Q1 2023
Report
Solar A/S
CVR no. 15 90 84 16
We are a leading
European sourcing and
Who we are
Installation Industry Trade
Denmark
Sweden
Norway
Poland
Other
1
33
16
4
3
%
%
%
%
%
%
Groups
Brands
Share of 2022 revenue
Share of 2022 revenue
ProductsSegments
Markets
The Netherlands
24
20
1) Including eliminations
Share of 2022 revenue
58
%
33
%
9
%
Electrical
Concepts
Heating & Plumbing
Other brands
Climate & Energy
73
%
23
%
17
%
77
%
10
%
2Solar A/S
Q1 2023
Our purpose
We improve construction,
building operation and industry
processes with a commitment to
sustainability and productivity.
For our customers. With our
partners. For a better world.
Contents
Management review
Financial highlights 4
Business update 5
Financial review 7
Our segments 9
Guidance 2023 10
Shareholder information 11
Consolidated Financial statements Q1
Statement of comprehensive income 13
Balance sheet 14
Cash flow statement 15
Statement of changes in equity 16
Notes 18
Section 1 – Basis for preparation 18
Section 2 – Income statement 20
Section 3 – Invested capital 23
Q1 Quarterly information 25
Statements 29
Investing in
Climate & Energy
Partnership makes
the difference
With our acquisition of ThermoNova,
we have established an even stronger
position in the industry segment and
underpinned the support we offer to our
many installation customers specialising
in green solutions
We’ve embarked on this partnership
to have the opportunity to develop
ThermoNova and eventually enter
new markets outside Denmark
Page 5
Page 6
3Solar A/S
Q1 2023
Q1 Financial messages
• Adjusted organic growth at group level amounted to 6.7%
(13.6%). As expected Q1 saw declining growth.
• Strong development in gross profit margin compensated
for increased costs.
• EBITDA amounted to DKK 280m (DKK 281m) which was on
par with our expectations.
• Our 2023 EBITDA guidance of DKK 900m is unchanged
despite currency headwinds.
Financial
highlights
Q1 Year
Consolidated (DKK million) 2023 2022 2022
Revenue 3,656 3,462 13,863
Earnings before interest, tax, depreciation and amortisation (EBITDA)
280 281 1,175
Earnings before interest, tax and amortisation (EBITA) 226 236 978
Earnings before interest and tax (EBIT) 209 222 909
Earnings before tax (EBT) 189 217 858
Net profit for the period 145 168 660
Balance sheet total 6,614 5,575 5,901
Total equity 1,759 1,808 1,931
Interest-bearing liabilities, net 1,530 617 1,074
Cash flow from operating activities 101 -202 16
Net investments in property, plant and equipment -30 -59 -167
Employees
Number of employees (FTE's), end of period 3,085 2,996 3,043
Average number of employees (FTE's) 3,042 2,932 3,019
Financial ratios (%, unless otherwise stated)
Adjusted organic growth 6.7 13.6 12.9
Gross profit margin 23.2 23.1 23.4
EBITDA margin 7.7 8.1 8.5
EBITA margin 6.2 6.8 7.1
Net working capital (end of period NWC)/revenue (LTM) 16.7 14.0 15.9
Gearing (net interest-bearing liabilities/EBITDA), no. of times 1.3 0.6 0.9
Return on equity (ROE) 35.0 31.9 34.0
Equity ratio 25.9 32.4 32.7
Share ratios (DKK)
Earnings per share outstanding (EPS) 19.85 23.00 90.37
In all material aspects financial ratios are calculated in accordance with the Danish Finance Society’s
“Recommendations & Financial Ratios”.
4Solar A/S
Q1 2023
Investing in Climate & Energy
We continue to challenge our customers in accelerat-
ing the green transition. With our acquisition of
ThermoNova, we have established an even stronger
position in the industry segment and underpinned the
support we offer to our many installation customers
specialising in green solutions.
Focus on sustainability
Solar offers sustainable solutions across our entire
product assortment among others solar panels, heat
pumps, lighting, EV chargers and ventilation.
ThermoNova adds an additional solution to our Climate
& Energy assortment. We are now able to provide our
customers with energy efficient, high-capacity heat
pumps for industrial buildings supported by
ThermoNova's strong expertise.
A growing market
For the past two years, our Climate & Energy focus
area has posted average growth of 40%, achieving
10% of sales in 2022 with solar panels and heat
pumps as the main growth drivers.
With the addition of ThermoNova, we expect an
increase in demand from our industry customers which
mirrors developments in the private market – a market
that has been characterised by a strong demand for
energy-efficient solutions to replace heat sources that
are subject to high price volatility.
Moreover, the opportunity within industry will be driven
by the general ambition to reduce emissions and will
be further enhanced by the expected introduction of a
CO
2
tax in 2025.
In order to meet the future demand, we are expanding
the ThermoNova production significantly. At the time
of acquisition, we subscribed newly issued shares for a
total value of DKK 50m in ThermoNova, which will
enable an expansion of the production facilities at least
fivefold.
Our primary focus will be serving customers in
Denmark. As production capacity increases, we will
add additional Solar markets.
ThermoNova adds
an additional solution
to our Climate &
Energy assortment,
and we are now able
to provide our
customers with
energy efficient,
high-capacity heat
pumps
“
Our Climate & Energy
products continue to
deliver solutions that
drive the green transition.
“
ThermoNova adds an additional
solution to our Climate & Energy
assortment, and we are now able
to provide our customers with
energy efficient, high-capacity
heat pumps for industrial buildings.
Business update
5Solar A/S
Q1 2023
Partnership
makes the
difference
Business update
About ThermoNova
ThermoNova was founded in 2016 by Mads Hougaard
and Steen Fristrup and specialises in heat pump
technology within high-performance water-water,
air-water and air-air heat pumps.
ThermoNova is strongly focused on sustainability and
aims to be the preferred supplier and sounding board
for all types of projects that include heat pumps for
heat in buildings, smaller district heating networks and
processing coolers with heat recovery from 20-1000
kW.
ThermoNova’s solutions differ from others in their use
of natural propane refrigerant. The technology is future
proof and typically provides a higher degree of
efficiency and low CO
2
emissions.
We’ve embarked on this partnership to have the opportunity to develop ThermoNova
and eventually enter new markets outside Denmark.
We, along with Solar, agree that our product range has great potential and that we can
best unleash this potential by engaging in an even closer collaboration than the one
we’ve enjoyed so far. We’ve chosen Solar because we believe that they’re one of the
strongest players in the market for climate and energy solutions. Drawing on a high
level of expertise, Solar is committed to finding the best solutions for its customers.
We think we’re a great fit and are entering this partnership with high expectations.
Mads Hougaard,
CEO of ThermoNova
Mads Hougaard and Steen Fristrup,
Founders of ThermoNova
6Solar A/S
Q1 2023
*Price effects: Price increases above normal level related to goods on stock.
Q1 EBITDA
amounted to
DKK 280m
Q1 2023
Revenue
Revenue increased to DKK 3.7bn (DKK 3.5bn).
Adjusted organic growth at group level amounted to
6.7% (13.6%) with Solar Norge and Solar Nederland
posting double-digit growth rates. However, as
expected Q1 saw declining growth.
Climate & Energy, one of our strategic focus areas,
delivered very strong growth rates, corresponding to
revenue of almost DKK 400m. This was despite a
substantial slowdown in Denmark in March, which we
expect to be temporary.
The Industry segment posted 11% in adjusted organic
growth, while the Installation and Trade segments
posted adjusted organic growth of 4% and 9%
respectively, see page 9.
Gross profit
Gross profit margin increased to 23.2% (23.1%)
which, combined with revenue growth, resulted in a
gross profit increase of DKK 47m. Adjusted for one-off
price effects the underlying gross profit margin
improved by 0.4 percentage points.
External operating costs and staff costs
As expected, cost and wage inflation had a negative
impact on cost development. To reduce the impact of
cost inflation we introduced several initiatives,
including cost containment, process improvements and
staff reductions.
In total, external operating costs and staff costs
increased to 15.3% (14.8%) of revenue.
EBITDA
EBITDA amounted to DKK 280m (DKK 281m)
corresponding to an EBITDA margin of 7.7% (8.1%)
which was on par with our expectations. EBITDA level
was supported by improvements across all our
strategic focus areas.
The results of the individual markets are given on
page 22.
Depreciation and write-down
Depreciation and write-down on property, plant and
equipment increased to DKK 54m (DKK 45m). 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 -20m (DKK -5m) and
were negatively affected by increased debt and
interest rate.
Earnings before tax
Earnings before tax decreased to DKK 189m (DKK
217m).
Net profit
Net profit amounted to DKK 145m (DKK 168m).
Cash flow
Net working capital calculated as an average of the
previous four quarters amounted to 15.3% (11.5%) of
revenue. Net working capital at the end of Q1 2023
amounted to 16.7% (14.0%) equal to the level we saw
in Q4 2022.
Q1 EBITDA of DKK 280m
(DKK 281m) was on par with
our expectations. Q1 adjusted
organic growth amounted to
6.7% (13.6%) while gross
profit margin increased to
23.2% (23.1%).
(Figures in brackets are figures from the
corresponding period in 2022)
Gross profit margin
Percentage
DKKm
EBITDA adj. for one-off price effects*
Q1
23.2
23.1
22.9
24.1
23.6
Q2 Q3 Q4
25
24
23
22
2023
2022
Q1 Q2 Q3 Q4
350
300
250
200
150
100
50
0
2023
2022
246
222
236
256
255
Financial review
7Solar A/S
Q1 2023
Cash flow from operating activities totalled DKK 101m
(DKK -202m).
Changes in inventories had an impact of DKK -122m
(DKK 14m). The inventory increase is mainly due to the
strong growth within our strategic focus area Climate
& Energy.
Changes in receivables had a DKK -304m (DKK -531m)
impact on cash flow affected by a lower growth level in
March 2023, while changes in non-interest-bearing
liabilities affected cash flow by DKK 306m (DKK 69m).
Total cash flow from investing activities amounted to
DKK -162m (DKK -99m). In Q1 2023, the acquisition of
ThermoNova, see note 3.1, had an impact of DKK
-111m. In Q1 2022, the investment in the expansion and
upgrade of our central warehouse in Denmark affected
cash flow by DKK -51m, while the acquisition of
Højager Belysning A/S had an impact of DKK -24m.
Cash flow from financing activities amounted to DKK
171m (DKK -37m), mainly affected by dividend
distributions of DKK -329m (DKK -329m) and by the
change in current interest-bearing debt of DKK 535m
(DKK 323m).
Consequently, total cash flow amounted to DKK 110m
(DKK -338m).
Net interest-bearing liabilities amounted to DKK
1,530m (DKK 617m).
As at 31 March 2023, gearing was 1.3 (0.6) times
EBITDA. Calculated as an average, our gearing was 1.1
(0.3) times EBITDA. Our gearing target is 1.5-3.0 times
EBITDA.
As at 31 March 2023, Solar had undrawn credit
facilities of DKK 715m (DKK 179m).
Invested capital
Invested capital for the Solar Group totalled DKK
3,263m (DKK 2,377m). ROIC amounted to 23.2%
(26.5%).
Activities with a Solar equity interest of less than 50%
and activities attributable to non-controlling interests
are not included in the ROIC calculation. Invested
capital only includes operating assets and liabilities.
Key risks and mitigation
The commercial and financial risks relating to our
activities are detailed in Solar’s 2022 Annual Report.
No additional material risks have been identified but
we continue to monitor the situation closely.
Financial review - continued
8Solar A/S
Q1 2023
Our Industry segment delivered
double-digit growth in Q1
Installation
Our Installation segment covers the installation of
electrical, heating and plumbing products.
In Q1, Installation revenue increased to DKK 2,083m
(DKK 2,035m) which corresponds to overall adjusted
organic growth of around 4% (9%) related primarily to
the electrical business. Except for Solar Danmark, all
main markets saw growth in the segment with Solar
Norge making a significant contribution.
Segment profit increased to DKK 260m (DKK 256m)
which corresponds to a segment profit margin of
12.5% (12.6%).
Industry
This segment covers the industry, offshore and marine
industries as well as utilities and infrastructure.
Industry also includes MAG45 and ThermoNova.
In Q1, Industry revenue increased to DKK 1,227m (DKK
1,120m). This corresponds to overall adjusted organic
growth of around 11% (18%) related primarily to MRO,
Marine & Offshore and OEM. Solar Sverige, Solar
Norge and MAG45 posted double-digit growth.
Segment profit increased to DKK 219m (DKK 198m).
This corresponds to a segment profit margin of 17.8%
(17.7%).
Trade
Our Trade segment covers special sales and other
small areas. It also includes Solar Polaris and Højager
Belysning.
In Q1, revenue from Trade amounted to DKK 346m
(DKK 307m) which corresponds to overall adjusted
organic growth of around 9% (35%) primarily
supported by strong growth in Solar Nederland.
Segment profit amounted to DKK 49m (DKK 40m)
which corresponds to a segment profit margin of
14.2% (13.0%).
Segment profit includes any items that are
directly attributable to the individual segment
and any items that can be reliably allocated to
the individual segment.
Segment profit does not include non-allocated
costs of DKK 248m (DKK 213m) in Q1, which
cover income and costs related to joint group
functions and to costs which cannot be reliably
allocated to the individual segment.
Detailed segment information is given on
page 21.
Our segments
Segment profit Overview business segmentsSegment revenue
DKKmDKKm
Installation Installation
Industry Industry
Trade Trade
2,083 260
1,227 219
346 49
Q1
Revenue Segment profit Segment margin %
DKK million 2023 2022 2023 2022 2023 2022
Installation
2,083 2,035 260 256 12.5 12.6
Industry 1,227 1,120 219 198 17. 8 17.7
Trade
346 307 49 40 14.2 13.0
Solar Group 3,656 3,462 528 494 14.4 14.3
Q1 2023 Q1 2023
9Solar A/S
Q1 2023
Unchanged EBITDA guidance
of DKK 900m for 2023
General assumptions
Due to the heightened geopolitical and macroeconom-
ic uncertainty (ref. page 28 of the annual report 2022),
our market outlook is characterised by greater
unpredictability, particularly for H2.
As expected, cost and wage inflation increased during
Q1 and we expect this to continue for the remainder of
2023. We have implemented, and will continue to
implement, mitigating measures including cost
containment, process improvements and the necessary
staff reductions to bring the expected impact from cost
and wage inflation well below general price increases.
We expect the global supply chain to continue to
normalise in 2023. Climate & Energy is a strategic
focus area for Solar and a growing market. However,
we still see challenges in the supply side of climate and
energy products.
Over the past few years, we have seen substantial
price increases from our suppliers. In Q1 we saw a
slowdown in price increases as expected. However,
Solar has a proven track record of strong price
management.
Our 2023 guidance does not include any significant
restructuring costs.
Market outlook for Solar segments
Overall, we expect markets to be stagnant or negative
in all countries throughout 2023. This will become
more evident in H2 as the roll-over effect from price
increases in 2022 wears off.
In general, we expect all segments to show weaker
growth in H2 than in H1 2023.
Installation
In 2023, we expect negative growth for the new
construction sector. The green transition will, however,
continue to deliver strong growth rates. We expect the
installation market to be stagnant or negative.
Industry
The guidance assumes that sales to Marine/Offshore
and MRO will continue to grow, albeit at a slower pace,
whereas we expect all other subsegments to be
stagnant or negative.
Overall, we expect the industry market to be stagnant.
Trade
In 2023, we expect minor growth for special sales,
which is the Trade segment's primary activity.
Financial outlook 2023
Revenue guidance
Due to currency headwinds, we decrease our revenue
guidance to DKK 13,500m compared to our previous
guidance of DKK 13,700m, corresponding to an
unchanged adjusted organic growth of approx. 0%.
In the wake of substantial price increases in 2022, the
majority of growth for 2023 is projected to take place
in H1 whereas we expect negative growth in H2.
Adjusted for price increases, mainly roll-over effects
from 2022, we expect negative growth in all main
segments which will only partly be offset by the
expected strong growth within Climate & Energy.
EBITDA guidance
Despite currency headwinds, we expect unchanged
EBITDA of approx. DKK 900m which corresponds to
an EBITDA margin of approx. 6.7%.
In 2022, we saw substantial positive one-off price
effects. We expect this to normalise in 2023, which
means that no major one-off price effects are included
in our guidance.
* Including one-off income of DKK 112m
Guidance 2023
Due to currency headwinds,
we decrease our revenue
guidance to DKK 13,500m
from DKK 13,700m. EBITDA
guidance remains unchanged
at DKK 900m.
EBITDA
DKKm
2019
2020
2021*
2022
One-offs
2022
538
637
911
1,175
-215
* including one-off income of DKK 112m
Inflation
catch-up
Guidance
2023
-60
900
10Solar A/S
Q1 2023
Share and webcast information
Total shareholder return
The total shareholder return on the Solar B share
during the holding period 1 January - 31 March 2023
was -3.4% including the DKK 45.00 ordinary dividend
that was paid out in March 2023.
Audio webcast
The presentation of the Quarterly Report Q1 2023 will
be conducted in English on 2 May 2023 at 11:00 CET.
The presentation will be transmitted as an audio
webcast and will be available at:
Shareholder information
In March, Solar distributed
dividends of DKK 329m,
corresponding to DKK 45.00
per share to our shareholders.
Financial calendar 2023
Quarterly Report Q1 2023
Quarterly Report Q2 2023
Quarterly Report Q3 2023
Shareholders according to section 55
of the Danish Companies Act
Share
Capital
Votes
The Fund of 20th December, Vejen,
Denmark
17.0% 60.5%
Nordea Funds Ltd., Helsinki, Finland 10.4% 5.0%
Shareholders with more than 5% of
shares or votes
The Solar share
www.solar.eu
02
May
10
Aug
02
Nov
A share B share
Shares 900,000 6,460,000
Nominel value (DKK) 100 100
Votes per share 10 1
Treasury shares - 56,813
Stock Exchange -
Nasdaq Copenhagen
Stock Exchange
Ticker symbol Solar B
Share price year-end (DKK) 554 554
Market Cap year-end (DKKm) 499 3.579
11
Solar A/S
Q1 2023
Contents
Q1 Year
DKK million 2023 2022 2022
Revenue 3,656 3,462 13,863
Cost of sales -2,809 -2,662 -10,618
Gross profit 847 800 3,245
Other operating income and costs 1 1 0
External operating costs -119 -96 -386
Staff costs -442 -418 -1,656
Loss on trade receivables -7 -6 -28
Earnings before interest, tax, depreciation and amortisation (EBITDA) 280 281 1,175
Depreciation and write-down on property, plant and equipment -54 -45 -197
Earnings before interest, tax and amortisation (EBITA) 226 236 978
Amortisation and impairment of intangible assets -17 -14 -69
Earnings before interest and tax (EBIT) 209 222 909
Share of net profit from associates 0 0 -1
Financial income 15 10 53
Financial expenses -35 -15 -103
Earnings before tax (EBT) 189 217 858
Income tax -44 -49 -198
Net profit for the period 145 168 660
Attributable to:
Shareholders of Solar A/S 145 168 660
Non-controlling interests 0 0 0
Net profit for the period 145 168 660
Earnings in DKK per share outstanding (EPS) 19.85 23.00 90.37
Diluted earnings in DKK per share outstanding (EPS-D) 19.81 22.95 90.05
Statement of comprehensive income
Q1 Year
DKK million 2023 2022 2022
Net profit for the period 145 168 660
Items that can be reclassified for the income statement
Foreign currency translation adjustment of foreign subsidiaries -36 7 -51
Fair value adjustment of hedging instruments before tax -1 13 36
Tax on fair value adjustments of hedging instruments
Other comprehensive income -37 17 -23
Total comprehensive income for the period
Attributable to:
Shareholders of Solar A/S 108 185 637
Non-controlling interests 0 0 0
Total comprehensive income for the period 108 185 637
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
Income statement Other comprehensive income
13Solar A/S
Q1 2023
Contents
Balance sheet
31.03 31.12
DKK million 2023 2022 2022
Equity and liabilities
Share capital 736 736 736
Reserves -218 -141 -181
Retained earnings 1,192 1,213 1,047
Proposed dividends for the financial year 0 0 329
Equity attributable to shareholders of Solar A/S 1,710 1,808 1,931
Non-controlling interests 49 0 0
Total equity 1,759 1,808 1,931
Interest-bearing liabilities 291 118 293
Lease liabilities 293 206 274
Provision for deferred tax 142 119 133
Other provisions 11 10 9
Non-current liabilities 737 453 709
Interest-bearing liabilities 1,101 335 556
Lease liabilities 121 101 117
Trade payables 2,149 2,100 1,902
Income tax payable 71 46 63
Other payables 651 710 604
Prepayments 4 19 2
Other provisions 21 3 17
Current liabilities 4,118 3,314 3,261
Liabilities 4,855 3,767 3,970
Total equity and liabilities 6,614 5,575 5,901
Consolidated
31.03 31.12
DKK million 2023 2022 2022
Assets
Intangible assets 340 186 173
Property, plant and equipment 963 929 963
Right-of-use assets 407 302 383
Deferred tax asset 9 12 9
Investments in associates 5 4 4
Other non-current assets 32 54 32
Non-current assets 1,756 1,487 1,564
Inventories 2,362 1,849 2,248
Trade receivables 2,134 2,042 1,859
Income tax receivable 24 3 13
Other receivables 11 12 9
Prepayments 51 39 42
Cash at bank and in hand 276 143 166
Current assets 4,858 4,088 4,337
Total assets 6,614 5,575 5,901
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
14Solar A/S
Q1 2023
Contents
Cash flow statement
Q1 Year
DKK million 2023 2022 2022
Investing activities
Purchase of intangible assets -20 -16 -59
Purchase of property, plant and equipment -30 -59 -167
Acquisition of subsidiaries and activities* -111 -24 -24
Acquisition of associates -1 0 0
Other financial investments 0 0 1
Cash flow from investing activities -162 -99 -249
Financing activities
Repayment of non-current interest-bearing debt -2 -2 -12
Raising of non-current interest-bearing liabilities 0 0 185
Change in current interest-bearing debt 535 323 519
Instalment on lease liabilities -33 -29 -116
Dividends paid to shareholders of Solar A/S -329 -329 -658
Cash flow from financing activities 171 -37 -82
Total cash flow 110 -338 -315
Cash at bank and in hand at the beginning of period 166 481 481
Cash at bank and in hand at the end of period 276 143 166
* A minor reclassification has been made in the comparative figures.
Consolidated
Q1 Year
DKK million 2023 2022 2022
Net profit of continuing operations for the period 145 168 660
Depreciation, write-down and amortisation 71 59 266
Changes to provisions and other adjustments -2 -3 -18
Share of net profit from associates 0 0 1
Financials, net 20 6 50
Income tax 44 49 198
Financial income, received 4 3 15
Financial expenses, settled -18 -7 -43
Income tax, settled -43 -29 -155
Cash flow before working capital changes 221 246 974
Working capital changes
Inventory changes -122 14 -433
Receivables changes -304 -531 -394
Non-interest-bearing liabilities changes 306 69 -131
Cash flow from operating activities 101 -202 16
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
15Solar A/S
Q1 2023
Contents
Statement of changes in equity
DKK million
Share
capital
Reserves
for hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Retained
earnings
Proposed
dividends
Equity
attributable to
shareholders
of Solar A/S
Non-
controlling
interests 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 -36 -36 -36
Fair value adjustments of hedging instruments before tax -1 -1 -1
Tax on fair value adjustments 0 0 0
Net income recognised in equity via other comprehensive income
in the statement of comprehensive income
Net profit for the period 145 145 0 145
Comprehensive income 0 -1 -36 145 0 108 0 108
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 March 736 -10 -208 1,192 0 1,710 49 1,759
1. Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
Consolidated
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
16Solar A/S
Q1 2023
Contents
Statement of changes in equity
DKK million
Share
capital
Reserves
for hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Retained
earnings
Proposed
dividends
Equity
attributable to
shareholders
of Solar A/S
Non-
controlling
interests 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 7 7 7
Fair value adjustments of hedging instruments before tax 13 13 13
Tax on fair value adjustments -3 -3 -3
Net income recognised in equity via other comprehensive income
in the statement of comprehensive income
Net profit for the period 168 168 168
Comprehensive income 0 10 7 168 0 185 0 185
Distribution of dividends (DKK 45.00 per share) -329 -329 -329
Transactions with the owners 0 0 0 0 -329 -329 0 -329
Equity as at 31 March 736 -27 -114 1,213 0 1,808 0 1,808
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 Q1
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
Q1 Quarterly information
Statement
– Continued
17Solar A/S
Q1 2023
Contents
Basis for preparation
Section 1
01
Consolidated financial statements Q1
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 Accounting policies
Section 2 – Income statement
Section 3 – Invested capital
Q1 Quarterly information
Statement
18Solar A/S
Q1 2023
Contents
Basis for preparation
01
1.1 Accounting policies
The financial report for Solar A/S has been
prepared in accordance with IAS 34
“Presentation of interim reports” as
approved by the EU and additional Danish
disclosure requirements for quarterly
reports of listed companies.
On 1 March 2023 Solar acquired 51% of
ThermoNova A/S, see note 3.1. Solar
recognises non-controlling interests in an
acquired entity either at fair value or at the
non-controlling interest’s proportionate
share of the acquired entity’s net identifiable
assets. This decision is made on an
acquisition-by-acquisition basis. For the
non-controlling interests in ThermoNova
A/S, Solar decided to recognise the
non-controlling interests at its proportionate
share of the acquired net identifiable assets.
The accounting items of subsidiaries are
included in full in the consolidated financial
statements. Non-controlling interests’ share
in the results and equity of subsidiaries is
included in the Group’s profit/loss and
equity but an allocation is shown separately
in the consolidated income statement,
statement of other comprehensive income,
balance sheet and statement of changes in
equity respectively.
Solar’s segment information is based on the
customers’ affiliation with the segments.
ThemoNova’s revenue and results are
included the operating segment Industry.
Apart from the above-mentioned addition
regarding non-controlling interests and the
effect of new IAS/IFRS standards
implemented during the period, the
accounting policies remain unchanged from
the Annual Report 2022, which contains a
full description of these on pages 50-52 as
well as of relevant, supplementary notes.
In the financial report, income tax has been
calculated on the basis of pre-tax profits at
the expected average tax rate.
New accounting standards
implemented during the period
An additional standard together with
amendments and improvements to existing
standards have become effective in the
period. These changes have no impact on
Solar’s accounting policies.
New accounting standards to be
implemented in coming accounting
periods
New or amended standards issued as at 31
March 2023 and to be implemented in
coming accounting periods are not
expected to have significant impact on
Solar's accounting policies.
Consolidated financial statements Q1
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
1.1 Accounting policies
Section 2 – Income statement
Section 3 – Invested capital
Q1 Quarterly information
Statement
19Solar A/S
Q1 2023
Contents
Income statement
Section 2
02
Consolidated financial statements Q1
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
Section 2 – Income statement
2.1 Segment information
Section 3 – Invested capital
Q1 Quarterly information
Statement
20Solar A/S
Q1 2023
Contents
Income statement
02
2.1 Segment information
Solar’s business segments are Installation, Industry and Trade and are based on the customers’
affiliation with the segments.
Installation covers installation of electrical, and heating and plumbing products, while Industry
covers industry, offshore and marine, and utility and infrastructure. Trade covers special sales and
other small areas. The three main segments have been identified without aggregation of operating
segments. The business of ThermoNova A/S, that was acquired as at 1 March 2023, see note 3.1, is
included in full in the business segment Industry.
DKK million Installation Industry Trade Total
Q1 2023
Revenue 2,083 1,227 346 3,656
Cost of sales -1,625 -911 -273 -2,809
Gross profit 458 316 73 847
Direct costs -70 -36 -9 -115
Earnings before indirect costs 388 280 64 732
Indirect costs -128 -61 -15 -204
Segment profit 260 219 49 528
Non-allocated costs -248
Earnings before interest, tax, depreciation and amortisation (EBITDA) 280
Depreciation and amortisation -71
Earnings before interest and tax (EBIT) 209
Financials, net incl. share of net profit from associates
and impairment on associates -20
Earnings before tax (EBT) 189
DKK million Installation Industry Trade Total
Q1 2022
Revenue 2,035 1,120 307 3,462
Cost of sales -1,585 -832 -245 -2,662
Gross profit 450 288 62 800
Direct costs -67 -32 -9 -108
Earnings before indirect costs 383 256 53 692
Indirect costs -127 -58 -13 -198
Segment profit 256 198 40 494
Non-allocated costs -213
Earnings before interest, tax, depreciation and amortisation (EBITDA) 281
Depreciation and amortisation -59
Earnings before interest and tax (EBIT) 222
Financials, net incl. share of net profit from associates
and impairment on associates -5
Earnings before tax (EBT) 217
Segment income and costs include any items that are directly attributable to the individual segment
and any items that can be reliably allocated to the individual segment.
Non-allocated costs refer to income and costs related to joint group functions and costs, which can
not be reliably allocated to the individual segment.
Assets and liabilities are not included in segment reporting.
Consolidated financial statements Q1
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
Section 2 – Income statement
2.1 Segment information
Section 3 – Invested capital
Q1 Quarterly information
Statement
21Solar A/S
Q1 2023
Contents
Income statement
02
DKK million Revenue
Adjusted
organic growth EBITDA
EBITDA
margin
Non-current
assets
Q1 2023
Denmark 1,135 -1.2 99 8.7 895
Sweden 682 4.4 54 7. 9 215
Norway 578 17.1 41 7.1 207
The Netherlands 924 11.9 68 7. 4 339
Poland 94 -17. 8 2 2.1 45
Other markets 243 23.9 16 6.6 54
Solar Group 3,656 6.7 280 7.7 1,756
DKK million Revenue
Adjusted
organic growth EBITDA
EBITDA
margin
Non-current
assets
Q1 2022
Denmark 1,117 12.7 108 9.7 696
Sweden 687 12.7 53 7.7 191
Norway 537 14.7 47 8.8 180
The Netherlands 813 10.6 56 6.9 335
Poland 115 47.4 7 6.1 26
Other markets 193 16.3 10 5.2 58
Solar Group 3,462 13.6 281 8.1 1,487
Geographical information
Solar A/S primarily operates on the Danish, Swedish, Norwegian and Dutch markets and to a lesser
extent on the Polish market. In the below table, Other markets includes MAG45 and also covers
the remaining markets, which can be seen in the group companies overview available on page 128
of Annual Report 2022 or on www.solar.eu. The below allocation has been made based on the
products’ place of sale.
2.1 Segment information - continued
Consolidated financial statements Q1
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
Section 2 – Income statement
2.1 Segment information
Section 3 – Invested capital
Q1 Quarterly information
Statement
22Solar A/S
Q1 2023
Contents
Invested capital
Section 3
03
Consolidated financial statements Q1
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
Section 2 – Income statement
Section 3 – Invested capital
3.1 Acquisition of subsidiaries
Q1 Quarterly information
Statement
23Solar A/S
Q1 2023
Contents
Invested capital
03
3.1 Acquisition of subsidiaries
Q1 2023
On 1 March 2023, Solar A/S acquired 42.5%
of the shares of ThermoNova A/S, a Danish
manufacturer of high-capacity heat pumps.
The acquisition price is made up of a fixed
amount of DKK 111m and a variable amount,
which will total DKK 10m at the most.
The variable amount is related to the required
expansion of the production capacity.
Simultaneous Solar A/S subscribed new issued
shares for DKK 50m in ThermoNova A/S. In total
Solar A/S owns 51% of the shares.
The acquisition had an insignificant impact on
Solar's Q1 2023 revenue and EBITDA and is
expected to have an insignificant impact on
Solar's full year 2023 revenue and EBITDA.
Fair value at the date of acquisition (DKK million)
Customer-related intangible assets 42
Property, plant and equipment 1
Inventories 19
Trade receivables 12
Cash 53
Provision for deferred tax -9
Other non-current liabilities, non-interest-bearing -1
Current liabilities, non-interest-bearing -16
Net assets 101
Non-controlling interest of acquired new assets -49
Acquired net assets 52
Goodwill 122
Total consideration 174
Cash acquired -53
Deferred consideration -10
Net cash used in acquistion 111
If the acquisition had occurred on 1 January
2023 the impact on Solar’s full year 2023
revenue and EBITDA would have been
insignificant as well.
Transaction costs related to the acquisition
totalled DKK 5m. These have been recognised
as part of external operating costs in the income
statement.
The fair value of the customer related assets
is based on the multi-period excess earnings-
method (MEEM). The fair value has been
calculated as the net present value (NPV) of the
future net cash-flow derived from the sale to the
customers minus a fair return on the assets used
to generate the sale. An interest rate of 10%
has been applied.
The main factors leading to the recognition of
goodwill are:
• the presence of certain intangible assets,
such as the assembled workforce and
knowhow, which do not qualify for separate
recognition
• expected synergies within sale which result in
Solar being prepared to pay a premium.
The goodwill recognised will not be deductible
for tax purposes.
For the non-controlling interests in ThermoNova
A/S, the group decided to recognise the non-
controlling interests at its proportionate share
of the acquired net identifiable assets. See page
19 for Solar’s accounting policies for business
combinations.
Q1 2022
On 1 March 2022, Solar acquired the shares in
the lighting company Højager Belysning A/S in
Denmark.
Consolidated financial statements Q1
Statement of comprehensive income
Balance sheet
Cash flow statement
Statement of changes in equity
Notes
Section 1 – Basis for preparation
Section 2 – Income statement
Section 3 – Invested capital
3.1 Acquisition of subsidiaries
Q1 Quarterly information
Statement
24Solar A/S
Q1 2023
Contents
Quarterly figures
Consolidated
Q1 Q2 Q3 Q4
Income statement (DKK million) 2023 2022 2022 2021 2022 2021 2022 2021
Revenue
3,656 3,462 3,451 3,098 3,266 2,872 3,684 3,380
Earnings before interest, tax, depreciation and amortisation (EBITDA)
280 281 267 211 301 237 326 259
Earnings before interest, tax and amortisation (EBITA)
226 236 218 166 250 192 274 212
Earnings before interest and tax (EBIT)
209 222 202 153 231 179 254 197
Financials, net
-20 -5 -8 3 -6 -20 -31 -11
Earnings before tax (EBT)
189 217 193 156 225 159 223 184
Net profit or loss for the quarter
145 168 147 148 176 124 169 159
Balance sheet (DKK million)
Non-current assets
1,756 1,487 1,557 1,385 1,545 1,393 1,564 1,415
Current assets
4,858 4,088 4,122 3,569 4,392 3,724 4,337 3,890
Balance sheet total
6,614 5,575 5,679 4,954 5,937 5,117 5,901 5,305
Total equity
1,759 1,808 1,600 1,661 1,764 1,784 1,931 1,952
Non-current liabilities
737 453 506 457 491 446 709 435
Current liabilities
4,118 3,314 3,573 2,836 3,682 2,887 3,261 2,918
Interest-bearing liabilities, net
1,530 617 1,122 329 1,205 450 1,074 -37
Invested capital
3,263 2,377 2,675 1,921 2,923 2,185 2,978 1,866
Net working capital, end of period
2,347 1,791 1,856 1,280 2,186 1,568 2,205 1,259
Net working capital, average
2,149 1,475 1,619 1,274 1,773 1,325 2,010 1,363
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
26Solar A/S
Q1 2023
Contents
Quarterly figures
Q1 Q2 Q3 Q4
Cash flows (DKK million) 2023 2022 2022 2021 2022 2021 2022 2021
Cash flow from operating activities
101 -202 -10 351 -14 -38 242 558
Cash flow from investing activities
-162 -99 -75 -63 -37 -65 -38 -53
Cash flow from financing activities
171 -37 41 -271 66 77 -152 -250
Net investments in intangible assets
-20 -16 -14 -15 -12 -14 -17 -16
Net investments in property, plant and equipment
-30 -59 -61 -47 -25 -51 -22 -35
Acquisition and divestment of subsidiaries and operations, net
-111 -24 0 0 0 0 0 0
Financial ratios (% unless otherwise stated)
Revenue growth
5.6 15.2 11.4 12.9 13.7 9.7 9.0 10.6
Adjusted organic growth
6.7 13.6 12.4 8.6 14.0 8.8 12.0 7.1
Gross profit margin
23.2 23.1 22.9 22.0 24.1 23.0 23.6 22.9
EBITDA margin
7.7 8.1 7.7 6.8 9.2 8.3 8.8 7.7
EBITA margin
6.2 6.8 6.3 5.4 7.7 6.7 7. 4 6.3
EBIT margin
5.7 6.4 5.9 4.9 7.1 6.2 6.9 5.8
Net working capital (end of period NWC)/revenue (LTM)
16.7 14.0 14.1 10.9 16.1 13.0 15.9 10.2
Net working capital (average NWC )/revenue (LTM)
15.3 11.5 12.3 10.8 13.1 11.0 14.5 11.0
Gearing (interest-bearing liabilities,net/EBITDA), no. of times
1.3 0.6 1.1 0.4 1.1 0.5 0.9 0.0
Return on equity (ROE)
35.0 31.9 35.1 18.2 38.6 19.7 35.7 28.4
Return on invested capital (ROIC)
23.2 26.5 25.5 21.0 25.3 23.6 25.5 24.6
Enterprise value/earnings before interest, tax and amortisation (EV/EBITA)
5.7 7.5 6.3 7.0 5.2 7.6 5.7 7. 8
Equity ratio
25.9 32.4 28.2 33.5 29.7 34.9 32.7 36.8
Consolidated – Continued
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
27Solar A/S
Q1 2023
Contents
Quarterly figures
Consolidated – Continued
Q1 Q2 Q3 Q4
Share ratios (DKK unless otherwise stated) 2023 2022 2022 2021 2022 2021 2022 2021
Earnings per share outstanding (EPS)
19.85 23.00 20.13 20.27 24.10 16.98 23.14 21.77
Intrinsic value per share outstanding
234.14 247. 56 219.08 227. 4 3 241.54 244.28 264.41 267. 2 8
Share price
553.54 749 .19 597.09 541.47 492.34 632.86 622.62 795.05
Share price/intrinsic value
2.36 3.03 2.73 2.38 2.04 2.59 2.35 2.97
Employees
Number of employees (FTE's), end of period
3,085 2,996 2,995 2,899 3,042 2,897 3,043 2,936
Average number of employees (FTE's)
Definitions
Adjusted organic growth Revenue growth adjusted for enterprises acquired and divested and any exchange rate changes. In addition adjustments have been made for number of working days.
Net working capital Inventories and trade receivables less trade payables.
ROIC Return on invested capital calculated on the basis of operating profit or loss less tax calculated using the effective tax rate.
In all material aspects financial ratios are calculated in accordance with the Danish Finance Society’s “Recommendations & Financial Ratios”.
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
28Solar A/S
Q1 2023
Contents
Executive Board
Board of Directors
Statement by the Executive Board
and the Board of Directors
Consolidated financial statements Q1
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
Q1 Quarterly information
Statement
30Solar A/S
Q1 2023
Denmark
Tel. +45 7 9 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 V est 43, 6600 V ejen
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 F und of 20th December