Q * Calculated as an average of the last four quarters inventories, trade receivables and trade payables.

Transcription

1 NASDAQ OMX Copenhagen A/S GlobeNewswire Announcement no. 20 Contacts: Group CEO Flemming H. Tomdrup - tel Group CFO Michael H. Jeppesen tel Corporate IR & Communications Manager Charlotte Risskov Kræfting tel Solar A/S Executive Board Haderslevvej 25 DK 6000 Kolding Denmark Tel Ref.: FHT/mje CVR no.: Quarterly report Q2 21 August Solar A/S disposed of its subsidiary Aurora Group Danmark A/S as of 24 April. Thus, the figures for both 2012 and in this announcement relate to the continuing operations. The Solar Group s Q2 revenue and EBITA matched our lowest expectation levels. Expectations for revenue and EBITA in are maintained but we expect EBITA at group level to meet the lowest expectation levels announced. Group CEO Flemming H. Tomdrup says: It is difficult to strengthen earnings when negative growth rates dominate most of our markets. Consequently, we are still working to adjust cost levels to current market development. We are doing a long haul to increase profitability. At the same time, we continue making efforts to reduce net working capital and saw positive cash flow from operating activities in Q2. Selected key figures ( million) Q2 Q H1 H Revenue EBITA (1.6) 12.1 Earnings before tax (2.1) (0.3) (9.9) 5.1 Cash flow from operating activities 8.1 (17.0) (23.5) 8.0 Selected financial ratios (%) Organic growth (4.7) 0.4 (7.6) 3.2 EBITA margin (0.2) 1.5 Net working capital/last 12 months revenue * * Calculated as an average of the last four quarters inventories, trade receivables and trade payables. Revenue in Q2 : Group revenue matched our lowest expectation levels. Revenue growth was -4.1% against 15.2% in Q Organic growth was -4.7% against 0.4% in Q Adjusted for number of working days, organic growth was -6.5% in Q2. EBITA in Q2 : Group EBITA matched our lowest expectation levels. EBITA for continuing activities was positively impacted by the accounting gain from the sale of Aurora Group Danmark A/S at 1.4m. EBITA was negatively impacted by restructuring costs of 0.7m against 1.0m in Q Page 1 of 3

2 EBITA was also, as expected, negatively impacted by Solar 8000 costs of 0.8m against 2.6m in Q Net working capital: In H1, the considerable build-up of inventories that we saw in Q had a negative impact on net working capital. We continued our efforts to reduce inventories to match current activity levels. Efforts to reduce net working capital will carry on. Stated as an average of four quarters, our target for is to get net working capital under 14% of revenue. Expectations for : Expectations for are maintained at revenue of 1,570-1,620m as the presentation of Aurora Group Danmark as a discontinued operation results in a 20m reduction in revenue expectations. EBITA expectations are maintained at 25-33m. We expect EBITA at group level to meet the lowest expectation levels announced. We have chosen not to adjust our expectations to match the present exchange rates on SEK, NOK and PLN. If these exchange rates remain at their present levels for the remainder of, we expect the translation of our enterprises results from SEK, NOK and PLN into euro to impact revenue and EBITA negatively by approximately 10m and approximately 0.6m, respectively. Expectations for EBITA for include restructuring costs of up to 6m, and Solar 8000 roll-out costs of approximately 4m. Adjusted for these, normalised EBITA is expected at 35-43m. The lower revenue expectation levels equal organic growth of approximately -4.5%, while the upper expectation levels equal organic growth of approximately -1.5%. As a result of the negative market trends, we restructured several group enterprises in H1, and further restructuring measures are planned. Consequently, total restructuring costs for the year will total up to 6m. The full-year effect of implemented as well as planned restructuring measures will total approximately 11m, all things being equal. Solar 8000 (SAP): Solar 8000 roll-out in Solar Danmark will be postponed from late Q3 to early Q4, while we expect to roll out in Solar Sverige some 4 months after this. We still expect the overall investment in Solar 8000 to total less than 54m. We will maintain our expectations for positive effects, still expecting the transition to Solar 8000 to increase earnings (EBITDA) by 8-10m annually when the system is fully implemented. Assessment of capital structure: At the annual general meeting this spring, Solar s Supervisory Board was authorised to distribute extraordinary dividends of up to DKK per share in the period until the next annual general meeting. In the autumn of, Solar s Supervisory Board will assess the company s capital structure and the possibility of distributing extraordinary dividends in the autumn of. Any distribution of extraordinary dividends will depend on net working capital trends and financial results. Expectations for 2014: The current downward trends in the wholesaling market combined with negative growth rates in several markets equal difficult market conditions. Experience has taught us that, traditionally, we see the effects of any upturn quite late. The resulting uncertainty means that we will not announce our expectations for 2014 until we publish our Annual Report. Page 2 of 3

3 Q2 presentation - webcast and teleconference today The presentation of quarterly report Q2 will be made from NASDAQ OMX Copenhagen today at CET, and an online webcast in English will be accessible via It will be possible to participate via a teleconference option - please use these numbers to participate: Callers from Denmark: tel Callers from Great Britain: tel Callers from the USA: tel International callers: tel. +44 (0) Yours faithfully Solar A/S Flemming H. Tomdrup Appendix: Quarterly report Q2, pages 1-26 Solar facts Solar A/S was established in 1919 and listed on the Copenhagen Stock Exchange in Solar is one of Northern Europe s leading technical wholesalers within electrical, heating, plumbing and ventilation products. The group, based in Kolding, Denmark, has subsidiaries in Denmark incl. the Faroes, Sweden, Norway, the Netherlands, Belgium, Germany, Poland and Austria. In 2012, Solar Group revenue totalled 1,700.9m, equating DKK 12.7bn. The group currently has some 3,500 employees. For more information, please visit Disclaimer This announcement was published in Danish and English today via NASDAQ OMX Copenhagen. In case of any discrepancy between the two languages, the Danish version shall prevail. Page 3 of 3

4 Quarterly report Q2 1 quarterly report q2

5 Quarterly report Q2 2 QUARTERLY REPORT Q2 contents Financial highlights Financial review Markets Expectations Shareholder information Quarterly figures Income statement and Statement of comprehensive income Balance sheet Cash flow statement Statement of changes in equity Segment information Share option plans Discontinued operations Accounting policies Management s statement Copyright: Solar, August Design and layout: Make Text: Solar A/S The quarterly report of Solar A/S was published in Danish and English on 21 August via NASDAQ OMX Copenhagen. In the event of any discrepancy between the Danish and English versions, the Danish version shall prevail.

6 Quarterly report Q2 3 financial HiGHliGHts Q2 H1 Year Income statement ( million) Revenue ,638.9 Earnings before interest, tax, depreciation and amortisation (EBITDA) Earnings before interest, tax and amortisation (EBITA) (1.6) Earnings before interest and tax (EBIT) (6.0) Earnings before tax (EBT) (2.1) (0.3) (9.9) Net profit or loss for the period (1.0) (1.2) (7.9) Balance sheet total Equity Interest-bearing liabilities, net Cash flow from operating activities 8.1 (17.0) (23.5) Financial ratios (% unless otherwise stated) Organic growth (4.7) 0.4 (7.6) 3.2 (0.1) EBITDA margin EBITA margin (0.2) EBIT margin (0.8) Net working capital (NWC average)/revenue (LTM) Gearing (net interest-bearing liabilities/ebitda), no. of times Return on equity (ROE) excluding amortisation Return on invested capital (ROIC) excluding amortisation Equity ratio Share ratios (% unless otherwise stated) Earnings in per share outstanding (EPS) (0.13) (0.15) (1.01) Earnings in per share outstanding excluding amortisation (EPS) (0.45) Employees Average number of employees in continuing activities (FTE) 3,320 3,506 3,368 3,504 3,505 Solar A/S disposed of its subsidiary Aurora Group Danmark A/S as of 24 April. Thus, the figures in this table relate to the continuing operations. outline H1 was characterised by difficult market conditions, and Solar s enterprises in the Netherlands, Germany and Poland were particularly hard hit with double-digit negative growth rates. The number of employees in the group s continuing operations was reduced from 3,473 at the end of Q to 3,329 at the end of Q2, thus reducing cost levels going forward. In H1, net working capital was negatively impacted by the considerable build-up of inventories seen in Q We are still working to reduce inventories to a level that corresponds to current activity levels. At the annual general meeting this spring, Solar s Supervisory Board was authorised to distribute extraordinary dividends of up to DKK per share in the period until the next annual general meeting. In the autumn of, the Supervisory Board will assess our capital structure and the possibility of distributing extraordinary dividends in the autumn of. In general, restatements have been made of 2012 and income statements, cash flows and key ratios to compensate for the divestment of Aurora Group Danmark A/S. In accordance with IFRS recommendations the balance sheet has not been restated. The calculation method has been changed for ROE, ROIC and EV/EBITA from previously quarter X 4 to net 12 months. The key ratio interest-bearing liabilities, net, has been adjusted for non-current, interest-bearing receivables relating to the divestment of Aurora Group Danmark A/S. Financial ratios may be impacted by amendments to accounting policies under IAS 19.

7 Quarterly report Q2 4 Group management s review financial review Difficult market conditions impacted results H1 was characterised by difficult market conditions, particularly in the group s enterprises in the Netherlands, Germany and Poland where we saw double-digit negative growth rates. H1 revenue from continuing operations dropped from 814.9m in H to 759.4m, while EBITA was down from 12.1m at -1.6m. Restructuring costs and bad debts impacted earnings in Solar Nederland. Initiatives in the enterprise s restructuring plan are proceeding as planned with the majority of planned restructuring measures already in place. EBITA margin in % of revenue Adjustments and restructuring were carried out in several group enterprises in H1 as planned. Organic growth in % Q1 Q2 Q3 Q4 Adjustments and restructuring were carried out in several group enterprises in H1 as planned, and total related costs amounted to 4.9m. The number of employees in the group s continuing enterprises was cut from 3,473 at the end of Q to 3,329 at the end of Q2. This will reduce cost levels going forward. The group s revenue and EBITA matched our lowest expectation levels Q1 Q2 Q3 Q In April, Solar disposed of the subsidiary Aurora Group Danmark A/S to Deltaco AB to focus fully on our core business. This disposal generated an accounting gain of 1.4m and is recognised in the income statement under other operating income. Cash flow from operating activities was down at -23.5m from 8.0m in H1 2012, and net interest-bearing debt was up 22.6m in H1. Q2 Revenue Negative market trends meant that revenue of continuing operations amounted to 383.9m against 400.2m in Q2 2012, equalling revenue growth of -4.1%. Organic growth was -4.7%, and -6.5% when adjusted for number of working days. The group saw negative growth in all key markets other than Norway as described on pages 7-9. Revenue matched the lowest Q2 expectations levels.

8 financial review Quarterly report Q2 5 EBITA EBITA was down at 2.3m against 3.1m in Q2 2012, equalling 0.6% of revenue against 0.8% of revenue in Q Gross profit dropped from 21.0% to 20.6% in Q2. In the Netherlands gross profit was down considerably relative to Q2 2012, equalling an effect of 0.4 percentage points at group level. However, compared with figures for Q the Dutch gross profit was improved. Bad debts remained unchanged at 0.4% of revenue when compared with Q Out of the total loss of 1.5m, 1.0m was incurred in the Netherlands. EBITA from continuing operations was impacted by the accounting gain deriving from the disposal of Aurora Group of 1.4m, of restructuring costs of 0.7m and of Solar 8000 costs of 0.8m. In Q2 2012, restructuring costs totalled 1.0m and Solar 8000 costs 2.6m. Normalised EBITA amounted to 2.4m when adjusted for the proceeds from disposing of Aurora Group, and restructuring and Solar 8000 costs, while the matching figure for Q was 6.7m. Group EBITA met the lowest part of our expectation levels. EBT, income tax and net profit or loss for the period EBT amounted to -2.1m against -0.3m in Q As part of the Danish growth and jobs initiative Vækstplan DK, the national parliament of Denmark adopted a motion at the end of June on the gradual reduction of income tax. In Solar s case, this led to an adjustment of deferred tax of 1.3m, which was recognised as income under income tax in Q2. Thus, expensed income tax on continuing operations came to income of 1.0m against expenses of -0.6m in Q Continuing operations results totalled -1.1m against -0.9m in Q2 2012, while net profit or loss for the period was -1.0m against -1.2m in Q H1 Revenue Revenue from continuing operations amounted to 759.4m, down from 814.9m in H1 2012, equalling organic growth of -7.6% against 3.2% in H EBITA H1 EBITA from continuing operations dropped to -1.6m from 12.1m. We are still working to reduce inventories to a level that corresponds to current activity levels. Gross profit was down from 21.2% in H at 21.1%. In the Netherlands gross profit was significantly reduced compared with H1 2012, corresponding to an effect of 0.5 percentage points at group level. However, relative to Q4 2012, gross profit was improved. Bad debts were on the rise and landed at 0.4% in H1 against the level of 0.3% of revenue in H Moreover, EBITA from continuing operations was also impacted by the accounting gain from the disposal of Aurora Group of 1.4m, restructuring costs of 4.9m and Solar 8000 costs of 1.7m. In H1 2012, restructuring and Solar 8000 costs totalled 1.0m and 4.6m, respectively. When adjustments are made for the proceeds from the disposal of Aurora Group, and restructuring and Solar 8000 costs, normalised EBITA totalled 3.6m against 17.7m in H EBT, income tax and net profit or loss for the period EBT from continuing operations was -9.9m against 5.1m in H Expensed income tax on continuing operations for H1 totalled income of 2.0m against expenses of 2.2m in H As part of the Danish growth and jobs initiative Vækstplan DK, the national parliament of Denmark adopted a motion at the end of June on the gradual reduction of income tax. In Solar s case, this led to an adjustment of deferred tax of 1.3m, which was recognised as income under income tax in H1. Results from continuing operations amounted to -7.9m against 2.9m in H1 2012, while results for the period were -7.9m, down from 2.7m in H Cash flow In H1, net working capital was impacted by the considerable build-up of inventories seen in Q We are still working to reduce inventories to a level that corresponds to current activity levels. Net working capital was down at 223.6m from 249.8m in H Net working capital from continuing operations totalled 14.1% of revenue against 14.9% in H When net working capital is calculated as an average of four quarters, it totalled 14.0% of revenue against 14.4% in H Efforts to reduce net working capital will carry on.

9 financial review Quarterly report Q2 6 Cash flow from operating activities in Q2 was positive and totalled 8.1m against -17.0m in Q Moreover, cash flow from operating activities in the first half-year of totalled -23.5m against 8.0m in H Cash flow from investing activities totalled 5.7m against -6.1m in H The disposal of Aurora Group impacted these postitively by 11.0m in H1. Cash flow from financing activities amounted to -11.6m against -9.6m in H Dividends distributed to the company s shareholders made up 7.0m of this, against 5.5m in H Cash flow from operating activities in Q2 was positive. On 30 June, Solar held undrawn credit facilities valued at 106.0m. Solar s agreements with its main bankers are not subject to any covenants. Investments In H1, 1.7m Solar 8000 (SAP) costs were expensed. This brings the total investment to 50.9m, of which 36.2m have been capitalised. The total Solar 8000 investment is expected to amount to less than 54m. See the Solar 8000 overview below. Net investments in property, plant and equipment amounted to 4.5m in H1. In total, cash flow from continuing operations amounted to -29.4m in H1, and cash flow totalled -32.1m. In the first half year, interest-bearing liabilities, net, were up 22.6m, pushing gearing levels to 2.9 against 1.6 times EBITDA at year-end Still, this is an improvement from the Q1 level of 3.3 times EBITDA. We expect gearing to continue to come down in Q3 so that we again operate within Solar s target range of times EBITDA. Key risks Solar s Annual Report 2012 details the commercial and financial risks related to our activities. The key risks remain that Solar, like other international companies, is affected by both global trends and local conditions in the markets where we operate. Solar 8000 Realised million Q Q Q3-Q Q1 Q2 Total Capitalised Expensed Total Accumulated Expensed: Solar 8000 costs Solar 8000 costs allocated to subsidiaries (3.0) (1.1) (1.1) (0.1) (0.2) (0.7) (6.2) Expensed in parent company Solar 8000 costs allocated to subsidiaries: Solar Nederland Solar Sverige (0.5) Solar Deutschland (0.4) Expensed in subsidiaries Amortisation, group ) Costs have been expensed under external costs and staff costs, respectively. The Solar 8000 investment does not include costs of operational support and any operating loss. Thus, these are not included here.

10 Quarterly report Q2 7 Group management s review Markets Negative growth rates all around Q2 was characterised by negative growth rates in all key markets except Norway. It is certainly difficult to strengthen earnings when negative growth rates dominate most of our markets. Consequently, we are still working to adjust cost levels to current market development. Overall, both revenue and EBITA matched the lowest level of our expectations. In Denmark we saw negative market trends in Q2. When adjustments are made for number of working days, growth was -8.0%. New construction is still showing negative growth especially within housing. However, offshore and utilities generate positive growth rates. In Sweden the market was characterised by negative growth in both Q1 and Q2. Gross profit improvements compensated for the drop in revenue experienced, and the organisational adjustments initiated in Q continue. Overall, both revenue and EBITA matched the lowest level of our expectations. Solar Danmark (excluding result in subsidiary) million Q1 Q2 Q3 Q4 Revenue Other operating income Other operating costs 0.0 (3.1) Solar 8000 costs (0.7) (0.1) EBITA Organic growth % (8.0) (4.8) EBITA % Revenue Other operating income Solar 8000 costs (0.9) (1.5) (1.2) (0.5) EBITA Organic growth % EBITA % Other operating income relates to reinvoicing of the Solar 8000 investment to subsidiaries. Other operating costs relate to the disposal of Aurora Group calculated using the cost method. In Norway we are now seeing the benefits of Solar Despite the weak start in Q1 market growth is now back. Efforts aimed at strengthening earnings have proceeded as planned. Moreover, gross profit and earnings were strengthened. In the Netherlands the poor result was founded in the still extremely negative market trends as we expected. Q2 results were also negatively impacted by restructuring costs of 0.5m and bad debts of 1.0m. Initiatives under Solar Nederland s restructuring plan are progressing as planned with the majority of the planned restructuring measures relating to reductions already in place. We will maintain the target of an EBITA break-even point in Solar Sverige million Q1 Q2 Q3 Q4 Revenue Solar 8000 costs (0.2) (0.7) EBITA Organic growth % (6.9) (2.7) EBITA % Revenue Solar 8000 costs (0.4) (0.4) 0.7 (0.2) EBITA Organic growth % (2.7) EBITA %

11 Markets Quarterly report Q2 8 Solar Deutschland 1 In Germany, market trends have been negative since Q1 2012, and we have made organisational adjustments several times. The market dropped further in Q2. However, we expect a stabilisation of this market in H2. Results for Q2 were impacted by loss on copper of 0.6m. This enterprise is organised in a profit centre structure following structural changes implemented in Q1. Remaining markets - see the tables. The German market dropped further in Q2. million Q1 Q2 Q3 Q4 Revenue EBITA (2.8) (2.7) Organic growth % (20.4) (12.0) EBITA % (9.2) (8.8) 2012 Revenue Solar 8000 costs (0.2) (0.2) EBITA (1.3) (2.5) (0.9) (1.3) Organic growth % (2.2) (19.2) (12.7) (17.0) EBITA % (3.4) (7.2) (2.3) (3.7) 1) Includes GFI Gesellschaft für Installationstechnik mbh. Solar Norge Claessen, Belgium million Q1 Q2 Q3 Q4 Revenue EBITA Organic growth % (5.5) 16.6 EBITA % Revenue EBITA Organic growth % (2.7) (0.5) EBITA % million Q1 Q2 Q3 Q4 Revenue EBITA 0.0 (0.1) Organic growth % (5.6) (3.1) EBITA % (0.1) (0.6) 2012 Revenue EBITA Organic growth % (7.2) EBITA % (0.3) 4.1 Solar Nederland 1 GFI, Austria million Q1 Q2 Q3 Q4 Revenue EBITA (7.6) (4.1) Organic growth % (15.0) (16.5) EBITA % (8.9) (5.3) 2012 Revenue Solar 8000 costs (0.5) (0.5) (1.0) 0.0 EBITA 0.9 (1.2) (4.4) (4.6) Organic growth % (4.1) (7.6) (13.0) (17.2) EBITA % 0.9 (1.2) (5.6) (5.0) million Q1 Q2 Q3 Q4 Revenue EBITA (0.3) (0.3) Organic growth % (6.3) (2.5) EBITA % (3.1) (1.8) 2012 Revenue EBITA (0.1) (0.3) Organic growth % EBITA % (0.9) (2.2) ) Includes Conelgro B.V.

12 Markets Quarterly report Q2 9 1 Solar Danmark A/S, Denmark 2 Solar Sverige AB, Sweden 3 Solar Norge AS, Norway 4 Solar Nederland B.V., the Netherlands 5 Solar Deutschland GmbH, Germany GFI Gesellschaft für Installationstechnik mbh, Germany GFI Elektro GmbH, Germany Solar Polska Sp. z o.o., Poland Claessen ELGB NV, Belgium GFI GmbH, Austria P/F Solar Føroyar, the Faroe Islands Solar Polska Solar Føroyar million Q1 Q2 Q3 Q4 Revenue EBITA (0.4) (0.3) Organic growth % (19.8) (15.6) EBITA % (4.9) (4.4) 2012 Revenue EBITA 0.0 (0.1) 0.0 (0.1) Organic growth % (1.4) 1.2 EBITA % 0.0 (1.2) (0.5) (0.4) million Q1 Q2 Q3 Q4 Revenue EBITA Organic growth % (7.0) 19.2 EBITA % Revenue EBITA Organic growth % 5.1 (2.1) (2.1) (18.2) EBITA %

13 Quarterly report Q2 10 Group management s review expectations Solar expects negative growth in Market expectations The Danish market saw negative growth in Q2 in all markets except offshore and utilities. However, the ever-growing effect of our Blue Energy concept with energy-efficient solutions for new and existing buildings is a positive touch. More focus on energy efficiency improvement renovations at state, regional and local government levels may also have a positive impact. Overall, we expect negative organic growth in our Danish enterprise in. As a result of the continued slowdown in the Swedish economy, we now expect a slightly negative growth rate in Sweden this year at best. On the other hand, the drop we experienced in Norway in Q1 has now been replaced by growth in most areas of our business. We expect to see continued positive growth in all lines of business. In the Netherlands, we expect a continued drop in construction activities to characterise the rest of, to be only partly offset by renovations. This drop should, however, be on a smaller scale than what we saw in H1. Overall, we expect the enterprise to generate considerable negative growth in as well. We still see pay increases founded in collective agreements in some countries even as their unemployment rates are rising. In Norway, labour shortage will result in overall pay increases above inflation rates again this year.

14 expectations Quarterly report Q2 11 Financial trends in Germany showed signs of improvement in late 2012, but growth generated in H1 fell short of expectations. We expect to see results of our push into industry which mostly shows higher activity levels than the construction sector. Overall, we expect the German market to generate negative growth. On the whole, we expect negative growth in the remaining markets. Business expectations The business areas renewable energy, lighting, and energy supply and infrastructure are all expected to generate positive growth rates. Some of the more traditional, major areas related to new construction, such as installation equipment and cables will show negative growth. The market for energy optimisation of existing buildings, including lighting projects, and renovations and upgrades of public buildings in particular, is expected to show positive growth. Any distribution of extraordinary dividends will depend on net working capital trends and financial results. Improving profitability, implementing Solar 8000 in Denmark and Sweden and implementing and executing our group strategy for will take centre stage. Also, efforts to reduce net working capital will carry on. Stated as an average of four quarters, our target for is to get net working capital under 14% of revenue. Moreover, we expect net working capital of less than 13% of revenue at year-end. Solar 8000 expectations Solar 8000 roll-out in Solar Danmark will be postponed from late Q3 to early Q4, while we expect to roll out in Solar Sverige some 4 months after this. We still expect the overall investment in Solar 8000 to total less than 54m. Financial expectations Expectations for are maintained at revenue of 1,570-1,620m as the presentation of Aurora Group Danmark as a discontinued operation results in a 20m reduction in revenue expectations. EBITA expectations are maintained at 25-33m. We expect EBITA at group level to meet the lowest expectation levels announced. We have chosen not to adjust our expectations to match the present exchange rates on SEK, NOK and PLN. If these exchange rates remain at their present levels for the remainder of, we expect the translation of our enterprises results from SEK, NOK and PLN into euro to impact revenue and EBITA negatively by approximately 10m and approximately 0.6m, respectively. Expectations for EBITA include restructuring costs of up to 6m, and Solar 8000 roll-out costs of approximately 4m. Adjusted for these, normalised EBITA is expected at 35-43m. The lower revenue expectation levels equal organic growth of approximately -4.5%, while the upper expectation levels equal organic growth of approximately -1.5%. As a result of the negative market trends, we restructured several group enterprises in H1, and further restructuring measures are planned. Consequently, total restructuring costs for the year will be up to 6m. The full-year effect of implemented as well as planned restructuring measures will total approximately 11m, all things being equal. We will maintain our expectations for positive effects, still expecting the transition to Solar 8000 to increase earnings (EBITDA) by 8-10m annually when the system is fully implemented. Assessment of capital structure In the autumn of, Solar s Supervisory Board will assess the company s capital structure and the possibility of distributing extraordinary dividends in the autumn of. At the annual general meeting this spring, Solar s Supervisory Board was authorised to distribute extraordinary dividends of up to DKK per share in the period until the next annual general meeting. Any distribution of extraordinary dividends will depend on net working capital trends and financial results. The Supervisory Board will always work to ensure that Solar maintains a level of borrowing that, on one hand, guarantees flexibility when it comes to acting on any business opportunities and maintaining our independence in relation to the group s bankers, while, on the other, avoiding excessive capitalisation in Solar. Expectations for 2014 The current downward trends in the wholesaling market combined with negative growth rates in several markets equal difficult market conditions. Experience has taught us that, traditionally, we see the effects of any upturn quite late. The resulting uncertainty means that we will not announce our expectations for 2014 until we publish our Annual Report.

15 Quarterly report Q2 12 GROUP MANAGEMENT s REVIEW SHAREHOLDER INFORMATION Solar s shares Solar s share capital is divided into nominally 12.1 million A shares and nominally 94.1 million B shares. Share price development On 30 June, the price of Solar s B share was DKK 267, up from DKK 257 on 1 January. This is a rise of approximately 4% over H1. A shares are not listed. B shares are listed on NASDAQ OMX Copenhagen under the ID code DK with the short designation SOLAR B and form part of the MidCap index and MidCap on NASDAQ OMX Nordic. Share price development (index) Solar B MidCap The following shareholders had registered ownership shares or voting rights of 5% or more of the total share capital as at 30 June : Shares The Fund of 20th December, Kolding Chr. Augustinus Fabrikker A/S, Copenhagen Arbejdsmarkedets Tillægspension, Hillerød Votes The Fund of 20th December, Kolding Chr. Augustinus Fabrikker A/S, Copenhagen Arbejdsmarkedets Tillægspension, Hillerød 15.6% 10.3% 5.0% 57.5% 5.1% 2.5% /1 30/6 Financial calendar 17 October 14 November IR quiet period 14 November Quarterly report Q3 Webcast The presentation of quarterly report Q2 will be transmitted online from NASDAQ OMX Copenhagen on 21 August at CET and will be accessible via

16 SHAREHOLDER information Quarterly report Q2 13 Distribution of share capital as at 30 June in % Distriubution of votes as at 30 June in % The Fund of 20th December 15.6% Chr. Augustinus Fabrikker A/S 10.3% ATP 5.0% Supervisory and executive boards Other Danish shareholders 38.9% Foreign shareholders 18.0 % Non-registered shareholders 8.1 % Treasury shares 0.8% The Fund of 20th December 57.5% Chr. Augustinus Fabrikker A/S 5.1% ATP 2.5% Supervisory and executive boards incl. related parties 2.4% Other Danish shareholders 19.2 % Foreign shareholders 8.9 % Non-registered shareholders 4.0 % Treasury shares 0.4% Company announcements excl. insider announcements Date No. Announcement Exercise of options in Solar A/S Resignation from Solar Sverige AB Quarterly report Q New CED appointed in Solar Nederland B.V Solar A/S has disposed of all shares in Aurora Group Danmark A/S Major shareholder announcement Articles of association of Solar A/S Course of annual general meeting (AGM) of Solar A/S Solar A/S has entered into agreement on disposal of all shares in Aurora Group Danmark A/S Major shareholder announcement Grant of options to the Executive Board and management team Notice of annual general meeting Share options to Executive Board and Management Team of Solar A/S Correction to Annual Report Annual Report The Solar Group s results for 2012 and expectations for Updated financial calendar for Solar A/S

17 Quarterly report Q2 consolidated quarterly figures 14 Q1 Q2 Q3 Q4 Income statement ( million) Revenue Earnings before interest, tax, depreciation and amortisation (EBITDA) (0.8) Earnings before interest, tax and amortisation (EBITA) (3.9) Earnings before interest and tax (EBIT) (6.2) Financials, net (1.6) (1.5) (2.3) (1.2) (1.4) (2.1) (1.5) (1.5) Earnings before tax (EBT) (7.8) 5.4 (2.1) (0.3) Net profit for the quarter (6.9) 3.9 (1.0) (1.2) Balance sheet ( million) Non-current assets Current assets Balance sheet total Equity Non-current liabilities Current liabilities Interest-bearing liabilities, net Invested capital Net working capital, year-end Net working capital, average Cash flow ( million) Cash flow from operating activities (31.6) (17.0) Cash flow from investing activities (3.3) (1.9) 9.0 (4.2) (1.3) (64.1) (1.9) (1.1) Cash flow from financing activities (2.4) (2.3) (9.2) (7.3) (2.5) (2.5) (2.2) (4.8) Net investments in intangible assets (0.2) (0.2) (0.6) (2.0) 0.0 (1.4) (0.1) (1.3) Net investments in property, plant and equipment (3.1) (1.7) (1.4) (2.2) (1.3) (0.7) (1.8) 0.5 Acquisition and disposal of subsidiaries and operations, net (62.0)

18 Quarterly report Q2 15 consolidated quarterly figures continued Q1 Q2 Q3 Q4 Financial ratios (% unless otherwise stated) Revenue growth (9.5) 20.1 (4.1) (1.3) 15.9 Organic growth (10.5) 6.0 (4.7) 0.4 (2.0) 3.2 (3.2) 1.9 EBITDA margin (0.2) EBITA margin (1.0) EBIT margin (1.7) Net working capital (NWC year-end)/revenue (LTM) Net working capital (NWC average)/revenue (LTM) Gearing (net interest-bearing liabilities/ebitda (LTM)), number of times Return on equity (ROE) Return on equity (ROE) excluding amortisation Return on invested capital (ROIC) Return on invested capital (ROIC) excluding amortisation Adjusted market capitalisation/earnings before interest, tax and amortisation (EV/EBITA) Equity ratio Share ratios (% unless otherwise stated) Earnings in per share outstanding (EPS) (0.88) 0.50 (0.13) (0.15) Earnings in per share outstanding excluding amortisation (EPS) (0.59) Intrinsic value in per share outstanding Share price in Share price/intrinsic value Share price in DKK Employees Average number of employees in continuing activities (FTE) 3,416 3,504 3,320 3,506 3,504 3,088 3,504 3,602 Definitions Organic growth Net working capital Gearing ROIC Revenue growth adjusted for enterprises acquired and disposed of, and any exchange rate changes. No adjustments have been made for number of working days. Inventories and trade receivables less trade payables. Interest-bearing liabilities, net, relative to EBITDA. EBITDA has not been adjusted for enterprises and operations acquired. Return on invested capital calculated on the basis of operating profit or loss before special items less calculated tax. In general, restatements have been made of 2012 and income statements, cash flows and key ratios to compensate for the divestment of Aurora Group Danmark A/S, however not for the 2011 figures. In accordance with IFRS recommendations the balance sheet has not been restated. The calculation method has been changed for ROE, ROIC and EV/EBITA from previously quarter X 4 to net 12 months. The key ratio interest-bearing liabilities, net, has been adjusted for non-current, interest-bearing receivables relating to the divestment of Aurora Group Danmark A/S. Financial ratios may be impacted by amendments to accounting policies under IAS 19.

19 Quarterly report Q2 consolidated income statement 16 Q2 H1 Year million Revenue ,638.9 Cost of sales (304.8) (316.3) (599.5) (642.5) (1,292.3) Gross profit Other operating income External operating costs (18.1) (20.0) (38.1) (39.0) (76.1) Staff costs (55.6) (56.2) (115.3) (113.1) (217.9) Loss on trade receivables (1.5) (1.7) (3.4) (2.4) (5.9) Earnings before interest, tax, depreciation and amortisation (EBITDA) Depreciation on property, plant and equipment (3.0) (2.9) (6.1) (5.8) (11.4) Earnings before interest, tax and amortisation (EBITA) (1.6) Amortisation of intangible assets (2.1) (2.2) (4.4) (4.3) (8.7) Earnings before interest and tax (EBIT) (6.0) Financial income Financial costs (2.9) (2.7) (5.2) (5.3) (9.8) Earnings before tax (EBT) (2.1) (0.3) (9.9) Income tax 1.0 (0.6) 2.0 (2.2) (6.9) Profit or loss from continuing operations (1.1) (0.9) (7.9) Result of discontinued operations 0.1 (0.3) 0.0 (0.2) 1.6 Net profit or loss for the period (1.0) (1.2) (7.9) Earnings per share in per share outstanding (EPS) (0.13) (0.15) (1.01) Diluted earnings per share in per share outstanding (EPS-D) (0.13) (0.15) (1.01) Earnings per share in per share outstanding (EPS) from continuing operations (0.14) (0.11) (1.01) Diluted earnings per share in per share outstanding (EPS-D) from continuing operations (0.14) (0.11) (1.01) Please see the note on discontinued operations for earnings per share outstanding (EPS) from discontinued operations. statement of comprehensive income Net profit or loss for the period (1.0) (1.2) (7.9) Other income and costs recognised: Items that cannot be reclassified for the income statement Actuarial gains / losses on defined benefit plans (0.1) (0.2) Tax (0.2) Items that can be reclassified for the income statement Foreign currency translation adjustment at the beginning of the year (0.6) 0.2 (0.3) 0.0 (1.0) Foreign currency translation adjustment of foreign subsidiaries (4.5) 0.3 (4.5) Value adjustment of hedging instruments before tax 2.4 (2.0) 4.0 (1.3) (2.8) Tax on value adjustments of hedging instruments (0.6) 0.7 (1.0) Other income and costs recognised after tax (3.3) (0.8) (1.8) Total comprehensive income for the period (4.3) (2.0) (9.7)

20 Quarterly report Q2 consolidated Balance sheet million Assets Intangible assets Property, plant and equipment Deferred tax asset Other non-current assets Non-current assets Inventories Trade receivables Income tax receivable Other receivables Prepayments Cash at bank and in hand Assets held for sale Current assets Total assets Equity and liabilities Share capital Reserves (4.7) (10.1) (8.1) (11.5) Retained earnings Proposed dividends for the year Equity Interest-bearing liabilities Provision for pension obligations Provision for deferred tax Other provisions Non-current liabilities Interest-bearing liabilities Trade payables Income tax payable Other payables Prepayments Other provisions Current liabilities Liabilities Total equity and liabilities

21 Quarterly report Q2 consolidated cash flow statement 18 Q2 H1 Year million Net profit for the period from continuing operations (1.1) (0.9) (7.9) Depreciation and amortisation Changes to provisions and other adjustments (2.8) (1.1) (0.1) Financials, net Income tax (1.0) 0.7 (2.0) Financials, net, settled (1.5) (1.6) (2.9) (3.0) (5.7) Income tax settled (0.6) (3.9) (2.5) (4.8) (14.8) Cash flow before change in working capital (0.8) Change in inventories (16.5) Change in receivables (1.8) (12.9) (10.7) (30.8) 5.1 Change in interest-bearing liabilities (3.6) (5.7) (25.1) Cash flow from operating activities 8.1 (17.0) (23.5) Purchase of intangible assets (0.6) (2.0) (0.8) (2.2) (2.3) Purchase of property, plant and equipment (3.0) (2.2) (6.1) (3.9) (8.3) Divestment of property, plant and equipment Divestment of subsidiaries Cash flow from investing activities 9.0 (4.2) 5.7 (6.1) (9.3) Repayment on long-term, interest-bearing debt (2.2) (2.3) (4.6) (4.6) (8.9) Raising of non-current, interest-bearing liabilities Dividends distributed (7.0) (5.5) (7.0) (5.5) (5.5) Cash flow from financing activities (9.2) (7.3) (11.6) (9.6) (14.3) Net cash flow from continuing operations 7.9 (28.5) (29.4) (7.7) 33.8 Cash flow from discontinued operations (1.9) (0.4) (2.7) Total cash flow 6.0 (28.9) (32.1) (6.4) 37.7 Cash at bank and in hand as at 1 January (1.2) (1.7) (1.7) Foreign currency translation adjustments (1.1) 0.0 (0.7) Cash at bank and in hand as at 31 December 3.7 (8.0) 3.7 (8.0) 36.5 Cash at bank and in hand as at 31 December Cash at bank and in hand Current interest-bearing liabilities (30.9) (32.9) (30.9) (32.9) (20.1) Cash at bank and in hand as at 31 December 3.7 (8.0) 3.7 (8.0) 36.5

22 Quarterly report Q2 consolidated statement of changes in equity 19 Share capital Reserves for hedging transactions Reserves for foreign currency translation adjustments Retained earnings Proposed dividends million Total Equity as at 1 January (13.8) Adjustments owing to changes in accounting policies Adjusted equity as at 1 January (13.8) Foreign currency translation adjustment at the beginning of the year (0.3) (0.3) Foreign currency translation adjustment of foreign subsidiaries (4.5) (4.5) Value adjustment of hedging instruments before tax Tax on value adjustments (1.0) (1.0) Net income recognised in equity via other comprehensive income in the statement of comprehensive income (4.5) (0.3) 0.0 (1.8) Net profit or loss for the period (7.9) (7.9) Comprehensive income (4.5) (8.2) 0.0 (9.7) Dividend distribution (7.0) (7.0) Other movements (7.0) (7.0) Equity as at 30 June (10.8) Equity as at 1 January (11.7) Adjustments owing to changes in accounting policies Adjusted equity as at 1 January (11.7) Foreign currency translation adjustment at the beginning of the year 0.0 Foreign currency translation adjustment of foreign subsidiaries Value adjustment of hedging instruments before tax (1.3) (1.3) Actuarial gains / losses on defined benefit plans (0.1) (0.1) Tax on value adjustments Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0.0 (0.8) 2.2 (0.1) Net profit or loss for the period Comprehensive income 0.0 (0.8) Dividend distribution (5.5) (5.5) Other movements (5.5) (5.5) Equity as at 30 June (12.5)

23 Quarterly report Q2 notes segment information 20 Solar A/S parent company 1 Solar Sverige AB Solar Norge AS Solar Nederland 2 Claessen ELGB, Belgium Solar Deutschland 3 GFI GmbH Austria Solar Polska Sp. z o.o. P/F Solar Føroyar Eliminations 4 Continuing operations total Discontinued operations 5 Solar consolidated million H1 Revenue (4.3) Other operating income (0.9) Other operating costs 6 (3.1) Solar 8000 costs (0.8) (0.9) (1.7) 0.0 (1.7) EBITA (11.7) (0.1) (5.5) (0.6) (0.7) (1.6) 0.3 (1.3) Financials, net (0.5) (1.5) (0.8) (0.9) 0.0 (0.1) (0.1) (3.9) (0.1) (4.0) EBT 3.9 (1.4) 4.3 (13.8) 0.0 (5.7) (0.6) (0.8) (9.9) 0.0 (9.9) Non-current assets (208.9) Equity (211.0) Liabilities (103.9) Balance sheet total (314.9) Organic growth % (6.7) (4.8) 5.4 (15.7) (4.4) (16.4) (4.3) (17.7) 4.8 (7.6) EBITA % (7.2) (0.3) (9.0) (2.4) (4.6) 3.9 (0.2) H Revenue (4.1) Other operating income (2.3) Solar 8000 costs (2.4) (0.8) 0.0 (1.0) 0.0 (0.4) (4.6) 0.0 (4.6) EBITA (0.3) 0.7 (3.8) (0.4) (0.1) 0.1 (2.3) Financials, net 0.0 (1.2) (0.4) (1.1) 0.0 (0.1) (2.7) 0.0 (2.7) EBT (2.5) 0.7 (4.2) (0.4) (0.1) 0.1 (0.3) 5.1 (0.2) 4.9 Non-current assets (272.1) Equity (273.0) Liabilities (58.5) Balance sheet total (331.5) Organic growth % (5.8) (11.1) EBITA % (3.4) (0.9) ) Under the cost method. 2) Includes the enterprise Conelgro B.V. acquired on 30 September ) Includes the enterprises GFI Gesellschaft für Installationstechnik mbh and GFI Elektro GmbH, both acquired on 30 September ) Intercompany revenue was 4.3m ( 4.1m in 2012). Eliminations include an adjustment resulting from the translation from cost method to equity method. 5) Comprises Solar Suomi and Aurora Group. 6) Loss resulting from the divestment of Aurora Group calculated under the cost method. 7) Organic growth figures for Conelgro B.V., Claessen ELGB, GFI Gesellschaft für Installationstechnik mbh, GFI Elektro GmbH and GFI GmbH Austria have been adjusted relative to period of ownership. 8) EBITA % has been calculated using absolute figures and is therefore not directly deductible. 9) The changes in accounting policies had the following impact in H1 2012: Solar Norge - equity +0.2m / liabilities -0.2m, Solar Nederland - equity +0.8m / liabilities -0.8m and Claessen - equity -0.2m / liabilities +0.2m.

24 Quarterly report Q2 notes share option plans 21 Executive Board Management employees Number of share options Total Outstanding 1 January 22,420 55,864 78,284 Granted in 8,147 30,217 38,364 Exercised (4,359) (4,358) (8,717) Forfeited 0 (10,124) (10,124) Expired Outstanding as at 30 June 26,208 71,599 97, Outstanding 1 January , , ,264 Granted in ,159 33,112 40,271 Exercised (10,099) (39,931) (50,030) Forfeited Expired (6,504) (25,052) (31,556) Outstanding as at 30 June ,420 68,529 90,949 million 30 June 30 June 2012 Market value estimated using the Black-Scholes model Conditions applying to the statement of market value using the Black Scholes model: Expected volatility 34% 36% Expected dividend in proportion to market value 3% 3% Risk-free interest rate 4% 4%