Solar Equity Story Our three value drivers are growth, EBITA margin and net working capital

Transcription

1 Solar Equity Story Our three value drivers are growth, EBITA margin and net working capital

2 Investor presentation Agenda Agenda 1. The results we achieved in Q Capital structure 3. Outlook CEO update priorities 5. Digital business development 6. Appendix facts about Solar 2

3 Quarterly Report Q The results we achieved in Q Organic growth adjusted for number of working days was 3.1% vs. 3.8% in Q improved performance in the last part of the quarter Organic growth, adjusted for number of working days 12% 10% 8% 6% Q Q Revenue, DKK million 2,595 2,449 Revenue growth, % Adj. organic growth, % % 2% 0% -2% -4% Q1 Q2 Q3 Q4 FY

4 Quarterly Report Q The results we achieved in Q Positive growth in the Nordic markets and at group level Update on the installation segment: Continued low construction activity levels but adjusted organic growth around 3.5%. In Solar Nederland, continued focus on improving profitability led to lower revenue, since sales of some products were reduced and some customers were deselected. Growth would have been around zero if adjusted for this impact. Update on the industry segment: We saw moderate industrial activity in our markets, resulting in minor sales growth in Q3. Adjusted organic growth around 1%. DKK million Q Revenue Q Adj. org. growth Denmark % Sweden % Norway % Benelux % Other markets % Eliminations -14 Group 2, % 4

5 Quarterly Report Q The results we achieved in Q EBITA amounted to DKK 67m in Q down from DKK 89m in Q EBITA margin Q Q % 3% 2% 1% 0% 3,6% 0,0% 0,0% -0,7% Q COGS Oth. income -0,7% 0,1% 0,3% 2,6% EOC Staff Debt. Depr. Q Revenue, DKK million 2,595 2,449 Revenue growth, % Adj. organic growth, % Gross profit, DKK million Gross profit margin Increase in EOC and staff costs was related to the acquisitions of MAG45 and EBS and also to costs from innovation and development and non-recurring costs. EBITA, DKK million EBITA margin

6 Quarterly Report Q The results we achieved in Q1-Q EBITA was slightly below our expectations but predominantly related to costs from innovation and development and non-recurring costs EBITA margin 9M M % 2,5% -0,1% 0,0% -0,5% Revenue, DKK million 8,062 7,768 2% 0,0% 0,1% 0,2% 2,2% Revenue growth, % % Adj. organic growth, % Gross profit, DKK million 1,674 1,620 0% 9M 2015 COGS Oth. income EOC Staff Debt. Depr. 9M 2016 Gross profit margin EBITA, DKK million EBITA margin

7 Quarterly Report Q The results we achieved in Q Cash flow at DKK -248m in Q3 impacted by acquisitions of DKK 57m and share buy-back of DKK 150m Cash flow DKK million Cash flow, operating activities DKK million Q22016 Oper. act. Inv. act. Fin. act. Other Q Net profit Depr. & amort. Tax & adj. Inv. Rec. Liab. Oper. act. 7

8 Quarterly Report Q The results we achieved in Q Continued improvement of net working capital Gearing impacted by DKK 150m from share buy-back in Q3 Net working capital average (NWC) DKK million ,0% Net interest-bearing debt (NIBD) 900 DKK million No. of times2, ,5% 700 1, , ,0% 300 0, ,5% 100 0, ,0% ,5 900 Q115 Q215 Q315 Q415 Q116 Q216 Q316 NWC NWC/Revenue LTM 10,5% ,0 Q115 Q215 Q315 Q415 Q116 Q216 Q316 NIBD NIBD/EBITDA LTM 8

9 Quarterly Report Q Capital structure Our search for acquisitions and investment opportunities will continue Solar s Board of Directors regularly assesses the company s capital structure to ensure that it is appropriate for both the shareholders and the company. In Q1-Q3 2016, Solar paid a total of DKK 274m to the shareholders via share buy-back programmes and as dividend regarding In Q1-Q3 2016, Solar acquired the two companies MAG45 and Euro Business School (EBS) as well as obtaining minority stakes in GenieBelt and Minuba. Investments in digitalisation etc. are made continuously, and share buy-back programmes have been executed. Our search for acquisition and investment opportunities will continue, and we will continue to look at investments in further innovation and development. 9

10 Quarterly Report Q Outlook 2016 We adjust our outlook for 2016 revenue slightly upwards and reconfirm our outlook for 2016 EBITA In Q3 2016, organic growth amounted to 3.1% with a better performance in the last part of the quarter. However, sales mix in Denmark was somewhat unfavourable from a margin perspective. This trend is expected to continue into Q4. Consequently, we now expect both modest market growth and organic revenue growth in 2016, giving us a revenue outlook of around DKK 11bn whereas we previously expected revenue of around DKK 10.9bn. We reconfirm our outlook for EBITA, expecting it to remain at 2015 levels less the positive one-off of DKK 9m from a change in pension plans in the Netherlands that we saw in 2015, giving us an EBITA outlook of around DKK 287m. As previously announced, we are investing in our digital platforms to strengthen the customer experience, and we are investing in growth in our new businesses MAG45 and EBS. Together, this will have a negative impact on our profitability for

11 Quarterly Report Q CEO update Status on 2016 priorities Maintain focus on short-term strategy; profitable growth Strengthen digital front-end - investing in digital start-ups Strengthen industrial offer - MAG45 growth plan Continue transformational process (sourcing and services) Pursue growth opportunities inside and outside current business scope - networked development 11

12 Quarterly Report Q Digital business development We are investing in people and technology We invest in digital solutions that make it easier to do business with Solar We believe digital construction technology will significantly alter the construction value chain We have recently invested in two digital start-ups: GenieBelt and Minuba Our digital investments are examples of networked business development 12

13 Appendix Facts about Solar

14 Our identity We strive to improve our customers business A leading European sourcing and services company mainly within: Electrical components Heating Plumbing Ventilation 14

15 Sourcing and services How we work We work with our customers to bundle their spend and improve their sourcing. to create the best offer and to proactively develop alternatives. to optimise their productivity, to optimise transportation cost and to minimise required inventory. to improve their employees skills and efficiency. 15

16 How we serve our customers Everything starts with the customer Customer channels Sales concepts Solar Services Webshop Mobile Direct online connection (EDI) Direct sales Drive-ins Competence centres Solar Plus Solar Light Solar Industry Cables Solar Blue Energy Sales services Ordering services Delivery and operational services Education and competence services 16

17 Solar Fastbox concept At work site within an hour With Solar Fastbox We make life easier for our customers Increase productivity Save time and transportation costs Solar Fastbox at customer work site within an hour 17

18 Optimal supply to our customers We offer a flexible distribution setup Day delivery Night delivery Delivery on worksite Delivery at company address Pick-up Fastbox* We work while you sleep Order via e-business before 6 PM and receive before 7 AM We have a 97% delivery success rate We perform extensive quality control in our operation Norway Sweden Denmark The Netherlands Poland Belgium Austria Electrical * Electrical, heating and plumbing components Electrical, heating and plumbing components 18

19 Solar Group at a glance We draw on nearly 100 years of experience and knowhow 1919 Founded in Listed on the stock exchange since 1953 DKK 10.6bn DKK 10.6bn in revenue and EBITA of DKK 296m in 2015 Customers A lot of close customer relationships in our markets 45.9% E-business percentage of 45.9 of revenue Warehouses Strategically placed central warehouses 215,000 Approximately 215,000 articles in stock 3,000 Approximately 3,000 people 19

20 Solar is listed on Nasdaq Copenhagen and has a majority of long term investors Distribution of share capital and votes as at 30 September 2016 in percent Holdings of 5% or more of share capital Share capital Votes The Fund of 20 December, Vejen, Denmark Chr. Augustinus Fabrikker A/S, Copenhagen, Denmark Nordea Funds Oy, Danish Branch, Copenhagen, Denmark RWC Asset Management LLP, London, England Solar A/S, Vejen, Denmark 15.6% 57.5% 10.3% 5.1% 10.2% 5.0% 9.5% 4.7% 7.9% 3.9% 20

21 Solar s business areas: Electrical, heating and plumbing, and ventilation technologies Installation Cables Marine & Lighting Industry Offshore Communication Security Ventilation Heating, Water & Sanitation Renewable energy 21

22 Solar delivers products and solutions within: Residential and Commercial buildings Industry Marine & Offshore Utility and infrastructure Public sector 22