Challenges Faced in the Second Quarter
In the second quarter, Solar experienced a surprising decline in market activity, primarily impacting the Industry segment, while the Installation segment also felt the strain. The results have prompted a thorough assessment of their operational strategies.
Insights from the CEO
CEO Jens Andersen expressed concerns about the unsatisfactory market performance observed in the second quarter and particularly in July. He highlighted the unexpected downturn in the Industry segment and a smaller impact on Installation. Nevertheless, growth was noted in the Trade and Climate & Energy sectors, largely due to Solar Polaris’ successful sales linked to a major solar park initiative. Andersen remains hopeful for a market recovery in 2025.
Staff Reductions and Operational Adjustments
During the second quarter, Solar made difficult decisions, including additional staff reductions, as part of their drive to optimize their business model. Transition and restructuring costs totaled DKK 57 million, with expectations of achieving comparable savings in 2025, and a projected DKK 70 million savings in the following years. The company’s resilient business framework, combined with these strategic changes, aims to further enhance profitability during this strategic period.
Key Financial Messages from H1
Several key financial highlights emerged for H1, such as:
- Significant revenue growth in the Trade segment, driven by Solar Polaris.
- Other segments saw disappointing revenue growth.
- Adjustment for Solar Polaris’ deliveries revealed a slight increase in the underlying gross profit margin.
- Total restructuring and transition expenses reached DKK 57 million.
- Overall revenue and EBITDA were below initial forecasts.
Financial Performance Overview
A brief overview of Solar’s performance metrics is as follows:
- Revenue: Q2 2025 was DKK 3,018 million, down from DKK 3,100 million in Q2 2024.
- EBITDA: Registered at DKK 112 million compared to DKK 137 million in the previous year.
- Cash flow from operations: A significant drop to DKK 4 million from DKK 202 million.
- Organic growth: Adjusted for operational days showed a decline of 1.2%.
Sets Sights on 2025 Projections
Looking ahead, guidance for 2025 forecasts revenue between DKK 11,750 and 12,250 million, with anticipated EBITDA ranging from DKK 450 to 510 million. These projections rest on a platform of targeted operational improvements and market recovery.
Aiming Higher for 2026
As part of its goals for 2026, Solar is committed to achieving an EBITDA margin exceeding 5%. The company plans to enhance its EBITDA margin by approximately 0.7 percentage points, thanks to initiatives already in place.
Conditions for Future Success
To ensure successful outcomes, Solar anticipates a favorable economic environment characterized by:
- A minimum annual GDP growth of 1.5%
- Low inflation in costs and wages
- A revival in industry and construction activities
- Strong government support for sustainable transitions
About Solar A/S
Solar is a reputable sourcing and services company based in Europe, mainly focusing on electrical, heating and plumbing, ventilation, and energy solutions. The company prides itself on its capabilities in product sourcing and value-adding services, empowering its customers' operational efficiencies through innovative digital tools.
Headquartered in Denmark, Solar recorded an impressive revenue of approximately DKK 12.2 billion in the last fiscal year, employing around 2,900 individuals. The company operates under the short designation SOLAR B on Nasdaq Copenhagen.
Contacts
For further information, please reach out to:
CEO Jens Andersen - tel. +45 79 30 02 01
CFO Michael H. Jeppesen - tel. +45 79 30 02 62
IR Director Dennis Callesen - tel. +45 29 92 18 11
Frequently Asked Questions
What contributed to the slowdown in Solar's market activity?
The slowdown was primarily noted in the Industry segment, with challenges also affecting the Installation sector, despite some growth in the Trade segment.
What are the company’s revenue expectations for 2025?
Solar expects revenues to range between DKK 11,750 million and 12,250 million for 2025.
How has Solar's financial performance changed in H1?
Major highlights include a decline in revenue and EBITDA compared to the same period last year, indicating challenges in achieving initial financial forecasts.
What is Solar’s aim for EBITDA in 2026?
Solar aims for an EBITDA margin exceeding 5% in 2026, bolstered by improvement initiatives.
Who can be contacted for investor relations inquiries at Solar?
Inquiries can be directed to IR Director Dennis Callesen at +45 29 92 18 11.
