No. 17 2014 Quarterly report Q3 2014

Quarterly Report Q3 2014
As at 24 April 2013, Solar A/S divested the subsidiary Aurora Group Danmark A/S. The stated figures for 2013 and 2014 in this announcement, therefore, relate to the continuing operations.

The Solar Group's revenue and EBITA in Q3 2014 were in line with our expectations. Expectations for underlying operations are unchanged, which is why expectations for yearly revenue are unchanged. However, a number of optimisation initiatives entail non-recurring costs in Denmark, Sweden, Norway and the Netherlands, which has changed our expectations for full-year EBITA.

CEO Anders Wilhjelm says:
”Several of our enterprises experienced negative growth in Q3, while the enterprises in Poland, Belgium and Austria generated positive growth. As we do not expect a significant change in the market conditions for our classic business areas, we have started to transform Solar from a wholesaler to a sourcing and services company with focus on customer needs. We have started a number of optimisation initiatives, but the journey Solar has embarked upon will take time. The transformation means that we have to become better at developing the existing business in a profitable manner, while at the same time exploring new opportunities.

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

Q3 2014 revenue:

• Group revenue matched our expectations.
• Organic growth amounted to -1.4% against -3.0% in Q3 2013.
  Adjusted for the number of working days, organic growth amounted to -1.3% against -4.5% in Q3 2013.

Q3 2014 EBITA:

• Group EBITA matched our expectations.
• EBITA was affected by restructuring costs of € 0.4m, while Q3 2013 EBITA was affected by restructuring costs of € 0.8m and Solar 8000 costs of € 0.9m.

Net working capital:

• Net working capital amounted to 13.3% of revenue, up from 13.2% in Q3 2013. When stated as an average of four quarters, net working capital was reduced to 13.0% of revenue from 13.6% in Q3 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. We expect net working capital of approximately 11% of revenue at year-end.

Expectations for 2014:

• Expectations for underlying operations are unchanged, which is why we continue to expect 2014 revenue around € 1,500m.
• However, the optimisation initiatives entail non-recurring costs which have changed expectations for EBITA from around € 23m to around € 9m. Normalised EBITA of unchanged approximately € 27m is expected.
• The optimisation initiatives in Solar’s enterprises in Denmark, Sweden, Norway and the Netherlands described in quarterly report Q3 2014 under events after closing of the accounts entail that expected restructuring costs increase from approximately
  € 2m to approximately € 12m along with an expected write-down of assets at fair value of € 4m which total € 16m.
• All things being equal, the annual effect of these initiatives entails cost savings of approximately € 7m of which approximately 50% is expected to be realised in 2015. Furthermore, the invested capital is expected to be reduced by € 9m as a result of the sales of assets along with the optimisation of net working capital in the Netherlands.

Presentation currency:

• Going forward, Solar will change the presentation currency from euro to Danish kroner. The change is a result of our wanting to reduce complexity in the presentation of accounts.

Q3 presentation – audio webcast and teleconference
The presentation of Quarterly Report Q3 2014 will be transmitted online from Nasdaq Copenhagen on Tuesday 18 November 2014 at 11.00 CET and will be accessible via www.solar.eu. Teleconference numbers are available here:

Participants from Denmark: tel. +45 32 72 80 18
Participants from the UK: 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 Q3 2014 pages 1-23

Facts about Solar
Solar A/S is a listed company and one of Northern Europe’s leading sourcing and services companies, mainly within electrical, heating, plumbing and ventilation technologies. Solar offers products, knowledge and solutions.

In 2013, the Solar Group, which is based in Denmark, generated revenue totalling

€ 1,531.5m, equating DKK 11.4bn. The group currently has some 3,300 employees. Solar is listed on Nasdaq Copenhagen with the short designation SOLAR B and has been listed since 1953.

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

Disclaimer
This announcement was published in Danish and English today via Nasdaq Copenhagen. In case of any discrepancy between the two versions, the Danish version shall prevail.
 

Vedhæftede filer:

fb201417 uk Q3 2014.pdf