Quarterly report 2008
(Figures in brackets state corresponding figures for 2007)
In Q3 Solar realised continued positive organic growth in line with
expectations while profit did not meet expectations.
For Q3 2008 the following can be highlighted:
• Revenue increased by 4.0% to € 349.4m (335.9).
• Organic revenue growth amounted to 4.7% (16).
• EBITA amounted to € 18.4m (20.7).
• Cash flow from operating activities amounted to € 19.1m (13.1).
For Q1-Q3 2008 the following can be highlighted:
• Revenue increased by 10% to € 1,087.7m (988.9).
• Organic revenue growth amounted to 7.3% (17).
• EBITA amounted to € 48.6m (54.1).
• Earnings before tax were € 37.6m (46.5).
• Working capital amounted to 18.2% (20.6) of revenue.
Comments on Q3 in general:
• Continued high activity level for the group as a whole.
• Geographical expansion with the opening of branches in Germany, Sweden and
Poland.
• General slowdown in new building and significant reduction in Denmark.
• Continually high freight costs which have only been possible to compensate
for in part.
• Solar Nederland B.V. experienced a successful change-over to the SGS IT
platform also used in Denmark, Norway, Sweden and Finland.
Expectations for / comments on the remainder of 2008:
• Considerable uncertainty about market development due to the financial
crisis.
• Organic growth will be on the decline and is expected to be negative overall
in Q4.
• Freight costs will affect the group's total net profit negatively compared
with 2007. Several activities have been launched to compensate for this cost
increase.
• The restoration plan for the Norwegian enterprise is in line with the
established targets.
• Further staff reductions have been initiated, and a number of new
appointments have been suspended. When the reductions have been fully completed
in 2009, the result will be annual savings equal to € 12m.
• Further cost reduction initiatives have been launched.
Profit expectations for 2008:
• Based on the above, expectations for 2008 are reduced from revenue of €
1,530m to € 1,510m.
• Expectations for EBITA are reduced from € 75m to € 68m.
Expectations for 2008 include the effect of the acquisitions of Eltomont Sp. z
o.o., Poland, and Vegro B.V., the Netherlands.
Expectations for 2009:
There is great uncertainty about market development in 2009. At present, the
duration of the financial crisis and the resulting effect on construction and
industry cannot be assessed with any reasonable certainty. Consequently,
expectations for revenue and earnings in 2009 will not be published until March
2009.
Yours faithfully
Solar A/S
Flemming H. Tomdrup
