AI assistant
Solar — Interim / Quarterly Report 2022
Aug 11, 2022
Preview isn't available for this file type.
Download source fileUntitled 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 STRONG PERFORMANCE IN ALL MARKETS Solar increased its guidance for 2022 EBITDA to DKK 1.1bn from DKK 975m. Moreover, we increased revenue guidance to DKK 13.45bn compared to our previous guidance of DKK 13.25bn. See announcement no. 11 2022. CEO Jens Andersen says: "We delivered a strong Q2 EBITDA growth driven by our four strategic focus areas, Concepts, Industry, Climate & Energy and Trade, supported by a positive development in all markets. We posted double-digit adjusted organic growth in our two main segments Installation and Industry reaching 11% and 18%, respectively. Within Climate & Energy, we see continued high demand, and green solutions will remain an important growth component.” Q2 key financial messages • Adjusted organic growth amounted to 12.4% up from 8.6%. • EBITDA increased by DKK 56m to DKK 267m • One-off price effects resulted in an impact of approx. DKK 45m on gross profit compared to DKK 30m in Q2 2021. Financial highlights (DKK million) Q2 2022 Q2 2021 H1 2022 H1 2021 Revenue 3,451 3,098 6,913 6,102 EBITDA 267 211 548 415 Cash flow from operating activities -10 351 -212 263 Financial ratios (%) Organic growth adj. for number of working days 12.4 8.6 12.9 3.8 EBITDA margin 7.7 6.8 7.9 6.8 Net working capital, end of period/revenue (LTM) 14.1 10.9 14.1 10.9 Gearing (NIBD/EBITDA), no. of times 1.1 0.4 1.1 0.4 Return on invested capital (ROIC) 25.5 21.0 25.5 21.0 11 August 2022 Announcement no. 12 2022 1 Solar A/S LEI: 21380031 XTLI9X5MTY92 Industrivej Vest 43, DK-6600 Vejen, Denmark Tel. +45 79 30 00 00 CVR no. 15 90 84 16 www.solar.eu 11 August 2022 Announcement no. 12 2022 Audio webcast and teleconference today The presentation of Quarterly Report Q2 2022 will be made in English on 11 August 2022 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 51 UK: tel. +44 333 300 9268 US: tel. +1 646 722 4904 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 12.4bn in 2021 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. 2 Q2 2022 Solar A/S Industrivej Vest 43 6600 Vejen Denmark CVR no. 15908416 LEI 21380031XTLI9X5MTY92 MANAGEMENT REVIEW 3 Who we are 4 Financial highlights 5 Core+ strategy update 6 Business update 9 Financial review 12 Our segments 14 Guidance 15 Shareholder information CONTENTS FINANCIAL STATEMENTS 17 Statement of comprehensive income 18 Balance sheet 19 Cash flow statement 20 Statement of changes in equity 22 Notes 28 Quarterly figures 31 Statement by the Executive Board and the Board of Directors OUR PURPOSE We improve construction, building operation and industry processes with a commitment to sustainability and productivity. For our customers. With our partners. For a better world. 2 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE We are a leading European sourcing and services company. Product groups Product brands Denmark Sweden Poland Norway The Netherlands Other 1 33% 21% 4% 16% 23% 3% Installation Industry 2021 share of revenue 2021 share of revenue2021 share of revenue Trade Electrical Concepts Other brands Heating & Plumbing Climate & Energy 60% 22% 74% 20% 6% 78% 8%32% OUR PRODUCTSOUR SEGMENTSOUR MARKETS 1 Including eliminations In Q2, our focus will centre on Trade, which is our smallest segment. However, with 14% year-on-year growth, it is one of the fastest growing business areas. Customers are not homogeneous; they require dierent products, services and logistics. 8,000 of our customers have found their perfect match in Trade. We engage with our customers to develop the services of tomorrow – which makes us stronger together. 3 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION MANAGEMENT REVIEW SOLAR Q2 2022 Q2 FINANCIAL MESSAGES • Adjusted organic growth amounted to 12.4% up from 8.6%. • EBITDA margin increased by 0.9% to 7.7%. EBITDA of DKK 267m (DKK 211m) was supported by positive development in all markets. • Return on invested capital (ROIC) increased to 25.5% from 21%. • On 9 August, EBITDA guidance for 2022 was revised upwards by DKK 125m to DKK 1.1bn. Revenue for 2022 was revised upwards to a total of DKK 13.45bn, up by DKK 0.2bn, which corresponds to organic growth of approx. 9%. See announcement no. 11 2022. Consolidated (DKK million) Q2 2022 Q2 2021 H1 2022 H1 2021 Year 2021 Revenue 3,451 3,098 6,913 6,102 12,354 Earnings before interest, tax, depreciation and amortisation (EBITDA) 267 211 548 415 911 Earnings before interest, tax and amortisation (EBITA) 218 166 454 323 727 Earnings before interest and tax (EBIT) 202 153 424 296 672 Earnings before tax (EBT) 193 156 410 279 622 Net profit for the period 147 148 315 248 531 Balance sheet total 5,679 4,954 5,679 4,954 5,305 Equity 1,600 1,661 1,600 1,661 1,952 Interest-bearing liabilities, net 1,122 329 1,122 329 -37 Cash flow from operating activities -10 351 -212 263 783 Net investments in property, plant and equipment -61 -47 -120 -39 -125 Employees Number of employees (FTE), end of period 2,995 2,899 2,995 2,899 2,936 Average number of employees (FTEs) 2,956 2,889 2,956 2,889 2,908 Financial ratios (% unless otherwise stated) Organic growth adjusted for number of working days 12.4 8.6 12.9 3.8 5.9 Gross profit margin 22.9 22.0 23.0 21.9 22.4 EBITDA margin 7.7 6.8 7.9 6.8 7.4 EBITA margin 6.3 5.4 6.6 5.3 5.9 Net working capital (end of period NWC)/revenue (LTM) 14.1 10.9 14.1 10.9 10.2 Gearing (net interest-bearing liabilities/EBITDA), no. of times 1.1 0.4 1.1 0.4 0.0 Return on equity (ROE) 35.1 18.2 35.1 18.2 29.1 Equity ratio 28.2 33.5 28.2 33.5 36.8 Share ratios (DKK) Earnings per share outstanding (EPS) 20.13 20.27 43.13 33.97 72.72 In all material aspects financial ratios are calculated in accordance with the Danish Finance Society’s “Recommendations & Financial Ratios”. FINANCIAL HIGHLIGHTS 4 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION CORE+ STRATEGY UPDATE 18 months into our Core+ strategy, we continue to see strong progress across our four strategic focus areas. We have introduced initiatives to ensure we are confident in meeting our 2023 ambitions. REVENUE >25% AMBITION Alignment and expansion of our product portfolio within each concept. Substitution of low margin business with concepts. Customisation of concept oerings to individual target groups. Introduction of Solar Select and Solar Zero: concepts tailored to our Trade and Climate & Energy customers, respectively. Extending the organisational scope in Sweden and Norway – increasing local market knowledge and consolidating our product portfolio. Introduction of high-capacity heat pumps as an alternative heating solution for the industry. Gas boilers phased out from our Danish product portfolio. Norwegian partner programme continues to add value to a growing customer base. Employee training in certified sustainable building. CONCEPTS CLIMATE & ENERGY Transition to a cross-border based vertical organisational structure – covering Denmark, Norway, Sweden and the Netherlands. Solar Nederland introduced Marine & Oshore. Important infrastructure contract in Norway extended. Increased demand from MRO and OEM customers in Sweden in the automation product category. Digitalisation drives demand for more integration between our customers’ ERP systems and our trading platform. Introduction of Trade into the Swedish and Norwegian markets. As Trade has been launched in all our major markets, we have now established a cross-market organisation which reflects the dierent sub-segments they serve. Increased level of activity in sales of sustainable solutions, driven in particular by heat pumps and lighting optimisation. We continued to expand into new sub-segments most recently into the B2B MRO segment. INDUSTRY TRADE Trade continues to deliver strong growth. We aim to grow our Trade segment by a CAGR of >7.5% over the strategic period. Continued growth in all our Industry sub-segments. We aim to grow Climate & Energy by >5% CAGR over the strategic period. Climate & Energy continues to see a significant increase in demand. We aim for a share of revenue from Industry of 35%. Our Concepts continue to perform and generate growing revenue. BUSINESS UPDATE We aim for a share of revenue from Concepts of >25%. CAGR >5% AMBITION REVENUE 35% AMBITION CAGR >7.5% AMBITION 5 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION BUSINESS UPDATE – TRADE DEDICATED LOCAL TEAMS SUPPORT TRADE CUSTOMERS WITH SPECIALISED SERVICES The requirements and buying preferences of our 8,000 trade customers dier from our Installation and Industry segments. Development is key Our customers are based locally, which means that cross-border sales are an exception. We have therefore set up our organisation locally to match our customers’ requirements. We also ensure that Solar representatives are available for consulta- tions whenever required. Our teams work together across markets to share knowledge and experience. We position our customers for success by ensuring a best practice approach, which means that we share trends and identify opportunities. Tailored product assortment We continuously adapt our broad assortment to changes in the market. With our extensive insight into our diverse customer base, we are able to present them with the right products – every time. We have introduced a new concept tailor-made for our Trade customers and designed to further advance their opportunities. The concept is known as Solar Select. Hands-on services The services we oer our Trade customers dier from the two other segments, Installation and Industry. Each of our segments comprises unique services. For Trade, these are storage solutions, logistics and the cleaning of shelves in DIY shops: 2021 Trade 8% Industry Installation 60% 32% services and solutions that support our Trade customers in their daily business, allowing them to focus on what they do best. We prioritise the continued development of our Trade services by engaging our customers. SEGMENTS SHARE OF REVENUE 6 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION ENERGY CHECKS OFFER POTENTIAL SAVINGS OF MORE THAN 10,000 KWH PER YEAR In a partnership between Solar and Grundfos, annual energy savings of more than 10,000 kWh and 2 tonnes of CO were identified at Vejen sports centre. This can be achieved simply by replacing circulation pumps with more energy-ecient models. "Rising energy prices mean that energy-saving initiatives are very much to the fore and this includes sports centre facilities,” says Solar’s Claus Hartmann Enemark Nielsen, who has market responsibility for Infrastructure & Trade, Heating & Sanitation. "Energy consumption for water accounts for a substantial part of the centre’s fixed costs. Local councils have committed to reducing their carbon footprint and to make leisure facilities more sustainable.” Circulation pumps are an oen-overlooked area, but the savings are easily achievable. The pumps are hidden away in basements and technical rooms, and play a vital part in the management and distribution of water. An inecient circulation pump can have a major impact on the overall energy bill and on operational reliability. By focusing on energy optimisation and replacing the old pumps, greater eciency, higher operational reliability, less water consumption and financial savings can be achieved. Solar’s partner, Grundfos, produces pumping solutions for building and construction, water supply, wastewater and industrial use. Together, the two companies visited the 30,000 m Vejen sports centre to carry out an energy check. An energy check means that the detailed results can be used to address customer requirements. At Vejen sports centre, the energy check resulted in potential annual energy savings of more than 10,000 kWh and 2 tonnes CO provided that the pumps were replaced with more energy-ecient models. "Replacing circulation pumps can account for an important part of the energy-saving initiatives that a sports centre can implement, but there are many other parts of the operation that can benefit from such monitoring,” says Claus Hartmann Enemark Nielsen. Solar adapts its products and services to customers’ various requirements. We help to form an overview of the potential savings and can provide suggestions for how energy consumption can be reduced. We have the insight and can advise on innovative measures. There are many opportunities for optimising energy consumption, and by making procurement more insightful, businesses can be made more ecient, with savings made on time and money. VEJEN SPORTS CENTRE, DENMARK At 30,000 m, Vejen sports centre is one of Denmark’s largest gyms and together with it's aliates, it caters for approx. 800,000 visitors per year. Rising energy prices mean that energy-saving initiatives are very much to the fore. And this includes sports centre facilities. 7 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE SHAREHOLDER INFORMATION SOLAR PHASES OUT GAS AND INSTALLS HEAT PUMPS At Solar’s warehouse facilities in Vejen, the installation of three large heat pumps has been finalised. They supply heat to the warehouse as well as the new AutoStore operation. Green energy saving solutions are an integral part of our investment in the expansion of the warehouse in Vejen, which is why gas boilers have been replaced with new energy saving air source heat pumps. "For Solar, rising gas prices are yet another incentive to switch to heat pumps, and with the prospect of rising CO₂ levies, the situation has gone from being a green initiative to also being one which is cost-eective and profitable,” says Dennis Jeppesen, Sales Director, Climate and Energy at Solar Danmark. Attractive payback time With the new heat pumps, we expect our annual savings in energy consumption to be approximately 1,373,000 kWh, which corresponds to the annual energy consumption of around 275 homes. At current prices, we expect to achieve savings of around DKK 2 million per year. "With a total investment of DKK 6.2 million in the new air source heat pumps and energy subsidies from the government, we expect a payback period of approximately 3 years. We’re switching to a green and sustainable solution, which is also a very attrac- tive investment for Solar,” explains Dennis Jeppesen. Reduces CO₂ emissions A gas boiler produces an average of 1 kWh of heat per 1 kWh of input energy whereas a heat pump produces approximately 3.5 times as much heat per 1 kWh of input energy. By switching to a heat pump, therefore, emissions are reduced accordingly. Simple installation Our new air source heat pump system, which replaces the two gas boilers, consists of three heat pumps. The heat pumps are located on the roof of the warehouse in a cascade system to enable opti- mum control. Photovoltaics on the roof mean that we are self-sucient in energy and can run the heat pumps with green energy. UPDATE: WAREHOUSE EXPANSION Green energy solutions are appropriate for all industrial companies: the combination of photovoltaics and heat pumps is ecient while also significantly reducing CO₂ emissions. WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE SHAREHOLDER INFORMATION 8 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION Q2 adjusted organic growth was up at 12.4% (8.6%), while gross profit margin increased to 22.9% (22.0%). Q2 EBITDA of DKK 267m (DKK 211m) was supported by positive development in all markets. Q2 2022 Revenue Revenue increased to DKK 3.5bn (DKK 3.1bn) and adjusted organic growth level amounted to 12.4% (8.6%). Although growth was supported by price increases, we continued to see solid underlying growth. The Installation and Industry segments posted double-digit adjusted organic growth, whereas Trade was stagnant, see page 12. Gross profit Gross profit margin increased to 22.9% (22.0%), which combined with revenue growth, resulted in a gross profit increase of DKK 109m. One-o price eects resulted in a positive impact of approx. DKK 45m (DKK 30m) on gross profit, corresponding to a gross profit margin improvement of approx. 1.3 percentage points (1 percentage point). External operating costs and sta costs In total, external operating costs and sta costs were down at 14.9% (15.1%) of revenue. Rising prices, including energy prices and costs relating to the establishment of our additional warehouse capacity in Norway, had a negative eect on cost development. Increased costs were also attributable to strong revenue growth and improved earnings. Loss on trade receivables Loss on trade receivables amounted to DKK 9m (DKK 5m) mainly due to a few losses on individual customers. EBITDA We succeeded in increasing EBITDA by DKK 56m. This was supported by our four strategic focus areas, Concepts, Industry, Climate & Energy and Trade, positive one-os and a strong growth level. The EBITDA margin was up at 7.7% (6.8%) as EBITDA increased to DKK 267m (DKK 211m) and slightly exceeded our expectations mainly due to one-o price increases. The results of the individual markets are given on page 24. Financials Net financials amounted to DKK -8m (DKK 3m). In Q2 2021, net financials were positively aected by DKK 11m due to an interest compensation related to a ruling from the Danish tax authorities, see section on income tax on page 10. Earnings before tax Earnings before tax were up at DKK 193m (DKK 156m). Q2 EBITDA INCREASED BY 27% TO DKK 267M (Figures in brackets are figures from the corresponding period in 2021) FINANCIAL REVIEW GROSS PROFIT MARGIN % EBITDA DKKm Q2Q1 Q3 Q4 21 22 23 24 2022 2021 Q2Q1 Q3 Q4 0 50 100 150 200 250 300 2022 2021 22.9 267 9 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION FINANCIAL REVIEW Income tax Income tax amounted to DKK -46m (DKK -8m). In Q2 2021, 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 amounted to approx. DKK 19m. Net profit Net profit came to DKK 147m (DKK 148m). H1 2022 Revenue In H1, adjusted organic growth at group level increased to 12.9% (3.8%) and revenue was up at DKK 6.9bn (DKK 6.1bn). Gross profit Gross profit increased by DKK 251m with continuous improvement in the gross profit mar- gin, which increased to 23.0% (21.9%). One-o price eects resulted in a positive impact of approx. DKK 80m (DKK 30m) on gross profit, corresponding to a gross profit margin improve- ment of approx. 1.2 percentage points (0.5 percentage point). Other income Other income amounted to DKK 1m (DKK 6m). By way of comparison, in H1 2021, other income related to profit from the disposal of a property in Denmark of DKK 3m and one-o compensation of DKK 3m. External operating costs and sta costs In total, external operating costs and sta costs were down at 14.9% (15.1%) of revenue. Rising prices, including energy prices, had a negative eect on cost development. Increased costs were also attributable to strong revenue growth and improved earnings. EBITDA EBITDA increased by DKK 133m to DKK 548m cor- responding to an EBITDA margin of 7.9% (6.8%) of revenue. All entities saw substantial improve- ment in EBITDA, with Solar Nederland and Solar Sverige making a significant contribution. The results of the individual markets are shown on page 25. Financials Net financials amounted to DKK -13m (DKK -17m). In H1 2021, net financials were negatively aected by DKK 14m due to the early redemption of an interest swap and positively aected by DKK 11m regarding interest compensation related to a ruling by the Danish tax authorities. Earnings before tax Earnings before tax were up at DKK 410m (DKK 279m). Income tax Income tax amounted to DKK -95m (DKK -31m). In H1 2021, 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 amounted to approx. DKK 19m. Net profit Net profit increased to DKK 315m (DKK 248m). Cash flow Net working capital calculated as an average of the previous four quarters amounted to 12.3% (10.8%) of revenue. Net working capital at the end of Q2 2022 was 14.1% (10.9%). In H1, cash flow from operating activities totalled DKK -212m (DKK 263m). Changes in receivables had a DKK -495m (DKK -433m) impact on cash flow, which was aected by the increased growth level in H1 2022 and nor- mal seasonal fluctuations. Changes in inventories and non-interest-bearing liabilities had an impact of DKK -159m (DKK 24m) and DKK -37m (DKK 315m), respectively. The general inventory level was aected by price increases and by the decision to increase our inventory level to ensure delivery performance during a period of potential goods shortage. Most of the COVID-19 financial support package has now been repaid. Total cash flow from investing activities amounted to DKK -184m (DKK -73m). DKK -98m related to the investment in the expansion and upgrading of our warehouse in Denmark, cf. page 10 in Annual Report 2021. In addition, the acquisition of Højager Belysning A/S had an impact of DKK -34m, cf. page 26 of this report. Cash flow from financing activities amounted to DKK 4m (DKK -342m), mainly aected by ordinary and extraordinary dividend distributions totalling DKK 658m (DKK 314m) and by the change in current interest-bearing debt of DKK 723m (DKK 49m). Consequently, cash flow totalled DKK -392m (DKK -152m). Net interest-bearing liabilities amounted to DKK 1,122m (DKK 329m). As at 30 June 2022, gearing was 1.1 (0.4) times EBITDA. Calculated as an average, gearing was un- changed at 0.5 times EBITDA. Our gearing target is between 1.5-3.0 times EBITDA. As at 30 June 2022, Solar had undrawn credit facilities of DKK 85m (DKK 426m). NIBD IN DKK MILLION -150 -658 -5 -98 10 -34 -12 200 0 -200 -400 -600 -800 -1,000 -1,200 37 31.12.2021 -212 Operating activities CAPEX Other investments Dividends Oth. fin. activities Leasing & misc. Assumed on acquisition FX -1,122 30.06.2022 10 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION FINANCIAL REVIEW KEY RISKS AND MITIGATION Invested capital Invested capital for the Solar Group totalled DKK 2,675m (DKK 1,921m). ROIC amounted to 25.5% (21.0%). 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 aected by both global trends and local conditions in the markets where we operate. The Russian invasion of Ukraine and sanctions imposed by the European Union and other international bodies may also aect markets outside Russia and Ukraine. Solar neither has business activities in Russia nor Ukraine, but there is a potential risk of the knock- on eects e.g. leading to significant drop in market activities. We are monitoring the situation closely and will adopt the necessary initiatives to limit these impacts, preserve business continuity and protect earnings. No additional risks have been identified. The commercial and financial risks relating to our activities are detailed in Solar’s 2021 Annual Report. 11 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION TRADE Our Trade segment covers special sales and other small areas. It also includes Solar Polaris. In Q2, revenue from Trade was unchanged at DKK 0.3bn corresponding to overall adjusted organic growth of around -2% (30%) as revenue in the DIY sub-segment declined albeit from a high level. Segment profit amounted to DKK 40m (DKK 50m) corresponding to a segment profit margin of 14.4% (18.1%) negatively aected by a decline in gross profit margin. OUR INSTALLATION AND INDUSTRY SEGMENTS DELIVERED STRONG GROWTH IN Q2 (Data shown in brackets relate to the corresponding period in 2021) Segment profit includes any items that are directly attributable to the individual segment and any items that can be reliably allocated to the individual segment. Segment profit does not include non-allocated costs of DKK 214m (DKK 187m) in Q2, which refer to income and costs related to joint group functions and to costs, which can not be reliably allocated to the individual segment. Detailed segment information is given on page 22. OUR SEGMENTS INSTALLATION Our Installation segment covers installation of electrical and heating and plumbing products. In Q2, Installation revenue increased to DKK 2.0bn (DKK 1.9bn) corresponding to overall adjusted organic growth of around 11% (4%) related pri- marily to the electrical business. Apart from Solar Polska, all markets saw growth in Installation. Segment profit increased to DKK 244m (DKK 211m) corresponding to a segment profit margin of 12.0% (11.4%) positively aected by an in- creased gross profit margin. INDUSTRY This segment covers industry, oshore and marine industries as well as utilities and infrastructure. Industry also includes MAG45. In Q2, Industry revenue increased to DKK 1.1bn (DKK 1.0bn). This corresponds to overall adjusted organic growth of around 18% (12%) related primarily to OEM, Utilities, Marine & Oshore, although MRO also saw solid growth. We saw growth above 20% for Solar Danmark, Solar Norge and Solar Polska. Segment profit increased to DKK 197m (DKK 137m). This corresponds to a segment profit margin of 17.2% (14.1%). Q2 2022 Q2 2022 Installation Installation 2,028 244 Industry Industry Trade Trade 278 40 1,145 197 SEGMENT REVENUE DKKm SEGMENT PROFIT DKKm OVERVIEW BUSINESS SEGMENTS Q2 Revenue Segment profit Segment margin % DKK million 2022 2021 2022 2021 2022 2021 Installation 2,028 1,850 244 211 12.0 11.4 Industry 1,145 971 197 137 17.2 14.1 Trade 278 277 40 50 14.4 18.1 Solar Group 3,451 3,098 481 398 13.9 12.8 12 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION TRADE In H1, revenue from Trade increased to DKK 0.6bn (DKK 0.5bn) corresponding to overall adjusted organic growth of around 14% (8%). Segment profit amounted to DKK 80m (DKK 88m) corresponding to a segment profit margin of 13.7% (17.6%). ALL SEGMENTS DELIVERED STRONG GROWTH IN H1 (Data shown in brackets relate to the corresponding period in 2021) Segment profit includes any items that are directly attributable to the individual segment and any items that can be reliably allocated to the individual segment. Segment profit does not include non-allocated costs of DKK 427m (DKK 351m) in H1, which refer to income and costs related to joint group functions and to costs, which can not be reliably allocated to the individual segment. Detailed segment information is given on page 23. OUR SEGMENTS INSTALLATION In H1, Installation revenue increased to DKK 4.1bn (DKK 3.7bn) corresponding to overall adjusted organic growth of around 10% (2%) related primarily to the electrical business. All markets saw growth in Installation, with Solar Sverige and Solar Polska posting particularly strong growth. Segment profit increased to DKK 500m (DKK 384m) corresponding to a segment profit margin of 12.3% (10.4%) positively aected by an in- creased gross profit margin. INDUSTRY In H1, Industry revenue increased to DKK 2.3bn (DKK 1.9bn). This corresponds to overall adjusted organic growth of around 18% (6%) related pri- marily to OEM, Utilities, Marine & Oshore with MRO also seeing solid growth. We posted growth above 14% in all markets covering Industry, with Solar Polska and Solar Norge making a substantial contribution. Segment profit increased to DKK 395m (DKK 294m). This corresponds to a segment profit mar- gin of 17.4% (15.4%). H1 2022 H1 2022 Installation Installation 4,063 500 Industry Industry Trade Trade 585 80 2,265 395 SEGMENT REVENUE DKKm SEGMENT PROFIT DKKm OVERVIEW BUSINESS SEGMENTS H1 Revenue Segment profit Segment margin % DKK million 2022 2021 2022 2021 2022 2021 Installation 4,063 3,699 500 384 12.3 10.4 Industry 2,265 1,904 395 294 17.4 15.4 Trade 585 499 80 88 13.7 17.6 Solar Group 6,913 6,102 975 766 14.1 12.6 13 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION EBITDA GUIDANCE HAS BEEN UPGRADED TO DKK 1.1BN Solar upgraded its EBITDA guidance for 2022 by DKK 125m to DKK 1.1bn on 9 August. Revenue for 2022 was revised upwards to a total of DKK 13.45bn, up by DKK 0.2bn, which corresponds to organic growth of approx. 9%. See announcement no. 11 2022. GENERAL ASSUMPTIONS The guidance for 2022 assumes that the Russian invasion of Ukraine and sanctions imposed by the European Union and other international bodies will not have any significant knock-on eects e.g. leading to significant drop in market activities. Loss on trade receivables is assumed to be approximately at the same level as in 2021. MARKET OUTLOOK FOR SOLAR’S SEGMENTS Overall, we expect the markets to show growth rates in all countries throughout the rest of 2022. Installation On the backdrop of continued electrification as one of the important megatrends, we expect the installation market to continue to show growth in 2022 compared to 2021. Industry The guidance is based on the assumption that sales to all industry sub-segments will continue to deliver solid growth rates. Trade In H2 2022, we also expect solid growth for spe- cial sales, the Trade segment's primary activity. FINANCIAL OUTLOOK 2022 Revenue guidance We expect revenue to amount to DKK 13.45bn, corresponding to organic growth of approx. 9%. Our Better Business project is an integral part of the Core+ strategy and is expected to reduce revenue by approx. DKK 200m compared to 2021. This will mainly aect Installation and Trade, primarily in Solar Sverige, and to a lesser extent Solar Nederland. Adjusted for this, we expect organic growth of approx. 11%. EBITDA guidance We expect EBITDA to amount to DKK 1.1bn, of which DKK 200m can be attributed to one-o price eects. * not adjusted for IFRS16 impact ** including one-o income of DKK 112m GUIDANCE 2022 1200 1100 1000 900 800 700 600 500 400 300 2017 2018 2019 2020 2021** One-os 2021 Improvement Guidance 2022 Feb One-os 2022 362 379 538 911 -112 51 850 637 200 Improvement 50 Guidance 2022 Aug 1100 EBITDA DKKm 14 MANAGEMENT REVIEW SOLAR Q2 2022 WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 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. 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% DISTRIBUTION OF SHARE CAPITAL AND VOTES BASED ON THE LATEST PUBLIC INFORMATION FINANCIAL CALENDAR 2022 11 August Quarterly Report Q2 2022 1 October - 3 November IR quiet period 3 November Quarterly Report Q3 2022 The A shares are not listed. The B shares are listed on Nasdaq Copenhagen under the ID code DK0010274844, and are designated SOLAR B, and 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 of the Solar B share during the holding period 1 January - 30 June 2022 was -12.5% including the DKK 45.00 ordinary dividend and the DKK 45.00 extraordinary dividend that was paid out in March and May 2022, respectively. AUDIO WEBCAST The presentation of the Quarterly Report Q2 2022 will be conducted in English on 11 August 2022 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 2022 15 MANAGEMENT REVIEW WHO WE ARE FINANCIAL HIGHLIGHTS BUSINESS UPDATE FINANCIAL REVIEW OUR SEGMENTS GUIDANCE 2022 SHAREHOLDER INFORMATION Solar A/S CVR no. 15 90 84 16 CONSOLIDATED FINANCIAL STATEMENTS Q2 2022 16 STATEMENT OF COMPREHENSIVE INCOME Income statement Q2 H1 Year DKK million 2022 2021 2022 2021 2021 Revenue 3,451 3,098 6,913 6,102 12,354 Cost of sales -2,661 -2,417 -5,323 -4,763 -9,581 Gross profit 790 681 1,590 1,339 2,773 Other operating income and costs 0 3 1 6 7 External operating costs -91 -68 -187 -143 -297 Sta costs -423 -400 -841 -776 -1,552 Loss on trade receivables -9 -5 -15 -11 -20 Earnings before interest, tax, depreciation and amortisation (EBITDA) 267 211 548 415 911 Depreciation and write-down on property, plant and equipment -49 -45 -94 -92 -184 Earnings before interest, tax and amortisation (EBITA) 218 166 454 323 727 Amortisation and impairment of intangible assets -16 -13 -30 -27 -55 Earnings before interest and tax (EBIT) 202 153 424 296 672 Share of net profit from associates -1 0 -1 0 -2 Financial income 12 14 22 22 41 Financial expenses -20 -11 -35 -39 -89 Earnings before tax (EBT) 193 156 410 279 622 Income tax -46 -8 -95 -31 -91 Net profit for the period 147 148 315 248 531 Earnings in DKK per share outstanding (EPS) 20.13 20.27 43.13 33.97 72.72 Diluted earnings in DKK per share outstanding (EPS-D) 20.07 20.22 43.00 33.90 72.50 Other comprehensive income Q2 H1 Year DKK million 2022 2021 2022 2021 2021 Net profit for the period 147 148 315 248 531 Other income and costs recognised: Items that can be reclassified for the income statement Foreign currency translation adjustments of foreign subsidiaries -35 -1 -28 11 14 Fair value adjustments of hedging instruments before tax 12 6 25 23 29 Tax on fair value adjustments of hedging instruments -3 -1 -6 -5 -6 Other income and costs recognised aer tax -26 4 -9 29 37 Total comprehensive income for the period 121 152 306 277 568 17 FINANCIAL STATEMENTS SOLAR Q2 2022 30.06 31.12 DKK million 2022 2021 2021 ASSETS Intangible assets 183 157 159 Property, plant and equipment 961 831 885 Right-of-use assets 346 317 300 Deferred tax asset 12 3 13 Investments in associates 4 5 5 Other non-current assets 51 72 53 Non-current assets 1,557 1,385 1,415 Inventories 1,991 1,513 1,855 Trade receivables 1,957 1,701 1,502 Income tax receivable 4 33 0 Other receivables 14 18 6 Prepayments 57 52 46 Cash at bank and in hand 99 252 481 Current assets 4,122 3,569 3,890 Total assets 5,679 4,954 5,305 30.06 31.12 DKK million 2022 2021 2021 EQUITY AND LIABILITIES Share capital 736 736 736 Reserves -167 -166 -158 Retained earnings 1,031 1,091 1,045 Proposed dividends for the financial year 0 0 329 Equity 1,600 1,661 1,952 Interest-bearing liabilities 116 124 120 Lease liabilities 247 217 203 Provision for deferred tax 133 103 101 Other provisions 10 13 11 Non-current liabilities 506 457 435 Interest-bearing liabilities 754 135 19 Lease liabilities 104 105 102 Trade payables 2,092 1,934 2,098 Income tax payable 59 46 33 Other payables 545 607 644 Prepayments 2 4 1 Other provisions 17 5 21 Current liabilities 3,573 2,836 2,918 Liabilities 4,079 3,293 3,353 Total equity and liabilities 5,679 4,954 5,305 BALANCE SHEET 18 FINANCIAL STATEMENTS SOLAR Q2 2022 CASH FLOW STATEMENT Q2 H1 Year DKK million 2022 2021 2022 2021 2021 Net profit of continuing operations for the period 147 148 315 248 531 Depreciation, write-down and amortisation 65 58 124 119 239 Changes to provisions and other adjustments -9 3 -12 -2 11 Share of net profit from associates 1 0 1 0 2 Financials, net 7 -3 13 17 48 Income tax 46 8 95 31 91 Financial income, received 3 2 6 3 23 Financial expenses, settled -7 -9 -14 -33 -50 Income tax, settled -20 -9 -49 -26 -81 Cash flow before working capital changes 233 198 479 357 814 Working capital changes Inventory changes -173 60 -159 24 -319 Receivables changes 36 -79 -495 -433 -229 Non-interest-bearing liabilities changes -106 172 -37 315 517 Cash flow from operating activities -10 351 -212 263 783 Q2 H1 Year DKK million 2022 2021 2022 2021 2021 Investing activities Purchase of intangible assets -14 -15 -30 -28 -58 Purchase of property, plant and equipment -61 -47 -120 -57 -143 Disposal of property, plant and equipment 0 0 0 18 18 Aquisition of subsidiaries and activities 0 0 -34 0 0 Acquisition of associates 0 -1 0 -3 -5 Other financial investments 0 0 0 -3 -3 Cash flow from investing activities -75 -63 -184 -73 -191 Financing activities Repayment of non-current interest-bearing debt -2 -2 -4 -22 -79 Change in current interest-bearing debt 400 -130 723 49 -9 Instalment on lease liabilities -28 -29 -57 -57 -115 Dividends distributed -329 -110 -658 -314 -314 Sale of treasury shares 0 0 0 2 2 Cash flow from financing activities 41 -271 4 -342 -515 Total cash flow -44 17 -392 -152 77 Cash at bank and in hand at the beginning of period 143 235 481 404 404 Assumed on aquisition of subsidaries 0 0 10 0 0 Cash at bank and in hand at the end of period 99 252 99 252 481 Cash at bank and in hand at the end of the period Cash at bank and in hand 99 252 99 252 481 Cash at bank and in hand at the end of the period 99 252 99 252 481 19 FINANCIAL STATEMENTS SOLAR Q2 2022 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 2022 Equity as at 1 January 736 -37 -121 1,045 329 1,952 Foreign currency translation adjustments of foreign subsidiaries -28 -28 Fair value adjustments of hedging instruments before tax 25 25 Tax on fair value adjustments -6 -6 Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0 19 -28 0 0 -9 Net profit for the period 315 315 Comprehensive income 0 19 -28 315 0 306 Distribution of dividends (DKK 45.00 per share) -329 -329 Distribution of extraordinary dividends (DKK 45.00 per share) -329 -329 Transactions with the owners 0 0 0 -329 -329 -658 Equity as at 30 June 736 -18 -149 1,031 0 1,600 20 FINANCIAL STATEMENTS SOLAR Q2 2022 – 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 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. 21 FINANCIAL STATEMENTS SOLAR Q2 2022 NOTES Segment information The business segments of Solar A/S are Installation, Industry and Trade and are based on the customers’ aliation with the segments. Installation covers installation of electrical, and heating and plumbing products, while Industry covers industry, oshore 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 and costs, which can not be reliably allocated to the individual segment. Assets and liabilities are not included in segment reporting. DKK million Installation Industry Trade Total Q2 2022 Revenue 2,028 1,145 278 3,451 Cost of sales -1,589 -856 -216 -2,661 Gross profit 439 289 62 790 Direct costs -69 -33 -10 -112 Earnings before indirect costs 370 256 52 678 Indirect costs -126 -59 -12 -197 Segment profit 244 197 40 481 Non-allocated costs -214 Earnings before interest, tax, depreciation and amortisation (EBITDA) 267 Depreciation and amortisation -65 Earnings before interst and tax (EBIT) 202 Financials, net incl. share of net profit from associates and impairment on associates -9 Earnings before tax (EBT) 193 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 interst and tax (EBIT) 153 Financials, net incl. share of net profit from associates and impairment on associates 3 Earnings before tax (EBT) 156 22 FINANCIAL STATEMENTS SOLAR Q2 2022 Segment information – continued DKK million Installation Industry Trade Total H1 2022 Revenue 4,063 2,265 585 6,913 Cost of sales -3,174 -1,688 -461 -5,323 Gross profit 889 577 124 1,590 Direct costs -136 -65 -19 -220 Earnings before indirect costs 753 512 105 1,370 Indirect costs -253 -117 -25 -395 Segment profit or loss 500 395 80 975 Non-allocated costs -427 Earnings before interest, tax, depreciation and amortisation (EBITDA) 548 Depreciation and amortisation -124 Earnings before interst and tax (EBIT) 424 Financials, net -14 Earnings before tax (EBT) 410 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 or loss 384 294 88 766 Non-allocated costs -351 Earnings before interest, tax, depreciation and amortisation (EBITDA) 415 Depreciation and amortisation -119 Earnings before interst and tax (EBIT) 296 Financials, net -17 Earnings before tax (EBT) 279 NOTES 23 FINANCIAL STATEMENTS SOLAR Q2 2022 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 132 of Annual Report 2021 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 2022 Denmark 1,10 9 9.5 100 9.0 2,150 Sweden 724 8.0 48 6.6 178 Norway 554 14.8 44 7.9 229 The Netherlands 825 18.3 59 7. 2 329 Poland 119 6.1 5 4.2 26 Several markets (MAG45) 193 18.1 9 4.7 52 Other markets 29 21.3 2 6.9 32 Eliminations -102 - 0 0.0 -1,439 Solar Group 3,451 12.4 267 7.7 1,557 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 Several markets (MAG45) 166 20.5 7 4.2 49 Other markets 14 11.2 1 7.1 4 Eliminations -82 - 0 0.0 -1,220 Solar Group 3,098 8.6 211 6.8 1,385 24 FINANCIAL STATEMENTS SOLAR Q2 2022 Segment information – continued NOTES DKK million Revenue Adjusted organic growth % EBITDA EBITDA margin % Non-current assets H1 2022 Denmark 2,261 11.1 208 9.2 2,150 Sweden 1,427 10.2 101 7.1 178 Norway 1,104 14.7 91 8.2 229 The Netherlands 1,649 14.3 115 7.0 329 Poland 251 24.2 12 4.8 26 Several markets (MAG45) 374 17.7 17 4.5 52 Other markets 48 10.5 4 8.3 32 Eliminations -201 - 0 0.0 -1,439 Solar Group 6,913 12.9 548 7.9 1,557 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 Several markets (MAG45) 318 13.5 13 4.1 49 Other markets 30 9.3 3 10.0 4 Eliminations -165 - 0 0.0 -1,220 Solar Group 6,102 3.8 415 6.8 1,385 25 FINANCIAL STATEMENTS SOLAR Q2 2022 NOTES Acquisition of business activities On 1 March 2022, Solar acquired the shares in the lighting company Højager Belysning A/S in Denmark. Total acquisition price of 100% of the Højager Belysning shares amounted to DKK 34m, equal to an enterprise value of DKK 25m. With the acquisition, Solar takes a strong position with the B2G market in Denmark, as Højager Belysning A/S is a leading supplier within sales of light sources and lighting for the public sector with Staten og Kommunernes Indkøbsservice A/S (in short: SKI) and the regions being their customers. Højager Belysning A/S has 28 dedicated employees. 26 FINANCIAL STATEMENTS SOLAR Q2 2022 NOTES Accounting policies The financial 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 eect of new IAS/IFRS standards implemented during the period, the accounting policies re- main unchanged from the Annual Report 2021, which contains a full description of these on pages 57-59 as well as of relevant, supplementary notes. In the financial 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 become eective 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 as at 30 June 2022 and to be implemented in coming accounting periods are not expected to have significant impact on Solar's accounting policies. 27 FINANCIAL STATEMENTS SOLAR Q2 2022 Consolidated QUARTERLY FIGURES Q1 Q2 Q3 Q4 Income statement (DKK million) 2022 2021 2022 2021 2021 2020 2021 2020 Revenue 3,462 3,004 3,451 3,098 2,872 2,618 3,380 3,057 Earnings before interest, tax, depreciation and amortisation (EBITDA) 281 204 267 211 237 177 259 191 Earnings before interest, tax and amortisation (EBITA) 236 157 218 166 192 132 212 145 Earnings before interest and tax (EBIT) 222 143 202 153 179 115 197 -14 Financials, net -5 -20 -8 3 -20 -10 -11 -16 Earnings before tax (EBT) 217 123 193 156 159 109 184 -7 Net profit or loss for the quarter 168 100 147 148 124 83 159 -32 Balance sheet (DKK million) Non-current assets 1,487 1,342 1,557 1,385 1,393 1,695 1,415 1,339 Current assets 4,088 3,500 4,122 3,569 3,724 3,227 3,890 3,268 Balance sheet total 5,575 4,842 5,679 4,954 5,117 4,922 5,305 4,607 Equity 1,808 1,619 1,600 1,661 1,784 1,688 1,952 1,696 Non-current liabilities 453 498 506 457 446 497 435 498 Current liabilities 3,314 2,725 3,573 2,836 2,887 2,737 2,918 2,413 Interest-bearing liabilities, net 617 461 1,122 329 450 726 -37 128 Invested capital 2,377 2,011 2,675 1,921 2,18 5 2,132 1,866 1,760 Net working capital, end of period 1,791 1,344 1,856 1,280 1,568 1,363 1,259 1,109 Net working capital, average 1,475 1,300 1,619 1,274 1,325 1,365 1,363 1,322 28 FINANCIAL STATEMENTS SOLAR Q2 2022 QUARTERLY FIGURES Consolidated – continued Q1 Q2 Q3 Q4 Cash flows (DKK million) 2022 2021 2022 2021 2021 2020 2021 2020 Cash flow from operating activities -202 -88 -10 351 -38 142 558 432 Cash flow from investing activities -109 -10 -75 -63 -65 -8 -53 213 Cash flow from financing activities -37 -71 41 -271 77 -116 -250 -397 Net investments in intangible assets -16 -13 -14 -15 -14 -12 -16 -14 Net investments in property, plant and equipment -59 8 -61 -47 -51 1 -35 -9 Acquisition and divestment of subsidiaries and operations, net -34 0 0 0 0 0 0 0 Financial ratios (% unless otherwise stated) Revenue growth 15.2 -1.3 11.4 12.9 9.7 -5.7 10.6 -0.6 Organic growth 15.4 -2.2 11.7 10.6 8.8 -4.8 9.1 0.0 Organic growth adjusted for number of working days 13.6 -0.6 12.4 8.6 8.8 -4.8 7.1 -2.1 Gross profit margin 23.1 21.9 22.9 22.0 23.0 21.5 22.9 21.5 EBITDA margin 8.1 6.8 7.7 6.8 8.3 6.8 7.7 6.2 EBITA margin 6.8 5.2 6.3 5.4 6.7 5.0 6.3 4.7 EBIT margin 6.4 4.8 5.9 4.9 6.2 4.4 5.8 -0.5 Net working capital (end of period NWC)/revenue (LTM) 14.0 11.8 14.1 10.9 13.0 11.9 10.2 9.7 Net working capital (average NWC )/revenue (LTM) 11.5 11.4 12.3 10.8 11.0 11.9 11.0 11.5 Gearing (interest-bearing liabilities,net/EBITDA), no. of times 0.6 0.7 1.1 0.4 0.5 1.2 0.0 0.2 Return on equity (ROE) 31.9 17.6 35.1 18.2 19.7 18.9 28.4 13.1 Return on invested capital (ROIC) 26.5 16.6 25.5 21.0 23.6 11.7 24.6 13.8 Enterprise value/earnings before interest, tax and amortisation (EV/EBITA) 7.5 7.6 6.3 7.0 7.6 6.2 7.8 5.8 Equity ratio 32.4 33.4 28.2 33.5 34.9 34.3 36.8 36.8 29 FINANCIAL STATEMENTS SOLAR Q2 2022 QUARTERLY FIGURES Consolidated – continued Q1 Q2 Q3 Q4 Share ratios (DKK unless otherwise stated) 2022 2021 2022 2021 2021 2020 2021 2020 Earnings per share outstanding (EPS) 23.00 13.70 20.13 20.27 16.98 11.37 21.77 -4.38 Intrinsic value per share outstanding 247. 5 6 221.68 219.08 227.43 244.28 231.29 267. 28 232.38 Share price 749.19 480.82 597.0 9 541.47 632.86 301.43 795.05 353.70 Share price/intrinsic value 3.03 2.17 2.73 2.38 2.59 1.30 2.97 1.52 Employees Number of employees (FTE's), end of period 2,996 2,901 2,995 2,899 2,897 2,891 2,936 2,864 Average number of employees (FTE's) 2,932 2,897 2,956 2,889 2,890 2,979 2,908 2,935 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 eective tax rate. In all material aspects financial ratios are calculated in accordance with the Danish Finance Society’s “Recommendations & Financial Ratios”. 30 FINANCIAL STATEMENTS SOLAR Q2 2022 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 2022. The financial report for the first six months of 2022, 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 2022 as well as of the results of the group’s activities and cash flow for the first six months of 2022. 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 2022 with the file name SOLA-2022-06-30-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation. Vejen, 11 August 2022 EXECUTIVE BOARD Jens E. Andersen Hugo Dorph Michael H. Jeppesen CEO CCO CFO BOARD OF DIRECTORS Michael Troensegaard Andersen Jesper Dalsgaard Peter Bang Chair Vice-chair Katrine Borum Morten Chrone Denise Goldby Louise Knauer Rune Jesper Nielsen Michael Kærgaard Ravn 31 FINANCIAL STATEMENTS SOLAR Q2 2022 Solar A/S Industrivej Vest 43 DK - 6600 Vejen Denmark Tel. +45 79 30 00 00 CVR no. 15908416 LEI 21380031XTLI9X5MTY92 www.solar.eu www.linkedin.com/company/solar-as Interim report (6 months)No audit assistanceParsePort XBRL Converter2022-01-012022-06-302021-01-012021-06-30Reporting class D21380031XTLI9X5MTY9215908416Solar A/SIndustrivej Vest 436600 Vejen21380031XTLI9X5MTY922022-01-012022-06-30cmn:ConsolidatedMember21380031XTLI9X5MTY922022-04-012022-06-3021380031XTLI9X5MTY922021-04-012021-06-3021380031XTLI9X5MTY922022-01-012022-06-3021380031XTLI9X5MTY922021-01-012021-06-3021380031XTLI9X5MTY922021-01-012021-12-3121380031XTLI9X5MTY922022-06-3021380031XTLI9X5MTY922021-06-3021380031XTLI9X5MTY922021-12-3121380031XTLI9X5MTY922022-03-3121380031XTLI9X5MTY922021-03-3121380031XTLI9X5MTY922020-12-3121380031XTLI9X5MTY922021-12-31ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922022-01-012022-06-30ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922022-06-30ifrs-full:IssuedCapitalMember21380031XTLI9X5MTY922021-12-31ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922022-01-012022-06-30ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922022-06-30ifrs-full:ReserveOfCashFlowHedgesMember21380031XTLI9X5MTY922021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922022-01-012022-06-30ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922022-06-30ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember21380031XTLI9X5MTY922021-12-31ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922022-01-012022-06-30ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922022-06-30ifrs-full:RetainedEarningsMember21380031XTLI9X5MTY922021-12-31SOL:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember21380031XTLI9X5MTY922022-01-012022-06-30SOL:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember21380031XTLI9X5MTY922022-06-30SOL:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember21380031XTLI9X5MTY922020-12-31ifrs-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:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember21380031XTLI9X5MTY922021-01-012021-06-30SOL:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember21380031XTLI9X5MTY922021-06-30SOL:DividendsProposedOrDeclaredBeforeFinancialStatementsAuthorisedForIssueButNotRecognisedAsDistributionToOwnersRecognisedInEquityMember21380031XTLI9X5MTY922022-01-012022-06-301cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-302cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-303cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-301cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-302cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-304cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-303cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-306cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-307cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-305cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-308cmn:ConsolidatedMember21380031XTLI9X5MTY922022-01-012022-06-309cmn:ConsolidatedMemberiso4217:DKKiso4217:DKKxbrli:sharesxbrli:pure