Solar Group: Results for 2012 and expectations for 2013
The Solar Group’s 2012 revenue and EBITA fell short of previously announced expectations. Expectations for revenue and EBITA for 2013 will be adjusted downwards. Financial gearing of 1.5 times EBITDA at year-end 2012. Capital structure will be assessed after H1 2013.
Results for 2012 (matching 2011 figures in brackets)
The Supervisory Board of Solar A/S has decided to publish the results for 2012 earlier than
Key financial ratios (€ million)* Q4 2012 Q4 2011 2012 2011
Revenue 455.7 460.8 1,700.9 1,532.4
Solar 8000 costs 0.7 1.9 6.4 5.3
EBITA 13.0 19.1 38.0 39.1
Earnings before tax 9.2 14.5 23.2 19.6
Net profit for the period 7.0 10.4 15.7 12.2
Balance sheet total 767.4 723.5 767.4 723.5
Equity 294.8 282.2 294.8 282.2
Interest-bearing liabilities, net 74.9 120.3 74.9 120.3
Cash flow from operating activities 48.2 26.0 61.4 48.5
Cash flow from investing activities -1.9 -1.1 -9.4 -68.8
Cash flow from financing activities -2.2 -4.8 -14.3 -23.1
Key financial ratios (%)*
Organic growth -3.1 1.9 0.1 3.6
EBITA margin 2.9 4.1 2.2 2.6
Net working capital/last 12 months’ revenue ** 14.0 15.3 14.0 15.3
* The figures listed are subject to finalisation of the audit. Annual Report for 2012 will be published on 6 March 2013.
**Calculated as an average of the last four quarters’ inventories, trade receivables and trade payables.
2012 was characterised by downturns in business in several of the markets where Solar
operates, and the end of Q4 was especially disappointing. The Dutch market saw another
sharp decline in Q4 which was a contributory cause of the negative organic growth and lack of
earnings for Solar in the Netherlands. Thus, Solar in the Netherlands generated organic
growth of -19.1% (-3.7%) and EBITA of € -4.6m (€ 2.3m).
Solar Sverige’s results in 2012 were negatively impacted by increased sales to projects with
low earnings potential and a change to the customer mix.
Generating organic growth of 14.2% in Q4, Solar Danmark kept up the positive trend of 2012
in the year’s final quarter. Organic growth was driven by the sale of solar panels to private
consumers and other energy-efficient products and solutions.
Solar Norge stayed on course with the pick-up seen throughout 2012. During the year, a
number of advantages to the move to Solar 8000 (SAP) became increasingly clear.
We have continuously adjusted the organisations in several group enterprises. In 2012,
restructuring costs totalled € 2.6m against the estimated € 2.0m.
Adjusted for 2012’s restructuring and Solar 8000 roll-out costs, normalised EBITA totalled €
47.0m, equalling 2.8% of revenue against 3.6% in 2011.
Revenue and EBITA in 2012:
• Group revenue and EBITA were unsatisfactory and fell short of previously announced
Net working capital:
• Positive trends in net working capital contributed to cash flow from operating activities
rising to € 61.4m against € 48.5m in 2011.
• Net working capital was reduced to € 215.4m, equating to 12.6% of revenue against
15.8% in 2011. This means that we met Solar’s target for net working capital by yearend
2012 of less than 14% of revenue.
• Net working capital was 14.0% of revenue when stated as an average of four
quarters, meeting our target of approximately 14%.
• Net interest-bearing debt was reduced by € 45.4m. As a result, gearing was reduced
to 1.5 against 2.3 times EBITDA in 2011, keeping it within Solar’s target range of 1.5
to 2.5 times EBITDA.
Expectations for 2013:
• We will adjust our expectations for 2013 downwards from revenue of € 1,720-1,770m
to revenue of € 1,690-1,730m and from EBITA of € 42-51m to EBITA of
• Normalised EBITA is expected at € 43-50m when adjusted for restructuring and Solar
8000 roll-out costs.
• The lower expectation levels equal negative growth of just above 1%, while the upper
expectation levels equal positive organic growth of just below 2%.
• Changes to the revenue expectations are mainly founded in the loss of solar panel
sales in Denmark and expectations of increasingly negative market trends in the
• As a result of the negative market trends seen, we adjusted the organisations in
several group enterprises. The most extensive restructuring measures will be
implemented in the Netherlands in H1. Consequently, estimated restructuring costs in
2013 will be up from approximately € 2m at approximately € 5m.
• Implemented and planned restructuring will generate savings of approximately € 6m
for 2013. These savings total approximately € 9m when translated to full-year figures.
Expectations relating to Solar 8000:
• Solar 8000 costs for 2013 are still expected at approximately € 4m in 2013.
• The group finds it crucial that Solar 8000 roll-outs in Denmark and Sweden bring as
little interruption as possible Thus, we have assessed that a Q1 roll-out of Solar 8000
in Denmark would not be prudent.
• We expect to present further information about Solar 8000 when we publish Annual
Report 2012, detailing the roll-outs in Denmark and Sweden by the end of 2013.
• We will make no changes to financial expectations when it comes to the total Solar
8000 investments and costs, and related future results improvements.
Focus in 2013
In addition to our continued efforts to build up future business areas and seeing the Solar 8000
implementations in Denmark and Sweden through, Solar will use 2013 to focus specifically on
strengthening earnings in the group enterprises – particularly in the Dutch enterprise.
At the annual general meeting on 5 April 2013, the Supervisory Board will propose dividend
distribution of DKK 6.65 per share which equates to € 0.89 per share and a distribution
percentage of 44.8.
Capital structure will be assessed after H1 2013
The group will maintain our target for financial gearing of 1.5 to 2.5 times EBITDA.
Solar does not expect to make any major acquisitions in 2013. In this light, the Supervisory
Board will assess the option to pay out extraordinary dividends in the autumn of 2013.
Therefore, at the upcoming annual general meeting, the Supervisory Board will propose that it
be granted the authority to pay out extraordinary dividends of up to DKK 15.00 per share for
the period until the next annual general meeting.
The Supervisory Board will continuously work to ensure that we hold to a level of borrowing
which, on one hand, ensures us flexibility when it comes to our ability to act on business
opportunities and maintains our independence from the group’s bankers while, on the other
hand, ensuring that Solar does not become overcapitalised.
Solar A/S was established in 1919 and listed on the Copenhagen Stock Exchange in 1953.
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 Faroe Islands, Sweden, Norway, the Netherlands, Belgium, Germany,
Poland and Austria. Solar also owns Aurora Group, a leading Scandinavian distributor of
accessories for consumer electronics that operates in Denmark, Sweden, Norway and
Finland. In 2012, Solar Group revenue totalled € 1,700.9m, equating DKK 12.7bn. The group
has approximately 3,600 employees.
For more information, please visit: www.solar.eu.
Group CEO Flemming H. Tomdrup - tel.+45 79 30 02 01
Group CFO Michael H. Jeppesen – tel. +45 79 30 02 62
Corporate IR and Communications Manager Charlotte Risskov Kræfting – tel.+45 40 34 29 08