No. 20 2013 Quarterly report Q2 2013 Solar A/S disposed

Solar A/S disposed of its subsidiary Aurora Group Danmark A/S as of 24 April 2013. Thus, the figures for both 2012 and 2013 in this announcement relate to the continuing operations.

The Solar Group’s Q2 2013 revenue and EBITA matched our lowest expectation levels. Expectations for revenue and EBITA in 2013 are maintained but we expect EBITA at group level to meet the lowest expectation levels announced.

Group CEO Flemming H. Tomdrup says: “It is difficult to strengthen earnings when negative growth rates dominate most of our markets. Consequently, we are still working to adjust cost levels to current market development. We are doing a long haul to increase profitability. At the same time, we continue making efforts to reduce net working capital and saw positive cash flow from operating activities in Q2.”

* Calculated as an average of the last four quarters’ inventories, trade receivables and trade payables.

Revenue in Q2 2013:

• Group revenue matched our lowest expectation levels.
• Revenue growth was -4.1% against 15.2% in Q2 2012.
• Organic growth was -4.7% against 0.4% in Q2 2012. Adjusted for number of working days, organic growth was -6.5% in Q2 2013.

EBITA in Q2 2013:

• Group EBITA matched our lowest expectation levels.
• EBITA for continuing activities was positively impacted by the accounting gain from the sale of Aurora Group Danmark A/S at € 1.4m.
• EBITA was negatively impacted by restructuring costs of € 0.7m against € 1.0m in Q2 2012.
• EBITA was also, as expected, negatively impacted by Solar 8000 costs of € 0.8m against € 2.6m in Q2 2012.

Net working capital:

• In H1, the considerable build-up of inventories that we saw in Q4 2012 had a negative impact on net working capital. We continued our efforts to reduce inventories to match current activity levels.
• Efforts to reduce net working capital will carry on. Stated as an average of four quarters, our target for 2013 is to get net working capital under 14% of revenue.

Expectations for 2013:

• Expectations for 2013 are maintained at revenue of € 1,570-1,620m as the presentation of Aurora Group Danmark as a discontinued operation results in a € 20m reduction in revenue expectations. EBITA expectations are maintained at € 25-33m. We expect EBITA at group level to meet the lowest expectation levels announced.
• We have chosen not to adjust our expectations to match the present exchange rates on SEK, NOK and PLN. If these exchange rates remain at their present levels for the remainder of 2013, we expect the translation of our enterprises’ results from SEK, NOK and PLN into euro to impact revenue and EBITA negatively by approximately € 10m and approximately € 0.6m, respectively.
• Expectations for EBITA for 2013 include restructuring costs of up to € 6m, and Solar 8000 roll-out costs of approximately € 4m. Adjusted for these, normalised EBITA is expected at € 35-43m.
• The lower revenue expectation levels equal organic growth of approximately -4.5%, while the upper expectation levels equal organic growth of approximately -1.5%.
• As a result of the negative market trends, we restructured several group enterprises in H1, and further restructuring measures are planned. Consequently, total restructuring costs for the year will total up to € 6m. The full-year effect of implemented as well as planned restructuring measures will total approximately € 11m, all things being equal.

Solar 8000 (SAP):

• Solar 8000 roll-out in Solar Danmark will be postponed from late Q3 to early Q4, while we expect to roll out in Solar Sverige some 4 months after this.
• We still expect the overall investment in Solar 8000 to total less than € 54m.
• We will maintain our expectations for positive effects, still expecting the transition to Solar 8000 to increase earnings (EBITDA) by € 8-10m annually when the system is fully implemented.

Assessment of capital structure:

• At the annual general meeting this spring, Solar’s Supervisory Board was authorised to distribute extraordinary dividends of up to DKK 15.00 per share in the period until the next annual general meeting.
• In the autumn of 2013, Solar’s Supervisory Board will assess the company’s capital structure and the possibility of distributing extraordinary dividends in the autumn of 2013. Any distribution of extraordinary dividends will depend on net working capital trends and financial results.

Expectations for 2014:

• The current downward trends in the wholesaling market combined with negative growth rates in several markets equal difficult market conditions. Experience has taught us that, traditionally, we see the effects of any upturn quite late. The resulting uncertainty means that we will not announce our expectations for 2014 until we publish our Annual Report 2013.

Q2 presentation - webcast and teleconference today The presentation of quarterly report Q2 2013 will be made from NASDAQ OMX Copenhagen today at 11.00 CET, and an online webcast in English will be accessible via www.solar.eu. It will be possible to participate via a teleconference option - please use these numbers to participate:

Callers from Denmark: tel. +45 32 72 80 18 Callers from Great Britain: tel. +44 145 255 5131 Callers from the USA: tel. +1 866 682 8490 International callers: tel. +44 (0) 145 255 5131

Yours faithfully Solar A/S

Flemming H. Tomdrup

Appendix: Quarterly report Q2 2013, pages 1-26

Solar facts Solar A/S was established in 1919 and listed on the Copenhagen Stock Exchange in 1953. Solar is one of Northern Europe’s leading technical wholesalers within electrical, heating, plumbing and ventilation products. The group, based in Kolding, Denmark, has subsidiaries in Denmark incl. the Faroes, Sweden, Norway, the Netherlands, Belgium, Germany, Poland and Austria. In 2012, Solar Group revenue totalled € 1,700.9m, equating DKK 12.7bn. The group currently has some 3,500 employees.

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

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