Solar AS (FRA:ZVR) Q1 2025 Earnings Call Highlights: Strong Revenue Growth Amidst Transition ...

In This Article:

  • Revenue: Increased to 3.2 billion, with adjusted organic growth of 6.5%.

  • Installation Growth: 4.7% growth in the installation segment.

  • Industry Growth: 3.3% growth in the industry segment.

  • Trade Growth: 30% growth in the trade segment.

  • Climate Segment Growth: 37% organic growth, adjusted to 14% excluding solar park deliveries.

  • Transition Costs: Approximately 12 million in transition costs incurred in Q1.

  • Restructuring Costs: Approximately EUR 40 million in restructuring costs.

  • Cost Savings: Estimated full-year cost savings of approximately 60 million from restructuring.

  • EBITDA: 74 million, in line with expectations; underlying EBITDA of 126 million after adjustments.

  • Gross Margin: Decrease attributed to the impact of solar polaris projects.

  • Operating Activities: Negative effect of 88 million due to increased accounts receivable.

  • Investing Activities: Net 78 million, with 126 million invested in PPE.

  • Net Working Capital: Reduced to 14.7% as an average for the last four quarters.

  • Dividend Payout: 110 million paid out in dividends during the quarter.

  • 2025 Guidance: Revenue expected in the range of 12.3 to 14.8 billion; EBITDA in the range of 530 to 600 million.

Release Date: May 09, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Revenue increased to 3.2 billion with an adjusted organic growth of 6.5%.

  • Trade segment showed an impressive growth of 30%.

  • Climate focus area demonstrated a strong organic growth of 37%, even when adjusted for specific project deliveries.

  • Warehouse capacity across Denmark, Sweden, and the Netherlands increased by 25%, enhancing operational efficiency.

  • Investments in automation and digitalization are expected to support a minimum of 10% volume growth without additional labor costs.

Negative Points

  • Transition costs of approximately 12 million were incurred due to warehouse relocations.

  • Restructuring costs amounted to approximately EUR40 million in Q1.

  • Operating activities showed a negative effect of 88 million due to increased accounts receivable.

  • Gross margin decreased due to the diluting impact from solar polaris.

  • Sweden and Norway markets are underperforming, impacted by restructuring and market conditions.

Q & A Highlights

Q: Can you elaborate on the motivation behind the efficiency initiative, particularly the staff cost reduction? A: Michael Jeppesen, CFO, explained that the initiative involves decentralizing some centralized functions and restructuring shared services to focus on digitalization. The changes primarily affect the commercial market, with a smaller group entity and decentralized product management. The goal is to simplify operations and align with current market conditions.