Solar A/S
Industrivej Vest 43
DK 6600 Vejen
Denmark
CVR no. 15 90 84 16
2023
Annua report
We are a leading
European sourcing and
services company.
Who we are
Instaaton
Industry Trade
Electrical
Concepts
Heating & Plumbing
Other brands
Climate & Energy
23
%
17
%
77
%
Denmark
Sweden
Norway
Poland
Other
32
15
3
7
%
%
%
%
%
Groups
Brands
Share of revenue
Share of revenue
Share of revenue
ProductsSegments
Markets
The Netherands
24
%
19
56
%
35
%
9
%
73
%
10
%
2
Management review
Solar A/S - Annual Report 2023
Management review
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.
Sustainability Report 2023
prepared in compliance with
sections 99a of the Danish
Financial Statements Act.
Together with the Annual Report,
the following publications constitute
Solar’s reporting for the year 2023:
Statutory report on corporate
governance 2023 cf. § 107b of the
Danish Financial Statements Act
Statutory report on data ethics
2023 cf. § 99d of the Danish
Financial Statements Act
www.solar.eu/investor/
www.solar.eu/investor/
corporate-governance
www.solar.eu/our-company/
sustainability
Contents
Letter from the CEO 4
Year at a glance 5
Highlights 2023 6
Guidance follow-up 2023 7
Guidance 2024 8
Our 2024-26 strategy 10
2026 ambitions 12
Business model 13
Five-year summary 15
Financial review 16
Segments 18
Sustainability highlights 22
Risk management 25
Exposure to top risks and mitigation 27
Statutory report on diversity 31
Corporate governance 32
Board of Directors 33
Members of the Board of Directors 35
Executive Management 37
Shareholder information 38
Consolidated financial statements 42
Separate financial statements 91
Group companies’ overview 127
Statements and reports 129
Q4 2023 135
01
Highlights
03
Financial review
04
Sustainability
07
Financial Statements
05
Risk management
06
Corporate matters
Strategy
02
Solar A/S
CVR no. 15 90 84 16
Statutory Report on
Data Ethics 2022,
cf. § 99d of the Danish
Financial Statements Act
Solar A/S
CVR no. 15 90 84 16
Statutory Report on
Corporate Governance 2022,
cf. § 107b of the Danish
Financial Statements Act
Additiona reports
Solar A/S
Industrivej Vest 43
DK 6600 Vejen
Denmark
CVR no. 15 90 84 16
2023
Sustanabty report
3
Management review
Solar A/S - Annual Report 2023
Thank you
We have reached the end of our three-year Core+
journey and I have been impressed by the dedication
and focus of our employees. They have delivered
beyond expectations and delivery of these strong
results - both financial and strategic - has only been
possible thanks to them. I would therefore like to
extend my thanks and appreciation to them all.
I would also like to thank our customers and suppliers
for their support and cooperation in 2023.
Letter from the CEO
Over the past three years, we have seen the benefits of
the implementation of our Core+ strategy, including
the strongest financial results in our history and
dividend payments of DKK 1.3bn to our shareholders.
As part of the three-year strategic period, we have also
invested almost DKK 1bn in our business.
For the year under review, revenue totalled DKK
13.0bn. EBITDA amounted to DKK 0.9bn.
Our Solve Strategy
Focusing on the coming three years, we are today
announcing the launch of our new three-year strategy
– Solve.
With Solve, it is our ambition to create additional value
at an earlier stage of our customers' decision-making
process focusing on effective solutions for their
challenges.
Core+ has served our business well, elevating our
margins to new and sustainable levels over the long
term. Now with our new Solve priorities, we will continue
our successful journey, targeting continued progress in
our product mix and supporting our underlying margins.
As a company we are resilient and we are ready to meet
a challenging 2024 and therefore able to have financial
ambitions towards 2026 for an EBITDA margin >6%.
Progressing towards net-zero
We are committed to eliminating emissions both in our
own operations and across the value chain through
collaboration with customers and suppliers. As part of
that effort, we are pleased to announce that our scope
1, 2 and 3 reduction targets have been approved by the
Science Based Targets initiative, ensuring that our
climate roadmap is aligned with the Paris Agreement’s
1.5°C objective.
In 2023, we reduced emissions from our own
operations by 9% and have established a target to
become net-zero in scope 1 and 2 by 2030, while also
maintaining a strong focus on reducing emissions in
our value chain. Even more important, we actively
promote products and solutions that enables our
customer to become a key driver of the green
transition.
Reducing emissions, however, is not enough: we also
want to give back to nature. We have therefore
acquired an additional 677 hectares of land in Latvia
where our ambition is to afforest 430 hectares with
1.5m trees over the next three years.
Ticket to growth
Throughout our Core and Core+ strategic period,
we automated and digitalised three of our main
markets by merging warehouses, installing AutoStore
with more than 210,000 boxes and 215 robots, and
added additional space. These investments will enable
significant efficiencies while creating value for our
customers, as we continue to be stronger together.
We continue to see opportunities for further
digitalisation and automatisation across our markets.
Including a decision to invest in a new modern
warehouse in Kumla, Sweden, which is expected to
come on stream in late 2026. The two existing
warehouses in Halmstad and Örebro will be divested.
Net investment will amount to approx. DKK 400m.
The Kumla warehouse will be constructed with a
sustainable mindset, reflected in the green areas that
will surround the warehouse providing habitats for
many animals. We will also be energy self-sufficient,
sourcing our supply locally from sustainable energy.
Jens Andersen
CEO
With Solve, it is our ambition to create
additional value at an earlier stage of
our customers' decision-making
process focusing on effective
solutions for their challenges.
01
Highlights
4
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
2
EBITDA reached DKK 0.9bn, the
second-best result in Solar's
history when results are adjusted
for one-offs.
#
Second-best
result
Year at a glance
Acquisition of
ThermoNova
Alkmaar
expansion
completed
Our climate reduction targets have
been approved by the Science Based
Targets initiative proving that our
climate roadmap is aligned with the
Paris Agreement’s 1.5°C objective. Our
target is to become net-zero in our own
operations and reduce our emissions in
scope 3 by 25% by 2030.
We aspire to run a business that
also gives back to nature. In May,
we planted 116,000 trees near our
head office. We have acquired an
additional 677 hectares of land in
Latvia where our ambition is to
afforest 430 hectares with 1.5m
trees over the next three years.
ThermoNova brings an additional
resource to our Climate & Energy
assortment. We can now provide our
customers with energy efficient,
high-capacity heat pumps for
industrial buildings backed by
ThermoNova's strong expertise.
With the completion of warehouse
Alkmaar we have now added more
than 18,600 sq.m of warehouse,
installed 3 AutoStore systems
totalling 210,000 boxes and 215
robots. Resulting in modern
warehouses in Denmark, Norway
and the Netherlands. We have
decided to invest in a modern
warehouse in Sweden, thereby
completing our warehouse
transformation.
Giving back
to nature
SBTi targets
During our strategic period
2021-2023, we have paid-out a
total of DKK 1.3bn in dividends.
1.3
Dividends
DKKbn
01
Highlights
5
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
7,690
2021 2022
5,920
2023
5,391
153,824
2021 2022
146,762
2023
136,093
68%
2021
2022
84%
2023
88%
Revenue EBITDA Dividend per share
Fnancal
Sustainabty
Adjusted for one-offs, we delivered the second-best result in
Solar’s history. EBITDA has been supported by positive one-off
effects of approx. DKK 30m (DKK 215m).
The Board of Directors will submit a proposal to the Annual
General Meeting for an ordinary dividend payout of DKK 30 per
share, corresponding to a total payout ratio of 63%. Our target
for payout ratio is at least 35% of profit after tax.
As expected, the market declined in H2 2023. Adjusted organic
growth at group level amounted to -2.6% (12.9%) for 2023.
Group revenue amounted to DKK 13.0bn (DKK 13.9bn).
2021 2022
12.4
13.9
13.0
2023
2021 2022
911
1,175
871
2023
2021 2022
90
45
30
2023
Scope 1 & 2 emissions Renewable energy Energy consumption
The share of renewable electricity increased to 88% (84%).
As regards Solar-owned sites, we achieved 98% in 2023, while
more time is needed to change to renewable energy for our
leased sites.
The energy consumption encompassing Scope 1 and 2
decreased 7% (5%) largely due to the installation of LED
lighting.
Emissions from Scope 1 and 2 were reduced by 9% (23%),
bringing total emissions down to 5,391 t CO2e. The decrease
was mainly driven by our continuous focus on energy optimisa-
tion and phasing out fossil fuels.
tCOe Share in percentage Giga joule (GJ)
DKKbn DKKm DKK
Highlights
2023
(Data shown in brackets relate
to 2022 figures)
01
Highlights
6
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Guidance follow-up 2023
Solar delivered EBITDA guidance of
DKK 0.9bn despite increased market
headwinds.
Stronger than expected
Expansion of our central warehouse in Alkmaar,
the Netherlands
The 7,600 sqm expansion of Alkmaar was finalised
ahead of schedule enabling us to clear the central
warehouse in Duiven before year end. Moreover, we
added 20,000 boxes to our AutoStore facilities
bringing the total up to 65,000 boxes. This was carried
out successfully with the minimum of disruption to
daily operations.
Cost initiatives
Measures to reduce the impact from cost and salary
inflation delivered more savings than we expected in
our initial guidance.
As expected
Inventory normalisation
Inventory normalisation continued to free up cash.
This was achieved without impeding our ability to meet
customer demand by supplying the right products. As
a result, inventories were reduced by DKK 230m.
EBITDA margin
We succeeded in delivering EBITDA margin of 6.7% as
our cost and margin measures compensated for
adjusted organic growth which was lower than
expected.
Less than expected
Revenue
Climate & Energy delivered adjusted organic growth of
4% (87%) compared to our initial projection of 40%.
Consequently, revenue was down with DKK 500m
compared to our expectations. Sales of high-capacity
ThermoNova industrial heat pumps delivered the
expected growth rates while heat pump and PV sales
for the residential market were disappointing. During
the latter part of Q4 we saw double-digit negative
growth rates for Installation, Industry and Trade.
Gross profit margin
Despite our focus on concept sales, which continued
to deliver growth opportunities, this was insufficient to
offset the loss on margin in other categories during H2,
including Climate & Energy which experienced
headwinds.
Organic growth
EBITDA margin
Revenue
EBITDA
Guidance, initial Guidance, initialGuidance, May update Guidance, May update
13,700 013,500 013,031 -2.6
Actual Actual
Solar Group
DKKm
%
871 6.7900 6.7900 6.6
01
Highlights
7
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
EBITDA guidance of DKK 600m for 2024
In Q4 2023 and in the beginning of
2024, we saw a market slowdown.
The slowdown is reflected in our 2024
guidance of a revenue of DKK 12.5bn
and an EBITDA of DKK 600m, see also
announcement no. 2 2024 dated 2
February 2024.
Assumptions
Our 2024 guidance is impacted by a more
unpredictable market outlook due to heightened
geopolitical and macroeconomic tension. However, we
expect a global recovery in the macroeconomic
situation at the end of the year.
Revenue
We expect markets to be negative in all countries in
2024. In general, we also expect all segments to show
negative growth in 2024, but that they will start to
recover at the end of the year.
Installation
We expect negative growth for the new construction
sector in 2024. The green transition is expected to
deliver slightly better growth rates despite
disappointing developments in 2023. We expect the
installation market to be negative.
Industry
The guidance assumes stagnant sales to Marine/
Offshore, whereas we expect all other sub-segments to
be negative. Overall, we expect the industry market to
be negative.
Trade
We expect negative growth in special sales in 2024,
which is the Trade segment's primary activity.
Gross profit margin
During the latter part of 2023, we saw a loss in gross
profit margin in several product categories despite a
positive impact from Concepts. We expect this
development to continue for the remainder of 2024. In
addition, we elevate our delivery service level which
leads to an increase in freight costs. Consequently, we
expect a lower gross profit margin for 2024.
Costs
As expected, cost and wage inflation increased during
2023. We anticipate this trend to persist throughout H1
2024.
We have implemented, and will continue to implement,
mitigating measures, including cost containment,
process improvements and the necessary staff
reductions.
Our 2024 guidance includes restructuring costs of
approx. DKK 35m, mainly in Q1.
In 2022, Solar Nederland entered into an agreement
on the sale of the warehouse in Duiven. Finalisation of
the transaction and transfer of the property to the
purchaser is expected before the end of 2024. The
financial impact of the sale is an expected capital gain
of approx. DKK 30m, which is included in the
guidance.
Financial outlook 2024
Revenue guidance
We expect revenue of DKK 12.5bn, corresponding to
an organic growth of -5%.
EBITDA guidance
We expect EBITDA of DKK 600m.
The guidance includes non-recurring income of around
DKK 30m due to the sale of our warehouse in Duiven
and restructuring costs of approx. DKK 35m.
In addition, we expect to invest DKK 20m in our
strategic focus areas - Climate & Energy, Concept
strength and Solution sales.
01
Highlights
8
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Strategy
Our 2024-26 strategy
2026 ambitions
Business model
As a sourcing and services company, we are a value-adding partner
Partnership makes the difference when private hospital Mølholm in Denmark is building their new
facilities according to DGNB. Jansson, our customer, knew that Solar had the expertise in
sustainable construction to ensure this project was a success. Solar can be trusted to select the
right products and ensure proper documentation when supplying all electrical materials required
for a DGNB* certified project.
02
*Certification considered internationally as the “Global Benchmark for Sustainability” among certification systems for sustainable buildings and districts.
01
Highlights
9
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
We are here to
Solve challenges
Our Solve strategy aims to further
strengthen Solar’s position as a leading
sourcing and services partner providing
comprehensive solutions that advance
the green transition.
We are committed to addressing the challenges our
industry and customers faces, particularly in driving the
green transition.
With Solve, it is our ambition to get even closer to the
decision-maker at the customer and we will:
Maximise the growth potential in Climate & Energy.
With the newly established Solar Industrial Solutions
we offer Climate & Energy turnkey solutions for
industry customers.
Increase profitability by focusing on Concept strength
which also will enhance our position in the value chain.
Increase market share by delivering Solutions sales
where we aim to increase the share of wallet with
existing customers and attract new B2B customers.
All of the strategic focus areas are core capabilities
in Solar.
With Solve, it is our ambition to create
additional value at an earlier stage of our
customers’ decision-making process.
With Solve we combine our Concepts with Solution sales
competence, especially within opportunities that emerge
from the green transition. We actively promote products and
solutions that accelerate the green transition, not only for the
benefit of our industry but also for the wider world.
In our business, sustainability is a vital component that
sets the direction for our operational practices as well
as shapes which solutions and products we bring to
market. Our sustainability focus includes measures to
reduce the carbon footprint, responsible sourcing of
materials and products, and actions to promote equality.
We embrace our responsibility to address societal inequalities
as part of our contribution towards creating a better world.
We take proactive steps to create a business that is governed
transparently and a workplace where people are treated with
respect, so they feel safe and empowered.
We believe that these considerations will be crucial to the
successful execution of our Solve strategy.
SOLVE
2024-26 strategy
Our 2024-26 strategy
01
Highlights
10
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Our strategy
Strategic focus areas
Sustainability
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.
Sustainable supply chain
Diversity and inclusion
As a leading sourcing and services partner, we will use our strong core to
combine products, services and specialist competence to deliver value-
adding solutions solving business challenges sustainably.
With Solve, it is our ambition to create additional value at an earlier stage
of our customers’ decision-making process.
Climate impact
Climate & energy Solution sales
We maximise the growth potential in climate and energy
solutions, such as heat pumps, solar panels, EV charging and
ventilation. The newly established Solar Industrial Solutions
offers combined solutions for both existing and new industry
customers based on our product technology and know-how.
We work to become carbon neutral in our own operation
and to enable our customers to decarbonize in their part of
the value chain.
We source energy efficient products complying to the latest
standards, from suppliers characterized by respect for human
rights, environment, and society.
We foster a workplace and culture that promotes diversity and
inclusion to attract, develop, and retain employees, while
respecting human rights.
We create new opportunities in selected areas by leading with
solution selling, specialist competence and a 360-degree view
on the future needs of our customers’ business. We aim to
increase the share of wallet with existing customers and open
new doors to new customer groups.
SOLVE
Concept strength
Our concepts will drive overall profitability and enhance our
position in the value chain. We aim to further develop value
adding concept assortments powered by logistical services and
specialist competences to increase the ease and effectiveness
of our customers’ daily operations.
Powered by our Dedicated people, Digital leadership and Superior logistics
Our 2024-26 strategy
01
Highlights
11
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
2026 ambitions
We set targets for our business and value
chain that embody our purpose and drive
our Solve strategy. These targets help us
measure and report transparently against
our performance.
EBITDA margin
Financial ambitions Strategic focus areas Sustainability
Climate impact
Sustainable supply chain
Diversity and inclusion
65
>
951.0-3.0x
>
25
%
%
%
%
Scope 1 & 2 emission:
Reduction compared to base year 2020
Spend covered by Code of Conduct
Women in senior management*
Climate & energy
Concept strength
Solution sales
>
15
>
0.7
>
20
%
Percentage
points
%
Share of revenueby 2026
Gearing
Gross profit margin improvement
Share of revenue
Following a slowdown in 2024, the remaining part of
the strategy period (2025-26) is assumed to be
characterised by:
Average annual GDP growth of at least 1.5%
Low cost and salary inflation
Pick-up in industry and building activities
Continued governmental support for the green
transition.
* Calculated according to the Danish Financial Statements Act §99b
>
6.0
01
Highlights
12
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Customer segments
Our customer segments include
industry, installation and trade.
Electrical components
A wide assortment of electrical
components, cables and lighting
solutions. We also provide
training and product guidance.
Climate & energy products
Energy-efficient solutions within
heat pumps, solar panels,
ventilation and EV chargers.
Heating & plumbing components
Wide assortment of heating &
plumbing components, pipes,
drainage systems, cold-water pumps
and insulation, combined with
training and product guidance.
Solar
More than 200,000 articles are available
from our automated warehouses.
Automa ed warehouses
Based on AutoStore, warehouses
improved productivity and reduced
energy consumption.
Customer services
Supporting customers throughout their
journey makes us stronger together.
FastboxFastbox
Fastbox
FastboxFastbox
t
Bike and EV deliveries
Delivery within the hour
and limited impact on the
environment.
Digital service
67% of customer orders are
made online – making us one
of the most digitised
companies in our industry.
School
Each year 6,000 participants
attend our Solar School.
Transport
More than 9,000
deliveries every day.
Suppliers
Solar works with around
3,500 suppliers.
Our strong business model
supports our Solve strategy.
Business model
01
Highlights
13
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Financial review
Whether you are a two-man company or a big, international business…
Partnership makes the difference. When a global home furnishing brand is aiming for an ‘outstanding’ BREEAM
certification, the SIF group relies on such a partnership with Solar to succeed. Knowledge sharing and great utilisation
of competences ensures that all requirements are met and that everybody involved are satisfied with the solution.
Five-year summary
Financial review
Segments
03
14
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review
01
Highlights Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Five-year
summary
In all material aspects financial ratios are calculated in accordance with the Danish Finance Society’s
“Recommendations & Financial Ratios”. Sustainability ratios are calculated in line with the accounting principles
included in our Sustainability Report 2023. Solar has applied Nasdaq/FSR/CFA key figures since 2020.
Consolidated (DKK million) 2023 2022 2021 2020 2019
Revenue 13,031 13,863 12,354 11,465 11,679
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
871 1,175 911 637 538
Earnings before interest, tax and amortisation (EBITA) 648 978 727 455 360
Earnings before interest and tax (EBIT) 558 909 672 248 260
Earnings before tax (EBT) 468 858 622 300 120
Net profit for the year 348 660 531 222 64
Balance sheet total 6,112 5,901 5,305 4,607 4,990
Total equity 1,982 1,931 1,952 1,696 1,592
Interest-bearing liabilities, net 1,157 1,074 -37 128 921
Cash flow from operating activities 855 16 783 813 300
Net investments in property, plant and equipment -169 -167 -125 -25 -110
Financial ratios (% unless otherwise stated)
Organic growth adjusted for number of working days -2.6 12.9 5.9 -2.0 4.9
Gross profit margin 22.5 23.4 22.4 21.0 20.1
EBITDA margin 6.7 8.5 7.4 5.6 4.6
EBITA margin 5.0 7.1 5.9 4.0 3.1
Effective tax rate 25.6 23.1 14.6 26.0 45.2
Net working capital (year-end NWC)/revenue 14.6 15.9 10.2 9.7 11.0
Gearing (net interest-bearing liabilities/EBITDA),
no. of times
1.3 0.9 0.0 0.2 1.7
Return on equity (ROE) 18.0 34.0 29.1 13.5 4.0
Return on invested capital (ROIC) 13.2 25.5 24.6 13.8 8.3
Equity ratio 31.6 32.7 36.8 36.8 31.9
Share ratios (DKK unless otherwise stated)
Earnings per share outstanding (EPS) 47.51 90.37 72.72 30.42 8.77
Ordinary dividend per share 30.00 45.00 45.00 28.00 14.00
Extraordinary dividend per share - - 45.00 15.00 -
Total dividend in % of net profit for the year (payout ratio) 63.1 49.8 123.8 141.1 159.4
Employees 2023 2022 2021 2020 2019
Average number of employees (FTEs) 3,036 3,019 2,908 2,935 3,039
Sustainability ratios (Solar Group ratios unless otherwise stated)
CO
2
e, scope 1 (tons) 2,150 3,033 3,583 2,814
CO
2
e, scope 2 (tons) 3,241 2,887 4,107 4,326
Renewable energy share (%) 88.0 84.0 68.0 28.0
Gender diversity board (%) 33.0 33.0 17.0 17.0
Gender diversity (%) 29.0 29.0 27.0 27.0
Gender diversity management, Danish activities (%) 15.0 17.0 19.0 17.0
Gender pay ratio (no. of times) 1.18 1.21 1.17 1.14
Days/FTE sickness absence 9.7 12.2 10.3 9.2
15
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review
01
Highlights Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Financial review
EBITDA of DKK 871m was one of
the best results in Solar’s history
EBITDA of DKK 871m was achieved in
a year of unpredictable markets caused
by heightened geopolitical and macro-
economic uncertainty. Market develop-
ments had a negative impact on all
Solar’s main segments, especially in Q4.
(Data shown in brackets relate to 2022 figures)
Revenue
As expected, 2023 saw declining growth. Adjusted
organic growth at group level amounted to -2.6%
(12.9%), and revenue declined to DKK 13.0bn (DKK
13.9bn).
Revenue from Climate & Energy, one of our strategic
focus areas, amounted to around DKK 1.3bn (DKK
1.3bn) and did not reach the expected growth rates in
H2 2023.
Sales of high-capacity ThermoNova industrial heat pumps
delivered expected growth rates while heat pump sales for
the residential market were disappointing. The slowdown
in Denmark seen in March continued throughout the rest
of 2023. The subsidy scheme for residential heat pumps
implemented in late Q3 did not lead to expected growth
rates in Q4.
The Industry segment delivered adjusted organic growth
of 2% driven by double-digit growth for MAG45, while the
Installation and Trade segments both delivered adjusted
organic growth of approx. -5%, see pages 18 and 20.
A significant portion of the decrease in the Installation
segment can be attributed to the lack of heat pump
sales. Our assessment is that we have maintained our
market share within Installation and Industry.
Gross profit
Gross profit amounted to DKK 2.9bn (DKK 3.2bn) and
gross profit margin amounted to 22.5% (23.4%).
Concept sales continued to deliver growth
opportunities in 2023. During H2, however, this was
not sufficient to offset the loss in gross profit margin in
other categories, including Climate & Energy which
experienced particular headwinds.
However, adjusted for one-off price effects the
underlying gross profit margin on a full-year basis
improved by approx. 0.4 percentage points.
External operating costs and staff costs
External operating costs and staff costs amounted to an
unchanged DKK 2.0bn or 15.7% (14.7%) of revenue.
Several measures were initiated in 2023, including
cost containment, process improvements and staff
reduction to reduce the impact of cost inflation. These
initiatives became effective in Q2 and despite the
impact of inflation, we succeeded in lowering costs in
H2 2023 compared to both H2 2022 and H1 2023.
Gross profit margin adjusted
for one-off price effects
EBITDA adjusted for one-off
price effects
2022 2023
21.9%
22.3
%
2022
960
2023
841
%
DKKm
16
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review
01
Highlights Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Financial review
Loss on trade receivables
We conduct efficient credit management even in the
currently unpredictable market conditions. As a result,
our loss on trade receivables decreased to DKK 17m
(DKK 28m).
EBITDA
EBITDA of DKK 871m (DKK 1,175m) was as expected.
When adjusted for one-off price effects, the underlying
EBITDA amounted to DKK 841m (DKK 960m)
corresponding to an underlying EBITDA margin of
6.5% (6.9%).
EBITDA declined in all markets in 2023. The results
from the individual markets are shown on page 54-55.
Depreciation and write-down
Depreciation and write-down on property, plant and
equipment increased to DKK 223m (DKK 197m). 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 90m (DKK 69m). Due to the loss of a
major customer, an impairment loss on Højager
Belysning of DKK 20m was recognised in 2023.
Financials
Net financials amounted to DKK -90m (DKK -50m) and
were negatively affected by increased debt and
interest rates. In addition, net financials were
negatively affected by DKK 8m (DKK 20m) due to fair
value adjustments.
Earnings before tax
Earnings before tax were down to DKK 468m (DKK
858m). EBT was positively impacted by one-off price
effects of approx. DKK 30m (DKK 215m).
Income tax
Income tax amounted to DKK -120m (DKK -198m). The
posted income tax corresponds to an effective tax rate
of 25.6% (23.1%).
Net profit
Net profit came to DKK 348m (DKK 660m).
Cash flow
Net working capital calculated as an average of the
previous four quarters amounted to 16.8% (14.5%) of
revenue. Net working capital amounted to 14.6%
(15.9%) at the end of 2023.
Cash flow from operating activities totalled DKK 855m
(DKK 16m).
Changes in inventories had an impact of DKK 230m
(DKK -433m) as we decreased the inventory level in
2023.
Changes in receivables had a DKK 182m (DKK -394m)
impact on cash flow affected by lower growth levels in
December 2023, while changes in non-interest-
bearing liabilities affected cash flow by DKK -219m
(DKK -131m).
Total cash flow from investing activities amounted to
DKK -405m (DKK -249m). The 7,600 sqm expansion of
the central warehouse in Alkmaar and the addition of
20,000 boxes to our AutoStore facilities had an impact
of DKK -104m, while the acquisition of ThermoNova in
2023 (see note 5.6) had an impact of DKK –111m. In
2022, the investment in the expansion and upgrade of
our central warehouse in Denmark affected cash flow
by DKK -128m, while the acquisition of Højager
Belysning A/S had an impact of DKK -24m.
Cash flow from financing activities amounted to DKK
-175m (DKK -82m), mainly affected by dividend
distributions of DKK -329m (DKK -658m) and by the
change in current interest-bearing debt of DKK 149m
(DKK 519m).
As a result, total cash flow amounted to DKK 275m
(DKK -315m).
Net interest-bearing liabilities amounted to DKK
1,157m (DKK 1,074m).
By the end of 2023, gearing was 1.3 (0.9) times
EBITDA. Our gearing target was 1.5-3.0 times EBITDA.
The Board of Directors assesses the capital structure
in relation to our target and capital requirements on an
ongoing basis.
At the end of 2023, Solar had undrawn credit facilities
of DKK 955m (DKK 710m).
Invested capital
Invested capital for the Solar Group totalled DKK 3,120m
(DKK 2,978m). ROIC amounted to 13.2% (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.
Remuneration of Executive Board
and management team
In accordance with Solar’s remuneration policy and
general guidelines for incentive-based remuneration,
the Board of Directors granted restricted shares to the
Executive Board and management team in February
2023.
14,649 (11,110) restricted shares were granted,
amounting to a fair value of DKK 9.2m (DKK 8.0m) at
the time of granting. The restricted shares vest three
years after the time of granting, i.e. this grant of shares
vests in 2026 (2025). In February 2023, 11,003 (7,479)
restricted shares from the grant in 2020 (2019) were
settled in cash. For more information, please see this
report’s note 5.1 on share-based payment.
General information on Solar’s incentive scheme is
available on our website:
www.solar.eu/investor/policies
Event after the reporting period
On 3 January 2024, the Board of Directors agreed with
Hugo Dorph that he steps down from his position as
CCO and member of Solar's Executive Board, see
announcement no. 1 2024 at www.solar.eu.
The Executive Board subsequently consists of CEO
Jens E. Andersen and CFO Michael H. Jeppesen.
17
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review
01
Highlights Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Rental
Special
handling
Inventory
management
EV
Chargers
Logistic
handling
Data and
security
Heating
& plumbing
Renewable
energy
Lighting
Cable
Electrical
material
SegmentsSegments
Installation
Today’s installers require more just than a product
Our 20,000 plus installation customers range from sole installation con-
tractors to large installation companies. Irrespective of their size, they
value both our expertise and our extensive range, which covers electrical,
heating & plumbing installations as well as climate & energy products.
Installation revenue amounted to DKK 7,293m (DKK 8,013m), which corre-
sponds to overall adjusted organic growth of around -4.9% (9.6%). Solar
Norge saw positive growth while negative growth was seen in all other
main markets.
Segment profit* amounted to DKK 794m (DKK 1,021m) which corresponds
to a segment profit margin of 10.9% (12.7%).
Detailed segment information is given on pages 54-55.
(Data shown in brackets relate to 2022)
2023 Segment revenue
DKKm
DKKm
2023 Segment profit
Installation
Installation
Industry
Industry
Trade
Trade
7,293
794
4,522
764
1,216
153
* Segment profit does not include non-allocated costs, which cover
income and costs related to joint group functions and to costs which
cannot be reliably allocated to the individual segment.
Ventilation
Services
Products
18
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review
01
Highlights Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
SegmentsSegments
Industry
Creating value for our Industry customers
Our 20,000 plus Industry customers cover the following sub-segments:
OEM (Original Equipment Manufacturers), MRO (Maintenance, Repair
& Operations), Infrastructure and Offshore & Marine. They all share one
common factor: they rely on our insight and ability to deliver the right
products at the right time.
Industry revenue amounted to DKK 4,522m (DKK 4,543m). This cor-
responds to overall adjusted organic growth of around 2.0% (16.6%).
MAG45 posted double-digit growth, with solid growth also seen in Solar
Norge.
Segment profit* amounted to DKK 764m (DKK 811m), which corresponds
to a segment profit margin of 16.9% (17.9%).
Detailed segment information is given on pages 54-55.
Services
Products
Heating
& plumbing
Lighting
Tools Cable Ventilation
Renewable
energy
Data and
security
EV
chargers
Inventory
management
Special
handling
Logistic
solutions
Electrical
material
(Data shown in brackets relate to 2022)
* Segment profit does not include non-allocated costs, which cover
income and costs related to joint group functions and to costs which
cannot be reliably allocated to the individual segment.
2023 Segment revenue
DKKm
DKKm
2023 Segment profit
Installation
Installation
Industry
Industry
Trade
Trade
7,293
794
4,522
764
1,216
153
19
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review
01
Highlights Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
HOTEL
Renewable
energy
Lighting Cable
Office &
canteen
articles
Heating
and
plumbing
Special
handling
Inventory
management
Solar
school
Ventilation
Logistics
solutions
Electricial
material
Data and
security
EV
chargers
Toilet &
cleaning
articles
Tools
SegmentsSegments
Trade
Dedicated local teams support Trade customers with
specialised services
Our 9,000 plus trade customers’ requirements and buying preferences
differ from our Installation and Industry segments. Each of our segments
comprises unique services. For Trade, these include storage solutions,
logistics and shelf cleaning for DIY shops. Such services and solutions
support our Trade customers in their daily business and allow them to
focus on what they do best. We prioritise the ongoing development of our
Trade services by engaging with our customers.
Revenue from Trade amounted to DKK 1,216m (DKK 1,307m), which corre-
sponds to overall adjusted organic growth of -4.6% (23%).
Segment profit* amounted to DKK 153m (DKK 174m), which corresponds
to a segment profit margin of 12.6% (13.3%).
Detailed segment information is given on pages 54-55.
(Data shown in brackets relate to 2022)
* Segment profit does not include non-allocated costs, which cover
income and costs related to joint group functions and to costs that
cannot be reliably allocated to the individual segment.
Services
Products
2023 Segment revenue
DKKm
DKKm
2023 Segment profit
Installation
Installation
Industry
Industry
Trade
Trade
7,293
794
4,522
764
1,216
153
20
Management review
Solar A/S - Annual Report 2023
02
Strategy
03
Financial review
01
Highlights Sustainability
04
Risk management
05
Corporte matters
06
Financial statements
07
Change takes a team
Partnership makes a difference when it comes to safeguarding the resources that we have and
adopting a circular mindset. Solar partners GreenDozer, a company that distributes recycled and
surplus goods to save serviceable materials from being wasted. Together, we pack, collect and ship
such materials for use in new projects, which means they have virtually no impact on the CO
2
emission.
Sustanabty
Sustainability highlights
04
21
Management review
Solar A/S - Annual Report 2023
04
Sustainability
02
Strategy
01
Highlights Risk management
05
Corporte matters
06
Financial statements
0703
Financial review
04
Sustainability
Governance
We see governance as a valuable tool for exercising sound
management and ensuring transparency for shareholders and other
stakeholders.
Environmental
Solar seeks to reduce environmental impacts and
promote sustainable solutions via our product and
service portfolio.
Social
We seek to ensure safe working conditions for our
employees and respect human rights in our operations as
well as in our business relations.
97% (98)
Board meeting attendance rate
25times (27)
CEO pay ratio
1
2,150
tons
(3,033)
CO
2
e, scope 1
3,241 tons
(2,887)
CO
2
e, scope 2
3,036 FTEs
(3,019)
Full-time workforce
15%
(17)
Gender diversity
management
13.2%
(12.8)
Employee
turnover rate
9.7
(12.2)
days/FTE Sickness
absence
29%
(29)
Gender diversity
33% (33)
Gender diversity board
1) If measured against Danish employees, the CEO pay ratio amounts to 20 times (2022: 23 times).
1.18times
(1.21)
Gender pay ratio
136,093GJ
(146,762)
Energy consumption
88
% (84)
Renewable electricity share,
procured certified electricity
25,213
m
3
(20,751)
Water consumption
Sustainability highlights
E
n
v
i
r
o
n
m
e
n
t
S
o
c
i
a
l
G
o
v
e
r
n
a
n
c
e
22
Management review
Solar A/S - Annual Report 2023
04
Sustainability
02
Strategy
01
Highlights Risk management
05
Corporte matters
06
Financial statements
0703
Financial review
Ratings Partnerships and commitments
B
D+
Gold
AAA
WE SUPPORT
Our SBTi targets were approved
and EcoVadis gold rating received
In 2023, our emissions reduction targets
for 2030 were approved by the Science
Based Targets initiative (SBTi) showing
that we are well on track with our goals.
We also received an EcoVadis gold rating for Solar
Sverige and Solar Norge, meaning that we have a gold
rating in Solar Danmark, Solar Nederland, Solar Norge
and Solar Sverige. This indicates that we are in the top
5% in our industry. MAG45 is rated bronze.
In addition, we signed a CEO statement together with
26 other companies in Denmark to stand together
globally with high ambitions for a green transition to a
net-zero future.
In line with good business practice, we completed a
preliminary materiality assessment for the first time in
2023, applying the concept of double materiality to
comply with the Corporate Sustainability Reporting
Directive (CSRD) in 2024.
Score: 32 Low risk
For 2023, we report on our sustainability performance
in accordance with relevant disclosure standards,
including Nasdaq - as a Nasdaq ESG Transparency
Partner - and the UN Global Compact. Since 2010,
we have been a member of the UN Global Compact
and CDP rated. As regards CDP, we are peer grouped
in the Trading, Wholesale, Distribution, Rental and
Leasing sector. The average score here is C-. Our
score is B. We support the UN Sustainable
Development Goals (SDG).
For additional information, please see our
Sustainability Report 2023 on
www.solar.eu/our-company/sustainability
Sustainability highlights
23
Management review
Solar A/S - Annual Report 2023
04
Sustainability
02
Strategy
01
Highlights Risk management
05
Corporte matters
06
Financial statements
0703
Financial review
The right choice will continue to make a difference
Partnership made the difference when a solution primarily intended to save energy ends up benefitting
the customer as well. Solar not only supplied thousands of sensor light fittings to the Royal Danish
Library, but also recommended a product that the library can replace themselves in future, without the
need to call on an external electrician. A win-win solution for both parties.
Risk management
Risk management
Exposure to top risks and mitigation
05
24
Management review
Solar A/S - Annual Report 2023
05
Risk management
02
Strategy
01
Highlights Corporte matters
06
Financial statements
07
Sustainability
0403
Financial review
05
Risk management
Risk management
The Executive Board is responsible for ensuring that
the necessary policies and procedures are in place,
that efficient risk management systems have been
established for all relevant areas and are improved
continuously. The overall purpose of risk management
is to support a robust business that is able to react
quickly and flexibly when conditions change.
Solar’s risk management encompasses the
relevant entities in Denmark, Norway, Sweden,
the Netherlands, Poland, and MAG45. The process
supports local management teams by taking a
structured approach towards risk management, with
risk self-assessments anchored in an annual cycle.
Data is consolidated at group level, and the findings
are presented to the Board of Directors for approval.
The individual risk owners are responsible for
mitigating risks to a level within Solar’s risk appetite
and tolerance. Throughout the year, Solar’s Group Risk
Management and local risk managers actively monitor
the progress of the mitigation to ensure that risks are
at the acceptable level.
Three lines of defence
Solar’s risk management is organised
according to the three lines of defence
model which demonstrates and structures
roles, responsibilities for risks, decision-
making and control to achieve effective
governance.Solar’s risk management is based on
Enterprise Risk Management (ERM)
and the Board of Directors’ rules of
procedure, which place the responsibility
for risk management with the Executive
Board.
First line of defence
Executive Board
Board of Directors / Audit Committee
Approve and accept risk policy including
risk appetite and tolerance
Monitor the risk management framework and effectiveness
Second line of defence Third line of defence
Business Management
& Risk Owners
Group Risk Management
& Risk Managers
Internal Audit
Own risks and risk
management activities
Establish policies and
frameworks, facilitate
risk identification and
monitoring
Test, validate and
assess efficiency in risk
management processes
and activities
25
Management review
Solar A/S - Annual Report 2023
05
Risk management
02
Strategy
01
Highlights Corporte matters
06
Financial statements
07
Sustainability
0403
Financial review
Risk definition
The focus of Solar’s risk management is to identify and
assess operational risks and operational aspects of
strategic risks throughout the Solar Group. Solar
defines these risks as events or developments that
could significantly reduce Solar’s ability to:
1. Meet profit expectations,
2. Execute the strategy, and/or
3. Maintain a licence to operate.
Solar works with the concepts of gross risk (inherent
risk) and net risk (residual risk).
The gross risk effect is defined as the product of the
impact and the probability of the risk materialising
without any change to current risk mitigation.
The net risk effect is defined as the risk level when
considering current as well as planned mitigation
activities with regard to both impact and probability.
Risk appetite and tolerance
Solar’s risk appetite and risk tolerance articulate the
extent to which Solar is willing to accept risks in three
overarching categories: Governance & Compliance,
Strategy & Planning, and Operations & Infrastructure.
Accordingly, the risk appetite outlines Solar’s strategic
outlook towards risk and defines the degree to which
Solar is risk-seeking or risk-avoiding, while the risk
tolerance, as an indicative parameter, outlines the
level of net risk that Solar is willing to accept for a
given measure of reward.
Risk appetite and risk tolerance are set by the Board
of Directors and are reviewed annually.
Risk self-assessment
Solar evaluates the effect of a risk based on the
product of the probability of the risk materialising and
the gross impact if the risk does materialise. In detail,
the probability of the risk is defined as the expected
frequency of the risk occuring, while the impact is
divided into four dimensions:
1. Effect on earnings
2. Reputational damage
3. Compliance (licence to operate)
4. Business activities
Risk handling
The purpose of identifying and then handling risk is to
reduce it to an acceptable level, which is in line with
risk appetite and tolerance. In Solar, we work with four
different risk treatment strategies when handling risks.
Avoid – seeks to eliminate uncertainty by changing
circumstances.
Transfer – seeks to transfer ownership of and/or
liability for the risk to a third party.
Accept – recognises net risks and monitors risk
exposure.
Mitigate – seeks to minimise risk exposure to below
the acceptable threshold.
To ensure an understanding of the philosophy and
the risk management preferences, Solar provides
structured criteria for risk attitude and a catalogue
of mitigating activities.
Solar Risk Map 2024
Solar’s top risks are mapped out
in terms of probability and impact
in the risk map.
Risk appetite and tolerance per risk category
Cyberattack
IT interruptions
Product documentation
Geopolitical and macroeconomic uncertainty
Credit management
Market and competition dynamics
Central warehouse breakdown
High
Impct
Probbty
High
Low
Low
Low Medium High
Risk seeking
Risk tolerantRisk neutral
Risk Appetite
Risk Tolerance
Risk Category
Moderately
Risk Averse
Risk averse
Governance and
compliance
Strategy
and planning
Operations and
infrastructure
Low
Low-medium
Low-medium
26
Management review
Solar A/S - Annual Report 2023
05
Risk management
02
Strategy
01
Highlights Corporte matters
06
Financial statements
07
Sustainability
0403
Financial review
One of the risks reported last year, ‘Global supply
chain’ – associated with unavailability of stock
materials and potential price volatility – has been
significantly reduced thanks to normalisation of the
supply chain, ensuring an adequate inventory and
supplier portfolio, as well as by improvements of the
order placement and forecast processes.
Risk F, previously headlined ‘New entrants in the
market’, was renamed to ‘Market and competition
dynamics’ to reflect the current competitive landscape
without an emphasis on the new players only.
The emerging risks related with environmental, social
and governance matters (ESG) have been included in
interviews and local risk assessments. Additionally,
they were thoroughly analysed and assessed in the
double materiality assessment conducted throughout
the year (see our Sustainability Report 2023 at www.
solar.eu). The consolidated risk score has not yet
triggered immediate risk mitigation at group level,
although the associated risks are monitored closely.
Exposure to
top risks and
mitigation
Cyberattack IT interruptions
A
B
The risk is unchanged.
Risk of IT breakdown and/or data breach due to a cyberattack.
Business interruptions in the form of compromised data, denial
of service, intellectual property theft, and regulatory
investigations are among the consequences of various cyber
incidents and would ultimately lead to financial losses and an
inability to run daily operations. The probability of the worst-case
scenario is slightly above medium, and the potential impact is
assessed as between medium and high.
Mitigation measures focus on strengthening cyber resilience.
This includes 24-hour monitoring of the network for unusual
behaviour as well as ensuring relevant solutions or upgrading the
existing ones. Using the advanced security analytics tool
supports the evaluation of the organisation's security measures
and implementation of recommended activities. The penetration
test performed in 2023 ensured reliability of the IT infrastruc-
ture. The latest disaster recovery tests provided assurance that
the company’s 'crown jewels' (the most critical systems) can be
restored within an acceptable timeline in case of a successful
cyberattack. Business continuity plans and scenario analyses
are regularly tested to identify potential improvement areas.
Additionally, Group IT continues to communicate appropriate
internal information on IT security by different channels to
maintain organisational awareness and reduce the likelihood of
an unwanted event caused by the human factor. As external
threats continue to increase, the risk is assessed as unchanged
due to a number of mitigating measures.
The risk is unchanged.
Risk of business interruption due to unforeseen but inherent
events affecting IT operations such as fire, power outage,
network, or system failure, and other natural or unintentional
man-made hazards.
Potential IT interruption may have a significant impact on
earnings and reputation depending on the nature and scale of
the event. However, the probability of the worst-case scenario is
between low and medium, but the potential impact is assessed
as between medium and high.
The IT area is continuously monitored and evaluated. Business-
critical applications are mirrored at two central data centres in
order to safeguard IT operations so that the business can
continue to run if one centre experiences downtime. Preventive
measures planned to reduce the impact of cyberattacks – such
as further improvements of network security, improving
application robustness, or strengthening and testing business
continuity plans – will also reduce the risk of losing stable digital
operations.
Risk
Scenario
Impact
Mitigation
27
Management review
Solar A/S - Annual Report 2023
05
Risk management
02
Strategy
01
Highlights Corporte matters
06
Financial statements
07
Sustainability
0403
Financial review
The risk has been added to the list of top group risks this year.
Risk of loss of business opportunities due to a need to keep up
with regulatory requirements and dynamic customer demand
regarding product documentation (i.e., environmental, climate
impact, country of origin).
Insufficient product documentation can lead to a lack of
transparency regarding the assortment, which may cause
difficulties for customers to make informed decisions about the
product's suitability. This can result in missed business
opportunities for the company as customers may choose to work
with suppliers who might be able to provide more comprehensive
information. At the same time, processing the data required for
documentation comes with challenges related to data collection,
organisation, analysis, and registration. The probability of the
worst-case scenario and the potential impact are assessed as
close to medium.
To understand current and future priorities in terms of legal and
regulatory compliance, Solar continues to build internal
competence. Raising awareness of external requirements
regarding certifications, packaging, or end-of-life product
handling, helps to reinforce product data governance.
Continuous development of webshop across the group aims to
ensure better visibility and clarity of product information, such as
EPD (Environmental Product Documentation). At the same time,
EcoVadis – a leading provider for due diligence supplier
assessment – supports the company in selecting responsible
vendors, which increases chances for obtaining adequate
documentation (see more in our Sustainability Report 2023).
The risk has increased.
Risk of adverse macroeconomic conditions or a change to
industry trends due to geopolitical and macroeconomic
uncertainties.
Geopolitical tensions, a wide range of macroeconomic factors
(incl. inflation, interest rates, energy costs) as well as dynamics
of customer needs may adversely impact markets and reduce
demand. The probability of the worst-case scenario and the
potential impact are assessed as between medium and high.
Solar draws up the appropriate risk indicators and mitigation
measures for specific parts of the business. These are monitored
on a regular basis in anticipation of an event requiring a rapid
response. Sudden imbalances between supply and demand
encouraged stronger focus on selling the right products (i.e.,
climate & energy) and growing the concept share in order to
achieve the projected results. With a view to a potential
escalation of political tensions, Solar has incorporated a military
conflict or a hybrid attack into its disaster management
framework. Potential triggers have been identified, and scenarios
and emergency strategies have been defined in the event of a
conflict affecting the countries in which we operate.
The risk is unchanged.
Risk of negative financial consequences of extending credit to
customers.
Extending credit to customers is regarded as a natural and
important element in Solar's business operations. If a negative
market cycle occurs, then the credit risk increases. The
challenging macroeconomic conditions, in particular the
continuing rise in inflation and interest rates, may raise the
likelihood of the risk. The probability and potential impact of the
worst-case scenario is assessed as close to medium.
Solar conducts efficient credit management at all times and
monitors the development of credit risk. Furthermore, we have
taken out insurance to hedge against potential losses on trade
receivables. In addition, uninsured trade receivables are
generally spread across a large number of small customers. The
impact of current market volatility has been a contributing factor
in maintaining the risk at the same level as last year.
Risk
Scenario
Impact
Mitigation
Product documentation Credit management
Geopolitical and
macroeconomic uncertainty
C D
E
28
Management review
Solar A/S - Annual Report 2023
05
Risk management
02
Strategy
01
Highlights Corporte matters
06
Financial statements
07
Sustainability
0403
Financial review
Central warehouse
breakdown
The risk is unchanged.
Risk of business interruption at the central warehouses due to
unforeseen but inherent events such as fire, power outage,
flooding, and other natural or man-made hazards.
Potential interruption of the operations of central warehouses
may have a significant impact on earnings and reputation
depending on the nature and scale of the event. However, the
probability of the worst-case scenario is low, but the potential
impact is assessed as between medium and high.
A contingency plan is regularly updated and tested at all central
warehouses. It clarifies roles and responsibilities and describes
actions required from staff in case of possible force majeure
events. Solar arranges for regular warehouse audits in order to
verify the level of preventive and detectable security measures
to protect its facilities. Thanks to the automated storage and
retrieval systems in Denmark, Norway and the Netherlands, the
risk of a man-made hazard is limited.
Risk
Scenario
Impact
Mitigation
The risk has increased.
Risk of new entrants and continued consolidations in the market
giving rise to increased competition and/or price pressure with a
negative impact on Solar’s business.
The current commercial risk of strong new entrants or
significant acquisitions in the market may result in reduced
competitiveness, lost revenue, and decreased earnings. The
probability of the worst-case scenario is assessed as slightly
above medium with the potential impact assessed as medium.
Solar seeks to engage in an active and regular cross-border
dialogue to share experience. A dedicated cross-functional team
is in place to monitor potential new players’ strategies and/or
recent market developments as well as to understand customers’
current and future buying criteria. Commercial market and sales
organisations monitor this for early indicators, but also
proactively engage in dialogue with customers. In accordance
with observations and feedback, Solar continues to invest in
digital tools and value-adding services to adapt to new trends.
Market and
competition dynamics
F
G
29
Management review
Solar A/S - Annual Report 2023
05
Risk management
02
Strategy
01
Highlights Corporte matters
06
Financial statements
07
Sustainability
0403
Financial review
TBU
Member benefits that give a headstart
Partnership makes the difference when you’re in need of support and technical back-up.
Partnership with Solar offers you technical assistance, advice on the choice of product and a great
network via our customer programme, VVS Mester in Denmark. As part of VVS Mester, we ensure
that heating and plumbing installers are supported in their digital marketing, that they are always up
to date on the latest industry trends and are familiar with the latest products – all of which gives
them a competitive advantage.
Corporate
matters
Statutory report on diversity
Corporate governance
Board of Directors
Members of the Board of Directors
Executive management
Shareholder information
06
30
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
31
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Statements Act section 107b, available on the
company’s website.
Please use this link to view the statutory corporate
governance statement 2023:
The Audit Committee and Internal Audit
Descriptions of the roles and responsibilities of the
Audit Committee and Internal Audit are available on
the link below.
www.solar.eu/investor/corporate-governance
www.solar.eu/investor/corporate-governance
32
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Board of Directors
Nomination Committee
Once a year, the composition of the Board of Directors
is assessed by a representative from the company’s
majority shareholder, the Fund of 20th December,
together with three representatives from the board,
including the chair of the company’s Board of
Directors.
The committee puts forward proposals for both
re-election and election of new members of the Board
of Directors and the Board's annual evaluation is
included as part of the process. The committee can
seek assistance from external advisers and
shareholders and undertakes a number of preparatory
tasks to ensure that the Board of Directors meets the
guidelines laid down by the Board of Directors at all
times. Emphasis is placed on members representing
relevant expertise in relation to the company’s
requirements. The aim remains to ensure diversity and
a balance between continuity and renewal of the Board
of Directors.
The Nomination Committee is not a board committee
in the same sense as the Audit and Remuneration
Committees, and the Board of Directors’ tasks in
relation to the composition of the board have not
changed since its establishment.
A charter determining the guidelines for the
composition and tasks of the Nomination Committee
is available at:
Board of Directors' affiliation with Solar
Peter Bang, Morten Chrone, Louise Knauer and
Michael Troensegaard Andersen are independent of
the company pursuant to the definition in the
recommendations on corporate governance in
Denmark.
Jesper Dalsgaard and Katrine Borum is affiliated with
the Fund of 20th December, Solar's majority
shareholder.
In 2023, the Board of Directors reelected Peter Bang,
Michael Troensegaard Andersen and Louise Knauer as
members of the Audit Committee. Peter Bang chairs
the Audit Committee. He and Michael Troensegaard
Andersen have special accountancy qualifications.
The Board of Directors reelected Morten Chrone and
Louise Knauer as members of the Remuneration
Committee together with the Chair of the Board of
Directors Michael Troensegaard Andersen. Michael
Troensegaard Andersen chairs the Remuneration
Committee.
Corporate governance structureThe Board of Directors and Executive
Board, which comprises the CEO
and CFO are jointly responsible for
Solar Group’s overall and strategic
management.
www.solar.eu
External
auditor
Internal
Audit
Shareholders/
general meeting
Executive Board
Audit
Comittee
(establ. 2007)
Remuneration
Comittee
(establ. 2017)
Board of Directors
Nomination
Comittee
(establ. 2019)
33
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Employee representatives
The most recent ordinary election of employee
representatives was held electronically in 2022. Rune
Jesper Nielsen, Denise Goldby, and Michael Kærgaard
Ravn were elected as members of the Board of
Directors.
Under the law, employee representatives have the
same rights, duties and responsibilities as the other
members of the board. Under Danish law, employees
have the right to elect a number of representatives and
alternates, corresponding to half the representatives
elected by the Annual General Meeting at the time of
the announcement of the election of employee
representatives.
Election period
All board members elected at the Annual General
Meeting stand for election each year, whereas
employee representatives are elected by the
company’s employees for four-year terms.
Activities
A minimum of six ordinary board meetings as well as
one Board of Directors’ conference are held each year.
In 2023, we had seven board meetings and one
conference for the Board of Directors.
Evaluation
During Q4 2023, the Chair facilitated a board
evaluation, among others covering the cooperation
between the Board of Directors and the Executive
Board, the Chair's role, the Board's and Board
Committees' work and an assessment of Board
capabilities relative to those best supporting Solar's
strategy.
All members of the Board of Directors participated in
the evaluation and provided input via questionnaires,
thus forming the basis of an evaluation report. The
2023 evaluation has been shared with the Nomination
Committee and has not given rise to any additional
measures.
Meeting attendance in 2023
Board member
Board
Meetings
Board
Conference
Audit
Committee
Remuneration
Committee
Michael Troensegaard Andersen 7 1 4 1
Jesper Dalsgaard 7 1 - –
Peter Bang 6 1 5 –
Katrine Borum 7 1 – –
Morten Chrone 7 1 – 1
Denise Goldby 7 1 – –
Louise Knauer 6 1 5 1
Rune Jesper Nielsen 7 1 – –
Michael Kærgaard Ravn 7 1 – –
34
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Members of the Board of Directors
Michae Troensegaard Andersen
Born 1961
Joined 2021
Chair
• Master of Science in Mechanical Engineering
from Denmark’s Technical University (1987) and
a Graduate Diploma in Business Administration
(Financial and Management Accounting) from
Copenhagen Business School (1988).
• Chair of the Board of Directors of Shark
Solutions A/S and BE Shark Holding ApS and
member of the board of directors of HusCom-
pagniet A/S.
• Possesses experience as CEO in listed compa-
nies and of strategic, structural and organiza-
tional transformation, sustainability and green
transition, together with in-depth knowledge
of the European Building and Building Material
Industry.
• Remuneration 2023: DKK 840,000.
• Holds 774 Solar B shares.
Did not trade Solar shares in 2023.
Jesper Dalsgaard Jensen
Born 1968
Joined 2017
Vice Chair
• Managing Director, Rambøll Environment &
Health, Rambøll Group A/S.
• M.Sc. in Law and Business Administration
1993.
• Member of the board of directors of the Fund
of 20th December, Mannaz A/S, Rambøll
Management Consulting A/S and other
international companies in the Rambøll Group.
• Possesses executive management experience
of companies managed by foundations and
companies within the construction industry,
and has experience within strategy, business
development, mergers & acquisitions together
with in-depth knowledge and experience within
sustainability and green transition.
• Remuneration 2023: DKK 450,000.
• Holds 1,550 Solar B shares of which 450
shares were acquired in 2023.
Peter Bang
Born 1969
Joined 2018
• CFO, Salling Group
• Cand.oecon. 1994 from Aarhus University,
specialising in business economics and
financing.
• Chair of the board of directors of BIMobject AB.
• Experience within construction, climate/
energy, sustainability and green transition,
digitalisation, organisational development, as
well as finance and performance management.
• Remuneration 2023: DKK 487,500.
• Holds 1,200 Solar B shares. Did not trade Solar
shares in 2023.
Katrine Borum
Born 1981
Joined 2022
• Chief Physician and Head of Education at
Nordsjællands Hospital.
• Cand.med., University of Copenhagen 2010,
Orthopedic specialist, 2021.
• Board member and Head of Education in the
Danish Orthopedic Society.
• Experience with managing many professions
and developing an educational environment.
• Remuneration 2023: DKK 350,000.
• Holds 42,723 Solar B shares. Did not trade
Solar shares in 2023.
Morten Chrone
Born 1966
Joined 2019
• Group CEO, Unisport Saltex Oy.
• MBA 2001 and B.Eng. in Civil and
Constructional Engineering 1994.
• Chair of the board of Unisport Scandinavia ApS
and CEO of Mads ApS.
• Has held management positions within the
construction industry/wholesale business in
Denmark and abroad for the past 25 years
and has significant knowledge of Solar’s core
business and the markets we operate in.
• Remuneration 2023: DKK 380,000
• Holds 712 Solar B shares. Did not trade Solar
shares in 2023.
35
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Denise Goldby
Born 1987
Joined 2022
Employee-elected member
• Head of Solar's Copenhagen and Amager
customer centres.
• Remuneration 2023: DKK 290,000.
• Holds 25 Solar B shares of which 5 shares were
acquired in 2023.
Rune Jesper Nielsen
Born 1971
Joined 2022
Employee-elected member
• Warehouse employee.
• Remuneration 2023: DKK 290,000.
• Holds no Solar shares.
Michael Kærgaard Ravn
Born 1971
Joined 2022
Employee-elected member
• Account Manager, Industry OEM.
• Remuneration 2023: DKK 290,000.
• Holds 123 Solar B shares. Did not trade Solar
shares in 2023.
Members of the Board of Directors
Louise Knauer
Born 1983
Joined 2017
• CED of Lady Invest ApS and It’s a club ApS.
• BSc in business administration and commercial
law, 2006, and MSc in finance and strategic
management, 2008.
• Member of the boards of directors of Rekom Group
Holding ApS, Rekom Group A/S, CC Mist NEW
Holding II ApS, CC Fly Holding II A/S, CC Globe
Holding I ApS, CC Globe Holding II A/S, FERM LIV-
ING ApS, NTG Nordic Transport Group A/S, Skako
A/S and two subsidiaries hereof.
• Possesses experience as CEO and member of
executive committees of listed and family-owned
companies. Has experience within strategy, M&A,
organisational development, and company turn-
arounds. In addition, expertise within tech, innova-
tion, digitisation, data/AI/ML and cyber security.
• Remuneration 2023: DKK 425,000.
• Holds 381 Solar B shares. Did not trade Solar shares
in 2023.
36
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Jens E. Andersen
Born 1968
CEO
• Chair of the boards of directors of 7 Solar
Group subsidiaries.
• Member of the boards of directors of VELTEK,
DI Byggeri, and HF Christiansen Holding A/S
and two subsidiaries hereof.
• Holds 10,664 Solar B shares. Did not trade
Solar shares in 2023.
• Holds 11,164 restricted share units. 4,007
restricted share units were granted and 3,795
were settled in 2023.
• Remuneration 2023: DKK 12.2m.
Michael H. Jeppesen
Born 1966
CFO
• Member of the boards of directors of all Solar
Group subsidiaries.
• Member of the boards of directors of
Aktieselskabet Sønder Omme Plantage.
• Holds 4,080 Solar B shares. Did not trade Solar
shares in 2023.
• Holds 5,959 restricted share units. 2,212
restricted share units were granted and 1,896
were settled in 2023.
• Remuneration 2023: DKK 6.6m.
Executive Board and
Solar Group Management
Solar Group Management comprises the
Executive Board, our Senior Vice Presidents
and the MDs of the Solar Group subsidiaries.
Solar Group Management
Carsten L. Antonisen Born 1965,
Senior Vice President & MD Solar Danmark
Jan Willy Fjellvær Born 1961,
Senior Vice President & MD Solar Norge
Lars Goth Born 1961,
Senior Vice President, Group Operations
Anders Koppel Born 1969,
Senior Vice President & MD Solar Sverige
Anders Solberg Odgaard Born 1971,
Senior Vice President, CIO
Peter Pedersen Born 1970,
Senior Vice President, Commercial Market
Michiel Rohrman Born 1967,
Senior Vice President & MD Solar Nederland
Frank Simonsen Born 1978,
Senior Vice President, Finance
Ole Sørensen Born 1971,
Senior Vice President, Industry Sales
Dariusz Targosz Born 1969,
Senior Vice President & MD Solar Polska
Bauke Zeinstra Born 1966,
Senior Vice President & MD MAG45
37
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Dividends
The Board of Directors proposes that the Annual Gen-
eral Meeting approves a dividend of DKK 30.00
per share for a total payout of DKK 219 million for the
2023 financial year. The proposed dividend corre-
sponds to a payout ratio of 63%. The proposal is in
line with the previously stated plan to have a payout ra-
tio of at least 35% of profits after tax. If approved, the
2023 dividend will be disbursed on March 20, 2024,
with March 15, 2024 as the last trading day
with dividend.
The Solar share price development
On 31 December 2023, the price of Solar’s B share
was DKK 465, down from the 2023 starting price of
DKK 620. This is a decrease of approx. 25% over the
year. By way of comparison, the MidCap index
increased by 3.0% in 2023.
Over a five-year period, Solar’s B share has generated
a total shareholder return of 266%.
In 2023, we had close to 10,000
shareholders. This is a testimony for our
ability to include the private investors in
our quarterly calls and investor visits.
Shareholder
information
Solar’s Annual General Meeting will be held on
Friday 15 March 2024 at 11.00.
Shareholders can register for the Annual General
Meeting at the investor portal accessible via:
The Board of Directors will submit the following
items for approval by the Annual General Meeting:
• Approval of Annual Report 2023.
• Payment of DKK 30.00 in return per share
outstanding of DKK 100.
• Indicative vote for approval of Remuneration
Report 2023.
• Approval of the Board of Directors’ remuneration
of an unchanged DKK 200,000 in 2024 and
meeting attendance fees of DKK 15,000 for
physical meetings and DKK 7,500 for virtual
meetings in 2024.
• Election of members to the Board of Directors.
• Appointment of auditor.
• Authority to potentially pass a resolution to
distribute extraordinary dividends of up to DKK
50.00 per share.
• Authority to acquire treasury shares valued at up
to 10% of share capital.
• Approval of revised remuneration policy.
A presentation of our Board of Directors can be
found on pages 35-36.
Annual general meeting
www.solar.eu
Dividend payments
DKK million 2023 2022 2021 2020 2019
Ordnary, dividend 329 329 204 102 102
Extraordnary, dividend – 329 110 – –
Tota, dividend 329 658 314 102 102
Payout rato in % 50 124 141 159 77
The Solar share
A share B share
Shares 900,000 6,460,000
Nominel value (DKK) 100 100
Votes per share 10 1
Treasury shares
1
- 56,813
Stock Exchange
-
Nasdaq Copenhagen
Stock Exchange
Ticker symbol Solar B
Share price year-end (DKK)
465 465
Market Cap year-end (DKKm)
419 3,004
1) See note 4.2, treasury shares
38
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Annual Report 2023
Annual General Meeting
Quarterly Report Q1 2024
Quarterly Report Q2 2024
Quarterly Report Q3 2024
Analysts
The following financial institutions cover the
Solar share:
• Carnegie Bank
• SEB
We are expecting coverage from additional
financial institutions during 2024.
Investor contact
Dennis Callesen
Investor Relations Director
Tel.: +45 29 92 18 11
E-mail: deca@solar.dk
Financial calendar 2024
08Feb
15Mar
02May
08Aug
31Oct
Shareholders according to section 55
of the Danish Comapnies Act
Shre
Cpt 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
Investor relations policy
We strive to maintain an open dialogue with investors
and to provide them with accurate and adequate
information for making reasoned investment decisions
about Solar's shares. We ensure all investors are given
fair and equal access to information by publishing
relevant information via Nasdaq Copenhagen. We
participate in conferences, arrange roadshows and
organise meetings with investors and financial analysts
following the publication of quarterly and annual
reports. Investor meetings and similar events cannot
be held during our quiet periods, which start on
1 January, 1 April, 1 July and 1 October and end with
the publication of a quarterly or annual report.
39
Management review
Solar A/S - Annual Report 2023
06
Corporate matters
02
Strategy
01
Highlights Risk management
05
Financial statements
07
Sustainability
0403
Financial review
Solar A/S - Annual Report 2023
Management review
40
Financial
statements
Consolidated financial statements
Separate financial statements
Group companies’ overview
Statements and reports
Q4 2023
07
40Solar A/S - Annual Report 2023
02
Strategy Sustainability
04
Risk management
05
06
Corporate matters
01
Highlights Financial statements
07
More than five kilometers of lighting
It was partnership that made the difference when Schou needed proper lighting for their 100,000 m
2
warehouse: lighting that was also energy efficient. Solar provided more than 5 km of motion detector
lighting. Employees are therefore assured of a work-friendly environment while Schou benefits from
reduced energy consumption.
Financial review
03
Financial Statements
Solar A/S - Annual Report 2023
Contents
42
Consolidated financial statements
Income statement (DKK million) 2023 2022 2021 2020 2019
Revenue 13,031 13,863 12,354 11,465 11,679
Earnings before interest, tax, depreciation and amortisation
(EBITDA) 871 1,175 911 637 538
Earnings before interest, tax and amortisation (EBITA) 648 978 727 455 360
Earnings before interest and tax (EBIT) 558 909 672 248 260
Financials, net -90 -50 -48 -40 -35
Earnings before tax (EBT) 468 858 622 300 120
Net profit for the year 348 660 531 222 64
Cash flow (DKK million) 2023 2022 2021 2020 2019
Cash flow from operating activities 855 16 783 813 300
Cash flow from investing activities -405 -259
-191
162 -194
Cash flow from financing activities -175 -82 -515 -627 -110
Net investments in intangible assets -102 -59 -58 -50 -35
Net investments in property, plant and equipment -169 -167 -125 -25 -110
Acquisition and divestment of subsidiaries
and operations, net -133 -34 0 0 -35
Summary for the Solar Group
Balance sheet (DKK million) 2023 2022 2021 2020 2019
Non-current assets 1,893 1,564 1,415 1,339 1,756
Current assets 4,219 4,337 3,890 3,268 3,234
Balance sheet total 6,112 5,901 5,305 4,607 4,990
Total equity 1,982 1,931 1,952 1,696 1,592
Non-current liabilities 908 709 435 498 503
Current liabilities 3,222 3,261 2,918 2,413 2,895
Interest-bearing liabilities, net 1,157 1,074 -37 128 921
Invested capital
3,120 2,978 1,866 1,760 2,297
Net working capital, year-end 1,907 2,205 1,259 1,109 1,280
Net working capital, average 2,193 2,010 1,363 1,322 1,386
Financial ratios (% unless otherwise stated) 2023 2022 2021 2020 2019
Revenue growth -6.0 12.2 7.8 -1.8 5.2
Organic growth -3.3 12.9 6.4 -1.2 4.8
Organic growth adjusted for number of working days -2.6 12.9 5.9 -2.0 4.9
Gross profit margin 22.5 23.4 22.4 21.0 20.1
EBITDA margin 6.7 8.5 7.4 5.6 4.6
EBITA margin 5.0 7.1 5.9 4.0 3.1
EBIT margin 4.3 6.6 5.4 2.2 2.2
Effective tax rate 25.6 23.1 14.6 26.0 45.2
Net working capital (year-end NWC)/revenue 14.6 15.9 10.2 9.7 11.0
Net working capital (average NWC)/revenue 16.8 14.5 11.0 11.5 11.9
Gearing (net interest-bearing liabilities/EBITDA),
no. of times 1.3 0.9 0.0 0.2 1.7
Return on equity (ROE) 18.0 34.0 29.1 13.5 4.0
Return on invested capital (ROIC) 13.2 25.5 24.6 13.8 8.3
Enterprise value/earnings before interest, tax and
amortisation (EV/EBITA) 7.0 5.7 7. 8 5.8 7. 9
Equity ratio 31.6 32.7 36.8 36.8 31.9
2019-2023
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
43
Share ratios (DKK unless otherwise stated) 2023 2022 2021 2020 2019
Earnings per share outstanding (EPS) 47.51 90.37 72.72 30.42 8.77
Intrinsic value per share outstanding 264.54 264.41 267. 28 232.38 218.13
Cash flow from operating activities per share outstanding 117.07 2.19 107.23
111.40 41.11
Share price 465.71 622.62 795.05 353.70 297. 31
Share price/intrinsic value 1.76 2.35 2.97 1.52 1.36
Ordinary dividend per share 30.00 45.00 45.00 28.00 14.00
Extraordinary dividend per share - - 45.00 15.00 -
Total dividend in % of net profit for the year (payout ratio) 63.1 49.8 123.8 141.1 159.4
Price Earnings (P/E) 9.8 6.9 10.9 11.6 33.9
Summary for the Solar Group
Employees 2023 2022 2021 2020 2019
Average number of employees (FTEs) 3,036 3,019 2,908 2,935 3,039
2019-2023 – continued
Definitions
Organic growth Revenue growth adjusted for enterprises acquired and sold off and any exchange
rate changes.No adjustments have been made for number of working days.
Organic growth
adjusted for number
of working days
Revenue growth adjusted for enterprises acquired and sold off and any exchange
rate changes and number of working days.
Net working capital Inventories and trade receivables less trade payables.
Return on invested
capital (ROIC)
Return on invested capital calculated on the basis of EBIT exclusive impairment on
goodwill less tax calculated using the effective tax rate adjusted for one-off effects,
if any.
In all material aspects financial ratios are calculated in accordance with the Danish Finance
Society’s “Recommendations & Financial Ratios”.
Consolidated financial statements
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
44
Notes DKK million 2023 2022
2.1 Revenue 13,031 13,863
Cost of sales -10,101 -10,618
Gross profit 2,930 3,245
5.4 External operating costs -399 -386
2.2 Staff costs -1,643 -1,656
2.3 Loss on trade receivables -17 -28
Earnings before interest, tax, depreciation and amortisation (EBITDA) 871 1,175
2.4 Depreciation and write-down on property, plant and equipment -223 -197
Earnings before interest, tax and amortisation (EBITA) 648 978
2.4 Amortisation and impairment of intangible assets -90 -69
Earnings before interest and tax (EBIT) 558 909
3.4 Share of net profit from associates 0 -1
4.5 Financial income 65 53
4.6 Financial expenses -155 -103
Earnings before tax (EBT) 468 858
2.5 Income tax -120 -198
2.6 Net profit for the year 348 660
Attributable to:
Shareholders of Solar A/S 347 660
Non-controlling interests 1 0
Net profit for the year 348 660
4.3 Earnings in DKK per share outstanding (EPS) for the year 47.51 90.37
4.3 Diluted earnings in DKK per share outstanding (EPS-D) for the year 47.34 90.05
Statement of comprehensive income
DKK million 2023 2022
Net profit for the year 348 660
Other income and costs recognised:
Items that can be reclassified to the income statement
Foreign currency translation adjustments of foreign subsidiaries -13 -51
Fair value adjustments of hedging instruments before tax -5 36
Tax on fair value adjustments of hedging instruments
Other income and costs recognised after tax
-17 -23
Total comprehensive income for the year
Attributable to:
Shareholders of Solar A/S 330 637
Non-controlling interests 1 0
Total comprehensive income for the year 331 637
Consolidated financial statements
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Income statement Other comprehensive income
Financial Statements
Solar A/S - Annual Report 2023
Contents
45
Notes DKK million 2023 2022
Assets
3.1 Intangible assets 348 173
3.2 Property, plant and equipment 1,066 963
3.3 Right-of-use assets 440 383
2.5 Deferred tax assets 7 9
3.4 Investments in associates 4 4
Other non-current assets 28 32
Non-current assets 1,893 1,564
3.5 Inventories 2,029 2,248
3.6 Trade receivables 1,648 1,859
Income tax receivable 25 13
Other receivables 17 9
Prepayments 59 42
Cash at bank and in hand 441 166
Current assets 4,219 4,337
Total assets 6,112 5,901
Notes DKK million 2023 2022
Equity and liabilities
4.1 Share capital 736 736
Reserves -198 -181
Retained earnings 1,175 1,047
Proposed dividends for the financial year 219 329
Equity attributable to shareholders of Solar A/S 1,932 1,931
Non-controlling interests 50 0
Total equity 1,982 1,931
4.4 Interest-bearing liabilities 434 293
3.3, 4.4 Lease liabilities 320 274
2.5 Provision for deferred tax 143 133
3.7 Other provisions 11 9
Non-current liabilities 908 709
4.4 Interest-bearing liabilities 714 556
3.3, 4.4 Lease liabilities 130 117
Trade payables 1,770 1,902
Income tax payable 54 63
3.8 Other payables 520 604
Prepayments 13 2
3.7 Other provisions 21 17
Current liabilities 3,222 3,261
Liabilities 4,130 3,970
Total equity and liabilities 6,112 5,901
Balance sheet
Consolidated financial statements
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
As at 31 December
Financial Statements
Solar A/S - Annual Report 2023
Contents
46
Notes DKK million 2023 2022
Net profit for the year 348 660
2.4 Depreciation, write-down and amortisation 313 266
Changes to provisions and other adjustments 5 -18
Share of net profit from associates 0 1
4.5, 4.6 Financials, net 90 50
Income tax 120 198
4.5 Financial income, received 30 15
4.6 Financial expenses, settled -106 -43
Income tax, settled -138 -155
Cash flow before working capital changes 662 974
Working capital changes
Inventory changes 230 -433
Receivables changes 182 -394
Non-interest-bearing liabilities changes -219 -131
Cash flow from operating activities 855 16
Investing activities
3.1 Purchase of intangible assets -102 -59
Purchase of property, plant and equipment -170 -167
Disposal of property, plant and equipment 1 0
Acquisition of associates -1 0
5.6 Acquisition of subsidiaries and activities
1
-133 -24
Other financial investments 0 1
Cash flow from investing activities -405 -249
Notes DKK million 2023 2022
Financing activities
4.6 Repayment of non-current interest-bearing debt -9 -12
Raising of non-current interest-bearing liabilities 150 185
Change in current interest-bearing debt 149 519
3.3 Instalment on lease liabilities -136 -116
Dividends paid to shareholders of Solar A/S -329 -658
Cash flow from financing activities -175 -82
Total cash flow 275 -315
Cash at bank and in hand at the beginning of the year 166 481
Cash at bank and in hand at the end of the year 441 166
1) In the comparative figures a minor reclassification has been made.
Cash flow statement
Consolidated financial statements
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
47
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 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 -13 -13 -13
Fair value adjustments of hedging instruments before tax -5 -5 -5
Tax on fair value adjustments 1 1 1
Net income recognised in equity via other comprehensive income
in the statement of comprehensive income
Net profit for the year 128 219 347 1 348
Comprehensive income 0 -4 -13 128 219 330 1 331
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 31 December 736 -13 -185 1,175 219 1,932 50 1,982
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
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
48
Statement of changes in equity
– continued
Consolidated financial statements
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
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 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 -51 -51 -51
Fair value adjustments of hedging instruments before tax 36 36 36
Tax on fair value adjustments -8 -8 -8
Net income recognised in equity via other comprehensive income
in the statement of comprehensive income
Net profit for the year 331 329 660 660
Comprehensive income 0 28 -51 331 329 637 0 637
Distribution of dividends (DKK 45.00 per share) -329 -329 -329
Distribution of extraordinary dividends (DKK 45.00 per share) -329 -329 -329
Transactions with the owners 0 0 0 -329 -329 -658 0 -658
Equity as at 31 December 736 -9 -172 1,047 329 1,931 0 1,931
1) Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
ContentsContents
Solar A/S - Annual Report 2023
Financial Statements
49
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 General accounting policies
1.2 Significant accounting estimates
and assessments
1.3 Financial risks
Section 2 – Income statement
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Consolidated financial statements
Section 1
Basis for preparation
Financial Statements
Solar A/S - Annual Report 2023
Contents
50
Basis for preparation
1
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 General accounting policies
1.2 Significant accounting estimates
and assessments
1.3 Financial risks
Section 2 – Income statement
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Consolidated financial statements
Financial Statements
Solar A/S - Annual Report 2023
Contents
51
1.1 General accounting policies
– continued
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 General accounting policies
1.2 Significant accounting estimates
and assessments
1.3 Financial risks
Section 2 – Income statement
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Consolidated financial statements
Basis for preparation
1
Financial Statements
Solar A/S - Annual Report 2023
Contents
52
1.1 General accounting policies
– continued
Summary for the Solar Group
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 General accounting policies
1.2 Significant accounting estimates
and assessments
1.3 Financial risks
Section 2 – Income statement
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Consolidated financial statements
Basis for preparation
1
Contents
Solar A/S - Annual Report 2023
Financial Statements
53
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Section 2
Income statement
Financial Statements
Solar A/S - Annual Report 2023
Contents
54
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Income statement
2 Accounting policies
Financial Statements
Solar A/S - Annual Report 2023
Contents
55
2.1 Segment information – continued
Income statement
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
2
Financial Statements
Solar A/S - Annual Report 2023
Contents
56
Income statement
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
2
Financial Statements
Solar A/S - Annual Report 2023
Contents
57
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Income statement
2
Financial Statements
Solar A/S - Annual Report 2023
Contents
58
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Income statement
2
Financial Statements
Solar A/S - Annual Report 2023
Contents
59
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Income statement
2
Financial Statements
Solar A/S - Annual Report 2023
Contents
60
2.5 Income tax – continued
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Income statement
2
Financial Statements
Solar A/S - Annual Report 2023
Contents
61
Consolidated financial statements
Summary for the Solar Group
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
2.2 Staff costs
2.3 Loss on trade receivables
2.4 Depreciation, write-down, amortisation
and impairment
2.5 Income tax
2.6 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Income statement
2
Contents
Solar A/S - Annual Report 2023
Financial Statements
62
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Section 3
Invested capital
Financial Statements
Contents
Solar A/S - Annual Report 2023 63
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Invested capital
3
Financial Statements
Solar A/S - Annual Report 2023
Contents
64
3.1 Intangible assets – continued
Invested capital
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
3
Financial Statements
Solar A/S - Annual Report 2023
Contents
65
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
3
Invested capital
Financial Statements
Solar A/S - Annual Report 2023
Contents
66
3.2 Property, plant and equipment – continued
Invested capital
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
3
Financial Statements
Solar A/S - Annual Report 2023
Contents
67
Invested capital
3
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
68
3.3 Leases – continued
Invested capital
3
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
69
3.3 Leases – continued
Invested capital
3
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
70
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Invested capital
3
Financial Statements
Solar A/S - Annual Report 2023
Contents
71
Invested capital
3
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
72
Invested capital
3
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
73
Invested capital
3
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
74
Invested capital
3
Consolidated financial statements
Summary for the Solar Group
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments in associates
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Contents
Solar A/S - Annual Report 2023
Financial Statements
75
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Section 4
Capital structure
and financing costs
Financial Statements
Solar A/S - Annual Report 2023
Contents
76
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Capital structure and financing costs
4
Financial Statements
Solar A/S - Annual Report 2023
Contents
77
Capital structure and financing costs
4
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Contents
Solar A/S - Annual Report 2023
Financial Statements
78
Capital structure and financing costs
4
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
79
4.4 Financial instruments – continued
Capital structure and financing costs
4
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
80
Capital structure and financing costs
4
4.4 Financial instruments – continued
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
81
Capital structure and financing costs
4
4.4 Financial instruments – continued
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
82
Capital structure and financing costs
4
4.4 Financial instruments – continued
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
83
Capital structure and financing costs
4
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Earnings per share in DKK per share
outstanding for the year
4.4 Financial instruments
4.5 Financial income
4.6 Financial expenses
Section 5 – Other notes
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Contents
Solar A/S - Annual Report 2023
Financial Statements
84
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Share-based payment
5.2 Contingent liabilities
and other financial liabilities
5.3 Related parties
5.4 Auditors’ fees
5.5 New financial reporting standards
5.6 Acquisitions of subsidiaries and activities
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Section 5
Other notes
Financial Statements
Solar A/S - Annual Report 2023
Contents
85
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Share-based payment
5.2 Contingent liabilities
and other financial liabilities
5.3 Related parties
5.4 Auditors’ fees
5.5 New financial reporting standards
5.6 Acquisitions of subsidiaries and activities
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Other notes
5
Financial Statements
Solar A/S - Annual Report 2023
Contents
86
5.1 Share-based payment – continued
Other notes
5
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Share-based payment
5.2 Contingent liabilities
and other financial liabilities
5.3 Related parties
5.4 Auditors’ fees
5.5 New financial reporting standards
5.6 Acquisitions of subsidiaries and activities
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
87
Other notes
5
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Share-based payment
5.2 Contingent liabilities
and other financial liabilities
5.3 Related parties
5.4 Auditors’ fees
5.5 New financial reporting standards
5.6 Acquisitions of subsidiaries and activities
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
88
Other notes
5
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Share-based payment
5.2 Contingent liabilities
and other financial liabilities
5.3 Related parties
5.4 Auditors’ fees
5.5 New financial reporting standards
5.6 Acquisitions of subsidiaries and activities
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
89
Other notes
5
Consolidated financial statements
Summary for the Solar Group
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Share-based payment
5.2 Contingent liabilities
and other financial liabilities
5.3 Related parties
5.4 Auditors’ fees
5.5 New financial reporting standards
5.6 Acquisitions of subsidiaries and activities
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
91
Notes DKK million 2023 2022
Revenue 4,155 4,511
Cost of sales -3,128 -3,365
Gross profit 1,027 1,146
Other operating income 31 29
5.3 External operating costs -58 -72
2.1 Staff costs -603 -620
2.2 Loss on trade receivables -6 -7
Earnings before interest, tax, depreciation and amortisation (EBITDA) 391 476
2.3 Depreciation and write-down on property, plant and equipment -81 -60
Earnings before interest, tax and amortisation (EBITA) 310 416
2.3 Amortisation and impairment of intangible assets -64 -65
Earnings before interest and tax (EBIT) 246 351
Profit from subsidiaries 215 418
Share of net profit from associates 0 -1
4.4 Financial income 42 25
4.5 Financial expenses -105 -60
Earnings before tax (EBT) 398 733
2.4 Income tax -51 -73
2.5 Net profit for the year 347 660
Statement of comprehensive income
DKK million 2023 2022
Net profit for the year 347 660
Other income and costs recognised:
Items that can be reclassified to the income statement
Foreign currency translation adjustments of foreign subsidiaries -13 -51
Fair value adjustments of hedging instruments before tax, parent company -5 36
Tax on fair value adjustments of hedging instruments, parent company
1 -8
Other income and costs recognised after tax -17 -23
Total comprehensive income for the year
330 637
Consolidated financial statements
Separate financial statements
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Group companies overview
Statements and reports
Q4 2023
Income sttement Other comprehensive ncome
Financial Statements
Solar A/S - Annual Report 2023
Contents
92
Notes DKK million 2023 2022
Assets
3.1 Intangible assets 172 148
3.2 Property, plant and equipment 422 450
3.3 Right-of-use assets 110 76
3.4 Investments measured at equity value 2,168 1,800
3.4 Other non-current assets 24 30
Non-current assets 2,896 2,504
3.5 Inventories 623 826
3.6 Trade receivables 520 555
Receivables from subsidiaries 264 202
Income tax receivable 0 7
Other receivables 3 1
Prepayments 32 13
Cash at bank and in hand 330 110
Current assets 1,772 1,714
Total assets 4,668 4,218
Notes DKK million 2023 2022
Equity and liabilities
4.1 Share capital 736 736
Reserves -66 -70
Retained earnings 1,043 936
Proposed dividends for the financial year 219 329
Total equity 1,932 1,931
4.3 Interest-bearing liabilities 434 293
3.3, 4.3 Lease liabilities 80 49
2.4 Provision for deferred tax 79 78
Non-current liabilities 593 420
4.3 Interest-bearing liabilities 710 535
3.3, 4.3 Lease liabilities 32 28
Trade payables 651 756
Amounts owed to subsidiaries 522 302
Income tax payable 6 0
3.8 Other payables 210 243
Prepayments 9 1
3.7 Other provisions 3 2
Current liabilities 2,143 1,867
Liabilities 2,736 2,287
Total equity and liabilities 4,668 4,218
Balance sheet
As at 31 December
Consolidated financial statements
Separate financial statements
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
93
Notes DKK million 2023 2022
Net profit for the year 348 660
2.3 Depreciation, write-down and amortisation 145 125
Changes to provisions and other adjustments 5 3
Profit from subsidiaries -215 -418
Share of net profit from associates 0 1
4.4, 4.5 Financials, net 63 35
Income tax 51 73
4.4 Financial income, received 36 17
4.5 Financial expenses, settled -90 -32
Income tax, settled -36 -83
Cash flow before working capital changes 307 381
Working capital changes
Inventory changes 202 -163
Receivables changes 12 -114
Non-interest-bearing liabilities changes -151 -225
Cash flow from operating activities 370 -121
Notes DKK million 2023 2022
Investing activities
3.1 Purchase of intangible assets -88 -56
Purchase of property, plant and equipment -17 -151
Disposal of property, plant and equipment 1 0
Changes to loans to subsidaries 159 75
Dividends from subsidiaries 7 6
Acquistion of subsidiaries and activities -164 -34
Capital increase subsidiaries 0 -33
Other financial investments 0 1
Cash flow from investing activities -102 -192
Financing activities
4.3 Repayment of non-current interest-bearing debt -9 -12
Raising of non-current interest-bearing liabilities 150 185
Change in current interest-bearing liabilities 176 526
Instalment on lease liabilities -36 -26
Dividends paid to shareholders of Solar A/S -329 -658
Cash flow from financing activities -48 15
Total cash flow 220 -298
Cash at bank and in hand at the beginning of the year 110 408
Cash at bank and in hand at the end of the year 330 110
Cash flow statement
Consolidated financial statements
Separate financial statements
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
94
Statement of changes in equity
DKK million Share capital
Reserves for
hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Reserves for
development
costs
1
Retained
earnings
Proposed
dividends Total equity
2023
Equity as at 1 January 736 -9 -172 111 936 329 1,931
Foreign currency translation adjustments of foreign subsidiaries -13 -13
Fair value adjustments of hedging instruments before tax -5 -5
Tax on fair value adjustments 1 1
Net income recognised in equity via other comprehensive income
in the statement of comprehensive income
0 -4 -13 0 0 0 -17
Net profit for the year 21 107 219 347
Comprehensive income 0 -4 -13 21 107 219 330
Distribution of dividends (DKK 45.00 per share) -329 -329
Non-controlling interests on acquisition of subsidiary 0
Transactions with the owners 0 0 0 0 0 -329 -329
Equity as at 31 December 736 -13 -185 132 1,043 219 1,932
1) Reserves for hedging transactions, reserves for foreign currency translation adjustments and reserves for development costs are recognised in the balance sheet as a total amount under reserves.
Consolidated financial statements
Separate financial statements
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
95
Statement of changes in equity
– continued
DKK million Share capital
Reserves for
hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Reserves for
development
costs
1
Retained
earnings
Proposed
dividends Total equity
2022
Equity as at 1 January 736 -37 -121 119 926 329 1,952
Foreign currency translation adjustments of foreign subsidiaries -51 -51
Fair value adjustments of hedging instruments before tax 36 36
Tax on fair value adjustments -8 -8
Net income recognised in equity via other comprehensive income
in the statement of comprehensive income
0 28 -51 0 0 0 -23
Net profit for the year -8 339 329 660
Comprehensive income 0 28 -51 -8 339 329 637
Distribution of dividends (DKK 45.00 per share) -329 -329
Distribution of extraordinary dividend (DKK 45.00 per share) -329 -329
Transactions with the owners 0 0 0 0 -329 -329 -658
Equity as at 31 December 736 -9 -172 111 936 329 1,931
1) Reserves for hedging transactions, reserves for foreign currency translation adjustments and reserves for development costs are recognised in the balance sheet as a total amount under reserves.
Consolidated financial statements
Separate financial statements
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Group companies overview
Statements and reports
Q4 2023
Basis for preparation
Secton 1
Solar A/S - Annual Report 2023
Financial Statements
Contents
96
Consolidated financial statements
Separate financial statements
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 General accounting policies
1.2 Significant accounting estimates
and assessments
Section 2 – Income statement
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
97
1.1 General accounting policies
The separate financial statements of the parent
company for 2023 are presented in accordance
with the International Financial Reporting
Standards (IFRSs) as approved by the EU and
additional Danish disclosure requirements for
annual reports of listed companies and the IFRS
executive order issued in accordance with the
Danish Financial Statements Act.
A general description of accounting policies
can be found in the consolidated financial
statements on pages 50-52 note 1.1, Accounting
policies.
When preparing the annual report in
accordance with generally applicable principles,
management make estimates and assumptions
that affect the reported assets and liabilities.
Management base their estimates on historic
experience and expectations for future events.
Therefore, actual results may differ from these
estimates.
The following estimates and accompanying
assessments are deemed material for the
preparation of the financial statements:
• Impairment test of equity investments
• Impairment test of software
• Inventory write-down
• Write-down for loss on doubtful receivables
Descriptions of accounting policies in notes
Descriptions of accounting policies in the
notes form part of the overall description of
accounting policies. Parent-specific descriptions
are found in the following notes:
Note 2.4 Income tax
Note 2.5 Net profit for the year
Note 3.1 Intangible assets
Note 3.2 Property, plant and equipment
Note 3.3 Leases
Note 3.4 Investments measured at equity value
and other non-current assets
Note 3.5 Inventories
Note 3.6 Trade receivables
Note 3.7 Other provisions
Note 4.1 Share capital
Note 4.3 Financial instruments
Note 5.1 Contingent liabilities and other
financial liabilities
These estimates and assessments are described
in the following notes:
Note 3.1 Intangible assets
Note 3.5 Inventories
Note 3.6 Trade receivables
1.2 Significant accounting estimates and assessments
Basis for preparation
1
Consolidated financial statements
Separate financial statements
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 General accounting policies
1.2 Significant accounting estimates
and assessments
Section 2 – Income statement
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Solar A/S - Annual Report 2023
Financial Statements
Contents
98
Income statement
Secton 2
Consolidated financial statements
Separate financial statements
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 Staff costs
2.2 Loss on trade receivables
2.3 Depreciation, write-down, amortisation
2.4 Income tax
2.5 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
99
DKK million 2023 2022
Salaries and wages etc. 538 561
Pensions, defined contribution 43 40
Costs related to social security 14 13
Share-based payment 8 6
Total 603 620
Average number of employees (FTEs) 861 869
Number of employees at year-end (FTEs) 834 886
Remuneration of Board of Directors
Remuneration of Board of Directors 4 3
Remuneration of Executive Board
Salaries and wages etc. 23 22
Share-based payment 3 4
Total 26 26
2.1 Staff costs
Terms of notice for members of the Executive Board is 12 months. When stepping down, the members
of the Executive Board are entitled to 6 months’ remuneration.
Income statement
2
Consolidated financial statements
Separate financial statements
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 Staff costs
2.2 Loss on trade receivables
2.3 Depreciation, write-down, amortisation
2.4 Income tax
2.5 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
100
DKK million 2023 2022
Buildings 16 14
Plant, operating equipment, tools and equipment 26 17
Leasehold improvements 2 2
Tenancy, lease 19 14
Cars, lease 9 8
IT equipment, lease 9 5
Total depreciation and write-down on property, plant and equipment 81 60
Customer-related assets 1 0
Software 61 65
Impairment of intangible assets 2 0
Total amortisation and impairment of intangible assets 64 65
Relevant accounting policies are described in note 3.1, intangible assets, and note 3.2, property, plant and
equipment, and note 3.3, leases.
DKK million 2023 2022
Recognised losses 4 6
Received on trade receivables previously written off 0 0
4 6
Change in write-down for bad and doubtful debts 2 1
Total 6 7
Relevant accounting policies are described in note 3.6 trade receivables.
2.2 Loss on trade receivables 2.3 Depreciation, write-down and amortisation
Income statement
2
Consolidated financial statements
Separate financial statements
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 Staff costs
2.2 Loss on trade receivables
2.3 Depreciation, write-down, amortisation
2.4 Income tax
2.5 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
101
Accounting policies
Tax for the year is recognised with the share
attributable to results for the year in the income
statement and with the share attributable to other
recognised income and costs in the statement of
comprehensive income. Tax consists of current tax and
changes to deferred tax.
DKK million 2023 2022
Current tax 40 78
Deferred tax 11 -4
Tax on profit for the year 51 74
Tax on taxable profit previous year 9 -1
Change in deferred tax previous year -9 0
Total 51 73
Statement of effective tax rate:
Danish income tax rate 22.0% 22.0%
Profit/loss from subsidiaries -11.9% -12.6%
Impairment on / gain from sale of / reversal of impairment on associates 0.3% 0.5%
Non-taxable/deductible items in parent 2.2% 0.1%
Tax regarding prevoius year 0.2% 0.0%
Effective tax rate 12.8% 10.0%
2.4 Income tax
Income statement
2
Consolidated financial statements
Separate financial statements
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 Staff costs
2.2 Loss on trade receivables
2.3 Depreciation, write-down, amortisation
2.4 Income tax
2.5 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
102
Accounting policies
Current tax liabilities and current tax receivables are
recognised in the balance sheet as calculated tax on
the year’s taxable income, adjusted for tax on previous
year’s taxable income and for tax paid on account.
Deferred tax is measured in accordance with the
balance sheet liability method of all temporary
differentials between accounting and tax-related
amounts and provisions. Deferred tax is recognised at
the local tax rate that any temporary differentials are
expected to be realised at based on the adopted or
expected adopted tax legislation on the balance sheet
date.
Deferred tax assets, including the tax value of tax loss
allowed for carryforward, are measured at the value at
which the asset is expected to be realised, either by
elimination in tax of future earnings or by offsetting
against deferred tax liabilities.
Deferred tax assets are assessed annually and only
recognised to the extent that it is probable that they
will be utilised.
Deferred tax is also recognised for the covering of
retaxation of losses in former foreign subsidiaries
participating in joint taxation assessed as becoming
current.
DKK million 2023 2022
Deferred tax 1/1 78 74
Recognised in other comprehensive income -1 8
Ordinary tax recognised in income statement 2 -4
Other items 0 0
Deferred tax 31/12 79 78
Specified as follows:
Deferred tax 79 78
Deferred tax assets 0 0
Total deferred tax, net 79 78
Further specified as follows:
Expected use within 1 year 0 0
Expected use after 1 year 79 78
Total, net 79 78
2.4 Income tax – continued
DKK million 2022
Recognised
in other
comprehensive
income
Ordinary tax
recognised
in income
statement 2023
Property, plant and equipment 28 0 -4 24
Provisions for loss on recievables 0 0 -1 -1
Other items
1
50 -1 7 56
Total, net 78 -1 2 79
1) Other items particularly cover intangible assets and loss balances in jointly taxed entities.
Income statement
2
Specification by balance sheet items
Consolidated financial statements
Separate financial statements
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 Staff costs
2.2 Loss on trade receivables
2.3 Depreciation, write-down, amortisation
2.4 Income tax
2.5 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
103
Accounting policies
Dividends
Proposed dividends are recognised as a liability at the
time of adoption of the general meeting.
DKK million 2023 2022
Proposed distribution of net profit for the year:
Proposed dividend 219 329
Reserves for development costs 21 -8
Retained earnings 107 339
Net profit for the year 347 660
Ordinary dividend in DKK per share of DKK 100
1
30.00 45.00
1) Calculations are based on proposed dividends.
2.5 Net profit for the year
Income statement
2
Consolidated financial statements
Separate financial statements
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 Staff costs
2.2 Loss on trade receivables
2.3 Depreciation, write-down, amortisation
2.4 Income tax
2.5 Net profit for the year
Section 3 – Invested capital
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Solar A/S - Annual Report 2023
Financial Statements
Contents
104
Invested capital
Secton 3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
105
Accounting policies
Customer-related intangible assets
Customer-related intangible assets acquired in
connection with business combinations are measured
at cost less accumulated amortisation and impairment
loss.
Customer-related intangible assets are amortised using
the straight-line principle over the expected useful life.
Typically, the amortisation period is 5-7 years.
Software
Software is measured at cost less accumulated
amortisation and impairment. Cost includes both direct
internal and external costs. Software is amortised using
the straight-line principle over 4-8 years. The basis of
amortisation is reduced by any impairment.
3.1 Intangible assets
DKK million
Customer-
related
assets Software Total
2023
Cost 1/1 5 701 706
Additions during the year 0 88 88
Disposals during the year 0 -6 -6
Cost 31/12 5 783 788
Amortisation and impairment 1/1 3 555 558
Amortisation during the year 1 61 62
Impairment during the year 0 2 2
Amortisation of abandoned assets 0 -6 -6
Amortisation and impairment 31/12 4 612 616
Carrying amount 31/12 1 171 172
Remaining amortisation period in number of years 2 1-8 -
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
106
3.1 Intangible assets – continued
Accounting policies – continued
Impairment of intangible assets
The carrying amount of intangible assets is assessed
annually to determine whether there is any indication
of impairment.
When such an indication is present, the asset’s
recoverable amount is calculated, which is the highest
of the asset’s fair value less expected costs of disposal
or value in use. Value in use is calculated as the
present value of expected cash flow from the smallest
cash-generating unit to which the asset belongs.
Impairment loss is recognised when the carrying
amount of an asset exceeds the asset’s recoverable
amount. Impairment loss is recognised in the income
statement.
Impairment loss on intangible assets is reversed if
changes have been made to the assumptions and
estimates that led to the impairment loss.
Accounting estimates
and assessments
Software
Software is evaluated annually for indicators of a
need for impairment. If a need to perform impairment
is identified, an impairment test for the software is
performed.
The impairment test is made on the basis of different
factors, including the software’s future application, the
present value of the expected cost saving as well as
interest and risks.
DKK million
Customer-
related
assets Software Total
2022
Cost 1/1 5 691 696
Additions during the year 0 56 56
Disposals during the year 0 -46 -46
Cost 31/12 5 701 706
Amortisation and impairment 1/1 3 536 539
Amortisation during the year 0 65 65
Amortisation of abandoned assets 0 -46 -46
Amortisation and impairment 31/12 3 555 558
Carrying amount 31/12 2 146 148
Remaining amortisation period in number of years 3 1-8 -
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
107
3.2 Property, plant and equipment
DKK million
Land and
buildings
Plant, operating
equipment,
tools and
equipment
Leasehold
improvements
Assets under
construction Total
2023
Cost 1/1 481 254 14 3 752
Additions during the year 6 8 0 3 17
Disposals during the year -1 -12 0 0 -13
Cost 31/12 486 250 14 6 756
Write-down and depreciation 1/1 203 91 8 0 302
Write-down and depreciation during the year 16 26 2 0 44
Write-down and depreciation of abandoned assets -1 -11 0 0 -12
Write-down and depreciation 31/12 218 106 10 0 334
Carrying amount 31/12 268 144 4 6 422
Accounting policies
Property, plant and equipment
Land and buildings as well as other plant, operating
equipment, and tools and equipment are measured at
cost less accumulated depreciation and write-down.
Cost includes the purchase price and costs directly
attributable to the acquisition until the time when the asset is
ready for use. Cost of a combined asset is disaggregated into
separate components which are depreciated separately if the
useful lives of the individual components differ.
Subsequent expenditure, for example in connection with
the replacement of components of property, plant or
equipment, is recognised in the carrying amount of the
relevant asset when it is probable that the incurrence will
result in future economic benefits for the group.
The replaced components cease to be recognised in the
balance sheet and the carrying amount is transferred
to the income statement. All other general repair
and maintenance costs are recognised in the income
statement when these are incurred.
Property, plant and equipment are depreciated on a straight-
line basis over their estimated useful lives which are:
• Buildings 40 years
• Technical installations 20 years
• Plant, operating equipment, and tools and equipment
2-5 years
There are a few differences from the mentioned
depreciation periods in which useful life is estimated as
shorter. Leasehold improvements are depreciated over
the lease term, however, maximum 5 years.
Land is not depreciated.
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
108
3.2 Property, plant and equipment – continued
Accounting policies – continued
The basis of depreciation is determined in
consideration of the asset’s residual value and reduced
by any impairment. Residual value is determined at
the time of acquisition and reassessed annually. If
residual value exceeds the asset’s carrying amount,
depreciation will cease.
By changing the depreciation period or residual value,
the effect of future depreciation is recognised as a
change to accounting estimates.
Impairment of property,
plant and equipment
The carrying amount of property, plant and equipment
is assessed annually to determine whether there is any
indication of impairment.
When such an indication is present, the asset’s
recoverable amount is calculated, which is the highest
of the asset’s fair value less expected costs of disposal
or value in use. Value in use is calculated as the
present value of expected cash flow from the smallest
cash-generating unit to which the asset belongs.
Impairment loss is recognised when the carrying
amount of an asset exceeds the asset’s recoverable
amount. Impairment loss is recognised in the income
statement.
Write-down on property, plant and equipment is
reversed to the extent that changes have been made
to the assumptions and estimates that led to the write-
down.
DKK million
Land and
buildings
Plant, operating
equipment,
tools and
equipment
Leasehold
improvements
Assets under
construction Total
2022
Cost 1/1 377 219 10 115 721
Additions during the year 105 154 4 117 380
Disposals during the year -1 -119 0 -229 -349
Cost 31/12 481 254 14 3 752
Write-down and depreciation 1/1 190 193 6 0 389
Write-down and depreciation during the year 14 17 2 0 33
Write-down and depreciation of abandoned assets -1 -119 0 0 -120
Write-down and depreciation 31/12 203 91 8 0 302
Carrying amount 31/12 278 163 6 3 450
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
109
3.3 Leases
DKK million Tenancy Cars IT equipment Total
2023
Cost 1/1 98 34 24 156
Additions during the year 34 10 27 71
Disposals during the year 0 -4 0 -4
Cost 31/12 132 40 51 223
Write-down and depreciation 1/1 45 20 15 80
Write-down and depreciation during the year
19 9 9 37
Write-down and depreciation of abandoned assets
0 -4 0 -4
Write-down and depreciation 31/12 64 25 24 113
Carrying amount 31/12 68 15 27 110
Accounting policies – continued
Right-of-use assets
Right-of-use assets are lease assets arising from a
lease agreement. Lease assets are initially measured
at cost consisting of the amount of the initial
measurement of the lease liability with addition
of lease payments made to the lessor at or before
the commencement date less any lease incentives
received. Three different types of leases have been
identified:
• Tenancy
• Cars
• IT equipment
The lease assets are depreciated on a straight-line
basis over the lease term. The carrying amount
of the right-of-use asset can be adjusted due to
modifications to the lease agreement or in special
cases reassessment of the lease term.
Payments associated with short-term leases and leases
of low-value assets are recognised on a straight-line
basis as an expense in the income statement. Short-
term leases are leases with a term of 12 months or less.
Low-value assets comprise IT-equipment and small
items of office furniture of a value below DKK 37,000.
Invested capital
3
Right-of-use assets
DKK million Tenancy Cars IT equipment Total
2022
Cost 1/1 91 28 21 140
Additions during the year 11 13 3 27
Disposals during the year -4 -7 0 -11
Cost 31/12 98 34 24 156
Write-down and depreciation 1/1 35 19 10 64
Write-down and depreciation during the year
14 8 5 27
Write-down and depreciation of abandoned assets
-4 -7 0 -11
Write-down and depreciation 31/12 45 20 15 80
Carrying amount 31/12 53 14 9 76
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
110
3.3 Leases – continued
DKK million 2023 2022
Maturity < 1 year 32 28
Short-term lease liabilities 31/12 32 28
Long-term lease liabilities
DKK million 2023 2022
Maturity > 1 year < 5 years, undiscounted 78 42
Maturity > 5 years, undiscounted 7 8
Long-term lease liabilities 31/12, undiscounted 85 50
Discounting on lease liabilities > 1 year < 5 years -5 -1
Discounting on lease liabilities > 5 years 0 0
Long-term lease liabilities 31/12 80 49
Amounts recognised in the income statement
DKK million 2023 2022
Depreciation of Right-of-use assets
36 26
Interest expense on lease liabilities
2 1
Expense relating to short-term leases
0 0
Expense relating to leases of low-value items
0 0
Expense relating to variable lease payments not included in the measurement
of lease liabilities
2 1
Total 40 28
Cash outflows for leases
Instalment on lease liabilities
-36 -26
Interest payments
-2 -1
Total cash outflows for leases -38 -27
Accounting policies
Lease liabilities
Lease liabilities arise from a lease agreement. Lease
liabilities are initially measured at the present value of
the lease payments during the non-cancellable lease
period with addition of periods covered by an option to
extend the lease if exercise of the option is considered
reasonably certain on inception of the lease.
At initial recognition, each contract is assessed
individually to assess the likelihood of exercising a
potential extension option in the contract. The option
to extend the contract period will be included in
measuring the lease liability if it is reasonably certain
that Solar will exercise the option. When calculating
the net present value, a discount rate corresponding to
Solar’s incremental borrowing rate has been used.
The lease liability will be remeasured when changes
occur due to modifications to the contract (extension,
termination etc.), indexation or in special cases
reassessment of the lease term.
Invested capital
3
Short-term lease liabilities
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
111
3.4 Investments measured at equity value and other non-current assets
DKK million
Equity
investments
Investments
in associates
Other
investments
Other
recievables Total
2023
Cost 1/1 2,591 16 60 15 2,682
Additions during the year 174 0 0 2 176
Disposals during the year 0 -11 0 0 -11
Cost 31/12 2,755 5 60 17 2,847
Value adjustment 1/1 -791 -16 -37 -8 -852
Foreign currency translation adjustments -14 0 0 0 -14
Dividends from subsidiaries -7 0 0 0 -7
Profit from subsidiaries 215 0 0 0 215
Fair value adjustment recognised under financial expenses
0 0 -8 0
-8
Other adjustments
0 11 0 0
11
Value adjustment 31/12 -597 -5 -45 -8 -655
Carrying amount 31/12
2,168 0 15 9
2,192
At the acquisition of ThermoNova as at 1 March 2023, DKK 122m was allocated to goodwill.
Accounting policies
Under the equity method of accounting, the
investments are initially recognised at cost and
adjusted thereafter to recognise the parent company’s
share of the post-acquisition profits or losses of the
subsidiary in profit or loss statement, and the parent
company’s share of movements in other comprehensive
income of the investee in other comprehensive income.
Dividends received or receivable from subsidiaries are
recognised as a reduction in the carrying amount of the
investment.
Unrealised gains on transactions between the parent
company and its subsidiaries are eliminated to the
extent of the parent company’s interest in these
entities. Unrealised losses are also eliminated unless
the transaction provides evidence of an impairment of
the asset transferred.
Accounting policies of equity accounted investees have
been changed where necessary to ensure consistency
with the policies adopted by the parent company.
The carrying amount of equity-accounted investments
is tested for impairment.
Other investments are measured at fair value.
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
112
3.4 Investments measured at equity value and other non-current assets – continued
Invested capital
3
DKK million
Equity
investments
Investments
in associates
Other
investments
Other
recievables Total
2022
Cost 1/1 2,624 16 59 19 2,718
Additions during the year 67 0 0 1 68
Transferred from other receivables to other investments 0 0 5 -5 0
Disposals during the year -100 0 -4 0 -104
Cost 31/12 2,591 16 60 15 2,682
Value adjustment 1/1 -1,253 -15 -23 -4 -1,295
Foreign currency translation adjustments -50 0 0 0 -50
Dividends from subsidiaries -6 0 0 0 -6
Profit from subsidiaries 418 -1 0 0 417
Fair value adjustment recognised under financial expenses
0 0 -16 -4
-20
Other adjustments
100 0 2 0
102
Value adjustment 31/12 -791 -16 -37 -8 -852
Carrying amount 31/12
1,800 0 23 7
1,830
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
113
3.5 Inventories
DKK million 2023 2022
End products 623 826
Recognised write-down 1 8
Accounting policies
Inventories are measured at cost according to the FIFO
method or at net realisable value, if this is lower.
Cost of inventories includes purchase price with
addition of delivery costs.
The net realisable value of inventories is determined
as selling price less costs incurred to make the sale
and is determined in consideration of marketability,
obsolescence and development of expected selling
price.
Accounting estimates
and assessments
Write-down of inventories
Write-down of inventories is made due to the
obsolescence of products.
Management specifically assess inventories, including
the products’ turnover rate, current economic trends
and product development when deciding whether the
write-down is sufficient.
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
114
3.6 Trade receivables
1
DKK million 2023 2022
Maturity statement, trade receivables
Not due 488 520
Past due for 1-30 day(s) 33 36
Past due for 31-90 days 6 7
Past due for 91+ days 3 0
530 563
Write-down -10 -8
Total 520 555
Write-down based on:
Age distribution 3 2
Individual assessment 7 6
Total 10 8
Write-down 1/1 8 6
Write-down for the year 6 5
Losses realised during the year -1 -2
Reversed for the year -3 -1
Write-down 31/12 10 8
1) A factoring arrangement on non-recourse conditions is established with a few major customers. As a result
trade receivables is reduced with approx. DKK 93m (DKK 97m).
We refer to the consolidated accounts, note 3.6, trade receivables, for information on credit risk.
Accounting policies
Trade receivables are measured at fair value at
acquisition and at amortised cost subsequently. Based
on an individual assessment of the loss risk, including a
statistical based model, write-down to amortised cost less
expected credit losses is made, if this is lower.
Accounting estimates
and assessments
Write-down for meeting of loss on doubt-
ful trade receivables
The IFRS 9 simplified approach is applied to measure
expected credit losses, which uses a lifetime expected
loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables
have been grouped based on shared credit risk
characteristics and the day past invoicing.
As the vast majority of our group companies generally takes
out insurance to hedge against loss to the extent possible,
the write-down based on age distribution amounts to less
than 0.6% (0.4%) of gross trade receivables.
Individual assessment of write-down is performed by
management specifically analysing trade receivables,
including the customers’ credit rating and current
economic trends to ensure that write-down is sufficient.
Write-down based on individual assessment amounts
to 1.3% (1.4%) of gross trade receivables. As the total
write-down on trade receivables amounts to 2% (1%)
of gross trade receivables, no maturity statement of
the write-down is included. However, the majority of the
provision relates to receivables overdue by more than 31
days (31 days).
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
115
3.7 Other provisions
DKK million 2023 2022
Non-current
Others
0 0
Total 31/12 0 0
Specification, non-current
1/1 0 1
Reversed during the year 0 -1
Provisions of the year
0 0
Total 31/12 0 0
Current
Restructuring costs
3 2
Total 31/12 3 2
Specification, current
1/1
2 0
Reversed during the year
-2 0
Provisions of the year
3 2
Total 31/12 3 2
Accounting policies
Provisions are measured in accordance with
management’s best estimate of the amount required to
settle a liability.
Restructuring expenses are recognised as liabilities
when a detailed official plan for the restructuring has
been published to the parties affected by the plan on
the balance sheet date at the latest.
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
116
3.8 Other payables
DKK million 2023 2022
Staff costs 109 139
Taxes and charges
30 52
Interest rate swaps
17 12
Other payables and amounts payable
54 40
Total 210 243
Accounting policies for hedging instruments are described in note 4.3 Financial instruments
Invested capital
3
Consolidated financial statements
Separate financial statements
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 Intangible assets
3.2 Property, plant and equipment
3.3 Leases
3.4 Investments measured at equity value
and other non-current assets
3.5 Inventories
3.6 Trade receivables
3.7 Other provisions
3.8 Other payables
Section 4 – Capital structure and financing costs
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Solar A/S - Annual Report 2023
Financial Statements
Contents
117
Capital structure
and financing costs
Secton 4
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Financial instruments
4.4 Financial income
4.5 Financial expenses
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
118
4.1 Share capital
DKK million 2023 2022
Share capital 1/1 736 736
Change in share capital
0
0
Share capital 31/12 736 736
Share capital is fully paid in and divided into the following classes:
A shares 900,000 at DKK 100, 10 votes per share
90
90
B shares 6,460,000 at DKK 100, 1 vote per share
646
646
Total 736 736
Capital structure and financing costs
4
4.2 Treasury shares
Treasury shares (B shares) Number of shares
Nominal value
(DKK million)
Cost
(DKK million)
Percentage
of share capital
2023 2022 2023 2022 2023 2022 2023 2022
Holding 1/1 56,813 56,813 6 6 22 22 0.7% 0.7%
Divestment 0 0 0 0 0 0 0.0% 0.0%
Holding 31/12 56,813 56,813 6 6 22 22 0.7% 0.7%
Accounting policies
Treasury shares
Acquisition and disposal sums related to treasury
shares are recognised directly in transactions with the
owners.
Number of shares Nominal value
2023 2022 2023 2022
A shares outstanding 31/12 900,000 900,000 90 90
B shares outstanding
Outstanding 1/1 6,403,187
6,403,187 640 640
Divestment of treasury shares 0 0 0 0
B shares outstanding 31/12 6,403,187 6,403,187 640 640
Total shares outstanding 31/12 7,303,187 7,303,187 730 730
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Financial instruments
4.4 Financial income
4.5 Financial expenses
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
119
4.3 Financial instruments
DKK million Interest rate 2023 2022
Debt to mortgage credit institutions Fixed
1
195 204
Debt to credit institutions Fixed
1
250 100
Lease liabilities Calculated 112 77
Bank loans and overdrafts Floating 699 524
Interest-bearing liabilities 1,256 905
Trade payables
2
651 756
Other payables 210 243
Financial liabilities 2,117 1,904
Cash at bank and in hand 330 110
Trade receivables 520 555
Other receivables 299 223
Financial assets 1,149 888
Total, financial balance sheet items, net 968 1,016
1) Interest swaps have been used to hedge floating-rate loans, converting these loans to fixed-rate loans.
2) Solar participates in supplier financing arrangement with a few suppliers. As a result trade payables are
increased with approx. DKK 140m (DKK 136m).
Accounting policies
Financial liabilities
Debt to credit institutions is recognised initially at fair
value that corresponds to the proceeds received net of
transaction costs incurred.
In subsequent periods, the financial liabilities are
measured at amortised cost using the effective interest
method, meaning that the difference between the
proceeds and the nominal value is recognised in the
income statement under financials for the term of the
loan. For information on lease liabilities, see note 3.3.
Fair value measurement
The group uses the fair value concept for recognition
of certain financial instruments and in connection with
some disclosure requirements. Fair value is defined as
the price that can be secured when selling an asset or
that must be paid to transfer a liability in a standard
transaction between market participants (exit price).
Fair value is a market-based and not enterprise-specific
valuation. The enterprise uses the assumptions that
market participants would use when pricing an asset or
liability based on existing market conditions, including
assumptions relating to risks.
As far as possible, fair value measurement is based on
market value in active markets (level 1) or alternatively on
values derived from observable market information (level 2).
If such observable information is not available or cannot
be used without significant modifications, recognised
valuation methods and fair estimates are used as the
basis of fair values (level 3).
Capital structure and financing costs
4
Fair value of Solar’s respective interest-bearing liabilities is seen as fair value measurement at level
2. Mortgage loans are valued based on underlying securities, while bank debt is calculated based
on models for discounting to net present value. Non-observable market data is primarily made up of
credit risks, which are seen as insignificant in Solar’s case.
The fair value of Solar’s interest swaps is measured as fair value measurement at level 2, since fair
value can be determined directly based on the actual forward rates and instalments on the balance
sheet date. Outstanding interest rate swaps for hedging of floating-rate loans expire over the period
until 2037 (2037).
Financial assets and financial liabilities
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Financial instruments
4.4 Financial income
4.5 Financial expenses
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
120
4.3 Financial instruments – continued
DKK million 2023 2022
Current interest-bearing liabilities
Maturity < 1 year
Debt to mortgage credit institutions 11 11
Lease liabilities 31 28
Bank loans and overdrafts 699 524
Current interest-bearing liabilities 741 563
Other financial liabilities 861 999
Financial liabilities 1,602 1,562
Current financial assets 1,149 888
Net current financial liabilities 453 674
Maturity 1-5 year(s)
Debt to mortgage credit institutions 45 45
Debt to credit institutions 250 100
Lease liabilities 74 41
Total 369 186
Maturity > 5 years
Debt to mortgage credit institutions 139 148
Lease liabilities 7 8
Total 146 156
Total non-current liabilities 515 342
Maturity, until year 2042 2042
The carrying amount of financial liabilities corresponds to fair value, see page 119.
Capital structure and financing costs
4
Financial liabilities, maturity statement
DKK million 2023 2022
Interest-bearing liabilities and maturity statement for expected interest expense
for the period
< 1 year 23 16
1-5 year(s) 41 41
> 5 years 40 47
Total 104 104
Financial liabilities, maturity statement –continued
DKK million 2023 2022
Effect of a 1% interest rate increase at the end of the year
Effect on equity 3 10
Of this, earnings impact is -5 -4
Undrawn credit facilities 31/12 863 638
Interest rate sensitivity
Distribution on currencies Current liabilities Non-current liabilities
DKK million 2023 2022 2023 2022
EUR 147 127 106 111
DKK 563 408 328 182
SEK 0 0 0 0
Total 710 535 434 293
Interest rate in % 4.3-5.7 3.0-5.5 4.3-5.6 4.3-5.5
The parent company has raised loans in Danish kroner and euro. We refer to the consolidated
accounts, note 4.4, Financial instruments, for more information on liquidity risk, interest rate and
currency risk management.
Financial liabilities, foreign currency risk exposure
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Financial instruments
4.4 Financial income
4.5 Financial expenses
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
121
4.3 Financial instruments – continued
DKK million 2023 2022
Outstanding interest swaps made for hedging floating-rate loans
Principal amount 367 122
Interest rate in % for outstanding swaps 4.5-5.6 5.5
Fair value -17 -12
Maturity for interest swaps follows the maturity for debt to mortgage credit institutions as stated on previous
page.
Capital structure and financing costs
4
Hedging activities
DKK million 2023 2022
Amounts recognised in other comprehensive income
Adjustment to fair value for the year -10 30
Realised during the year, recognised as financial income/expenses 5 6
Total -5 36
Accounting policies
Derivatives
Derivatives are only used to hedge financial risks in the
form of interest rate and currency risks.
Derivatives are recognised at fair value. Both realised and
unrealised gains and losses are recognised in the income
statement unless the derivatives are part of hedging of
future transactions. Value adjustments of derivatives for
hedging of future transactions are recognised directly in
other comprehensive income. Any non-effective part of
the financial instrument in question is recognised in the
income statement. Derivatives are recognised under other
receivables or other payables.
DKK million 2023 2022
Interest-bearing liabilities 1/1 905 207
Repayment of non-current interest-bearing debt -9 -12
Raising of non-current interest-bearing liabilities 150 185
Change in current interest-bearing debt 176 525
Instalment on lease liabilities -36 -26
Lease liability raised during the year, non-cash 71 27
Foreign currency translation adjustment -1 -1
Interest-bearing liabilities 31/12 1,256 905
Reconciliation of development in interest-bearing debt to financing activities in the cash flow statement:
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Financial instruments
4.4 Financial income
4.5 Financial expenses
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
122
4.4 Financial income 4.5 Financial expenses
DKK million 2023 2022
Interest income 15 9
Foreign exchange gains 6 8
Other financial income 21 8
Total 42 25
Financial income, received 36 17
DKK million 2023 2022
Interest expenses 82 28
Foreign exchange losses 7 8
Interest on lease liabilities 2 1
Fair value adjustments, other financial investments 8 20
Other financial expenses 6 3
Total 105 60
Financial expenses, settled 90 32
Capital structure and financing costs
4
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
4.1 Share capital
4.2 Treasury shares
4.3 Financial instruments
4.4 Financial income
4.5 Financial expenses
Section 5 – Other notes
Group companies overview
Statements and reports
Q4 2023
Solar A/S - Annual Report 2023
Financial Statements
123
Contents
Other notes
Secton 5
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Contingent liabilities
and other financial liabilities
5.2 Related parties
5.3 Auditors’ fees
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
124
5.1 Contingent liabilities and other financial liabilities
DKK million 2023 2022
Collateral
Assets have been pledged as collateral for bank arrangements at
a carrying amount of:
Land and buildings 262 274
Total 262 274
Mortgaging and guarantees
As security of subsidiaries' bank arrangements, guarantees have been issued for:
Total 92 93
As security of subsidiaries' liabilites, guarantees have been issued for:
Total 561 654
Other notes
5
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Contingent liabilities
and other financial liabilities
5.2 Related parties
5.3 Auditors’ fees
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
125
5.2 Related parties
Group and parent Solar A/S are subject to control by the Fund of 20th December (registered as a
commercial foundation in Denmark), which owns 17.0% of the shares and holds 60.5% of the voting
rights. The remaining shares are owned by a widely combined group of shareholders.
Other related parties include the company’s Board of Directors and Executive Board. There have
been no transactions in the financial year with members of the Board of Directors and Executive
Board other than those which appear from note 2.1.
The parent company has had the following significant transactions with related parties:
5.3 Auditors' fees
DKK million 2023 2022
Deloitte
Statutory audit 2 1
Other assurance engagements
1
1 1
Other services
2
0 1
Total 3 3
Other auditors
Other services 0 0
Total 0 0
1) Other assurance engagements mainly consists of IT Cyber resilience and ESG assurance.
2) Other services in 2022 mainly consists of Board effectiveness review.
DKK million 2023 2022
Sale of services to subsidiaries 169 162
Sale of goods to subsidiaries 150 165
Interest income from subsidiaries 17 7
Interest expense from subsidiaries 6 2
On the balance sheet date, the usual product balances derived from these transactions exist. These
appear from the parent company’s balance sheet.
Solar also invoices the Fund of 20th December for the performance of administrative services at
DKK 55,000 (DKK 20,000). Balances with the Fund of 20th December total 0 on balance sheet date.
Other notes
5
Consolidated financial statements
Separate financial statements
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
Section 4 – Capital structure and financing costs
Section 5 – Other notes
5.1 Contingent liabilities
and other financial liabilities
5.2 Related parties
5.3 Auditors’ fees
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
127
Group companies overview
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
129
EXECUTIVE BOARD
BOARD OF DIRECTORS
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Statement by the executive board and the
board of directors
Independent Auditors' report
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
130
financial statements Opinion
Independent auditors’ report
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Statement by the executive board and the
board of directors
Independent Auditors' report
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
131
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Statement by the executive board and the
board of directors
Independent Auditors' report
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
132
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Statement by the executive board and the
board of directors
Independent Auditors' report
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
133
Identification No (MNE) mne10052
Identification No (MNE) mne40040
Business Registration No 33963556
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Statement by the executive board and the
board of directors
Independent Auditors' report
Q4 2023
Financial Statements
Solar A/S - Annual Report 2023
Contents
135
Quarterly figures
Q1 Q2 Q3 Q4
Income statement (DKK million) 2023 2022 2023 2022 2023 2022 2023 2022
Revenue 3,656 3,462 3,250 3,451 2,965 3,266 3,160 3,684
Earnings before interest, tax, depreciation and amortisation (EBITDA) 280 281 214 267 187 301 190 326
Earnings before interest, tax and amortisation (EBITA) 226 236 159 218 132 250 131 274
Earnings before interest and tax (EBIT) 209 222 121 202 114 231 114 254
Financials, net -20 -5 -20 -8 -21 -6 -29 -31
Earnings before tax (EBT) 189 217 101 193 93 225 85 223
Net profit or loss for the quarter 145 168 77 147 71 176 55 169
Consolidated
Q1 Q2 Q3 Q4
Balance sheet (DKK million) 2023 2022 2023 2022 2023 2022 2023 2022
Non-current assets 1,756 1,487 1,761 1,557 1,809 1,545 1,893 1,564
Current assets 4,858 4,088 4,556 4,122 4,456 4,392 4,219 4,337
Balance sheet total 6,614 5,575 6,317 5,679 6,265 5,937 6,112 5,901
Total equity 1,759 1,808 1,810 1,600 1,910 1,764 1,982 1,931
Non-current liabilities 737 453 894 506 877 491 908 709
Current liabilities 4,118 3,314 3,613 3,573 3,478 3,682 3,222 3,261
Interest-bearing liabilities, net 1,530 617 1,558 1,122 1,480 1,205 1,157 1,074
Invested capital 3,263 2,377 3,342 2,675 3,366 2,923 3,120 2,978
Net working capital, end of period 2,347 1,791 2,265 1,856 2,253 2,186 1,907 2,205
Net working capital, average 2,149 1,475 2,251 1,619 2,268 1,773 2,193 2,010
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
136
Quarterly figures
Q1 Q2 Q3 Q4
Cash flows (DKK million) 2023 2022 2023 2022 2023 2022 2023 2022
Cash flow from operating activities 101 -202 78 -10 190 -14 486 242
Cash flow from investing activities -162 -99 -54 -75 -102 -37 -87 -38
Cash flow from financing activities 171 -37 -38 41 -109 66 -199 -152
Net investments in intangible assets -20 -16 -25 -14 -26 -12 -31 -17
Net investments in property, plant and equipment -30 -59 -29 -61 -76 -25 -34 -22
Acquisition and disposal of subsidiaries, net -111 -24 0 0 0 0 -22 0
Consolidated – continued
Q1 Q2 Q3 Q4
Financial ratios (% unless otherwise stated) 2023 2022 2023 2022 2023 2022 2023 2022
Revenue growth 5.6 15.2 -5.8 11.4 -9.2 13.7 -14.2 9.0
Organic growth 8.3 15.4 -2.2 11.7 -6.2 14.0 -12.5 10.9
Organic growth adjusted for number of working days 6.7 13.6 -1.0 12.4 -4.7 14.0 -11.1 12.0
Gross profit margin 23.2 23.1 22.7 22.9 21.5 24.1 22.4 23.6
EBITDA margin 7.7 8.1 6.6 7.7 6.3 9.2 6.0 8.8
EBITA margin 6.2 6.8 4.9 6.3 4.5 7.7 4.1 7.4
EBIT margin 5.7 6.4 3.7 5,9 3.8 7.1 3.6 6.9
Net working capital (NWC end of period)/revenue 16.7 14.0 16.3 14.1 16.6 16.1 14.6 15.9
Net working capital (NWC average)/revenue 15.3 11.5 16.2 12.3 16.7 13.1 16.8 14.5
Gearing (interest-bearing liabilities,net/EBITDA), no. of times 1.3 0.6 1.4 1.1 1.5 1.1 1.3 0.9
Return on equity (ROE) 35.0 31.9 32.7 35.1 25.5 38.6 18.3 35.7
Return on invested capital (ROIC) 23.2 26.5 20.5 25.5 16.9 25.3 13.2 25.5
Enterprise value/earnings before interest, tax and amortisation (EV/EBITA) 5.7 7.5 5.7 6.3 6.2 5.2 7.0 5.7
Equity ratio 25.9 32.4 27.9 28.2 29.7 29.7 31.6 32.7
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
137
Quarterly figures
Q1 Q2 Q3 Q4
Share ratios (DKK unless otherwise stated) 2023 2022 2023 2022 2023 2022 2023 2022
Earnings per share outstanding (EPS) 19.85 23.00 10.54 20.13 9.72 24.10 7. 3 9 23.14
Intrinsic value per share outstanding 234.14 247.56 241.13 219.08 254.82 241.54 264.54 264.41
Share price 553.54 749.19 506.42 597.0 9 476.27 492.34 465.71 622.62
Share price/intrinsic value 2.36 3.03 2.10 2.73 1.87 2.04 1.76 2.35
Consolidated – continued
Q1 Q2 Q3 Q4
Employees 2023 2022 2023 2022 2023 2022 2023 2022
Average number of employees (FTE's) continuing operations 3,042 2,932 3,058 2,956 3,049 2,992 3,036 3,019
Definitions
Organic growth Revenue growth adjusted for enterprises acquired and sold off and any exchange rate changes. No adjustments have been made for number of working days.
Organic growth adjusted for number of working days Revenue growth adjusted for enterprises acquired and sold off and any exchange rate changes and number of working days.
Net working capital Inventories and trade receivables less trade payables.
ROIC
Return on invested capital calculated on the basis of EBIT exclusive impairment on goodwill less tax calculated using the effective tax rate adjusted for
one-off effects, if any.
In all material aspects financial ratios are calculated in accordance with the Danish Finance Society's "Recommendations & Financial Ratios".
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
138
Q4 EBITDA amounted to
DKK 190m
Financial review
(Data shown in brackets relate to the corresponding period in 2022)
Market developments had a
negative impact on all Solar’s
main segments in Q4. Adjusted
organic growth amounted to
-11.1% (12.0%).
Revenue
Revenue amounted to DKK 3.2bn (DKK
3.7bn). Adjusted organic growth decreased to
-11.1% (12.0%) with November and December
underperforming October.
Revenue from Climate & Energy, one of
our strategic focus areas, did not reach the
expected growth rates in Q4 and amounted to
around DKK 256m (DKK 438m).
Sales of high-capacity ThermoNova industrial
heat pumps delivered the expected growth rates
while heat pump sales for the residential market
were disappointing. The slowdown in Denmark
seen in March continued for the remainder of
2023. The subsidy scheme for residential heat
pumps implemented in late Q3 did not lead to
the expected growth rates for Q4.
The Installation and Trade segments delivered
adjusted organic growth of approx.-11% and
approx. -30%, respectively.
Approx. 75% of the decrease in the Installation
segment can be accounted for by the lack
of heat pump sales. The Industry segment
delivered adjusted organic growth of approx.
-4%, with MAG45 delivering positive adjusted
organic growth of more than 8% (see page
140).
Our assessment is that we will maintain market
share within Installation and Industry.
Gross profit
Gross profit margin amounted to 22.4% (23.6%),
By way of comparison, one-off price effects in Q4
2022 improved the underlying gross profit margin
by approx. 1.9 percentage points while one-off
price effects were negligible in Q4 2023.
The gross profit margin for Climate & Energy
products remained substantially below that for last
year.
Freight costs were lower than normal which,
combined with a strong performance from year-
end activities, increased the gross profit margin.
External operating costs
and staff costs
External operating costs and staff costs
amounted 16.3% (14.5%) of revenue.
Several measures were initiated in 2023,
including cost containment, process
Gross profit margin adj. for
one-off effects*
%
EBITDAadj. for one-off
price effects*
DKKm
Q2Q1
Q3 Q4
2022
2023
246
255
222
204
236
187
256
195
Q2Q1
Q3 Q4
2022
22.5
22.1
22.4
22.6
21.6
21.5
22.1
21.7
2023
*Price effects: Price increases above normal level
related to goods on stock
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
139
improvements and staff reduction, to reduce
the impact of cost inflation. These initiatives
became effective in Q2 and despite the impact
of inflation, costs declined in Q4 compared to
Q4 2022.
Loss on trade receivables
We conduct efficient credit management,
including in the currently unpredictable market
conditions. As a result, our loss on trade
receivables decreased to DKK 2m (DKK 6m).
EBITDA
EBITDA of DKK 190m (DKK 326m) was on par
with expectations. When adjusted for one-off
price effects in Q4 2022, the underlying EBITDA
margin amounted to 6.2% (6.9%).
The results from the individual markets are given
on pages 144-145.
Depreciation and write-down
Depreciation and write-down on property, plant
and equipment increased to DKK 59m (DKK 52m).
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.
Financials
Net financials amounted to DKK -29m (DKK
-31m) and were affected by increased debt and
interest rates.
Earnings before tax
Earnings before tax amounted to DKK 85m
(DKK 223m).
Income tax
Income tax amounted to DKK 30m (DKK 54m).
Net profit
Net profit amounted to DKK 55m (DKK 169m).
Cash flows
Net working capital calculated as an average of
the previous four quarters amounted to 16.8%
(14.5%) of revenue. Net working capital at the
end of 2023 decreased to 14.6% (15.9%).
Cash flow from operating activities totalled DKK
486m (DKK 242m).
We succeeded in decreasing inventories with
inventory changes having a cash flow impact of
DKK 171m (DKK -67m)
Changes in receivables had an impact of DKK
298m (DKK 177m) on cash flow mainly due to a
lower growth level in December 2023 compared
to December 2022.
Changes in non-interest-bearing liabilities had a
cash flow impact of DKK -129m (DKK -84m).
Total cash flow from investing activities
amounted to DKK -87m (DKK -38m). DKK -22m
related to the acquisition of an additional 677
hectares of land in Latvia.
Cash flow from financing activities amounted
to DKK -199m (DKK -152m), mainly due to a
change in current interest-bearing liabilities.
Consequently, total cash flow amounted to DKK
200m (DKK 52m).
Net interest-bearing liabilities were up at DKK
1,157m (DKK 1,074m).
By the end of 2023, gearing was 1.3 (0.9) times
EBITDA. Our gearing target was 1.5-3.0 times
EBITDA. The Board of Directors assesses the
capital structure in relation to our target and
capital requirements on an ongoing basis.
At the end of 2023, Solar had undrawn credit
facilities of DKK 955m (DKK 710m).
Invested capital
Invested capital for the Solar Group totalled
DKK 3,120m (DKK 2,978m). ROIC amounted to
13.2% (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.
Financial review - continued
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
140
Market developments had a negative
impact on all our main segments
Installation
Our Installation segment covers the installation of
electrical, heating and plumbing products.
Installation revenue for Q4 amounted to DKK
1,764m (DKK 2,067m), which corresponds to
overall adjusted organic growth of around -11%
(6%) related to the electrical as well as the
heating and plumbing business. All main markets
saw negative growth.
Segment profit amounted to DKK 173m (DKK
270m), which corresponds to a segment profit
margin of 9.8% (13.1%).
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 Q4 amounted to DKK
1,096m (DKK 1,166m). This corresponds to overall
adjusted organic growth of around -4% (13%).
MAG45 saw positive growth while main markets
posted negative growth.
Segment profit amounted to DKK 186m (DKK
220m). This corresponds to a segment profit
margin of 17.0% (18.9%).
Trade
Our Trade segment covers special sales and other
small areas. It also includes Solar Polaris and
Højager Belysning.
Revenue from Trade for Q4 amounted to DKK
300m (DKK 451m), which corresponds to overall
adjusted organic growth of around -30% (50%).
Especially Solar Nederland saw significant negative
growth affected by loss of a major customer and by
the fact that revenue in Q4 2022 was exceptional
as supply chain issues eased and sale of PV
reached its peak. Solar Danmark, and Solar Sverige
posted positive growth. Segment profit amounted
to DKK 42m (DKK 58m), which corresponds to a
segment profit margin of 14.0% (12.9%).
Segment profit includes items that are directly
attributable to the individual segment and
items that can be reliably allocated to the
individual segment.
Segment profit does not include non-allocated
costs of DKK 211m (DKK 222m) in Q4, which
cover income and costs related to joint group
functions and to costs that cannot be reliably
allocated to the individual segment.
Detailed segment information is given on page
144.
Installation
Industry
Trade
173
186
42
Installation
Industry
Trade
1,764
1,096
300
Q4
2023
Q4
2023
Installation
Industry
Trade
173
186
42
Installation
Industry
Trade
1,764
1,096
300
Q4
2023
Q4
2023
Revenue Segment profit Segment margin %
DKK million 2023 2022 2023 2022 2023 2022
Installation 1,764 2,067 173 270 9.8 13.1
Industry 1,096 1,166 186 220 17.0 18.9
Trade 300 451 42 58 14.0 12.9
Solar Group 3,160 3,684 401 548 12.7 14.9
Segment revenue
DKKm
Segment profit
DKKm
Financial review - continued
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
141
Q4
DKK million 2023 2022
Revenue 3,160 3,684
Cost of sales -2,451 -2,815
Gross profit 709 869
Other operating income and costs -1 -1
External operating costs -101 -110
Staff costs -415 -426
Loss on trade receivables -2 -6
Earnings before interest, tax, depreciation and amortisation (EBITDA) 190 326
Depreciation and write-down on property, plant and equipment -59 -52
Earnings before interest, tax and amortisation (EBITA) 131 274
Amortisation and impairment of intangible assets -17 -20
Earnings before interest and tax (EBIT) 114 254
Share of net profit from associates 0 0
Financial income 22 16
Financial expenses -51 -47
Earnings before tax (EBT) 85 223
Income tax -30 -54
Net profit for the period 55 169
Earnings in DKK per share outstanding (EPS) 7.39 23.14
Diluted earnings in DKK per share outstanding (EPS-D) 7.37 23.07
Attributable to:
Shareholders of Solar A/S 54 169
Non-controlling interests 1 0
Net profit for the period 55 169
Statement of comprehensive income
Q4
DKK million 2023 2022
Net profit for the period 55 169
Other income and costs recognised:
Items that can be reclassified for the income statement
Foreign currency translation adjustment of foreign subsidiaries 23 -3
Fair value adjustment of hedging instruments before tax -8 1
Tax on fair value adjustments of hedging instruments 2 0
Other income and costs recognised after tax 17 -2
Total comprehensive income for the period 72 167
Attributable to:
Shareholders of Solar A/S 71 167
Non-controlling interests 1 0
Total comprehensive income for the period 72 167
Income statement Other comprehensive income
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
142
31.12
DKK million 2023 2022
Assets
Intangible assets 348 173
Property, plant and equipment 1,066 963
Right-of-use assets 440 383
Deferred tax assets 7 9
Investments in associates 4 4
Other non-current assets 28 32
Non-current assets 1,893 1,564
Inventories 2,029 2,248
Trade receivables 1,648 1,859
Income tax receivable 25 13
Other receivables 17 9
Prepayments 59 42
Cash at bank and in hand 441 166
Current assets 4,219 4,337
Total assets 6,112 5,901
31.12
DKK million 2023 2022
Equity and liabilities
Share capital 736 736
Reserves -198 -181
Retained earnings 1,043 1,047
Proposed dividend for the financial year 219 329
Equity attributable to shareholders of Solar A/S 1,932 1,931
Non-controlling interests 50 0
Total equity 1,982 1,931
Interest-bearing liabilities 434 293
Lease liabilities 320 274
Provision for deferred tax 143 133
Other provisions 11 9
Non-current liabilities 908 709
Interest-bearing liabilities 714 556
Lease liabilities 130 117
Trade payables 1,770 1,902
Income tax payable 54 63
Other payables 520 604
Prepayments 13 2
Other provisions 21 17
Current liabilities 3,222 3,261
Liabilities 4,130 3,970
Total equity and liabilities 6,112 5,901
Balance sheet
Consolidated
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
143
Q4
DKK million 2023 2022
Net profit for the period from continuing operations 55 169
Depreciation, write-down and amortisation 76 72
Changes to provisions and other adjustments 8 0
Financials, net 29 31
Income tax 30 54
Financial income, received 15 6
Financial expenses, settled -37 -20
Income tax, settled -30 -96
Cash flow before working capital changes 146 216
Working capital changes
Inventory changes 171 -67
Receivables changes 298 177
Non-interest-bearing liabilities changes -129 -84
Cash flow from operating activities 486 242
Investing activities
Purchase of intangible assets -31 -17
Purchase of property, plant and equipment -34 -22
Acquisition of subsidaries and activities -22 0
Other financial investments 0 1
Cash flow from investing activities -87 -38
Cash flow statement
Q4
DKK million 2023 2022
Financing activities
Repayment of non-current, interest-bearing debt -2 -6
Raising of non-current interest-bearing liabilities 0 185
Change in current interest-bearing debt -160 -301
Instalment on lease liabilities -37 -30
Cash flow from financing activities -199 -152
Total cash flow 200 52
Cash at bank and in hand at the beginning of period 241 114
Cash at bank and in hand at the end of period 441 166
Consolidated
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
144
Segment information
Income statement (DKK million) Installation Industry Trade Total
Q4 2023
Revenue 1,764 1,096 300 3,160
Cost of sales -1,406 -809 -236 -2,451
Gross profit 358 287 64 709
Direct costs -69 -44 -9 -122
Earnings before indirect costs 289 243 55 587
Indirect costs -116 -57 -13 -186
Segment profit 173 186 42 401
Non-allocated costs -211
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 190
Depreciation and amortisation -76
Earnings before interst and tax (EBIT) 114
Financials, net including share of net profit from associates
and impairment on associates -29
Earnings before tax (EBT) 85
Income statement (DKK million) Installation Industry Trade Total
Q4 2022
Revenue 2,067 1,166 451 3,684
Cost of sales -1,599 -852 -364 -2,815
Gross profit 468 314 87 869
Direct costs -69 -35 -10 -114
Earnings before indirect costs 399 279 77 755
Indirect costs -129 -59 -19 -207
Segment profit 270 220 58 548
Non-allocated costs -222
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 326
Depreciation and amortisation -72
Earnings before interst and tax (EBIT) 254
Financials, net including share of net profit from associates
and impairment on associates -31
Earnings before tax (EBT) 223
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 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. Assets and liabilities are not included in segment
reporting.
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Financial Statements
Solar A/S - Annual Report 2023
Contents
145
Q4
DKK million Revenue
Adjusted
organic growth EBITDA
EBITDA
margin
Non-current
assets
2023
Denmark 1,020 -9.2 97 9.5 899
Sweden 599 -9.6 35 5.8 214
Norway 464 -13.8 25 5.4 225
The Netherlands 732 -18.4 20 2.7 421
Poland 103 -5.6 2 1.9 48
Other markets 242 8.1 11 4.5 86
Solar Group 3,160 -11.1 190 6.0 1,893
Q4
DKK million Revenue
Adjusted
organic growth EBITDA
EBITDA
margin
Non-current
assets
2022
Denmark 1,132 8.3 117 10.3 729
Sweden 703 4.1 59 8.4 192
Norway 613 23.4 58 9.5 220
The Netherlands 908 18.4 70 7.7 333
Poland 101 -13.9 4 4.0 36
Other markets 227 21.1 18 7.9 54
Solar Group 3,684 12.0 326 8.8 1,564
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 companies overview
available on page 127.
The below allocation has been made based on the products’ place of sale.
– continued
Segment information
Consolidated financial statements
Separate financial statements
Group companies overview
Statements and reports
Q4 2023
Quarterly figures
Financial review
Statement of comprehensive income
Balance sheet
Cash flow statement
Segment information
Tel. +45 79 30 00 00
CVR no. 15908416
LEI 21380031XTLI9X5MTY92
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