Værdiansættelse af Vestas Wind Systems A/S

Jens Libak Bisgaard

Student thesis: Master thesis


The purpose of this master thesis is to valuate Vestas Wind Systems A/S (Vestas), who is manufacturing and selling windmills around the world. The valuation is performed with the use of the Discounted Cash Flow-model. In order to calculate the final valuation a strategic analysis, financial analysis and budget-estimation are constructed. The strategic analysis is constructed with the use of a PEST-analysis and Porters Five Forces. The two models describe a framework of macro-environmental factors and a framework for industry analysis and business strategy development. The industry is highly influenced by political interference where governments and world leader are trying to heighten the renewable energy production and minimizing the dependence of fossil fuels. That is done by gathering world nations at climate change conferences such as COP17 in South Africa 2011, and creating federal subsidies for windmill establishment. The yearly windmill industry growth-rate is estimated to be 15.5 % the next four years, and the amount of small suppliers below 2 % market share, were reduced in half in 2010. In order to survive the fast growing market, there is a need for suppliers to have considerable production capacity. Vestas is the only global windmill manufacturer and had a market share of 12 % in 2010, with delivery to 25 markets. The Chinese market is growing rapidly and Vestas have already invested substantial amounts in this market, in order to heighten their Chinese market share. The financial analysis is based on the last five years historical result, and 2010 was the worst year in the period, with a ROIC at 6.4 % and ROE at 7 %. Vestas also changed their debt to equity ratio significantly in 2010 to 19 %, by issuing company bonds instead of issuing stocks. The financial report for the first 6 months of 2011 showed less positive revenue, which could make Vestas change their financial goals for 2011. The valuation set the price for a Vestas-share at 21.9 €, at October 17, 2011. The price is higher than the market price at 12.2 €. The WACC used in discounting the cash flows was estimated to be 9.31 %. The valuation of Vestas was compared to a Peer-group through several multiples, and estimates showed that Vestas will increase their EPS over the next three years.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2011
Number of pages102