Værdiansættelse af Vestas Wind Systems A/S

Atef Sadr & Eddy Egizarian

Student thesis: Diploma thesis


This project is about the valuation of Vestas Wind Systems A/S. We had to investigate and find equity value for the company and then calculate the value per share from a strategic and accounting analysis. Then we compared the equity value with the market value and made an assessment if investment in Vestas share is attractive for private investors. For the analytical work, we have found support in our theory books, in Vestas' annual reports, in various credible, neutral and publicly available articles from magazines and websites, etc., which we believe have fulfilled our needs for data and information material to the project's purpose. In the strategic analysis, we looked upon the key factors in the environment and industry, as well as internal company matters. The strategic analysis is concluded with a SWOT analysis where we found that Vestas' global presence, research and knowledge, patents, product and technology development are among their strengths. The current overcapacity as well as having only one general business area (only wind) is among Vestas' weaknesses. We have also assessed that the environmental policy decisions and targets international climate change plans, rising prices of oil and other fossil fuels, increasing population growth and energy consumption are some of the opportunities that favors the growth Opportunities for Vestas. Finally, we have identified the discontinuance or reduction in economic aid innovation in other alternative forms of energy (especially solar energy), and increased competition are some of the threats that can give Vestas challenges in the future. Based on the historical development and a number of assumptions and expectations of the future, we have set budgets and pro-forma statements for a period of 15 years. The budget and the proforma statement are the foundation for our valuation of Vestas. We find the equity value of Vestas to be 4,496m EUR at the valuation date 27/04/2012. Vestas has issued 203,704,103 shares which gives us a value of EUR 22 per share. With an average EUR rate at 7.4385 DKK on 27/04/2012 from the Danish Central Bank, this corresponds to a share value of 164 DKK. If we compare this value with the market value of 27/04/2012 which was at 51.31 DKK, we note that the share value is highly undervalued by the market. From our sensitivity analysis, we note that a negative change of 2.5 percentage points in gross margin compared to the original budget is a critical issue for Vestas. Therefore, Vestas should focus on their gross margin. As an end of our analysis we have developed a Best-and Worst-Case Scenarios. The result of the Best-Case Scenario, gave us a share value of 376 DKK. In our Worst-Case Scenario, we could observe that the share value is still far above market value as of 27/04/2012 on 51.35 DKK. We can conclude from our analysis that an investment in Vestas share is a good investment with high yield potential, and correspondingly high risk of course. Shares cannot be recommended as a short term investment.

EducationsGraduate Diploma in Accounting and Financial Management, (Diploma Programme) Final Thesis
Publication date2012
Number of pages93