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No. 14 2020 Quarterly Report Q2 2020

14 2020    ·    12. August, 2020

Solar performed well in Q2 despite the challenges brought about by the COVID-19 pandemic. We reiterate our original EBITA guidance for 2020.


CEO Jens Andersen says:

"Solar’s agile and digital business model has proved itself during the COVID-19 pandemic. We have been able to serve our customers and maintain our delivery performance, and we will continue to invest in our digital transformation.

We continue our journey towards improved profitability, delivering a 35% EBITA increase in Q2 despite a lower revenue compared to Q2 2019.

We are pleased to reiterate our original EBITA guidance despite the fact that we expect a quarter of a billion Danish kroner lower revenue in H2 2020 compared to H2 2019. We owe this to our gross profit margin initiatives, efficiency gains and cost containment.”

Key financial messages

  • Due to improved gross profit margin, efficiency gains and cost containment we achieved a 35% EBITA increase despite a revenue decrease of DKK 123m.
  • New 2020 guidance: revenue of DKK 11.4bn and reiteration of EBITA of DKK 400m.
Financial highlights
(DKK million)*
Q2 2020Q2 2019H1 2020H1
2019
Revenue2,7452,8685,7905,825
EBITA8160178140
Cash flow from operating activities282-17239-149
Financial ratios (%)    
Organic growth adj. for number of working days-1.65.60.05.6
EBITA margin3.02.13.12.4
Net working capital, period-end/revenue (LTM)11.912.911.912.9
Gearing (NIBD/EBITDA), no. of times1.52.61.52.6
* Due to the divestment of our Norwegian training business, STI, in Q1 2019, 2019 and 2020 figures in this announcement relate to our continuing operations.

Q2 2020 Revenue

  • Adjusted organic growth amounted to -1.6% (5.6%).


Q2 2020 EBITA

  • We succeeded in increasing EBITA by DKK 21m due to improved gross profit margin, efficiency gains and cost containment despite a revenue decrease of DKK 123m.
  • EBITA from core business was up at DKK 80m (DKK 66m) corresponding to an EBITA margin of 3.1% (2.4%).
  • As expected, Solar Danmark’s and Solar Norge’s financial performances were negatively affected by roll-out costs for SAP eWM of approx. DKK 2m and approx. DKK 5m respectively.

BIMobject valuation

  • Based on the share price on 30 June 2020, the value of BIMobject increased to DKK 204m. Hence, the reversal of a previously performed write-down amounted to DKK 97m (DKK 29m).

2020 outlook

Due to the COVID-19 pandemic, we see an increased risk in the market outlook for 2020 compared to 2019. The new guidance for 2020 in the table below is based on the main assumption that no new significant resurgence of COVID-19 resulting in new lockdowns will take place in our markets.

See detailed information on page 11-12 in Quarterly Report Q2 2020.

Guidance 2020 overview DKK millionNew guidanceWithdrawn guidance
Core business, revenue10,85011,200
Core business, EBITA400400
Related business, revenue550600
Related business, EBITA00
Solar Group, revenue11,40011,800
Solar Group, EBITA400400

Audio webcast and teleconference today 

The presentation of Quarterly Report Q2 2020 will be made in English on 12 August 2020 at 11:00 CET. The presentation will be transmitted as an audio webcast and will be available at www.solar.eu. Participation will be possible via a teleconference.

Teleconference call-in numbers:

DK: tel. +45 781 501 09
UK: tel. +44 333 300 9030
US: tel. +1 833 526 8396

Yours faithfully,
Solar A/S

Jens Andersen

Contacts
CEO Jens Andersen - tel. +45 79 30 02 01

CFO Michael H. Jeppesen - tel. +45 79 30 02 62

Director, Stakeholder Relations Charlotte Risskov Kræfting - tel. +45 40 34 29 08

Enclosure: Quarterly Report Q2 2020, pages 1-31.

Facts about Solar
Solar is a leading European sourcing and services company mainly within electrical, heating and plumbing, ventilation and climate and energy solutions. Our core business centres on product sourcing, value-adding services and optimisation of our customers’ businesses.

We facilitate efficiency improvement and provide digital tools that turn our customers into winners. We drive the green transition and provide best in class solutions to ensure sustainable use of resources.

Solar Group is headquartered in Denmark, generated revenue of approx. DKK 11.7bn in 2019 and has approx. 3,000 employees. Solar is listed on Nasdaq Copenhagen and operates under the short designation SOLAR B. For more information, please visit www.solar.eu.

Disclaimer
This announcement was published in Danish and English today via Nasdaq Copenhagen. In the event of any inconsistency between the two versions, the Danish version shall prevail.

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+4540342908

Charlotte Risskov KræftingDirector, Stakeholder Relations