Investor presentation Flemming H. Tomdrup, Group CEO Michael H. - PowerPoint PPT Presentation

Solar Group select ”Send to back”. Investor presentation Flemming H. Tomdrup, Group CEO Michael H. Jeppesen, Group CFO 4 June 2013, Paris roadshow

Investor presentation - agenda 1 The results we achieved in Q1 2013 2 The results we expect in 2013 3 Solar 8000 expectations 4 Capital structure 5 Divestment Appendix – facts about Solar 6 2

Organic growth of -5.7% in Q1 when adjusted for working days - revenue below expectations Organic growth Q1 2013 Q1 2012 Revenue € million 390.1 428.9 8% 6% Revenue growth % -9.0 19.2 4% Organic growth % -10.1 5.7 2% 0% -2% -4% -6% -8% -10% -12% Q1 Q2 Q3 Q4 FY 2012 2013 3

Difficult market conditions The Dutch and German markets are decreasing Market update € million Q1 2013 Q1 2013 Revenue Org. growth  In Denmark we saw negative market Denmark 91.5 -8.0% trends in Q1. Growth totalled -1.9% when Sweden 79.3 -6.9% adjusted for number of working days. Norway 63.9 -5.5% The Netherlands 85.5 -15.0%  The Swedish market was characterised by lower growth than what we normally Others 69.9 -13.9% see in this market. Group 390.1 -10.1%  Gross profit and earnings were strengthened in Norway.  New CED in Solar Nederland in place. 4

Gross profit margin 0.1% up compared to Q1 2012 and 0.4% up compared to Q4 2012 Gross profit margin Q1 2013 Q1 2012 Revenue € million 390.1 428.9 21,7% 21,6% Revenue growth % -9.0 19.2 21,5% Organic growth % -10.1 5.7 21,4% Gross profit € million 84.4 92.0 21,3% Gross profit margin 21.6 21.5 21,2% 21,1%  Gross profit margin was strengthened 21,0% compared to Q1 2012 and Q4 2012. 20,9%  In the Netherlands gross profit was reduced compared to Q1 2012 but improved 20,8% compared to Q4 2012. Q1 Q2 Q3 Q4 FY 2012 2013 5

Normalised EBITA of € 1.3m in Q1 2013 EBITA margin Q1 2013 Q1 2012 Revenue € million 3,0% 390.1 428.9 2.1% 0.1% 2,0% Revenue growth % -9.0 19.2 -0.7% 1,0% Organic growth % -10.1 5.7 0,0% Gross profit € million 84.4 92.0 -1,0% -2.1% -0.3% -0.1% -1.0% -2,0% Gross profit margin 21.6 21.5 Q112 COGS EOC Staff Debt. Deprec. Q113 EBITA € million -3.8 9.1 4,0% 3,0% EBITA margin -1.0 2.1 2,0% 1,0%  Solar 8000 costs of € 0.9m in Q1 2013 and 0,0% € 2.0m in Q1 2012. -1,0% -2,0%  Restructuring costs of € 4.2m in Q1 2013 Q1 Q2 Q3 Q4 FY and € 0.0m in Q1 2012. 2012 2013 6

Gearing up to 3.0 in Q1 - expected to be reduced during the year Net working capital (NWC) Net interest-bearing debt (NIBD) € million No. of € million times 150 3,3 270 17% Acquisition of 140 Acquisition of 3,1 enterprises in enterprises in NL, BE, DE, AU NL, BE, DE, AU 130 2,9 250 16% 120 Acquisition Acquisition 2,7 of operations of operations 230 15% 110 from Otra from Otra 2,5 100 2,3 210 14% 90 2,1 80 190 13% 1,9 70 1,7 60 170 12% 1,5 50 40 1,3 150 11% 2009 2010 2011 2012 Q1 2013 2009 2010 2011 2012 2013Q1 NIBD NIBD/EBITDA LTM NWC NWC/Revenue LTM 7

Efforts were made to reduce inventories with a negative impact on trade payables in the short run Cash flow Cash flow, operating activities € million € million 40 5 36.5 1.3 35 0.2 0 5.5 30 -5 25 -6.9 -7.7 -10 20 -15 15 -20 10 -25 5 -32.5 0.5 -30 0 -3.3 -1.2 -24.9 -2.4 -32.5 -5 -35 Q4 2012 Oper. act. Inv. act. Fin. act. Other Q1 2013 Net Depr. & Tax & Inv. Rec. Liab. Op. act. profit amort. adj. 8

Guidance 2013: Revenue € 1,590-1,640m, EBITA € 25-33m 2013 expectations: Revenue EBITA  Expected restructuring costs of approx. € million € million € 6m and Solar 8000 roll-out costs of 1.800 80 approx. € 4m. 1.600 70 1.400 60  The lower expectation level equals 1.200 50 organic growth of approx. -4.5%, while 1.000 the upper expectation level equals 40 800 organic growth of approx. -1.5%. 30 600 20  Net working capital below 14% on 400 average. 10 200 0 0 2009 2010 2011 2012 2013E 2013E low high Revenue EBITA 9

Solar 8000 expectations  We are planning to roll out Solar 8000 in Solar Danmark in late Q3, and roll-out in Solar Sverige is expected 3-4 months after this.  As always, quality and safety take centre stage when we roll out IT platforms in our group enterprises.  We still expect the overall investment in Solar 8000 to total up to € 54m.  We stick to our expectations for positive effects, still expecting the transition to Solar 8000 to increase earnings (EBITDA) by € 8-10m annually when fully implemented. 10

Capital structure Gearing of 1.5 to 2.5 times EBITDA will be maintained  At the annual general meeting, the Supervisory Board proposed that an ordinary dividend of DKK 6.65 per share be paid. This equates to € 0.89 per share.  We do not expect to make any major acquisitions in 2013.  In this light, the Supervisory Board will assess the option to pay out extraordinary dividends of up to DKK 15.00 per share, equalling € 2.01 per share, in the autumn of 2013. 11

Divestment We have sold all shares in Aurora Group Danmark A/S  On 24 April 2013 we sold our subsidiary Aurora Group Danmark A/S to the Swedish company Deltaco AB.  The expected total selling price is approximately € 17m and includes an earn-out agreement.  The sale is expected to generate an accounting gain of approximately € 1.4m.  We want to focus fully on our core business - wholesaling of electrical, heating and plumbing, and ventilation products – where we want to be the strongest link between suppliers and customers. 12

Appendix select ”Send to back”. Facts about Solar

Solar in short Solar is one of Northern Europe’s leading technical wholesalers Listed on NASDAQ OMX Copenhagen Business € 1,701m revenue in 2012 – approx. 3,500 people Ace Servicing customers in 9 countries from 11 central warehouses Electrical, heating, plumbing and ventilation components and solutions Operation People 14

To increase profits is our number one priority We will achieve this through focused strategies and operation Foundation Ambition Strategies Operations Values Focus on Glow, SmartFun Northern Europe & Courage Daily operations To become one of Increase Continuous the most profitable productivity Mission improvement technical whole- salers in our • Simplification We understand our Increased markets customers’ needs • Standardisation profit Excel in sales • Digitalisation and provide value adding services and To excel in Performance products. We call it Business Acumen, Grow in the climate management stronger together. Operation & People and energy area Develop our Vision people #1 in Technical Wholesale 15

Group strategy 2013-2015 Short-term financial objectives Year / Financial Financial ratios period objectives EBITA margin 2015 4.5% Short-term financial objectives  Prerequisites: Average growth ROIC excl. amortisation 2015 >14% exceeding 3% for this period and stabilisation of the Dutch market NWC/revenue LTM 2015 <13% in 2013. Equity ratio 2013-2015 35-40% Long-term financial objectives  EBITA margin of 5-6%. Gearing (NIBD/EBITDA) 2013-2015 1.5-2.5x Prerequisites: Average growth exceeding 4%. Dividend yield (PAT) 2013-2015 35-45% 16

Solar is listed on NASDAQ OMX Copenhagen and has a majority of long term investors 17

Solar’s business areas are within: Electrical - HVAC&R - Plumbing - Renewable Energy Marine & Installation Cables Industry Lighting Offshore Heating, Water Renewable Ventilation & Sanitation Communication Security energy 18

Solar delivers products and solutions to customers within: Residential Industry Marine Utility Public Sector and and and Commercial Offshore Infrastructure Buildings Business Ace Operation People 19

Solar Blue Energy - making energy efficiency a better business A strategic focus area • A sales, marketing and training concept • One energy-efficient product is good – an intelligent solution is better • Focus on renovation projects through cases and cost-savings potential • Cooperation between strategic Business suppliers and Solar Ace The 20-20-20 targets of the EU Climate and Energy Package are: • a 20% reduction in EU greenhouse gas emissions based on 1990 levels by 2020 • 20% of EU energy to come from renewable Operation People sources by 2020 • a 20% reduction in primary energy use through improved energy efficiency by 2020, compared with projected levels 20

CSR - we take our responsibilities with regard to people and the environment seriously  We have signed up for the United Nations’ Global Compact Programme, which contains ten principles, including human rights, working environment/labour, the environment and anti-corruption.  We see our involvement in the programme as an asset in relation to customers and suppliers and a clear advantage in respect of attracting and maintaining employees.  In addition, there is the need for and a desire to be seen as a company in which both Danish and foreign investors can safely invest – also from an ethical standpoint.  CDP: Solar has established a reporting system for the company’s CO2 consumption.  UN Global Compact – Communication of Progress: http://www.unglobalcompact.org/participant/10987-Solar-A-S 21