No. 16 2017 Quarterly Report Q2 2017

LEI: 21380031XTLI9X5MTY92

Q2 EBITA was on par with expectations and we reconfirm our EBITA guidance for the full year. Revenue and results for the quarter were negatively impacted by the timing of Easter compared to Q2 2016, but when taking the number of working days into consideration, Solar's business experienced solid growth.

CEO Anders Wilhjelm says:
"The main business improved performance in H1. Our key markets, Denmark, Sweden, Norway, and the Netherlands generated both growth and earnings significantly above last year, and performance was good in both installation and industry. However, as we are investing in new business, such as MAG45 and Solar Polaris, earnings were diluted as expected."

Financial highlights (DKK million)	Q2 2017	Q2 2016	H1 2017	H1 2016
Revenue	2,861	2,811	5,857	5,467
EBITA	43	57	99	109
Net financials*	-31	-6	64	-17
Earnings before tax	-5	37	129	65
Cash flow from operating activities	-197	40	-293	-211
Financial ratios (%)
Organic growth adj. for number of working days	7.4	-1.8	5.9	-0.2
EBITA margin	1.5	2.0	1.7	2.0
Net working capital, period-end/revenue (LTM)	11.4	11.1	11.4	11.1
Net working capital, average/revenue (LTM)**	10.4	11.2	10.4	11.2
Gearing (NIBD/EBITDA), no. of times	2.2	0.6	2.2	0.6
Return on invested capital (ROIC)	6.5	8.4	6.5	8.4

* Fair value adjustment of BIMobject AB is recognised in the income statement as financial income.

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

Q2 2017 revenue

Organic growth increased to 7.4% from -1.8% in Q2 2016 adjusted for the number of working days.

Q2 2017 EBITA

EBITA was on par with expectations.
Compared to Q2 2016, there has been an increase in external operating costs and staff costs, which was primarily related to MAG45's growth-related initiatives, the effect of the acquisitions of STI and Solar Polaris in 2016 and 2017, and necessary structural changes.
In H1, approx. DKK 30m of the expected 2017 costs related to innovation and business development as well as to the necessary structural changes were included. Hence, operational EBITA increased to approx. DKK 130m from approx. DKK 115m in H12016.

2017 outlook

We expect revenue above DKK 11.4bn, corresponding to organic growth above 3%.
For 2017, we expect to spend approx. DKK 25m in innovation and business development and approx. DKK 20m on structural changes.
We reconfirm our expectations for EBITA of approx. DKK 300m.

EBITA overview DKK million	Guidance 2017	Actual 2016
Operational EBITA	345	302
Innovation and business development	-25	-20
Non-recurring costs	-20	-15
Positive one-offs	0	11
EBITA	300	278

Audio webcast and teleconference today
The presentation of the Quarterly Report Q2 2017 will be made in English on 10 August 2017 at 11:00 CET. The presentation will be transmitted as an audio webcast and will be available at www.solar.eu. Participation will be possible via a teleconference.

Teleconference call-in numbers:

DK: tel. +45 354 455 83
UK: tel. +44 203 194 0544
US: tel. +1 855 269 2604

Yours faithfully
Solar A/S

Anders Wilhjelm

Contacts:
CEO Anders Wilhjelm - tel. +45 79 30 02 01

CFO Michael H. Jeppesen - tel. +45 79 30 02 62

Director, Stakeholder Relations Charlotte Risskov Kræfting -
tel. +45 40 34 29 08

Enclosure: Quarterly Report Q2 2017, pages 1-33.

Facts about Solar
Solar Group is a leading sourcing and services company. Our core business centres on product sourcing, value-adding services and optimisation of our customers' businesses.

Being a sourcing and services company, we focus on each individual customer. We always strive to understand our customers' unique and genuine needs in order to provide relevant, personal and value-adding services, turning our customers into winners.

Solar Group is headquartered in Denmark, generated revenue of approximately DKK 11.1bn in 2016 and has more than 3,000 employees. Solar is listed on Nasdaq Copenhagen and operates under the short designation SOLAR B. For more information, please visit www.solar.eu.

Disclaimer
This announcement was published in English and Danish today via Nasdaq Copenhagen. In the event of any inconsistency between the two versions, the English version shall prevail.