No. 10 2014 Quarterly report Q1 2014

As at 24 April 2013, Solar A/S sold the subsidiary Aurora Group Danmark A/S. Hence, the stated figures for 2013 and 2014 in this announcement relate to the continuing activities.

The Solar Group’s Q1 2014 revenue and EBITA matched our expectations. We maintain our expectations for revenue and EBITA for 2014.

CEO Anders Wilhjelm says:
”Most of our enterprises generated positive organic growth in the first quarter except the enterprises in Denmark and the Netherlands, and we maintain our financial expectations for the year. We continue to focus on improving operations and increasing customer focus.”
 

* Calculated as an average of the last four quarters’ inventories, debtors and creditors.

Revenue in Q1 2014:

• Group revenue matched our expectations.
• Adjusted for the number of working days, organic growth in Q1 2014 was 2.3%.

EBITA in Q1 2014:

• Group EBITA matched our expectations.
• In Q1 2014, a € -0.4m adjustment was made to the variable part of the selling price of Aurora Group. This amount was recognised under other operating income and costs.
• In addition, EBITA was as expected negatively affected by Solar 8000 costs of
  € 0.7m against € 0.9m in Q1 2013.
• In Q1 2014, no restructuring costs were recognised, whereas Q1 2013 EBITA was affected by restructuring costs of € 4.2m.

 
Net working capital:

• Net working capital was reduced to 12.7% of revenue, down from 13.7% in Q1 2013. When stated as an average of four quarters, net working capital was reduced to 13.0% of revenue from 14.1% in Q1 2013.
• Efforts to reduce net working capital will continue. Stated as an average of four quarters, our target for 2014 is to get net working capital to 13% of revenue. Moreover, we expect net working capital of 11% of revenue at year-end 2014.

 
Expectations for 2014:

• For 2014, we still expect revenue of € 1,465-1,510m and EBITA of € 25-32m.
• Expectations for 2014 EBITA include restructuring costs and Solar 8000 implementation costs totalling approximately € 3m. Adjusted for these, normalised EBITA is expected at € 28-35m.
• The lower expectation levels equal negative growth of approximately 2.5%, while the upper levels equal positive growth of approximately 0.5%.
• We will continuously implement improvement measures in several group enterprises to adjust cost levels to the current market situation as a result of our expectations for continued low market growth.
• We still expect to roll out SAP in Solar Sverige in Q2 2014.

Q1 presentation – audio webcast and teleconference today
The presentation of Quarterly Report Q1 2014 will be transmitted online in English from NASDAQ OMX Copenhagen today at 11.00 CET and will be accessible via www.solar.eu. It will be possible to participate via teleconference – see phone numbers below:

Participants from Denmark: tel. +45 32 72 80 18
Participants from Great Britain: tel. +44 145 255 5131
Participants from the USA: tel. +1 866 682 8490
International participants: tel. +44 (0) 145 255 5131

Yours faithfully
Solar A/S

Anders Wilhjelm

Attachment: Quarterly report Q1 2014 page 1-22

Facts about Solar
Solar A/S was established in 1919 and listed on the Copenhagen Stock Exchange in 1953. Solar is one of Northern Europe’s leading sourcing and services companies 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 2013, Solar Group revenue totalled € 1,531.5m, equating DKK 11.4bn. The group currently has some 3,300 employees.

For more information, please visit: www.solar.eu.

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.