Solar A/S
LEI: 21380031XTLI9X5MTY92
Industrivej Vest 43, DK-6600 Vejen, Denmark
Tel. +45 79 30 00 00
CVR no. 15 90 84 16
www.solar.eu
ANNUAL REPORT 2021
In 2021, we achieved a 43% increase in EBITDA, which slightly exceeded our
expectations. At the Annual General Meeting, the Board of Directors will propose a 2021
dividend distribution of DKK 45 per share.
CEO Jens Andersen says:
"Our 2021 result reflects strong performance across all our segments driven by our
strategic focus areas. This echoes in the 43% increase in EBITDA, which totalled DKK
911m, and our EBITDA margin of 7.4%.
With our strong financial performance in mind we propose a dividend payment of DKK
329m.
We have set an ambition to reach net zero in scope 1+2 already in 2030. As a part of
our road to net zero we expect to introduce our Science Based Targets initiative targets
within 2022.
In addition, I would like to thank my colleagues for their dedication and commitment to
Solar. Every single one of you has made a difference and contributed to the results. This
gives me great hope for the future and reinforces my firm belief in: Solar - Stronger
Together.”
Financial highlights (DKK million)
Q4 2021
Q4 2020
2021
2020
Revenue
3,380
3,057
12,354
11,465
EBITDA
259
191
911
637
EBITA
212
145
727
455
Earnings before tax
184
-7
622
300
Cash flow from operating activities
558
432
783
813
Financial ratios (%)
Organic growth adj. for number of working days
7.1
-2.1
5.9
-2.0
EBITDA margin
7.7
6.2
7.4
5.6
EBITA margin
6.3
4.7
5.9
4.0
Net working capital,
end of period/revenue
(LTM)
10.2
9.7
10.2
9.7
Gearing (NIBD/EBITDA), no. of times
0.0
0.2
0.0
0.2
Return on invested capital (ROIC)
24.6
13.8
24.6
13.8
10 February 2022
Announcement no. 2 2022
Solar A/S
LEI: 21380031XTLI9X5MTY92
Industrivej Vest 43, DK-6600 Vejen, Denmark
Tel. +45 79 30 00 00
CVR no. 15 90 84 16
www.solar.eu
10 February 2022
Announcement no. 2 2022
2021 revenue
• Adjusted organic growth amounted to 5.9% (-2.0%) due to strong performance in all
main segments partly offset by our Better Business initiatives. Adjusted for the Better
Business impact, organic growth was approx. 8%.
2021 EBITDA
• EBITDA increased by DKK 274m to DKK 911m compared to 2020.
• EBITDA was supported by an increase in our four strategic focus areas: Concepts,
Industry, Climate & Energy and Trade and by positive one-off price effects combined
with a solid growth level.
• EBITDA was impacted by non-recurring income of net DKK 112m. Adjusted for this
EBITDA amounted to DKK 799m.
Dividend distribution
• At the Annual General Meeting, the Board of Directors will propose dividend
distribution of DKK 45.00 per share, corresponding to a pay-out ratio of 62%.
• Furthermore, the Board of Directors asks for authorisation to decide on distribution of
extraordinary dividend of up to DKK 50.00 per share.
2022 outlook
• We expect revenue of approx. DKK 12,750m equal to an organic growth of approx.
3%.
• Better Business initiatives are expected to reduce revenue by approx. DKK 200m
adjusted for this the growth amounts to approx. 5%.
• We expect an EBITDA of approx. DKK 850m.
See the assumptions on page 9 in Annual Report 2021.
Solar A/S
LEI: 21380031XTLI9X5MTY92
Industrivej Vest 43, DK-6600 Vejen, Denmark
Tel. +45 79 30 00 00
CVR no. 15 90 84 16
www.solar.eu
10 February 2022
Announcement no. 2 2022
Audio webcast and teleconference today
The presentation of Annual Report 2021 will be made in English on 10 February 2022 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 teleconference.
Teleconference call-in numbers:
DK: tel. +45 787 232 50
UK: tel. +44 333 300 9271
US: tel. +1 631 913 1422 Pin: 4158 3571#
Contacts
CEO Jens Andersen - tel. +45 79 30 02 01
CFO Michael H. Jeppesen - tel. +45 79 30 02 62
IR Director Dennis Callesen - tel. +45 29 92 18 11
Enclosure: Annual Report 2021, pages 1-150, including Q4 2021 quarterly information.
FACTS ABOUT SOLAR
Solar is a leading European sourcing and services company mainly within electrical,
heating & plumbing and climate & energy solutions. Our core business centres on
product sourcing, value-adding services and optimisation of our customers’ businesses.
We facilitate efficiency improvement and provide digital tools that turn our customers
into winners. We drive the green transition and provide best in class solutions to ensure
sustainable use of resources.
Solar Group is headquartered in Denmark, generated revenue of approx. DKK 12.4bn in
2021 and has approx. 2,900 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 Danish and English today via Nasdaq
Copenhagen. In the event of any inconsistency between the two versions, the Danish
version shall prevail.
Solar A/S
CVR no. 15 90 84 16
ANNUAL
REPORT
2021
4
STATUTORY REPORT ON
CORPORATE GOVERNANCE
2021, CF. § 107B OF THE DANISH
FINANCIAL STATEMENTS ACT
GREEN
TOGETHER
SUSTAINABILITY REPORT 2021
STATUTORY REPORT ON
DATA ETHICS 2021,
CF. § 99D OF THE DANISH
FINANCIAL STATEMENTS ACT
ADDITIONAL REPORTS
Together with the Annual Report, the following
publications constitute Solar’s reporting for the
year 2021:
WHO WE ARE
Sustainability Report 2021 Statutory report on corporate governance 2021
cf. § 107b of the Danish Financial Statements Act
Statutory report on data ethics 2021 cf. §
99d of the Danish Financial Statements Act
We are a leading European sourcing and services company .
Product groups
Product brands
Poland
Norway
The Netherlands Other
1
33% 21%
4%
16%
23% 3%
Installation Industry
Share of revenue Share of revenueShare of revenue
Trade
Electrical
Concepts
Other brands
Heating & Plumbing
Climate & Energy
60%
22%
74%
20%
6%
78%
8%32%
OUR PRODUCTSOUR SEGMENTSOUR ENTITIES
1
Including eliminations
5
CONTENTS
MANAGEMENT REVIEW
4 Letter from the CEO
6 Year at glance
7 Financial highlights 2021
8 Guidance follow-up 2021
9 Guidance 2022
11 Strategy
12 Business model
13 Our strategy
14 Our strategic focus areas
22 Strategic progress
23 Ambitions for 2023
24 Financial review
25 Five-year summary
26 Financial review
29 Risk management
30 Risk management
32 Group risks and mitigation
35 Corporate matters
36 Sustainability
38 Corporate governance
39 Shareholder information
41 Board of Directors
46 Executive Management
FINANCIAL STATEMENTS
48 Consolidated financial statements
50 Summary for the Solar Group
52 Statement of comprehensive income
53 Balance sheet
54 Cash flow statement
55 Statement of changes in equity
57 Notes
95 Separate financial statements
97 Statement of comprehensive income
98 Balance sheet
99 Cash flow statement
100 Statement of changes in equity
102 Notes
131 Group companies' overview
133 Statements and reports
134 Statement by the Executive Board
and the Board of Directors
135 Independent auditor’s report
139 Q4 2021
OUR PURPOSE
We improve
construction, building operation
and industry processes
with a commitment to
sustainability and productivity.
For our customers. With our partners.
For a better world.
6
MANAGEMENT REVIEW
LETTER FROM THE CEO 2021 AT A GLANCE FINANCIAL HIGHLIGHTS 2021 GUIDANCE FOLLOWUP 2021 GUIDANCE 2022
ALLTIME
HIGH EBITDA
We can look back on a profitable
year where we exceeded
expectations. In 2021, we
delivered an all-time high EBITDA.
A substantial contribution to this
is the execution of our Core+
strategy driven by all employees,
who have navigated the volatile
markets.
LETTER FROM THE CEO
7Solar – Annual Report 2021
YOUR ORDER
IS ON IT’S
WAY
MANAGEMENT REVIEW
LETTER FROM THE CEO 2021 AT A GLANCE FINANCIAL HIGHLIGHTS 2021 GUIDANCE FOLLOWUP 2021 GUIDANCE 2022
In 2021, EBITDA was impacted by the strong
execution of our Core+ strategy, resulting in an
EBITDA of DKK 911m. This equates to a 43%
increase for 2021 and a return on invested capital
(ROIC) aer tax of almost 25%.
CORE+ OFFERS FURTHER POTENTIAL
Core+ builds on four strategic focuses – Con-
cepts, Climate & Energy, Industry and Trade.
Twelve months into Core+, we have seen
strong improvements in our financial
performance. The four strategic focus areas
have all supported our journey towards stronger
customer focus and profitability.
All our strategic focus areas have shown progress:
• Our Concepts share increased by 1 percentage
point and now totals 22%.
• Climate & Energy succeeded in growing
revenue by 7% .
• Industry, which focuses on the OEM, MRO,
Infrastructure and Marine & Oshore
seg
ments, achieved an overall share of revenue
of 32% up from 31%.
• Trade delivered a strong revenue performance
and double-digit growth in 2021.
ELEVATING OUR STRATEGIC
AMBITIONS
We have identified further opportunities to
improve our business and establish an even
stronger Solar going forward.
These new opportunities mean that we are
increasing our ambition for EBITDA margin from
>6% to >6.5% and are including MAG45 in our
ambitions for 2023.
OUR TICKETS FOR GROWTH
The expansion of our warehouse in V ejen ,
Denmark, commenced in February 2021 with the
construction of an additional 11,000 sqm,
corresponding to a 25% increase in capacity.
During the spring of 2022, we plan to inaugurate
one of the largest AutoStore facilities in Scandi-
navia. This will enable us to close several external
warehouses on dierent locations in Vejen, which
will reduce our energy consumption, increase
product accessibility and provide us with
opportunities for future growth.
In the Netherlands, an expansion of our
warehouse and AutoStore setup in Alkmaar will
commence during 2022, thus centralising
services, reducing costs and ensuring future
opportunities for growth. As a result, the
warehouse in Duiven will close.
Furthermore, we are currently evaluating the
opportunities for the further expansion of our
warehouses in Sweden and Norway.
NETZERO IN 2030
Solar is determined to play an active part in the
green transition. We have set an aggressive
ambition to reach net-zero in scope 1 & 2 in 2030.
As part of our ambition we have committed
ourselves to the Science Based Targets initiative
(SBTi). We believe that a clearly defined binding
science-based target is the way to achieve an
actual reduction in our environmental footprint.
We expect to introduce our Science Based
Targets in 2022.
I would like to thank my colleagues for their
dedication and commitment to Solar. Every
single one of you has made a dierence and
contributed to the results. This gives me
great hope for the future and reinforces my
firm belief in: Solar - Stronger Together.
2021 will be remembered for the successful
execution of our Core+ strategy. It was also
the start of a journey that we will continue
into 2023.
We wish to add value for our customers and
shareholders with a strong focus on digital
and green approach.
THANK YOU
LETTER FROM THE CEO
Jens Andersen
CEO
8Solar – Annual Report 2021
CO
2
LETTER FROM THE CEO 2021 AT A GLANCE FINANCIAL HIGHLIGHTS 2021 GUIDANCE FOLLOWUP 2021 GUIDANCE 2022
MANAGEMENT REVIEW
2021 AT A GLANCE
AMBITION SET FOR
NETZERO IN SCOPE 1 & 2
We have set an ambition to reach net-zero in scope 1 & 2 in
2030. As part of our ambition we have committed ourselves to
the Science Based Targets initiative (SBTi). We are preparing
for the introduction of targets that will support Solar’s
journey towards lowering emissions as well as supporting our
customers on their journey towards decarbonisation. We expect
to introduce our Science Based Targets in 2022. For more
information read our Sustainability Report 2021 at www.solar.eu.
GREEN EXPANSION OF
WAREHOUSE VEJEN, DENMARK
We have completed the first stage of the construction process, which means
that the construction of our 11,000 sqm warehouse expansion in Vejen is
finished and we are preparing for the next step. The second stage will see
the installation of AutoStore, which commenced in January and will begin
operations in the spring of 2022.
The AutoStore facility in Vejen will be one of the largest of its kind in
Scandinavia, containing 125 robots and a picking system with 108,000 boxes.
Furthermore, the expansion will elevate the working environment, significantly
reduce energy consumption, and support biodiversity in the
surroundings of the warehouse.
In early 2021, we introduced our Core+
strategy that centres on four strategic
focus areas and is designed to increase
profitability and develop our core business.
Within the first year, we exceeded our
EBITDA margin ambition for 2023.
Moreover, our strategy exceeded
expectations compared to what we
thought was financially feasible within
the time frame and how successfully the
strategy would be implemented in the
organisation.
OUR RESULTS
EXCEEDED THE
GUIDANCE
In 2021, we revised our guidance
upwards. The revision was driven by
better-than-expected performance
across all segments and a DKK 115m
one-o relating to positive price
eects.
Revenue and EBITDA guidance
was increased by DKK 750m and
250m to DKK12.3bn and DKK 900m,
respectively.
CONTINUED DIGITALISATION
During 2021, we successfully launched a big data project
focusing on cross-selling. This means that we are able to
recommend alternative products to our customers mitigating
the eects of the global supply chain disruption.
We have finalised the implementation of our new webshop
in Sweden and the Netherlands and have taken digitalisation
to the next level. The implementation of new webshops in
Denmark and Norway will be finalised shortly.
To support our daily business, we deploy robotics as virtual
assistants to carry out routine tasks and boost our daily
performance. Robotics are used in transportation,
delivery and internal processes.
ALLTIME HIGH EBITDA MARGIN
7.4
%
911
DKKm
9Solar – Annual Report 2021
LETTER FROM THE CEO 2021 AT A GLANCE FINANCIAL HIGHLIGHTS 2021 GUIDANCE FOLLOWUP 2021 GUIDANCE 2022
MANAGEMENT REVIEW
FINANCIAL HIGHLIGHTS 2021
Adjusted organic growth at group level increased
to 5.9% (-2.0%). All entities saw positive organic
growth apart from Solar Nederland where the
Better Business project had a negative impact on
revenue. Adjusted for the Better Business impact,
organic growth at group level was approx. 8%.
Group revenue was up at DKK 12.4bn (DKK
11.5bn).
With an all-time high EBITDA of DKK 911m, we
succeeded in increasing EBITDA by DKK 274m
compared to 2020. The increase was supported by
our four strategic focus areas Concepts, Industry,
Climate & Energy and Trade as well as positive
one-o price eects of DKK 115m combined with a
solid growth level. The EBITDA margin increased to
7.4% (5.6%).
All entities saw substantial improvements in
EBITDA with Solar Danmark making a significant
contribution.
At year-end, gearing was 0.0 times EBITDA.
Calculated as an average, gearing was 0.3 times
EBITDA in 2021.
Gearing was impacted by high cash generation in
operating activities.
In 2021, we paid out dividend of DKK 314m
and invested DKK 200m in digital improvements,
operations optimisation and expansion.
Net interest-bearing debt decreased by DKK 165m
to DKK -37m.
Our target for payout ratio is at least 35%
of profit aer tax. The Board of Directors
will submit a proposal to the Annual General
Meeting for an ordinary dividend payout of
DKK 45 per share, corresponding to a total
payout ratio of 62%.
In 2021, we paid DKK 28 per share in ordinary
dividend and DKK 15 per share in extraordi-
nary dividend. Dividend payment amounted
to DKK 14 per share in both 2020 and 2019.
GEARING
times EBITDA
EBITDA
DKKm
REVENUE
DKKbn
DIVIDEND PER SHARE
DKK
911
0.0
45
50
40
30
20
10
0
20182017 2019 2020 2021
1000
800
600
400
200
20182017 2019 2020 2021
2.0
1.5
1.0
0.5
0.0
20182017 2019 2020
2021
12.5
12.0
11.5
11.0
10.5
10.0
20182017 2019 2020 2021
12.4
Ordinary
Extraordinary
10Solar – Annual Report 2021
LETTER FROM THE CEO 2021 AT A GLANCE FINANCIAL HIGHLIGHTS 2021 GUIDANCE FOLLOWUP 2021 GUIDANCE 2022
MANAGEMENT REVIEW
STRONGER THAN EXPECTED
EBITDA performance was aected by the
following:
REVENUE
Strong growth rates within Installation, Industry
and Trade delivered organic growth of 5.9%
compared to our initial expectation of 0%.
GROSS PROFIT MARGIN
Focus on concept sales continued to deliver
growth opportunities and we saw revenue and
margin from concept sales picking up in all
markets.
One-o price eects had an impact of approx.
DKK 115m corresponding to an improvement in
the gross profit margin of approx. 0.9 percentage
points.
EBITDA MARGIN
Non-recurring income of DKK 122m in total and
non-recurring costs of DKK 10m had a net
positive eect of DKK 112m corresponding to
approx. 0.9 of the 1.8 percentage points EBITDA
margin improvement.
AS EXPECTED
Our Better Business project continued to deliver
gross profit margin improvements by focusing on
supplying the right products to the right
customers and by product pruning. As a
consequence, revenue was reduced by approx.
DKK 205m.
SAP eWM implementation at our central ware-
house in Alkmaar, the Netherlands, was carried
out successfully with hardly any disruptions. All
central warehouses are now using SAP eWM.
Operational excellence. Due to COVID-19, we
initiated several prudent cost-saving measures in
2020 to protect short-term earnings and to
deliver cash generation such as reducing travel
and shiing many physical meetings to digital.
The initiatives continue to perform as expected,
which means that we have been able to maintain
the level of external operating costs as we
anticipated.
During 2021, Solar upgraded both
revenue and EBITDA guidance.
Compared to our initial 2021
guidance, revenue was up by DKK
0.8bn to DKK 12.4bn and EBITDA
was up by DKK 261m to DKK 911m.
GUIDANCE FOLLOWUP 2021
Organic growth
EBITDA MARGIN
Revenue
EBITDA
Guidance,
initial
Guidance,
initial
Guidance,
last update
Guidance,
last update
11,550
650
12,300
900
6
7.3
0
5.6
12,354
911
5.9
7.4
Actual Actual
SOLAR GROUP
DKKm
%
11Solar – Annual Report 2021
MANAGEMENT REVIEW
GUIDANCE 2022
For the Solar Group, we expect
revenue of DKK 12,750m corre-
sponding to organic growth of
approx. 3%. We expect EBITDA
of approx. DKK 850.
GENERAL ASSUMPTIONS
The guidance for 2022 assumes that the resurgence
of COVID-19 will not result in any significant
COVID-19 related knock-on eects.
During the latter part of 2021, we saw a sub-
stantial increase in the unavailability of stock
materials due to global supply chain disruption,
as stated on page 33. Despite the mitigating
activities, there is a risk that this might lead to
a loss of revenue and earnings. The guidance is
based on the assumption that the situation will
not deteriorate further.
As we expect price increases to normalise in
2022 to pre-COVID-19 levels, no additional price
eects have been included in the guidance.
Loss on trade receivables is assumed to be at
the same level as in 2021.
MARKET OUTLOOK FOR
SOLAR’S SEGMENTS
Overall, we expect the markets to show modest
growth rates in 2022 in all countries partly due
to the full-year eect of the price increases in
2021.
Installation
On the backdrop of continued electrification as
one of the important megatrends, we expect
the installation market to show modest growth
in 2022 compared to 2021.
Industry
The guidance is based on the assumption that
sales to Marine & Oshore remain at the current
level. However, we expect OEM and MRO to
deliver solid growth rates. Therefore, we expect
solid growth rates for Industry.
Trade
We expect solid growth in Special Sales, which is
the primary activity in the Trade segment.
FINANCIAL OUTLOOK 2022
Revenue guidance
We expect revenue at DKK 12,750m,
corresponding to organic growth of approx. 3%.
Our Better Business project is an integral part
of the Core+ strategy and is expected to reduce
revenue by approx. DKK 200m compared to 2021.
This will aect mainly Installation and Trade,
primarily in Solar Sverige, and to a lesser extent
in Solar Nederland. Adjusted for this, we expect
organic growth of approx. 5%.
Due to substantial price increases during the
last eight months of 2021 the majority of growth
is expected in the first four months of 2022.
EBITDA guidance
We expect EBITDA at DKK 850m. In 2021, we saw
non-recurring income of around DKK 122m and
non-recurring costs of DKK 10m. In total, the
above had a net positive eect of DKK 112m.
850
EBITDA 2022
DKKm
EBITDA
DKKm
12,750
REVENUE 2022
DKKm
1000
900
800
700
600
500
400
300
2017*
2018*
2019
2020
2021
One-os 2021
Improvement
Guidance 2022
362
379
538
637
911
-112
51
850
* not adjusted for IFRS16 impact
12Solar – Annual Report 2021
LETTER FROM THE CEO 2021 AT A GLANCE FINANCIAL HIGHLIGHTS 2021 GUIDANCE FOLLOWUP 2021 GUIDANCE 2022
MANAGEMENT REVIEW
We expect the strategic focus areas – Concepts,
Climate & Energy, Industry and Trade – to
deliver continuous improvement in earnings,
osetting approx. 50% of the positive one-o
price eects in 2021.
Expected major investments
In 2022, we expect to invest approx. DKK 219m
in the expansion and upgrading of our ware-
house in Vejen, Denmark, and further automa-
tion of our warehouse in Alkmaar, the Nether-
lands.
In 2021, we initiated the expansion and upgrade
of our warehouse in Denmark to which we add
a 11,000 sqm warehouse. This will enable us to
close down three external warehouses, which
we are currently operating in the vicinity of Ve-
jen. We will also invest in AutoStore as we have
done in Solar Norge and Solar Nederland.
Following the expansion, we will have more than
25% available capacity for future growth. The to-
tal investment is expected to amount to approx.
DKK 250m of which DKK 144m is expected to be
paid in H1 2022.
In addition, we have decided to close down our op-
eration in Duiven and move activities to Alkmaar. In
2022, we therefore expect to invest approx. DKK
75m in expanding Alkmaar. We will add another
7,600 sqm to the warehouse in Alkmaar and also
invest in further automation.
Aer the completion, we will have more than
20% available capacity for future growth in Solar
Nederland.
In addition, we have commenced work on ana-
lysing how to expand and further automate the
central warehouses in both Norway and Sweden.
13Solar – Annual Report 2021
LETTER FROM THE CEO 2021 AT A GLANCE FINANCIAL HIGHLIGHTS 2021 GUIDANCE FOLLOWUP 2021 GUIDANCE 2022
STRATEGY
COOPERATION IS THE KEY TO SUCCESS
The installation company ENCO is involved in
a major construction project in Carlsbergbyen,
Copenhagen. The project comprises approx. 200
multi-storey flats and 200 business units. Logistics
plays an important role.
Collaboration between Solar and the
customer is crucial for projects in which
time and eciency are vital components.
Digitisation is the key to success.
CUSTOMERS
& PRODUCTS
Our customers are active within
the industry, installation and
trade segments.
Electrical
Wide assortment of electrical
components, cables and lighting
solutions. We also provide
training and product guidance.
Climate & Energy
Energy ecient solutions within
heat pumps, solar panels,
ventilation and EV chargers.
Heating & Plumbing
Wide assortment of heating &
plumbing components, pipes, drainage
systems, cold-water pumps and
insulation, combined with training
and product guidance.
SOLAR
More than 200,000 articles are available
from our automated warehouses.
Automa ed warehouses
Based on AutoStore, warehouses
improve productivity and reduce
energy consumption.
Customer services
Supporting customers throughout their
journey makes us stronger together.
FastboxFastbox
Fastbox
Fastbox
t
Bike and EV deliveries
Delivery within the hour
and limited impact on the
environment.
Digital service
+65% of customer orders are
made online – making us one
of the most digitised
companies in our industry.
School
Each year 6,000 participants
attend our Solar School.
Transport
More than 10,000
deliveries every day.
SUPPLIERS
Solar works with around
3,500 suppliers.
SOLAR IS A GREEN AND
DIGITAL SOURCING AND
SERVICES COMPANY
BUSINESS MODEL
15Solar – Annual Report 2021
STRATEGY
BUSINESS MODEL OUR STRATEGY OUR STRATEGIC FOCUS AREAS STRATEGIC PROGRESS AMBITIONS FOR 2023
STRATEGIC FOCUS AREAS
CONCEPTS
Grow Concept share
across all customer
segments
INDUSTRY
Become preferred
supplier to four selected
Industry segments
CLIMATE & ENERGY
Focus on Climate
& Energy solutions
in all segments
TRADE
Grow Trade with focus
on retail, e-tail and
e-trading customers
Digital Together
‘Digital Together’ is our roadmap for our digital
first approach. It impacts our customers,
business partners, employees, and our
day-to-day operations – as it enables us to work
with greater eciency and respond faster to
customer needs based on enriched data
and real-time market insights.
Green Together
‘Green Together’ is our ambition to ensure
a holistic approach to our work with sustainability
– to strengthen our position as a responsible
business, to provide sustainable solutions for our
customers, and to contribute to a more
sustainable world.
OUR STRATEGY
Last year, we launched our Core+ strategy. It builds on our key dierentiating capabilities in
digital sales, category management and operations. These are influenced by the two megatrends
digital transformation and green solutions that guide over our strategic focus areas.
16Solar – Annual Report 2021
STRATEGY
BUSINESS MODEL OUR STRATEGY OUR STRATEGIC FOCUS AREAS STRATEGIC PROGRESS AMBITIONS FOR 2023
2021
Solar's concepts are our curated product assortments targeted
at specific customer needs within installation and industry.
The concepts embody five elements: price, quality,
availability, coverage and delivery.
Our ambition is to grow our concepts in terms
of revenue share. We aim for a concept share
of >25% and we are well on track. Customer
demand fluctuates considerably, which is why
it is important to view each customer as an
individual, adjusting assortments and services
accordingly.
We have embarked on an alignment of our
product
portfolio across our markets and an expansion
of our assortment. This allows us to reach more
customers, strengthen our sourcing power, and
increase our general understanding of customer
requirements as well as how to address them.
As we have seen greater demand for sustainable
construction from our customers, we have pro-
vided our employees with further training. This
will enable them to oer our customers newly
acquired expertise in the products required for
certified sustainable buildings.
More than 65% of our total revenue stems from
digital sales. To ensure the right presentation of
concepts in our webshop, we collect and process a
large amount of data which we use to learn more
about purchasing patterns. This enables us to
customise oerings to individual target groups.
Part of the increase in our concept share was
driven by the Netherlands, Sweden and
Norway, where we have pruned low margin
business and partly replaced it with our concept
oers, thus attracting business that does not
usually come our way.
CONCEPTS
PRODUCT BRANDS
SHARE OF REVENUE
Concepts
Other brands
22%
78%
17Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS
CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
PERFECT LIGHTING ON
THE PADEL COURT
Padel is currently Sweden’s trendiest form of exercise.
It is so popular that courts are being built across the
country. Perfect lighting is essential. Solar Light has
been a go-to partner to install the right
lighting solution.
Padel, a racquet sport, has gained in popularity
in many parts of the world, particularly in Swe-
den. The number of players and padel courts has
increased significantly thanks to the COVID-19
pandemic. In 2020, half a million players booked a
padel court in Sweden and now there are around
2,000 padel courts in the country.
Solar has been involved in supplying the lighting
to a number of padel centres in Sweden. The
most recent is Gislövs IF following the associa-
tion’s decision to turn the former gymnastics hall
into an indoor training centre and padel court.
"Instead of the hall being empty during the year,
we thought it would be the ideal place for a
padel court. And this has proved to be a success.
It is almost always fully booked and all the money
we earn from it goes to our non-profit associa-
tion,” says Anders Herrlin Carlsson from Gislövs IF.
Building a padel court may seem easy, but there
are many factors to take into account – particu-
larly the lighting. Lights must be spaced so that
all players can see equally well and there is no
risk of them being dazzled on court.
"In this respect, special and customised solu-
tions are required because the lighting depends
on whether the court is indoors or out and
also whether the court is to be used for regular
practice or competitions,” says Jerry Persson from
Solar Light.
In the former gymnastics hall at Gislövs IF, the
lighting has won high praise.
"Most of the comments we get are about the
lighting. The players think that it is great. And
it shows the importance of investing in quality,”
says Anders Herrlin.
The installation was carried out by RSA Rosengren
AB with the lighting calculations and fittings
supplied by Solar Light.
"To achieve the best results, we recommended
One 23 Flex from Solar Light. It is installed
lengthwise and illuminates obliquely which works
well on a padel court. Our lighting experts are
always ready to help make the calculations and
provide the right lighting solution,” says Jerry
Persson.
THE LIGHTING ON AN INDOOR
COURT REQUIRES A HIGHER LUX*
If the court is to be used for competitions,
the requirements are higher. For regional
competitions, 500 lux is required while for
national and international tournaments,
the requirement is at least 750 lux.
*Lux is a standardised unit of measurement
of light intensity level.
CONCEPTS
CASE
18Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
2021
We are seeing a significant trend towards green
solutions from fitters, manufacturing companies and
end-users who are experiencing an increased demand
for heat pumps, solar panels, ventilation
and EV chargers.
This has driven our sales within these areas
significantly. In 2021, we posted double digit
growth in our Climate & Energy segment sup-
porting our ambition of growing more than 5%
annually in our strategic period.
In terms of the organisation, we have extended
our scope in Sweden, Norway and the Nether-
lands through the extension of our category
management and sourcing. In turn, this supports
the further consolidation of our product portfolio
and increases local market knowledge enabling
us to share learnings across countries and within
dierent product categories.
Generally, we are seeing spikes in demand
triggered by government subsidies. In Denmark,
for example, the government is subsidising the
replacement of oil and gas boilers in favour of
more sustainable heating solutions such as heat
pumps. The government has also made it more
beneficial to buy electric vehicles, which has
prompted the need for expanding
infrastructure,
which covers EV chargers, among other things.
We typically combine these with a digital solution
that enhances the charging experience.
CLIMATE & ENERGY
In Norway, our partner programme continues
to add value to our growing customer base and
to Solar. Customers within the heat pump, solar
panel and EV charger product groups receive
additional services if they select Solar as their
preferred partner. As well as regular access to our
service centres, our additional services include
training, webinars and sales specialists who are
regarded as experts in their fields.
PRODUCT GROUPS
SHARE OF REVENUE
Electrical
Heating & Plumbing
Climate & Energy
74%
20%
6%
19Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
CLIMATE & ENERGY
THE DEMAND FOR
HEAT PUMPS SENDS
ELECTRICIANS
ON COURSES
The green transition is increasing the demand for heat pumps
from private consumers as well as companies. This means
higher standards for electricians and their training.
That is why Svend Erik Møller and his employees
attend KMO* training from Solar School.
The seats at Solar School are filled when it comes
to courses and training in KMO and heat pumps.
Electricians and fitters gain better knowledge of
the required installation and service of dierent
types of heat pumps. One of the students is Svend
Erik Møller from A.T. Møller A/S in Denmark.
"We have put three employees through KMO
training at Solar School because we have noticed
a demand for heat pumps from both private indi-
viduals and industry. It is important for us to be
able to install and service all types of heat pumps
and that our customers know us for quality,” says
Svend Erik Møller.
The training has also given him new insight into
the area.
"This is one of the best courses I have taken
because I learned a great deal from a highly pro-
fessional instructor.”
WORKING WITH HEAT PUMPS
REQUIRES KNOWLEDGE
Increasing political focus on the environment, the
green transition and grants have given a further
boost to energy renovations. In regards to heat
pumps, fitters have to be KMO certified in order
to install and service heat pumps and systems.
Solar School is therefore seeing a growing de-
mand for this type of training. In 2021, eight KMO
courses were held in Denmark and 102 partici-
pants attended the courses.
Jacob Mortensen is the course instructor and
recognises the tendency. Oil and gas boilers are
due to be replaced, and therefore, there is a need
for fitters who can install and service the new
heat pump systems.
"KMO is not a compulsory part of a plumber’s or
electrician’s basic training. But working with heat
pumps requires knowledge and training because
refrigerants can be dangerous to people and the
environment. That is why I think Solar School
makes a dierence for fitters of the future, the
environment, and in terms of instilling confi-
dence in our end users,” says Jacob Mortensen.
Solar’s ambition is that before 2023, 2,000
participants will have attended courses in
renewable energy solutions at Solar School. Solar
School oers courses in photovoltaics, charging
points, heat pumps and ventilation.
* Kølebranchens Miljøordning (KMO) is a provider of
certifications to refrigeration technicians under the
Danish Ministry of Environment and Food.
CASE
SOLAR SCHOOL
Solar School was started in 2003 and
attracts several thousand course
participants and visitors every year.
The school oers skills development
courses for the installation sector – from
engineering to management. Teaching is
conducted online and in person. Courses
currently focus on green transition and
sustainable constructions.
20Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
2021
INDUSTRY
In the first year of our strategy period, we focused
on our organisational structure, extending a major con-
tract and increasing market share in certain markets, all
supporting our ambition of a 35% share of revenue.
We have introduced changes to our
organisational setup for Industry. These
changes are designed to ensure that products,
solutions and services increasingly focus on
customer requirements. This has been achieved
by transforming Solar Industry from a local
setup in each country to a vertically based
organisational structure with focus on customer
types: OEM (Original Equipment Manufacturer),
MRO (Maintenance, Repair & Operations),
Infrastructure and Oshore & Marine across
borders. Not only will this take customer
understanding to a new level, but we will also
benefit from the related global synergies.
In Norway, we extended an important infrastruc-
ture contract with Telenor, a long-standing
customer. The contract supports the expansion
of 5G infrastructure in Norway. We have proven
to be a trusted partner who has supported the
general network expansion for Telenor in Norway
for the past decade.
The Marine & Oshore business areas are seeing
growth in demand. We have therefore established
a branch under Solar Nederland’s brand, building
on our knowledge and experience from Solar
Norge. We have already sent out contracts to our
first Dutch customers and are looking forward to
becoming a reliable business partner within our
new segment in the Netherlands.
As our customers are putting greater value on our
digitalisation, they are looking for more integration
between their ERP system and our trading platform
thus providing them with a better understanding
of their spend and product requirements.
In Sweden, we have benefited from increased
market demand and added new customers in two
sub-segments; MRO and OEM. Our new customers
are attracted by our strong position within the
automated product category.
SEGMENTS
SHARE OF REVENUE
Installation
Industry
Trade
60%
32%
8%
21Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
INDUSTRY
DANISH CROWN
Danish Crown’s history began with the
establishment of Denmark’s first pig
slaughterhouse in Horsens in 1887. Today,
it is the country’s largest slaughterhouse.
Danish Crown employs approximately
8,000 employees in Denmark and 23,000
employees across the world.
VENDING MACHINES
SUPPORT A MORE
EFFICIENT WORKING DAY
Danish Crown Foods' Maintenance Department in Vejle has leased
vending machines through Solar. With a special access key,
employees can retrieve various items, which saves time, reduces
costs, and makes the working day more ecient.
Danish Crown Foods' production floor manufac-
tures canned sausages, ham and ready-made
meals. The Maintenance Department comprises
around 55 people whose job is to ensure that the
machinery functions as it should. Warehouse
Manager Erik Grønborg Sørensen is responsible for
technical procurement.
In the spring of 2021, Solar put forward a service
package aimed at making the working day more
ecient. By using vending machines and an
access key, the maintenance team can access
everything from batteries to car keys instead of
the warehouse manager having to find and
supply the products himself.
"I have not had to supply any employees since we
received the vending machines from Solar. In the
past, this was the case several times a day:
someone would need a spray can or a pack of
batteries. Now the items are available to
employees on a 24-hour basis, which frees up
time and makes the working day more ecient,”
he says.
"Availability is paramount for Danish Crown
Foods. The vending machines mean that
everyone has 24-hour access, which is ideal for a
factory like this. What’s more, we have identified
savings for everyone who uses this service – typi-
cally between 25-40 per cent,” says Jesper
Grøning Andersen, who is head of Solar Services.
Danish Crown Foods has seen cost savings of as
much as 30 per cent.
"We generated savings over the summer because
items did not just disappear. Now people have to
log in with their access key to get their items and
many of them have to be returned to the
compartments again,” explains Erik Grønborg
Sørensen. The vending machines have also meant
that employees only take what they need
because items are always available.
AUTOMATIC RESTOCKING
Chemicals are among the many items needed by
the maintenance team, but such items have to be
locked away. In the past, only Erik Grønborg
Sørensen had the key, which meant that he had
to release the items as required. Now, however,
these are also located in the vending machines,
but the system allows for restricted access only.
"And what’s more, we never run out of products,”
says the Warehouse Manager in Vejle.
The vending machines transmit a message to
Solar when stocks are low so that the compart-
ments can be replenished.
"We avoid having to keep track of items and
doing any purchasing ourselves. As we save both
time and eort on invoicing, we are very pleased
with the results that the vending machines have
delivered.”
The plan is now to fill up the last vending
machines so even more products are accessible
to employees on a round-the-clock basis.
CASE
22Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS
CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
TRADE
Twelve months into the Core+ strategy, our strategic focus
on the Trade segment has generated a number of initiatives
supporting our financial ambition of a compound annual revenue
growth of >7.5%.
We have introduced Trade to the Norwegian and
Swedish markets and addressed new customer
groups. The segment’s characteristics remain the
same: demand for a wide assortment and ecient
delivery with no additional services.
In early 2021, we introduced the Danish Trade
setup to the Norwegian and Swedish markets. This
ensures that Solar covers the full customer range
in all the markets where we are present. The first
customer contracts were signed shortly aer the
introduction to the two new Trade markets.
Trade succeeded in growing, adding customers
across markets and introducing a new sub-seg-
ment in the B2B MRO segment (Maintenance,
Repair and Operations). Solar is the first to present
a segment that includes hotels, fitness centres,
housing associations, etc., where we oer solu-
tions tailored to this specific customer group.
Our digital trade solutions have enhanced our
customer opportunities, among others within
recycled materials for the construction sector.
SEGMENTS
SHARE OF REVENUE
Installation
Industry
Trade
60%
32%
8%
2021
23Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
TRADE
DUTCH COMPANY MAKES
ITS MARK THANKS TO
SOLAR’S PRODUCTS
The Dutch company, Gijsberts BV, supplies bathrooms, kitchens, tiles
and sanitary ware – all including installation. They have been working
with Solar for more than 25 years because of our fast delivery,
availability and unique own label products, which enable them to
stand out from their competitors.
Gijsberts BV is a family-run business, which was
founded in 1976. In 2002, the current owner,
Lammert Jan Gijsberts, took over the company
from his father. A 5,000 sqm showroom enables
dierent types of customers to find just what
they are looking for.
"Our strength is that we oer a complete
package which is fantastic for our customers.
With us they find beautiful bathrooms, floors
and kitchens and we can install and arrange
everything from A to Z", says Lammert Jan
Gijsberts.
The collaboration between the company and Solar
has endured for over 25 years and the personal
contact and knowledge are appreciated. Solar
knows the company inside and out and can there-
fore be part of the innovative and development
process, the owner explains.
"It is important that we set ourselves apart
from online oerings. Solar regularly comes up
with new products and unique own labels, e.g.
Catalano. This is a beautiful ceramic range with
products of the highest quality. With Solar’s Blue
Label, I can also oer customers good quality
products at a sensible price, which are not
available online. Such unique brands are essential
for us,” Lammert Jan Gijsberts points out.
"With Solar, the collaboration really feels like a
partnership. There is a lot of trust between us.
At the moment, it is oen dicult to get things
delivered on time, but Solar always keeps me
updated on delivery. It is great to be able to work
together like this.”
CASE
GIJSBERTS
Gijsberts is a household name in Dutch
Apeldoorn and the surrounding area.
They have a 5000 sqm showroom for kitch-
ens, tiles, bathrooms and sanitary ware.
The family-owned company
has 19 employees.
24Solar – Annual Report 2021
OUR STRATEGIC FOCUS AREAS CONCEPTS CLIMATE & ENERGY INDUSTRY TRADE
Concepts have exceeded our expectations across
all markets, particularly Solar Plus, Solar Cable
and Solar Tools. This is supported by layout and
assortment in our drive-ins as well as big data
driven recommendations in our digital touch-
points. So irrespective of how and where we meet
our customers, we are able to add value with the
best solution matching their needs.
Our customers have responded very positively
to the changes, which is why we have high
expectations for our concept share.
Green has become the new blue for Solar,
especially within sustainable solutions such as
EV chargers and heat pumps. Market demand for
green alternatives is growing. Our ambitions are
high, both for our products and for our advisory
and training services.
In 2021, government subsidies helped accelerate
demand for green products and solutions in
all our main markets. In Solar, we saw this
particularly in the heat pump area.
INCREASED AMBITIONS FOR 2023
NOW ALSO INCLUDING MAG45
CONCEPTS CLIMATE & ENERGY
STRATEGIC PROGRESS
REVENUE REVENUECAGR CAGRREVENUE REVENUECAGR CAGR
22% 32%7% 17%>25% 35%>5% >7.5%
TODAY TODAYTODAY TODAYAMBITION AMBITIONAMBITION AMBITION
Our Industry share of revenue including MAG45
has increased by 1% to 32%. Strong performance
across markets, but particularly within our OEM
and MRO business, is the main reason. We have
gained several customers in both business areas.
The two other segments – Marine & Oshore and
Infrastructure – have also supported our ambition
for a 35% share of total revenue, by delivering a
positive performance during the second half of
2021 following a slow start of the year.
Our strategic focus area Trade delivered double-
digit growth in the first year of our strategy.
Trade has now been successfully launched in all
our markets, and we continue to attract new
customers in our established markets as well as in
Norway and Sweden where we launched Trade in
the first half of 2021. This supports our ambition to
grow our revenue by an average of >7.5% during
our strategy period despite substantial negative
impact from the Better Business project in 2022.
We also introduced a new business segment
within Trade known as B2B MRO, for further
information see page 20.
INDUSTRY TRADE
We aim to grow our Trade segment and
increase our target CAGR from 5% to >7.5%.
We are increasing our ambition for our
Industry share of revenue from 30% to
35% reflecting the inclusion of MAG45 and
stronger underlying performance than
previously planned.
We continue to see growth opportunities
within sustainable solutions and are
increasing our expectations from 5% CAGR
(Compound Annual Growth Rate) to >5%
CAGR for the strategic period.
We are increasing our Concept share of revenue
ambition to >25%, up from 25%. The increase
reflects the inclusion of MAG45 that dilutes
the share by approx. two percentage points as
MAG45 does not have concept revenue.
25Solar – Annual Report 2021
STRATEGY
BUSINESS MODEL OUR STRATEGY OUR STRATEGIC FOCUS AREAS STRATEGIC PROGRESS AMBITIONS FOR 2023
CORE+ STRATEGIC FOCUS AREAS
FINANCIAL & NONFINANCIAL TARGETS
ENVIRONMENT, SOCIAL & GOVERNANCE
ALL ELECTRICITY
WILL BE FROM
RENEWABLE
SOURCES
INSTALL PV
EQUIPMENT AT
ALL SOLAROWNED
SITES AND EV
CHARGERS AT
ALL MAJOR
SOLAR SITES
INCREASE
GENDER DIVERSITY
AT MANAGEMENT
LEVEL
SBTI
COMMITMENT*
CLIMATE & ENERGY
>5%
INDUSTRY
35%
TRADE
>7.5%
OUR AMBITIONS
AMBITIONS FOR 2023
Our 2021 results exceeded our expectations and met
the ambitions we presented with the introduction of our Core+
strategy. Therefore, we have increased our ambitions.
EBITDA MARGIN
>6.5%
ROIC AFTER TAX
20%
GEARING
1.5-3.0x
NIBD/EBITDA
EBUSINESS SHARE
70%
PARTICIPANTS
2,000
participants to complete
training in renewable solutions
at Solar School
CONCEPTS
share of revenue
incl. MAG45
>25%
CAGR for the
strategic period
share of revenue incl.
MAG45
CAGR for the
strategic period
* Net-zero in scope
1&2 in 2030
26Solar – Annual Report 2021
STRATEGY
BUSINESS MODEL OUR STRATEGY OUR STRATEGIC FOCUS AREAS STRATEGIC PROGRESS AMBITIONS FOR 2023
FINANCIAL
REVIEW
Solar Kitbox in combination with
SiteHub increases eciency and reduces
material waste at the same time.
PLANNING AND OVERVIEW IN A PROJECT
"It makes sense to use Solar Kitbox in a project like
this because there are so many flats. Searching for the
right materials can take some time. But there is no
need for us to do this now because one complete box
is used for each flat. This also means that a flat can
be completed immediately without any interruptions
to the workflow, which is also financially beneficial,”
explains Adam Sjur Sinding, Project Manager at Enco.
FIVEYEAR SUMMARY
In all material aspects, financial ratios are calculated in accordance with the Danish Finance Society’s
“Recommendations & Financial Ratios”. As at 1 January 2019, Solar implemented IFRS 16, Leases, by
applying the modified retrospective approach. Comparative figures are not restated. This especially
aects EBITDA, interest-bearing liabilities, EBITDA margin, gearing and equity ratio.
In general, restatements have been made of income statements, cash flow and key ratios for the
discontinued operations in STI AS for 2017 and 2018. In accordance with IFRS, the balance sheet has
not been restated.
Extraordinary dividend was paid in H1 the following year.
Consolidated (DKK million) 2021 2020 2019 2018 2017
Revenue 12,354 11,465 11,679 11,098 11,061
Earnings before interest, tax, depreciation and
amortisation (EBITDA)
911 637 538 379 362
Earnings before interest, tax and amortisation (EBITA) 727 455 360 327 310
Earnings before interest and tax (EBIT) 672 248 260 224 176
Earnings before tax (EBT) 622 300 120 237 176
Net profit for the year 531 222 64 133 19
Balance sheet total 5,305 4,607 4,990 4,633 4,717
Equity 1,952 1,696 1,592 1,638 1,591
Interest-bearing liabilities, net -37 128 921 461 489
Cash flow from operating activities 783 813 300 224 7
Net investments in property, plant and equipment -125 -25 -110 -59 -14
Employees
Average number of employees (FTEs) 2,908 2,935 3,039 2,941 2,870
Financial ratios (% unless otherwise stated) 2021 2020 2019 2018 2017
Organic growth adjusted for number of working days 5.9 -2.0 4.9 2.2 7.0
Gross profit margin 22.4 21.0 20.1 20.2 20.7
EBITDA margin 7.4 5.6 4.6 3.4 3.3
EBITA margin 5.9 4.0 3.1 2.9 2.8
Eective tax rate 14.6 26.0 45.2 23.3 17.0
Net working capital (year-end NWC)/revenue (LTM) 10.2 9.7 11.0 9.8 9.7
Gearing (net interest-bearing liabilities/EBITDA),
no. of times
0.0 0.2 1.7 1.2 1.3
Return on equity (ROE) 29.1 13.5 4.0 8.2 1.2
Return on invested capital (ROIC) 24.6 13.8 8.3 8.1 6.3
Equity ratio 36.8 36.8 31.9 35.4 33.7
Share ratios (DKK unless otherwise stated)
Earnings per share outstanding (EPS) 72.72 30.42 8.77 18.22 2.60
Ordinary dividend per share 45.00 28.00 14.00 14.00 10.00
Extraordinary dividend per share - 15.00 - - -
Total dividend in % of net profit for the year (payout ratio) 61.9 141.1 159.4 76.7 385.6
28Solar – Annual Report 2021
FINANCIAL REVIEW FIVEYEAR SUMMARY FINANCIAL REVIEW
In 2021, we reached an all-time high
EBITDA of DKK 911m (DKK 637m)
which slightly exceeded our latest
guidance. We returned to positive
adjusted organic growth of 5.9%
(-2.0%) and the gross profit margin
increased to 22.4% (21.0%).
Strong execution of our Core+
strategy was the main contributor to
the EBITDA increase together with
one-o price eects of DKK 115m
(DKK 18m).
REVENUE
Adjusted organic growth at group level increased
to 5.9% (-2.0%). All entities saw positive organic
growth apart from Solar Nederland where the
Better Business project had a negative impact on
revenue. Adjusted for the Better Business impact,
organic growth was approx. 8%. Group revenue
was up at DKK 12.4bn (DKK 11.5bn).
Installation
Solar’s overall adjusted organic growth for
Installation amounted to around 3%, driven
mainly by Solar Danmark and Solar Polska. Our
Core+ strategy continues to focus on the Better
Business project, which aims to supply the right
products to the right customers.
Industry
All entities saw positive growth in the Industry
segment, primarily within MRO and OEM. Overall,
organic growth within this segment amounted to
around 9%.
Trade
The trade segment delivered double-digit growth
rates. We saw positive adjusted organic growth in
all entities.
GROSS PROFIT MARGIN
There was continuous improvement in gross
profit margin, which increased to 22.4% (21.0%).
Combined with revenue growth, this resulted in a
gross profit increase of DKK 368m.
One-o price eects had a positive impact of
approx. DKK 115m (DKK 18m). The net impact of
price eects corresponded to a gross profit
margin improvement of approx. 0.8 percentage
points.
In addition, we saw continuous positive develop-
ment in concept sales. This, together with the
Better Business project, is part of the Core+
strategy and focuses on increasing the gross
profit margin.
OTHER INCOME
Other income amounted to DKK 7m (DKK 8m)
mainly related to one-o income from the
disposal of a property in Denmark and one-o
compensation. In 2020, the outcome of a
settlement with the former shareholder of MAG45
constituted the major proportion of other
income.
EBITDA INCREASED BY
MORE THAN 40% TO DKK 911M
(Data shown in brackets relate to 2020 figures)
FINANCIAL REVIEW
EBITDA
EBITDA increased to DKK 911m (DKK 637m) and
slightly exceeded our latest guidance.
We succeeded in increasing EBITDA by DKK 274m
supported by our four strategic focus areas,
Concepts, Industry, Climate & Energy and Trade
as well as by positive one-o price eects
combined with a solid growth level.
Besides positive one-o income of DKK 7m
included as other income, EBITDA was negatively
aected by DKK 10m in restructuring costs
related to Solar Nederland’s planned closure of
the operation in Duiven and the relocation of the
activities to Alkmaar.
The EBITDA margin increased to 7.4% (5.6%).
All entities saw substantial improvements in
EBITDA, with Solar Danmark making a significant
contribution. We saw a similar development in
our segments Installation, Industry and Trade,
with a substantial improvement in segment
profit. The results of the individual segments and
entities are given on page 61-63.
29Solar – Annual Report 2021
FINANCIAL REVIEW FIVEYEAR SUMMARY FINANCIAL REVIEW
AMORTISATION AND IMPAIRMENT
Amortisation totalled DKK 55m (DKK 207m). No
impairment write-down took place in 2021.
In 2020, review of intangible assets resulted in a
total impairment loss of DKK 139m. Of this, DKK
129m related to goodwill obtained when Solar
Sverige acquired Alvesta V.V.S-Material AB in 2007.
In addition, a DKK 10m impairment of soware
was made which mainly related to Axapta soware
acquired in 2015 and deployed at Solar Polska.
SHARE OF NET PROFIT
FROM ASSOCIATES
Our share of earnings from our digital, construc-
tion and service associates amounted to DKK -2m
(DKK -12m) related to HomeBob and Zolw, while
the 2020 share related mainly to BIMobject.
IMPAIRMENT ON ASSOCIATES
Impairment on associates amounted to DKK 0m
(DKK 104m).
In Q4 2020, we divested our shareholding in
BIMobject for a total cash consideration of DKK
237m. Profits from the divestment amounted to
DKK 23m based on a book value of DKK 214m as
at 30 September 2020. In addition, the previously
performed BIMobject write-down of DKK 86m was
reversed in 2020.
In 2020, we also divested 60% of our investment
in Viva Labs. The write-down and loss related to
this divestment amounted to DKK 4m. Further-
more, other investments resulted in a loss of DKK
1m in 2020.
FINANCIALS
Net financials amounted to DKK -48m (DKK -40m)
negatively aected by DKK 14m in 2021 and DKK
10m in 2020 due to the early redemption of an
interest swap. Similar positive amounts were
reported under other comprehensive income in
2021 and 2020, respectively.
In 2021, net financials were also positively
aected by DKK 13m owing to interest compen-
sation relating to a ruling by the Danish Tax
Authorities, see section on income tax on this
page. In addition, net financials were negatively
aected by DKK 19m due to a fair value adjust-
ment of the investment in LetsBuild.
Adjusted for these items, net financials totalled
DKK -28m (DKK -30m).
EARNINGS BEFORE TAX
Earnings before tax increased to DKK 622m (DKK
300m).
In 2020, earnings before tax were positively
aected by the reversal of impairment on
associates of DKK 104m and negatively aected
by impairment losses on intangible assets of DKK
139m. When adjusted for these items, 2020
earnings before tax amounted to DKK 335m.
INCOME TAX
Income tax totalled DKK 91m (DKK 78m).
In 2021, we received a ruling from the Danish Tax
Authorities approving a reduction in Danish
taxable income in 2012 with a tax loss of DKK 74m
related to divested activities. The tax value of the
loss amounts to approx. DKK 19m, see note 8 for
additional information.
Due to the improved performance in both MAG45
and Solar Nederland tax loss carried forward
amounting to DKK 32m was capitalised.
The posted income tax corresponds to an
eective tax rate of 14.6% (26.0%). Adjusted for
the above-mentioned tax value of loss regarding
previous years and change in non-capitalised loss
in subsidiaries, the eective tax rate was 22.4%.
In 2020, the eective tax rate was 23.5% when
adjusted for impairment on associates and
non-deductible items.
FINANCIAL REVIEW
NET PROFIT
Net profit for the Solar Group totalled DKK 531m
(DKK 222m).
CASH FLOWS
Net working capital calculated as an average of
the previous four quarters amounted to 11.0%
(11.5%) of revenue. Net working capital at the
end of 2021 amounted to 10.2% (9.7%).
Cash flow from operating activities totalled DKK
783m (DKK 813m).
Changes in non-interest-bearing liabilities had an
impact of DKK 517m (DKK -15m), while changes
in inventories and changes in receivables had a
DKK -319m (DKK 126m) and a DKK -229m (DKK
173m) impact on cash flow, respectively.
The inventory level was aected by price
increases and also by the decision to ensure
delivery performance during a period with a
potential shortage on goods. Cash flow from
receivables was aected by the increased
growth level in 2021. As at 31 December 2021,
COVID-19 financial support packages amounted
to DKK 99m and positively aected cash flow
from non-interest-bearing debt.
Total cash flow from investing activities
amounted to DKK -191m (DKK 162m). The disposal
of a property in Denmark had a positive impact
of DKK 18m, while DKK -106m related to the
investment in the expansion and upgrade of our
central warehouse in Denmark, cf. page 10 in this
report.
30Solar – Annual Report 2021
FINANCIAL REVIEW FIVEYEAR SUMMARY FINANCIAL REVIEW
NIBD in DKK million
In 2020, the divestment of BIMobject and Viva Labs
impacted by DKK 237m and DKK 3m, respectively.
Cash flow from financing activities amounted to
DKK -515m (DKK -627m), mainly aected by
ordinary and extraordinary dividend distributions
totalling DKK 314m (DKK 102m). Raising or
repayment of non-current interest-bearing debt
amounted to DKK -79m (DKK -199m).
Total cash flow amounted to DKK 77m (DKK 348m).
Net interest-bearing liabilities were down at DKK
-37m (DKK 128m).
As at 31 December 2021, gearing was 0.0 (0.2)
times EBITDA. Calculated as an average, our
gearing was 0.3 (1.1) times EBITDA. Our gearing
target is 1.5-3.0 times EBITDA.
As at 31 December 2021, Solar had undrawn
credit facilities of DKK 495m (DKK 474m).
Invested capital for the Solar Group totalled DKK
1,866m (DKK 1,760). ROIC amounted to 24.6%
(13.8%).
Activities with a Solar equity interest of less than
50% and discontinued activities are not included
in the ROIC calculation. Invested capital only
includes operating assets and liabilities.
MAG45
Revenue from MAG45 amounts to approx.
5% of our total revenue.
We have finalised our strategic review of
MAG45 resulting in continuous improvements
in operations in 2021.
Adjusted organic growth increased to 17.2%
(3.1%) and MAG45 succeeded in increasing
EBITDA margin to 4.5% (2.0%) resulting in an
EBITDA increase of DKK 19m.
Earnings in MAG45 exceeded our expecta-
tions.
WWW.SOLAR.EU/INVESTOR/POLICIES/
FINANCIAL REVIEW
31.12.2020
Operating activities
CAPEX
Other investments
Dividends
Oth. fin. activities
Leasing & misc.
31.12.2021
-128
783
-183 -8
-314
37
-200
-100
0
100
200
300
400
500
600
700
800
2
-115
REMUNERATION OF EXECUTIVE BOARD
AND MANAGEMENT TEAM
In accordance with Solar’s remuneration policy
and general guidelines for incentive-based
remuneration, the Board of Directors granted
restricted shares to the Executive Board and
management team in February 2021.
Overall, the granting of shares is covered by the
same terms as the previous grants of share
options. 13,037 restricted shares were granted,
amounting to a fair value of DKK 5.9m at the time
of granting. The restricted shares vest three years
aer the time of granting, i.e. this grant of shares
vests in 2024. In February 2021, 20,033 share
options from the grant in 2017 were exercised
either by converting the options to shares or
settled in cash. For more information, please see
this report’s note 23 on share-based payment.
General information on Solar’s incentive scheme
is available on our website:
31Solar – Annual Report 2021
FINANCIAL REVIEW FIVEYEAR SUMMARY FINANCIAL REVIEW
RISK
MANAGEMENT
ORDERING ON THE GO
When Project Manager Adam Sjur Sinding
updates the project plan, Solar is automatically
informed that a Solar Kitbox must be packed and
delivered the following day.
The digital project plan links Enco to Solar
and our Solar Kitbox delivery service. For
each individual flat an installation task and
a matching Kitbox is defined with the right
materials for the job.
Board of Directors / Audit Committee
Approve and accept risk policy including
risk appetite and tolerance
Business Management
& Risk Owners
Own risks and risk
management activities
Internal Audit
Test, validate and assess
eciency in risk management
processes and activities
Executive Board
Monitor the risk management framework and eectiveness
First line of defence Third line of defence
Group Risk Management
& Risk Managers
Establish policies and
frameworks, facilitate risk
identification and monitoring
Second line of defence
Solar’s risk management is based on
Enterprise Risk Management (ERM)
and the Board of Directors’ rules
of procedure, which place the
responsibility for risk management
with the Executive Board.
RISK MANAGEMENT
The Executive Board is responsible for ensuring
that the necessary policies and procedures are
in place, that ecient risk management systems
have been established for all relevant areas and
are improved continuously. The overall purpose of
risk management is to support a robust business
that is able to react quickly and flexibly when
conditions change.
Solar’s risk management encompasses the
relevant entities in Denmark, Norway, Sweden,
the Netherlands, Poland and MAG45. The process
supports local management teams by taking a
structured approach towards risk management,
with risk self-assessments anchored in an annual
cycle. Data is consolidated at group level, and the
findings are presented to the Board of Directors
for approval.
The individual risk owners are responsible for
mitigating risks to a level within Solar’s risk
appetite and tolerance. Throughout the year,
Solar’s Group Risk Management and local risk
managers actively monitor the progress of the
mitigation to ensure that risks are at the
acceptable level.
THREE LINES OF DEFENCE
Solar’s risk management is organised
according to the three lines of defence
model which demonstrates and structures
roles, responsibilities for risks, decision-
making and control to achieve eective
governance.
33Solar – Annual Report 2021
RISK MANAGEMENT RISK MANAGEMENT GROUP RISKS AND MITIGATION
Low Medium High
RISK CATEGORY
Risk seeking
Risk tolerantRisk neutral
RISK APPETITE
Moderately
Risk Averse
Risk averse
Governance and
compliance
Strategy
and planning
Operations and
infrastructure
RISK TOLERANCE
Low
Low-medium
Low-medium
High
High
Low
Low
IMPACT
PROBABILITY
A
G
B
F
D
C
E
H
A
B
C
D
E
F
G
H
RISK MANAGEMENT
RISK DEFINITION
The focus of Solar’s risk management is to iden-
tify and assess operational risks and operational
aspects of strategic risks throughout the Solar
Group. Solar defines these risks as events or de-
velopments that could significantly reduce Solar’s
ability to:
1. Meet profit expectations,
2. Execute the strategy, and/or
3. Maintain a licence to operate.
Solar works with the concepts of gross risk (in-
herent risk) and net risk (residual risk).
The gross risk eect is defined as the product
of the impact and the probability of the risk
materialising without any change to current risk
mitigation.
The net risk eect is defined as the risk level
when considering current as well as planned
mitigation activities with regard to both impact
and probability.
RISK APPETITE AND TOLERANCE
Solar’s risk appetite and risk tolerance articulate
the extent to which Solar is willing to accept risks
in three overarching categories: Governance &
Compliance, Strategy & Planning and Operations
& Infrastructure.
Accordingly, the risk appetite outlines Solar’s stra-
tegic outlook towards risk and defines the degree
to which Solar is risk-seeking or risk-avoiding,
while the risk tolerance, as an indicative param-
eter, outlines the level of net risk that Solar is
willing to accept for a given measure of reward.
RISK APPETITE AND TOLERANCE PER RISK CATEGORY
SOLAR RISK MAP
Risk appetite and risk tolerance are set by the
Board of Directors and are reviewed annually.
RISK SELFASSESSMENT
Solar evaluates the eect of a risk based on the
product of the probability of the risk materi-
alising and the gross impact if the risk does
materialise. In detail, the probability of the risk
is defined as the expected frequency of the risk
occuring, while the impact is divided into four
dimensions:
1. Eect on earnings
2. Reputational damage
3. Compliance (licence to operate)
4. Business activities
RISK HANDLING
The purpose of identifying and then handling risk
is to reduce it to an acceptable level, which is in
line with risk appetite and tolerance. In Solar, we
work with four dierent risk treatment strategies
when handling risks.
• Avoid – seeks to eliminate uncertainty by
changing circumstances.
• Transfer – seeks to transfer ownership of and/or
liability for the risk to a third party.
• Accept – recognises net risks and monitors risk
exposure.
• Mitigate – seeks to minimise risk exposure to
below the acceptable threshold.
To ensure an understanding of the philosophy
and the risk management preferences, Solar
provides structured criteria for risk attitude
and a catalogue of mitigating activities.
Cyberattack
IT interruptions
Global supply chain
Warehouse operations
Credit management
New entrants in the market
Central warehouse breakdown
Talent management
Solar’s top risks are mapped
out in terms of probability and
impact in the risk map.
34Solar – Annual Report 2021
RISK MANAGEMENT RISK MANAGEMENT GROUP RISKS AND MITIGATION
EXPOSURE TO POTENTIAL TOP RISKS
AND MITIGATION
One of the risks reported last year – customer
migration to a new webshop – has been
signifi-
cantly
reduced as all customers of Solar Sverige
and Solar Nederland have been successfully
migrated from the legacy webshop to the new
one. Therefore, the risk is no longer prioritised at
group level. However, the risk, as well as its
mitigation, are continuously monitored at Solar
Danmark and Solar Norge.
Additionally, the risk of market volatility from last
year has transformed into a more pronounced
risk related to a global supply chain disruption.
Headlined 'Global supply chain' it is now
prioritised at group level.
CYBERATTACK
The impact of the risk has been reduced, but its
probability has increased.
Risk of IT breakdown and/or data breach due to
cyberattack.
Business interruptions in the shape of data
compromise, denial of service, intellectual property
the, and regulatory investigation are among the
consequences of various cyber incidents and would
ultimately lead to financial losses and inability to
run daily operations. The probability of the
worst-case scenario is medium, but the potential
impact is assessed as between medium and high.
Mitigation eorts concentrate on strengthening
cyber resilience. This includes monitoring the
network for unusual behaviour as well as ensuring
security solutions or upgrading existing ones.
Ongoing activities related to network safety aim to
minimise the damage from a potential attack. During
2021, the disaster recovery test and the identified
improvements provided evidence that the company’s
'crown jewels' (the most critical systems) can be
restored within an acceptable timeline. Additional
eorts are focused on developing business continuity
plans and scenario analyses for warehouses and
oces. These activities will secure readiness and a
clarity of priorities within IT and the business during
a potential disruption. Group IT continues to
communicate appropriate internal information and
deliver e-learnings on IT security to maintain
organisational awareness and reduce the likelihood
of an unwanted event caused by the human factor.
IT INTERRUPTIONS
The risk is unchanged.
Risk of business interruption due to unforeseen
but inherent events aecting IT operations such as
fire, power outage, network or system failure, and
other natural or unintentional man-made hazards.
Potential IT interruptions may have a significant
impact on earnings and reputation depending on
the nature and scale of the event. However, the
probability of the worst-case scenario is between
low and medium, but the potential impact is
assessed as between medium and high.
The IT area is continuously monitored and
evaluated. Business-critical applications are
mirrored at two central data centres in order to
safeguard IT operations, so that the business can
continue to run if one centre experiences
downtime. Mitigation eorts planned to reduce
the risk of cyberattacks – such as increasing
network security and further development of
business continuity plans – will also reduce the
risk of losing the stability of digital operations.
Risk
Scenario
Impact
Mitigation
RISK MANAGEMENT
35Solar – Annual Report 2021
RISK MANAGEMENT RISK MANAGEMENT GROUP RISKS AND MITIGATION
A
B
GLOBAL SUPPLY CHAIN
The risk has been added to the list of top group
risks this year.
Risk of stock materials being unavailable due to a
global supply chain disruption and potential price
volatility.
Inability to meet customer demand and maintain
acceptable service delivery can jeopardise
customer relationships and ultimately aect
business results. The probability of the risk
materialising is between medium and high, and
the impact is assessed as medium.
Solar has taken action to minimise the risk of a
zero stock situation to occur. Purchasing
materials that are at high risk is a natural
mitigation measure that has already been
initiated. Increasing the conversion to concept
products would also improve product availability.
Solar has stepped up its dialogue with major
suppliers regarding their supply chain.
Additionally, a review of alternative suppliers is
taking place to minimise negative consequences
should a disruption impact a certain country or
supplier. A dedicated cross-functional team
shares market information and continuously
reviews risk indicators to identify early warnings.
Improving the order placement process,
monitoring average delays in delivery, and
improving forecasts on material levels help to
avoid a shortage of critical products in
warehouses.
The risk is unchanged.
Risk of pandemic regulations aecting warehouse
operations.
A new wave of pandemics and the ensuing
regulatory environment may influence the digital
transformation and challenge the flexibility of
Solar’s business model. The probability of the
worst-case scenario and the potential impact are
assessed as between low and medium.
The experience of adapting quickly to the
pandemic and the regulatory changes of 2020
provides confidence that the company is able
to act flexibly and appropriately should the
situation happen again. Solar regularly monitors
the impact of the pandemic on local markets
and follows the recommendations of health
organisations and the local authorities in order to
protect all employees and those of third parties.
A comprehensive contingency plan for warehouse
sta is regularly updated to support the manage-
ment of the consequences of the pandemic and
to ensure business continuity. The pre-prepared
flexible mitigation plan and a wide range of
preventive actions help to keep the threat within
the risk appetite.
CREDIT MANAGEMENT
The risk is unchanged.
Risk of negative financial consequences of
extending credit to customers.
Extending credit to customers is regarded as a
natural and important element in Solar's business
operations. If a negative market cycle occurs,
then the credit risk increases. The fallout from
the pandemic may raise the likelihood of the risk,
in particular when government support packages
are withdrawn. The probability and potential
impact of the worst-case scenario is assessed as
close to medium.
Solar conducts ecient credit management at all
times and monitors the development of credit
risk. The credit policy has already been tightened
due to the onset of the COVID-19 pandemic in
2020. Furthermore, we have taken out insurance
to hedge against potential losses on trade
receivables. In addition, uninsured trade
receivables are generally spread across a large
number of small customers. The impact of
COVID-19 has increased the risk on trade
receivables.
Risk
Scenario
Impact
Mitigation
WAREHOUSE
OPERATIONS
RISK MANAGEMENT
36Solar – Annual Report 2021
RISK MANAGEMENT RISK MANAGEMENT GROUP RISKS AND MITIGATION
C
D
E
NEW ENTRANTS IN THE
MARKET
The risk is unchanged.
The risk of new market players entering the market
and resulting in increased competition and/or price
pressure with a negative impact on Solar’s business.
The current commercial risk of strong new
entrants in the market may result in reduced
competitiveness, lost revenue and decreased
earnings. However, the probability of the worst-
case scenario is assessed as close to medium with
the potential impact assessed to be between low
and medium.
Solar seeks to engage in an active and regular
cross-border dialogue to share experiences.
A dedicated cross-functional team is in place to
monitor potential new players’ strategies and/or
recent market developments as well as to
understand customers’ present and future buying
criteria. Commercial market and sales
organisations monitor this for early indicators. In
accordance with observations and feedback, Solar
continues to invest in digital tools and value-
adding services so as to adapt to new trends.
CENTRAL WAREHOUSE
BREAKDOWN
The risk is unchanged.
Risk of business interruption at the central
warehouses due to unforeseen but inherent events
such as fire, power outage, flooding, and other
natural or man-made hazards.
Potential interruptions of the operations of central
warehouses may have a significant impact on
earnings and reputation depending on the nature
and scale of the event. However, the probability of
the worst-case scenario is low, but the potential
impact is assessed as between medium and high.
A contingency plan has been implemented and is
updated in all central warehouses. It clarifies roles
and responsibilities and describes actions required
from sta in case of possible force majeure events.
Solar arranges for regular warehouse audits in
order to verify the level of preventative and
detectable security measures to protect the
facilities. In addition, Solar is in the process of
expanding the warehouse area and modernising
the equipment in Vejen.
TALENT
MANAGEMENT
The risk has been added to the list of top group
risks this year.
Risk of succession challenges and inability to attract
or retain people with key skills.
Failure to attract the right managerial skills and
specialists may challenge day-to-day business or
even hinder the achievement of strategic goals.
However, the probability of the worst-case scenario
is between low and medium and the impact is
assessed as close to medium.
Several HR activities are focused on strengthening
succession planning with priority given to ensuring
the strength of the management team. All related
eorts are driven locally and are aimed at investing
in the internal talent pool and developing a
cross-country skills matrix. Hosting events to
attract young talent and setting objectives for
more diverse management are other examples of
Solar's endeavours to identify new or promote
existing talent. The HR departments regularly
monitor employee attrition and loyalty indicators
so that relevant actions can be taken. Any increase
in sta turnover is noted, although the current rate
remains acceptable at group level.
Risk
Scenario
Impact
Mitigation
RISK MANAGEMENT
37Solar – Annual Report 2021
RISK MANAGEMENT RISK MANAGEMENT GROUP RISKS AND MITIGATION
F
G
H
CORPORATE
MATTERS
DELIVERY AT DAWN
In a project with a tight timetable it is important
to have the materials delivered at the right time
and at the right place so that the working day
can be organised as eciently as possible.
Solar Kitbox is delivered to Carlsbergbyen
at 7 am. Meanwhile, the installers arrive
and get ready for the day ahead.
E
n
v
i
r
o
n
m
e
n
t
a
l
For further information please see our
Sustainability Report 2021.
We remain committed to supporting
our customers and being a
responsible member of society.
ENVIRONMENTAL,
SOCIAL &
GOVERNANCE
SOLAR
LEADING WITH TRANSPARENCY
We see governance as a valuable tool for exercising sound
management and ensuring transparency for shareholders
and other stakeholders.
RESPONSIBLE USE OF RESOURCES
Solar seeks to reduce environmental impacts and promote
sustainable solutions via our product and service portfolio.
BECAUSE WE CARE
We seek to ensure safe working con-
ditions for our employees and respect
human rights in our operations as well as
in our business relations.
98% (98)
Board meeting
attendance rate
28 times (24)
CEO pay ratio
1
3,583
tons
(2,814)
CO
2
e, scope 1
4,107 tons
(4,326)
CO
2
e, scope 2
2,908 FTEs
(2,935)
Full-time workforce
19% (17)
Gender diversity
management
7.8% (5.2)
Employee
turnover rate
2
10.3 (9.2)
days/FTE Sickness
absence
27% (27)
Gender diversity
17% (17)
Gender diversity
board
In the Environmental area, we saw an increase in
the 2021 scope 1 emission as the 2020 activity level
was lower due to COVID-19. However, we have set an
aggressive ambition to become net-zero in scope 1 and
2 in 2030 and we intend to introduce further targets
in 2022.
Our Social Responsibility area has seen an increase in
management gender diversity. However, we have seen
an increase in FTE absence because of COVID-19, and
we have seen a widening of the gender pay ratio due
to a skewed distribution among male white- and blue-
collar workers. Finally, we have seen an increase in sta
turnover, which reflects the current job market.
With regard to our Governance area, we have seen an
increase in the CEO pay ratio, which reflects Solar’s
strong results, thereby increasing the variable part of
the remuneration.
1) If measured against Danish employees, the CEO pay ratio amounts to 23 times (2020: 20 times).
2) Voluntary employee turnover.
Data shown in brackets relate to 2020 figures.
1.17 times
(1.14)
Gender pay ratio
SUSTAINABILITY
89,429 GJ
(90,210)
Energy consumption
68% (28)
Renewable energy share
39Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
G
o
v
e
r
n
a
n
c
e
S
o
c
i
a
l
WHAT ARE SCIENCE BASED TARGETS?
Science based targets provide a clearly defined
pathway for companies to reduce greenhouse gas
emissions. Targets are considered science based if
they are in line with what the latest climate science
deems necessary to meet the goals of the 2015 Paris
Agreement. The Science Based Targets initiative is a
partnership between CDP, the United Nations Global
Compact, the World Resources Institute and World
Wildlife Fund (WWF).
For further information please see our
Sustainability Report 2021.
SUSTAINABILITY
Clearly defined targets will enable
us to become net-zero in scope 1
and 2 emissions in 2030.
COMMITTED TO SCIENCE BASED
TARGETS INITIATIVE
This year, we submitted our letter of commitment
to the Science Based Targets initiative. The
Science Based Targets’ systematic approach will
assist us in breaking down our targets and
transforming them into actions.
With our target of becoming net-zero in 2030 in
scope 1 and 2 emissions, our focus will be on
removing the maximum amount of carbon from
our operations as rapidly as possible and only
osetting the remaining emissions as a last resort.
However, emissions from our operations are only
a small part of our overall carbon footprint. With
around 3,500 suppliers, our eorts to get our
suppliers on board and start to decarbonise will
play a significant role in our green transition.
Our baseline is 2020. The journey and ambition
for scope 1 and 2 have already been set. In
parallel, we have embarked on scope 3 materiality
assessment where ‘purchased goods & services’,
‘transport & logistics' and ‘use of sold products’
have been identified as our three primary focus
areas thus far. We intend to communicate our
actions for scope 1 and 2 and target for scope 3
during 2022.
40Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
CORPORATE GOVERNANCE
Solar has set out our practice in
relation to the 2020 recommenda-
tions of the Danish Committee on
Corporate Governance. In general,
Solar regards the 2020 recommenda-
tions as a valuable tool for exercis-
ing sound management, providing
shareholders and other stakeholders
with full transparency and ensuring
ecient risk management.
SOLAR COMPLIES WITH 2020 CORPORATE
GOVERNANCE RECOMMENDATIONS
A full description of Solar’s views on the individu-
al items in the corporate governance recommen-
dations is available at: www.solar.eu/investor/
corporate-governance.
DEVIATION
Solar complies with 38 of the 40 recommenda-
tions but deviates from:
Recommendation on the procedure for evaluating
the Board of Directors
The Board of Directors undertakes an annual
evaluation of the board’s work and the interac-
tion between the Board of Directors and the
Executive Board. This includes an evaluation of
the Chairman’s leadership of the board's work.
The evaluation is based on a number of questions
covering all subjects included in the board's
work. The questions are the same every year so
as to detect trends and are rarely changed. The
Board of Directors finds that the repetitive
format is preferable rather than obtaining
occasional external assistance.
The chairman is in charge of the evaluation,
which is discussed by the Board of Directors. If a
need for skills development becomes apparent,
members of the Board of Directors will partici-
pate in relevant courses and supplementary
training as agreed.
In connection with the evaluation of the board's
work, the Board of Directors annually assesses
the structure and work of the committees.
Recommendation on the variable part
of remuneration
Limits have been set as to the size of both
share-based and non-share-based incentive
payments in relation to the fixed remuneration
in order to ensure an appropriate balance
between long-term and short-term interests and
balanced risk.
As a simple model for allocation of variable
remuneration is applied, the Board of Directors
does not deem it relevant to assess the value of
this in dierent scenarios.
STATUTORY CORPORATE
GOVERNANCE STATEMENT
Solar has chosen to make the statutory
corporate governance statement, cf.
Danish Financial Statements Act section
107b, available on the company’s website.
Please use this link to view the statutory
corporate governance statement 2021:
THE AUDIT COMMITTEE AND
INTERNAL AUDIT
Descriptions of the roles and responsibilities
of the Audit Committee and Internal Audit
are available on the link below.
SOLAR.EU/INVESTOR/CORPORATEGOVERNANCE
SOLAR.EU/INVESTOR/CORPORATEGOVERNANCE
41Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
WWW.SOLAR.EU/INVESTOR/
INVESTOR RELATIONS POLICY
We strive to maintain an open dialogue with
investors and to provide them with accurate and
adequate information for making reasoned
investment decisions about Solar's shares. We
ensure all investors are given fair and equal
access to information by publishing relevant
information via Nasdaq Copenhagen.
We participate in conferences, arrange roadshows
and conduct meetings with investors and
financial analysts following the publication of
quarterly and annual reports.
Investor meetings and similar events cannot be
held during our quiet periods, which start on 3
January, 1 April, 1 July and 3 October and end
with the publication of a quarterly or annual
report.
SOLAR’S SHARES
Solar’s share capital is divided into nominal value
DKK 90m A shares and nominal value DKK 646m B
shares.
The A shares are not listed. The B shares are
listed on Nasdaq Copenhagen under the ID code
DK0010274844. They are designated SOLAR B and
are part of the MidCap index and MidCap on
Nasdaq Nordic.
The share capital includes 900,000 A shares and
6,460,000 B shares. Solar’s portfolio of treasury
SHAREHOLDER INFORMATION
shares totals 56,813 B shares or 0.7% of share
capital.
A shares have 10 votes per share amount of DKK
100, while B shares have 1 vote per share amount
of DKK 100.
To be entitled to vote, shares must be registered
in Solar’s register of shareholders no later than
one week before the date of the Annual General
Meeting.
SHAREHOLDERS
As at 31 December 2021, registered share capital
totalled 93.6%, distributed among 7,184 share-
holders. Two shareholders have notified Solar of
holdings of 5% or more of the share capital or
votes:
ANNUAL GENERAL MEETING
Solar’s Annual General Meeting will be held
on Friday 18 March 2022 at 11.00.
Shareholders can register for the Annual
General Meeting at the investor portal
accessible via:
The Board of Directors will submit the
following items for approval by the Annual
General Meeting:
• Payment of DKK 45.00 in return per share
outstanding of DKK 100.
• Authority to decide to distribute extraordi-
nary dividends of up to DKK 50.00 per share.
• Authority to acquire treasury shares valued
at up to 10% of share capital.
• Approval of remuneration report 2021.
• Approval of the Board of Directors’
remuneration of an unchanged DKK 200,000
in 2022.
A presentation of our Board of Directors can
be found on pages 43-45.
Investor Relations is responsible
for communication with the capital
markets. We make information
accessible on our website and
maintain an open dialogue with
investors.
Holdings of 5%
or more of share capital
Share
capital in %
Votes
in %
The Fund of 20th December ,
Vejen, Denmark 17.0% 60.5%
Nordea Funds Ltd., Helsinki,
Finland 10.4% 5.0%
DISTRIBUTION OF SHARE CAPITAL AND
VOTES AS AT 31 DECEMBER 2021 IN %
42Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
31.12.1901.01.19
MidCap Solar B
80
90
100
110
120
130
140
31.12.21
01.01.21
MidCap Solar B
0
50
100
150
200
250
SHAREHOLDER INFORMATION
DIVIDENDS
Solar’s ambition is to pay shareholders an
attractive return. At the Annual General Meeting,
the Board of Directors will propose distributing
DKK 329m as dividend, corresponding to DKK
45.00 per share outstanding of DKK 100.
TOTAL SHAREHOLDER RETURN
Total shareholder return on the Solar B share
during the holding period from 1 January 2021 to
31 December 2021 was DKK 478, corresponding
to 133% as DKK 43.00 was paid out in dividend
and the share price increase amounted to DKK
435 in 2021.
SHARE PRICE DEVELOPMENT
On 31 December 2021, the price of Solar’s B share
was DKK 795, up from the 2021 starting price of
DKK 360. This is an increase of approx. 121% in
Solar’s share price over the year. By way of
comparison, the MidCap index increased 32%
in 2021.
ANALYSTS
The following financial institutions cover
the Solar share:
• Carnegie Bank
• SEB
We are expecting coverage from
additional financial institutions during
2022.
INVESTOR CONTACT
Dennis Callesen
Investor Relations Director
Tel.: +45 29 92 18 11
E-mail: deca@solar.dk
Share price development (index)
FINANCIAL CALENDAR 2022
3 January – 10 February IR quiet period
10 February Annual Report 2021
18 March Annual General Meeting
1 April – 5 May IR quiet period
5 May Quarterly Report Q1 2022
1 July – 11 August IR quiet period
11 August Quarterly Report Q2 2022
3 october – 3 November IR quiet period
3 November Quarterly Report Q3 2022
43Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
WWW.SOLAR.EU
External
auditor
Internal
Audit
Shareholders /
General Meeting
Executive Board
Board of Directors
Audit Committee
(est 2007)
Remuneration
Committee
(est 2017)
Nomination
Committee
(est 2019)
BOARD OF DIRECTORS
NOMINATION COMMITTEE
Once a year, the composition of the Board of
Directors is assessed by a representative from
the company’s majority shareholder, the Fund of
20
th
December, together with two representatives
from the board, including the chairman of the
company’s Board of Directors.
The committee puts forward proposals for both
re-election and election of new members of
the Board of Directors and the Board's annual
evaluation is included as part of the process. The
committee can seek assistance from external ad-
visers and shareholders and undertakes a number
of preparatory tasks to ensure that the Board of
Directors meets the guidelines laid down by the
Board of Directors at all times. Emphasis is placed
on members representing relevant expertise in
relation to the company’s requirements. The aim
remains to ensure diversity and a balance between
continuity and renewal of the Board of Directors.
The Nomination Committee is not a board com-
mittee in the same sense as the Audit and Remu-
neration Committees, and the Board of Directors’
tasks in relation to the composition of the board
have not changed since its establishment.
A charter determining the guidelines for the com-
position and tasks of the Nomination Committee
is available at:
DIVERSITY IN THE BOARD OF
DIRECTORS
Solar’s diversity policy sets out our objective
for the composition of the Board of Directors.
When board members are replaced, we conduct
a broad sweep of the market to ensure a mix of
skills and diversity.
The Board of Directors strives for equal gender
representation, while ensuring that it has a broad
portfolio of skills and experience. Our aim is to
ensure that women are not underrepresented.
Our objective is that after Solar’s Annual General
Meeting in 2023, women will constitute 40% of
the Board of Directors.
Michael Troensegaard Andersen was elected in
2021 replacing Jens Peter To. Thus the gender
distribution is unchanged. One in six members
elected by the Annual General Meeting is, there-
fore, female.
The Board of Directors and the
Executive Board, which comprises
the CEO, CCO and CFO, are jointly
responsible for Solar Group’s overall
and strategic management.
CORPORATE GOVERNANCE STRUCTURE
44Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
BOARD OF DIRECTORS' AFFILIATION
WITH SOLAR
Peter Bang, Morten Chrone, Louise Knauer and
Michael Troensegaard Andersen are independent
of the company pursuant to the definition in
the recommendations on corporate governance
in Denmark. Jens Borum has been member of
the Board of Directors for more than 12 years.
Jesper Dalsgaard is aliated with the Fund of 20
th
December, Solar's majority shareholder.
In 2021, the Board of Directors elected Peter
Bang, Michael Troensegaard Andersen and Louise
Knauer as members of the Audit Committee. Peter
Bang chairs the Audit Committee. He and Michael
Troensegaard Andersen have special accountancy
qualifications.
The Board of Directors elected Morten Chrone and
Louise Knauer as members of the Remuneration
Committee together with the Chairman of the
Board of Directors Jens Borum. Jens Borum chairs
the Remuneration Committee.
EMPLOYEE REPRESENTATIVES
Under the law, employee representatives have
the same rights, duties and responsibilities as
the other members of the board. Under Danish
law, employees have the right to elect a number
of representatives and alternates, corresponding
to half the representatives elected by the Annual
General Meeting at the time of the announcement
of the election of employee representatives.
The next ordinary election of employee represen-
tatives will take place electronically in 2022.
ELECTION PERIOD
All board members elected at the Annual General
Meeting stand for election each year, whereas
employee representatives are elected by the
company’s employees for four-year terms.
ACTIVITIES
A minimum of six ordinary board meetings as
well as one Board of Directors’ conference are
held each year. In 2021, we had seven board
meetings and one conference for the Board of
Directors.
EVALUATION
The Chairman is responsible for the evaluation
of the Board of Directors’ work by means of a
questionnaire. The purpose is to assess whether
the overall skills of the Board of Directors match
the company’s current needs.
The evaluation also assesses the quality of the
material distributed to the Board, the holding
of board meetings and the relevance of issues
discussed in terms of legal requirements, risk fac-
tors and the company’s development potential.
The 2021 evaluation has been shared with the
Nomination Committee and has not given rise to
any additional measures.
1)
Joined at AGM 19 March 2021
2)
Le at AGM 19 March 2021
Board member
Board
Meetings
Board
Conference
Audit
Committee
Remuneration
Committee
Jens Borum 7 1 3 1
Jesper Dalsgaard 7 1 – –
Lars Lange Andersen 7 1 – –
Michael Troensegaard Andersen
1
5 1 7 –
Peter Bang 7 1 8 –
Morten Chrone 7 1 – 1
Ulrik Damgaard 7 1 – –
Bent Frisk 7 1 – –
Louise Knauer 7 1 8 1
Jens Peter To
2
2 – 1 –
MEETING ATTENDANCE IN 2021
BOARD OF DIRECTORS
45Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
Jens Borum Jesper Dalsgaard Jensen Lars Lange Andersen
Born 1953, joined 1982
Chairman
Born 1968, joined 2017
Vice Chairman
Born 1968, joined 2010
• Associate Professor, University of Copenhagen.
• M.Sc. 1980, PhD 1985.
• Has long-standing experience as chairman. extensive
industry experience together with in-depth knowledge of
sustainability.
• Remuneration 2021: DKK 762,500.
• Holds 120.020 Solar B shares. Acquired 1,500 shares in
2021.
• Managing Director, Rambøll Environment & Health, Ram-
bøll Group A/S.
• M.Sc. in Law and Business Administration 1993.
• Member of the board of directors of the Fund of 20th
December and Mannaz A/S.
• Possesses executive management experience of com-
panies managed by funds and companies within the
construction industry, and has experience within strategy,
business development and mergers & acquisitions.
• Remuneration 2021: DKK 425,000.
• Holds 1,100 Solar B shares. Did not trade Solar shares in
2021.
• Sales Director MRO.
• Remuneration 2021: DKK 200,000.
• Holds 93 Solar B shares. Did not trade Solar shares in 2021.
BOARD OF DIRECTORS
MEMBERS OF THE BOARD
OF DIRECTORS
46Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
Michael Troensegaard Andersen Peter Bang Morten Chrone
Born 1961, joined 2021 Born 1969, joined 2018 Born 1966, joined 2019
• CEO of H+H International A/S.
• Master of Science in Mechanical Engineering from
Denmark’s Technical University (1987) and a Graduate
Diploma in Business Administration (Financial and
Management Accounting) from Copenhagen Business
School (1988).
• Chairman of board of directors of nine H+H subsidiaries.
• Member of the board of directors of HS Hansen Group
A/S.
• Possesses experience as CEO in listed companies and of
strategic, structural and organisational transformation
together with in-depth knowledge of the European
Building and Building Material Industry.
• Remuneration 2021: DKK 306,250.
• Holds 510 Solar B shares acquired in 2021.
• Cand.oecon. 1994 from Aarhus University, specialising in
business economics and financing.
• CEO and member of the board of O.B. Holding Aabenraa
ApS and member of the board of directors and chairman
of the audit committee of BIMobject AB.
• Experience within construction, climate/energy, digital-
isation, organisational development, as well as finance
and performance management.
• Remuneration 2021: DKK 468,750.
• Holds 1,200 Solar B shares. Did not trade Solar shares in
2021.
• Group CEO, Unisport Saltex Oy.
• MBA 2001 and B.Eng. in Civil and Constructional
Engineering 1994.
• Chairman of the board of Unisport Scandinavia ApS and
CEO of Mads ApS.
• Has held management positions within the construction
industry/wholesale business in Denmark and abroad for
the past 25 years and has significant knowledge of Solar’s
core business and the markets we operate in.
• Remuneration 2021: DKK 312,500.
• Holds 712 Solar B shares. Did not trade Solar shares in
2021.
BOARD OF DIRECTORS
MEMBERS OF THE BOARD
OF DIRECTORS
47Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
Ulrik Damgaard Bent H. Frisk Louise Knauer
Born 1973, joined 2014
Born 1961, joined 2006
Born 1983, joined 2017
• Regional Director.
• Remuneration 2021: DKK 200,000.
• Holds 60 Solar B shares. Did not trade Solar shares in 2021.
• Central Warehouse Manager.
• Remuneration 2021: DKK 200,000.
• Holds 60 Solar B shares. Did not trade Solar shares in 2021.
• CED of Lady Invest ApS.
• BSc in business administration and commercial law, 2006,
and MSc in finance and strategic management, 2008.
• Member of the boards of directors of REKOM A/S, CC Fly
Holding I ApS, CC Fly Holding II A/S, CC Globe Holding I
ApS, CC Globe Holding II A/S, Skako A/S and two subsi-
diaries hereof.
• Possesses experience as CEO and member of executive
commitees of listed and family owned companies. Has
experience within strategy, M&A, and organisational
development, and company turn arounds. In addition
expertise within tech, innovation, digitisation, data/AI/ML
and cyber security.
• Remuneration 2021: DKK 393,750.
• Holds 381 Solar B shares. Did not trade Solar shares in
2021.
BOARD OF DIRECTORS
MEMBERS OF THE BOARD
OF DIRECTORS
48Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
EXECUTIVE MANAGEMENT
EXECUTIVE BOARD AND
SOLAR GROUP MANAGEMENT
Jens E. Andersen Hugo Dorph Michael H. Jeppesen
Born 1968
CEO and MD Denmark
Born 1965
CCO
Born 1966
CFO
• Chairman of the boards of directors of
8 Solar Group subsidiaries.
• Member of the boards of directors of
VELTEK, Associated Danish Ports A/S
and HF Christiansen Holding A/S and
two subsidiaries hereof.
• Holds 9,242 Solar B shares of which
1,013 were purchased while 2,709
shares were share options exercised
in 2021.
• Holds 8,172 restricted share units.
4,184 restricted share units were
granted in 2021.
• Remuneration: DKK 12.4m.
• Member of the boards of directors of 5
Solar Group subsidiaries.
• Chairman of the board of directors of
Flexya A/S, Flexya Innovations A/S and
HomeBob A/S.
• Member of the boards of directors of
LetsBuild Denmark ApS.
• Holds no Solar shares.
• Holds 4,218 restricted share units. 2,110
restricted share units were granted in
2021. Exercised 2,703 share options for
cash settlement in 2021.
• Remuneration: DKK 7.4m.
• Member of the boards of directors of all
Solar Group subsidiaries.
• Member of the boards of directors of
Aktieselskabet Sønder Omme Plantage.
• Holds 4,080 Solar B shares of which 2,186
shares were share options exercised in
2021.
• Holds 4,059 restricted share units. 2,089
restricted share units were granted in
2021.
• Remuneration: DKK 6.8m.
SOLAR GROUP MANAGEMENT
Solar Group Management comprises the Executive
Board, our Senior Vice Presidents and the MDs of the
Solar Group subsidiaries.
Jan Willy Fjellvær
Born 1961
Senior Vice President & MD Norway
Lars Goth
Born 1961
Senior Vice President, Group Operations
Anders Koppel
Born 1969
Senior Vice President & MD Sweden
Peter Pedersen
Born 1970
Senior Vice President, Commercial Market
Michiel Rohrman
Born 1967
Senior Vice President & MD the Netherlands
Frank Simonsen
Born 1978
Senior Vice President, Finance
Ole Sørensen
Born 1971
Senior Vice President, Industry Sales
Dariusz Targosz
Born 1969
Senior Vice President & MD Poland
Bauke Zeinstra
Born 1966
Senior Vice President & MD MAG45
49Solar – Annual Report 2021
CORPORATE MATTERS SUSTAINABILITY CORPORATE GOVERNANCE SHAREHOLDER INFORMATION BOARD OF DIRECTORS EXECUTIVE MANAGEMENT
FINANCIAL
STATEMENTS
2021
PICK UP SPOT
To generate maximum productivity, all materials
are delivered as Solar Kitboxes in combination
with the digital logistic solution, SiteHub. The
Solar Kitbox is delivered directly to the individual
installer. The Carlsbergbyen construction site has
59 dierent drop-o points.
Installers are not forced to go on a
useless hunt for materials as they receive
an SMS message when the kitbox has
been delivered to the nearest drop-o
point along with a QR code.
CONTENTS
NOTES TO THE FINANCIAL STATEMENTS
Basis for preparation
1 General accounting policies 57
2 Significant accounting estimates
and assessments 60
3 Financial risks 60
Notes to the income statement
4 Segment information 61
5 Sta costs 64
6 Loss on trade receivables 65
7 Depreciation, write-down, amortisation
and impairment 65
8 Income tax 66
9 Net profit for the year 69
Invested capital
10 Intangible assets 70
11 Property, plant and equipment 73
12 Leases 75
13 Investments in associates 78
14 Inventories 79
15 Trade receivables 80
16 Other provisions 81
17 Other payables 82
Capital structure and financing costs
18 Share capital 83
19 Earnings per share in DKK per share
outstanding for the year 84
20 Interest-bearing liabilities and
maturity statement 85
21 Financial income 89
22 Financial expenses 89
Other notes
23 Share-based payment 90
24 Contingent liabilities
and other financial liabilities 92
25 Related parties 93
26 Auditors’ fees 93
27 New financial reporting standards 94
Summary for the Solar Group 50
Statement of comprehensive income 52
Balance sheet 53
Cash flow statement 54
Statement of changes in equity 55
Notes 57
49Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Cash flow (DKK million) 2021 2020 2019 2018 2017
Cash flow from operating activities 783 813 300 224 7
Cash flow from investing activities -191 162 -194 -112 -342
Cash flow from financing activities -515 -627 -110 -108 99
Net investments in intangible assets -58 -50 -35 -88 -106
Net investments in property, plant and equipment -125 -25 -110 -59 -14
Acquisition and divestment of subsidiaries
and operations, net 0 0 -35 50 -16
Financial ratios (% unless otherwise stated)
Revenue growth 7.8 -1.8 5.2 0.3 6.4
Organic growth 6.4 -1.2 4.8 1.8 6.4
Organic growth adjusted for number of working days 5.9 -2.0 4.9 2.2 7.0
Gross profit margin 22.4 21.0 20.1 20.2 20.7
EBITDA margin 7.4 5.6 4.6 3.4 3.3
EBITA margin 5.9 4.0 3.1 2.9 2.8
EBIT margin 5.4 2.2 2.2 2.0 1.6
Eective tax rate 14.6 26.0 45.2 23.3 17.0
Net working capital (year-end NWC)/revenue (LTM) 10.2 9.7 11.0 9.8 9.7
Net working capital (average NWC)/revenue (LTM) 11.0 11.5 11.9 10.6 10.2
Gearing (net interest-bearing liabilities/EBITDA),
no. of times 0.0 0.2 1.7 1.2 1.3
Return on equity (ROE) 29.1 13.5 4.0 8.2 1.2
Return on invested capital (ROIC) 24.6 13.8 8.3 8.1 6.3
Enterprise value/earnings before interest, tax and
amortisation (EV/EBITA) 7.8 5.8 7.9 6.8 10.4
Equity ratio 36.8 36.8 31.9 35.4 33.7
Income statement (DKK million) 2021 2020 2019 2018 2017
Revenue 12,354 11,465 11,679 11,098 11,061
Earnings before interest, tax, depreciation and amortisation
(EBITDA) 911 637 538 379 362
Earnings before interest, tax and amortisation (EBITA) 727 455 360 327 310
Earnings before interest and tax (EBIT) 672 248 260 224 176
Financials, net -48 -40 -35 -35 70
Earnings before tax (EBT) 622 300 120 237 176
Net profit for the year 531 222 64 133 19
Balance sheet (DKK million)
Non-current assets 1,415 1,339 1,756 1,516 1,522
Current assets 3,890 3,268 3,234 3,117 3,195
Balance sheet total 5,305 4,607 4,990 4,633 4,717
Equity 1,952 1,696 1,592 1,638 1,591
Non-current liabilities 435 498 503 543 557
Current liabilities 2,918 2,413 2,895 2,452 2,569
Interest-bearing liabilities, net -37 128 921 461 489
Invested capital 1,866 1,760 2,297 1,797 1,790
Net working capital, year-end 1,259 1,109 1,280 1,090 1,081
Net working capital, average 1,363 1,322 1,386 1,182 1,133
SUMMARY FOR THE SOLAR GROUP
2017-2021
50Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
In all material aspects financial ratios are calculated in accordance with the Danish Finance Society’s
“Recommendations & Financial Ratios”. As at 1 January 2019, Solar implemented IFRS 16, Leases, by applying
the modified retrospective approach. Comparative figures are not restated. This especially aects EBITDA,
interest-bearing liabilities, EBITDA margin, gearing and equity ratio.
In general, restatements have been made of income statements, cash flow and key ratios for the
discontinued operations in STI for 2017 and 2018. In accordance with IFRS, the balance sheet has not been
restated.
Extraordinary dividend was paid in H1 the following year.
SUMMARY FOR THE SOLAR GROUP
Share ratios (DKK unless otherwise stated) 2021 2020 2019 2018 2017
Earnings per share outstanding (EPS) 72.72 30.42 8.77 18.22 2.60
Intrinsic value per share outstanding 267.28 232.38 218.13 224.44 218.00
Cash flow from operating activities per share outstanding
107.2 3 111.40 41.11 30.67 0.96
Share price 795.05 353.70 297.31 28 4.12 414.52
Share price/intrinsic value 2.97 1.52 1.36 1.27 1.90
Ordinary dividend per share 45.00 28.00 14.00 14.00 10.00
Extraordinary dividend per share - 15.00 - - -
Total dividend in % of net profit for the year (payout ratio) 61.9 141.1 159.4 76.7 385.6
Price Earnings (P/E) 10.9 11.6 33.9 15.6 159.2
Employees
Average number of employees (FTEs) 2,908 2,935 3,039 2,941 2,870
Definitions
Organic growth Revenue growth adjusted for enterprises acquired and divested and any exchange rate
changes. No adjustments have been made for number of working days.
Net working capital Inventories and trade receivables less trade payables.
ROIC Return on invested capital calculated on the basis of EBIT exclusive impairment on
goodwill less tax calculated using the eective tax rate adjusted for one-o eects.
2017-2021 – continued
51Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Income statement
Note DKK million 2021 2020
4 Revenue 12,354 11,465
Cost of sales -9,581 -9,060
Gross profit 2,773 2,405
Other operating income 7 8
26 External operating costs -297 -288
5 Sta costs -1,552 -1,465
6 Loss on trade receivables -20 -23
Earnings before interest, tax, depreciation and amortisation (EBITDA) 911 637
7 Depreciation and write-down on property, plant and equipment -184 -182
Earnings before interest, tax and amortisation (EBITA) 727 455
7 Amortisation and impairment of intangible assets -55 -207
Earnings before interest and tax (EBIT) 672 248
13 Share of net profit from associates -2 -12
13 Impairment and gain from divestment of associates 0 104
21 Financial income 41 24
22 Financial expenses -89 -64
Earnings before tax (EBT) 622 300
8 Income tax -91 -78
9 Net profit for the year 531 222
19 Earnings in DKK per share outstanding (EPS) for the year 72.72 30.42
19 Diluted earnings in DKK per share outstanding (EPS-D) for the year 72.50 30.38
STATEMENT OF COMPREHENSIVE INCOME
Other comprehensive income
DKK million 2021 2020
Net profit for the year 531 222
Items that can be reclassified to the income statement
Foreign currency translation adjustments of foreign subsidiaries 14 -22
Fair value adjustments of hedging instruments before tax 29 7
Tax on fair value adjustments of hedging instruments
-6 -1
Other income and costs recognised aer tax 37 -16
Total comprehensive income for the year
52Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
BALANCE SHEET
Notes DKK million 2021 2020
Assets
10 Intangible assets 159 157
11 Property, plant and equipment 885 818
12 Right-of-use assets 300 288
8 Deferred tax assets 13 3
13 Investments in associates 5 2
Other non-current assets 53 71
Non-current assets 1,415 1,339
14 Inventories 1,855 1,531
15 Trade receivables 1,502 1,271
Income tax receivable 0 13
Other receivables 6 8
Prepayments 46 41
Cash at bank and in hand 481 404
Current assets 3,890 3,268
Total assets 5,305 4,607
Notes DKK million 2021 2020
Equity and liabilities
18 Share capital 736 736
Reserves -158 -195
Retained earnings 1,045 951
Proposed dividends for the financial year 329 204
Equity 1,952 1,696
20 Interest-bearing liabilities 120 199
12, 20 Lease liabilities 203 189
8 Provision for deferred tax 101 98
16 Other provisions 11 12
Non-current liabilities 435 498
20 Interest-bearing liabilities 19 41
12, 20 Lease liabilities 102 103
Trade payables 2,098 1,693
Income tax payable 33 21
17 Other payables 644 544
Prepayments 1 2
16 Other provisions 21 9
Current liabilities 2,918 2,413
Liabilities 3,353 2,911
Total equity and liabilities 5,305 4,607
As at 31 December
53Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Notes DKK million 2021 2020
Net profit for the year 531 222
7 Depreciation, write-down and amortisation 239 389
Impairment on associates 0 -104
Changes to provisions and other adjustments 11 -3
Share of net profit from associates 2 12
21, 22 Financials, net 48 40
Income tax 91 78
21 Financial income, received 23 7
22 Financial expenses, settled -50 -47
Income tax, settled -81 -65
Cash flow before working capital changes 814 529
Working capital changes
Inventory changes -319 126
Receivables changes -229 173
Non-interest-bearing liabilities changes 517 -15
Cash flow from operating activities 783 813
Investing activities
10 Purchase of intangible assets -58 -50
Purchase of property, plant and equipment -143 -33
Disposal of property, plant and equipment 18 8
Acquisition of associates -5 -2
Divestment of associates 0 240
Other financial investments -3 -1
Cash flow from investing activities -191 162
CASH FLOW STATEMENT
Notes DKK million 2021 2020
Financing activities
22 Repayment of non-current interest-bearing debt -79 -252
Raising of non-current interest-bearing liabilities 0 53
Change in current interest-bearing debt -9 -205
12 Instalment on lease liabilities -115 -121
18 Sale of treasury shares 2 0
Dividends distributed -314 -102
Cash flow from financing activities -515 -627
Total cash flow 77 348
Cash at bank and in hand at the beginning of the year 404 56
Cash at bank and in hand at the end of the year 481 404
Cash at bank and in hand 481 404
Cash at bank and in hand at the end of the year 481 404
54Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
DKK million
Share
capital
Reserves
for hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Retained
earnings
Proposed
dividends Total
2021
Equity as at 1 January 736 -60 -135 951 204 1,696
Foreign currency translation adjustments of foreign subsidiaries 14 14
Fair value adjustments of hedging instruments before tax 29 29
Tax on fair value adjustments -6 -6
Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0 23 14 0 0 37
Net profit for the year 202 329 531
Comprehensive income 0 23 14 202 329 568
Distribution of dividends (DKK 28,00 per share) -204 -204
Distribution of extraordinary dividend (DKK 15,00 per share) -110 -110
Sale of treasury shares 2 2
Transactions with the owners 0 0 0 -108 -204 -312
Equity as at 31 December 736 -37 -121 1,045 329 1,952
1) Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
STATEMENT OF CHANGES IN EQUITY
55Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
STATEMENT OF CHANGES IN EQUITY
– continued
DKK million
Share
capital
Reserves
for hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Retained
earnings
Proposed
dividends Total
2020
Equity as at 1 January 736 -66 -113 933 102 1,592
Foreign currency translation adjustments of foreign subsidiaries -22 -22
Fair value adjustments of hedging instruments before tax 7 7
Tax on fair value adjustments -1 -1
Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0 6 -22 0 0 -16
Net profit for the year 18 204 222
Comprehensive income 0 6 -22 18 204 206
Distribution of dividends (DKK 14,00 per share) -102 -102
Transactions with the owners 0 0 0 0 -102 -102
Equity as at 31 December 736 -60 -135 951 204 1,696
1) Reserves for hedging transactions and reserves for foreign currency translation adjustments are recognised in the balance sheet as a total amount under reserves.
56Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
1
General accounting policies
The consolidated financial statements of Solar A/S for 2021 are presented in accordance with the International
Financial Reporting Standards (IFRSs) as approved by the EU and additional Danish disclosure requirements for
annual reports of listed companies and the IFRS executive order issued in accordance with the Danish Financial
Statements Act.
The consolidated financial statements have been prepared using the historical cost formula with the exception
of derivative financial instruments and investments in equity instruments, which are measured at fair value, as
well as non-current assets and groups of assets held for sale, which are measured at the lowest value of the
book value before changes in classification or fair value less sales costs.
The accounting policies described below have been applied consistently in the financial year and to the compar-
ative figures.
Implementation of new financial reporting standards
No additional standards have been implemented in 2021 only amendments and improvements to existing stan-
dards. These changes have no impact on Solar’s accounting policies.
Presentation currency
The annual report is presented in Danish kroner rounded o to the nearest 1,000,000 Danish kroner. Danish
kroner is the parent company’s functional currency.
Translation of foreign currency items
A functional currency has been set for each reporting group entity. The functional currencies are the currencies
used in the primary economic environments in which each individual reporting entity operates. Transactions in
other currencies than the functional currency are considered transactions in foreign currencies.
Transactions in foreign currency are translated at first recognition to the functional currency at the exchange
rate prevailing at the date of the transaction. Dierences between the exchange rate prevailing on the date of
the transaction and the exchange rate on the payment date are recognised in the income statement as items
under financial income and expenses.
All monetary items in foreign currencies that have not been settled on the balance sheet date are translated
into the functional currencies using the exchange rates on the balance sheet date. Any dierence between
the exchange rate prevailing on the date of the transaction and the balance sheet date exchange rate are rec-
ognised in the income statement as items under financial income and expenses.
When recognising entities with dierent functional currencies than Danish kroner in the consolidated financial
statements, the income statements are translated at the exchange rate prevailing on the date of the trans-
action and balance sheet items are translated at the balance sheet date exchange rates. The average rate of
exchange for the individual months is used as exchange rate prevailing on the date of the transaction when this
does not result in a considerably dierent presentation. Exchange rate dierences, from translation of these en-
tities’ equity at the beginning of the year at the balance sheet date exchange rates and in connection with the
translation of income statements from the exchange rate prevailing at the date of transaction to the balance
sheet date exchange rates, are recognised directly in other comprehensive income as a separate reserve for
foreign currency translation adjustments.
When translating investments in associates with a functional currency other than Danish kroner in the consol-
idated financial statement, the group’s share of comprehensive income is translated at the average exchange
rates and the share of equity, including goodwill, is translated at the exchange rate on the balance sheet date.
The exchange rate dierence resulting from the translation of the share of foreign associates’ equity at the be-
ginning of the year at the exchange rate on the balance sheet date and the translation of the share of compre-
hensive income from the average exchange rates to the exchange rate prevailing on the balance sheet date is
recognised in other comprehensive income and presented in a separate reserve for foreign currency translation
adjustments under equity. The cumulative currency translation adjustment is recycled to the income statement
upon disposal of the investment.
Consolidated financial statements
The consolidated financial statements include the financial statements of the parent company Solar A/S and
subsidiaries in which Solar A/S has power over the investee, exposure to variable returns and the ability to use
its power over the investee to aect the returns.
The consolidated financial statements have been prepared as an aggregation of the parent company and the
individual subsidiaries’ financial statements and in accordance with the group’s accounting policies. Intercom-
pany revenue, other intercompany operating items, intercompany balances, profit and loss from transactions
between the consolidated entities as well as internal equity investments are eliminated.
Entities over which the group has significant influence but not control over operational and financial decisions
are classified as associates. Significant influence typically exists when the group directly or indirectly holds more
than 20% of voting rights, but less than 50%. However, for each investment an individual assessment
on the classification will be performed. The assessment will be based on our part of the voting rights and our
57Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
General accounting policies – continued
representation on Board of Directors. If such an assessment concludes that we have insignificant influence then
the investment is classified as other non-current assets.
The group’s share of the associates’ earnings aer tax and the elimination of the proportional share of internal
profit/loss is recognised in the income statement. The group’s share of the associates’ other comprehensive
income is recognised in other comprehensive income.
When obtaining significant influence over an entity in which the group has previously held an interest account-
ed for as a financial asset, the fair value as of the date when the group obtained significant influence is deemed
as cost under the equity method.
Statement of comprehensive income
Solar A/S presents the statement of comprehensive income in two statements. An income statement and a
statement of comprehensive income that show the year’s results and income that forms part of other compre-
hensive income. Other comprehensive income includes exchange rate adjustments, adjustments of investments
in associates and hedging transactions.
Cash flow statement
The cash flow statement shows cash flow distributed on operating, investing and financing activities for the
year, changes in cash and cash equivalents, and cash at bank and in hand at the beginning and end of the year.
The eect of cash flow on the acquisition and divestment of entities is shown separately under cash flow from
investing activities. Cash flow from acquired entities is recognised in the cash flow statement from the date
of acquisition and cash flow from divested entities is recognised until the time of divestment. Cash flow from
discontinued operations is presented separately under operating, investing and financing activities.
Cash flow from operating activities is determined using the indirect method as earnings before tax adjusted
for non-cash operating items, changes in working capital, interest received and paid, and income tax paid. Cash
flow from investing activities includes payments in connection with the acquisition and sale of intangibles,
property, plant and equipment and investments, and acquisition and divestment of entities. Cash flow from
financing activities includes acquisition and sale of treasury shares, dividends distribution, incurrence or repay-
ment of non-current and current interest-bearing liabilities and instalment on lease liabilities. Cash at bank and
in hand includes cash holdings and deposits with banks.
Financial ratios
Earnings per share (EPS) and diluted earnings per share (EPS-D) are determined in accordance with IAS 33.
In general, financial ratios are calculated in accordance with the “Recommendations and Ratios” of the Danish
Finance Society.
1
58Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
1
General accounting policies – continued
Description of accounting policies in notes
Descriptions of accounting policies in the notes form part of the overall description of accounting policies.
These descriptions are found in the following notes:
Note 4 Segment information
Note 8 Income tax
Note 9 Net profit for the year
Note 10 Intangible assets
Note 11 Property, plant and equipment
Note 12 Leases
Note 13 Associates
Note 14 Inventories
Note 15 Trade receivables
Note 16 Other provisions
Note 18 Share capital
Note 20 Interest-bearing liabilities and maturity statement
Note 23 Share-based payment
59Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Significant accounting estimates and assessments
When preparing the annual report in accordance with generally applicable principles, management make
estimates and assumptions that aect the reported assets and liabilities. Management base their estimates on
historic experience and expectations for future events. Therefore, actual results may dier from these estimates.
The following estimates and accompanying assessments are deemed material for the preparation of the finan-
cial statements:
• Impairment test of soware
• Inventory write-down
• Write-down for meeting of loss on doubtful receivables
• Deferred tax assets
These estimates and assessments are described in the following notes:
Note 8 Income tax
Note 10 Intangible assets
Note 14 Inventories
Note 15 Trade receivables
2
Financial risks
Results and equity are aected by a range of financial risks. All financial transactions are based on commercial
activities, and no speculative transactions are made. Derivative financial instruments are solely used for hedging
of financial risks.
The financial risks are described in the following notes:
Note 15 Trade receivables
Note 20 Interest-bearing liabilities and maturity statement
For description of Solar’s other business related risks and our approach to risk management, see the manage-
ment’s review on pages 30-34.
3
60Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
4
Segment information
Solar’s business segments are Installation, Industry and Trade and are based on the customers’ aliation
with the segments. Installation covers installation of electrical, and heating and plumbing products,
while Industry covers industry, oshore and marine, and utility and infrastructure. Trade covers other
small areas. The three main segments have been identified without aggregation of operating segments.
Segment income and costs include any items that are directly attributable to the individual segment and
any items that can be reliably allocated to the individual segment. Non-allocated costs refer to income
and costs related to joint group functions. Assets and liabilities are not included in segment reporting.
DKK million Installation Industry Trade Total
2021
Revenue 7,399 3,920 1,035 12,354
Cost of sales -5,863 -2,951 -767 -9,581
Gross profit 1,536 969 268 2,773
Direct costs -242 -123 -34 -399
Earnings before indirect costs 1,294 846 234 2,374
Indirect costs -480 -211 -51 -742
Segment profit 814 635 183 1,632
Non-allocated costs -721
Earnings before interest, tax, depreciation and amortisation (EBITDA) 911
Depreciation and amortisation -239
Earnings before interest and tax (EBIT) 672
Financials, net incl. share of net profit from associates
and impairment on associates -50
Earnings before tax (EBT) 622
Accounting policies
The reporting on business segments follows the structure
of Solar’s internal management reporting to chief
operating decision makers, the group Executive Board.
The group Executive Board uses business segmentation
when allocating resources and following up on results.
Furthermore, Solar presents the geographical
distribution of revenue and non-current assets divided on
Denmark, Sweden, Norway, the Netherlands and Other
markets. The geographical distribution is based on the
business units operating in these geographical areas.
MAG45 is included in the operating segment Industry,
while Solar Polaris is included in the operating segment
Trade.
Revenue
Revenue includes goods for resale recognised in the
income statement if the transfer of control to the
customer according to the agreed delivery terms takes
place before the end of the year and if revenue can be
determined reliably. Revenue is measured exclusive VAT
and duties charged on behalf of a third party. All types of
discounts allowed are recognised in revenue.
Cost of sales
Cost of sales includes the year’s purchases and change in
inventory of goods for resale. This includes shrinkage and
any write-down resulting from obsolescence.
61Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
4
Segment information – continued
DKK million Installation Industry Trade Total
2020
Revenue 7,0 45 3,546 874 11,465
Cost of sales -5,645 -2,716 -699 -9,060
Gross profit 1,400 830 175 2,405
Direct costs -234 -99 -22 -355
Earnings before indirect costs 1,166 731 153 2,050
Indirect costs -542 -170 -50 -762
Segment profit 624 561 103 1,288
Non-allocated costs -651
Earnings before interest, tax, depreciation and amortisation (EBITDA) 637
Depreciation and amortisation -389
Earnings before interest and tax (EBIT) 248
Financials, net incl. share of net profit from associates
and impairment on associates 52
Earnings before tax (EBT) 300
No single customer makes up more than 10% of the total revenue.
62Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
DKK million Revenue
Adjusted
organic
growth EBITDA EBITDA margin
Non-current
assets
2021
Denmark 4,040 9.7 399 9.9 1,988
Sweden 2,665 4.7 160 6.0 200
Norway 1,929 2.1 160 8.3 177
The Netherlands 2,879 -1.4 136 4.7 335
Poland 462 39.0 19 4.1 27
Several markets (MAG45) 660 17.2 30 4.5 56
Other markets 63 6.1 7 11.1 4
Eliminations -344 - 0 - -1,372
Solar Group 12,354 5.9 911 7.4 1,415
DKK million Revenue
Adjusted
organic
growth EBITDA EBITDA margin
Non-current
assets
2020
Denmark 3,642 3.2 297 8.2 1,757
Sweden 2,455 -8.7 113 4.6 198
Norway 1,807 -1.9 122 6.8 171
The Netherlands 2,893 -2.4 78 2.7 350
Poland 359 -12.0 11 3.1 27
Several markets (MAG45) 560 3.1 11 2.0 51
Other markets 56 10.3 5 8.9 5
Eliminations -307 - 0 - -1,220
Solar Group 11,465 -2.0 637 5.6 1,339
4
Segment information – continued
Geographical information
Solar A/S primarily operates on the Danish, Swedish, Norwegian and Dutch markets. In the below table, Other
markets covers the remaining markets, which can be seen in the companies overview available on page 132.
The below allocation has been made based on the products’ place of sale.
63Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
5
Sta costs
Terms of notice for members of the Executive Board is 12 months. When stepping down, the members of the
Executive Board are entitled to 6 months’ remuneration.
DKK million 2021 2020
Salaries and wages etc.
1
1,282 1,216
Pensions, defined contribution 106 99
Costs related to social security 160 148
Share-based payment 4 2
Total 1,552 1,465
Average number of employees (FTEs) 2,908 2,935
Number of employees at year-end (FTEs) 2,936 2,864
Remuneration of Board of Directors
Remuneration of Board of Directors 3 3
Remuneration of Executive Board
Salaries and wages etc. 20 18
Share-based payment
2
7 1
Total 27 19
1) In 2020, Solar received DKK 15m in furlough schemes due to COVID-19, which is included in salaries and wages.
2) See note 23 share-based payment. The amount stated is the total cost related to share-based payment. A part
of this cost is included in financial expenses, which in 2021 amounted to DKK 5m (2020: DKK 0m).
64Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
DKK million 2021 2020
Recognised losses 19 22
Received on trade receivables previously written o -2 -4
17 18
Change in write-down for bad and doubtful debts 3 5
Total 20 23
Relevant accounting policies are described in note 15, trade receivables.
DKK million 2021 2020
Buildings 27 24
Plant, operating equipment, tools and equipment 35 34
Leasehold improvements 4 4
Tenancy, lease 86 85
Cars, lease 24 26
IT equipment, lease 6 6
Technical equipment, lease 2 2
Other lease 0 1
Total depreciation and write-down on property, plant and equipment 184 182
Customer-related assets 1 1
Soware 54 67
Impairment on intangible assets 0 139
Total amortisation and impairment of intangible assets 55 207
Relevant accounting policies are described in note 10, intangible assets, and note 11, property, plant and
equipment, and note 12, leases.
6 7
Loss on trade receivables Depreciation, write-down, amortisation and impairment
65Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
8
Income tax
Accounting policies
Tax for the year is recognised with the share attributable
to results for the year in the income statement and with
the share attributable to other recognised income and
costs in the statement of comprehensive income. Tax
consists of current tax and changes to deferred tax.
DKK million 2021 2020
Current tax 124 78
Deferred tax -13 3
Tax on profit for the year 111 81
Tax on taxable profit previous year -20 1
Adjustment of deferred tax for previous years 1 -4
Change in Swedish income tax rate -1 0
Total 91 78
Statement of eective tax rate:
Danish income tax rate 22.0% 22.0%
Tax base change for non-capitalised loss in subsidiaries -4.8% 1.8%
Change in Swedish income tax rate -0.2% 0.0%
Impairment on / gain from sale of / reversal of impairment on associates 0.0% -7.7 %
Non-taxable/deductible items in parent company 0.8% 0.8%
Non-taxable/deductible items and diering tax rates compared to Danish tax rate in foreign subsidiaries -0.2% 10.2%
Tax for previous years -3.0% -1.1%
Eective tax rate 14.6% 26.0%
66Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
DKK million 2021 2020
Provision for deferred tax
1/1 95 93
Foreign currency translation adjustments 0 1
Recognised in other comprehensive income 6 1
Ordinary tax recognised in income statement -13 -1
Other items 0 1
Total 31/12 88 95
Specified as follows:
Deferred tax liabilities 101 98
Deferred tax assets -13 -3
Total deferred tax, net 88 95
Further specified as follows:
Expected use within 1 year -18 -9
Expected use aer 1 year 106 104
Total, net 88 95
Not recognised in balance sheet:
Deferred tax assets 23 58
Deferred tax assets not recognised in the balance sheet are the part of tax losses where it is not considered suciently certain that
the tax losses can be realised within a short time frame. Non-recognised tax assets can in all material respects be attributed to tax
losses in the Netherlands, where the non-recognised tax assets may be exercised with no maturity date (2020: until 2028). In addition,
deferred tax assets not recognised in the balance sheet of Claessen ELGB NV (activity divested in 2018) and Solar Deutschland GmbH
(activity divested in 2015) amounted to DKK 80m (DKK 113m) at the end of the period.
8
Income tax – continued
Accounting estimates and assesments
Deferred tax assets
Deferred tax assets are not recognised if it is not deemed
suciently safe that these can reduce future taxable
income. In this connection, management assess expected
future taxable income.
Accounting policies
Current tax liabilities and current tax receivables are
recognised in the balance sheet as calculated tax on the
year’s taxable income, adjusted for tax on previous year’s
taxable income and for tax paid on account.
Deferred tax is measured in accordance with the balance
sheet liability method of all temporary dierentials
between accounting and tax-related amounts and
provisions. Deferred tax is recognised at the local tax
rate that any temporary dierentials are expected to be
realised at based on the adopted or expected adopted
tax legislation on the balance sheet date.
Deferred tax assets, including the tax value of tax loss
allowed for carryforward, are measured at the value at
which the asset is expected to be realised, either by
elimination in tax of future earnings or by osetting
against deferred tax liabilities.
Deferred tax assets are assessed annually and only
recognised to the extent that it is probable that they will
be utilised.
Deferred tax is also recognised for the covering of the
retaxation of losses in former foreign subsidiaries partici-
pating in joint taxation assessed as becoming current.
67Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
8
Income tax – continued
DKK million 1/1
Foreign
currency
translation
adjustments
Change in
tax rate
Other
adjustments 2021 2020
Specification by balance sheet items
Property, plant and equipment 40 0 1 2 43 40
Inventories -3 0 0 -1 -4 -3
Provisions for loss on receivables -4 0 0 1 -3 -4
Pension obligations -1 0 0 0 -1 -1
Other items
1
63 0 -2 -8 53 63
Total, net 95 0 -1 -6 88 95
1) Other items particularly cover intangible assets and loss balances in jointly taxed entities.
68Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
9
Net profit for the year
DKK million 2021 2020
Proposed distribution of net profit for the year:
Proposed dividend 329 204
Retained earnings 202 18
Net profit for the year 531 222
Ordinary dividend in DKK per share of DKK 100
1
45.00 28.00
Extraordinary dividend in DKK per share of DKK 100
2
- 15.00
1) Calculations are based on proposed dividends.
2) Based on 2020 results, an extraordinary dividend was paid in H1 2021.
Accounting policies
Dividends
Proposed dividends are recognised as a liability at the
time of adoption of the general meeting.
69Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
10
Intangible assets
Accounting policies
Customer-related intangible assets
Customer-related intangible assets acquired in connection
with business combinations are measured at cost less
accumulated amortisation and impairment loss.
Customer-related intangible assets are amortised using
the straight-line principle over the expected useful life.
Typically, the amortisation period is 5-7 years.
Goodwill
Goodwill is initially recognised in the balance sheet as the
positive balance between the acquisition consideration of
an enterprise on one side and the fair value of the assets,
liabilities and contingent liabilities acquired on the other
side. In cases of measurement uncertainty, the goodwill
amount can be adjusted until 12 months aer the date of
the acquisition. Goodwill is not amortised but an
impairment test is done annually. The first impairment test
is done by the end of the year of acquisition.
Subsequently, goodwill is measured at this value less
accumulated impairment losses. On acquisition, goodwill
is assigned to the cashgenerating units that form the basis
of the impairment test subsequently. The determination
of cashgenerating units follows the managerial structure
and management control.
Soware
Soware is measured at cost less accumulated
amortisation and writedown. Cost includes both direct
internal and external costs. Soware is amortised using
the straight-line principle over 4-8 years. The basis of
amortisation is reduced by any write-down.
DKK million Goodwill
Customer-
related
assets Soware Total
2021
Cost 1/1 0 278 690 968
Foreign currency translation adjustment 0 -3 -1 -4
Additions during the year 0 0 58 58
Disposals during the year 0 -41 -21 -62
Cost 31/12 0 234 726 960
Amortisation 1/1 0 274 537 811
Foreign currency translation adjustment 0 -3 0 -3
Amortisation during the year 0 1 54 55
Amortisation of abandoned assets 0 -41 -21 -62
Amortisation and impairment 31/12 0 231 570 801
Carrying amount 31/12 0 3 156 159
Remaining amortisation period in number of years - 1-4 1-8 -
70Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
10
Intangible assets – continued
Accounting policies
Impairment of intangible assets
Goodwill is tested yearly for impairment and at first
before the end of the year of acquisition.
The carrying amount of goodwill is tested for impairment
together with the other non-current assets of the
cash-generating unit to which goodwill is allocated, and
is written down to the recoverable amount via the
income statement, provided that the carrying amount is
larger. Generally, the recoverable amount is determined
as the present value of the expected future net cash flow
from
the company or activity (cash-generating unit) that the
goodwill is aliated to. Write-down of goodwill is
recognised in the income statement as part of
amortisation of intangible assets.
The carrying amount of intangible assets is assessed
annually to determine whether there is any indication of
impairment.
When such an indication is present, the asset’s
recoverable amount is calculated, which is the highest of
the asset’s fair value less expected costs of disposal or
value in use. Value in use is calculated as the present
value of expected cash flow from the smallest cash
flow-generating unit to which the asset belongs.
Impairment loss is recognised when the carrying amount
of an asset exceeds the asset’s recoverable amount.
Impairment loss is recognised in the income statement.
Impairment loss relating to goodwill is not reversed.
Impairment on other intangible assets are reversed to
the extent that changes have been made to the
assumptions and estimates that led to the write-down.
DKK million Goodwill
Customer-
related
assets Soware Total
2020
Cost 1/1 269 277 642 1,188
Foreign currency translation adjustment 0 1 -1 0
Additions during the year 0 0 50 50
Disposals during the year -269 0 -1 -270
Cost 31/12 0 278 690 968
Amortisation 1/1 140 272 461 873
Foreign currency translation adjustment 0 1 0 1
Amortisation during the year 0 1 67 68
Impairments during the year 129 0 10 139
Amortisation of abandoned assets -269 0 -1 -270
Amortisation and impairment 31/12 0 274 537 811
Carrying amount 31/12 0 4 153 157
Remaining amortisation period in number of years - 1-5 1-8 -
71Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
10
Intangible assets – continued
Goodwill, customer-related assets and other intangible assets
(Comparative figures for 2020 in brackets)
Management has completed the impairment test of the carrying amount of soware. The im pairment test
was based on our new Core+ strategy, estimates and expectations as well as other assumptions approved by
the Executive Board and the Board of Directors with the necessary adjustments under IAS 36.
When performing an impairment test of cash-generating units, the recoverable amount (value in use), deter-
mined as the discounted value of the expected future cash flow, is compared to the carrying amounts of the
individual cash-generating units. Non-allocated costs are proportionately distributed between the individual
segments and thus aect the individual impairment tests by the estimated total costs.
Overall, the impairment tests made are based on the new strategy for 2021-2023 approved by the Executive
Board and the Board of Directors in December 2020. A budget period of 5 years (5 years) has been applied
to ensure that the entire impact from strategic initiatives is included. This reduces the dependency of the
terminal value and thereby also the volatility. Budgets and expectations for the budget for the next 5 years
(5 years) are based on Solar’s current, ongoing and contract investments, in which risks of the material
parameters have been assessed and recognised in the future expected cash flow. In general, expected growth
for core business is based on a conservative outlook for market growth in the coming years.
Accounting estimates and assessments
Impairment test for goodwill
In connection with the annual impairment test of goodwill,
or when there is an indication of impairment, an estimate is
made of how the parts of the business (cash-generating
units), that goodwill is linked to, will be able to generate
sucient positive cash flow in future to support the value
of goodwill and other net assets in the relevant part of the
business.
Due to the nature of the business, estimates must be made
of expected cash flow for many years ahead which,
naturally, results in a certain level of uncertainty. This
uncertainty is reflected in the discount rate determined.
The impairment test and the very sensitive related aspects
are described in more detail in the comments section.
Soware
Soware is evaluated annually for indicators of a need for
impairment. If a need to perform impairment is identified,
an impairment test for the soware is performed.
The impairment test is made on the basis of dierent
factors, including the soware’s future application, the
present value of the expected cost saving as well as interest
and risks.
72Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
11
Property, plant and equipment
Accounting policies
Property, plant and equipment
Land and buildings as well as other plant, operating
equipment, and tools and equipment are measured at
cost less accumulated depreciation and write-down.
Cost includes the purchase price and costs directly
attributable to the acquisition until the time when the
asset is ready for use. Cost of a combined asset is
disaggregated into separate components which are
depreciated separately if the useful lives of the individual
components dier.
Subsequent expenditure, for example in connection with
the replacement of components of property, plant or
equipment, is recognised in the carrying amount of the
relevant asset when it is probable that the incurrence will
result in future economic benefits for the group.
The replaced components cease to be recognised in the
balance sheet and the carrying amount is transferred to
the income statement. All other general repair and
maintenance costs are recognised in the income
statement when these are incurred.
Property, plant and equipment are depreciated on a straight-
line basis over their estimated useful lives which are:
• Buildings 40 years
• Technical installations 20 years
• Plant, operating equipment, and tools and equipment
2-5 years
There are a few dierences from the mentioned
depreciation periods in which useful life is estimated as
shorter. Leasehold improvements are depreciated over
the lease term, however, maximum 5 years.
Land is not depreciated.
DKK million
Land and
buildings
Plant,
operating
equipment,
tools and
equipment
Leasehold
improvements
Assets
under
construction Total
2021
Cost 1/1 1,155 605 76 8 1,844
Foreign currency translation adjustments 5 3 1 0 9
Additions during the year 0 33 2 128 163
Disposals during the year -36 -61 -23 -20 -140
Cost 31/12 1,124 580 56 116 1,876
Write-down and depreciation 1/1 475 495 56 0 1,026
Foreign currency translation adjustments 1 2 1 0 4
Write-down and depreciation during the year 27 35 4 0 66
Write-down and depreciation of abandoned assets -21 -61 -23 0 -105
Write-down and depreciation 31/12 482 471 38 0 991
Carrying amount 31/12 642 109 18 116 885
73Solar – Annual Report 2021
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11
Property, plant and equipment – continued
Accounting policies – continued
The basis of depreciation is determined in consideration
of the asset’s residual value and reduced by any
impairment. Residual value is determined at the time of
acquisition and reassessed annually. If residual value
exceeds the asset’s carrying amount, depreciation will
cease.
By changing the depreciation period or residual value,
the eect of future depreciation is recognised as a
change to accounting estimates.
Impairment of property, plant and equipment
The carrying amount of property, plant and equipment is
assessed annually to determine whether there is any
indication of impairment.
When such an indication is present, the asset’s
recoverable amount is calculated, which is the highest of
the asset’s fair value less expected costs of disposal or
value in use. Value in use is calculated as the present
value of expected cash flow from the smallest cash
flow-generating unit to which the asset belongs.
Impairment loss is recognised when the carrying amount
of an asset exceeds the asset’s recoverable amount.
Impairment loss is recognised in the income statement.
Write-down on property, plant and equipment is reversed
to the extent that changes have been made to the
assumptions and estimates that led to the write-down.
DKK million
Land and
buildings
Plant,
operating
equipment,
tools and
equipment
Leasehold
improvements
Assets
under
construction Total
2020
Cost 1/1 1,164 558 74 48 1,844
Foreign currency translation adjustments -10 -4 -1 0 -15
Additions during the year 1 67 5 13 86
Disposals during the year 0 -16 -2 -53 -71
Cost 31/12 1,155 605 76 8 1,844
Write-down and depreciation 1/1 454 470 55 0 979
Foreign currency translation adjustments -3 -1 -1 0 -5
Write-down and depreciation during the year 24 34 4 0 62
Write-down and depreciation of abandoned assets 0 -8 -2 0 -10
Write-down and depreciation 31/12 475 495 56 0 1,026
Carrying amount 31/12 680 110 20 8 818
74Solar – Annual Report 2021
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12
Leases
Right-of-use assets
DKK million Tenancy Cars IT equipment
Technical
equipment
Other
equipment Total
2021
Cost 1/1 344 86 21 9 2 462
Foreign currency translation adjustments 1 0 0 0 0 1
Additions during the year 118 16 0 4 0 138
Disposals during the year
1
-37 -9 0 -4 -1 -51
Cost 31/12 426 93 21 9 1 550
Write-down and depreciation 1/1 124 39 5 4 2 174
Foreign currency translation adjustments 0 0 0 0 0 0
Write-down and depreciation during the
year 86 24 6 2 0 118
Write-down and depreciation of abandoned
assets -31 -8 0 -2 -1 -42
Write-down and depreciation 31/12 179 55 11 4 1 250
Carrying amount 31/12 247 38 10 5 0 300
1) Disposals relate to expiration and renewal of contracts.
Accounting policies
Right-of-use assets
Right-of-use assets are lease assets arising from a lease
agreement. Lease assets are initially measured at cost
consisting of the amount of the initial measurement of
the lease liability with addition of lease payments made
to the lessor at or before the commencement date less
any lease incentives received. Five dierent types of
leases have been identified:
• Tenancy
• Cars
• IT equipment
• Technical equipment
• Other equipment
The lease assets are depreciated on a straight-line basis
over the lease term. The carrying amount of the
right-of-use asset can be adjusted due to modifications
to the lease agreement or in special cases reassessment
of the lease term.
Payments associated with short-term leases and leases of
low-value assets are recognised on a straight-line basis as
an expense in the income statement. Short-term leases
are leases with a term of 12 months or less. Low-value
assets comprise IT-equipment and small items of oce
furniture of a value below DKK 37,000.
75Solar – Annual Report 2021
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Leases – continued
Right-of-use assets
DKK million Tenancy Cars IT equipment
Technical
equipment
Other
equipment Total
2020
Cost 1/1 353 76 16 8 2 455
Foreign currency translation adjustments -1 0 0 0 0 -1
Additions during the year 163 23 14 2 0 202
Disposals during the year
1
-171 -13 -9 -1 0 -194
Cost 31/12 344 86 21 9 2 462
Write-down and depreciation 1/1 81 24 6 2 1 114
Foreign currency translation adjustments 0 0 0 0 0 0
Write-down and depreciation during
the year 85 26 6 2 1 120
Write-down and depreciation of abandoned
assets
-42 -11 -7 0 0 -60
Write-down and depreciation 31/12 124 39 5 4 2 174
Carrying amount 31/12 220 47 16 5 0 288
1) Disposals relate to expiration and renewal of contracts.
76Solar – Annual Report 2021
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12
Leases – continued
Short-term lease liabilities
DKK million 2021 2020
Maturity < 1 year 102 103
Short-term lease liabilities 31/12 102 103
Accounting policies
Lease liabilities
Lease liabilities arise from a lease agreement. Lease
liabilities are initially measured at the present value of
the lease payments during the non-cancellable lease
period with addition of periods covered by an option to
extend the lease if exercise of the option is considered
reasonably certain on inception of the lease.
At initial recognition, each contract is assessed
individually to assess the likelihood of exercising a
potential extension option in the contract. The option to
extend the contract period will be included in measuring
the lease liability if it is reasonably certain that Solar will
exercise the option.
When calculating the net present value, a discount rate
corresponding to Solar’s incremental borrowing rate has
been used. The weighted average lessee’s incremental
borrowing rate applied to the lease liabilities on January
1 2021 are unchanged between 1.3% and 4.0% depending
among other things on the term and the currency in
which the contracts are denominated.
The lease liability will be remeasured when changes occur
due to modifications to the contract (extension,
termination etc.), indexation or in special cases
reassessment of the lease term.
Long-term lease liabilities
DKK million 2021 2020
Maturity > 1 year < 5 years, undiscounted 181 166
Maturity > 5 years, undiscounted 28 29
Long-term lease liabilities 31/12, undiscounted 209 195
Discounting on lease liabilities > 1 year < 5 years -5 -5
Discounting on lease liabilities > 5 years -1 -1
Long-term lease liabilities 31/12 203 189
Amounts recognised in the income statement
Depreciation of right-of-use assets 118 120
Interest expense on lease liabilities
5 5
Expense relating to short-term leases 1 0
Expense relating to leases of low-value items 1 1
Expense relating to variable lease payments not included in the measurement of lease liabilities 8 10
Total 133 136
Cash outflows for leases
Instalment on lease liabilities -115 -121
Interest payments -5 -5
Total cash outflows for leases -120 -126
Future cash outflows not recognised as lease liabilities in the balance sheet amount to DKK 0 (DKK 0m) regarding signed but not yet
started lease contracts on rent of premises. Extension options regarding lease contracts on rent of premises, which are not
recognised in the balance sheet amount to DKK 28m (DKK 24m).
77Solar – Annual Report 2021
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13
Investments in associates
1
Accounting policies
Investment in associates
Investments in associates are accounted for by using
the equity method of accounting, by which the
investments are measured at the proportional share of
the entities’ equity determined according to the group’s
accounting policies reduced by the proportional share of
unrealised gains on transaction between the group and
the associates and increased by goodwill determined as
of the date when the investment became an associate.
Investments in associates are tested for impairment
when there is an indication of impairment.
Associates with a negative equity are accounted for at
DKK 0. If the group has a legal or actual obligation to
cover the negative balance of the associate, this
obligation is recognised under liabilities.
Investments in associates, DKK million 2021 2020
Cost 1/1 16 273
Additions during the year 5 2
Transferred to other investments 0 -3
Disposals during the year 0 -256
Cost 31/12 21 16
Adjustments 1/1 -14 -127
Profit from associates
-2 -12
Impairment/reversal of impairment
0 81
Transferred to other investments
0 2
Disposals during the year
0 42
Value adjustment 31/12 -16 -14
Carrying amount 31/12 5 2
Impairment and realised gain from sale of associates, DKK million 2021 2020
Impairment/reversal of impairment
0 81
Realised gain from sale of associates
0 23
Impairment on associates, total 0 104
1) Associates include the following investments:
• Monterra where Solar owns 30.0%
• HomeBob where Solar owns 44.9%
• Zolw where Solar owns 35.0%
• Edison Data AS where Solar owns 20.0%
78Solar – Annual Report 2021
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14
Inventories
Accounting policies
Inventories are measured at cost according to the FIFO
method or at net realisable value, if this is lower.
Cost of inventories includes purchase price with
addition of delivery costs.
The net realisable value of inventories is determined as
selling price less costs incurred to make the sale and is
determined in consideration of marketability, obsole-
scence and development of expected selling price.
DKK million 2021 2020
End products 1,855 1,531
Recognised write-down 1 -2
The main reasons for the recognised write-downs are sales and scrapping of previously written-down products.
Accounting estimates and assesments
Write-down of inventories
Write-down of inventories is made due to the obsole-
scence of products.
Management specifically assess inventories, including the
products’ turnover rate, current economic trends and
product development when deciding whether the
write-down is sucient.
79Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
15
Trade receivables
Accounting policies
Trade receivables are measured at fair value at acquisition and at amortised cost subsequently. Based
on an individual assessment of the loss risk, including a statistical based model, write-down to
amortised cost less expected credit losses is made, if this is lower.
Accounting estimates and assesments
Write-down for meeting of loss on doubtful trade receivables
The IFRS 9 simplified approach is applied to measure expected credit losses, which uses a lifetime
expected loss allowance for all trade receivables.
To measure the expected credit losses, trade receivables have been grouped based on shared credit risk
characteristics and the days past invoicing.
As the vast majority of our group companies generally takes out insurance to hedge against loss to the
extent possible, the write-down based on age distribution amounts to less than 0.8% (0.5%) of gross
trade receivables. Individual assessment of write-down is performed by management specifically
analysing trade receivables, including the customers’ credit rating and current economic trends to ensure
that write-down is sucient. Write-down based on individual assessment amounts to 1.4% (1.8%) of gross
trade receivables. As the total write-down on trade receivables amounts to less than 3% (3%) of gross
trade receivables, no maturity statement of the write-down is included. However, the majority of the
provision relates to receivables overdue by more than 30 (30) days.
Financial risks
Credit risk
Solar is subject to credit risks in respect of trade receivables and cash at bank. No credit risk is
deemed to exist in respect of cash as the counterparts are banks with good credit ratings.
As a result of customer diversification, trade receivables are distributed so that there is no significant
concentration of risk. Credit granting to customers is regarded as a natural and important element in
Solar’s business operations. Solar conducts ecient credit management at all times. The vast majority
of our group companies generally takes out insurance to hedge against loss to the extent possible. As
a result, 68% of trade receivables is covered by insurance against 70% at year-end 2020.
Loss due to credit granting is considered a normal business risk and, therefore, will occur.
DKK million 2021 2020
Maturity statement, trade receivables
Not due 1,411 1,215
Past due for 1-30 day(s) 89 66
Past due for 31-90 days 17 6
Past due for 91+ days 18 13
1,535 1,300
Write-down -33 -29
Total 1,502 1,271
Write-down based on:
Age distribution 12 6
Individual assessment 21 23
Total 33 29
Write-down 1/1 29 24
Foreign currency translation adjustment 1 0
Write-down for the year 18 11
Losses realised during the year -8 -4
Reversed for the year -7 -2
Write-down 31/12 33 29
80Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
16
Other provisions
Accounting policies
Provisions are measured in accordance with
management’s best estimate of the amount required to
settle a liability.
Restructuring expenses are recognised as liabilities
when a detailed ocial plan for the restructuring has
been published to the parties aected by the plan on
the balance sheet date at the latest.
DKK million 2021 2020
Non-current
Other provisions 11 12
Total 31/12 11 12
Specification, non-current
1/1 12 13
Reversed during the year
-1 -2
Provisions of the year
0 1
Total 31/12 11 12
Current
Other provisions 21 9
Total 31/12 21 9
Specification, current
1/1 9 13
Reversed during the year -9 -13
Provisions of the year 21 9
Total 31/12 21 9
81Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
17
Other payables
DKK million 2021 2020
Sta costs 282 232
Taxes and charges 215 164
Hedging instruments 49 77
Other payables 98 71
Total 644 544
Relevant accounting policies for hedging instruments are described in note 20 on interest-bearing liabilities and maturity statement.
82Solar – Annual Report 2021
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18
Share capital
DKK million 2021 2020
Share capital 1/1 736 736
Change in share capital 0 0
Share capital 31/12 736 736
Share capital is fully paid in and divided into the following classes:
A shares, 900,000 at DKK 100 90 90
B shares, 6,460,000 at DKK 100 646 646
Total 736 736
Number of shares
Nominal value
(DKK million)
2021 2020 2021 2020
A shares outstanding 31/12 900,000 900,000 90 90
B shares outstanding
Outstanding 1/1 6,398,292 6,398,292 640 640
Divestment of treasury shares 4,895 0 0 0
B shares outstanding 31/12 6,403,187 6,398,292 640 640
Total shares outstanding 31/12 7,303,187 7,298,292 730 730
Accounting policies
Treasury shares
Acquisition and disposal sums related to treasury shares
are recognised directly in transactions with the owners.
83Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
18
Share capital – continued
Treasury shares (B shares)
Number of shares
Nominal value
(DKK million)
Cost
(DKK million)
Percentage
of share capital
2021 2020 2021 2020 2021 2020 2021 2020
Holding 1/1 61,708 61,708 6 6 24 24 0.8% 0.8%
Divestment -4,895 0 0 0 -2 0 -0.1% 0.0%
Holding 31/12 56,813 61,708 6 6 22 24 0.7% 0.8%
19
Earnings per share in DKK per share outstanding for the year
2021 2020
Net profit for the year in DKK million 531 222
Average number of shares 7,360,000 7,360,000
Average number of treasury shares -57,6 0 4 -61,708
Average number of shares outstanding 7,302,396 7,298,292
Dilution eect of share options and restricted share units 22,120 9,091
Diluted number of shares outstanding 7,324, 516 7,307,383
Earnings per share in DKK per share outstanding for the year 72.72 30.42
Diluted earnings per share in DKK per share outstanding for the year 72.50 30.38
84Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
20
Interest-bearing liabilities and maturity statement
DKK million Interest rate 2021 2020
Debt to mortgage credit institutions Fixed
1
129 155
Debt to credit institutions Floating 0 53
Lease liabilities Calculated 305 292
Bank loans and overdras Floating 10 31
Interest-bearing liabilities 444 531
Trade payables 2,098 1,693
Other payables 644 576
Financial liabilities 3,186 2,800
Cash at bank and in hand 481 404
Trade receivables 1,502 1,271
Other receivables 52 62
Financial assets 2,035 1,737
Total, financial balance sheet items, net 1,151 1,063
1) Interest swaps have been used to hedge floating-rate loans, converting these loans to fixed-rate loans.
2021 2020
Interest-bearing liabilities 1/1 531 977
Repayment of non-current interest-bearing debt -79 -252
Raising of non-current interest-bearing liabilities 0 53
Change in current interest-bearing debt -9 -205
Installment on lease liabilities -115 -121
Lease liability raised during the year, non-cash 129 68
Foreign currency translation adjustment -13 11
Interest-bearing liabilities 31/12 444 531
Accounting policies
Financial liabilities
Debt to credit institutions is recognised initially at fair
value that corresponds to the proceeds received net of
transaction costs incurred.
In subsequent periods, the financial liabilities are
measured at amortised cost using the eective interest
method, meaning that the dierence between the
proceeds and the nominal value is recognised in the
income statement under financials for the term of the
loan. For information on lease liabilities, see note 12.
Financial risks
Interest rate risk
Solar monitors and adjusts interest-bearing liabilities on
an ongoing basis. Loans are only raised in the functional
currencies of the countries where Solar operates. Of
total interestbearing liabilities, Solar endeavours to
ensure that
a maximum of half is based on variable payment of
interest determined in accordance with current money
market rates. The remaining interest-bearing liabilities
are fixed-rate. Solar Group has no significant non-current
interest-bearing assets.
As a result of Solar’s policies, a certain interest rate risk
exists.
Reconciliation of development in interest-bearing debt to financing activities in the cash flow
statement:
85Solar – Annual Report 2021
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20
Interest-bearing liabilities and maturity statement – continued
DKK million 2021 2020
Maturity < 1 year
Debt to mortgage credit institutions 9 9
Lease liabilities 102 103
Bank loans and overdras 10 32
Current interest-bearing liabilities 121 144
Other financial liabilities 2,742 2,269
Financial liabilities 2,863 2,413
Current financial assets 2,035 1,737
Net current financial liabilities 828 676
Maturity 1-5 year(s)
Debt to mortgage credit institutions 32 36
Debt to credit institutions 0 53
Lease liabilities 176 161
Total 208 250
Maturity > 5 years
Debt to mortgage credit institutions 88 110
Lease liabilities 27 28
Total 115 138
Total non-current liabilities 323 388
Maturity, until year 2037 2037
The carrying amount of financial liabilities corresponds to fair value.
Financial risks – continued
Currency risk
Solar is exposed to currency risks in the form of
translation
risks since a substantial proportion of activity derives
from foreign subsidiaries which apply other currencies
than Danish kroner. The currencies used are euro, Danish
kroner, Swedish kroner, Norwegian kroner and, to a lesser
extent, Polish zloty, Swiss Franc, US dollar and British
pound.
Solar has a number of investments in foreign subsidiaries,
where the translation of equity into Danish kroner depends on
exchange rates. Investments in subsidiaries are not hedged as
such investments are regarded as long-term and because
hedging is seen as unlikely to create any long-term value.
The individual subsidiaries are not significantly aected
by exchange rate fluctuations since revenue and costs in
subsidiaries are mainly in the same currencies.
Liquidity risks
Solar has an objective of substantial self-financing to
minimise dependence on lenders and thus gain greater
freedom of action. Financing is primarily controlled
centrally based on the individual subsidiary’s operating
and investment cash requirements. Solar ensures that
there are always sucient and flexible cash reserves and
diversification of maturities of both non-current and
current credit facilities.
Eect from translation of foreign subsidiaries when the
exchange rate increases by 10% (average for the year and at
year end)
Profit of the year Equity
DKK million 2021 2020 2021 2020
NOK 13.0 8.2 46.8 39.4
SEK 9.5 -7. 0 35.2 29.3
PLN 1.4 1.3 7.1 6.7
Total 23.9 2.4 89.1 75.4
86Solar – Annual Report 2021
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20
Interest-bearing liabilities and maturity statement – continued
DKK million 2021 2020
Interest-bearing liabilities and maturity statement for expected interest expense for the period
< 1 year 11 12
1-5 year(s) 28 32
> 5 years 30 37
Total 69 81
Outstanding interest swaps made for hedging floating-rate loans
Principal amount 127 164
Interest rate in % for outstanding interest swaps 5.4 5.2
Fair value recognised as other payables under current liabilities -49 -77
Maturity for interest swaps follows the maturity for debt to mortgage credit institutions as stated on previous page.
Amounts recognised in other comprehensive income
Adjustment to fair value for the year 9 -10
Realised during the year, recognised as financial income/expenses 20 17
Total 29 7
Eect of a 1% interest rate increase at the end of the year
Eect on equity 10 15
Of this, earnings impact is 0 0
Undrawn credit facilities 31/12 495 474
Accounting policies
Derivatives
Derivatives are only used to hedge financial risks in the form of
interest rate and currency risks.
Derivatives are recognised at fair value. Both realised and
unrealised gains and losses are recognised in the income
statement unless the derivatives are part of hedging of future
transactions. Value adjustments of derivatives for hedging of
future transactions are recognised directly in other
comprehensive income.
Any non-eective part of the financial instrument in question is
recognised in the income statement.
Derivatives are recognised under other receivables or other
payables.
Fair value measurement
The group uses the fair value concept for recognition of certain
financial instruments and in connection with some disclosure
requirements. Fair value is defined as the price that can be secured
when selling an asset or that must be paid to transfer a liability in
a standard transaction between market participants (exit price).
Fair value is a marked-based and not enterprise-specific valuation.
The enterprise uses the assumptions that market participants
would use when pricing an asset or liability based on existing
market conditions, including assumptions relating to risks.
As far as possible, fair value measurement is based on market
value in active markets (level 1) or alternatively on values derived
from observable market information (level 2).
If such observable information is not available or cannot be used
without significant modifications, recognised valuation methods
and fair estimates are used as the basis of fair values (level 3).
87Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Interest-bearing liabilities and maturity statement – continued
Distribution on currencies
Current liabilities Non-current liabilities
DKK million 2021 2020 2021 2020
EUR 8 9 120 146
DKK 1 0 0 53
NOK 0 0 0 0
PLN 10 0 0 0
SEK 0 32 0 0
Total 19 41 120 199
Interest rate in % 1.1-5.4 1.1-5.2 5.4 1.1-5.2
Fair value of Solar’s respective interest-bearing liabilities is seen as fair value measurement at level 2. Mortgage loans are
valued based on underlying securities, while bank debt is calculated based on models for discounting to net present value.
Non-observable market data is primarily made up of credit risks, which are seen as insignificant in Solar’s case.
The fair value of Solar’s interest rate instrument is measured as fair value measurement at level 2, since fair value can be
determined directly based on the actual forward rates and instalments on the balance sheet date. Outstanding interest rate
swaps for hedging of floating-rate loans expire over the period until 2037 (2037).
The group’s enterprises have raised loans in their respective functional currencies, while the parent company has also raised
loans in euro.
20
88Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
21 22
Financial income Financial expenses
DKK million 2021 2020
Interest income 21 7
Foreign exchange gains 18 17
Other financial income 2 0
Total 41 24
Financial income, received 23 7
DKK million 2021 2020
Interest expenses 22 28
Foreign exchange losses 16 17
Fair value adjustments, other financial investments 23 0
Interest on lease liabilities 5 5
Other financial expenses 23 14
Total 89 64
Financial expenses, settled 50 47
89Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
23
Share-based payment
Share options
DKK million
Executive
Board Others Total
No. of share options at year-end 2021
Outstanding at the beginning of 2021 7,598 16,807 24,405
Exercised
1
-7,598 -12,435 -20,033
Expired 0 -4,372 -4,372
Outstanding at year-end 2021 0 0 0
No. of share options at year-end 2020
Outstanding at the beginning of 2020 15,870 36,933 52,803
Expired -8,272 -20,126 -28,398
Outstanding at year-end 2020 7,598 16,807 24,405
DKK million 2021 2020
Market value estimated using the Black-Scholes model, recognised under other liabilities - 0
Conditions applying to the statement of market value using the Black-Scholes model:
Expected volatility - 37%
Expected dividends in proportion to market value - 4%
Risk-free interest rate - 0%
1) Jens Ellegaard Andersen, CEO, and Michael H. Jeppesen, CFO, were granted an equivalent number of shares for their share options,
while Hugo Dorph, CCO, cash settled his share options.
Accounting policies
Share options and restricted share units are measured at
fair value at the grant date and are recognised in the
income statement under sta costs over the period when
the final right to the options and/or the restricted share
units is vested. The set-o to this is recognised under
other payables, as the employees have the right to
choose cash settlement. This liability is regularly adjusted
to fair value and fair value adjustments are recognised in
financials.
The fair value of the granted share options is estimated
using the Black-Scholes model. Allowance is made for the
conditions and terms related to the granted share
options when performing the calculation.
The fair value of the granted restricted share units is
estimated using the market price of the company’s
shares at closing date.
90Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
23
Share-based payment – continued
Specification of share option plans
Year of granting
No. of shares 2018 2017
Executive Board
Granted 0 9,261
Transferred on change to the Executive Board 0 -1,663
Exercised 0 -7,59 8
Total 0 0
Others
Granted 2,322 14,457
Transferred on change to the Executive Board 0 1,663
Forfeited on resignation of management employees 0 -1,635
Exercised -2,322 -10,113
Expired 0 -4,372
Total 0 0
Exercise price
1
391.80 373.84
Exercise period
10 banking days following the publication of the annual report in 2021/2022 2020/2021
1) Exercise price was adjusted by DKK -7.39 in 2018 as dividends distributed in 2018 exceeded ye ars’ results.
Restricted share units
Executive
Board Others Total
No. of restricted share units at year-end 2021
Outstanding at the beginning of 2021 10,310 8,875 19,185
Granted in 2021 6,595 6,442 13,037
Forfeited on resignation of management employees 0 -1,809 -1,809
Adjustment due to dividend distribution 1,788 1,480 3,268
Exercised -2,244 -1,199 -3,443
Outstanding at year-end 2021 16,449 13,789 30,238
No. of restricted share units at year-end 2020
Outstanding at the beginning of 2020 4,972 5,739 10,711
Granted in 2020 4,904 2,760 7,6 6 4
Adjustment due to dividend distribution 434 376 810
Outstanding at year-end 2020 10,310 8,875 19,185
DKK million 2021 2020
Market value recognised under other liabilities 13 4
Restricted share units
In accordance with Solar’s remuneration policy and general guidelines for incentive-based remuneration,
the Board of Directors decided to grant restricted shares to the Executive Board and management team in
2021 and 2020. Overall, the grant of shares is covered by the same terms as the previous grants of share
options.
Restricted shares are granted for no consideration and provide the holder with a right and an obligation to
receive B shares at a nominal value of DKK 100. The price at the time of granting is fixed at DKK 456.39
(319.39) based on the average price on Nasdaq Copenhagen the first 10 business days aer publication of
Annual Report 2020 (2019). The restricted shares vest three years aer the time of granting, meaning that
this grant of shares vests in 2024 (2023). At this point, the holder may exercise the restricted share
granting.
91Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Contingent liabilities and other financial liabilities
DKK million 2021 2020
Collateral
Assets have been pledged as collateral for bank arrangements at a carrying amount of:
Land and buildings 371 402
Current assets 0 0
Total 371 402
In 2013 Solar Nederland B.V. closed its defined benefit pension plan and transferred all risks that in 2013 amounted
to DKK 373m to an insurance company. In 2016 the Conelgro B.V. closed its defined benefit pension plan and
transferred all risks that in 2016 amounted to DKK 250m to an insurance company.
Solar is liable for payment of the benefit vs. the participants and has consequently a credit risk vs. the insurance
company. Based on the insurance company’s current rating, this risk is determined to be limited.
24
Share-based payment – continued
The number of granted shares was adjusted by +3,268 (+810) shares in 2021 (2020) due to dividend
distribution.
General information on Solar’s incentive scheme is available on our website:
https://www.solar.eu/investor/policies.
Specification of restricted share units
Year of granting
DKK million 2021 2020 2019 2018
Executive Board
Granted 6,595 4,904 2,690 2,006
Adjustment due to dividend distribution 639 925 696 238
Exercised 0 0 0 -2,244
Total 7,234 5,829 3,386 0
Others
Granted 6,442 2,760 4,380 1,333
Forfeited on resignation of management employees 0 -575 -1,234 -269
Adjustment due to dividend distribution 630 439 947 135
Exercised 0 0 0 -1,199
Total 7,072 2,624 4,093 0
Price at time of granting 456.39 319.39 297.70 399.19
Vesting year 2024 2023 2022 2021
23
92Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
25 26
Auditors’ fees
DKK million 2021 2020
Deloitte (2021)/PWC(2020)
Statutory audit 2 3
Other assurance engagements 0 0
Tax consulting 0 0
Other services
1
1 1
Total 3 4
Other auditors
Statutory audit 1 1
Other services 0 0
Total 1 1
1) Other services mainly consists of IT-related services.
Related parties
Group and parent Solar A/S are subject to control by the Fu nd o f 2 0 t h D ec em be r ( registered as a
commercial foundation in Denmark), which owns 17.0% of the shares and holds 60.5% of the voting
rights. The remaining shares are owned by a widely combined group of shareholders.
Other related parties include the company’s Board of Directors and Executive Board. There
have been no transactions in the financial year with members of the Board of Directors and
Executive Board other than those which appear from note 5 and note 23.
Solar invoices the Fund of 20th December for the performance of administrative services at DKK
20,000. Balances with the Fund of 20th December total 0 on balance sheet date.
93Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
27
New financial reporting standards
IASB har issued a number of amendments to existing IFRS standards that are eective for financial years
beginning on 1 January 2022 or later, some of which are not yet endorsed by the EU. Solar will implement
the amendments when they become eective. It is the assessment that none of these amendments will
have significant impact on the financial statements of Solar for the coming years.
94Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
NOTES TO THE SEPARATE FINANCIAL
STATEMENTS
Basis for preparation
1 General accounting policies 102
2 Significant accounting estimates
and assessments 102
Notes to the income statement
3 Sta costs 103
4 Loss on trade receivables 104
5 Depreciation, write-down and amortisation 104
6 Income tax 105
7 Net profit for the year 108
Invested capital
8 Intangible assets 109
9 Property, plant and equipment 111
10 Leases 113
11 Investments measured at equity value
and other non-current assets 116
12 Inventories 118
13 Trade receivables 119
14 Other provisions 120
15 Other payables 121
Capital structure and financing costs
16 Share capital 122
17 Interest-bearing liabilities and
maturity statement 124
18 Financial income 128
19 Financial expenses 128
Other notes
20 Contingent liabilities and other
financial liabilities 129
21 Related parties 130
22 Auditors’ fees 130
CONTENTS
Statement of comprehensive income 97
Balance sheet 98
Cash flow statement 99
Statement of changes in equity 100
Notes 102
96Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
STATEMENT OF COMPREHENSIVE INCOME
Income statement
Note DKK million 2021 2020
Revenue 4,040 3,642
Cost of sales -3,046 -2,785
Gross profit 994 857
Other operating income 36 37
22 External operating costs -38 -31
3 Sta costs -559 -527
4 Loss on trade receivables -5 -8
Earnings before interest, tax, depreciation and amortisation (EBITDA) 428 328
5 Depreciation and write-down on property, plant and equipment -47 -46
Earnings before interest, tax and amortisation (EBITA) 381 282
5 Amortisation and impairment of intangible assets -55 -75
Earnings before interest and tax (EBIT) 326 207
Profit from subsidiaries 291 -12
Share of net profit from associates -1 -12
Impairment on associates 0 104
18 Financial income 29 16
19 Financial expenses -65 -41
Earnings before tax (EBT) 580 262
6 Income tax -49 -40
7 Net profit for the year 531 222
Other comprehensive income
DKK million 2021 2020
Net profit for the year 531 222
Items that can be reclassified to the income statement
Foreign currency translation adjustments of foreign subsidiaries 14 -22
Fair value adjustments of hedging instruments before tax, parent company 29 7
Tax on fair value adjustments of hedging instruments, parent company
-6 -1
Other income and costs recognised aer tax 37 -16
Total comprehensive income for the year
568 206
97Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
BALANCE SHEET
Notes DKK million 2021 2020
Assets
8 Intangible assets 157 154
9 Property, plant and equipment 332 242
10 Right-of-use assets 76 72
11 Investments measured at equity value 1,372 1,219
11 Other non-current assets 51 69
Non-current assets 1,988 1,756
12 Inventories 663 533
13 Trade receivables 441 345
Receivables from subsidiaries 282 386
Income tax receivable 2 3
Other receivables 4 3
Prepayments 15 16
Cash at bank and in hand 408 323
Current assets 1,815 1,609
Total assets 3,803 3,365
Notes DKK million 2021 2020
Equity and liabilities
16 Share capital 736 736
Reserves -39 -80
Retained earnings 926 836
Proposed dividends for the financial year 329 204
Equity 1,952 1,696
17 Interest-bearing liabilities 120 199
10, 17 Lease liabilities 55 51
6 Provision for deferred tax 74 72
14 Other provisions 1 1
Non-current liabilities 250 323
17 Interest-bearing liabilities 9 41
10, 17 Lease liabilities 23 22
Trade payables 944 738
Amounts owed to subsidiaries 308 282
15 Other payables 316 261
Prepayments 1 1
14 Other provisions 0 1
Current liabilities 1,601 1,346
Liabilities 1,851 1,669
Total equity and liabilities 3,803 3,365
as at 31 December
98Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
CASH FLOW STATEMENT
Notes DKK million 2021 2020
Net profit for the year 531 222
5 Depreciation, write-down and amortisation 102 121
Impairment on associates 0 -104
Changes to provisions and other adjustments 0 1
Profit from subsidiaries -291 12
Share of net profit from associates 1 12
18, 19 Financials, net 36 25
Income tax 49 40
18 Financial income, received 25 9
19 Financial expenses, settled -39 -35
Income tax, settled -52 -49
Cash flow before working capital changes 362 254
Working capital changes
Inventory changes -130 -27
Receivables changes -98 48
Non-interest-bearing liabilities changes 289 73
Cash flow from operating activities 423 348
Notes DKK million 2021 2020
Investing activities
8 Purchase of intangible assets -58 -47
Purchase of property, plant and equipment -127 -9
Disposal of property, plant and equipment 18 0
Changes to loans to subsidaries 129 119
Dividends from subsidiaries 153 60
Acquistion of associates -2 0
Divestment of associates
1
0 240
Other financial investments -3 -1
Cash flow from investing activities 110 362
Financing activities
17 Repayment of non-current interest-bearing debt -79 -145
Raising of non-current interest-bearing liabilities 0 53
Change in current interest-bearing liabilities -32 -167
Instalment on lease liabilities -25 -26
Sale of treasury shares 2 0
Dividends distributed -314 -102
Cash flow from financing activities -448 -387
Total cash flow 85 323
Cash at bank and in hand at the beginning of the year 323 0
Cash at bank and in hand at the end of the year 408 323
Cash at bank and in hand 408 323
Cash at bank and in hand at the end of the year 408 323
1) DKK 237m relates to the divestment of our shareholding in BIMobject.
99Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
DKK million
Share
capital
Reserves
for hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Reserves for
development
costs
1
Retained
earnings
Proposed
dividends Total
2021
Equity as at 1 January 736 -60 -135 115 836 204 1,696
Foreign currency translation adjustments of foreign subsidiaries 14 14
Fair value adjustments of hedging instruments before tax 29 29
Tax on fair value adjustments -6 -6
Net income recognised in equity via other comprehensive income in the statement of comprehensive income 0 23 14 0 0 0 37
Net profit for the year 4 198 329 531
Comprehensive income 0 23 14 4 198 329 568
Distribution of dividends (DKK 28.00 per share) -204 -204
Distribution of extraordinary dividend (DKK 15.00 per share) -110 -110
Sale of treasury shares 2 2
Transactions with the owners 0 0 0 0 -108 -204 -312
Equity as at 31 December 736 -37 -121 119 926 329 1,952
1) Reserves for hedging transactions, reserves for foreign currency translation adjustments and reserves for development costs are recognised in the balance sheet as a total amount under reserves.
STATEMENT OF CHANGES IN EQUITY
100Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
STATEMENT OF CHANGES IN EQUITY
– continued
DKK million
Share
capital
Reserves
for hedging
transactions
1
Reserves for
foreign
currency
translation
adjustments
1
Reserves for
development
costs
1
Retained
earnings
Proposed
dividends Total
2020
Equity as at 1 January 736 -66 -113 128 805 102 1,592
Foreign currency translation adjustments of foreign subsidiaries -22 -22
Fair value adjustments of hedging instruments before tax 7 7
Tax on fair value adjustments -1 -1
Net income recognised in equity via other comprehensive
income in the statement of comprehensive income 0 6 -22 0 0 0 -16
Net profit for the year -13 31 204 222
Comprehensive income 0 6 -22 -13 31 204 206
Distribution of dividends (DKK 14.00 per share) -102 -102
Transactions with the owners 0 0 0 0 0 -102 -102
Equity as at 31 December 736 -60 -135 115 836 204 1,696
1) Reserves for hedging transactions, reserves for foreign currency translation adjustments and reserves for development costs are recognised in the balance sheet as a total amount under reserves.
101Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
1 2
General accounting policies
The separate financial statements of the parent company for 2021 are presented in accordance with the Interna-
tional Financial Reporting Standards (IFRSs) as approved by the EU and additional Danish disclosure require-
ments for annual reports of listed companies and the IFRS executive order issued in accordance with the Danish
Financial Statements Act. Reclassifications without any eect on the income statement or the equity have been
conducted.
A general description of accounting policies can be found in the consolidated financial statements on pages
57-58, note 1, Accounting policies.
Descriptions of accounting policies in notes
Descriptions of accounting policies in the notes form part of the overall description of accounting
policies. Parent-specific descriptions are found in the following notes:
Note 6 Income tax
Note 7 Net profit for the year
Note 8 Intangible assets
Note 9 Property, plant and equipment
Note 10 Leases
Note 11 Investments measured at equity value and other non-current assets
Note 12 Inventories
Note 13 Trade receivables
Note 14 Other provisions
Note 16 Share capital
Note 17 Interest-bearing liabilities
Note 20 Contingent liabilities and other financial liabilities
Significant accounting estimates and assessments
When preparing the annual report in accordance with generally applicable principles, management make
estimates and assumptions that aect the reported assets and liabilities. Management base their estimates on
historic experience and expectations for future events. Therefore, actual results may dier from these estimates.
The following estimates and accompanying assessments are deemed material for the preparation of the finan-
cial statements:
• Impairment test of equity investments
• Impairment test of soware
• Inventory write-down
• Write-down for parrying loss on doubtful receivables
These estimates and assessments are described in the following notes:
Note 8 Intangible assets
Note 12 Inventories
Note 13 Trade receivables
102Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
3
Sta costs
Terms of notice for members of the Executive Board is 12 months. When stepping down, the members of
the Executive Board are entitled to 6 months’ remuneration.
DKK million 2021 2020
Salaries and wages etc.
1
509 480
Pensions, defined contribution 36 34
Costs related to social security 12 11
Share-based payment 2 2
Total 559 527
Average number of employees (FTEs) 810 760
Number of employees at year-end (FTEs) 847 766
Remuneration of Board of Directors
Remuneration of Board of Directors 3 3
Remuneration of Executive Board
Salaries and wages etc. 20 18
Share-based payment
2
7 1
Total 27 19
1) In 2020, Solar received DKK 5m from furlough schemes due to COVID-19 which is included in salaries and wages.
2) The amount stated is the total cost related to share-based payment. A part of this cost is included in financial
expenses, which in 2021 amounted to DKK 5m (2020: DKK 0m).
103Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
4 5
Loss on trade receivables Depreciation, write-down and amortisation
DKK million 2021 2020
Recognised losses 6 5
Received on trade receivables previously written o 0 0
6 5
Change in write-down for bad and doubtful debts -1 3
Total 5 8
Relevant accounting policies are described in note 13, trade receivables.
DKK million 2021 2020
Buildings 14 11
Plant, operating equipment, tools and equipment 7 8
Leasehold improvements 1 1
Tenancy, lease 13 11
Cars, lease 7 9
IT equipment, lease 5 6
Total depreciation and write-down on property, plant and equipment 47 46
Customer-related assets 1 1
Soware 54 64
Impairment of intangible assets 0 10
Total amortisation and impairment of intangible assets 55 75
Relevant accounting policies are described in note 8, intangible assets, and note 9, property, plant and equipment
and note 10, leases.
104Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
6
Income tax
Accounting policies
Tax for the year is recognised with the share attributable
to results for the year in the income statement and with
the share attributable to other recognised income and
costs in the statement of comprehensive income. Tax
consists of current tax and changes to deferred tax.
DKK million 2021 2020
Current tax 73 49
Deferred tax -4 -9
Tax on profit or loss for the year 69 40
Tax on taxable profit previous year -20 0
Total 49 40
Statement of eective tax rate:
Danish income tax rate 22.0% 22.0%
Profit/loss from subsidiaries -11.0% 1.2%
Impairment on / gain from sale of / reversal of impairment on associates 0.0% -8.9%
Non-taxable/deductible items in parent 0.8% 1.0%
Tax regarding prevoius year -3.3% 0.0%
Eective tax rate 8.5% 15.3%
105Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
6
Income tax – continued
Accounting policies
Current tax liabilities and current tax receivables are
recognised in the balance sheet as calculated tax on the
year’s taxable income, adjusted for tax on previous year’s
taxable income and for tax paid on account.
Deferred tax is measured in accordance with the balance
sheet liability method of all temporary dierentials
between accounting and tax-related amounts and
provisions. Deferred tax is recognised at the local tax
rate that any temporary dierentials are expected to be
realised at based on the adopted or expected adopted
tax legislation on the balance sheet date.
Deferred tax assets, including the tax value of tax loss
allowed for carryforward, are measured at the value at
which the asset is expected to be realised, either by
elimination in tax of future earnings or by osetting
against deferred tax liabilities.
Deferred tax assets are assessed annually and only
recognised to the extent that it is probable that they
will be utilised.
Deferred tax is also recognised for the covering of
retaxation of losses in former foreign subsidiaries
participating in joint taxation assessed as becoming
current.
DKK million 2021 2020
1/1 72 79
Recognised in other comprehensive income 6 1
Ordinary tax recognised in income statement -4 -9
Other items 0 1
Total 31/12 74 72
Specified as follows:
Deferred tax 74 72
Deferred tax assets 0 0
Total deferred tax, net 74 72
Further specified as follows:
Expected use within 1 year 0 0
Expected use aer 1 year 74 72
Total, net 74 72
106Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
6
Income tax – continued
Specification by balance sheet items
DKK million 1/1
Other
adjustments 2021 2020
Property, plant and equipment 20 3 23 20
Other items
1
52 -1 51 52
Total, net 72 2 74 72
1) Other items cover intangible assets and loss balances in jointly taxed entities.
107Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
7
Net profit for the year
Accounting policies
Dividends
Proposed dividends are recognised as a liability at the
time of adoption of the general meeting.
DKK million 2021 2020
Proposed distribution of net profit for the year:
Proposed dividend 329 204
Reserves for development costs 4 -13
Retained earnings 198 31
Net profit for the year 531 222
Ordinary dividend in DKK per share of DKK 100
1
45.00 28.00
Extraordinary dividend in DKK per share of DKK 100
2
- 15.00
1) Calculations are based on proposed dividends.
2) Based on 2020 results, an extraordinary dividend was paid in H1 2021.
108Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
8
Intangible assets
Accounting policies
Customer-related intangible assets
Customer-related intangible assets acquired in
connection with business combinations are measured at
cost less accumulated amortisation and impairment loss.
Customer-related intangible assets are amortised using
the straight-line principle over the expected useful life.
Typically, the amortisation period is 5-7 years.
Goodwill
Goodwill is initially recognised in the balance sheet as
the positive balance between the acquisition
consideration of an enterprise on one side and the fair
value of the assets, liabilities and contingent liabilities
acquired on the other side. In cases of measurement
uncertainty, the goodwill amount can be adjusted until 12
months aer the date of the acquisition. Goodwill is not
amortised but an impairment test is done annually. The
first impairment test is done by the end of the year of
acquisition. Subsequently, goodwill is measured at this
value less accumulated impairment losses. On acquisition,
goodwill is assigned to the cashgenerating units that
form the basis of the impairment test subsequently. The
determination of cashgenerating units follows the
managerial structure and
management control.
Soware
Soware is measured at cost less accumulated
amortisation and write-down. Cost includes both direct
internal and external costs. Soware is amortised using
the straight-line principle over 4-8 years. The basis of
amortisation is reduced by any write-down.
DKK million Goodwill
Customer-
related assets Soware Total
2021
Cost 1/1 0 46 653 699
Additions during the year 0 0 58 58
Disposals during the year 0 -41 -20 -61
Cost 31/12 0 5 691 696
Amortisation and impairment 1/1 0 43 502 545
Amortisation during the year 0 1 54 55
Amortisation of abandoned assets 0 -41 -20 -61
Amortisation and impairment 31/12 0 3 536 539
Carrying amount 31/12 0 2 155 157
Remaining amortisation period in number of years - 4 1-8 -
8
109Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Accounting policies – continued
Impairment of intangible assets
The carrying amount of intangible assets is assessed
annually to determine whether there is any indication of
impairment.
When such an indication is present, the asset’s
recoverable amount is calculated, which is the highest of
the asset’s fair value less expected costs of disposal or
value in use. Value in use is calculated as the present
value of expected cash flow from the smallest cash
flow-generating unit to which the asset belongs.
Impairment loss is recognised when the carrying amount
of an asset exceeds the asset’s recoverable amount.
Impairment loss is recognised in the income statement.
Impairment loss on intangible assets is reversed if
changes have been made to the assumptions and
estimates that led to the impairment loss.
8
Intangible assets – continued
Accounting estimates and assesments
Soware
Soware is evaluated annually for indicators of a need for
impairment. If a need to perform impairment is identified,
an impairment test is performed for the soware.
The impairment test is made on the basis of dierent
factors, including the soware’s future application, the
present value of the expected cost saving as well as interest
and risks.
DKK million Goodwill
Customer-
related assets Soware Total
2020
Cost 1/1 9 46 606 661
Additions during the year 0 0 48 48
Disposals during the year -9 0 -1 -10
Cost 31/12 0 46 653 699
Amortisation and impairment 1/1 9 42 429 480
Amortisation during the year 0 1 64 65
Impairment during the year 0 0 10 10
Amortisation of abandoned assets -9 0 -1 -10
Amortisation and impairment 31/12 0 43 502 545
Carrying amount 31/12 0 3 151 154
Remaining amortisation period in number of years - 5 1-8 -
110Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
9
Property, plant and equipment
Accounting policies
Property, plant and equipment
Land and buildings as well as other plant, operating
equipment, and tools and equipment are measured at
cost less accumulated depreciation and write-down.
Cost includes the purchase price and costs directly
attributable to the acquisition until the time when the
asset is ready for use. Cost of a combined asset is
disaggregated into separate components which are
depreciated separately if the useful lives of the individual
components dier.
Subsequent expenditure, for example in connection with
the replacement of components of property, plant or
equipment, is recognised in the carrying amount of the
relevant asset when it is probable that the incurrence will
result in future economic benefits for the group. The
replaced components cease to be recognised in the
balance sheet and the carrying amount is transferred to
the income statement. All other general repair and
maintenance costs are recognised in the income
statement when these are incurred.
Property, plant and equipment are depreciated on a
straight-line basis over their estimated useful lives which
are:
• Buildings 40 years
• Technical installations 20 years
• Plant, operating equipment, and tools and equipment
2-5 years.
There are a few dierences from the mentioned
depreciation periods in which useful life is estimated as
shorter. Leasehold improvements are depreciated over
the lease term, however, maximum 5 years.
Land is not depreciated.
DKK million
Land and
buildings
Plant,
operating
equipment,
tools and
equipment
Leasehold
improvements
Assets
under
construction Total
2021
Cost 1/1 410 244 10 5 669
Additions during the year 0 17 0 123 140
Disposals during the year -33 -42 0 -13 -88
Cost 31/12 377 219 10 115 721
Write-down and depreciation 1/1 194 228 5 0 427
Write-down and depreciation during the year 14 7 1 0 22
Write-down and depreciation of abandoned assets -18 -42 0 0 -60
Write-down and depreciation 31/12 190 193 6 0 389
Carrying amount 31/12 187 26 4 115 332
111Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
9
Property, plant and equipment – continued
Accounting policies – continued
The basis of depreciation is determined in consideration
of the asset’s residual value and reduced by any
impairment. Residual value is determined at the time of
acquisition and reassessed annually. If residual value
exceeds the asset’s carrying amount, depreciation will
cease.
By changing the depreciation period or residual value,
the eect of future depreciation is recognised as a
change to accounting estimates.
Impairment of property, plant and equipment
The carrying amount of property, plant and equipment
is assessed annually to determine whether there is any
indication of impairment.
When such an indication is present, the asset’s
recoverable amount is calculated, which is the highest of
the asset’s fair value less expected costs of disposal or
value in use. Value in use is calculated as the present
value of expected cash flow from the smallest cash
flow-generating unit to which the asset belongs.
Impairment loss is recognised when the carrying amount
of an asset exceeds the asset’s recoverable amount.
Impairment loss is recognised in the income statement.
Write-down on property, plant and equipment is reversed
to the extent that changes have been made to the
assumptions and estimates that led to the write-down.
DKK million
Land and
buildings
Plant,
operating
equipment,
tools and
equipment
Leasehold
improvements
Assets
under
construction Total
2020
Cost 1/1 409 244 12 1 666
Additions during the year 1 4 0 9 14
Disposals during the year 0 -4 -2 -5 -11
Cost 31/12 410 244 10 5 669
Write-down and depreciation 1/1 183 224 6 0 413
Write-down and depreciation during the year 11 8 1 0 20
Write-down and depreciation of abandoned assets 0 -4 -2 0 -6
Write-down and depreciation 31/12 194 228 5 0 427
Carrying amount 31/12 216 16 5 5 242
112Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
10
Leases
Right-of-use assets
DKK million Tenancy Cars
IT
equipment Total
2021
Cost 1/1 64 28 21 113
Additions during the year 27 2 0 29
Disposals during the year 0 -2 0 -2
Cost 31/12 91 28 21 140
Write-down and depreciation 1/1 22 14 5 41
Write-down and depreciation during the year 13 7 5 25
Write-down and depreciation of abandoned assets 0 -2 0 -2
Write-down and depreciation 31/12 35 19 10 64
Carrying amount 31/12 56 9 11 76
Accounting policies
Right-of-use assets
Right-of-use assets are lease assets arising from a lease
agreement. Lease assets are initially measured at cost
consisting of the amount of the initial measurement of
the lease liability with addition of lease payments made
to the lessor at or before the commencement date less
any lease incentives received. Three dierent types of
leases have been identified:
• Tenancy
• Cars
• IT equipment
The lease assets are depreciated on a straight-line basis
over the lease term. The carrying amount of the
right-of-use asset can be adjusted due to modifications to
the lease agreement or in special cases reassessment of
the lease term.
Payments associated with short-term leases and leases of
low-value assets are recognised on a straight-line basis as
an expense in the income statement. Short-term leases
are leases with a term of 12 months or less. Low-value
assets comprise IT-equipment and small items of oce
furniture of a value below DKK 37,000.
113Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
10
Leases – continued
Right-of-use assets
DKK million Tenancy Cars
IT
equipment Total
2020
Cost 1/1 59 25 16 100
Additions during the year 5 7 14 26
Disposals during the year 0 -4 -9 -13
Cost 31/12 64 28 21 113
Write-down and depreciation 1/1 11 9 6 26
Write-down and depreciation during the year 11 9 6 26
Write-down and depreciation of abandoned assets 0 -4 -7 -11
Write-down and depreciation 31/12 22 14 5 41
Carrying amount 31/12 42 14 16 72
114Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Leases – continued
Short-term lease liabilities
DKK Million 2021 2020
Maturity < 1 year 23 22
Short-term lease liabilities 31/12 23 22
10
Accounting policies
Lease liabilities
Lease liabilities arise from a lease agreement. Lease
liabilities are initially measured at the present value of
the lease payments during the non-cancellable lease
period with addition of periods covered by an option to
extend the lease if exercise of the option is considered
reasonably certain on inception of the lease.
At initial recognition, each contract is assessed
individually to assess the likelihood of exercising a
potential extension option in the contract. The option to
extend the contract period will be included in measuring
the lease liability if it is reasonably certain that Solar will
exercise the option.
When calculating the net present value, a discount rate
corresponding to Solar’s incremental borrowing rate has
been used. The weighted average lessee’s incremental
borrowing rate applied to the lease liabilities on January
1 2021 are unchanged between 1.3% and 4.0% depending
among other things on the term and the currency in
which the contracts are denominated.
The lease liability will be remeasured when changes occur
due to modifications to the contract (extension,
termination etc.), indexation or in special cases
reassessment of the lease term.
Long-term lease liabilities
DKK Million 2021 2020
Maturity > 1 year < 5 years, undiscounted 41 40
Maturity > 5 years, undiscounted 16 13
Long-term lease liabilities 31/12, undiscounted 57 53
Discounting on lease liabilities > 1 year < 5 years -1 -1
Discounting on lease liabilities > 5 years -1 -1
Long-term lease liabilities 31/12 55 51
Amounts recognised in the income statement
Depreciation of Right-of-use assets 25 26
Interest expense on lease liabilities 1 1
Expense relating to variable lease payments not included in the measurement of lease liabilities 1 2
Total 27 29
Cash outflows for leases
Instalment on lease liabilities -25 -26
Interest payments -1 -1
Total cash outflows for leases -26 -27
115Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Investments measured at equity value and other non-current assets
DKK million
Equity
investments
Investments
in associates
Other
investments
Other
receivables Total
2021
Cost 1/1 2,624 14 55 20 2,713
Additions during the year 0 2 3 7 12
Transferred from Other receivables to other
investments 0 0 1 -1 0
Disposals during the year 0 0 0 -7 -7
Cost 31/12 2,624 16 59 19 2,718
Value adjustment 1/1 -1,405 -14 -4 -2 -1,425
Foreign currency translation adjustments 14 0 0 0 14
Dividends from subsidiaries -153 0 0 0 -153
Profit from subsidiaries 291 -1 0 0 290
Fair value adjustment recognised under financial
expenses 0 0 -19 -4 -23
Other adjustments 0 0 0 2 2
Value adjustment 31/12 -1,253 -15 -23 -4 -1,295
Carrying amount 31/12 1,371 1 36 15 1,423
11
Accounting policies
Under the equity method of accounting, the investments
are initially recognised at cost and adjusted thereaer to
recognise the parent company’s share of the post-
acquisition profits or losses of the subsdiary in profit or
loss statement, and the parent company’s share of
movements in other comprehensive income of the
investee in other comprehensive income.
Dividends received or receivable from subsidiaries are
recognised as a reduction in the carrying amount of the
investment.
Unrealised gains on transactions between the parent
company and its subsidiaries are eliminated to the extent
of the parent company’s interest in these entities.
Unrealised losses are also eliminated unless the
transaction provides evidence of an impairment of the
asset transferred.
Accounting policies of equity accounted investees have
been changed where necessary to ensure consistency
with the policies adopted by the parent company.
The carrying amount of equity-accounted investments is
tested for impairment.
Other investments are measured at fair value.
116Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Investments measured at equity value and other non-current assets – continued
11
DKK million
Equity
investments
Investments
in associates
Other
investments
Other
receivables Total
2020
Cost 1/1 2,624 273 53 49 2,999
Foreign currency translation adjustments 0 0 -1 0 -1
Additions during the year 0 0 0 1 1
Transferred from associates to other investments 0 -3 3 0 0
Disposals during the year 0 -256 0 -30 -286
Cost 31/12 2,624 14 55 20 2,713
Value adjustment 1/1 -1,313 -127 -2 -22 -1,464
Foreign currency translation adjustments -22 0 0 0 -22
Dividends from subsidiaries -60 0 0 0 -60
Profit from subsidiaries -12 -12 0 0 -24
Fair value adjustment recognised under impairment on
associates 0 81 0 0 81
Fair value adjustment recognised under financial
expenses 0 0 0 -2 -2
Transferred from associates to other investments 0 2 -2 0 0
Other adjustments 2 42 0 22 66
Value adjustment 31/12 -1,405 -14 -4 -2 -1,425
Carrying amount 31/12 1,219 0 51 18 1,288
117Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
12
Inventories
Accounting policies
Inventories are measured at cost according to the FIFO
method or at net realisable value, if this is lower.
Cost of inventories includes purchase price with addition
of delivery costs.
The net realisable value of inventories is determined as
selling price less costs incurred to make the sale and is
determined in consideration of marketability,
obsolescence and development of expected selling
price.
DKK million 2021 2020
End products 663 533
Recognised write-down 0 3
The main reasons for the recognised write-downs is an increase in write-down articles.
Accounting estimates and assesments
Write-down of inventories
Write-down of inventories is made due to the
obsolescence of products.
Management specifically assess inventories, including
the products’ turnover rate, current economic trends
and product development when deciding whether the
write-down is sucient.
118Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Accounting policies
Trade receivables are measured at fair value at
acquisition and at amortised cost subsequently. Based on
an individual assessment of the loss risk, including a
statistical based model, write-down to amortised cost
less expected credit losses is made, if this is lower.
Accounting estimates and assesments
Write-down for meeting of loss on doubtful trade
receivables
The IFRS 9 simplified approach is applied to measure
expected credit losses, which uses a lifetime expected loss
allowance for all trade receivables.
To measure the expected credit losses, trade receivables
have been grouped based on shared credit risk
characteristics and the day past invoicing.
As the vast majority of our group companies generally takes
out insurance to hedge against loss to the extent possible,
the write-down based on age distribution amounts to less
than 0.2% (0.3%) of gross trade receivables.
Individual assessment of write-down is performed by
management specifically analysing trade receivables,
including the customers’ credit rating and current
economic trends to ensure that write-down is sucient.
Write-down based on individual assessment amounts to
1.1% (1.7%) of gross trade receivables. As the total
write-down on trade receivables amounts to 1% (2%) of
gross trade receivables, no maturity statement of the write-
down is included. However, the majority of the provision
relates to receivables overdue by more than 31 days (31
days).
13
Trade receivables
DKK million 2021 2020
Maturity statement, trade receivables
Not due 418 344
Past due for 1-30 day(s) 20 4
Past due for 31-90 days 7 3
Past due for 91+ days 2 1
447 352
Write-down -6 -7
Total 441 345
Write-down based on:
Age distribution 1 1
Individual assessment 5 6
Total 6 7
Write-down 1/1 7 4
Write-down for the year 3 5
Losses realised during the year -2 0
Reversed for the year -2 -2
Write-down 31/12 6 7
We refer to the consolidated accounts, note 15, trade receivables, for information on credit risk.
119Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
14
Other provisions
Accounting policies
Provisions are measured in accordance with
management’s best estimate of the amount required to
settle a liability.
Restructuring expenses are recognised as liabilities when
a detailed ocial plan for the restructuring has been
published to the parties aected by the plan on the
balance sheet date at the latest.
DKK million 2021 2020
Non-current
Others 1 1
Total 31/12 1 1
Specification, non-current
1/1 1 2
Reversed during the year
0 -1
Provisions of the year
0 0
Total 31/12 1 1
Current
Restructuring costs 0 1
Total 31/12 0 1
Specification, current
1/1 1 0
Reversed during the year -1 0
Provisions of the year 0 1
Total 31/12 0 1
120Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
15
Other payables
DKK million 2021 2020
Sta costs 130 105
Taxes and charges 101 48
Hedging instruments 49 77
Other payables and amounts payable 36 31
Total 316 261
Accounting policies for hedging instruments are described in note 17 on interest-bearing liabilities and maturity statement.
121Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
16
Share capital
DKK million 2021 2020
Share capital 1/1 736 736
Change in share capital 0 0
Share capital 31/12 736 736
Share capital is fully paid in and divided into the following classes:
A shares, 900,000 at DKK 100 90 90
B shares, 6,460,000 at DKK 100 646 646
Total 736 736
Number of shares Nominal value
2021 2020 2021 2020
A shares outstanding 31/12
1
900,000 900,000 90 90
B shares outstanding
Outstanding 1/1 6,398,292 6,398,292 640 640
Divestment of treasury shares 4,895 0 0 0
B shares outstanding 31/12 6,403,187 6,398,292 640 640
Total shares outstanding 31/12 7,303,187 7,298,292 730 730
Accounting policies
Treasury shares
Acquisition and disposal sums related to treasury shares
are recognised directly in transactions with the owners.
122Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
16
Share capital – continued
Treasury shares (B shares)
Number of shares Nominal value (DKK million) Cost (DKK million) Percentage of share capital
2021 2020 2021 2020 2021 2020 2021 2020
Holding 1/1 61,708 61,708 6 6 24 24 0.8% 0.8%
Divestment -4,895 0 0 0 -2 0 -0.1% 0.0%
Holding 31/12 56,813 61,708 6 6 22 24 0.7% 0.8%
All treasury shares are held by the parent company.
123Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
17
Interest-bearing liabilities and maturity statement
DKK million Interest rate 2021 2020
Debt to mortgage credit institutions Fixed
1
129 155
Debt to credit institutions Floating 0 53
Lease liabilities Calculated 78 73
Bank loans and overdras Floating 0 31
Interest-bearing liabilities 207 312
Trade payables 944 738
Other payables 316 545
Financial liabilities 1,467 1,595
Cash at bank and in hand 408 323
Trade receivables 441 345
Other receivables 303 408
Financial assets 1,152 1,076
Total, net 315 519
1) Interest swaps have been used to hedge floating-rate loans, converting these loans to fixed-rate loans.
Reconciliation of development in interest-bearing debt to financing acitivites in the cash flow
statement:
DKK million 2021 2020
Interest-bearing liabilities 1/1 312 572
Repayment of non-current interest-bearing debt -79 -145
Raising of non-current interest-bearing liabilities 0 53
Change in current interest-bearing debt -32 -167
Installment on lease liabilities -25 -26
Lease liability raised during the year, non-cash 30 25
Foreign exchange translation adjustment 1 0
Interest-bearing liabilities 31/12 207 312
Accounting policies
Financial liabilities
Debt to credit institutions is recognised initially at the
proceeds received net of transaction costs incurred.
In subsequent periods, the financial liabilities are
measured at amortised cost using the eective interest
method, meaning that the dierence between the
proceeds and the nominal value is recognised in the
income statement under financials for the term of the
loan. For information on lease liabilities, see note 10.
124Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
17
Interest-bearing liabilities and maturity statement – continued
DKK million 2021 2020
Current interest-bearing liabilities
Maturity < 1 year
Debt to mortgage credit institutions 9 9
Debt to credit institutions 0 0
Lease liabilities 23 22
Bank loans and overdras 0 31
Current interest-bearing liabilities 32 62
Other financial liabilities 1,260 1,283
Financial liabilities 1,292 1,345
Current financial assets 1,152 1,076
Net current liabilities 140 269
Maturity 1-5 year(s)
Debt to mortgage credit institutions 32 36
Debt to credit institutions 0 53
Lease liabilities 40 39
Total 72 128
Maturity > 5 years
Debt to mortgage credit institutions 88 110
Lease liabilities 15 12
Total 103 122
Total non-current liabilities 175 250
Maturity, until year 2037 2037
The carrying amount of financial liabilities corresponds to fair value.
125Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
17
Interest-bearing liabilities and maturity statement – continued
DKK million 2021 2020
Interest-bearing liabilities and maturity statement for expected interest expense for the period
< 1 year 8 9
1-5 year(s) 26 29
> 5 years 29 36
Total 63 74
Outstanding interest swaps made for hedging floating-rate loans
Principal amount 127 164
Interest rate in % for outstanding swaps 5.4 5.2
Fair value -49 -77
Maturity for interest swaps follows the maturity for debt to mortgage credit institutions
as stated on previous page.
Amounts recognised in other comprehensive income
Adjustment to fair value for the year 9 -10
Realised during the year, recognised as financial income/expenses 20 17
Total 29 7
Eect of a 1% interest rate increase
Eect on equity 10 15
Of this, earnings impact is 0 0
Undrawn credit facilities 31/12 412 380
Accounting policies
Derivatives
Derivatives are only used to hedge financial risks in the form of
interest rate and currency risks.
Derivatives are recognised at fair value. Both realised and
unrealised gains and losses are recognised in the income
statement unless the derivatives are part of hedging of future
transactions. Value adjustments of derivatives for hedging of
future transactions are recognised directly in other
comprehensive income. Any non-eective part of the financial
instrument in question is recognised in the income statement.
Derivatives are recognised under other receivables or other
payables.
Fair value measurement
The group uses the fair value concept for recognition of certain
financial instruments and in connection with some disclosure
requirements. Fair value is defined as the price that can be
secured when selling an asset or that must be paid to transfer a
liability in a standard transaction between market participants
(exit price).
Fair value is a market-based and not enterprise-specific
valuation. The enterprise uses the assumptions that market
participants would use when pricing an asset or liability based
on existing market conditions, including assumptions relating to
risks.
As far as possible, fair value measurement is based on market
value in active markets (level 1) or alternatively on values
derived from observable market information (level 2).
If such observable information is not available or cannot be used
without significant modifications, recognised valuation methods
and fair estimates are used as the basis of fair values (level 3).
126Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
17
Interest-bearing liabilities and maturity statement – continued
Distribution on currencies
Current liabilities Non-current liabilities
DKK million 2021 2020 2021 2020
EUR 8 9 120 146
DKK 1 0 0 53
SEK 0 32 0 0
Total 9 41 120 199
Interest rate in % 1.1-5.4 1.1- 5.2 5.4 1.1-5.2
Fair value of Solar’s respective interest-bearing liabilities is seen as fair value measurement at level 2. Mortgage loans are
valued based on underlying securities, while bank debt is calculated based on models for discounting to net present value.
Non-observable market data is primarily made up of credit risks, which are seen as insignificant in Solar’s case.
The fair value of Solar’s interest rate instrument is measured as fair value measurement at level 2,
since fair value can be determined directly based on the actual forward rates and instalments on the balance sheet date.
Outstanding interest rate swaps for hedging of floating-rate loans expire over the period until 2037 (2037).
The parent company has raised loans in Danish kroner and euro. We refer to the consolidated accounts, note 20, interest-
bearing liabilities and maturity statement, for more information on liquidity risk, interest rate and currency risk
management.
127Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
18 19
Financial income Financial expenses
DKK million 2021 2020
Interest income 23 4
Foreign exchange gains 4 7
Other financial income 2 5
Total 29 16
Financial income, received 25 9
DKK million 2021 2020
Interest expenses 16 20
Foreign exchange losses 3 6
Fair value adjustments, other financial investments 23 0
Interest on lease liabilities 1 1
Other financial expenses 22 14
Total 65 41
Financial expenses, settled 39 35
128Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
20
Contingent liabilities and other financial liabilities
DKK million 2021 2020
Collateral
Assets have been pledged as collateral for bank arrangements at a carrying amount of:
Land and buildings 190 218
Current assets 0 0
Total 190 218
Mortgaging and guarantees
As security of subsidiaires’ bank arrangements, guarantees have been issued for:
Total 96 95
As security of subsidiaires’ liabilities, guarantees have been issued for:
Total 493 433
129Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
21
Related parties
Group and parent Solar A/S are subject to control by the Fund of 20th December (registered as a
commercial foundation in Denmark), which owns 17.0% of the shares and holds 60.5% of the voting rights.
The remaining shares are owned by a widely combined group of shareholders.
Other related parties include the company’s Board of Directors and Executive Board. There have been no
transactions in the financial year with members of the Board of Directors and Executive Board other than
those which appear from note 3.
The parent company has had the following significant transactions with related parties:
DKK million 2021 2020
Sale of services to subsidiaries 150 148
Sale of goods to subsidiaries 138 99
Interest income from subsidiaries 4 5
Interest expense from subsidiaries 1 1
On the balance sheet date, the usual product balances derived from these transactions exist. These appear
from the parent company’s balance sheet.
Solar also invoices the Fund of 20th December for the performance of administrative services at DKK
20,000. Balances with the Fund of 20th December total 0 on balance sheet date.
22
Auditors’ fees
DKK million 2021 2020
Deloitte 2021 / PricewaterhouseCoopers 2020
Statutory audit 1 1
Other assurance engagements 0 0
Other services
1
1 1
Total 2 2
Other auditors
Other services 0 0
Total 0 0
1) Other services mainly consists of IT-related services (IT-related services and services related to business
combinations).
130Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Group companies overview
Companies fully owned by Solar A/S Companies fully owned by Solar A/S – continued
Name Reg. no. Currency Share capital Country
Solar A/S 15908416 DKK 736,000,000 DK
Solar Sverige AB 5562410406 SEK 100,000,000 SE
Solar Norge AS 980672891 NOK 70,000,000 NO
Solar Nederland B.V. 09013687 € 67,000,500 NL
Eltechna B.V. KvK 23066336 € 18,151 NL
MAG45 Holding B.V. 17213145 € 28,544 NL
MAG45 B.V. 17168649 € 18,000 NL
MAG45 Sp.z.oo 277409 PLN 50,000 PL
MAG45 GmbH 18354 € 25,000 DE
MAG45 Ltd 311859 € 152 IE
MAG45 (UK) Ltd 4092664 £ 301 UK
MAG45 S.a.r.l. CHE-26 5,557,148 CHF 20,000 CH
MAG45 INC 123858292 $ 1,500 USA
MAG45 S.R.O 27697690 CZK 200,000 CZ
MAG45 Iss Co. Ltd 91320594693364287L $ 80,000 CN
MAG45 Ltd 39740334 $ 1 HK
MAG45 Pte Ltd. 201709959H SG$ 100,000 SG
MAG45 K 01-09-300892 HUF 3,000,000 HU
MAG45 Srl 10053890967 € 20,000 IT
Solar Polska Sp.z.oo 0000003924 PLN 65,050,000 PL
Claessen Holding N.V 0 4 37.191.965 € 65,094 BE
Claessen ELGB NV 0436.564.831 € 5,697,100 BE
Name Reg. no. Currency Share capital Country
P/F Solar Føroyar P/F 104 DKK 12,000,000 FO
SD of 16 March GmbH HRB 516 NM € 51,400,000 DE
SD of 17 March Gesellscha für
Vermögensverwaltung mbH
HRB 16642 KI € 25,000 DE
SD of 16 March Gesellscha für
Vermögensverwaltung mbH
HRB 16638 KI € 2,556,500 DE
SD of 16 March
Immobilienverwaltung GmbH
HRB 16616 KI € 25,000 DE
Solar Invest A/S 73316111 DKK 500,000 DK
Solar Polaris A/S 38378171 DKK 5,000,000 DK
Name, equity interest Reg. no. Currency Share capital Country
Associates
Monterra AB, 30.00% 559103-4847 SEK 50,000 SE
HomeBob A/S, 44.91% 38832840 DKK 5,511,195 DK
Zolw AS, 35.00% 925 003 328 NOK 48,000 NO
Edison Data AS, 20.00% 928 651 150 NOK 1.800.000 NO
Other financial investments
LetsBuild Holding SA, 8.07% 0656.613.388 EUR 20,769,243 BE
Viva Labs AS, 7.89% 898 444 392 NOK 105,534 NO
Minuba ApS, 19.98% 33259336 DKK 100,542 DK
SiteHub ApS, 20.00% 41823194 DKK 50,000 DK
Companies, where Solar’s equity interest is less than 50%
132Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
STATEMENT BY THE EXECUTIVE BOARD
AND THE BOARD OF DIRECTORS
EXECUTIVE BOARD
BOARD OF DIRECTORS
134Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS
STATEMENTS AND REPORTS
Q4 2021
INDEPENDENT AUDITORS’ REPORT
Report on the audit of the Financial Statements
135Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS
STATEMENTS AND REPORTS
Q4 2021
Recognition of revenue
Recognition of revenue is complex due to the volume of transactions and the variety of dierent
revenue streams within the dierent segments. We focused on this area due to the high number of
transactions involved and because recognition of revenue involves accounting policy decisions and
judgements made by Management, originating from dierent customer behavior, market conditions
and customer agreements and supplier agreements on projects. Further, the number of transactions
and extent of dierent revenue streams require various IT setups to ensure correct revenue recogni-
tion, which are complex and involve an inherent risk to the revenue recognition process. Reference is
made to note 4 in the consolidated financial statements.
How the identified key audit matter was addressed in our audit
We assessed and tested the design and implementation and operating effectiveness of relevant inter-
nal controls, including test of relevant IT controls performed by our IT specialists, for the dierent rev-
enue streams primarily relating to capture and processing of revenue transactions, order acceptance
and terms, change in orders and the pricing structure.
In addition, we utilized data analytics tools for selection of revenue transactions throughout 2021 to
underlying documentation. We have focused our sample selection on transactions that was considered
unusual by nature or was generated outside the normal billing and revenue recognition process.
We also tested cut-o on revenue recognized around the balance sheet date and performed retrospec-
tive reviews of returned goods and credit notes to test the accuracy and completeness of revenue
recognition for the year.
136Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS
STATEMENTS AND REPORTS
Q4 2021
137Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS
STATEMENTS AND REPORTS
Q4 2021
Business Registration No 33 96 35 56
Identification No (MNE) mne10052 Identification No (MNE) mne32208
138Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS
STATEMENTS AND REPORTS
Q4 2021
QUARTERLY FIGURES
Consolidated
Q1 Q2 Q3 Q4
Income statement (DKK million) 2021 2020 2021 2020 2021 2020 2021 2020
Revenue
3,004 3,045 3,098 2,745 2,872 2,618 3,380 3,057
Earnings before interest, tax, depreciation and amortisation (EBITDA)
204 142 211 127 237 177 259 191
Earnings before interest, tax and amortisation (EBITA)
157 97 166 81 192 132 212 145
Earnings before interest and tax (EBIT)
143 82 153 65 179 115 197 -14
Financials, net
-20 -8 3 -6 -20 -10 -11 -16
Earnings before tax (EBT)
123 45 156 153 159 109 184 -7
Net profit or loss for the quarter
100 30 148 141 124 83 159 -32
Balance sheet (DKK million)
Non-current assets
1,342 1,636 1,385 1,735 1,393 1,695 1,415 1,339
Current assets
3,500 3,349 3,569 3,267 3,724 3,227 3,890 3,268
Balance sheet total
4,842 4,985 4,954 5,002 5,117 4,922 5,305 4,607
Equity
1,619 1,441 1,661 1,614 1,784 1,688 1,952 1,696
Non-current liabilities
498 455 457 457 446 497 435 498
Current liabilities
2,725 3,089 2,836 2,931 2,887 2,737 2,918 2,413
Interest-bearing liabilities, net
461 1,077 329 845 450 726 -37 128
Invested capital
2,011 2,332 1,921 2,178 2,18 5 2,132 1,866 1,760
Net working capital, end of period
1,344 1,432 1,280 1,383 1,568 1,363 1,259 1,109
Net working capital, average
1,300 1,411 1,274 1,391 1,325 1,365 1,363 1,322
140Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
QUARTERLY FIGURES
Consolidated – continued
Q1 Q2 Q3 Q4
Cash flows (DKK million) 2021 2020 2021 2020 2021 2020 2021 2020
Cash flow from operating activities
-88 -43 351 282 -38 142 558 432
Cash flow from investing activities
-10 -25 -63 -18 -65 -8 -53 213
Cash flow from financing activities
-71 84 -271 -198 77 -116 -250 -397
Net investments in intangible assets
-13 -12 -15 -12 -14 -12 -16 -14
Net investments in property, plant and equipment
8 -13 -47 -4 -51 1 -35 -9
Acquisition and disposal of subsidiaries, net
0 0 0 0 0 0 0 0
Financial ratios (% unless otherwise stated)
Revenue growth
-1.3 3.0 12.9 -4.3 9.7 -5.7 10.6 -0.6
Organic growth
-2.2 2.6 10.6 -1.7 8.8 -4.8 9.1 0.0
Organic growth adjusted for number of working days
-0.6 1.4 8.6 -1.6 8.8 -4.8 7.1 -2.1
Gross profit margin
21.9 20.5 22.0 20.5 23.0 21.5 22.9 21.5
EBITDA margin
6.8 4.7 6.8 4.6 8.3 6.8 7.7 6.2
EBITA margin
5.2 3.2 5.4 3.0 6.7 5.0 6.3 4.7
EBIT margin
4.8 2.7 4.9 2.4 6.2 4.4 5.8 -0.5
Net working capital (NWC end of period)/revenue (LTM)
11.8 12.2 10.9 11.9 13.0 11.9 10.2 9.7
Net working capital (NWC average)/revenue (LTM)
11.4 12.0 10.8 11.9 11.0 11.9 11.0 11.5
Gearing (interest-bearing liabilities,net/EBITDA), no. of times
0.7 1.9 0.4 1.5 0.5 1.2 0.0 0.2
Return on equity (ROE)
17.6 7.5 18.2 13.6 19.7 18.9 28.4 13.1
Return on invested capital (ROIC)
16.6 9.0 21.0 10.2 23.6 11.7 24.6 13.8
Enterprise value/earnings before interest, tax and amortisation (EV/EBITA)
7.6 6.3 7. 0 6.0 7.6 6.2 7. 8 5.8
Equity ratio
33.4 28.9 33.5 32.3 34.9 34.3 36.8 36.8
141Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
QUARTERLY FIGURES
Consolidated – continued
Q1 Q2 Q3 Q4
Share ratios (DKK unless otherwise stated) 2021 2020 2021 2020 2021 2020 2021 2020
Earnings per share outstanding (EPS)
13.70 4.11 20.27 19.32 16.98 11.37 21.77 -4.38
Intrinsic value per share outstanding
221.68 197.44 227.43 221.15 244.28 231.29 267.2 8 232.38
Share price
480.82 204.50 541.47 255.05 632.86 301.43 795.05 353.70
Share price/intrinsic value
2.17 1.04 2.38 1.15 2.59 1.30 2.97 1.52
Employees
Average number of employees (FTE’s) continuing operations
2,897
3,057
2,889
3,024
2,890 2,979 2,908
2,935
Definitions
Organic growth Revenue growth adjusted for enterprises acquired and sold o and any exchange rate changes. No adjustments have been made for number of working days.
Net working capital Inventories and trade receivables less trade payables.
ROIC Return on invested capital calculated on the basis of operating profit or loss less tax calculated using the eective tax rate.
In all material aspects financial ratios are calculated in accordance with the Danish Finance Society’s “Recommendations & Financial Ratios”.
142Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
Q4 EBITDA of DKK 259m
(DKK 191m) slightly exceeded our
latest expectations mainly due to
the strong execution of our Core+
strategy. Q4 adjusted organic
growth was up at 7.1% (-2.1%)
and gross profit margin increased
to 22.9% (21.5%).
Q4 2021
REVENUE
In Q4, adjusted organic growth at group level
amounted to 7.1% (-2.1%). All entities saw posi-
tive adjusted organic growth. Revenue increased
to DKK 3.4bn (DKK 3.1bn).
Solar’s overall adjusted organic growth for Instal-
lation amounted to around 3%, driven by Solar
Danmark, Solar Sverige and Solar Polska. Our
Core+ strategy remains focused on the Better
Business project, which aims to supply the right
products to the right customers.
All entities saw positive growth in the Industry
segment, primarily within MRO and OEM. Overall,
adjusted organic growth within this segment
amounted to around 10%.
The Trade segment also delivered two-digit
growth rates in Q4.
GROSS PROFIT
Gross profit margin increased to 22.9% (21.5%)
which, combined with revenue growth, resulted
in a gross profit increase of DKK 117m. One-o
price eects resulted in a positive impact of
approx. DKK 35m (DKK 8m) on gross profit. The
net impact of price eects corresponded to a
gross profit margin improvement of approx. 0.8
percentage points.
EBITDA
EBITDA increased to DKK 259m (DKK 191m) and
slightly exceeded our expectations. EBITDA was
negatively aected by DKK 10m in restructuring
costs related to Solar Nederland’s planned clo-
sure of the operation in Duiven and the reloca-
tion of activities to Alkmaar.
The EBITDA margin increased to 7.7% (6.2%).
We succeeded in increasing EBITDA by DKK 68m
supported by our four strategic focus areas,
Concepts, Industry, Climate & Energy and Trade,
and positive one-o price eects combined with
a solid growth level.
The results of the individual entities are given on
page 149.
AMORTISATION AND IMPAIRMENT
Amortisation amounted to DKK 15m (DKK 159m).
In Q4 2020, review of intangible assets resulted in
an overall impairment loss of DKK 139m. Of this,
DKK 129m related to goodwill obtained when
Solar Sverige acquired Alvesta V.V.S-Material AB
in 2007. There was also a DKK 10m soware im-
pairment which mainly relates to Axapta soware
acquired in 2015 and deployed in Solar Polska.
Q4 EBITDA INCREASED BY
MORE THAN 35% TO DKK 259M
(Data shown in brackets relate to the corresponding period in 2020)
Financial review
Q2Q1
Q3
Q4
2020
2021
0
50
100
150
200
250
300
Q2Q1
Q3 Q4
2020
2021
19
20
21
22
23
24
GROSS PROFIT MARGIN
%
EBITDA
DKKm
143Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
IMPAIRMENT ON ASSOCIATES
Impairment on associates amounted to DKK 0m
(DKK 24m).
In 2020, this mainly related to the divestment of
our shareholding in BIMobject for a total cash
consideration of SEK 333m (DKK 237m). Profits
from the divestment amounted to DKK 23m
based on a book value of DKK 214m as at 30
September 2020.
EARNINGS BEFORE TAX
Earnings before tax amounted to DKK 184m (DKK
-7m). When adjusted for impairment loss on intan-
gible assets of DKK 139m and the positive impair-
ment on associates of DKK 24m in 2020, earnings
before tax were up at DKK 184m (DKK 108m).
INCOME TAX
Income tax was unchanged at DKK 25m (DKK
25m).
Due to the improved performance in both MAG45
and Solar Nederland, tax loss carried forward
amounting to DKK 32m was capitalised.
NET PROFIT
Net profit came to DKK 159m (DKK -32m).
CASH FLOWS
Net working capital calculated as an average of
the previous four quarters amounted to 11.0%
(11.5%) of revenue. Net working capital at the
end of 2021 amounted to 10.2% (9.7%).
Cash flow from operating activities totalled DKK
558m (DKK 432m).
Changes in non-interest-bearing liabilities and
changes in receivables had an impact of DKK
286m (DKK 26m) and DKK 221m (DKK 235m)
respectively, while changes in inventories had a
DKK -145m (DKK 35m) impact on cash flow.
The inventory level was aected by price increas-
es but also by the decision to ensure delivery
performance during a period of potential goods’
shortage. Cash flow from receivables was aected
by the increased growth level in Q4 2021. As at
31 December 2021, COVID-19 financial support
packages amounted to DKK 99m and positively af-
fected cash flow from non-interest-bearing debt.
Total cash flow from investing activities
amounted to DKK -53m (DKK 213m). In 2020, the
divestment of our shareholding in BIMobject had
an impact of DKK 237m.
Cash flow from financing activities amounted to
DKK -250m (DKK -397m), mainly due to a change
in current interest-bearing liabilities.
Consequently, total cash flow amounted to DKK
255m (DKK 248m).
Net interest-bearing liabilities were down at DKK
-37m (DKK 128m).
As at 31 December 2021, gearing was 0.0 (0.2)
times EBITDA. Calculated as an average, our
gearing was 0.3 (1.1) times EBITDA. Our gearing
target is 1.5-3.0 times EBITDA.
As at 31 December 2021, Solar had undrawn cred-
it facilities of DKK 495m (DKK 474m).
Invested capital for the Solar Group totalled DKK
1,866m (DKK 1,760). ROIC amounted to 24.6%
(13.8%).
Activities with a Solar equity interest of less than
50% and discontinued activities are not included
in the ROIC calculation. Invested capital only
includes operating assets and liabilities.
Financial review
MAG45
Revenue from MAG45 amounts to approx. 5%
of our total revenue.
We have finalised our strategic review of
MAG45 and we saw continuous improvement
in operations in 2021.
In Q4, adjusted organic growth increased to
19.1% (13.6%) and MAG45 succeeded in
increasing EBITDA margin to 5.1% (2.0%)
resulting in a tripling of EBITDA to DKK 9m.
144Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
STATEMENT OF COMPREHENSIVE INCOME
Income statement
Q4
DKK million 2021 2020
Revenue 3,380 3,057
Cost of sales -2,606 -2,400
Gross profit 774 657
Other operating income and costs 0 -2
External operating costs -85 -75
Sta costs -425 -381
Loss on trade receivables -5 -8
Earnings before interest, tax, depreciation and amortisation (EBITDA) 259 191
Depreciation and write-down on property, plant and equipment -47 -46
Earnings before interest, tax and amortisation (EBITA) 212 145
Amortisation and impairment of intangible assets -15 -159
Earnings before interest and tax (EBIT) 197 -14
Share of net profit from associates -2 -1
Impairment and gain from divestment of associates 0 24
Financial income 9 5
Financial expenses -20 -21
Earnings before tax (EBT) 184 -7
Income tax -25 -25
Net profit for the period 159 -32
Earnings in DKK per share outstanding (EPS) 21,77 -4.38
Diluted earnings in DKK per share outstanding (EPS-D) 21,71 -4.38
Other comprehensive income
Q4
DKK million 2021 2020
Net profit for the period 159 -32
Items that can be reclassified for the income statement
Foreign currency translation adjustment of foreign subsidiaries 6 30
Fair value adjustment of hedging instruments before tax 3 12
Tax on fair value adjustments of hedging instruments
0 -2
Other income and costs recognised aer tax 9 40
Total comprehensive income for the period
168 8
145Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
BALANCE SHEET
31.12
DKK million 2021 2020
ASSETS
Intangible assets 159 157
Property, plant and equipment 885 818
Right-of-use assets 300 288
Deferred tax assets 13 3
Investments in associates 5 2
Other non-current assets 53 71
Non-current assets 1,415 1,339
Inventories 1,855 1,531
Trade receivables 1,502 1,271
Income tax receivable 0 13
Other receivables 6 8
Prepayments 46 41
Cash at bank and in hand 481 404
Current assets 3,890 3,268
Total assets 5,305 4,607
31.12
DKK million 2021 2020
EQUITY AND LIABILITIES
Share capital 736 736
Reserves -158 -195
Retained earnings 1,045 951
Proposed dividend for the financial year 329 204
Equity 1,952 1,696
Interest-bearing liabilities 120 199
Lease liabilities 203 189
Provision for deferred tax 101 98
Other provisions 11 12
Non-current liabilities 435 498
Interest-bearing liabilities 19 41
Lease liabilities 102 103
Trade payables 2,098 1,693
Income tax payable 33 21
Other payables 644 544
Prepayments 1 2
Other provisions 21 9
Current liabilities 2,918 2,413
Liabilities 3,353 2,911
Total equity and liabilities 5,305 4,607
Consolidated
146Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
CASH FLOW STATEMENT
Q4
DKK million 2021 2020
Net profit for the period from continuing operations 159 -32
Depreciation, write-down and amortisation 62 205
Impairment and gain from divestment of associates 0 -24
Changes to provisions and other adjustments 9 9
Share of net profit from associates 2 1
Financials, net 11 16
Income tax 25 25
Financial income, received 4 2
Financial expenses, settled -9 -17
Income tax, settled -67 -49
Cash flow before working capital changes 196 136
Working capital changes
Inventory changes -145 35
Receivables changes 221 235
Non-interest-bearing liabilities changes 286 26
Cash flow from operating activities 558 432
Investing activities
Purchase of intangible assets -16 -14
Purchase of property, plant and equipment -35 -9
Disposal of property, plant and equipment 0 0
Aquisition of associates -2 0
Divestment of associates 0 237
Other financial investments 0 -1
Cash flow from investing activities -53 213
Q4
DKK million 2021 2020
Financing activities
Repayment of non-current, interest-bearing debt -2 -245
Raising non-current interest-bearing liabilities 0 0
Change in current interest-bearing debt -219 -121
Instalment on lease liabilities -29 -31
Cash flow from financing activities -250 -397
Total cash flow 255 248
Cash at bank and in hand at the beginning of period 226 155
Foreign currency translation adjustments 0 1
Cash at bank and in hand at the end of period 481 404
Cash at bank and in hand 481 404
Cash at bank and in hand at the end of period 481 404
Consolidated
147Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
SEGMENT INFORMATION
Solar’s business segments are Installation, Industry and Trade and are based on the customers’ aliation with
the segments. Installation covers installation of electrical, and heating and plumbing products, while Industry
covers industry, oshore and marine, and utility and infrastructure. Trade covers special sales and other small
areas. The three main segments have been identified without aggregation of operating segments. Segment
income and costs include any items that are directly attributable to the individual segment and any items that
can be reliably allocated to the individual segment. Non-allocated costs refer to income and costs related to
joint group functions. Assets and liabilities are not included in segment reporting.
DKK million Installation Industry Trade Total
Q4 2021
Revenue 2,023 1,063 294 3,380
Cost of sales -1,597 -787 -222 -2,606
Gross profit 426 276 72 774
Direct costs -59 -36 -10 -105
Earnings before indirect costs 367 240 62 669
Indirect costs -122 -56 -14 -192
Segment profit 245 184 48 477
Non-allocated costs -218
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 259
Depreciation and amortisation -62
Earnings before interst and tax (EBIT) 197
Financials, net including share of net profit from associates
and impairment on associates
-13
Earnings before tax (EBT) 184
DKK million Installation Industry Trade Total
Q4 2020
Revenue 1,894 937 226 3,057
Cost of sales -1,509 -714 -177 -2,400
Gross profit 385 223 49 657
Direct costs -58 -26 -5 -89
Earnings before indirect costs 327 197 44 568
Indirect costs -145 -45 -14 -204
Segment profit 182 152 30 364
Non-allocated costs -173
Earnings before interest, tax,
depreciation and amortisation (EBITDA) 191
Depreciation and amortisation -205
Earnings before interst and tax (EBIT) -14
Financials, net including share of net profit from associates
and impairment on associates
7
Earnings before tax (EBT) -7
148Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
SEGMENT INFORMATION
Geographical information
Solar A/S primarily operates on the Danish, Swedish, Norwegian and Dutch markets. In the below table, Other
markets covers the remaining markets, which can be seen in the companies overview available on page 132.
The below allocation has been made based on the products’ place of sale. Geographical information should be
regarded as supplementary information.
Q4
DKK million Revenue
Adjusted organic
growth EBITDA
EBITDA
margin
Non-current
assets
2021
Denmark 1,063 8.0 105 9.9 1,988
Sweden 747 6.6 50 6.7 200
Norway 528 0.2 43 8.1 177
The Netherlands 804 3.6 43 5.3 335
Poland 133 51.1 5 3.8 27
Several markets
(MAG45) 178 19.1 9 5.1 56
Other markets 19 3.6 4 21.1 4
Eliminations -92 - 0 - -1,372
Solar Group 3,380 7.1 259 7.7 1,415
Q4
DKK million Revenue
Adjusted organic
growth EBITDA
EBITDA
margin
Non-current
assets
2020
Denmark 959 4.6 76 7.9 1.757
Sweden 669 -8.9 38 5.7 198
Norway 483 4.5 44 9.1 171
The Netherlands 763 -8.8 24 3.1 350
Poland 96 -12.8 3 3.1 27
Several markets
(MAG45) 148 13.6 3 2.0 51
Other markets 16 0.5 3 18.8 5
Eliminations -77 - 0 - -1,220
Solar Group 3,057 -2.1 191 6.2 1,339
– continued
149Solar – Annual Report 2021
FINANCIAL STATEMENTS CONSOLIDATED FINANCIAL STATEMENTS GROUP COMPANIES OVERVIEWSEPARATE FINANCIAL STATEMENTS STATEMENTS AND REPORTS Q4 2021
