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Solar Interim / Quarterly Report 2021
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Interim / Quarterly Report
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- august 2021
Meddelelse nr. 16 2021
solar
SOLAR LEVEREDE EN EBITDA-STIGNING
PÅ 66% I 2. KVARTAL
I juli opjusterede vi vores forventninger til omsætning og EBITDA med DKK 350 mio. og DKK 100 mio. til henholdsvis DKK 12.100 mio. og DKK 825 mio., se meddelelse nr. 15.
CEO Jens Andersen udtaler:
"Vi offentliggjorde vores anden opjustering kun seks måneder inde i vores Core+ strategiperiode. Alle fire strategiske fokusområder viser fremgang på tværs af markeder og har bidraget væsentligt til det stærke resultat.
Vi ser stærke resultater inden for alle vores segmenter. Vi er især godt tilfredse med vores industrisegment, hvor OEM og MRO viser fremdrift. På samme tid har andelen af vores konceptsalg nået det højeste niveau nogensinde og udgør nu 22% af omsætningen. Vi ser stærke resultater på alle vores markeder, især i Solar Nederland, som opnåede en stigning i konceptandelen på over 2 procentpoint.
Derudover har vi udbetalt ekstraordinært udbytte på DKK 110 mio. til vores aktionærer, hvormed det totale udbytte udbetalt år til dato er på DKK 314 mio. svarende til DKK 43 per aktie á DKK 100.
De imponerende resultater kunne ikke være opnået uden det dedikerede og store stykke arbejde, der er udført af vores medarbejdere, som jeg gerne vil takke – de er grundlaget for vores succes."
Finansielle hovedbudskaber for Q2
- EBITDA-margin steg med 2,2 procentpoint, en stigning på næsten 50%
- Engangspriseffekter resulterede i en positiv indvirkning på ca. DKK 30 mio. af bruttofortjenesten, svarende til en forbedring af bruttoavancen på ca. 1 procentpoint
- Forventninger til 2021: Omsætning på DKK 12.100 mio. og EBITDA på DKK 825 mio.
- Afkast af investeret kapital (ROIC) steg til 21% fra 10%
| Udvalgte hovedtal (DKK mio.) | Q2 2021 | Q2 2020 | H1 2021 | H1 2020 |
|---|---|---|---|---|
| Omsætning | 3.098 | 2.745 | 6.102 | 5.790 |
| EBITDA | 211 | 127 | 415 | 269 |
| Pengestrømme fra driftsaktivitet | 351 | 282 | 263 | 239 |
| Udvalgte nøgletal (%) | ||||
| Organisk vækst justeret for antal arbejdsdage | 8,6 | -1,6 | 3,8 | 0,0 |
| EBITDA-margin | 6,8 | 4,6 | 6,8 | 4,6 |
| Nettoarbejdskapital, ultimo/omsætning (LTM) | 10,9 | 11,9 | 10,9 | 11,9 |
| Gearing (NIBD/EBITDA), antal gange | 0,4 | 1,5 | 0,4 | 1,5 |
| Afkast af investeret kapital (ROIC) | 21,0 | 10,2 | 21,0 | 10,2 |
Solar A/S
LEI: 21380031XTL6X5MTY92
Industrivej Vest 43, 6600 Vejen, Danmark
Tlf. +45 79 30 00 00
CVR-nr. 15 90 84 16
www.solar.eu/
- august 2021
Meddelelse nr. 16 2021
solar
Audio webcast og telekonference i dag
Præsentationen af Delårsrapport Q2 2021 foregår på engelsk den 12. august 2021 kl. 11.00. Præsentationen bliver transmitteret som en audio webcast og kan følges på www.solar.eu. Deltagelse er mulig via den tilknyttede telekonference.
Opkaldsnumre til telekonferencen:
DK: tlf. +45 787 232 50
UK: tlf. +44 333 300 9035
US: tlf. +1 646 722 4956
Kontaktpersoner
CEO Jens Andersen - tlf. +45 79 30 02 01
CFO Michael H. Jeppesen - tlf. +45 79 30 02 62
IR Director Dennis Callesen - tlf. +45 29 92 18 11
FAKTA OM SOLAR
Solar-koncernen er en førende europæisk sourcing- og servicevirksomhed, der leverer løsninger primært inden for el, vvs, ventilation samt klima og energi. Vores kerneforretning centrerer sig om sourcing af produkter, værdiskabende services og optimering af vores kunders forretning.
Vi fremmer effektivitetsforbedringer og tilbyder digitale værktøjer, der gør vores kunder til vindere. Vi driver den grønne omstilling og leverer de bedste løsninger, der sikrer bæredygtig brug af ressourcer.
Solar-koncernen har hovedsæde i Danmark, havde i 2020 en omsætning på ca. 11,5 mia. kroner og beskæftiger ca. 2.900 medarbejdere. Solar er noteret på Nasdaq Copenhagen med kortnavn SOLAR B. Flere oplysninger kan findes på www.solar.eu
Ansvarsfraskrivelse
Denne meddelelse er offentliggjort dags dato på dansk og engelsk via Nasdaq Copenhagen. I tilfælde af uoverensstemmelse mellem de to versioner er det den danske version, der er gældende.
Solar A/S
LEI: 21380031XTL6X5MTY92
Industrivej Vest 43, 6600 Vejen, Danmark
Tlf. +45 79 30 00 00
CVR-nr. 15 90 84 16
www.solar.eu
2021
2021
2021
2021
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
CONTENTS
MANAGEMENT REVIEW
3 Financial highlights
4 Business update
10 Financial review
13 Guidance
14 Shareholder information
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
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
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
FINANCIAL HIGHLIGHTS
| Consolidated (DKK million) | Q2 | H1 | Year | ||
|---|---|---|---|---|---|
| 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".
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-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 percentage point.
- Return on invested capital (ROIC) increased to 21% from 10%.
3
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
BUSINESS UPDATE - STRATEGY
STRATEGIC PROGRESS
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.
CONCEPTS
CLIMATE & ENERGY
INDUSTRY
TRADE
OUR CURRENT ACHIEVEMENTS
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/offshore 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 target is to increase our share of revenue in Sweden, Norway and the Netherlands. Ultimately, targeting a concept share of 25% of revenue for the core business, up from 21%.
With a starting point of DKK 600m for 2020, we are targeting a CAGR of 5% for the strategic period.
We aim to increase our Industry share of revenue, particularly in Sweden and the Netherlands, which supports our ambition of an Industry share of 30% of core revenue, up from 27%.
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.
25% SHARE OF REVENUE
5% CAGR FOR OUR STRATEGIC PERIOD
30% SHARE OF CORE REVENUE
5% CAGR FOR OUR STRATEGIC PERIOD
SOLAR Q2 2021
MANAGEMENT'S REVIEW
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BUSINESS UPDATE - CONCEPTS
CORE+ STRATEGY
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 shifting circumstances. Trade and concepts are good examples of how we do this.
Based on our customers' needs, Solar has developed seven concepts, each with a different DNA. They embody five elements: price, quality, assortment, 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 particularly aim to increase our share of revenue in Sweden, Norway and the Netherlands.
Solar Plus, our oldest and most important concept, 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 reaffirms our pledge: we are ready to assist with the right products and offer guidance on how to use them to the best advantage.
SOLAR Q2 2021
MANAGEMENT'S REVIEW
BUSINESS UPDATE - CONCER
Solar Fastbox
SEVEN BENEFICIAL CONCEPTS FOR OUR CUSTOMERS
solar plus
Solar Plus offers 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' efficiency.
solar tools
Solar Tools covers tools and related products. Our Smart Supply service is linked to this concept in that our inventory solutions enable our customers to find the right tools and articles more easily.
solar netto
Solar Netto is our most price-effective offering. In other words, a basic assortment where quality meets standard requirements. Our customers are guaranteed low prices and products that match expectations.
solar project
Solar Project, which covers the full project scope, aims to ensure that the purchasing process is smooth and efficient 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.
solar light
Solar Light offers 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 heat
Solar Heat was developed in our Dutch market and comprises a wide range of high-quality heating-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 cable
Solar Cable involves collaborating with a number of suppliers across Europe, which benefits our customers. Solar offers more than 6,000 different types of cables and wires and is one of the largest 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.
- Building Information Modelling Object
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
BUSINESS UPDATE - CONCEPTS
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.
EL:CON, AARHUS, DENMARK
EL:CON is a Danish electrical installation contractor founded in Aarhus. The company has more than 800 employees across Denmark.
When EL:CON in the town of Fredericia in Denmark, 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 install Solar Smart Supply, which has provided them with a better overview and resulted in substantial savings.
"Our new inventory solution is extremely effective. 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 serving our customers more efficiently," 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 inventory 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 Grønning Andersen, Customer Logistics Manager at Solar.
Around half the products in the inventory are from Solar Plus because they are always available and can be restocked immediately, Jesper Grønning Andersen points out.
"An industrial customer may have an urgent need for a certain product in the event of a breakdown, so it's of critical importance that EL:CON always has the required item in stock. Naturally, Solar Plus' competitive pricing is also an important 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-offs as fewer items are destroyed, lost, scratched, become outdated or otherwise lose value.
> Our new inventory solution is extremely effective. 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
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
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-customers. 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 paramount. We offer a great webshop where customers 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 proposition in Denmark and the Netherlands. Both Norway 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 onboarding new customers every month.
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
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 efficient 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 different 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 therefore obvious for us to offer green and energy-saving 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 staff to know every detail about all of them. A technically skilled partner who can offer support when specific questions arise is important," he explains. As Bauhaus was quite specific about what it needed from Solar in terms of logistics and branding, a customised solution was required.
"It's imperative that we provide the best customer experience from start to finish. Solar has adapted their set-up to meet our wishes and requirements," says Holger Jepsen from Bauhaus.
SOLAR Q2 2021
MANAGEMENT'S REVIEW
FINANCIAL REVIEW
Q2 EBITDA INCREASED BY DKK 84M TO DKK 211M EXCEEDING OUR EXPECTATIONS
(Figures in brackets are figures from the corresponding period in 2020)
Q2 EBITDA exceeded expectations. We delivered an EBITDA increase of 66%. Core+ focus areas are already paying off with substantial gross profit margin improvements combined with adjusted organic growth of 8.6% as the main drivers behind the DKK 84m EBITDA increase.
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.
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-off price effects 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 development 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, substantial improvements in the gross profit margin and positive one-off price effects.
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
GROSS PROFIT MARGIN
EBITDA
SOLAR Q2 2021
MANAGEMENT'S REVIEW
FINANCIAL REVIEW
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 Installation 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 continuous 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-off compensation of DKK 3m.
In Q1 2020, other income primarily included the outcome of a settlement with the former shareholder of MAG45, which amounted to DKK 7m.
EBITDA
EBITDA increased by DKK 146m to DKK 415m corresponding to an EBITDA margin of 6.8% (4.6%) of revenue. All entities saw substantial improvements 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 shareholding 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 affected 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 affected 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.
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 affected
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
FINANCIAL REVIEW
by the increased growth level in Q2 2021. As at 30 June 2021, COVID-19 financial support packages amounted to DKK 102m and affected 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 Denmark, c.f. page 9 in the 2020 Annual Report.
Cash flow from financing activities amounted to DKK -342m (DKK -114m), mainly affected 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).
NET INTEREST-BEARING DEBT
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 facilities 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 affected 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 affected by the challenges this has brought about.
Solar has adopted a number of initiatives to limit the risk of infection, safeguard the health of employees, preserve business continuity and protect earnings.
Commercial and financial risks relating to our activities are detailed in Solar's 2020 Annual Report.
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 adjusted 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
MANAGEMENT'S REVIEW
三
GUIDANCE 2021
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 affected 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, corresponding 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-off price effects.
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 Annual Report. The investment is expected to total approx. DKK 250m and to be finalised in 2022.
EBITDA
DKKm
- not adjusted for IFRS16 impact
** including one-off income of DKK 56m
SOLAR Q2 2021
MANAGEMENT'S REVIEW
三
SHAREHOLDER INFORMATION
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.
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 :
www.SOLAR.EU
FINANCIAL CALENDAR 2021
4 October - 4 November IR quiet period
4 November Quarterly Report Q3 2021
DISTRIBUTION OF SHARE CAPITAL AND VOTES IN % BASED ON THE LATEST PUBLIC INFORMATION
| 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 |
solar
CONSOLIDATED FINANCIAL STATEMENTS
Q2 2021
Solar A/S
CVR no. 15 90 84 16
SOLAR Q2 2021
FINANCIAL STATEMENTS
16
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 |
| Staff 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 after tax | 4 | 32 | 29 | -47 | -16 |
| Total comprehensive income for the period | 152 | 173 | 277 | 124 | 206 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
三
BALANCE SHEET
| DKK million | 30.06 | 31.12 | |
|---|---|---|---|
| 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 |
| DKK million | 30.06 | 31.12 | |
| --- | --- | --- | --- |
| 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 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
18
CASH FLOW STATEMENT
| DKK million | Q2 | H1 | Year | ||
|---|---|---|---|---|---|
| 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 |
| DKK million | Q2 | H1 | Year | ||
| --- | --- | --- | --- | --- | --- |
| 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 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
三
STATEMENT OF CHANGES IN EQUITY
| DKK million | Share capital | Reserves for hedging transactions1 | Reserves for foreign currency translation adjustments1 | 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 |
- Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
SOLAR Q2 2021
FINANCIAL STATEMENTS
20
STATEMENT OF CHANGES IN EQUITY
– continued
| 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.
SOLAR Q2 2021
FINANCIAL STATEMENTS
21
NOTES
Segment information
Solar's business segments are Installation, Industry and Trade and are based on the customers' affiliation with the segments. Installation covers installation of electrical, and heating and plumbing products, while Industry covers industry, offshore 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.
SOLAR Q2 2021
FINANCIAL STATEMENTS
NOTES
Segment information – continued
| 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 | 1,185 |
| 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 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
三
NOTES
Segment information – continued
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.
| 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 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
NOTES
Segment information – continued
| 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 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
25
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 effect of new IAS/IFRS standards implemented during the period, the accounting policies remain 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 expected to have significant impact on Solar's accounting policies.
SOLAR Q2 2021
FINANCIAL STATEMENTS
26
QUARTERLY FIGURES
Consolidated
| Income statement (DKK million) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 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 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
QUARTERLY FIGURES
Consolidated – continued
| Cash flows (DKK million) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 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 |
SOLAR Q2 2021
FINANCIAL STATEMENTS
28
QUARTERLY FIGURES
Consolidated – continued
| Share ratios (DKK unless otherwise stated) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 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 off 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 effective tax rate. |
In general, financial ratios are calculated in accordance with the Danish Finance Society's "Recommendations & Financial Ratios".
SOLAR Q2 2021
FINANCIAL STATEMENTS
29
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
CEO | Hugo Dorph
CCO | Michael H. Jeppesen
CFO |
| --- | --- | --- |
BOARD OF DIRECTORS
| Jens Borum
Chairman | Jesper Dalsgaard
Vice-chairman | Lars Lange Andersen |
| --- | --- | --- |
| Michael Troensegaard
Andersen | Peter Bang | Morten Chrone |
| Ulrik Damgaard | Bent H. Frisk | Louise Knauer |
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
solar