Værdiansættelse af Vestas Wind Systems A/S

Jens Slots Rasmussen

Student thesis: Master thesis


The main purpose of this master thesis is to make a valuation of Vestas Wind Systems A/S, a Danish windmill manufacturer. The valuation model used for this is the Discounted Cash Flow model. The valuation is done through budget assumptions based on a strategic and financial statement analysis of Vestas Wind Systems A/S. The strategic analysis consists of 3 models. The first model is the PEST-analysis, which conclude that the political objectives and aid benefits is of all importance for the continual growth of the industry. The growth of the windmill industry is estimated to be 13.5% pr. year until 2015. The second model Porters Five Forces determines, that the competition within the industry is intensifying. Today the best renewable source of energy is considered to be windmills. The third model is an internal analysis of Vestas Wind Systems A/S. It concludes that they have a surplus capacity to counter a future growth in sales. In 2010 Vestas Wind Systems A/S launched a new promising windmill, and they consider it to give them a competitive edge. Vestas Wind Systems A/S is the only real global windmill manufacturer. They have installed 25% of all the windmills in the world, and are therefore the most experienced in the field. The financial statement analysis of Vestas Wind Systems A/S performance is based on the financial reports starting from 2005 to 2010. They showed a favorably development in the most important financial value drivers. The return on equity yielded 10.54% in 2006 and it grew up to 23.16% in 2009. Due to capital injections Vestas Wind Systems A/S is a company with a low financial leverage. The valuation of Vestas Wind Systems A/S is mainly driven by recent negative development for the second quarter of 2010. Therefore my future expectations are of a more pessimistic estimate than Vestas Wind Systems A/S own. An estimated 9.18 % WACC was used to discount the free cash flows. The stock price was estimated to be 245.6 DDK on the 19th of August. The same day the market price was 243 DDK. The majority of the projected valuation of Vestas Wind Systems A/S is accumulated from 2015 to 2030. This makes it a risky stock, and it should be seen as a long time investment. The valuation of Vestas Wind Systems A/S was compared to a peer group through the two multiple: P/E and EV/EBITDA. A rough 2012 estimate indicated that Vestas Wind Systems A/S had a fair valuation compared to the average of the chosen peer group.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2010
Number of pages111