Release Date: February 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Solar AS (FRA:ZVR, Financial) achieved a 3% organic growth in Q4, indicating a return to growth after several challenging quarters.
- The climate and energy segment delivered strong results in Q4, supported by large projects such as the Solar Polaris solar park in Denmark.
- The company successfully reduced costs through process optimization and staff reduction, helping to mitigate margin dilution.
- The board of directors proposed a dividend of 15 DKK per share, reflecting confidence in the company's strategic investments.
- Solar AS (FRA:ZVR) expects positive growth in the installation and industry segments in 2025, driven by the green transition and other sub-segments.
Negative Points
- Revenue for 2024 was below expectations, with a decline to DKK12.2 billion from DKK13 billion in 2023.
- The gross margin was more suppressed than expected, with no significant improvement anticipated in 2025.
- The company faces challenges from salary inflation and new taxes, which are not expected to be passed on to the market.
- Uncertainty remains high, with unpredictable recovery timing and strength across markets.
- The company's concept initiatives underperformed in 2024, facing price pressure and limited impact from expected gains.
Q & A Highlights
Q: Can you comment on the pricing and cost expectations for 2025, particularly regarding salary increases?
A: Michael Jeppesen, CFO: Salary increases will be spread throughout the year due to mandatory adjustments. The impact will be gradual, with full effects seen by the end of the year. It's advisable to allocate the growth rate evenly across quarters, considering rollover effects from late Q4 increases.
Q: What is the status of your investment in the new central warehouse in Sweden, and how much do you plan to invest in 2025?
A: Michael Jeppesen, CFO: We plan to invest over DKK300 million in the new central warehouse in Sweden in 2025, which is a substantial amount on top of regular maintenance investments.
Q: Can you elaborate on the supplier bonuses received in 2024 and whether they are expected to recur?
A: Michael Jeppesen, CFO: We received substantial supplier bonuses in 2024, which were outside normal agreements. These are not guaranteed to recur annually, as they depend on special circumstances and negotiations.
Q: What is the impact of Solar Polaris on Q4's organic growth, and is this performance sustainable?
A: Jens Andersen, CEO: Solar Polaris contributed significantly to Q4's organic growth. We have expanded our scope to include large PV parks and have several offers in the market, which could sustain this level if successful.
Q: Why is there no expected EBITDA growth in 2025 despite revenue growth?
A: Michael Jeppesen, CFO: The gross margin is expected to be slightly lower due to cost pressures, mainly from salary inflation, which cannot be passed on to the market. Revenue growth will be diluted by these cost increases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
