Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Solar AS (FRA:ZVR, Financial) reported a sequential improvement in revenue from planned energy, increasing by almost 18% compared to Q1 2024.
- The company's Industry segment showed resilience with MAG45 delivering positive adjusted organic growth of more than 8%.
- Solar AS (FRA:ZVR) won a significant DKK200 million PV project with a major Danish industry customer, indicating strong project acquisition capabilities.
- The order pipeline for high-capacity ThermoNova heat pumps is growing, now exceeding DKK300 million, showing potential for future growth.
- Solar Denmark is showing signs of recovery with positive growth rates in July, marking the first positive growth in over a year.
Negative Points
- Overall revenue declined to DKK3.1 billion from DKK3.3 billion last year, with an adjusted organic growth of minus 7.8%.
- EBITDA decreased significantly to DKK137 million from DKK240 million last year, reflecting a challenging market environment.
- The Installation and Trade segments experienced substantial declines in adjusted organic growth, at approximately minus 11% and 14%, respectively.
- Gross profit margins have been negatively impacted by a less favorable mix and suppressed margins in Climate & Energy products.
- The conversion rate for ThermoNova heat pump orders remains low, indicating challenges in turning interest into actual sales.
Q & A Highlights
Q: Why is Denmark outperforming other markets for Solar A/S?
A: Jens Andersen, CEO, explained that Denmark entered a recession earlier than other countries, which is a timing factor rather than a market condition. Additionally, Denmark's operations are more diversified, contributing to resilience. The strategy is to replicate this diversification in other markets.
Q: How significant is the pharmaceutical sector to Solar Denmark's sales?
A: Jens Andersen noted that while the pharmaceutical sector, including companies like Novo Nordisk, is important, it is not the sole contributor to sales. The exact sales figures related to this sector are not available.
Q: What were the tactical purchases made at the end of Q2?
A: Michael Jeppesen, CFO, stated that the purchases were mainly cables and supporting systems to counter expected price increases. This is a routine tactical move to manage inventory and costs.
Q: What drove the increase in Climate & Energy sales from DKK199 million to DKK234 million in Q2?
A: The increase was primarily due to PV panels and air-to-air heat pumps. There is also growing interest in ThermoNova products, although sales are still below expectations.
Q: How is the DKK300 million order pipeline for ThermoNova defined?
A: Michael Jeppesen clarified that it consists of potential offers where customers have requested quotes. The conversion rate is improving but remains low, with some orders expected for 2025.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
