Solar (SOLAR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined to DKK 3.1 billion from DKK 3.3 billion year-over-year, with EBITDA at DKK 137 million, both in line with expectations and guidance reaffirmed for the year.

• All segments experienced negative growth, but Denmark showed early signs of recovery, with Solar Danmark nearly breaking even in Q2 and July seeing positive year-over-year growth and record order intake.

• Adjusted organic growth improved to -7.8% from -15% in Q1 2024, indicating sequential recovery.

• Net profit for Q2 was DKK 25 million, down from DKK 77 million year-over-year; H1 net profit was DKK 19 million versus DKK 222 million in H1 2023.

• The order pipeline for high-capacity heat pumps exceeded DKK 300 million.

Financial highlights

• Q2 revenue: DKK 3,100 million, down 4.6% year-over-year; H1 revenue: DKK 6,130 million, down 11.2% year-over-year.

• Q2 EBITDA: DKK 137 million (down from DKK 214 million); H1 EBITDA: DKK 225 million (down from DKK 494 million).

• Q2 gross profit margin: 20.4% (down from 22.7%); Q2 EBITDA margin: 4.4% (down from 6.6%).

• Operating cash flow: DKK 202 million in Q2; H1 cash flow from operating activities: DKK 209 million.

• Net working capital improved to 14% at quarter-end.

Outlook and guidance

• 2024 guidance reconfirmed: revenue of DKK 12.5 billion and EBITDA of DKK 600 million, including DKK 30 million non-recurring income from a warehouse sale and DKK 35 million restructuring costs.

• All segments expected to show negative growth in 2024, with gradual recovery anticipated, especially in Denmark.

• Gross margin setbacks from late 2023 and margin pressure from product mix and higher delivery costs expected to persist through 2024.

• Guidance includes approx. DKK 20 million for new strategic focus areas.

• Expected capital gain of approx. DKK 30 million from the sale of the Duiven warehouse is included in guidance.