Solar — Interim / Quarterly Report 2023

Aug 10, 2023

Untitled Q2 2023 Report Solar A/S CVR no. 15 90 84 16 We are a leading European sourcing and services company. Who we are Installation Industry Trade Denmark Sweden Norway Poland Other 1 33 16 4 3 % % % % % % Groups Brands Share of 2022 revenue Share of 2022 revenue ProductsSegments Markets The Netherlands 24 20 1) Including eliminations Share of 2022 revenue 58 % 33 % 9 % Electrical Concepts Heating & Plumbing Other brands Climate & Energy 73 % 23 % 17 % 77 % 10 % 2Solar A/S Q2 2023 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. Contents 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 Solar plants 116,000 trees for the benefit of climate and environment 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. 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 7 Page 8 3Solar A/S Q2 2023 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. Financial highlights Q2 H1 Year Consolidated (DKK million) 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”. 4Solar A/S Q2 2023 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. Business update 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. 2023 Ambitions Today Our Concepts continue to perform and convert sales. Climate & Energy continues to see increased demand despite temporary slowdown in Denmark. Continued growth in all our Industry sub-segments. Trade continues to deliver growth. Today Today Today2023 Ambitions 2023 Ambitions 2023 Ambitions 25 % > 40 % > 35 % > 15 % > 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. 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 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. Concepts Climate & Energy Industry Trade of revenue of revenueCAGR CAGR 5Solar A/S Q2 2023 Strengthening margin and earnings 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. ThermoNova adds an additional solution to our Climate & Energy assortment, and we are now able to provide our customers with energy efficient, high-capacity heat pumps “ 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. Business update Not adjusted for IFRS 16, Leasing 6Solar A/S Q2 2023 Solar’s concepts make the difference Business update 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 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-solu- tions/concepts/ 7Solar A/S Q2 2023 Solar plants 116,000 trees for the benefit of climate and environment Sustainability 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 CO 2 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. 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 CO 2 -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. 8Solar A/S Q2 2023 Price effects: Price increases above normal level related to goods on stock. Q2 EBITDA of DKK 214m is on par with expectations 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. 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) Gross profit margin Percentage DKKm EBITDA adj. for one-off price effects Q1 23.2 23.1 22.9 24.1 23.6 Q2 Q3 Q4 22.7 25 24 23 22 2023 2022 Q1 Q2 Q3 Q4 350 300 250 200 150 100 50 0 2023 2022 246 222 236 256 255 214 Financial review 9Solar A/S Q2 2023 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). Financial review - continued 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. 10Solar A/S Q2 2023 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 Højager 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. Our segments Q2 Segment profit Overview business segmentsSegment revenue DKKmDKKm Installation Installation Industry Industry Trade Trade 1,843 204 1,119 188 288 34 Q2 Revenue Segment profit Segment margin % DKK million 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 Q2 2023 Q2 2023 11Solar A/S Q2 2023 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. Our segments H1 Segment profit Overview business segmentsSegment revenue DKKmDKKm Installation Installation Industry Industry Trade Trade 3,926 464 2,346 407 634 83 H1 Revenue Segment profit Segment margin % DKK million 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 H1 2023 H1 2023 12Solar A/S Q2 2023 We confirm our EBITDA guidance of DKK 900m for 2023 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. * Including one-off income of DKK 112m Guidance 2023 We confirm our revenue guidance of DKK 13,500m and EBITDA guidance of DKK 900m. EBITDA DKKm 2019 2020 2021 2022 One-offs 2022 538 637 911 1,175 -215 * including one-off income of DKK 112m Inflation catch-up Guidance 2023 -60 900 13Solar A/S Q2 2023 Share and webcast information 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: Shareholder information Solar’s share capital is divided into nominal value DKK 90 million A shares and nominal value DKK 646 million B shares. Financial calendar 2023 Quarterly Report Q2 2023 Quarterly Report Q3 2023 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% Shareholders with more than 5% of shares or votes The Solar share www.solar.eu 10 Aug 02 Nov A share B share Shares 900,000 6,460,000 Nominel 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 14 Solar A/S Q2 2023 Q2 2023 Consolidated financial statements 15Solar A/S Q2 2023 Contents Q2 H1 Year DKK million 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 Statement of comprehensive income Q2 H1 Year DKK million 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 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 Income statement Other comprehensive income 16Solar A/S Q2 2023 Contents Balance sheet 30.06 31.12 DKK million 2023 2022 2022 Equity and liabilities Share capital 736 736 736 Reserves -244 -167 -181 Retained earnings 1,269 1,031 1,047 Proposed dividends for the financial year 0 0 329 Equity attributable to shareholders of Solar A/S 1,761 1,600 1,931 Non-controlling interests 49 0 0 Total equity 1,810 1,600 1,931 Interest-bearing liabilities 439 116 293 Lease liabilities 307 247 274 Provision for deferred tax 138 133 133 Other provisions 10 10 9 Non-current liabilities 894 506 709 Interest-bearing liabilities 953 754 556 Lease liabilities 121 104 117 Trade payables 1,933 2,092 1,902 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 Consolidated 30.06 31.12 DKK million 2023 2022 2022 Assets Intangible assets 328 183 173 Property, plant and equipment 967 961 963 Right-of-use assets 420 346 383 Deferred tax asset 9 12 9 Investments in associates 5 4 4 Other non-current assets 32 51 32 Non-current assets 1,761 1,557 1,564 Inventories 2,276 1,991 2,248 Trade receivables 1,922 1,957 1,859 Income tax receivable 22 4 13 Other receivables 15 14 9 Prepayments 59 57 42 Cash at bank and in hand 262 99 166 Current assets 4,556 4,122 4,337 Total assets 6,317 5,679 5,901 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 17Solar A/S Q2 2023 Contents Cash flow statement Q2 H1 Year DKK million 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. Consolidated Q2 H1 Year DKK million 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 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 18Solar A/S Q2 2023 Contents Statement of changes in equity DKK million Share capital Reserves for hedging transactions 1 Reserves for foreign currency translation adjustments 1 Retained earnings Proposed dividends Equity attributable to Shareholders of Solar A/S Non controlling interests Tot al equit y 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 0 Equity as at 30 June 736 -9 -235 1,269 0 1,761 49 1,810 1. Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves. Consolidated 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 19Solar A/S Q2 2023 Contents Statement of changes in equity DKK million Share capital Reserves for hedging transactions 1 Reserves for foreign currency translation adjustments 1 Retained earnings Proposed dividends Equity attributable to Shareholders of Solar A/S Non controlling interests Tot al equit y 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 1. Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves. 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 – Continued 20Solar A/S Q2 2023 Contents Basis for preparation Section 1 01 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 21Solar A/S Q2 2023 Contents Basis for preparation 01 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. ThemoNova’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. 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 22Solar A/S Q2 2023 Contents Income statement Section 2 02 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 23Solar A/S Q2 2023 Contents Income statement 02 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 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 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 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. 24Solar A/S Q2 2023 Contents Income statement 02 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 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 25Solar A/S Q2 2023 Contents Income statement 02 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 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 Q2 2022 Denmark 1,082 9.5 100 9.2 74 0 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 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 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. 2.1 Segment information – continued 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 26Solar A/S Q2 2023 Contents Invested capital Section 3 03 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 27Solar A/S Q2 2023 Contents Invested capital 03 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 acquistion 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. 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 28Solar A/S Q2 2023 Q2 2023 Quarterly information 29Solar A/S Q2 2023 Contents Quarterly figures Consolidated Q1 Q2 Q3 Q4 Income statement (DKK million) 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 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 30Solar A/S Q2 2023 Contents Quarterly figures Q1 Q2 Q3 Q4 Cash flows (DKK million) 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 Consolidated – Continued 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 31Solar A/S Q2 2023 Contents Quarterly figures Consolidated – Continued Q1 Q2 Q3 Q4 Share ratios (DKK unless otherwise stated) 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. 5 6 241.13 219.08 241.54 244.28 264.41 267.28 Share price 553.54 749.1 9 506.42 597. 0 9 492.34 632.86 622.62 795.05 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”. 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 32Solar A/S Q2 2023 Q2 2023 Statement 33Solar A/S Q2 2023 Contents 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 require- ments 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 Board of Directors Statement by the Executive Board and the Board of Directors Hugo Dorph CCO Jesper Dalsgaard Vice chair Morten Chrone Rune Jesper Nielsen Jens E. Andersen CEO Michael Troensegaard Andersen Chair Katrine Borum Louise Knauer Michael H. Jeppesen CFO Peter Bang Denise Goldby Michael Kærgaard Ravn 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 34Solar A/S Q2 2023 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 Interim report (6 months)No audit assistanceParsePort XBRL Converter2023-01-012023-06-302022-01-012022-06-3021380031XTLI9X5MTY92Reporting class DDenmark2023-08-10Solar A/SIndustrivej Vest 436600 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