solar equity story
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Solar Equity Story. Our three value drivers are growth , EBITA margin and networking capital. Investor presentation - agenda. Group strategy #1 in Technical Wholesale 2013-2015 We aim at creating operational excellence. Our strategy will ensure that we as a group:. - PowerPoint PPT PresentationTRANSCRIPT
Solar Equity Story
Our three value drivers are growth, EBITA margin and networking capital
Investor presentation - 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 2013-2015We 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 offers 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 operations C
ompa
ny
prog
ram
mes
People Development
Group strategy #1 in Technical Wholesale 2013-2015Group 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
PeopleOperations
Acumen
Group strategy #1 in Technical Wholesale 2013-2015 Go-to-market strategy
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Go-to-market strategyOperational objectivesKPIs
Serviceoffer
Productoffer
Logisticsoffer
Solar’s business modelNew markets
Market segmentationCustomer segmentationCustomer drivers
StructureSizeCharacteristics
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 objectives
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 panelsThe Dutch and German markets are decreasing
Market update
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In Denmark, we saw increased business opportunities 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 ofVegro and Eltomont
Acquisition of 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 organic 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:
LightingInstallation Cables IndustryMarine & Offshore
Heating, Water & SanitationVentilationSecurityCommunication
Renewable energy
Solar delivers products and solutions to customers within:
Residential and
CommercialBuildings
Industry Marineand
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 containsten 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 responsibilityStrong 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.