Solar Group Presentation 27 November 2012, London roadshow Agenda - - PDF document

27 November 2012, London roadshow

Solar Group Presentation

Michael H. Jeppesen, Group CFO

Agenda

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1 Group strategy #1 in Technical Wholesale 2013-2015 2 The results we achieved in Q3 2012 3 The results we expect in 2012 and 2013 4 Appendix – facts about Solar Group

Group strategy #1 in Technical Wholesale 2013-2015 We aim at creating operational excellence

Our strategy will ensure that we as a group:

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• Strengthen our position as one of Northern

Europe’s leading technical wholesalers within electrical, plumbing and ventilation products,

• Profit more from our business model which
• ffers competitive logistics, product and

service solutions,

• Benefit maximally from daily operations by

utilising our employees’ strong individual skills to create high-performance teams,

• Are seen by customers as their preferred

technical wholesaler,

• In time become one of the most profitable

enterprises within our industry.

Enterprises / functions

Local projects Day-to-day

• perations

Company programmes

People Development

Group strategy #1 in Technical Wholesale 2013-2015 Group company programmes

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Sales Excellence Blue Energy Local strategic projects Solar Way

Group strategy #1 in Technical Wholesale 2013-2015 Strategic direction focuses on three areas

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It’s all about:

• Digitalisation
• Standardisation
• Simplification

People Operations Acumen

Group strategy #1 in Technical Wholesale 2013-2015 Go-to-market strategy

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Go-to-market strategy Operational objectives KPIs Service

• ffer

Product

• ffer

Logistics

• ffer

Solar’s business model New markets

Market segmentation Customer segmentation Customer drivers Structure Size Characteristics

Group strategy #1 in Technical Wholesale 2013-2015 Short-term financial objectives

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Short-term financial objectives

• Prerequisites: Average growth

exceeding 3% for this period and stabilisation of the Dutch market in 2013. Long-term financial objectives

• EBITA margin of 5-6%.

Prerequisites: Average growth exceeding 4%. Financial ratios Period Financial

• bjectives

EBITA margin 2015 4.5% ROIC excl. amortisation 2015 >14% NWC/revenue LTM 2015 <13% Equity ratio 2013-2015 35-40% Gearing (NIBD/EBITDA) 2013-2015 1.5-2.5x Dividend yield (PAT) 2013-2015 35-45%

The actual figures and guidance

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Guidance 2012 and 2013

Q3 2012

Organic growth of -0.1% in Q3 when adjusted for working days - revenue developed as expected

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Organic growth

Q3 2012 Q3 2011 Revenue € m 403.0 353.3 Revenue growth % 14.1 5.1 Organic growth %

• 1.6

3.2

Strong growth in Denmark due to solar panels The Dutch and German markets are decreasing

Market update

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In Denmark, we saw increased business

• pportunities within renewable energy

and energy efficiency. Our market position in Norway was improved again. Solar Nederland’s results were negatively impacted by changes to the customer mix and pricing pressure in the much declining market. Overall, our Dutch enterprises held their market positions.

€ million Revenue

• Org. growth

Denmark 98.7 9.4% Sweden 79.3 0.6% Norway 63.3

• 2.7%

The Netherlands 78.8

• 13.0%

Other 82.9

• 5.6%

Group 403.0

• 1.6%

Gross profit margin 0.5% up compared to Q3 2011

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Gross profit margin

Gross profit in Solar Norge went up from 21.0% in Q2 2012 to 23.2%. Fierce price competition in the Netherlands. Denmark delivered according to plan. Q3 2012 Q3 2011 Revenue € m 403.0 353.3 Revenue growth % 14.1 5.1 Organic growth %

• 1.6

3.2 Gross profit € m 87.0 74.4 Gross profit margin 21.6 21.1

Normalised EBITA of € 13.9m in Q3 2012

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EBITA margin

Q3 2012 Q3 2011 Revenue € m 403.0 353.3 Revenue growth % 14.1 5.1 Organic growth %

• 1.6

3.2 Gross profit € m 87.0 74.4 Gross profit margin 21.6 21.1 EBITA € m 12.8 12.9 EBITA margin 3.2 3.7 Solar 8000 costs of € 1.1m in Q3 2012 and € 1.3m in Q3 2011.

Normalised EBITA of € 31.7m in 9M 2012

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EBITA margin

Solar 8000 costs of € 5.7m in 9M 2012 and € 3.4m in 9M 2011. Restructuring costs of € 1.0m. 9M 2012 9M 2011 Revenue € m 1,245.2 1,071.6 Revenue growth % 16.2 6.8 Organic growth % 1.7 4.2 Gross profit € m 266.3 226.5 Gross profit margin 21.4 21.1 EBITA € m 25.0 20.0 EBITA margin 2.0 1.9

Gearing unchanged at 2.2 Adjusted for acquisitions in Sep 2011, NWC was 14.7%

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Net working capital (NWC) Net interest-bearing debt (NIBD)

Acquisition of Vegro and Eltomont Acquisition

• f operations

from Otra Acquisition of enterprises in NL, BE, DE, AU

Cash flow from operating activities was € 3.9m in Q3 and € 13.2m in 9M

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Cash flow Cash flow, operating activities

Guidance 2012: Revenue € 1,710m, EBITA € 44m

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• Expected Solar 8000 implementation

costs of approx. € 7m and restructuring costs of approx. € 2m.

• We expect low growth. For the year,

revenue expectations equal organic growth of approximately 1%.

• Net working capital at approx. 14% on

average. 2012 expectations:

Guidance 2013: Revenue € 1,720-1,770m, EBITA € 42-51m

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• Expected Solar 8000 implementation

costs of approx. € 4m and restructuring costs of approx. € 2m.

• The lower expectation level equals a

no-growth scenario, while the upper expectation level equals positive

• rganic growth of some 3%.
• Net working capital below 14% on

average. 2013 expectations:

Facts about Solar Group

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Appendix

Solar in short

Solar is one of Northern Europe’s leading technical wholesalers Listed on NASDAQ OMX Copenhagen * € 1,532m revenue – approx. 3,600 people Servicing customers in 9 countries from 11 central warehouses Electrical, heating, plumbing and ventilation components and solutions Aurora Group - accessories to consumer electronic goods in 4 countries Solar is one of Northern Europe’s leading technical wholesalers

(*2011 figures)

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

Electrical - HVAC&R - Plumbing - Renewable Energy

Solar’s business areas are within:

Lighting Installation Cables Industry Marine & Offshore Heating, Water & Sanitation Ventilation Security Communication Renewable energy

Solar delivers products and solutions to customers within:

Residential and Commercial Buildings Industry Marine and Offshore Utility and Infrastructure Public Sector

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

suppliers and Solar

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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

sources by 2020

• a 20% reduction in primary energy use

through improved energy efficiency by 2020, compared with projected levels

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Corporate social responsibility

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. Carbon Disclosure Project: 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

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Corporate social responsibility

Strong focus on ethics

As a condition for entering into strategic partnerships with suppliers, Solar requires that such suppliers observe the Global Compact principles. We have implemented a Code of Conduct across the group. Under the code, Solar is committed to comply with current legislation and regulations and to act in an ethical, sustainable and socially responsible way in all its business activities. We value a broad and diverse workforce in terms of gender, age and nationality. Solar shows respect for all employees and is committed to ensuring a good working environment with room for diversity.