http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/RSS.ashxSolar Group PagesTue, 18 Nov 2008 09:12:39 +0100http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=1http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=1Q3 / 20082008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=2http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=22008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=3http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=3Contents Financial highlights Outline Group report Q3 2008 Q1-Q3 2008 Strategic initiatives Expectations for 2008 and 2009 Solar’s shares Accounting policies 2 3 4 4 4 5 7 8 9 10 11 12 Status on the development in the individual subsidiaries 5 Management’s statement Income statement Balance sheet Statement of changes in equity/ Treasury shares Cash flow statement Acquisition of subsidiaries Quarterly figures 13 14 15 16 The report for Q3 2008 for Solar A/S CVR no. 15 90 84 16 via NASDAQ OMX Copenhagen. In the event of any discrepancy between the Danish and English versions, the Danish version shall prevail. was published in Danish and English on 18 November 2008 Solar A/S Quarterly report Q3 2008 / Contents Page 1 of 162008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=4http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=4Financial highlights Consolidated Q3 2008 Financial and operating data for income statement (€ million) Revenue Earnings before interest, tax and amortisation (EBITA) Earnings before interest and tax (EBIT) Items under financial income and expenses, net Earnings before tax (EBT) Net profit for the period Earnings per share in € per share outstanding (EPS) Earnings excl amortisation per share in € per share outstanding Financial and operating data for balance sheet (€ million) Total assets Net investments in property, plant and equipment Share capital outstanding Equity Interest-bearing liabilities Financial and operating data for cash flow (€ million) Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Financial ratios (% unless otherwise stated) Revenue growth Organic growth Earnings before interest, tax and amortisation (EBITA) Earnings before interest and tax (EBIT) Operating margin Return on equity (ROE) Return on equity (ROE) excl amortisation Return on invested capital (ROIC) Return on invested capital (ROIC) excl amortisation EV/EBITA Equity ratio Intrinsic value in € per share outstanding Share price in € Share price / Intrinsic value Share price in DKK Employees Average number of employees (FTE) 2,942 2,712 2,878 2,625 2,658 4.0 4.7 5.3 4.8 2.9 18.2 21.2 11.8 13.6 6.4 39.2 32.9 46.4 1.41 346 31.2 16.3 6.2 5.7 3.8 24.2 27.5 13.2 14.8 9.3 37.3 31.1 85.1 2.73 634 10.0 7.3 4.5 4.0 2.4 15.7 18.7 10.3 12.1 7.3 39.2 32.9 46.4 1.41 346 28.9 17.4 5.5 5.0 3.4 21.6 24.4 11.5 12.9 10.7 37.3 31.1 85.1 2.73 634 27.2 15.3 5.7 5.2 3.5 22.3 25.2 13.1 14.7 8.6 42.2 32.9 74.3 2.26 554 19.1 -0.6 -9.0 13.1 0.5 -2.4 31.4 -6.6 -38.8 19.5 -55.5 30.7 54.6 -59.3 25.5 564.1 0.4 90.0 221.2 161.6 580.5 0.4 93.4 216.8 184.7 564.1 6.4 90.0 221.2 161.6 580.5 10.0 93.4 216.8 184.7 542.8 13.8 93.3 229.0 151.7 349.4 18.4 16.7 -2.4 14.3 10.0 1.48 1.73 335.9 20.7 19.0 -1.3 17.7 12.7 1.82 2.07 1,087.7 48.6 43.5 -5.9 37.6 26.5 3.88 4.62 988.9 54.1 49.7 -3.2 46.5 33.4 4.79 5.43 1,367.2 77.3 71.2 -5.6 65.6 47.5 6.82 7.70 2007 Q1 - Q3 2008 2007 Year 2007 Page 2 of 16 Solar A/S Quarterly report Q3 2008 / Financial highlights2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=5http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=5Outline Q3 and Q1-Q3 2008 In Q3, revenue increased to € 349.4m, equating to an increase of 4.0%. For the first nine months in total, revenue increased by € 98.8m to € 1,087.7m, i.e. an increase of 10%. Organic growth amounted to 4.7% for Q3 and 7.3% for the first nine months of the year. Revenue in € million Expectations for 2008 and 2009 In spite of great efforts within new business areas and our geographical expansion, the very long period of high organic growth is expected to end in Q4. This does not result from a loss of customers – quite the contrary – but is a result of the general uncertainty that has hit markets and the slowdown that affects new builds in particular in a number of countries. Consequently, staff reductions have been introduced in a number of subsidiaries to reduce cost levels. Continued high freight costs, which have been possible to compensate for only partly in Q3, will also affect group profit negatively for the remainder of 2008. As a result, Solar downgrades the expectations for the 380 360 340 320 300 Q1 2008 2007 Q2 Q3 Q4 2008 revenue from € 1,530m to € 1,510m. EBITA expectations are reduced to € 68m against the previously expected € 75m. EBITA decreased by 11% in Q3 to € 18.4m. For Q1-Q3, EBITA in € million 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. EBITA totalled € 48.6m against € 54.1m for Q1-Q3 2007. 25 20 15 10 5 0 Q1 2008 2007 Q2 Q3 Q4 Strategic initiatives Based on the company programme New Solar 2010, Q3 also focused on strategic initiatives within the three areas of Growth, Efficiency and People. Geographical expansion continues with the opening of already planned branches in several countries and continued emphasis on acquisitions. Business development within current and new product areas continues to contribute positively to organic growth. The optimisation of net working capital is on schedule and improvements in Q3 fully meet the prescribed targets. To be able to support continued positive development of the group’s business activities even better, the IT strategy has been redefined. A business case has been prepared based on New SGS (the group’s joint ERP platform). On this basis, the decision has been made to transfer part of the group’s in-house developed ERP system to SAP. Solar A/S Quarterly report Q3 2008 / Outline Page 3 of 16 EBT decreased by 19% to € 14.3m in Q3, and net profit for the period decreased by 21% to € 10.0m. For Q1-Q3 in total, pre-tax profit decreased by 19% to € 37.6m, and net profit for the period decreased by 21% to € 26.5m. Net profit per outstanding share for Q1-Q3 totalled € 3.88 against € 4.79 for Q1-Q3 2007. Revenue was in line with expectations, but net profit failed to reach the expected level.2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=6http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=6Group report Q3 2008 Revenue Revenue for the quarter increased by € 13.5m to € 349.4m, equating to 4.0% revenue growth. Organic growth amounted to 4.7%. Organic growth development in % over the last seven quarters can be illustrated as follows: Organic growth in % EBT and net profit for the period EBT in Q3 amounted to € 14.3m against € 17.7m for the corresponding period last year. Net profit for Q3 amounted to € 10.0m against € 12.7m last year. Net profit failed to reach the expected level. Net profit per share Net profit per outstanding share for Q3 decreased by 19% to € 1.48. 20 15 10 5 0 Q1 20 0 8 2007 Q2 Q3 Q4 Q1-Q3 2008 Revenue for the first nine months of 2008 increased by € 98.8m to € 1,087.7m, equating a revenue increase of 10%. Organic growth amounted to 7.3%. Revenue distribution on subsidiaries was as follows: Revenue in € million Q1-Q3 Q1-Q3 2008 2007 Solar Danmark A/S Solar Sverige AB Solar Norge AS Solar Nederland B.V. Solar Deutschland GmbH Solar Suomi Oy Solar Polska Sp. z o.o. P/F Solar Føroyar Aurora Group Eliminations 331.2 226.2 182.8 165.4 112.6 15.2 17.0 4.8 39.8 -7.3 1,087.7 307.2 186.2 155.9 160.6 107.0 16.6 15.8 4.2 42.4 -7.0 988.9 7 17 Organic growth in %* Q1-Q3 Q1-Q3 2008 2007 8 9 16 3 5 -8 -3 14 -6 13 22 42 8 9 -3 35 35 16 Revenue for Q3 was at the expected level. EBITA EBITA decreased by 11% to € 18.4m, i.e. 5.3% of revenue. Compared with Q3 2007, rising freight costs impacted EBITA in percentage of revenue negatively by 0.6 percentage points. The development in EBITA in % of revenue over the past seven quarters can be illustrated as follows: EBITA in % of revenue Total * When calculating organic growth, no adjustments have been made for the number of working days. 8 6 4 2 0 Q1 20 0 8 2007 Q2 Q3 Q4 EBITA declined by 10% to € 48.6m, i.e. 4.5% of revenue. Compared with the corresponding period in 2007, rising freight costs alone impacted EBITA in percentage of revenue negatively by 0.5 percentage points. EBT decreased by 19% to € 37.6m, equating 3.5% of revenue. Net profit for the period decreased by 21% to € 26.5m. In Q1-Q3 2008, net profit was affected by amortisation of € 5.1m against € 4.4m in Q1-Q3 2007. Adjusted for Page 4 of 16 Solar A/S Quarterly report Q3 2008 / Group report2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=7http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=7amortisation, both pre-tax profit and net profit for the period decreased by 16%. Revenue was in line with expectations, while net profit failed to meet the expected level. international businesses, is affected by global as well as local economic trends in Solar’s markets. Solar is continually expanding its business base and has, therefore, reduced its exposure to economic changes in the construction industry. Investments In 2007, construction of a new Norwegian administration building adjacent to the central warehouse in Gardermoen began. As expected, the building was commissioned in Q3 2008. Extension of the administration building in Vejen, Denmark, has begun. The building is expected to be commissioned in Q3 2009. The first nine months of the year saw net investments in property, plant and equipment of € 6.4m. Based on the New Solar 2010 company programme, Q3 focused on strategic initiatives within the three areas of Growth, Efficiency and People. Within the overall cross-disciplinary group concepts, the following can be accentuated: STRATEGIC INITIATIVES Growth The implementation of IWS, our new means of optimising our customer cooperation, continues as planned. All countries are also making great efforts to increase the share of E-business orders. Cash flow Cash flow from operating activities totalled € 31.4m for efforts to reduce net working capital are proceeding according to plan. As at 30 September 2008, net working capital amounted to 18.2% of the expected revenue for 2008 against 20.6% as at 30 September 2007. Cash flow from investing activities totalled € -6.6m for Q1-Q3 2008 against € -55.5m for Q1-Q3 2007. the period against € 19.5m for Q1-Q3 2007. Long-term Efficiency To be able to support continued positive development of the group’s business activities even better, the IT strategy has been redefined. A business case has been prepared based on New SGS (the group’s joint ERP platform). On this basis, a decision has been made to move part of the group’s ERP functions to SAP. The change-over to New SGS will be implemented over the next 3-4 years. Total investments are expected to amount to up to € 40m distributed over a 3-year period with the main costs in 2009 and 2010. When fully implemented throughout the group, the change-over to New SGS is expected to increase EBITDA by € 8-10m annually. The optimisation of net working capital follows the predetermined plans and the substantial improvements fully meet expectations. Cash flow from financing activities totalled € -38.8m against € 30.7m for Q1-Q3 2007. In the first nine months of 2008, cash flow from financing activities was negatively affected by payment of dividend of € 17.6m, corresponding to DKK 19.00 per share, and purchase of treasury shares by € 14.0m. In connection with the acquisition of Vegro B.V. in October 2008, long-term debt of € 54m has been contracted, and Solar A/S has provided property as security for € 35m of this debt. People Key risks Annual Report 2007 outlines Solar’s commercial and financial risks. The most important risk is that Solar, like other Solar maintains increased focus on employees through the mapping of competences. The objective is for all employee competences to be mapped against the defined job comSolar A/S Quarterly report Q3 2008 / Group report Page 5 of 162008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=8http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=8Group report petences by the end of 2009. At group level, the mapping of competences will form the basis of an even more efficient utilisation of existing competences and training. Anders Gärdström joined Solar in the beginning of October. Anders Gärdström will take up the position of CED as at 1 January 2009. The current CED of the enterprise will remain with Solar part-time in a new role with special focus on development of plumbing and sanitary activities. The implementation of Lean continues with very satisfac- STATUS ON THE DEVELOPMENT IN THE INDIVIDUAL SUBSIDIARIES Solar Danmark A/S The activity level in the Danish market is now very low within housing construction and decreasing within industrial construction, which the enterprise noted at the end of the quarter particularly. tory results. Solar Norge AS The general activity level remains relatively high. Organic growth was at the expected level. In Q2, the During the past couple of years, a number of business development initiatives have been taken within areas that are independent of new build activities. These activities help to alleviate the effect of the negative growth expected in Q4. enterprise initiated a restructuring plan which involves staff reductions and strengthening of the gross profit. Both revenue and earnings meet the targets established in the restructuring plan. As planned, the new administration building in Garder- Extension of the administration building in Vejen is proceeding according to schedule. The building is expected to be commissioned in Q3 2009. The implementation of Lean proceeds on schedule and means continuous increased efficiency, quality and employee satisfaction. moen has been commissioned, meaning that all central functions and the central warehouse are now located at one single address in Gardermoen. Solar Nederland B.V. The activity level in the market remains at a relatively high level. As stated in announcement no. 52, the enterprise has acquired Vegro B.V. The Post Merger Integration (PMI) plan for the integration has been initiated. Vegro is expected to be fully integrated by the end of 2010. As a result of the acquisition of Vegro, the planned geographical expansion within the plumbing and sanitation area is stopped as far as Solar Nederland is concerned. Implementation of the group’s SGS (IT/ERP) systems was carried out as planned at the end of Q3. The Dutch organisation was supported by 25 super users from the group’s other subsidiaries and 30 persons from the corporate IT and process development departments. This ensured a successful change-over to the SGS platform used also in Denmark, Sweden, Norway and Finland. Solar Sverige AB In Q3, the enterprise continued to implement its geographical expansion in the plumbing and sanitation area, which was envisaged at the time of the acquisition of Alvesta V.V.S. – Material AB in the spring of 2007. With the basis for continued growth in place, we will now focus further on strengthening earnings as planned. The last of two combined electricity, plumbing and sanitation branches has opened in Stockholm. Combined electricity, plumbing and sanitation branches will open in Malmø and Karlstad before the end of Q4. Within electricity, improvement of earnings has been the primary focus area for some time. Declining growth reported at the end of Q2 has continued. Page 6 of 16 Solar A/S Quarterly report Q3 2008 / Group report2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=9http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=9Solar Deutschland GmbH After having performed only moderately over the summer, the subsidiary is now experiencing more positive development. electronics. In spite of the start-up of deliveries to a new chain in Q3, the enterprise recorded a drop in revenue – the Norwegian market was especially disappointing. The decision about the location of the new central ware- The geographical expansion of the enterprise is on schedule with the opening of branches in Magdeburg, Hamelin and Uelzen, meaning that we have gotten off to a good start from a business point of view. We have carried out extensive activities to integrate the many new employees in the enterprise. house has been postponed until the beginning of 2009. EXPECTATIONS FOR 2008 AND 2009 There is uncertainty about market development for the remainder of 2008 and for 2009. The group continues to work at a relatively high level of activity. Solar Suomi Oy General development is affected by a marked slowdown in exports in addition to weak demand for new housing. Still, the subsidiary has managed to increase revenue in Q3. Great efforts within new business areas and our geographical expansion create revenue growth but affect performance negatively in the short term. Under the current market conditions, the very long period of high organic growth is expected to end in Q4 2008 when we expect slightly negative organic growth. Continually high freight costs will also have a negative impact on the group’s net profit for the remainder of 2008 and probably also for some part of 2009. As a consequence of general market trends, staff reductions have been introduced to adjust costs to the new situation. When this reduction has been fully completed during 2009, it will result in annual savings of € 12m. In Q3 the enterprise opened two new branches in Tarnów and Bydgoszcz. As stated in announcement no. 51, Solar Polska Sp. z o.o. has acquired technical wholesaler Eltomont Sp. z o.o. The Post Merger Integration (PMI) plan has been initiated, and Eltomont Sp. z o.o. is expected to be fully integrated by the end of 2009. At present, the duration of the financial crisis and its effects on construction, industry and raw material prices cannot be assessed with any reasonable certainty. Consequently, expectations for 2009 revenue and earnings will not be published until March 2009. As a result, Solar downgrades the expectations for 2008 from € 1,530m to € 1,510m. EBITA expectations are reduced to € 68m against the previously expected € 75m. Expectations for 2008 include the effect of the acquisitions of both Eltomont Sp. z o.o. and Vegro B.V. Solar Polska Sp. z o.o. Developments in the market were generally negative in Q3 but this must be compared to a very high activity level a year ago. This has increased competition further, which reduced earnings in Q3. Technical wholesalers such as Solar perform better than the general wholesalers who only focus on construction activities. The market situation is expected to remain unchanged for the remainder of the year. P/F Solar Føroyar Solar Føroyar saw declining growth in Q3 as expected. Aurora Group Decreasing private consumption, which has also hit the Nordic market for consumer electronics, has had a negative impact on revenue from accessories for consumer Solar A/S Quarterly report Q3 2008 / Group report Page 7 of 162008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=10http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=10Group report SOLAR’S SHARES Solar’s share capital is composed of nominally € 12.1m A shares and nominally € 85.5m B shares. Treasury shares Since December 2007, Solar has purchased treasury shares for € 6.3m through three share buy-back programmes. The most recent share buy-back programme was completed on 22 May 2008. In addition to the share buy-back programmes, Solar purchased treasury shares for € 8.0m in April and September 2008. As at 30 September 2008, Solar’s portfolio of treasury As at 30 September 2008, the following shareholders had registered ownership shares or voting rights of 5% or more of the total share capital: Ownership and voting rights Shares The Fund of 20th December, Kolding Arbejdsmarkedets Tillægspension, Hillerød Solar A/S, Kolding 17.0% 13.2% 7.8% Votes 59.9% 6.3% 3.7% shares totalled 568,220 B shares, equating to 7.8% of the share capital. Price development As at 30 September 2008, the price of Solar’s B share was DKK 346 against DKK 554 at the beginning of the year. Distribution of share capital as at 30 September 2008 The Fund of 20th December (17.0%) ATP (13.2%) Supervisory and Executive Boards incl. related parties (3.7%) Other Danish shareholders (36.6%) Foreign shareholders (2.3%) Non-registered shareholders (19.4%) Treasury shares (7.8%) Share price development (index) 105 100 95 90 85 80 75 70 65 60 55 01 01 01 01 02 02 02 03 03 04 04 04 05 05 05 06 06 06 07 07 07 08 08 08 09 09 09 09 01 10 21 30 08 19 28 10 19 02 11 23 05 15 26 04 16 25 04 15 24 04 13 22 02 11 22 30 Distribution of votes as at 30 September 2008 The Fund of 20th December (59.9%) ATP (6.3%) Supervisory and Executive Boards incl. related parties (2.5%) Other Danish shareholders (17.3%) Foreign shareholders (1.1%) Non-registered shareholders (9.2%) Treasury shares (3.7%) S ola r B M idC a p+ Financial calendar 2009 12 February – 12 March 12 March 17 April 22 April – 20 May 20 May 24 July – 21 August 21 August 21 October – 18 November 18 November IR quiet period Annual Report 2008 Annual general meeting IR quiet period Quarterly report Q1 2009 IR quiet period Quarterly report Q2 2009 IR quiet period Quarterly report Q3 2009 The presentation of Annual Report 2008 will be transmitted online from NASDAQ OMX Copenhagen A/S on 12 March 2009 at 11:00 CET and will be available at www.solar.eu. Page 8 of 16 Solar A/S Quarterly report Q3 2008 / Group report2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=11http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=11Announcements 2008 excl insider announcements Date 30.09 No. 50 Announcement Solar Nederland B.V. now expects clarification of the acquisition of the Dutch HWS wholesaler Vegro B.V. by mid-October Purchase of treasury shares Purchase of treasury shares Financial calendar 2009 for Solar A/S Quarterly report Q2 2008 New CED appointed in Solar Sverige AB Solar Nederland B.V. has entered into negotiations concerning the acquisition of Vegro B.V. Quarterly report Q1 2008 Share buy-back in Solar A/S Share buy-back in Solar A/S Share buy-back in Solar A/S Share buy-back in Solar A/S Solar A/S’ Polish subsidiary, Solar Polska Sp. z o.o. has started negotiations concerning the acquisition of an electrical wholesaler Launch of a new share buy-back programme Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Purchase of treasury shares Applicable articles of association Course of the General Meeting of Solar A/S Share buy-back in Solar A/S Share buy-back in Solar A/S Issue of options to leading employees in Solar A/S Share buy-back in Solar A/S Notice of general meeting Share buy-back in Solar A/S Share buy-back in Solar A/S Launch of a new share buy-back programme Annual Report 2007 Share buy-back in Solar A/S Change of financial calendar 2008 Share buy-back in Solar A/S Establishment of option plan for leading employees in Solar A/S Results for 2007 and new expectations for 2008 Share buy-back in Solar A/S Share buy-back in Solar A/S Share buy-back in Solar A/S Share buy-back in Solar A/S Share buy-back in Solar A/S New Chief Executive Director in Aurora Group Share buy-back in Solar A/S Share buy-back in Solar A/S New Corporate IT Director in Solar A/S Share buy-back in Solar A/S ACCOUNTING POLICIES The quarterly report for Solar A/S has been prepared in accordance with IAS 34 “Presentation of interim reports” as approved by the EU and additional Danish disclosure requirements for quarterly reports of listed companies. The accounting policies remain unchanged from Annual Report 2007 which contains a full description of the accounting policies on pages 44-50. Key items in the accounts are based on annual contracts, etc. A prudent assessment of the current year’s activities was undertaken during the preparation of the quarterly report. In the quarterly report, corporation tax has been calculated on the basis of pre-tax profits at the expected average tax rate. No assessment of the taxable income for the period has been made. No audit or review of the quarterly report has been conducted. 15.09 10.09 26.08 20.08 05.08 30.07 23.05 23.05 19.05 13.05 05.05 28.04 48 47 45 44 43 42 41 40 39 38 37 36 25.04 24.04 23.04 22.04 17.04 16.04 11.04 11.04 11.04 07.04 31.03 31.03 25.03 25.03 17.03 11.03 11.03 05.03 05.03 03.03 25.02 25.02 25.02 18.02 11.02 04.02 28.01 24.01 21.01 14.01 07.01 07.01 35 34 33 31 30 29 28 27 26 25 24 23 22 20 19 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1 Solar A/S Quarterly report Q3 2008 / Group report Page 9 of 162008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=12http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=12Management’s statement Today, the Supervisory Board and the Executive Board discussed and approved the quarterly report for Q3 2008 for Solar A/S. The quarterly report, which has not been audited or reviewed by the company’s auditor, is presented in accordance with IAS 34 ”Interim Financial Reporting” as approved by the EU and additional Danish disclosure requirements for quarterly reports of listed companies. It is our opinion that the quarterly report gives a true and fair view of the group’s assets, equity and liabilities and financial position as at 30 September 2008 and of the result of the group’s activities and cash flow for Q1-Q3 2008. Furthermore, it is our opinion that the group report contains a true statement of the development in the group’s activities and financial situation, the result for the period and of the group’s financial position as a whole and a description of the most significant risks and uncertainties the group is faced with. Kolding, 18 November 2008 Executive Board Flemming H. Tomdrup CEO Supervisory Board Jens Borum (Chairman) Peter Falkenham (Vice-Chairman) Kent Arentoft Niels Borum Remy Cramer Bent H. Frisk Preben Jessen Aase Kofoed Carsten H. Ørssleff Page 10 of 16 Solar A/S Quarterly report Q3 2008 / Management’s statement2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=13http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=13Income statement Consolidated Q3 € million Revenue Cost of sales Gross profit External operating costs Staff costs Loss on trade receivables Earnings before interest, tax, depreciation and amortisation (EBITDA) Depreciation on property, plant and equipment Earnings before interest, tax and amortisation (EBITA) Amortisation of intangible assets Operating profit before special items Special items, net Earnings before interest and tax (EBIT) Financial income Financial costs Earnings before tax (EBT) Corporation tax Net profit for the period Earnings in € per share outstanding (EPS) Diluted earnings in € per share outstanding (EPS-D) 2008 349.4 -276.5 72.9 -13.5 -37.9 -0.9 2007 335.9 -264.2 71.7 -12.7 -35.2 -1.0 Q1 - Q3 2008 1,087.7 -859.3 228.4 -45.9 -125.1 -2.4 2007 988.9 -774.1 214.8 -40.1 -112.6 -1.8 Year 2007 1,367.2 -1.072.7 294.5 -55.2 -152.2 -1.7 20.6 -2.2 18.4 -1.7 16.7 0.0 16.7 1.1 -3.5 14.3 -4.3 10.0 1.48 1.48 22.8 -2.1 20.7 -1.7 19.0 0.0 19.0 1.5 -2.8 17.7 -5.0 12.7 1.82 1.82 55.0 -6.4 48.6 -5.1 43.5 0.0 43.5 3.2 -9.1 37.6 -11.1 26.5 3.88 3.88 60.3 -6.2 54.1 -4.4 49.7 0.0 49.7 3.9 -7.1 46.5 -13.1 33.4 4.79 4.79 85.4 -8.1 77.3 -6.1 71.2 0.0 71.2 4.9 -10.5 65.6 -18.1 47.5 6.82 6.82 Solar A/S Quarterly report Q3 2008 / Financial statements Page 11 of 162008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=14http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=14Balance sheet Consolidated Note 1. januar til 31. december € million As at 30 September € mio. 2007 2008 2007 Year-end 2006 2007 Omsætning ASSETS Vareforbrug 2 3 4 5 Intangible assets Bruttoresultat Property, plant and equipment Eksterne driftsomkostninger Investments Fixed assets 44.2 126.1 0.9 171.2 146.1 227.0 8.9 6.3 4.6 392.9 564.1 421,3 -313,8 53.2 107,5 126.0 -12,9 0.7 179.9 377,3 -280,3 50.5 97,0 125.7 -9,9 0.7 176.9 Personaleomkostninger -53,9 152.9 40,1 230.3 5.7 -3,5 6.5 36,6 5.2 400.6 580.5 -50,8 154.7 35,3 196.9 2.2 -3,8 7.4 31,5 4.7 365.9 542.8 Inventories Primært resultat før afskrivning (EBITDA) Trade receivables Corporation Afskrivning tax på receivable materielle anlægsaktiver Other receivables and prepayments Primært resultat før amortisering (EBITA) Cash at bank and in hand Current assets Tab på tilgodehavender fra salg -0,6 -1,0 Amortisering af immaterielle anlægsaktiver Primært resultat før særlige poster Særlige poster, netto 0,0 0,0 0,0 6 Total assets 36,6 36,6 19,7 3,0 31,5 -0,1 31,4 10,5 1,3 97.7 -2,7 7 8 9 Primært resultat (EBIT) Udbytte AND LIABILITIES EQUITY Finansielle indtægter Share capital Finansielle omkostninger Reserves Resultat før skat (EBT) Retained earnings Selskabsskat Proposed dividend Equity Årets resultat Interest-bearing liabilities Provision for pension obligations som fordeles således: Provision for deferred tax Foreslået udbytte Other provisions Non-current liabilities 97.6 -0.7 124.3 0.0 221.2 70.8 3.8 14.4 0.0 89.0 90.8 108.5 € 12.7 mio. 41.9 0.0 253.9 342.9 564.1 -1.2 55,8 120.3 -8,6 0.0 216.8 47,2 82.8 4.6 14.3 17,6 0.0 101.7 97.7 -3,5 -0.1 40,5 113.8 -9,6 17.6 229.0 30,9 77.4 3.9 15.2 15,9 0.0 96.5 Overført resultat 29,6 15,0 30,9 74.3 I alt Interest-bearing liabilities Note Trade payables Corporation tax payable Pr. 31. december Other payables and prepayments Other provisions Current liabilities Liabilities Total equity and liabilities 47,2 101.9 100.3 16.4 2007 43.4 0.0 262.0 363.7 580.5 95.7 4.3 2006 42.8 0.2 217.3 313.8 542.8 Page 12 of 16 Solar A/S Quarterly report Q3 2008 / Financial statements2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=15http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=15Statement of changes in equity / Treasury shares Consolidated AKTIVER € million 2008 Q3 2007 Q1 - Q3 2008 2007 Year 2007 10 11 12 Immaterielle anlægsaktiver STATEMENT OF CHANGES IN EQUITY Materielle anlægsaktiver 0,0 38,8 219.5 0.0 -2.7 -2.3 0.7 -4.3 10.0 5.7 0.0 -4.0 0.0 -4.0 221.2 97.6 -0.7 124.3 0.0 221.2 202.7 0.0 1.6 -0.2 0.0 1.4 12.7 14.1 0.0 0.0 0.0 0.0 216.8 97.7 -1.2 120.3 0.0 216.8 229.0 0.0 -2.2 -0.7 0.0 -2.9 26.5 23.6 -17.6 -14.0 0.2 -31.4 221.2 97.6 -0.7 124.3 0.0 221.2 0,0 38,9 178,4 217,3 47,5 0.0 0.4 46,2 1.1 33,2 -0.1 1.4 1,3 47.5 48.9 196.4 Finansielle anlægsaktiver Anlægsaktiver Equity at the beginning of the period 181,9 13 14 Foreign currency translation adjustment Varebeholdninger at the beginning of the period Foreign currency translation Tilgodehavender fra salg adjustment of foreign subsidiaries Value adjustment of hedging instruments before tax Tilgodehavender hos dattervirksomheder Tax on value adjustments Net income recognised directly in equity Andre tilgodehavender Net profit for the period Total income for the period 220,7 47,8 0.0 2.5 52,1 0.4 41,4 0.0 196.4 Tilgodehavende selskabsskat Periodeafgrænsningsposter Likvider 15 2.9 2,2 33.4 36.3 0,0 1,2 0,5 0,2 0,2 2,3 Distribution of dividend Omsætningsaktiver Purchase of treasury shares Additional from treasury shares Aktiver i dividend alt Other movements Equity at the end of the period which is specified as follows: Share capital PASSIVER Reserves Retained earnings Aktiekapital Proposed dividend Equity at the end of the period -15.9 144,2 0.0 0.0 364,9 -15.9 216.8 97.7 -1.2 120.3 97,7 0.0 216.8 -15.9 131,9 -0.4 0.0 349,2 -16.3 229.0 97.7 -0.1 113.8 97,7 17.6 229.0 16 Reserver 0,9 -0,1 Overført resultat Egenkapital 137,9 17,6 254,1 108,7 15,9 222,2 318,420 26,0 5,000 1,2 0 Forslag til udbytte for regnskabsåret TREASURY SHARES 17 18 19 Holding at the beginning of the period in number of shares Rentebærende forpligtelser Purchases in the period Hensættelse til pensionsforpligtelser Sales in the period 486,445 81,775 0 568,220 7.8 26.2 4.0 0.0 -0.1 30.1 7.6 26.4 318,420 0 0 318,420 4.4 15.9 0.0 0.0 0.0 15.9 4.3 27.1 323,420 244,800 0 568,220 7.8 16.2 14.0 0.0 -0.1 30.1 7.6 26.4 318,420 21,0 0 0,6 0 Hensættelse udskudt skat in number of shares Holding at thetil end of the period Langfristede forpligtelser Holding at the end of the period in% Acquisition cost at the beginning of the period Rentebærende forpligtelser Purchases in the period Gæld til leverandører Sales in the period Gæld til dattervirksomheder Foreign currency translation adjustment in the period Acquisition cost at the end of the period Nominal value at the end of the period Market value at the end of the period 5,2 318,420 26,8 4.4 15.9 29,7 0.0 31,5 0.0 2,1 0.0 5,1 323,420 32,3 4.5 15.9 45,8 0.4 27,1 0.0 1,8 -0.1 17 Skyldig selskabsskat 20 Andre gældsforpligtelser 20,4 84,0 110,8 27.1 4.3 15.9 0,3 20,0 94,7 127,0 349,2 24.0 4.4 16.2 0,0 Kortfristede forpligtelser Forpligtelser The holding treasury shares is maintained as a cash reserve in connection with any future acquisition of enterprises, for hedging of a Passiver i of alt 364,9 share option plan and a reduction of the share capital. In compliance with authority granted at the general meeting, Solar can acquire up to 10% treasury shares until the annual general meeting in 2009. All treasury shares are held by the parent company. Solar A/S Quarterly report Q3 2008 / Financial statements Page 13 of 162008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=16http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=16Cash flow statement Consolidated Note 1. januar til 31. december € million 2008 10.0 3.9 -0.1 2.4 4.3 -1.9 -2.4 16.2 9.3 -0.7 -5.7 19.1 0.0 -0.4 -0.2 0.0 -0.6 0.0 -2.7 0.0 -4.0 -2.3 -9.0 9.5 -92.9 0.0 -2.8 -86.2 Q3 2007 12.7 3.8 0.1 1.3 5.0 -1.3 -1.1 20.5 -0.8 -5.7 -0.9 13.1 0.0 -0.4 0.9 0.0 0.5 0.0 -2.2 0.0 0.0 -0.2 -2.4 11.2 -106.7 0.0 -1.2 -96.7 € mio. Q1 - Q3 2008 26.5 11.5 -0.1 5.9 11.1 -5.4 -9.4 40.1 8.6 -29.0 11.7 31.4 0.0 -6.4 -0.2 0.0 -6.6 0.0 -6.6 -17.6 -14.0 -0.6 -38.8 -14.0 -69.6 0.0 -2.6 -86.2 € mio. 4.6 -90.8 -86.2 2007 2007 2006 Year 2007 Omsætning Net profit for the period Depreciation and amortisation Vareforbrug Change in provisions and other adjustments Bruttoresultat Financials, net Eksterne driftsomkostninger Corporation tax Personaleomkostninger Financials, net, paid Corporation tax paid Tab på tilgodehavender fra salg Cash flowresultat before change in working(EBITDA) capital Primært før afskrivning Change in inventories Afskrivning på materielle anlægsaktiver Change in receivables Primært før amortisering Change in resultat non-interest-bearing liabilities (EBITA) 421,3 33.4 10.6 -313,8 -0.6 107,5 3.2 -12,9 13.1 -53,9 -3.2 -7.8 -0,6 -2.4 -3,5 -52.5 36,6 25.7 48.7 40,1 377,3 47.5 14.2 -280,3 -1.1 5.6 -9,9 18.1 -50,8 -6.0 -20.0 -1,0 97,0 2 3 4 5 -4.2 -3,8 -15.5 31,5 16.0 58.3 35,3 Amortisering afoperating immaterielle anlægsaktiver Cash flow from activities 6 Primært resultat før særlige poster Net investments in intangible assets Net investments property, plant and equipment Særlige poster,in netto Net investments in other investments Primært resultat (EBIT) Acquisition of subsidiaries Cash flow from investing activities Raising of non-current interest-bearing activities Finansielle omkostninger Repayment of non-current interest-bearing liabilities Resultat før skat (EBT) Dividend paid Purchase and sale of treasury shares Selskabsskat Other items Cash flow from financing activities Total cash flow som fordeles således: Cash at the beginning of the period Foreslået Taken over udbytte in connection with acquisition of subsidiaries Overført resultat Foreign currency translation adjustments Cash I alt at the end of the period Note Cash the end of the period Pr. 31.at december Cash at bank and in hand Current interest-bearing liabilities Cash at the end of the period 0,0 19.5 36,6 0.0 -10.0 0,0 0.9 36,6 -46.4 -55.5 0,0 54.6 31,5 0.0 -13.8 -0,1 0.9 31,4 -46.4 -59.3 Udbytte 19,7 3,0 -3,5 10,5 1,3 -2,7 7 8 9 Finansielle indtægter Årets resultat 51.5 -5.3 55,8 -15.9 0.0 -8,6 0.4 30.7 47,2 51.5 -10.7 40,5 -15.9 -0.4 -9,6 1.0 25.5 30,9 -5.3 -91.4 17,6 0.0 29,6 0.0 -96.7 47,2 2007 5.2 -101.9 -96.7 20.8 -91.4 15,9 0.0 15,0 1.0 -69.6 30,9 2006 4.7 -74.3 -69.6 4.6 -90.8 -86.2 5.2 -101.9 -96.7 Page 14 of 16 Solar A/S Quarterly report Q3 2008 / Financial statements2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=17http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=17Acquisition of subsidiaries Consolidated AKTIVER Q1 - Q3 2008 10 11 12 No subsidiaries have been acquired or divested in the period Q1-Q3 2008. Immaterielle anlægsaktiver 0,0 38,8 0,0 38,9 As at 6 October 2008, Solar Polska Sp. z o.o. acquired 100% of the share capital and voting rights in the Polish enterprise Eltomont Sp. z o.o., Finansielle anlægsaktiver 181,9 178,4 see announcement no. 51. Materielle anlægsaktiver Anlægsaktiver 220,7 52,1 217,3 47,5 46,2 33,2 1,2 1,3 0,2 2,3 13 14 As at 15 October 2008, Solar Nederland B.V. acquired 100% of the share capital and voting rights in the Dutch enterprise Vegro B.V., Varebeholdninger 47,8 see announcement no. 52. Tilgodehavender fra salg Tilgodehavender hos dattervirksomheder Q1 - Q3 2007 Andre refer tilgodehavender Please to note 27 in the consolidated accounts in Annual Report 2007 for further details concerning the acquisition. 15 Periodeafgrænsningsposter Likvider 2007 41,4 2,2 Tilgodehavende As at 1 May 2007, selskabsskat Solar Sverige AB acquired 100% of the share capital and voting rights in the Swedish enterprise Alvesta V.V.S.0,0 - Material AB. 0,5 0,2 As at 1 May 2007, Solar Sverige AB acquired 100% of the share capital and voting rights in the Swedish enterprise Alvesta V.V.S. - Material AB.131,9 Omsætningsaktiver 144,2 Please refer to note 27 in the consolidated accounts in Annual Report 2007 for further details concerning the acquisition. Aktiver i alt 364,9 349,2 PASSIVER 16 Aktiekapital Reserver Overført resultat Forslag til udbytte for regnskabsåret Egenkapital 17 18 19 Rentebærende forpligtelser Hensættelse til pensionsforpligtelser Hensættelse til udskudt skat Langfristede forpligtelser 17 Rentebærende forpligtelser Gæld til leverandører Gæld til dattervirksomheder Skyldig selskabsskat 20 Andre gældsforpligtelser Kortfristede forpligtelser Forpligtelser Passiver i alt 97,7 0,9 137,9 17,6 254,1 21,0 0,6 5,2 26,8 29,7 31,5 2,1 0,3 20,4 84,0 110,8 364,9 97,7 -0,1 108,7 15,9 222,2 26,0 1,2 5,1 32,3 45,8 27,1 1,8 0,0 20,0 94,7 127,0 349,2 Solar A/S Quarterly report Q3 2008 / Financial statements Page 15 of 162008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=18http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=18Quarterly figures Consolidated Q1 2008 Financial and operating data for the balance sheet (€ million) Revenue Earnings before interest, tax and amortisation (EBITA) Operating profit before special items Special items, net Earnings before interest and tax (EBIT) Financials, net Earnings before tax (EBT) Net profit for the quarter Earnings per share in € per share outstanding Earnings excl amortisation per share in € per share outstanding Financial and operating data for the balance sheet (€ million) Total assets Net investments in property, plant and equipment Share capital outstanding Equity Interest-bearing liabilities Financial and operating data for cash flow (€ million) Cash flow from operating activities Cash flow from investing activities Cash flow from financing activities Financial ratios (% unless otherwise stated) Revenue growth Organic growth Earnings before interest, tax and amortisation (EBITA) Earnings before interest and tax (EBIT) Operating margin Return on equity (ROE) Return on equity (ROE) excl amortisation Return on invested capital (ROIC) Return on invested capital (ROIC) excl amortisation EV/EBITA Equity ratio Intrinsic value in € per share outstanding Share price in € Share price / Intrinsic value Share price in DKK Employees Average number of employees (FTE) 2007 2008 Q2 2007 2008 Q3 2007 2007 Q4 2006 360.8 15.3 13.6 0.0 13.6 -1.8 11.8 8.3 1.20 1.44 319.4 17.5 16.3 0.0 16.3 -0.5 15.8 11.1 1.59 1.77 377.5 14.9 13.2 0.0 13.2 -1.7 11.5 8.2 1.20 1.45 333.6 15.9 14.4 0.0 14.4 -1.4 13.0 9.6 1.38 1.59 349.4 18.4 16.7 0.0 16.7 -2.4 14.3 10.0 1.48 1.73 335.9 20.7 19.0 0.0 19.0 -1.3 17.7 12.7 1.82 2.07 378.3 23.2 21.5 0.0 21.5 -2.4 19.1 14.1 2.03 2.27 307.2 18.6 18.3 -0.1 18.2 -0.6 17.6 11.8 1.68 1.74 562.2 3.0 92.4 231.9 150.1 483.7 5.2 93.5 206.9 124.8 573.6 3.0 91.1 219.5 170.0 574.5 4.4 93.6 202.7 196.0 564.1 0.4 90.0 221.2 161.6 580.5 0.4 93.4 216.8 184.7 542.8 3.8 93.3 229.0 151.7 464.7 2.2 93.4 196.4 133.8 11.3 -3.0 -6.6 14.8 -5.2 -1.8 1.0 -3.0 -23.2 -8.4 -50.8 34.9 19.1 -0.6 -9.0 13.1 0.5 -2.4 35.1 -3.8 -5.2 0.9 -27.3 -2.3 13.0 6.7 4.2 3.8 2.3 14.4 17.4 9.7 11.5 9.1 41.2 33.6 59.7 1.77 445 25.8 18.1 5.5 5.1 3.5 22.0 24.4 13.7 15.2 11.3 42.8 29.7 97.2 3.27 725 13.2 10.4 3.9 3.5 2.2 14.5 17.5 9.3 11.0 8.5 38.3 32.3 49.8 1.54 372 29.7 17.9 4.8 4.3 2.9 18.8 21.7 10.3 11.8 14.0 35.3 29.1 100.3 3.44 746 4.0 4.7 5.3 4.8 2.9 18.2 21.2 11.8 13.6 6.4 39.2 32.9 46.4 1.41 346 31.2 16.3 6.2 5.7 3.8 24.2 27.5 13.2 14.8 9.3 37.3 31.1 85.1 2.73 634 23.1 10.2 6.1 5.7 3.7 25.3 28.4 16.1 17.8 7.2 42.2 32.9 74.3 2.26 554 20.1 17.9 6.1 5.9 3.8 24.8 25.5 14.6 15.0 10.6 42.3 28.2 95.5 3.39 712 2,786 2,515 2,861 2,646 2,942 2,712 2,764 2,409 Page 16 of 16 Solar A/S Quarterly report Q3 2008 / Quarterly figures2008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=19http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=192008-11-18T09:12:39+01:00http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=20http://ipaper.ipapercms.dk/solargroup/solar/Q32008report/Q32008UK/?Page=20Solar A/S Haderslevvej 25 DK - 6000 Kolding Phone: +45 76 30 42 00 www.solar.eu2008-11-18T09:12:39+01:00