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Solar Interim / Quarterly Report 2023
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Interim / Quarterly Report
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Report
Q2 2023
solar
Solar.A/S
CVR no. 15 00 84 16
Q2 2023
Who we are
We are a leading European sourcing and services company.
solar
Segments
Share of 2022 revenue
Installation
58%
Industry
33%
Trade
9%
Products
Share of 2022 revenue
Groups
● Electrical 73%
● Heating & Plumbing 17%
● Climate & Energy 10%
Brands
● Concepts 23%
● Other brands 77%
Markets
Share of 2022 revenue
Denmark 33%
The Netherlands 24%
Sweden 20%
Norway 16%
Poland 4%
Other¹ 3%
¹) Including eliminations
Solar A/S
Q2 2023
Contents
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.
Management review
- Financial highlights 4
- Business update 5
- Financial review 9
- Our segments 11
- Guidance 2023 13
- Shareholder information 14
Consolidated financial statements Q2
- Statement of comprehensive income 16
- Balance sheet 17
- Cash flow statement 18
- Statement of changes in equity 19
- Notes 21
- Section 1 – Basis for preparation 21
- Section 2 – Income statement 23
- Section 3 – Invested capital 27
- Quarterly information 29
- Statement 33
Strengthening margin and earnings
We launched our Core and Core+ strategy in 2018 and 2021 respectively, largely targeting Concepts and Industry as well as efficiency in general. We boosted our EBITDA from DKK 362m in 2017 to a projected DKK 900m in 2023.
Page 7
Solar plants 116,000 trees for the benefit of climate and environment
Solar has converted 38 hectares of agricultural land into a new forest in Vejen, Denmark, where 116,000 trees have been planted: 35% deciduous and 65% coniferous.
Page 8
Solar A/S
Q2 2023
Financial highlights
| Consolidated (DKK million) | Q2 | H1 | Year | ||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Revenue | 3,250 | 3,451 | 6,906 | 6,913 | 13,863 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 214 | 267 | 494 | 548 | 1,175 |
| Earnings before interest, tax and amortisation (EBITA) | 159 | 218 | 385 | 454 | 978 |
| Earnings before interest and tax (EBIT) | 121 | 202 | 330 | 424 | 909 |
| Earnings before tax (EBT) | 101 | 193 | 290 | 410 | 858 |
| Net profit for the period | 77 | 147 | 222 | 315 | 660 |
| Balance sheet total | 6,317 | 5,679 | 6,317 | 5,679 | 5,901 |
| Total equity | 1,810 | 1,600 | 1,810 | 1,600 | 1,931 |
| Interest-bearing liabilities, net | 1,558 | 1,122 | 1,558 | 1,122 | 1,074 |
| Cash flow from operating activities | 78 | -10 | 179 | -212 | 16 |
| Net investments in property, plant and equipment | -29 | -61 | -59 | -120 | -167 |
Employees
| Number of employees (FTE's), end of period | 3,063 | 2,995 | 3,063 | 2,995 | 3,043 |
|---|---|---|---|---|---|
| Average number of employees (FTE's) | 3,058 | 2,956 | 3,058 | 2,956 | 3,019 |
Financial ratios (%, unless otherwise stated)
| Adjusted organic growth | -1.0 | 12.4 | 2.8 | 12.9 | 12.9 |
|---|---|---|---|---|---|
| Gross profit margin | 22.7 | 22.9 | 22.9 | 23.0 | 23.4 |
| EBITDA margin | 6.6 | 7.7 | 7.2 | 7.9 | 8.5 |
| EBITA margin | 4.9 | 6.3 | 5.6 | 6.6 | 7.1 |
| Net working capital (end of period NWC)/revenue (LTM) | 16.3 | 14.1 | 16.3 | 14.1 | 15.9 |
| Gearing (net interest-bearing liabilities/EBITDA), no. of times | 1.4 | 1.1 | 1.4 | 1.1 | 0.9 |
| Return on equity (ROE) | 32.7 | 35.1 | 32.7 | 35.1 | 34.0 |
| Equity ratio | 27.9 | 28.2 | 27.9 | 28.2 | 32.7 |
Share ratios (DKK)
| Earnings per share outstanding (EPS) | 10.54 | 20.13 | 30.40 | 43.13 | 90.37 |
|---|---|---|---|---|---|
In all material aspects financial ratios are calculated in accordance with the Danish Finance Society's "Recommendations & Financial Ratios".
Q2 Financial messages
- Q2 EBITDA of DKK 214m in line with our expectations.
- Adjusted for one-off price effects the underlying EBITDA margin was slightly improved.
- We confirm our 2023 EBITDA guidance of DKK 900m.
Solar A/S
Q2 2023
•
Business update
Core+ strategy update
The introduction of several initiatives within our four strategic focus areas is paying off and will not only support our ambitions for 2023 but also for the years to come.
Concepts
Product consolidation across our footprint to ensure our product assortment is aligned.
Concepts is now firmly rooted in Drive-ins, where the offering has become part of daily sales.
Our operating model has been fully implemented and rolled out - ensuring focus, alignment and execution.
Ongoing optimisation of concept assortment ensuring it meets customer demand and the current market situation.
Climate & Energy
ThermoNova acquisition has led to the establishment of Solar Industrial Solutions (HP & PV).
Cross-border alignment on heat pumps and solar panels to respond to customer specific needs at speed in constantly changing markets.
Launch of Solar Zero Concept across all Climate & Energy sub-categories.
Alignment of solar panel & heat pump brands across Solar markets leveraging Solar Group's strength.
Industry
Fully transitioned to a cross-border based vertical organisational structure – encompassing Denmark, Norway, Sweden and the Netherlands.
Continued focus on our Swedish market fuels solid growth within both OEM and MRO.
Fibre infrastructure contracts are coming to an end, which are partly being replaced by incoming DNO (Distribution Network Operator) contracts.
Trade
Trade is recently established in the Swedish and Norwegian markets and is now showing growth across all four markets.
MRO B2B continues to drive growth, particularly within procurement collaboration across different sectors, such as hotels, fitness centres etc.
Our Solar Select concept has been well received by the Trade segment and has shown progress since the introduction.
| 2023 Ambitions | Today | 2023 Ambitions | Today | 2023 Ambitions | Today |
|---|---|---|---|---|---|
| >25% | |||||
| of revenue | Our Concepts continue to perform and convert sales. | >40% | |||
| CAGR | Climate & Energy continues to see increased demand despite temporary slowdown in Denmark. | >35% | |||
| of revenue | Continued growth in all our Industry sub-segments. | ||||
| 2023 Ambitions | Today | 2023 Ambitions | Today | ||
| --- | --- | --- | --- | ||
| >15% | |||||
| CAGR | Trade continues to deliver growth. |
Solar A/S
Q2 2023
Business update
Strengthening margin and earnings
We launched our Core and Core+ strategy in 2018 and 2021 respectively, largely targeting Concepts and Industry as well as efficiency in general. We boosted our EBITDA from DKK 362m* in 2017 to a projected DKK 900m in 2023.
*Not adjusted for IFRS 16, Leasing
Concepts
Our Concepts embody five elements – price, quality, availability, coverage and delivery, which makes them a strong alternative to the A-brand. Conversion to a concept delivers an increase to our EBITDA margin and ensures higher value for our customers. The concepts are a win-win situation for both customers and Solar.
With a strong focus on driving our concept share, we have achieved a 23% share of revenue, which corresponds to a +2 percentage point growth. We are therefore well on our way to reaching our target of 25% share of revenue even in a period with high revenue growth in areas where concepts are not available.
Industry
The industry segment comprises four sub-segments – Infrastructure, MRO, OEM and Marine & Offshore.
We have seen strong growth in all four segments, boosting the share of revenue by 2 percentage points and reaching 34%. We have also significantly increased our segment profit margin.
Growth has not only supported our margin, but has also had a positive effect by diversifying our business and lowering the impact from the cyclical trends inherent in 'new build projects'.
Efficiency
Efficiency is of paramount importance and in this respect, internal and external digitalisation and automation are our main drivers.
Digitalisation covers the installation of SAP across all our main entities, which has increased the insight and control of our local warehouses, enhanced customer understanding and sharpened our ability to adapt to different market situations significantly faster.
We also strive to transfer our customers onto our digital platforms, which are available on their preferred browser and as a mobile app. In this way, we are offering our customers greater flexibility and availability when placing orders. In May 2023, our Solar mobile app won a silver medal at the Danish Digital Awards in the 'customer experience' category.
Automation is focused largely on our warehouses, where we have installed AutoStore in Norway, Denmark and the Netherlands to further improve customer experience and take automation to a new level.
As a leading digital company, we will invest in the continuous improvement of our business by deploying tried and tested technology.
Solar A/S
Q2 2023
Business update
Solar's concepts make the difference
I always buy Solar Plus items wherever possible. My employees can access what their customers want every time, which means satisfied customers.
Solar's webshop is designed so that we can always get Solar Plus alternatives. We can also see how much we save by converting to Solar Plus. There are substantial sums to be saved – every time.
Kim Boysen,
Co-owner of Hjerting Installationsforretning
About Hjerting Installationsforretning
Hjerting Installationsforretning is a Danish electrical installation company based in Esbjerg, Denmark. The firm has 13 employees and services commercial, industrial and domestic customers.
The company is focused on 'treating customers as we would wish to be treated'. And their flexibility stems from employees being encouraged to collaborate across their own areas of expertise.
solar plus
Solar Plus is one of a number of Solar concepts and covers the majority of products used by our customers on a daily basis. High quality, a competitive price and constant availability are what set us apart. You can read more about Solar's concepts at:
→ www.solar.eu/products-solutions/concepts/
Solar A/S
Q2 2023
Sustainability
Solar plants 116,000 trees for the benefit of climate and environment
Trees for the future
Sustainability is a vital part of our strategy. Our sustainability framework, Green Together, centres upon the three pillars: environment, social and governance. Solar goes above and beyond by focusing not only on becoming CO₂-neutral in scope 1 and 2 no later than 2030 but also aims to improve biodiversity and help improve life on land by afforestation.
Solar's investment in the planting of a new forest just outside the head office in Vejen, Denmark, is an important aspect of our ambitious sustainability strategy. As it was of prime importance for Solar to follow the afforestation project at close hand and play an active part, proximity was a key factor in the choice of location.
Afforestation and increasing biodiversity are a long-term investment in nature. Both are beneficial to the climate and the environment as trees retain emissions, protect groundwater and help improve the living conditions of animals.
Solar has converted 38 hectares of agricultural land into a new forest in Vejen, Denmark, where 116,000 trees have been planted: 35% deciduous and 65% coniferous. The initiative takes into account both the climate and the environment as coniferous trees have an approximately 65% greater CO₂ absorption rate compared to deciduous trees, which have a substantial effect on biodiversity. The forest and its operation will be certified under the FSC global labelling system.
Solar A/S
Q2 2023
Financial review
Q2 EBITDA of DKK 214m is on par with expectations
Our continuous focus on gross profit margin and our cost containment initiatives continued to deliver in Q2. Adjusted for one-off price effects, the underlying EBITDA margin improved slightly.
(Figures in brackets are figures from the corresponding period in 2022)
Q2 2023
Revenue
As expected, Q2 saw declining growth. Revenue decreased to DKK 3.3bn (DKK 3.5bn) and adjusted organic growth at group level amounted to -1.0% (12.4%). Solar Norge and MAG45 delivered positive adjusted organic growth.
Climate & Energy, one of our strategic focus areas, delivered very strong growth rates, corresponding to revenue of almost DKK 375m even though the substantial slowdown in Denmark seen in March continued in Q2. We expect the sale of heat pumps to pick up when the new subsidy scheme is implemented, which is expected late Q3.
The Industry and Trade segments posted adjusted organic growth of 1% and 8% respectively, while the Installation segment posted adjusted organic growth of -3%, see page 24.
Gross profit
The gross profit margin decreased to 22.7% (22.9%). However, the underlying gross profit margin improved in Q2 2023. By way of comparison, one-off price effects improved the underlying gross profit margin by approx. 1.3 percentage points in Q2 2022, while one-off price effects were negligible in Q2 2023.
External operating costs and staff costs
External operating costs and staff costs amounted to 15.9% (14.9%) of revenue.
Several measures were initiated in Q1, including cost containment, process improvements and staff reduction to reduce the impact of cost inflation. The initiatives became effective in Q2 as total external operating costs and staff costs declined compared to Q1 2023 and were on a par with Q2 2022 despite the impact of inflation.
Loss on trade receivables
We conduct efficient credit management also in the currently unpredictable market conditions. As a result, our loss on trade receivables decreased to DKK 6m (DKK 9m).
EBITDA
EBITDA of DKK 214m (DKK 267m) was on a par with expectations. When adjusted for one-off price effects in Q2 2022, the underlying EBITDA margin improved slightly to 6.6% (6.4%). The EBITDA level was supported by improvements across all our strategic focus areas.
The results of the individual markets are given on page 26.
Gross profit margin Percentage
2023 2022
EBITDA adj. for one-off price effects DKKm
Price effects: Price increases above normal level related to goods on stock.
Solar A/S
Q2 2023
•
Financial review - continued
Depreciation and write-down
Depreciation and write-down on property, plant and equipment increased to DKK 55m (DKK 49m). The expansion of the central warehouse in Vejen, Denmark, and the implementation of AutoStore were completed in Q4 2022 and the investment is now being depreciated.
Amortisation and impairment of intangible assets
Amortisation and impairment of intangible assets amounted to DKK -38m (DKK -16m) as an impairment loss on Højager Belysning of DKK 20m was recognised in Q2 2023.
Financials
Net financials amounted to DKK -20m (DKK -8m) and were negatively affected by increased debt and interest rates.
Earnings before tax
Earnings before tax decreased to DKK 101m (DKK 193m) as Q2 2022 was positively affected by one-off price effects of DKK 45m.
Net profit
Net profit came to DKK 77m (DKK 147m).
H1 2023
Revenue
As expected, we saw declining growth in H1. Adjusted organic growth at group level amounted to 2.8% (12.9%), while revenue was unchanged at DKK 6.9bn.
Gross profit
Gross profit was almost unchanged at DKK 1.6bn and gross profit margin amounted to 22.9% (23.0%).
However, adjusted for one-off price effects the underlying gross profit margin improved by approx. 0.7 percentage points.
External operating costs and staff costs
External operating costs and staff costs amounted to 15.6% (14.9%).
Several measures were initiated in H1, including cost containment, process improvements and staff reduction to reduce the impact of cost inflation. The initiatives became effective in Q2 as total external operating costs and staff costs declined compared to Q1 2023 and were on a par with Q2 2022 despite the impact of inflation.
EBITDA
EBITDA of DKK 494m (DKK 548m) was as expected.
When adjusted for one-off price effects, the underlying EBITDA was on a par with H1 2022 corresponding to an unchanged underlying EBITDA margin of 6.8%.
The results of the individual markets are shown on page 26.
Financials
Net financials amounted to DKK -40m (DKK -13m) and were negatively affected by increased debt and interest rate.
Earnings before tax
Earnings before tax were down to DKK 290m (DKK 410m) as H1 2022 was positively impacted by one-off price effects of DKK 80m.
Net profit
Net profit came to DKK 222m (DKK 315m).
Cash flow
Net working capital calculated as an average of the previous four quarters amounted to 16.2% (12.3%) of revenue. Net working capital at the end of H1 2023 amounted to 16.3% (14.1%) down from the level seen in Q1 2023.
Cash flow from operating activities totalled DKK 179m (DKK -212m). Changes in inventories had an impact of DKK -57m (DKK -159m). The inventory increase is due to strong growth within our strategic focus area Climate & Energy. In total, Climate & Energy products increased the inventory by more than DKK 200m in H1 2023.
Changes in receivables had a DKK -125m (DKK -495m) impact on cash flow affected by a lower growth level in June 2023, while changes in non-interest-bearing liabilities affected cash flow by DKK 3m (DKK -37m).
Total cash flow from investing activities amounted to DKK -216m (DKK -174m). The acquisition of ThermoNova in H1 2023, see note 3.1, had an impact of DKK -111m. In H1 2022, the investment in the expansion and upgrade of our central warehouse in Denmark affected cash flow by DKK -98m, while the acquisition of Højager Belysning A/S had an impact of DKK -24m.
Cash flow from financing activities amounted to DKK 133m (DKK 4m), mainly affected by dividend distributions of DKK -329m (DKK -658m) and by the change in current interest-bearing debt of DKK 381m (DKK 723m).
As a result, total cash flow amounted to DKK 96m (DKK -382m).
Net interest-bearing liabilities amounted to DKK 1,558m (DKK 1,122m).
As at 30 June 2023, gearing was 1.4 (1.1) times EBITDA. Calculated as an average, our gearing was 1.2 (0.5) times EBITDA. Our gearing target is 1.5-3.0 times EBITDA.
As at 30 June 2023, Solar had undrawn credit facilities of DKK 864m (DKK 85m).
Invested capital
Invested capital for the Solar Group totalled DKK 3,342m (DKK 2,675m). ROIC amounted to 20.5% (25.5%).
Activities with a Solar equity interest of less than 50% and activities attributable to non-controlling interests are not included in the ROIC calculation. Invested capital only includes operating assets and liabilities.
Key risks and mitigation
The commercial and financial risks relating to our activities are detailed in Solar's 2022 Annual Report.
No additional material risks have been identified but we continue to monitor the situation closely.
Solar A/S
Q2 2023
•
Our segments Q2
Positive growth for our Industry and Trade segments in Q2
Installation
Our Installation segment covers the installation of electrical, heating and plumbing products.
Installation revenue for Q2 amounted to DKK 1,843m (DKK 2,028m), which corresponds to overall adjusted organic growth of around -3% (11%) related to the electrical business and the heating and plumbing business. Solar Norge saw positive growth for the Installation segment.
Segment profit amounted to DKK 204m (DKK 244m), which corresponds to a segment profit margin of 11.1% (12.0%).
Industry
This segment covers the industry, offshore and marine industries as well as utilities and infrastructure. Industry also includes MAG45 and ThermoNova.
Industry revenue for Q2 amounted to DKK 1,119m (DKK 1,145m). This corresponds to overall adjusted organic growth of around 1% (18%) related primarily to MRO. MAG45 posted double-digit growth, while Solar Danmark and Solar Nederland saw negative growth.
Segment profit amounted to DKK 188m (DKK 197m). This corresponds to a segment profit margin of 16.8% (17.2%).
Trade
Our Trade segment covers special sales and other small areas. It also includes Solar Polaris and Hajager Belysning.
Revenue from Trade for Q2 increased to DKK 288m (DKK 278m), which corresponds to overall adjusted organic growth of around 8% (-2%) supported by strong growth for Solar Danmark, Solar Nederland and Solar Norge.
Segment profit amounted to DKK 34m (DKK 40m), which corresponds to a segment profit margin of 11.8% (14.4%).
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 212m (DKK 214m) in Q2, which cover income and costs related to joint group functions and to costs, which cannot be reliably allocated to the individual segment.
Detailed segment information is given on page 24.
Segment revenue
DKKm
Q2 2023
Segment profit
DKKm
Q2 2023
| ● Installation | 204 |
|---|---|
| ● Industry | 188 |
| ● Trade | 34 |
Overview business segments
| DKK million | Revenue | Segment profit | Segment margin % | |||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| Installation | 1,843 | 2,028 | 204 | 244 | 11.1 | 12.0 |
| Industry | 1,119 | 1,145 | 188 | 197 | 16.8 | 17.2 |
| Trade | 288 | 278 | 34 | 40 | 11.8 | 14.4 |
| Solar Group | 3,250 | 3,451 | 426 | 481 | 13.1 | 13.9 |
Solar A/S
Q2 2023
•
Our segments H1
Growth above 5% for our Industry and Trade segments in H1
Installation
Installation revenue for H1 amounted to DKK 3,926m (DKK 4,063m), which corresponds to overall adjusted organic growth of around 0% (10%) related primarily to the electrical business. Solar Norge, Solar Nederland and Solar Sverige saw growth in the segment.
Segment profit decreased to DKK 464m (DKK 500m), which corresponds to a segment profit margin of 11.8% (12.3%).
Industry
Industry revenue for H1 increased to DKK 2,346m (DKK 2,265m). This corresponds to overall adjusted organic growth of around 6% (18%) related primarily to MRO and Marine & Offshore. Solar Norge and MAG45 posted double-digit growth.
Segment profit increased to DKK 407m (DKK 395m). This corresponds to a segment profit margin of 17.3% (17.4%).
Trade
Revenue from Trade amounted to DKK 634m (DKK 585m), which corresponds to overall adjusted organic growth of around 8% (14%) primarily supported by strong growth for Solar Norge and Solar Nederland.
Segment profit amounted to DKK 83m (DKK 80m), which corresponds to a segment profit margin of 13.1% (13.7%).
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 460m (DKK 427m) in H1, which cover income and costs related to joint group functions and to costs, which cannot be reliably allocated to the individual segment.
Detailed segment information is given on page 25.
Segment revenue
DKKm
- Installation 3,926
- Industry 2,346
- Trade 634
Segment profit
DKKm
- Installation 464
- Industry 407
- Trade 83
Overview business segments
| DKK million | Revenue | Segment profit | Segment margin % | |||
|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
| Installation | 3,926 | 4,063 | 464 | 500 | 11.8 | 12.3 |
| Industry | 2,346 | 2,265 | 407 | 395 | 17.3 | 17.4 |
| Trade | 634 | 585 | 83 | 80 | 13.1 | 13.7 |
| Solar Group | 6,906 | 6,913 | 954 | 975 | 13.8 | 14.1 |
Solar A/S
Q2 2023
•
Guidance 2023
We confirm our EBITDA guidance of DKK 900m for 2023
We confirm our revenue guidance of DKK 13,500m and EBITDA guidance of DKK 900m.
EBITDA DKKm
* Including one-off income of DKK 112m
General assumptions
Due to the heightened geopolitical and macro-economic uncertainty (ref. page 28 of the annual report 2022), our market outlook is characterised by greater unpredictability.
As expected, cost and wage inflation increased during H1. We expect this to continue for the remainder of 2023, albeit at a slower pace. We have implemented, and will continue to implement, mitigating measures including cost containment, process improvements and the necessary staff reductions to ensure that the expected impacts from cost and wage inflation remain well below general price increases.
Over the past years, we have seen substantial price increases from our suppliers. As expected, in H1 we saw a slowdown in price increases to pre-Covid levels. However, Solar has a proven track record of strong price management.
Our 2023 guidance does not include any significant restructuring costs.
Market outlook for Solar's segments
Overall, we expect markets to be stagnant or negative in all countries throughout 2023. This will become more evident in H2 as the roll-over effects from price increases in 2022 wear off.
In general, we expect all segments to show weaker growth in H2 compared to H1 2023.
Installation
We expect negative growth for the new construction sector in 2023. The green transition will, however, continue to deliver strong growth rates. We expect the installation market to be stagnant or negative.
Industry
The guidance assumes that sales to Marine/Offshore and MRO will continue to grow, albeit at a slower pace, whereas we expect all other sub-segments to be stagnant or negative.
Overall, we expect the industry market to be stagnant.
Trade
We expect modest growth for special sales in 2023, which is the Trade segment's primary activity.
Financial outlook 2023
Revenue guidance
We confirm our revenue guidance of DKK 13,500m, corresponding to unchanged adjusted organic growth of approx. 0%.
In the wake of substantial price increases in 2022, we delivered positive growth in H1, whereas we expect negative growth in H2.
Adjusted for price increases, mainly roll-over effects from 2022, we expect negative growth in all main segments, which will only partly be offset by the expected strong growth within Climate & Energy.
EBITDA guidance
We confirm our EBITDA guidance of approx. DKK 900m, which corresponds to an EBITDA margin of approx. 6.7%.
We saw substantial positive one-off price effects in 2022. We expect this to normalise in 2023, which means that no major one-off price effects are included in our guidance.
Solar A/S
Q2 2023
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.
Total shareholder return
The total shareholder return of the Solar B share during the holding period 1 January - 30 June 2023 was -11.3% including the DKK 45.00 ordinary dividend that was paid out in March 2023.
Audio webcast
The presentation of the Quarterly Report Q2 2023 will be conducted in English on 10 August 2023 at 11:00 CET. The presentation will be transmitted as an audio webcast and will be available at:
www.solar.eu
The Solar share
| A share | B share | |
|---|---|---|
| Shares | 900,000 | 6,460,000 |
| Nominal value (DKK) | 100 | 100 |
| Votes per share | 10 | 1 |
| Treasury shares | - | 56,813 |
| Stock Exchange | - | Nasdaq Copenhagen Stock Exchange |
| Ticker symbol | Solar B | |
| Share price 30 June (DKK) | 505 | 505 |
| Market Cap 30 June (DKKm) | 455 | 3,262 |
Financial calendar 2023
| 10 Aug | Quarterly Report Q2 2023 |
|---|---|
| 02 Nov | Quarterly Report Q3 2023 |
Shareholders with more than 5% of shares or votes
| Shareholders according to section 55 of the Danish Companies Act | Share Capital | Votes |
|---|---|---|
| The Fund of 20th December, Vejen, Denmark | 17.0% | 60.5% |
| Nordea Funds Ltd., Helsinki, Finland | 10.4% | 5.0% |
Solar A/S
Q2 2023
•
Q2 2023
Consolidated financial statements
Solar A/S
15
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
Quarterly information
Statement
Statement of comprehensive income
Income statement
| DKK million | Q2 | H1 | Year | ||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Revenue | 3,250 | 3,451 | 6,906 | 6,913 | 13,863 |
| Cost of sales | -2,513 | -2,661 | -5,322 | -5,323 | -10,618 |
| Gross profit | 737 | 790 | 1,584 | 1,590 | 3,245 |
| Other operating income and costs | 0 | 0 | 1 | 1 | 0 |
| External operating costs | -98 | -91 | -217 | -187 | -386 |
| Staff costs | -419 | -423 | -861 | -841 | -1,656 |
| Loss on trade receivables | -6 | -9 | -13 | -15 | -28 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 214 | 267 | 494 | 548 | 1,175 |
| Depreciation and write-down on property, plant and equipment | -55 | -49 | -109 | -94 | -197 |
| Earnings before interest, tax and amortisation (EBITA) | 159 | 218 | 385 | 454 | 978 |
| Amortisation and impairment of intangible assets | -38 | -16 | -55 | -30 | -69 |
| Earnings before interest and tax (EBIT) | 121 | 202 | 330 | 424 | 909 |
| Share of net profit from associates | 0 | -1 | 0 | -1 | -1 |
| Financial income | 16 | 12 | 31 | 22 | 53 |
| Financial expenses | -36 | -20 | -71 | -35 | -103 |
| Earnings before tax (EBT) | 101 | 193 | 290 | 410 | 858 |
| Income tax | -24 | -46 | -68 | -95 | -198 |
| Net profit for the period | 77 | 147 | 222 | 315 | 660 |
| Attributable to: | |||||
| Shareholders of Solar A/S | 77 | 147 | 222 | 315 | 660 |
| Non-controlling interests | 0 | 0 | 0 | 0 | 0 |
| Net profit for the period | 77 | 147 | 222 | 315 | 660 |
| Earnings in DKK per share outstanding (EPS) | 10.54 | 20.13 | 30.40 | 43.13 | 90.37 |
| Diluted earnings in DKK per share outstanding (EPS-D) | 10.52 | 20.07 | 30.31 | 43.00 | 90.05 |
Other comprehensive income
| DKK million | Q2 | H1 | Year | ||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Net profit for the period | 77 | 147 | 222 | 315 | 660 |
| Items that can be reclassified for the income statement | |||||
| Foreign currency translation adjustments of foreign subsidiaries | -27 | -35 | -63 | -28 | -51 |
| Fair value adjustments of hedging instruments before tax | 1 | 12 | 0 | 25 | 36 |
| Tax on fair value adjustments of hedging instruments | 0 | -3 | 0 | -6 | -8 |
| Other income and costs recognised after tax | -26 | -26 | -63 | -9 | -23 |
| Total comprehensive income for the period | 51 | 121 | 159 | 306 | 637 |
| Attributable to: | |||||
| Shareholders of Solar A/S | 51 | 121 | 159 | 306 | 637 |
| Non-controlling interests | 0 | 0 | 0 | 0 | 0 |
| Total comprehensive income for the period | 51 | 121 | 159 | 306 | 637 |
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
- Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
Quarterly information
Statement
Balance sheet
Consolidated
| 30.06 | 31.12 | 30.06 | 31.12 | ||||
|---|---|---|---|---|---|---|---|
| DKK million | 2023 | 2022 | 2022 | DKK million | 2023 | 2022 | 2022 |
| Assets | Equity and liabilities | ||||||
| Intangible assets | 328 | 183 | 173 | Share capital | 736 | 736 | 736 |
| Property, plant and equipment | 967 | 961 | 963 | Reserves | -244 | -167 | -181 |
| Right-of-use assets | 420 | 346 | 383 | Retained earnings | 1,269 | 1,031 | 1,047 |
| Deferred tax asset | 9 | 12 | 9 | Proposed dividends for the financial year | 0 | 0 | 329 |
| Investments in associates | 5 | 4 | 4 | Equity attributable to shareholders of Solar A/S | 1,761 | 1,600 | 1,931 |
| Other non-current assets | 32 | 51 | 32 | Non-controlling interests | 49 | 0 | 0 |
| Non-current assets | 1,761 | 1,557 | 1,564 | Total equity | 1,810 | 1,600 | 1,931 |
| Inventories | 2,276 | 1,991 | 2,248 | Interest-bearing liabilities | 439 | 116 | 293 |
| Trade receivables | 1,922 | 1,957 | 1,859 | Lease liabilities | 307 | 247 | 274 |
| Income tax receivable | 22 | 4 | 13 | Provision for deferred tax | 138 | 133 | 133 |
| Other receivables | 15 | 14 | 9 | Other provisions | 10 | 10 | 9 |
| Prepayments | 59 | 57 | 42 | Non-current liabilities | 894 | 506 | 709 |
| Cash at bank and in hand | 262 | 99 | 166 | ||||
| Current assets | 4,556 | 4,122 | 4,337 | Interest-bearing liabilities | 953 | 754 | 556 |
| Lease liabilities | 121 | 104 | 117 | ||||
| Trade payables | 1,933 | 2,092 | 1,902 | ||||
| Total assets | 6,317 | 5,679 | 5,901 | Income tax payable | 46 | 59 | 63 |
| Other payables | 536 | 545 | 604 | ||||
| Prepayments | 4 | 2 | 2 | ||||
| Other provisions | 20 | 17 | 17 | ||||
| Current liabilities | 3,613 | 3,573 | 3,261 | ||||
| Liabilities | 4,507 | 4,079 | 3,970 | ||||
| Total equity and liabilities | 6,317 | 5,679 | 5,901 |
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
- Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
Quarterly information
Statement
Cash flow statement
Consolidated
| DKK million | Q2 | H1 | Year | ||
|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Net profit of continuing operations for the period | 77 | 147 | 222 | 315 | 660 |
| Depreciation, write-down and amortisation | 93 | 65 | 164 | 124 | 266 |
| Changes to provisions and other adjustments | -7 | -9 | -9 | -12 | -18 |
| Share of net profit from associates | 0 | 1 | 0 | 1 | 1 |
| Financials, net | 20 | 7 | 40 | 13 | 50 |
| Income tax | 24 | 46 | 68 | 95 | 198 |
| Financial income, received | 5 | 3 | 9 | 6 | 15 |
| Financial expenses, settled | -24 | -7 | -42 | -14 | -43 |
| Income tax, settled | -51 | -20 | -94 | -49 | -155 |
| Cash flow before working capital changes | 137 | 233 | 358 | 479 | 974 |
| Working capital changes | |||||
| Inventory changes | 65 | -173 | -57 | -159 | -433 |
| Receivables changes | 179 | 36 | -125 | -495 | -394 |
| Non-interest-bearing liabilities changes | -303 | -106 | 3 | -37 | -131 |
| Cash flow from operating activities | 78 | -10 | 179 | -212 | 16 |
| DKK million | Q2 | H1 | Year | ||
| --- | --- | --- | --- | --- | --- |
| 2023 | 2022 | 2023 | 2022 | 2022 | |
| Investing activities | |||||
| Purchase of intangible assets | -25 | -14 | -45 | -30 | -59 |
| Purchase of property, plant and equipment | -30 | -61 | -60 | -120 | -167 |
| Disposal of property, plant and equipment | 1 | 0 | 1 | 0 | 0 |
| Acquisition of subsidiaries and activities* | 0 | 0 | -111 | -24 | -24 |
| Acquisition of associates | 0 | 0 | -1 | 0 | 0 |
| Other financial investments | 0 | 0 | 0 | 0 | 1 |
| Cash flow from investing activities | -54 | -75 | -216 | -174 | -249 |
| Financing activities | |||||
| Repayment of non-current interest-bearing debt | -3 | -2 | -5 | -4 | -12 |
| Raising of non-current interest-bearing liabilities | 150 | 0 | 150 | 0 | 185 |
| Change in current interest-bearing debt | -154 | 400 | 381 | 723 | 519 |
| Instalment on lease liabilities | -31 | -28 | -64 | -57 | -116 |
| Dividends paid to shareholders of Solar A/S | 0 | -329 | -329 | -658 | -658 |
| Cash flow from financing activities | -38 | 41 | 133 | 4 | -82 |
| Total cash flow | -14 | -44 | 96 | -382 | -315 |
| Cash at bank and in hand at the beginning of period | 276 | 143 | 166 | 481 | 481 |
| Cash at bank and in hand at the end of period | 262 | 99 | 262 | 99 | 166 |
*In the comparative figures a minor reclassification has been made.
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
Quarterly information
Statement
Statement of changes in equity
Consolidated
| DKK million | Share capital | Reserves for hedging transactions1 | Reserves for foreign currency translation adjustments2 | Retained earnings | Proposed dividends | Equity attributable to Shareholders of Solar A/S | Non controlling interests | Total equity |
|---|---|---|---|---|---|---|---|---|
| 2023 | ||||||||
| Equity as at 1 January | 736 | -9 | -172 | 1,047 | 329 | 1,931 | 0 | 1,931 |
| Foreign currency translation adjustments of foreign subsidiaries | -63 | -63 | -63 | |||||
| Fair value adjustments of hedging instruments before tax | 0 | 0 | 0 | |||||
| Tax on fair value adjustments | 0 | 0 | 0 | |||||
| Net income recognised in equity via other comprehensive income in the statement of comprehensive income | 0 | 0 | -63 | 0 | 0 | -63 | 0 | -63 |
| Net profit or loss for the period | 222 | 222 | 222 | |||||
| Comprehensive income | 0 | 0 | -63 | 222 | 0 | 159 | 0 | 159 |
| Distribution of dividends (DKK 45.00 per share) | -329 | -329 | -329 | |||||
| Non-controlling interests on acquisition of subsidiary | 0 | 49 | 49 | |||||
| Transactions with the owners | 0 | 0 | 0 | 0 | -329 | -329 | 49 | -280 |
| Equity as at 30 June | 736 | -9 | -235 | 1,269 | 0 | 1,761 | 49 | 1,810 |
- Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
Quarterly information
Statement
Statement of changes in equity
- Continued
| DKK million | Share capital | Reserves for hedging transactions1 | Reserves for foreign currency translation adjustments2 | Retained earnings | Proposed dividends | Equity attributable to Shareholders of Solar A/S | Non controlling interests | Total equity |
|---|---|---|---|---|---|---|---|---|
| 2022 | ||||||||
| Equity as at 1 January | 736 | -37 | -121 | 1,045 | 329 | 1,952 | 0 | 1,952 |
| Foreign currency translation adjustments of foreign subsidiaries | -28 | -28 | -28 | |||||
| Fair value adjustments of hedging instruments before tax | 25 | 25 | 25 | |||||
| Tax on fair value adjustments | -6 | -6 | -6 | |||||
| Net income recognised in equity via other comprehensive income in the statement of comprehensive income | 0 | 19 | -28 | 0 | 0 | -9 | 0 | -9 |
| Net profit or loss for the period | 315 | 315 | 315 | |||||
| Comprehensive income | 0 | 19 | -28 | 315 | 0 | 306 | 0 | 306 |
| Distribution of dividends (DKK 45.00 per share) | -329 | -329 | -329 | |||||
| Distribution of extraordinary dividend (DKK 45 per share) | -329 | -329 | -329 | |||||
| Transactions with the owners | 0 | 0 | 0 | -329 | -329 | -658 | 0 | -658 |
| Equity as at 30 June | 736 | -18 | -149 | 1,031 | 0 | 1,600 | 0 | 1,600 |
- Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
Solar A/S
Q2 2023
21
Contents
Consolidated financial statements Q2
- Statement of comprehensive income
- Balance sheet
- Cash flow statement
- Statement of changes in equity
Notes
- Section 1 – Basis for preparation
- 1.1 Accounting policies
- Section 2 – Income statement
- Section 3 – Invested capital
- Quarterly information
- Statement
Section 1 Basis for preparation
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
- 1.1 Accounting policies
Section 2 – Income statement
Section 3 – Invested capital
Quarterly information
Statement
01 Basis for preparation
1.1 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.
On 1 March 2023 Solar acquired 51% of ThermoNova A/S, see note 3.1. Solar recognises non-controlling interests in an acquired entity either at fair value or at the non-controlling interest's proportionate share of the acquired entity's net identifiable assets. This decision is made on an acquisition-by-acquisition basis. For the non-controlling interests in ThermoNova A/S, Solar decided to recognise the non-controlling interests at its proportionate share of the acquired net identifiable assets.
The accounting items of subsidiaries are included in full in the consolidated financial statements. Non-controlling interests' share in the results and equity of subsidiaries is included in the Group's profit/loss and equity but an allocation is shown separately in the consolidated income statement, statement of other comprehensive income, balance sheet and statement of changes in equity respectively.
Solar's segment information is based on the customers' affiliation with the segments. ThermoNova's revenue and results are included the operating segment Industry.
Apart from the above-mentioned addition regarding non-controlling interests and the effect of new IAS/IFRS standards implemented during the period, the accounting policies remain unchanged from the Annual Report 2022, which contains a full description of these on pages 50-52 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
An additional standard together with amendments and improvements to existing standards have become effective in the period. 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 2023 and to be implemented in coming accounting periods are not expected to have significant impact on Solar's accounting policies.
Solar A/S
Q2 2023
23
Contents
Consolidated financial statements Q2
- Statement of comprehensive income
- Balance sheet
- Cash flow statement
- Statement of changes in equity
- Notes
- Section 1 – Basis for preparation
- Section 2 – Income statement
- 2.1 Segment information
- Section 3 – Invested capital
- Quarterly information
- Statement
Section 2 Income statement
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
- 2.1 Segment information
Section 3 - Invested capital
Quarterly information
Statement
02 Income statement
2.1 Segment information
Solar's business segments are Installation, Industry and Trade and are based on the customers' affiliation with the segments. Installation covers installation of electrical, and heating and plumbing products, while Industry covers industry, offshore and marine, and utility and infrastructure. Trade covers special sales and other small areas. The three main segments have been identified without aggregation of operating segments. Segment income and costs include any items that are directly attributable to the individual segment and any items that can be reliably allocated to the individual segment. Non-allocated costs refer to income and costs related to joint group functions 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 2023 | ||||
| Revenue | 1,843 | 1,119 | 288 | 3,250 |
| Cost of sales | -1,451 | -831 | -231 | -2,513 |
| Gross profit | 392 | 288 | 57 | 737 |
| Direct costs | -69 | -40 | -10 | -119 |
| Earnings before indirect costs | 323 | 248 | 47 | 618 |
| Indirect costs | -119 | -60 | -13 | -192 |
| Segment profit | 204 | 188 | 34 | 426 |
| Non-allocated costs | -212 | |||
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 214 | |||
| Depreciation and amortisation | -93 | |||
| Earnings before interest and tax (EBIT) | 121 | |||
| Financials, net incl. share of net profit from associates and impairment on associates | -20 | |||
| Earnings before tax (EBT) | 101 | |||
| 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 |
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
2.1 Segment information
Section 3 - Invested capital
Quarterly information
Statement
02 Income statement
2.1 Segment information - continued
| DKK million | Installation | Industry | Trade | Total |
|---|---|---|---|---|
| H1 2023 | ||||
| Revenue | 3,926 | 2,346 | 634 | 6,906 |
| Cost of sales | -3,076 | -1,742 | -504 | -5,322 |
| Gross profit | 850 | 604 | 130 | 1,584 |
| Direct costs | -139 | -76 | -19 | -234 |
| Earnings before indirect costs | 711 | 528 | 111 | 1,350 |
| Indirect costs | -247 | -121 | -28 | -396 |
| Segment profit | 464 | 407 | 83 | 954 |
| Non-allocated costs | -460 | |||
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 494 | |||
| Depreciation and amortisation | -164 | |||
| Earnings before interest and tax (EBIT) | 330 | |||
| Financials, net incl. share of net profit from associates and impairment on associates | -40 | |||
| Earnings before tax (EBT) | 290 | |||
| 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 | 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 incl. share of net profit from associates and impairment on associates | -14 | |||
| Earnings before tax (EBT) | 410 |
Solar A/S
Q2 2023
Contents
02 Income statement
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
- 2.1 Segment information
Section 3 - Invested capital
Quarterly information
Statement
2.1 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 128 of Annual Report 2022 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 2023 | |||||
| Denmark | 1,009 | -5.9 | 78 | 7.7 | 872 |
| Sweden | 606 | -3.6 | 38 | 6.3 | 221 |
| Norway | 500 | 9.0 | 39 | 7.8 | 212 |
| The Netherlands | 795 | -2.4 | 45 | 5.7 | 350 |
| Poland | 103 | -3.2 | 2 | 1.9 | 47 |
| Other markets | 237 | 14.0 | 12 | 5.1 | 59 |
| Solar Group | 3,250 | -1.0 | 214 | 6.6 | 1,761 |
| DKK million | Revenue | Adjusted organic growth | EBITDA | EBITDA margin | Non-current assets |
| --- | --- | --- | --- | --- | --- |
| Q2 2022 | |||||
| Denmark | 1,082 | 9.5 | 100 | 9.2 | 740 |
| Sweden | 699 | 8.0 | 48 | 6.9 | 178 |
| Norway | 544 | 14.8 | 44 | 8.1 | 229 |
| The Netherlands | 814 | 18.3 | 59 | 7.2 | 329 |
| Poland | 105 | 6.1 | 5 | 4.8 | 26 |
| Other markets | 207 | 18.7 | 11 | 5.3 | 55 |
| Solar Group | 3,451 | 12.4 | 267 | 7.7 | 1,557 |
| DKK million | Revenue | Adjusted organic growth | EBITDA | EBITDA margin | Non-current assets |
| --- | --- | --- | --- | --- | --- |
| H1 2023 | |||||
| Denmark | 2,144 | -3.5 | 177 | 8.3 | 872 |
| Sweden | 1,288 | 0.4 | 92 | 7.1 | 221 |
| Norway | 1,078 | 13.0 | 80 | 7.4 | 212 |
| The Netherlands | 1,719 | 4.8 | 113 | 6.6 | 350 |
| Poland | 197 | -10.9 | 4 | 2.0 | 47 |
| Other markets | 480 | 18.7 | 28 | 5.8 | 59 |
| Solar Group | 6,906 | 2.8 | 494 | 7.2 | 1,761 |
| DKK million | Revenue | Adjusted organic growth | EBITDA | EBITDA margin | Non-current assets |
| --- | --- | --- | --- | --- | --- |
| H1 2022 | |||||
| Denmark | 2,199 | 11.1 | 208 | 9.5 | 740 |
| Sweden | 1,386 | 10.2 | 101 | 7.3 | 178 |
| Norway | 1,081 | 14.7 | 91 | 8.4 | 229 |
| The Netherlands | 1,627 | 14.3 | 115 | 7.1 | 329 |
| Poland | 220 | 24.2 | 12 | 5.5 | 26 |
| Other markets | 400 | 17.5 | 21 | 5.3 | 55 |
| Solar Group | 6,913 | 12.9 | 548 | 7.9 | 1,557 |
Solar A/S
Q2 2023
27
Contents
Consolidated financial statements Q2
- Statement of comprehensive income
- Balance sheet
- Cash flow statement
- Statement of changes in equity
Notes
- Section 1 – Basis for preparation
- Section 2 – Income statement
- Section 3 – Invested capital
- 3.1 Acquisition of subsidiaries
- Quarterly information
- Statement
Section 3
Invested capital
Solar A/S
Q2 2023
Contents
03 Invested capital
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
Section 2 – Income statement
Section 3 – Invested capital
- 3.1 Acquisition of subsidiaries
Quarterly information
Statement
3.1 Acquisition of subsidiaries
On 1 March 2023, Solar A/S acquired 42.5% of the shares of ThermoNova A/S, a Danish manufacturer of high-capacity heat pumps.
The acquisition price is made up of a fixed amount of DKK 111m and a variable amount, which will total DKK 10m at the most.
The variable amount is related to the required expansion of the production capacity.
Simultaneous Solar A/S subscribed new issued shares for DKK 50m in ThermoNova A/S. In total Solar A/S owns 51% of the shares.
The acquisition had an insignificant impact on Solar's H1 2023 revenue and EBITDA and is expected to have an insignificant impact on Solar's full year 2023 revenue and EBITDA. If the acquisition had occurred on 1 January 2023 the impact on Solar's full year 2023 revenue and EBITDA would have been insignificant as well.
Fair value at the date of acquisition (DKK million)
| Customer-related intangible assets | 42 |
|---|---|
| Property, plant and equipment | 1 |
| Inventories | 19 |
| Trade receivables | 12 |
| Cash | 53 |
| Provision for deferred tax | -9 |
| Other non-current liabilities, non-interest-bearing | -1 |
| Current liabilities, non-interest-bearing | -16 |
| Net assets | 101 |
| Non-controlling interest of acquired new assets | -49 |
| Acquired net assets | 52 |
| Goodwill | 122 |
| Total consideration | 174 |
| Cash acquired | -53 |
| Deferred consideration | -10 |
| Net cash used in acquisition | 111 |
Transaction costs related to the acquisition totalled DKK 5m. These have been recognised as part of external operating costs in the income statement.
The fair value of the customer related assets is based on the multi-period excess earnings-method (MEEM). The fair value has been calculated as the net present value (NPV) of the future net cash-flow derived from the sale to the customers minus a fair return on the assets used to generate the sale. An interest rate of 10% has been applied.
The main factors leading to the recognition of goodwill are:
- the presence of certain intangible assets, such as the assembled workforce and knowhow, which do not qualify for separate recognition
- expected synergies within sale which result in Solar being prepared to pay a premium.
The goodwill recognised will not be deductible for tax purposes.
For the non-controlling interests in ThermoNova A/S, the group decided to recognise the non-controlling interests at its proportionate share of the acquired net identifiable assets. See page 22 for Solar's accounting policies for business combinations.
2022
On 1 March 2022, Solar acquired the shares in the lighting company Højager Belysning A/S in Denmark.
Solar A/S
Q2 2023
29
Quarterly information
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
- Quarterly information
Statement
Quarterly figures
Consolidated
| Income statement (DKK million) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | 2021 | 2022 | 2021 | |
| Revenue | 3,656 | 3,462 | 3,250 | 3,451 | 3,266 | 2,872 | 3,684 | 3,380 |
| Earnings before interest, tax, depreciation and amortisation (EBITDA) | 280 | 281 | 214 | 267 | 301 | 237 | 326 | 259 |
| Earnings before interest, tax and amortisation (EBITA) | 226 | 236 | 159 | 218 | 250 | 192 | 274 | 212 |
| Earnings before interest and tax (EBIT) | 209 | 222 | 121 | 202 | 231 | 179 | 254 | 197 |
| Financials, net | -20 | -5 | -20 | -8 | -6 | -20 | -31 | -11 |
| Earnings before tax (EBT) | 189 | 217 | 101 | 193 | 225 | 159 | 223 | 184 |
| Net profit or loss for the quarter | 145 | 168 | 77 | 147 | 176 | 124 | 169 | 159 |
Balance sheet (DKK million)
| Non-current assets | 1,756 | 1,487 | 1,761 | 1,557 | 1,545 | 1,393 | 1,564 | 1,415 |
|---|---|---|---|---|---|---|---|---|
| Current assets | 4,858 | 4,088 | 4,556 | 4,122 | 4,392 | 3,724 | 4,337 | 3,890 |
| Balance sheet total | 6,614 | 5,575 | 6,317 | 5,679 | 5,937 | 5,117 | 5,901 | 5,305 |
| Total equity | 1,759 | 1,808 | 1,810 | 1,600 | 1,764 | 1,784 | 1,931 | 1,952 |
| Non-current liabilities | 737 | 453 | 894 | 506 | 491 | 446 | 709 | 435 |
| Current liabilities | 4,118 | 3,314 | 3,613 | 3,573 | 3,682 | 2,887 | 3,261 | 2,918 |
| Interest-bearing liabilities, net | 1,530 | 617 | 1,558 | 1,122 | 1,205 | 450 | 1,074 | -37 |
| Invested capital | 3,263 | 2,377 | 3,342 | 2,675 | 2,923 | 2,185 | 2,978 | 1,866 |
| Net working capital, end of period | 2,347 | 1,791 | 2,265 | 1,856 | 2,186 | 1,568 | 2,205 | 1,259 |
| Net working capital, average | 2,149 | 1,475 | 2,251 | 1,619 | 1,773 | 1,325 | 2,010 | 1,363 |
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
- Quarterly information
Statement
Quarterly figures
Consolidated - Continued
| Cash flows (DKK million) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | 2021 | 2022 | 2021 | |
| Cash flow from operating activities | 101 | -202 | 78 | -10 | -14 | -38 | 242 | 558 |
| Cash flow from investing activities | -162 | -99 | -54 | -75 | -37 | -65 | -38 | -53 |
| Cash flow from financing activities | 171 | -37 | -38 | 41 | 66 | 77 | -152 | -250 |
| Net investments in intangible assets | -20 | -16 | -25 | -14 | -12 | -14 | -17 | -16 |
| Net investments in property, plant and equipment | -30 | -59 | -29 | -61 | -25 | -51 | -22 | -35 |
| Acquisition and divestment of subsidiaries and operations, net | -111 | -24 | 0 | 0 | 0 | 0 | 0 | 0 |
Financial ratios (% unless otherwise stated)
| Revenue growth | 5.6 | 15.2 | -5.8 | 11.4 | 13.7 | 9.7 | 9.0 | 10.6 |
|---|---|---|---|---|---|---|---|---|
| Organic growth | 8.3 | 15.4 | -2.2 | 11.7 | 14.0 | 8.8 | 10.9 | 9.1 |
| Adjusted organic growth | 6.7 | 13.6 | -1.0 | 12.4 | 14.0 | 8.8 | 12.0 | 7.1 |
| Gross profit margin | 23.2 | 23.1 | 22.7 | 22.9 | 24.1 | 23.0 | 23.6 | 22.9 |
| EBITDA margin | 7.7 | 8.1 | 6.6 | 7.7 | 9.2 | 8.3 | 8.8 | 7.7 |
| EBITA margin | 6.2 | 6.8 | 4.9 | 6.3 | 7.7 | 6.7 | 7.4 | 6.3 |
| EBIT margin | 5.7 | 6.4 | 3.7 | 5.9 | 7.1 | 6.2 | 6.9 | 5.8 |
| Net working capital (end of period NWC)/revenue (LTM) | 16.7 | 14.0 | 16.3 | 14.1 | 16.1 | 13.0 | 15.9 | 10.2 |
| Net working capital (average NWC)/revenue (LTM) | 15.3 | 11.5 | 16.2 | 12.3 | 13.1 | 11.0 | 14.5 | 11.0 |
| Gearing (interest-bearing liabilities, net/EBITDA), no. of times | 1.3 | 0.6 | 1.4 | 1.1 | 1.1 | 0.5 | 0.9 | 0.0 |
| Return on equity (ROE) | 35.0 | 31.9 | 32.7 | 35.1 | 38.6 | 19.7 | 35.7 | 28.4 |
| Return on invested capital (ROIC) | 23.2 | 26.5 | 20.5 | 25.5 | 25.3 | 23.6 | 25.5 | 24.6 |
| Enterprise value/earnings before interest, tax and amortisation (EV/EBITA) | 5.7 | 7.5 | 5.7 | 6.3 | 5.2 | 7.6 | 5.7 | 7.8 |
| Equity ratio | 25.9 | 32.4 | 27.9 | 28.2 | 29.7 | 34.9 | 32.7 | 36.8 |
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 - Basis for preparation
Section 2 - Income statement
Section 3 - Invested capital
- Quarterly information
Statement
Quarterly figures
Consolidated - Continued
| Share ratios (DKK unless otherwise stated) | Q1 | Q2 | Q3 | Q4 | ||||
|---|---|---|---|---|---|---|---|---|
| 2023 | 2022 | 2023 | 2022 | 2022 | 2021 | 2022 | 2021 | |
| Earnings per share outstanding (EPS) | 19.85 | 23.00 | 10.54 | 20.13 | 24.10 | 16.98 | 23.14 | 21.77 |
| Intrinsic value per share outstanding | 234.14 | 247.56 | 241.13 | 219.08 | 241.54 | 244.28 | 264.41 | 267.28 |
| Share price | 553.54 | 749.19 | 506.42 | 597.09 | 492.34 | 632.86 | 622.62 | 795.05 |
| Share price/intrinsic value | 2.36 | 3.03 | 2.10 | 2.73 | 2.04 | 2.59 | 2.35 | 2.97 |
Employees
| Number of employees (FTE's), end of period | 3,085 | 2,996 | 3,063 | 2,995 | 3,042 | 2,897 | 3,043 | 2,936 |
|---|---|---|---|---|---|---|---|---|
| Average number of employees (FTE's) | 3,042 | 2,932 | 3,058 | 2,956 | 2,992 | 2,890 | 3,019 | 2,908 |
Definitions
| Adjusted organic growth | Revenue growth adjusted for enterprises acquired and divested and any exchange rate changes. In addition 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 A/S
Q2 2023
33
Q2 2023 Statement
Solar A/S
Q2 2023
Contents
Consolidated financial statements Q2
- Statement of comprehensive income
- Balance sheet
- Cash flow statement
- Statement of changes in equity
- Notes
- Section 1 – Basis for preparation
- Section 2 – Income statement
- Section 3 – Invested capital
Q2 Quarterly information
- Statement
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 2023
The financial report for the first six months of 2023, 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 2023 as well as of the results of the group's activities and cash flow for the first six months of 2023.
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 2023 with the file name SOLA-2023-06-30-en.zip is prepared, in all material respects, in compliance with the ESEF Regulation.
Vejen, 10 August 2023
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 A/S
solar
Solar A/S
Industrivej Vest 43
DK 6600 Vejen
Denmark
Tel. +45 79 30 00 00
CVR no. 15908416
LEI 21380031XTLI9X5MTY92
www.solar.eu
http://www.linkedin.com/company/solar-as
ESEF data
| Name of reporting entity or other means of identification | Solar A/S |
|---|---|
| Domicile of entity | Denmark |
| Legal form of entity | A/S |
| Country of incorporation | Denmark |
| Address of entity's registered office | Industrivej Vest 43, 6600 Vejen |
| Principal place of business | Europe |
| Description of nature of entity's operations and principal business | Sourcing and services company |
| Name of parent entity | Solar A/S |
| Name of ultimate parent of group | Fund of 20th December |