Solar (SOLAR) Q2 2024 earnings summary

Executive summary

• Q2 2024 revenue declined to DKK 3.1 billion, 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 adjusted organic growth improving to -1.9% in Q2 and record order intake in July.

• The order pipeline for high-capacity heat pumps exceeded DKK 300 million, and a DKK 200 million PV project was secured by Solar Polaris.

• 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.

• Guidance for 2024 is reconfirmed: revenue of DKK 12.5 billion and EBITDA of DKK 600 million.

Financial highlights

• Q2 2024 revenue declined 4.6% year-over-year to DKK 3,100 million; adjusted organic growth was -7.8%.

• Q2 EBITDA margin was 4.4% (down from 6.6% last year); gross profit margin fell to 20.4% from 22.7%.

• H1 2024 revenue was DKK 6,130 million (down from DKK 6,906 million); H1 EBITDA was DKK 225 million (down from DKK 494 million), margin at 3.7%.

• Operating activities generated DKK 202 million in cash in Q2; net working capital improved to 14% at quarter-end.

• H1 restructuring costs totaled approx. DKK 27 million, with external and staff costs declining by DKK 57 million.

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.

• Gradual recovery is expected, especially in Denmark, with other markets to follow.

• Gross margin challenges and cost inflation are expected to persist through 2024.

• All segments expected to show negative growth in 2024, with recovery anticipated by year-end.

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