Results for 2008
The Supervisory Board of Solar has decided to publish the results for 2008
earlier than planned.
Revenue was up 9.7% at € 1,500m in 2008. EBITA amounted to € 65.0m against €
77.3m in 2007, and earnings before tax totalled € 45.4m against € 65.6m in
2007. Thus, revenue and EBITA did not fully meet the most recently announced
expectations of revenue of € 1,510m and EBITA of € 68m.
Results for 2008 were affected negatively by unexpected inventory write-down of
€ 2.2m, owing to a severe decline in the price of raw materials in Q4. In
addition, significant falls in the exchange rates of primarily SEK and NOK
affected financials negatively by € 4.6m. € 3.3m of this total exchange rate
loss concerns the non-cash aspects of the balances in NOK between Solar Norge
AS and Solar A/S as well as Aurora Group Norge AS and Aurora Group Danmark A/S.
Financial and operating data for 2008
(See table of financial and operating data in the attached file)
At the Annual General Meeting, the Supervisory Board will propose distribution
of
dividend of DKK 15.00 per outstanding share, equating € 2.01 per share and a
distribution percentage of 44.
Stated figures are subject to final completion of audit.
Continued focus on acquisition possibilities
Solar expects to continue its announced acquisition strategy, acquiring
enterprises to strengthen its market position and/or product portfolio. The
Supervisory Board has decided to maintain the holding of treasury shares as
cash resources to meet the level of financial resources necessary to realise
acquisitions. Thus, the proposal in announcement no. 44 2008 for the
cancellation of 364.120 treasury B shares will not be submitted.
Expectations for 2009
The long period of high organic growth recorded ended in 2008. A general
slowdown worsened from spring onwards, and, combined with the financial crisis,
formed the basis of the deep economic crisis that we find ourselves in now.
The business development and geographical expansion of recent years will only
to a limited extent dampen the negative growth expected this year.
Further staff reductions are necessary to adjust costs to the new situation
resulting from current market developments. In 2009, when completed, reductions
will represent annual savings of € 11m. They are a continuation of the measures
implemented in the autumn of 2008, and total annual savings will amount to €
23m. In addition to these staff cost reductions, we will focus on strengthening
the gross profit, limiting costs, reducing working capital and limiting
investments in 2009. However, we will still be making investments of up to €
40m in a new ERP system in the period from 2009 to 2011 as outlined in
announcement no. 53 2008.
Consequently, expectations include revenue of between € 1,450 and € 1,350m,
with negative organic growth reaching nearly 20% at worst. The sharply
declining revenue results in expected EBITA of between € 40m to € 25m in spite
of general cost savings and staff reductions implemented.
The duration of the financial crisis and its derived effects on construction,
industry and raw material prices cannot be estimated with reasonable certainty
at present. As such, expectations for revenue, gross profit and loss on debtors
in 2009 are more uncertain than usual. However, we have conditioned our
expectations on stimulus packages in the countries, in which Solar operates,
showing positive effects as from Q4.
Annual Report 2008 will be published on 12 March 2009.
Yours faithfully,
Solar A/S
Flemming H. Tomdrup
CEO
