Solar A/S
LEI: 21380031XTLI9X5MTY92
Industrivej Vest 43, DK-6600 Vejen, Denmark
Tel. +45 79 30 00 00
CVR no. 15 90 84 16
www.solar.eu
QUARTERLY REPORT Q1 2021
Solar delivered an EBITDA increase of 44% in Q1. In April, revenue and EBITDA
guidance were revised upwards by DKK 200m and DKK 75m to DKK 11,750m and DKK
725m, respectively.
CEO Jens Andersen says:
"2021 is off to a good start with revenue and EBITDA exceeding our expectations.
We have seen the first impact of the new Core+ strategy, which we introduced in
February. In Q1, the gross profit margin has shown strong performance across
our markets driven by the Better Business project and the positive development
in concept sales. At the same time, we maintained focus on cost containment.
Finally the Board of Directors has decided to distribute an extraordinary dividend
of DKK 15.00 per share.”
Q1 key financial messages
• EBITDA margin up by 2.1%-points
• Net working capital down by 0.6%-points
• 2021 guidance: Revenue of DKK 11,750m and EBITDA of DKK 725m
Financial highlights (DKK million)
Q1 2021
Q1 2020
Revenue
3,004
3,045
EBITDA
204
142
Cash flow from operating activities
-88
-43
Financial ratios (%)
Organic growth adj. for number of working days
-0.6
1.4
EBITDA margin
6.8
4.7
Net working capital, period-end/revenue (LTM)
11.4
12.0
Gearing (NIBD/EBITDA), no. of times
0.7
1.9
6 May 2021
Announcement no. 13 2021
Solar A/S
LEI: 21380031XTLI9X5MTY92
Industrivej Vest 43, DK-6600 Vejen, Denmark
Tel. +45 79 30 00 00
CVR no. 15 90 84 16
www.solar.eu
6 May 2021
Announcement no. 13 2021
Audio webcast and teleconference today
The presentation of Quarterly Report Q1 2021 will be made in English on 6 May 2021 at
11:00 CET. The presentation will be transmitted as an audio webcast and will be
available at www.solar.eu. Participation will be possible via a teleconference.
Teleconference call-in numbers:
DK: tel. +45 787 232 52
UK: tel. +44 333 300 9264
US: tel. +1 833 526 8397
Contacts
CEO Jens Andersen - tel. +45 79 30 02 01
CFO Michael H. Jeppesen - tel. +45 79 30 02 62
IR Director Dennis Callesen - tel. +45 29 92 18 11
FACTS ABOUT SOLAR
Solar is a leading European sourcing and services company mainly within electrical,
heating and plumbing, ventilation and climate and energy solutions. Our core business
centres on product sourcing, value-adding services and optimisation of our customers’
businesses.
We facilitate efficiency improvement and provide digital tools that turn our customers
into winners. We drive the green transition and provide best in class solutions to ensure
sustainable use of resources.
Solar Group is headquartered in Denmark, generated revenue of approx. DKK 11.5bn in
2020 and has approx. 2,900 employees. Solar is listed on Nasdaq Copenhagen and
operates under the short designation SOLAR B. For more information, please visit
www.solar.eu.
Disclaimer
This announcement was published in Danish and English today via Nasdaq
Copenhagen. In the event of any inconsistency between the two versions, the Danish
version shall prevail.
Solar A/S
CVR no. 15 90 84 16
Q1
2021
MANAGEMENT'S REVIEW
3 Financial highlights
4 Business update
8 Financial review
11 Guidance
12 Shareholder information
We are a leading European sourcing and
services company mainly within electrical,
heating & plumbing, ventilation, and
climate & energy solutions.
A DIGITAL COMPANY
>60%
e-business share
OUR MARKETS
Denmark, Norway,
Sweden, the Netherlands,
Poland & the Faroe Islands
OUR 2021-2023 STRATEGY IS ENTITLED CORE+
AND HAS FOUR STRATEGIC FOCUS AREAS
TRADE
CLIMATE
& ENERGY
INDUSTRY
CONTENTS
CONCEPTS
FINANCIAL STATEMENTS
14 Statement of comprehensive income
15 Balance sheet
16 Cash flow statement
17 Statement of changes in equity
19 Notes
22 Quarterly figures
25 Statement by the Executive Board and
the Board of Directors
SOLAR Q1 2021
2
MANAGEMENT’S REVIEW
Q1 FINANCIAL MESSAGES
• The Better Business project and ongoing developments
in concept sales contributed to a gross profit margin of
21.9%. The gross profit margin increase attributes to all
markets.
• External operating costs and sta costs were reduced by
DKK 32m to DKK 451m despite a negative FX impact of
DKK 4m.
• The Board of Directors has decided to use their authority
to pay out an extraordinary dividend of DKK 15 per share.
Totalling DKK 110m, the extraordinary dividend will be
paid out on 17 May 2021, see announcement no. 12 of 6
May 2021.
Consolidated (DKK million)
Q1
2021
Q1
2020
Year
2020
Revenue 3,004 3,045 11,465
Earnings before interest, tax, depreciation and amortisation (EBITDA)
204 142 637
Earnings before interest, tax and amortisation (EBITA) 157 97 455
Earnings before interest and tax (EBIT) 143 82 248
Earnings before tax (EBT) 123 45 300
Net profit for the year 100 30 222
Balance sheet total 4,842 4,985 4,607
Equity 1,619 1,441 1,696
Interest-bearing liabilities, net 461 1,077 128
Cash flow from operating activities -88 -43 813
Net investments in property, plant and equipment 8 -13 -25
Employees
Number of employees (FTE), end of period 2,901 3,052 2,864
Average number of employees (FTEs) 2,897 3,057 2,935
Financial ratios (% unless otherwise stated)
Organic growth adjusted for number of working days -0.6 1.4 -2.0
Gross profit margin 21.9 20.5 21.0
EBITDA margin 6.8 4.7 5.6
EBITA margin 5.2 3.2 4.0
Net working capital (year-end NWC)/revenue (LTM) 11.8 12.2 9.7
Gearing (net interest-bearing liabilities/EBITDA), no. of times 0.7 1.9 0.2
Return on equity (ROE) 17.6 7.5 13.5
Equity ratio 33.4 28.9 36.8
Share ratios (DKK)
Earnings per share outstanding (EPS) 13.70 4.11 30.42
In general, financial ratios are calculated in accordance with the Danish Finance Society’s “Recommendations & Ratios”.
FINANCIAL HIGHLIGHTS
SOLAR Q1 2021
3
MANAGEMENT’S REVIEW
BUSINESS UPDATE
WE SUPPORT A DIGITAL
AND GREEN INDUSTRY
Solar is a digital and a green company. As a
sourcing and services business, our customers
and their specific needs are our priority.
In February 2021, we launched our new Core+
strategy that builds on the strong progress we
have made within our core business areas.
The strategy is based on four strategic focus
areas:
In each of the quarterly reports we will take a
deep dive into the individual strategic focus
areas. In this Q1 report, we concentrate our
eorts on Industry.
More than 27% of core revenue derives from
Industry, which comprises four subsegments:
Infrastructure, Maintenance, Repair & Operations
(MRO), Original Equipment Manufacturers (OEM)
and Marine & Oshore. They require a wide
product assortment, a high level of accessibility,
digital solutions and sustainability, all of which
Solar supports and which increase customers’
eciency and productivity.
TCO (Total Cost of Ownership) is a calculation
method in widespread use in Industry. Our TCO
approach takes account of all costs associated
with purchasing and consumption before
cost reduction measures are implemented.
These may include streamlining administrative
processes, changes to the logistics setup and the
consolidation of suppliers to ensure the right
product prices that are essential for a business.
Consolidating suppliers also makes 'green' sense
as fewer suppliers mean fewer deliveries.
For us delivery is not just delivery. We adapt
services to the specific needs of our customers.
Some customers rely on a fixed delivery time and
place every week, others require flexibility. Our
delivery set-up is equipped to handle a vast array
of customised solutions in terms of the distribu-
tion and flow of materials.
Our digital mindset is a clear strength in helping
customers to be more productive. For Industry,
this means that our digital integrated services are
more important than ever. Sustainability has been
important to us for many years. Our goal is to
help customers run a responsible and sustainable
business, cut waste and energy consumption and
oer green alternatives.
For us delivery is not
just delivery – we
adapt our services
to the specific needs
of our customers.
CONCEPTS
CLIMATE & ENERGY
INDUSTRY
TRADE
For further information on the Core+ strategy,
see https://www.solar.eu/our-company/strategy/
SOLAR Q1 2021
4
MANAGEMENT’S REVIEW
BUSINESS UPDATE - INDUSTRY
PREFERRED PARTNER IN FOUR
INDUSTRY SEGMENTS
OEM
The Original Equipment Manufacturer (OEM)
segment is targeted at panel and machine
building customers. This segment is characterised
by a project-driven approach, which means that
demand spikes during periods when projects are
in progress and the customer is dependent on
the services and quality that Solar oers.
Customers typically strive for innovation and
accomplish projects as eciently as possible.
We help by standardising and using the latest
technology platforms along with a high delivery
performance of 98 per cent, which oers our
customers security and reliability.
INFRASTRUCTURE
Within Infrastructure, our focus is directed at
the Telecoms & Fibre business, Energy Utility &
Distribution and Rail & Road.
These customers demand best-in-class products
and specific logistical solutions that enhance
eciency. Our role is not only to distribute
products, but also to manage and store the
materials and products purchased by our
customers. Everything is underpinned by a strong
Supply Chain Management system from one
Northern European Infrastructure organisation.
MRO
Maintenance, Repair & Operations (MRO) sup-
ports the daily workflow of manufacturers.
Access to the right products and components is
key. Ensuring the availability of critical compo-
nents is crucial in order to minimise production
downtime. We oen implement inventory solu-
tions that provide customers with an overview
of and access to vital components to ensure
continuity of supply.
Assortment is all-important when it comes to
products and components. We oer a wide range
of products from handpicked suppliers to ensure
we meet quality standards. Additionally, our
sourcing is based on customer requirements and
ensures that the right components and products
arrive straight to their destination with the mini-
mum of interaction.
What is more, our technical support team is
always on hand to answer industry specific
questions and provide guidance on alternative
components.
MARINE & OFFSHORE
We have served the Marine & Oshore segments
for decades and are regarded as a trusted partner
with considerable expertise and industry insight
within the Wind, Oil & Gas, Ship owners, Harbour
and Aqua industries.
Our distribution system and warehouse structure
is customised to these specific segments. We
provide a wide range of products within the
electrical, automation, pneumatics and tool
categories – and in a digital format, which oers
a more comprehensive overview.
Our in-house consultants are ready to assist on
technical questions regarding products, systems
and new solutions, such as the selection of new
components or the replacement of existing
products.
SOLAR Q1 2021
5
MANAGEMENT’S REVIEW
BUSINESS UPDATE - INDUSTRY, INFRASTRUCTURE
LARGE TECHNICAL
COMPANY OUTSOURCES
STOCK TO SOLAR
The Danish technical company, Kemp & Lauritzen, is
responsible for the operation and maintenance of the
electricity grid in Konstant Net's supply area, which
covers large parts of Eastern Jutland.
It requires heavy and specialised products such
as supply cables and transformers. To save time
and resources, the company has outsourced part
of their stock to Solar.
The consequences may be severe when a trans-
former fails and leaves many households without
power. This is why quick access to spare parts
and new transformers is essential. However, not
all suppliers carry heavy transformers, which
weigh several tonnes, in stock.
Kemp & Lauritzen, therefore, has entered into
collaboration with Solar, which includes inventory
management and fast availability.
"Solar ensures that the required products are
always in stock. We manage Kemp & Lauritzen’s
warehouse, which means that they don’t have to
invest in the required space and sta themselves.
We also provide the company with a complete
overview via our web shop, which allows them
to see what is available and when it can be
delivered," explains Otto Axelsen, Sales Manager
for Infrastructure at Solar.
All technicians and fitters can order directly from
the web shop and have the products delivered to
the work site.
"This is an easy solution for us because all the
items we need are available, usually with a short
delivery time. We save both time and costs be-
cause there is no need for storage space or for
us to contract with carriers. Another advantage is
that the goods are delivered directly to the work
site instead of a warehouse," says Thomas Wiborg
Kortsen, Department Manager, Kemp & Lauritzen.
Kemp & Lauritzen has been contracted by Kon-
stant Net A/S, which is part of the NRGi Group.
They ensure that the electricity grid remains
operational – from northern Vejle to Djursland.
Their responsibilities include ongoing mainte-
nance, new supply facilities and troubleshooting.
The latter requires fast delivery.
"When customers experience a power outage,
speed is of the essence and it is imperative that
the warehouse is open around the clock. This
means the fitter can get set up while the order is
on its way. The time saved by not having to pick
up the necessary items is considerable. When the
products arrive, we are much further ahead with
the job and this makes for a highly ecient way
of working," explains Thomas Wiborg Kortsen.
KEMP & LAURITZEN, DENMARK
Kemp & Lauritzen is a Danish technical
company mainly within electrical,
plumbing, ventilation and cooling. They
oer a wide range of technical solutions
for one-o projects to largescale technical
enterprises. Kemp & Lauritzen has
been providing companies and private
customers with technical expertise for
more than 135 years.
SOLAR Q1 2021
6
MANAGEMENT’S REVIEW
BUSINESS UPDATE - INDUSTRY, MARINE & OFFSHORE
ODFJELL, BERGEN, NORWAY
Odell Drilling is a leading inter-
national drilling and engineering
company. Through close to five
decades in the industry, Odell
Drilling has established its position
as a world-class drilling operator
in some of the most challenging
natural environments on earth. The
company is based in Norway with
operations across the globe.
Our ERP system will be
integrated with Solar’s web
shop, which will make it
easier for the purchasing
department. We can
reduce transaction costs
and increase eciency.
ODFJELL DRILLING:
DIGITISING THE
SUPPLY CHAIN
The Norwegian company Odell Drilling
needs a supplier and business partner
that oers a digital mindset, an innovative
approach and substantial knowledge of their
business. That is why they have chosen Solar.
For the past 10 years, Odell Drilling has emailed
their daily orders to Solar. As a result of a new
digital collaboration, however, the drilling compa-
ny can now draw on the benefits of Solar’s web
shop.
"Our ERP system will be integrated with Solar’s
web shop, which will make it easier for the pur-
chasing department. We can reduce transaction
costs and increase eciency," explains Johnny
Kristensen, Advisor GBS-SCM, Odell Drilling.
During on- and oshore projects, time of delivery
is crucial. Because of tight deadlines, it can be
expensive and time-consuming when goods are
delayed. Engineers might only be available for
a certain time and if the goods fail to arrive on
time, an alternative timetable has to be put in
place. In future, however, delivery time and inven-
tory will be available in a digital format.
Solar was invited to also deliver onshore project
support services. These include a dedicated proj-
ect support team and a digitised consignment
stock solution during larger projects and Special
Periodic Surveys (rig projects required by the
classification societies).
"It is also important for us to be able to access
product information and certificates at all times
– especially when we are handling dangerous
items. The new digital solution means that these
will always be readily accessible," explains Johnny
Kristensen, who regards Solar as an innovative
and digital business partner with modern solu-
tions.
Improved logistics
Odell Drilling is also investing in innovative
digital solutions that support transparent, lean
and cost-ecient supply chain processes. The
preferred suppliers are invited to participate in
the development of a new solution with the ob-
jective to reduce time and costs throughout the
process from purchase order until goods receipt.
Currently, Solar is one out of a few companies
invited to a deliver a proof of concept.
“We are certain that this will become our new
and cost-ecient way of supporting our oshore
operations,” says Johnny Kristensen.
"Our digital solutions provide Odell Drilling
with a better overview. Constant access to their
own complete catalogue, prices and relevant
documentation boosts eciency and results in fi-
nancial savings,” says Egil Finshus, Sales Manager,
Oshore and Marine, Solar.
SOLAR Q1 2021
7
MANAGEMENT’S REVIEW
Q1 EBITDA exceeded expec-
tations. We delivered an EBITDA
increase of 44%. Core+ focus areas
are already paying o as
substantial gross profit margin
improvements together with cost
containment were the main drivers
of the DKK 62m EBITDA increase.
Q1 2021 REVENUE
In Q1, adjusted organic growth at group level
amounted to -0.6% (1.4%). Revenue was almost
unchanged at DKK 3.0bn.
Core business delivered adjusted organic growth
of -1.0% (1.5%). Solar Danmark and Solar Polska
saw positive adjusted organic growth.
Solar’s overall adjusted organic growth for
Installation amounted to around 0% whereas
Solar Danmark and Solar Polska saw positive
growth. Our Core+ strategy continues to focus
on the Better Business project, which aims to
supply the right products to the right customers.
Part of this project involves product pruning
of low-margin business, which is one of the
causes of negative growth in Installation in Solar
Nederland.
All entities, except Solar Norge, saw positive
growth in the Industry segment. Overall, organic
growth within the Industry segment amounted to
around 1%.
The Trade segment delivered negative organic
growth in Q1, mainly due to the Better Business
project.
GROSS PROFIT
Gross profit margin increased to 21.9% (20.5%)
resulting in an increase of DKK 35m. Part of the
Core+ strategy focuses on increasing gross profit
margin. This includes the Better Business project
and concept sales, which contributed to the
improvement in Q1’s gross profit margin.
OTHER INCOME
Profit from the disposal of a property in Denmark
amounted to DKK 3m. In Q1 2020, other income
included the outcome of a settlement with the
former shareholder of MAG45, which amounted
to DKK 7m.
EXTERNAL OPERATING COSTS AND
STAFF COSTS
In general, costs remained at a lower level due
to COVID-19 restrictions but were also positively
aected by eciency gains.
External operating costs and sta costs were
down by DKK 32m compared to last year despite
negative foreign exchange translation of DKK4m.
Cost savings amounted to DKK 19m. In Q1 2020,
costs were aected by roll-out costs for SAP eWM
of around DKK 9m as well as restructuring and
AutoStore implementation costs totalling approx.
DKK 8m.
Q1 EBITDA INCREASED BY DKK 62M TO DKK 204M
EXCEEDING OUR ORIGINAL EXPECTATIONS
(Figures in brackets are figures from the corresponding period in 2020)
Our comments on core and related business and
disclosures in the note, Segment information, should be
regarded as supplementary information. Information on
the following segments - Installation, Industry and Trade
- is included in the note, Segment information.
FINANCIAL REVIEW
GROSS PROFIT MARGIN
%
EBITDA
DKKm
21.9
204
Q2Q1 Q3 Q4
19.5
2021
20.0
20.5
21.0
21.5
22.0
2020
22.5
Q2Q1 Q3 Q4
0
2021
50
100
150
200
250
2020
=
SOLAR Q1 2021
8
MANAGEMENT’S REVIEW
LOSS ON TRADE RECEIVABLES
Impacts from COVID-19 have increased risks
on trade receivables. Solar, however, conducts
ecient credit management at all times and has
taken out insurance to hedge against potential
losses on trade receivables.
In Q1, loss on trade receivables was unchanged at
0.2% of revenue.
EBITDA
EBITDA increased to DKK 204m (DKK 142m) and
exceeded our expectations.
The EBITDA margin increased to 6.8% (4.7%).
We succeeded in increasing EBITDA by DKK 62m
mainly due to improvements in the gross profit
margin and cost containment despite a revenue
decrease of DKK 41m.
EBITDA from core business was up at DKK 198m
(DKK 138m) corresponding to an EBITDA margin
of 7.0% (4.8%).
The results from the individual countries are
given on page 20.
SHARE OF NET PROFIT FROM
ASSOCIATES
Our share of earnings from our digital, construc-
tion and services associates was DKK 0m (DKK
-5m). In Q1 2020, the amount related to the asso-
ciate BIMobject.
FINANCIALS
Net financials amounted to DKK -20m (DKK -8)
negatively aected by DKK 14m due to the early
redemption of an interest swap. A similar, positive
amount is reported under other comprehensive
income. Adjusted for this item, net financials
totalled DKK -6m (DKK -8m).
IMPAIRMENT ON ASSOCIATES
Impairment on associates was DKK 0m (DKK
-24m).
In Q1 2020, Solar identified the need for a write-
down of DKK 24m regarding our shareholding
in BIMobject, which we divested in Q4 2020. The
shareholding was divested for a total cash consid-
eration of DKK 237m.
The shares were acquired at DKK 172m in H1
2017.
EARNINGS BEFORE TAX
Earnings before tax were up at DKK 123m (DKK
45m) and when adjusted, earnings before tax
totalled DKK 123m (DKK 69m), as illustrated in the
following table.
DKK million
Q1
2021
Q1
2020
Year
2020
Earnings before tax 123 45 300
Impact due to market value
changes in BIMobject:
Impairment on associates 0 24 -104
Earnings before tax, adjusted
for impact from associates 123 69 196
Impairment loss,
other intangible assets 0 0 10
Impairment loss, goodwill
and customer lists 0 0 129
Adjusted earnings before tax 123 69 335
NET PROFIT
Net profit came to DKK 100m (DKK 30m).
CASH FLOWS
Net working capital calculated as an average of
the previous four quarters amounted to 11.4%
(12.0%) of revenue. Net working capital at the
end of Q1 2021 was 11.8% (12.2%).
Cash flow from operating activities totalled DKK
-88m (DKK -43m). Changes in inventories and
changes in receivables had a DKK -36m (DKK 85m)
and a DKK -354m (DKK -303m) impact on cash
flow respectively, while changes in non-interest-
bearing liabilities had an impact of DKK 143m
(DKK 61m).
Total cash flow from investing activities totalled
DKK -10m (DKK -25m). Disposal of a property in
Denmark had a positive impact of DKK 18m.
Cash flow from financing activities amounted to
DKK -71m (DKK 84m), mainly aected by dividend
distributions of DKK 204m (DKK 102m) and by the
change in current interest-bearing debt of DKK
179m (DKK 220m).
Consequently, total cash flow totalled DKK -169m
(DKK 16m).
Net interest-bearing liabilities were down at DKK
461m (DKK 1,077m). Over the past 12 months, we
have
• received DKK 237m from the disposal of our
shareholding in BIMobject;
• paid dividend of DKK 204m;
• invested DKK 51m in digital improvements;
• invested DKK 29m in optimising our opera-
tions.
FINANCIAL REVIEW
RELATED BUSINESS
Revenue from related business amounts to
approx. 5% of our total revenue.
In Q1 2021, we continued to see positive
development. MAG45 saw adjusted organic
growth of 6.7% (-1.1%) and EBITDA of DKK
6m (DKK 4m).
Due to the COVID-19 situation, the strategic
review of MAG45 initiated in Q3 2019 is on
hold.
Related business (MAG45 and Solar Polaris)
showed adjusted organic growth of 6.0%
(-0.5%) while EBITDA was up at DKK 6m (DKK
4m) in Q1 2021.
SOLAR Q1 2021
9
MANAGEMENT’S REVIEW
As at 31 March 2021, gearing was 0.7 (1.9) times
EBITDA. Calculated as an average, our gearing
was 0.8 (1.9) times EBITDA. Our gearing target is
1.5-3.0 times EBITDA.
As at 31 March 2021, Solar had undrawn credit
facilities of DKK 305m (DKK 319m).
INVESTED CAPITAL
Invested capital for the Solar Group totalled DKK
2,011m (DKK 2,332). ROIC amounted to 16.6%
(9.0%). ROIC for core business amounted to
18.0% (11.3%).
Activities with a Solar equity interest of less than
50% and discontinued activities are not included
in the ROIC calculation. Invested capital only
includes operating assets and liabilities.
KEY RISKS AND MITIGATION
Like other international companies, Solar is af-
fected by both global trends and local conditions
in the markets where we operate.
The COVID-19 pandemic has impacted the entire
world and Solar is also aected by the challenges
this has brought about.
Solar has adopted a number of initiatives to limit
the risk of infection, safeguard the health of em-
ployees, preserve business continuity and protect
earnings.
Commercial and financial risks relating to our
activities - including the risk market volatility
(COVID-19) – are detailed in Solar’s Annual Report
2020.
EVENTS OCCURRING AFTER THE
REPORTING PERIOD
Solar’s Board of Directors assesses the compa-
ny’s capital structure regularly to ensure that it
is appropriate for both the shareholders and the
company.
The Board of Directors has decided to use their
authority to pay out extraordinary dividend of
DKK 15 per share due to upgrading of EBITDA
guidance for 2021 and supported by the divest-
ment of BIMobject in early October 2020. The
authority to distribute extraordinary dividend was
granted at the Annual General Meeting in March
2021.
The extraordinary dividend totalling DKK 110m
will be paid out on 17 May 2021, see announce-
ment no. 12 of 6 May 2021.
FINANCIAL REVIEW
SOLAR Q1 2021
10
MANAGEMENT’S REVIEW
GUIDANCE 2021 REVISED UPWARDS TO REVENUE
OF DKK 11.75BN AND EBITDA OF DKK 725M
On 22 April, Solar upgraded its
EBITDA guidance 2021 by DKK
75m to DKK 725m. 2021 revenue
was revised upwards to a total of
DKK 11.75bn, up by DKK 0.2bn,
and corresponding to organic
growth of approx. 1%, see
announcement no. 11 2021.
GENERAL ASSUMPTIONS
The Core+ strategy is expected to continue to
have a positive impact on gross profit.
Cost containment measures will continue to de-
liver as expected. Despite these measures, costs
are expected to partly normalise to pre-COVID-19
levels, albeit at a slow pace.
The guidance does not include any restructuring
costs.
Loss on trade receivables is assumed to be at
the same level as in 2020. There is, however, a
risk that we will see increased loss on debtors as
government support is reversed.
The guidance for 2021 assumes that COVID-19 will
neither result in new significant lockdowns in our
business segments nor other COVID-19 related
knock-on eects.
MARKET OUTLOOK FOR SOLAR’S
SEGMENTS
Overall, we expect the Installation and Industry
markets to deliver growth in 2021.
Installation
We expect the Installation market to show
growth as compared to 2020, positively aected
by electrification, which is one of the important
megatrends.
Industry
The guidance is based on the assumption that
sales to OEM and Marine & Oshore remain at
least at current levels. Infrastructure is expected
to pick up from the unexpected slowdown in Q1
and deliver strong growth rates for the rest of
the year.
Trade
We expect growth in Special Sales, which is the
primary activity in the Trade segment.
FINANCIAL OUTLOOK 2021
Revenue guidance
We expect revenue of DKK 11.75bn, correspond-
ing to organic growth of approx. 1%.
The Better Business project is an integral
part of the Core+ strategy and is expected to
reduce revenue by DKK 200m compared to 2020.
Adjusted for this, we expect organic growth of
approx. 3%.
DKK 600m of the projected revenue can be ac-
counted for by related business.
EBITDA guidance
We expect our strategic focus areas to deliver
continuous improvement in earnings, delivering
an EBITDA of DKK 725m.
Approx. DKK 15m of the projected EBITDA can be
accounted for by related business.
Investments
As announced on 11 February 2021, we have
initiated an expansion and upgrade of our central
warehouse in Denmark, c.f. page 9 in Annual
Report 2020.
The investment is expected to total approx. DKK
250m and to be finalised in 2022.
GUIDANCE 2021
SOLAR Q1 2021
11
MANAGEMENT’S REVIEW
SHARE AND WEBCAST
INFORMATION
Solar’s share capital is divided
into nominal value DKK 90 million
A shares and nominal value DKK
646 million B shares.
Holdings of 5%
or more of share capital
Share
capital
in %
Votes
in %
The Fund of 20th December,
Vejen, Denmark 17.0% 60.5%
Nordea Funds Ltd., Helsinki,
Finland 10.4% 5.0%
RWC asset management LLP,
London, England 10.0% 4.7%
Investeringsforeningen Nordea
Invest, Copenhagen, Denmark 5.0% 2.4%
DISTRIBUTION OF SHARE CAPITAL
AND VOTES IN % BASED ON THE
LATEST PUBLIC INFORMATION
FINANCIAL CALENDAR 2021
4 April – 6 May IR quiet period
6 May Quarterly Report Q1 2021
4 July – 12 August IR quiet period
12 August Quarterly Report Q2 2021
4 October - 4 November IR quiet period
4 November Quarterly Report Q3 2021
The A shares are not listed. The B shares are
listed on Nasdaq Copenhagen under the ID code
DK0010274844, and are designated SOLAR B, and
form part of the MidCap index and MidCap on
Nasdaq Nordic.
The share capital includes 900,000 A shares and
6,460,000 B shares. Solar’s portfolio of treasury
shares totals 56,813 B shares or 0.8% of share
capital.
A shares have 10 votes per share amount of DKK
100, while B shares have 1 vote per share amount
of DKK 100.
TOTAL SHAREHOLDER RETURN
Total shareholder return from the Solar B share
during the holding period 1 January 2021 - 31
March 2021 was 41.0%, including the DKK 28.00
dividend that was paid out in March 2021.
AUDIO WEBCAST
The presentation of the Q1 2021 results will be
conducted in English on 6 May 2021 at 11:00 CET.
The presentation will be transmitted as an audio
webcast and will be available at:
SHAREHOLDER INFORMATION
WWW.SOLAR.EU
SOLAR Q1 2021
12
MANAGEMENT’S REVIEW
Solar A/S
CVR no. 15 90 84 16
CONSOLIDATED
FINANCIAL
STATEMENTS
Q1 2021
13
STATEMENT OF COMPREHENSIVE INCOME
Income statement
Q1 Year
DKK million 2021 2020 2020
Revenue 3,004 3,045 11,465
Cost of sales -2,346 -2,422 -9,060
Gross profit 658 623 2,405
Other operating income and costs 3 8 8
External operating costs -75 -88 -288
Sta costs -376 -395 -1,465
Loss on trade receivables -6 -6 -23
Earnings before interest, tax, depreciation and amortisation (EBITDA) 204 142 637
Depreciation and write-down on property, plant and equipment -47 -45 -182
Earnings before interest, tax and amortisation (EBITA) 157 97 455
Amortisation and impairment of intangible assets -14 -15 -207
Earnings before interest and tax (EBIT) 143 82 248
Share of net profit from associates 0 -5 -12
Impairment and gain from divestment of associates 0 -24 104
Financial income 8 9 24
Financial expenses -28 -17 -64
Earnings before tax (EBT) 123 45 300
Income tax -23 -15 -78
Net profit for the period 100 30 222
Earnings in DKK per share outstanding (EPS) 13.70 4.11 30.42
Diluted earnings in DKK per share outstanding (EPS-D) 13.68 4.11 30.38
Other comprehensive income
Q1 Year
DKK million 2021 2020 2020
Net profit for the period 100 30 222
Other income and costs recognised:
Items that can be reclassified for the income statement
Foreign currency translation adjustments of foreign subsidiaries 12 -75 -22
Fair value adjustments of hedging instruments before tax 17 -5 7
Tax on fair value adjustments of hedging instruments
-4 1 -1
Other income and costs recognised aer tax 25 -79 -16
Total comprehensive income for the period
14
SOLAR Q1 2021 FINANCIAL STATEMENTS
31.03 31.12
DKK million 2021 2020 2020
ASSETS
Intangible assets 156 304 157
Property, plant and equipment 801 836 818
Right-of-use assets 305 291 288
Deferred tax asset 3 10 3
Investments in associates 4 119 2
Other non-current assets 73 76 71
Non-current assets 1,342 1,636 1,339
Inventories 1,572 1,520 1,531
Trade receivables 1,631 1,664 1,271
Income tax receivable 12 14 13
Other receivables 11 31 8
Prepayments 39 48 41
Cash at bank and in hand 235 72 404
Current assets 3,500 3,349 3,268
Total assets 4,842 4,985 4,607
31.03 31.12
DKK million 2021 2020 2020
EQUITY AND LIABILITIES
Share capital 736 736 736
Reserves -170 -258 -195
Retained earnings 1,053 963 951
Proposed dividends for the financial year 0 0 204
Equity 1,619 1,441 1,696
Interest-bearing liabilities 179 154 199
Lease liabilities 205 189 189
Provision for deferred tax 101 100 98
Other provisions 13 12 12
Non-current liabilities 498 455 498
Interest-bearing liabilities 208 703 41
Lease liabilities 104 103 103
Trade payables 1,859 1,752 1,693
Income tax payable 27 12 21
Other payables 517 504 544
Prepayments 3 6 2
Other provisions 7 9 9
Current liabilities 2,725 3,089 2,413
Liabilities 3,223 3,544 2,911
Total equity and liabilities 4,842 4,985 4,607
BALANCE SHEET
15
SOLAR Q1 2021 FINANCIAL STATEMENTS
CASH FLOW STATEMENT
Q1 Year
DKK million 2021 2020 2020
Net profit or loss of continuing operations for the period 100 30 222
Depreciation, write-down and amortisation 61 60 389
Impairment and gain from divestment of associates 0 24 -104
Changes to provisions and other adjustments -5 -8 -3
Share of net profit from associates 0 5 12
Financials, net 20 8 40
Income tax 23 15 78
Financial income, received 1 2 7
Financial expenses, settled -24 -9 -47
Income tax, settled -17 -13 -65
Cash flow before working capital changes 159 114 529
Working capital changes
Inventory changes -36 85 126
Receivables changes -354 -303 173
Non-interest-bearing liabilities changes 143 61 -15
Cash flow from operating activities -88 -43 813
Q1 Year
DKK million 2021 2020 2020
Investing activities
Purchase of intangible assets -13 -12 -50
Purchase of property, plant and equipment -10 -14 -33
Disposal of property, plant and equipment 18 1 8
Acquisition of associates -2 0 -2
Divestment of associates 0 0 240
Other financial investments -3 0 -1
Cash flow from investing activities -10 -25 162
Financing activities
Repayment of non-current interest-bearing debt -20 -2 -252
Raising of non-current interest-bearing liabilities 0 0 53
Change in current interest-bearing debt 179 220 -205
Instalment on lease liabilities -28 -32 -121
Dividends distributed -204 -102 -102
Sale of treasury shares 2 0 0
Cash flow from financing activities -71 84 -627
Total cash flow -169 16 348
Cash at bank and in hand at the beginning of period 404 56 56
Cash at bank and in hand at the end of period 235 72 404
Cash at bank and in hand at the end of the period
Cash at bank and in hand 235 72 404
Cash at bank and in hand at the end of the period 235 72 404
16
SOLAR Q1 2021 FINANCIAL STATEMENTS
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 Total
2021
Equity as at 1 January 736 -60 -135 951 204 1,696
Foreign currency translation adjustments of foreign subsidiaries 12 12
Fair value adjustments of hedging instruments before tax 17 17
Tax on fair value adjustments -4 -4
Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0 13 12 0 0 25
Net profit for the period 100 100
Comprehensive income 0 13 12 100 0 125
Distribution of dividends (DKK 28.00 per share) -204 -204
Sale of treasury shares 2 2
Transactions with the owners 0 0 0 2 -204 -202
Equity as at 31 March 736 -47 -123 1,053 0 1,619
1) Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
17
SOLAR Q1 2021 FINANCIAL STATEMENTS
– continued
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 Total
2020
Equity as at 1 January 736 -66 -113 933 102 1,592
Foreign currency translation adjustments of foreign subsidiaries -75 -75
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 -75 0 0 -79
Net profit for the period 30 30
Comprehensive income 0 -4 -75 30 0 -49
Distribution of dividends (DKK 14.00 per share) -102 -102
Transactions with the owners 0 0 0 0 -102 -102
Equity as at 31 March 736 -70 -188 963 0 1,441
1) Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
18
SOLAR Q1 2021 FINANCIAL STATEMENTS
NOTES
Segment information
Solar’s business segments are Installation, Industry and Trade and are based on the customers’ aliation with
the segments. Installation covers installation of electrical, and heating and plumbing products, while Industry
covers industry, oshore and marine, and utility and infrastructure. Trade covers special sales and other small
areas. The three main segments have been identified without aggregation of operating segments. Segment
income and costs include any items that are directly attributable to the individual segment and any items that
can be reliably allocated to the individual segment. Non-allocated costs refer to income and costs related to
joint group functions. Assets and liabilities are not included in segment reporting.
DKK million Installation Industry Trade Total
Q1 2021
Revenue 1,849 933 222 3,004
Cost of sales -1,478 -702 -166 -2,346
Gross profit 371 231 56 658
Direct costs -58 -27 -5 -90
Earnings before indirect costs 313 204 51 568
Indirect costs -140 -47 -13 -200
Segment profit 173 157 38 368
Non-allocated costs -164
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 204
Depreciation and amortisation -61
Earnings before interst and tax (EBIT) 143
Financials, net incl. share of net profit from
associates and impairment on associates -20
Earnings before tax (EBT) 123
DKK million Installation Industry Trade Total
Q1 2020
Revenue 1,855 936 254 3,045
Cost of sales -1,494 -722 -206 -2,422
Gross profit 361 214 48 623
Direct costs -67 -27 -6 -100
Earnings before indirect costs 294 187 42 523
Indirect costs -144 -46 -12 -202
Segment profit 150 141 30 321
Non-allocated costs -179
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 142
Depreciation and amortisation -60
Earnings before interst and tax (EBIT) 82
Financials, net incl. share of net profit from
associates and impairment on associates -37
Earnings before tax (EBT) 45
19
SOLAR Q1 2021 FINANCIAL STATEMENTS
Geographical information
Solar A/S primarily operates on the Danish, Swedish, Norwegian and Dutch markets. In the below table,
Other markets covers the remaining markets, which can be seen in the group companies overview available
on page 137 of Annual Report 2020 or on www.solar.eu. The below allocation has been made based on the
products’ place of sale.
Segment information – continued
NOTES
DKK million Revenue
Adjusted
organic
growth % EBITDA
EBITDA
margin %
Non-current
assets
2021
Denmark 1,000 7.1 94 9.4 1,742
Sweden 637 -3.5 32 5.0 199
Norway 457 -3,5 35 7.7 187
The Netherlands 733 - 8.1 32 4.4 352
Poland 92 9.0 3 3.3 26
Other markets 12 19.1 2 16.7 5
Eliminations -83 - 0 0.0 -1,220
Core business 2,848 -1.0 198 7.0 1,291
Several markets
(MAG45) 152 6.7 6 3.9 51
Other markets 4 -19.1 0 0.0 0
Related business 156 6.0 6 3.8 51
Solar Group 3,004 -0.6 204 6.8 1,342
DKK million Revenue
Adjusted
organic
growth % EBITDA
EBITDA
margin %
Non-current
assets
2020
Denmark 946 4.0 71 7.5 2,015
Sweden 642 -1.9 28 4.4 312
Norway 475 -2.0 21 4.4 168
The Netherlands 812 3.8 15 1.8 364
Poland 89 -3.9 2 2.2 30
Other markets 10 26.5 1 10.0 5
Eliminations -78 - 0 0.0 -1,315
Core business 2,896 1.5 138 4.8 1,579
Several markets
(MAG45) 145 -1.1 4 2.8 56
Other markets 4 25.5 0 0.0 1
Related business 149 -0.5 4 2.7 57
Solar Group 3,045 1.4 142 4.7 1,636
20
SOLAR Q1 2021 FINANCIAL STATEMENTS
NOTES
Accounting policies
The quarterly 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.
Apart from the eect of new IAS/IFRS standards implemented during the period, the accounting policies re-
main unchanged from the Annual Report 2020, which contains a full description of these on pages 58-60 as well
as of relevant, supplementary notes.
Key items in the accounts are based on annual contracts etc. A prudent assessment of the current year’s activi-
ties was undertaken during the preparation of this quarterly report.
In the quarterly report, income tax has been calculated on the basis of pre-tax profits at the expected average
tax rate. No calculations of taxable income for the period have been made.
New accounting standards implemented during the period
No additional standards have been implemented in the period, only amendments and improvements to existing
standards. These changes have no impact on Solar’s accounting policies.
New accounting standards to be implemented in coming accounting periods
For information on new accounting standards, reference is made to note 29 on page 99 in Annual Report 2020.
No new or amended standards have been issued in 2021 other than those stated in the annual report.
On Audit
This quarterly report has not been audited or reviewed.
21
SOLAR Q1 2021 FINANCIAL STATEMENTS
Consolidated
QUARTERLY FIGURES
Q1 Q2 Q3 Q4
Income statement (DKK million) 2021 2020 2020 2019 2020 2019 2020 2019
Revenue
3,004 3,045 2,745
2,868
2,618 2,777 3,057 3,077
Earnings before interest, tax, depreciation and amortisation (EBITDA)
204 142 127
104
177 152 191 161
Earnings before interest, tax and amortisation (EBITA)
157 97 81
60
132 105 145 115
Earnings before interest and tax (EBIT)
143 82 65
41
115 82 -14 75
Financials, net
-20 -8 -6
-9
-10 -9 -16 -10
Earnings before tax (EBT)
123 45 153
56
109 -2 -7 73
Net profit or loss for the quarter
100 30 141
48
83 -22 -32 58
Balance sheet (DKK million)
Non-current assets
1,342 1,636 1,735
1,792
1,695 1,691 1,339 1,756
Current assets
3,500 3,349 3,267
3,451
3,227 3,460 3,268 3,234
Balance sheet total
4,842 4,985 5,002
5,243
4,922 5,151 4,607 4,990
Equity
1,619 1,441 1,614
1,552
1,688 1,512 1,696 1,592
Non-current liabilities
498 455 457
713
497 707 498 503
Current liabilities
2,725 3,089 2,931
2,978
2,737 2,932 2,413 2,895
Interest-bearing liabilities, net
461 1,077 845
1,182
726 1,089 128 921
Invested capital
2,011 2,332 2,178
2,461
2,132 2,395 1,760 2,297
Net working capital, end of period
1,344 1,432 1,383
1,466
1,363 1,467 1,109 1,280
Net working capital, average
1,300 1,411 1,391
1,299
1,365 1,339 1,322 1,386
22
SOLAR Q1 2021 FINANCIAL STATEMENTS
QUARTERLY FIGURES
Consolidated – continued
Q1 Q2 Q3 Q4
Cash flows (DKK million) 2021 2020 2020 2019 2020 2019 2020 2019
Cash flow from operating activities
-88 -43 282
-17
142 144 432 305
Cash flow from investing activities
-10 -25 -18
-78
-8 -40 213 -48
Cash flow from financing activities
-71 84 -198
82
-116 -88 -397 -264
Net investments in intangible assets
-13 -12 -12
-8
-12 -8 -14 -9
Net investments in property, plant and equipment
8 -13 -4
-25
1 -25 -9 -39
Acquisition and divestment of subsidiaries and operations, net
0 0 0
-40
0 0 0 0
Financial ratios (% unless otherwise stated)
Revenue growth
-1.3 3.0 -4.3
4.9
-5.7 9.4 -0.6 2.3
Organic growth
-2.2 2.6 -1.7
4.2
-4.8 7.9 0.0 1.6
Organic growth adjusted for number of working days
-0.6 1.4 -1.6
5.6
-4.8 6.3 -2.1 2.6
Gross profit margin
21.9 20.5 20.5
20.2
21.5 19.7 21.5 20.5
EBITDA margin
6.8 4.7 4.6
3.6
6.8 5.5 6.2 5.2
EBITA margin
5.2 3.2 3.0
2.1
5.0 3.8 4.7 3.7
EBIT margin
4.8 2.7 2.4
1.4
4.4 3.0 -0.5 2.4
Net working capital (end of period NWC)/revenue (LTM)
11.8 12.2 11.9
12.9
11.9 12.6 9.7 11.0
Net working capital (average NWC )/revenue (LTM)
11.4 12.0 11.9
11.4
11.9 11.5 11.5 11.9
Gearing (interest-bearing liabilities,net/EBITDA), no. of times
0.7 1.9 1.5
2.6
1.2 2.2 0.2 1.7
Return on equity (ROE)
17.6 7. 5 13.6
5.7
18.9 1.0 13.1 4.1
Return on invested capital (ROIC)
16.6 9.0 10.2
7.9
11.7 8.3 13.8 8.3
Adjusted enterprise value/earnings before interest, tax and amortisation (EV/EBITA)
7.6 6.3 6.0
8.9
6.2 8.1 5.8 7.9
Equity ratio
33.4 28.9 32.3
29.6
34.3 29.4 36.8 31.9
23
SOLAR Q1 2021 FINANCIAL STATEMENTS
QUARTERLY FIGURES
Consolidated – continued
Q1 Q2 Q3 Q4
Share ratios (DKK unless otherwise stated) 2021 2020 2020 2019 2020 2019 2020 2019
Earnings per share outstanding (EPS)
13.70 4.11 19.32
6.82
11.37 -3.18 -4.38
7.95
Intrinsic value per share outstanding
221.68 197.44 221.15
224.52
231.29 218.73 232.38
218.13
Share price
480.82 204.50 255.05
312.60
301.43 289.41 353.70
297.31
Share price/intrinsic value
2.17 1.04 1.15
1.39
1.30 1.32 1.52
1.36
Employees
Number of employees (FTE's), end of period
2,901 3,052 2,934
3,079
2,891 3,070 2,864
3,041
Average number of employees (FTE's)
2,897 3,057 3,024
2,984
2,979 3,018 2,935
3,039
Definitions
Organic growth Revenue growth adjusted for enterprises acquired and sold o and any exchange rate changes. No 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 eective tax rate.
In general, financial ratios are calculated in accordance with the Danish Finance Society’s “Recommendations & Financial Ratios”.
24
SOLAR Q1 2021 FINANCIAL STATEMENTS
STATEMENT BY THE EXECUTIVE BOARD
AND THE BOARD OF DIRECTORS
Today, the group’s Board of Directors and Executive Board have discussed and approved the Q1 2021
quarterly report of Solar A/S.
The quarterly report, which has not been audited or reviewed by the company’s auditor, is presented
in accordance with IAS 34 “Interim Financial Reporting” as approved by the EU and additional Danish
disclosure requirements for quarterly reports of listed companies.
In our opinion, the quarterly report gives a fair presentation of the group’s assets, equity and liabilities
and financial position as at 31 March 2021 as well as of the results of the group’s activities and cash
flow for Q1 2021.
Further, in our opinion, the management’s review gives a true and fair statement of the development
of the group’s activities and financial situation, net profit or loss for the period and of the group’s over-
all financial position and describes the most significant risks and uncertainties that the group faces.
In our opinion, the Q1 2021 Quarterly Report of Solar A/S with the file name SOLA-2021-03-31.zip is
prepared, in all material respects, in compliance with the ESEF Regulation.
Vejen, 6 May 2021
EXECUTIVE BOARD
Jens E. Andersen Hugo Dorph Michael H. Jeppesen
CEO CCO CFO
BOARD OF DIRECTORS
Jens Borum Jesper Dalsgaard Lars Lange Andersen
Chairman Vice-chairman
Michael Troensegaard Peter Bang Morten Chrone
Andersen
Ulrik Damgaard Bent H. Frisk Louise Knauer
25
SOLAR Q1 2021 FINANCIAL STATEMENTS
