 Distribution of dividends (DKK 28.00 per share) -204 -204 Distribution of extraordinary dividends (DKK 15.00 per share) -110 -110 Sale of treasury shares 2 2 Transactions with the owners 0 0 0 -108 -204 -312 Equity as at 30 June 736 -42 -124 1,091 0 1,661 1. Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves. 19 SOLAR Q2 2021 FINANCIAL STATEMENTS – continued STATEMENT OF CHANGES IN EQUITY DKK million Share capital Reserves for hedging transactions 1 Reserves for foreign currency translation adjustments 1 Retained earnings Proposed dividends Total 2020 Equity as at 1 January 736 -66 -113 933 102 1,592 Foreign currency translation adjustments of foreign subsidiaries -42 -42 Fair value adjustments of hedging instruments before tax -7 -7 Tax on fair value adjustments 2 2 Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0 -5 -42 0 0 -47 Net profit or loss for the period 171 171 Comprehensive income 0 -5 -42 171 0 124 Distribution of dividends (DKK 14.00 per share) -102 -102 Transactions with the owners 0 0 0 0 -102 -102 Equity as at 30 June 736 -71 -155 1,104 0 1,614 1) Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves. 20 SOLAR Q2 2021 FINANCIAL STATEMENTS NOTES Segment information Solar’s business segments are Installation, Industry and Trade and are based on the customers’ aliation with the segments. Installation covers installation of electrical, and heating and plumbing products, while Industry covers industry, oshore and marine, and utility and infrastructure. Trade covers special sales and other small areas. The three main segments have been identified without aggregation of operating segments. Segment income and costs include any items that are directly attributable to the individual segment and any items that can be reliably allocated to the individual segment. Non-allocated costs refer to income and costs related to joint group functions. Assets and liabilities are not included in segment reporting. DKK million Installation Industry Trade Total Q2 2021 Revenue 1,850 971 277 3,098 Cost of sales -1,470 -744 -203 -2,417 Gross profit 380 227 74 681 Direct costs -63 -33 -12 -108 Earnings before indirect costs 317 194 62 573 Indirect costs -106 -57 -12 -175 Segment profit 211 137 50 398 Non-allocated costs -187 Earnings before interest, tax, depreciation and amortisation (EBITDA) 211 Depreciation and amortisation -58 Earnings before interest and tax (EBIT) 153 Financials, net incl. share of net profit from associates and impairment on associates 3 Earnings before tax (EBT) 156 No single customer makes up more than 10% of the total revenue. DKK million Installation Industry Trade Total Q2 2020 Revenue 1,701 837 207 2,745 Cost of sales -1,370 -644 -169 -2,183 Gross profit 331 193 38 562 Direct costs -57 -24 -5 -86 Earnings before indirect costs 274 169 33 476 Indirect costs -139 -41 -13 -193 Segment profit 135 128 20 283 Non-allocated costs -156 Earnings before interest, tax, depreciation and amortisation (EBITDA) 127 Depreciation and amortisation -62 Earnings before interest and tax (EBIT) 65 Financials, net incl. share of net profit from associates and impairment on associates 88 Earnings before tax (EBT) 153 No single customer makes up more than 10% of the total revenue. 21 SOLAR Q2 2021 FINANCIAL STATEMENTS DKK million Installation Industry Trade Total H1 2021 Revenue 3,699 1,904 499 6,102 Cost of sales -2,948 -1,446 -369 -4,763 Gross profit 751 458 130 1,339 Direct costs -121 -60 -17 -198 Earnings before indirect costs 630 398 113 1,141 Indirect costs -246 -104 -25 -375 Segment profit 384 294 88 766 Non-allocated costs -351 Earnings before interest, tax, depreciation and amortisation (EBITDA) 415 Depreciation and amortisation -119 Earnings before interest and tax (EBIT) 296 Financials, net incl. share of net profit from associates and impairment on associates -17 Earnings before tax (EBT) 279 DKK million Installation Industry Trade Total H1 2020 Revenue 3,556 1,773 461 5,790 Cost of sales -2,864 -1,366 -375 -4,605 Gross profit 692 407 86 1,18 5 Direct costs -124 -51 -11 -186 Earnings before indirect costs 568 356 75 999 Indirect costs -283 -87 -25 -395 Segment profit 285 269 50 604 Non-allocated costs -335 Earnings before interest, tax, depreciation and amortisation (EBITDA) 269 Depreciation and amortisation -122 Earnings before interest and tax (EBIT) 147 Financials, net incl. share of net profit from associates and impairment on associates 51 Earnings before tax (EBT) 198 Segment information – continued NOTES 22 SOLAR Q2 2021 FINANCIAL STATEMENTS Geographical information Solar A/S primarily operates on the Danish, Swedish, Norwegian and Dutch markets. In the below table, Other markets covers the remaining markets, which can be seen in the group companies overview available on page 137 of Annual Report 2020 or on www.solar.eu. The below allocation has been made based on the products’ place of sale. Segment information – continued NOTES DKK million Revenue Adjusted organic growth % EBITDA EBITDA margin % Non-current assets Q2 2021 Denmark 1,007 13.8 91 9.0 1,778 Sweden 692 7.4 35 5.1 221 Norway 482 5.9 38 7.9 183 The Netherlands 707 -1.4 34 4.8 342 Poland 112 47.0 5 4.5 28 Other markets 10 19.7 1 10.0 4 Eliminations -82 - 0 0.0 -1,220 Core business 2,928 8.0 204 7.0 1,336 Several markets (MAG45) 166 20.5 7 4.2 49 Other markets 4 -4.6 0 0.0 0 Related business 170 19.7 7 4.1 49 Solar Group 3,098 8.6 211 6.8 1,385 DKK million Revenue Adjusted organic growth % EBITDA EBITDA margin % Non-current assets Q2 2020 Denmark 865 1.9 62 7.2 2,101 Sweden 607 -4.8 20 3.3 322 Norway 430 -5.0 19 4.4 172 The Netherlands 694 0.6 20 2.9 363 Poland 84 -14.5 2 2.4 30 Other markets 9 16.4 1 11.1 5 Eliminations -83 - 0 0.0 -1,313 Core business 2,606 -1.6 124 4.8 1,680 Several markets (MAG45) 134 -0.7 3 2.2 54 Other markets 5 -6.8 0 0.0 1 Related business 139 -0.9 3 2.2 55 Solar Group 2,745 -1.6 127 4.6 1,735 23 SOLAR Q2 2021 FINANCIAL STATEMENTS Segment information – continued NOTES DKK million Revenue Adjusted organic growth % EBITDA EBITDA margin % Non-current assets H1 2021 Denmark 2,007 10.4 185 9.2 1,778 Sweden 1,329 1.9 67 5.0 221 Norway 939 1.1 73 7.8 183 The Netherlands 1,440 -5.0 66 4.6 342 Poland 204 27.5 8 3.9 28 Other markets 22 19.4 3 13.6 4 Eliminations -165 - 0 0.0 -1,220 Core business 5,776 3.4 402 7.0 1,336 Several markets (MAG45) 318 13.5 13 4.1 49 Other markets 8 -11.3 0 0.0 0 Related business 326 12.7 13 4.0 49 Solar Group 6,102 3.8 415 6.8 1,385 DKK million Revenue Adjusted organic growth % EBITDA EBITDA margin % Non-current assets H1 2020 Denmark 1,811 3.0 133 7.3 2,101 Sweden 1,249 -3.3 48 3.8 322 Norway 905 -3.4 40 4.4 172 The Netherlands 1,506 2.4 35 2.3 363 Poland 173 -9.3 4 2.3 30 Other markets 19 21.5 2 10.5 5 Eliminations -161 - 0 0.0 -1,313 Core business 5,502 0.0 262 4.8 1,680 Several markets (MAG45) 279 -0.9 7 2.5 54 Other markets 9 6.1 0 0.0 1 Related business 288 -0.7 7 2.4 55 Solar Group 5,790 0.0 269 4.6 1,735 24 SOLAR Q2 2021 FINANCIAL STATEMENTS NOTES Accounting policies The quarterly report for Solar A/S has been prepared in accordance with IAS 34 “Presentation of interim reports” as approved by the EU and additional Danish disclosure requirements for quarterly reports of listed companies. Apart from the eect of new IAS/IFRS standards implemented during the period, the accounting policies re- main unchanged from the Annual Report 2020, which contains a full description of these on pages 58-60 as well as of relevant, supplementary notes. In the quarterly report, income tax has been calculated on the basis of pre-tax profits at the expected average tax rate. New accounting standards implemented during the period No additional standards have been implemented in the period, only amendments and improvements to existing standards. These changes have no impact on Solar’s accounting policies. New accounting standards to be implemented in coming accounting periods New or amended standards issued in 2021 and to be implemented in coming accounting periods are not ex- pected to have significant impact on Solar's accounting policies. 25 SOLAR Q2 2021 FINANCIAL STATEMENTS Consolidated QUARTERLY FIGURES Q1 Q2 Q3 Q4 Income statement (DKK million) 2021 2020 2021 2020 2020 2019 2020 2019 Revenue 3,004 3,045 3,098 2,745 2,618 2,777 3,057 3,077 Earnings before interest, tax, depreciation and amortisation (EBITDA) 204 142 211 127 177 152 191 161 Earnings before interest, tax and amortisation (EBITA) 157 97 166 81 132 105 145 115 Earnings before interest and tax (EBIT) 143 82 153 65 115 82 -14 75 Financials, net -20 -8 3 -6 -10 -9 -16 -10 Earnings before tax (EBT) 123 45 156 153 109 -2 -7 73 Net profit or loss for the quarter 100 30 148 141 83 -22 -32 58 Balance sheet (DKK million) Non-current assets 1,342 1,636 1,385 1,735 1,695 1,691 1,339 1,756 Current assets 3,500 3,349 3,569 3,267 3,227 3,460 3,268 3,234 Balance sheet total 4,842 4,985 4,954 5,002 4,922 5,151 4,607 4,990 Equity 1,619 1,441 1,661 1,614 1,688 1,512 1,696 1,592 Non-current liabilities 498 455 457 457 497 707 498 503 Current liabilities 2,725 3,089 2,836 2,931 2,737 2,932 2,413 2,895 Interest-bearing liabilities, net 461 1,077 329 845 726 1,089 128 921 Invested capital 2,011 2,332 1,921 2,178 2,132 2,395 1,760 2,297 Net working capital, end of period 1,344 1,432 1,280 1,383 1,363 1,467 1,109 1,280 Net working capital, average 1,300 1,411 1,274 1,391 1,365 1,339 1,322 1,386 26 SOLAR Q2 2021 FINANCIAL STATEMENTS QUARTERLY FIGURES Consolidated – continued Q1 Q2 Q3 Q4 Cash flows (DKK million) 2021 2020 2021 2020 2020 2019 2020 2019 Cash flow from operating activities -88 -43 351 282 142 144 432 305 Cash flow from investing activities -10 -25 -63 -18 -8 -40 213 -48 Cash flow from financing activities -71 84 -271 -198 -116 -88 -397 -264 Net investments in intangible assets -13 -12 -15 -12 -12 -8 -14 -9 Net investments in property, plant and equipment 8 -13 -47 -4 1 -25 -9 -39 Acquisition and divestment of subsidiaries and operations, net 0 0 0 0 0 0 0 0 Financial ratios (% unless otherwise stated) Revenue growth -1.3 3.0 12.9 -4.3 -5.7 9.4 -0.6 2.3 Organic growth -2.2 2.6 10.6 -1.7 -4.8 7.9 0.0 1.6 Organic growth adjusted for number of working days -0.6 1.4 8.6 -1.6 -4.8 6.3 -2.1 2.6 Gross profit margin 21.9 20.5 22.0 20.5 21.5 19.7 21.5 20.5 EBITDA margin 6.8 4.7 6.8 4.6 6.8 5.5 6.2 5.2 EBITA margin 5.2 3.2 5.4 3.0 5.0 3.8 4.7 3.7 EBIT margin 4.8 2.7 4.9 2.4 4.4 3.0 -0.5 2.4 Net working capital (end of period NWC)/revenue (LTM) 11.8 12.2 10.9 11.9 11.9 12.6 9.7 11.0 Net working capital (average NWC )/revenue (LTM) 11.4 12.0 10.8 11.9 11.9 11.5 11.5 11.9 Gearing (interest-bearing liabilities,net/EBITDA), no. of times 0.7 1.9 0.4 1.5 1.2 2.2 0.2 1.7 Return on equity (ROE) 17.6 7.5 18.2 13.6 18.9 1.0 13.1 4.1 Return on invested capital (ROIC) 16.6 9.0 21.0 10.2 11.7 8.3 13.8 8.3 Adjusted enterprise value/earnings before interest, tax and amortisation (EV/EBITA) 7.6 6.3 7.0 6.0 6.2 8.1 5.8 7.9 Equity ratio 33.4 28.9 33.5 32.3 34.3 29.4 36.8 31.9 27 SOLAR Q2 2021 FINANCIAL STATEMENTS QUARTERLY FIGURES Consolidated – continued Q1 Q2 Q3 Q4 Share ratios (DKK unless otherwise stated) 2021 2020 2021 2020 2020 2019 2020 2019 Earnings per share outstanding (EPS) 13.70 4.11 20.27 19.32 11.37 -3.18 -4.38 7.95 Intrinsic value per share outstanding 221.68 197.44 227.43 221.15 231.29 218.73 232.38 218.13 Share price 480.82 204.50 541.47 255.05 301.43 289.41 353.70 297.31 Share price/intrinsic value 2.17 1.04 2.38 1.15 1.30 1.32 1.52 1.36 Employees Number of employees (FTE's), end of period 2,901 3,052 2,899 2,934 2,891 3,070 2,864 3,041 Average number of employees (FTE's) 2,897 3,057 2,889 3,024 2,979 3,018 2,935 3,039 Definitions Organic growth Revenue growth adjusted for enterprises acquired and sold o and any exchange rate changes. No adjustments have been made for number of working days. Net working capital Inventories and trade receivables less trade payables. ROIC Return on invested capital calculated on the basis of operating profit or loss less tax calculated using the eective tax rate. In general, financial ratios are calculated in accordance with the Danish Finance Society’s “Recommendations & Financial Ratios”. 28 SOLAR Q2 2021 FINANCIAL STATEMENTS STATEMENT BY THE EXECUTIVE BOARD AND THE BOARD OF DIRECTORS Today, the group’s Board of Directors and Executive Board have discussed and approved the financial report of Solar A/S for the first six months of 2021. The financial report for the first six months of 2021, which has not been audited or reviewed by the company’s auditor, is presented in accordance with IAS 34 “Interim Financial Reporting” as approved by the EU and additional Danish disclosure requirements for quarterly reports of listed companies. In our opinion, the financial report gives a fair presentation of the group’s assets, equity and liabilities and financial position as at 30 June 2021 as well as of the results of the group’s activities and cash flow for the first six months of 2021. Further, in our opinion, the management’s review gives a true and fair statement of the development of the group’s activities and financial situation, net profit for the period and of the group’s overall financial position and describes the most significant risks and uncertainties that the group faces. In our opinion, the financial report of Solar A/S for the first six months of 2021 with the file name SOLA-2021-06-30.zip is prepared, in all material respects, in compliance with the ESEF Regulation. Vejen, 12 August 2021 EXECUTIVE BOARD Jens E. Andersen Hugo Dorph Michael H. Jeppesen CEO CCO CFO BOARD OF DIRECTORS Jens Borum Jesper Dalsgaard Lars Lange Andersen Chairman Vice-chairman Michael Troensegaard Peter Bang Morten Chrone Andersen Ulrik Damgaard Bent H. Frisk Louise Knauer 29 SOLAR Q2 2021 FINANCIAL STATEMENTS Solar A/S Industrivej Vest 43 DK-6600 Vejen Tel. +45 79 30 00 00 CVR no. 15908416 www.solar.eu www.linkedin.com/company/solar-as 21380031XTLI9X5MTY922021-01-012021-06-3021380031XTLI9X5MTY922021-01-012021-06-30cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-301cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-302cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-303cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-301cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-302cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-303cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-304cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-305cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-306cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-307cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-308cmn:ConsolidatedMember21380031XTLI9X5MTY922021-01-012021-06-309cmn:ConsolidatedMember21380031XTLI9X5MTY922020-01-012020-06-30cmn:ConsolidatedMember21380031XTLI9X5MTY922021-04-012021-06-3021380031XTLI9X5MTY922020-04-012020-06-3021380031XTLI9X5MTY922020-01-012020-06-3021380031XTLI9X5MTY922020-01-012020-12-3121380031XTLI9X5MTY922021-06-3021380031XTLI9X5MTY922020-06-3021380031XTLI9X5MTY922020-12-3121380031XTLI9X5MTY922021-03-3121380031XTLI9X5MTY922020-03-3121380031XTLI9X5MTY922019-12-3121380031XTLI9X5MTY922020-12-31ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922021-01-012021-06-30ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922021-06-30ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922020-12-31ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922021-01-012021-06-30ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922021-06-30ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922021-01-012021-06-30ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922021-06-30ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922020-12-31ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922021-01-012021-06-30ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922021-06-30ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922020-12-31SOL:ProposedDividendRecognisedInEquityMember21380031XTLI9X5MTY922021-01-012021-06-30SOL:ProposedDividendRecognisedInEquityMember21380031XTLI9X5MTY922021-06-30SOL:ProposedDividendRecognisedInEquityMember21380031XTLI9X5MTY922019-12-31ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922020-01-012020-06-30ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922020-06-30ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922019-12-31ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922020-01-012020-06-30ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922020-06-30ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922020-01-012020-06-30ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922020-06-30ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922019-12-31ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922020-01-012020-06-30ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922020-06-30ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922019-12-31SOL:ProposedDividendRecognisedInEquityMember21380031XTLI9X5MTY922020-01-012020-06-30SOL:ProposedDividendRecognisedInEquityMember21380031XTLI9X5MTY922020-06-30SOL:ProposedDividendRecognisedInEquityMemberxbrli:pureiso4217:DKKiso4217:DKKxbrli:sharesInterim report (6 months)No audit assistanceParsePort XBRL Converter2021-01-012021-06-302020-01-012020-06-30221380031XTLI9X5MTY92Solar A/SReporting class D2889302421380031XTLI9X5MTY9215908416Solar A/SIndustrivej Vest 436600 Vejen