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Solar Interim / Quarterly Report 2022
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Interim / Quarterly Report
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- august 2022
Meddelelse nr. 12 2022
solar
SOLAR LEVEREDE EN STÆRK PERFORMANCE I ALLE MARKEDER
Solar øgede forventningerne til EBITDA for 2022 til DKK 1,1 mia. fra DKK 975 mio. Desuden opjusterede vi forventningerne til omsætningen til DKK 13,45 mia. sammenlignet med vores tidligere forventning på DKK 13,25 mia. Se meddelelse nr. 11 2022.
CEO Jens Andersen udtaler:
"Vi opnåede en stærk EBITDA-vækst i Q2 drevet af vores fire strategiske fokusområder, Koncepter, Industri, Klima & Energi samt Trade, understøttet af en positiv udvikling på alle markeder.
Vi opnåede tocifret justeret organisk vækst i vores to hovedsegmenter Installation og Industri på henholdsvis 11% og 18%.
Vi ser fortsat en høj efterspørgsel inden for Klima & Energi, og grønne løsninger vil fortsætte med at være en vigtig vækstkomponent."
Finansielle hovedbudskaber for Q2
- Justeret organisk vækst steg til 12,4% fra 8,6%.
- EBITDA steg med DKK 56 mio. til DKK 267 mio.
- Engangspriseffekter påvirkede bruttofortjenesten med ca. DKK 45 mio. mod DKK 30 mio. i 2. kvartal 2021.
| Udvalgte hovedtal (DKK mio.) | Q2 2022 | Q2 2021 | H1 2022 | H1 2021 |
|---|---|---|---|---|
| Omsætning | 3.451 | 3.098 | 6.913 | 6.102 |
| EBITDA | 267 | 211 | 548 | 415 |
| Pengestrømme fra driftsaktivitet | -10 | 351 | -212 | 263 |
| Udvalgte nøgletal (%) | ||||
| Organisk vækst justeret for antal arbejdsdage | 12,4 | 8,6 | 12,9 | 3,8 |
| EBITDA-margin | 7,7 | 6,8 | 7,9 | 6,8 |
| Nettoarbejdskapital, ultimo/omsætning (LTM) | 14,1 | 10,9 | 14,1 | 10,9 |
| Gearing (NIBD/EBITDA), antal gange | 1,1 | 0,4 | 1,1 | 0,4 |
| Afkast af investeret kapital (ROIC) | 25,5 | 21,0 | 25,5 | 21,0 |
Solar A/S
LEI: 21380031XTL6X5MTY92
Industrivej Vest 43, DK-6600 Vejen, Denmark
Tlf. +45 79 30 00 00
CVR-nr. 15 90 84 16
www.solar.eu/
- august 2022
Meddelelse nr. 12 2022
solar
Audio webcast og telekonference i dag
Præsentationen af Delårsrapport Q2 2022 foregår på engelsk den 11. august 2022 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 51
UK: tlf. +44 333 300 9268
US: tlf. +1 646 722 4904
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 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 2021 en omsætning på ca. 12,4 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
Selskabsmeddelelsen 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, DK-6600 Vejen, Denmark
Tlf. +45 79 30 00 00
CVR-nr. 15 90 84 16
www.solar.eu/
2022
solar
Solar A/S
Industrivej 1651 43
6000 Solen
Denmark
CVR no. 15908416
LEI 21380031XTLD965MTY92
MANAGEMENT REVIEW
CONTENTS
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
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.
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
WHO WE ARE
We are a leading European sourcing and services company.
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 different 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.
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
三
FINANCIAL HIGHLIGHTS
| 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".
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.
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
三
BUSINESS UPDATE
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.
| CONCEPTS | CLIMATE & ENERGY | INDUSTRY | TRADE |
|---|---|---|---|
| Alignment and expansion of our product portfolio within each concept. | Extending the organisational scope in Sweden and Norway – increasing local market knowledge and consolidating our product portfolio. | Transition to a cross-border based vertical organisational structure – covering Denmark, Norway, Sweden and the Netherlands. | 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 different sub-segments they serve. |
| Substitution of low margin business with concepts. | Introduction of high-capacity heat pumps as an alternative heating solution for the industry. | Solar Nederland introduced Marine & Offshore. | Increased level of activity in sales of sustainable solutions, driven in particular by heat pumps and lighting optimisation. |
| Customisation of concept offerings to individual target groups. | Gas boilers phased out from our Danish product portfolio. | Important infrastructure contract in Norway extended. | We continued to expand into new sub-segments most recently into the B2B MRO segment. |
| Introduction of Solar Select and Solar Zero: concepts tailored to our Trade and Climate & Energy customers, respectively. | Norwegian partner programme continues to add value to a growing customer base. | Increased demand from MRO and OEM customers in Sweden in the automation product category. | |
| Employee training in certified sustainable building. | Digitalisation drives demand for more integration between our customers' ERP systems and our trading platform. | ||
| Our Concepts continue to perform and generate growing revenue. | Climate & Energy continues to see a significant increase in demand. | Continued growth in all our Industry sub-segments. | Trade continues to deliver strong growth. |
| AMBITION >25% REVENUE | AMBITION >5% CAGR | AMBITION 35% REVENUE | AMBITION >7.5% CAGR |
| We aim for a share of revenue from Concepts of >25%. | We aim to grow Climate & Energy by >5% CAGR over the strategic period. | We aim for a share of revenue from Industry of 35%. | We aim to grow our Trade segment by a CAGR of >7.5% over the strategic period. |
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
三
BUSINESS UPDATE - TRADE
DEDICATED LOCAL TEAMS SUPPORT TRADE CUSTOMERS WITH SPECIALISED SERVICES
The requirements and buying preferences of our 8,000 trade customers differ 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 consultations 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 offer our Trade customers differ 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:
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
60% Installation
32% Industry
8% Trade
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE
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 CO₂ were identified at Vejen sports centre. This can be achieved simply by replacing circulation pumps with more energy-efficient 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 often-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 inefficient 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 efficiency, 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 m² 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 CO₂ provided that the pumps were replaced with more energy-efficient models.
VEJEN SPORTS CENTRE, DENMARK
At 30,000 m², Vejen sports centre is one of Denmark's largest gyms and together with it's affiliates, 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.
"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 efficient, with savings made on time and money.
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHABILITIES AND INVESTIGATION
UPDATE: WAREHOUSE EXPANSION
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-effective 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 attractive 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 optimum control. Photovoltaics on the roof mean that we are self-sufficient in energy and can run the heat pumps with green energy.
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
3
FINANCIAL REVIEW
Q2 EBITDA INCREASED BY 27% TO DKK 267M
(Figures in brackets are figures from the corresponding period in 2021)
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-off price effects 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 staff costs
In total, external operating costs and staff 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 effect 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-offs 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-off 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 affected 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).
GROSS PROFIT MARGIN
EBITDA
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
11
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 margin, which increased to 23.0% (21.9%).
One-off price effects resulted in a positive impact of approx. DKK 80m (DKK 30m) on gross profit, corresponding to a gross profit margin improvement 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-off compensation of DKK 3m.
External operating costs and staff costs
In total, external operating costs and staff costs were down at 14.9% (15.1%) of revenue.
Rising prices, including energy prices, had a negative effect on cost development. Increased costs were also attributable to strong revenue growth and improved earnings.
EBITDA
EBITDA increased by DKK 133m to DKK 548m corresponding to an EBITDA margin of 7.9% (6.8%) of revenue. All entities saw substantial improvement 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 affected by DKK 14m due to the early redemption of an interest swap and positively affected 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 affected by the increased growth level in H1 2022 and normal 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 affected 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 Hejager 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 affected 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).
NIBD IN DKK MILLION
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 unchanged 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).
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
11
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 affected 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 affect markets outside Russia and Ukraine.
Solar neither has business activities in Russia nor Ukraine, but there is a potential risk of the knock-on effects 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.
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
三
OUR SEGMENTS
OUR INSTALLATION AND INDUSTRY SEGMENTS DELIVERED STRONG GROWTH IN Q2
(Data shown in brackets relate to the corresponding period in 2021)
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 primarily 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 affected by an increased gross profit margin.
INDUSTRY
This segment covers industry, offshore 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 & Offshore, 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%).
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 affected by a decline in gross profit margin.
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.
SEGMENT REVENUE
DKKm
2,028 Installation
1,145 Industry
278 Trade
SEGMENT PROFIT
DKKm
244 Installation
197 Industry
40 Trade
OVERVIEW BUSINESS SEGMENTS
| DKK million | Revenue | Segment profit | Segment margin % | |||
|---|---|---|---|---|---|---|
| 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 |
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
三
OUR SEGMENTS
ALL SEGMENTS DELIVERED STRONG GROWTH IN H1
(Data shown in brackets relate to the corresponding period in 2021)
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 affected by an increased 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 primarily to OEM, Utilities, Marine & Offshore 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 margin of 17.4% (15.4%).
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%).
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.
SEGMENT REVENUE
DKKm
4,063 Installation
2,265 Industry
585 Trade
SEGMENT PROFIT
DKKm
500 Installation
395 Industry
80 Trade
OVERVIEW BUSINESS SEGMENTS
| DKK million | Revenue | Segment profit | Segment margin % | |||
|---|---|---|---|---|---|---|
| 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 |
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
三
GUIDANCE 2022
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 effects 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 special 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 affect 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-off price effects.
EBITDA
DKKm
* not adjusted for IFRS16 impact
** including one-off income of DKK 112m
SOLAR Q2 2022
MANAGEMENT REVIEW
WHO WE ARE
FINANCIAL HIGHLIGHTS
BUSINESS UPDATE
FINANCIAL REVIEW
OUR SEGMENTS
GUIDANCE 2022
SHAREHOLDER INFORMATION
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, 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:
WWW.SOLAR.EU
FINANCIAL CALENDAR 2022
| 11 August | Quarterly Report Q2 2022 |
|---|---|
| 1 October - 3 November | IR quiet period |
| 3 November | Quarterly Report Q3 2022 |
DISTRIBUTION OF SHARE CAPITAL AND VOTES 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% |
SOLAR Q2 2022
solar
CONSOLIDATED FINANCIAL STATEMENTS
Q2 2022
Solar A/S
CVR no. 15 90 84 16
FINANCIAL STATEMENTS
三
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 |
| Staff 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 after tax | -26 | 4 | -9 | 29 | 37 |
| Total comprehensive income for the period | 121 | 152 | 306 | 277 | 568 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
BALANCE SHEET
| DKK million | 30.06 | 31.12 | |
|---|---|---|---|
| 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 |
| DKK million | 30.06 | 31.12 | |
| --- | --- | --- | --- |
| 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 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
CASH FLOW STATEMENT
| DKK million | Q2 | H1 | Year | ||
|---|---|---|---|---|---|
| 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 |
| DKK million | Q2 | H1 | Year | ||
| --- | --- | --- | --- | --- | --- |
| 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 acquisition of subsidiaries | 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 |
SOLAR Q2 2022
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 |
|---|---|---|---|---|---|---|
| 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 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
STATEMENT OF CHANGES IN EQUITY
- continued
| 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 2022
FINANCIAL STATEMENTS
三
NOTES
Segment information
The business segments of Solar A/S 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 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 interest 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 interest and tax (EBIT) | 153 | |||
| Financials, net incl. share of net profit from associates and impairment on associates | 3 | |||
| Earnings before tax (EBT) | 156 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
NOTES
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 interest 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 interest and tax (EBIT) | 296 | |||
| Financials, net | -17 | |||
| Earnings before tax (EBT) | 279 |
SOLAR Q2 2022
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 132 of Annual Report 2021 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 2022 | |||||
| Denmark | 1,109 | 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 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
NOTES
Segment information – continued
| 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 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
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.
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
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 effect of new IAS/IFRS standards implemented during the period, the accounting policies remain 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 effective 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.
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
QUARTERLY FIGURES
Consolidated
| Income statement (DKK million) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 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 | 2,185 | 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 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
QUARTERLY FIGURES
Consolidated – continued
| Cash flows (DKK million) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 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 |
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
QUARTERLY FIGURES
Consolidated – continued
| Share ratios (DKK unless otherwise stated) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 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 | 247.56 | 221.68 | 219.08 | 227.43 | 244.28 | 231.29 | 267.28 | 232.38 |
| Share price | 749.19 | 480.82 | 597.09 | 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 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 all material aspects financial ratios are calculated in accordance with the Danish Finance Society's "Recommendations & Financial Ratios".
SOLAR Q2 2022
FINANCIAL STATEMENTS
三
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
CEO | Hugo Dorph
CCO | Michael H. Jeppesen
CFO |
| --- | --- | --- |
| BOARD OF DIRECTORS | | |
| Michael Troensegaard Andersen
Chair | Jesper Dalsgaard
Vice-chair | Peter Bang |
| Katrine Borum | Morten Chrone | Denise Goldby |
| Louise Knauer | Rune Jesper Nielsen | Michael Kærgaard Ravn |
SOLAR Q2 2022
Solar A/S
Industrivej Vest 43
DK - 6600 Vejen
Denmark
Tel. +45 79 30 00 00
CVR no. 15908416
LEI 213B0031XTLI9X5MTY92
www.solar.eu
www.linkedin.com/company/solar-as