Strategisk analyse og værdiansættelse af Vestas Wind Systems A/S

Emil Max Møller

Student thesis: Master thesis


The purpose of this thesis is to conduct a valuation of Vestas Wind Systems A/S, which will be based on an analysis of the wind turbine industry, a strategic- and a financial analysis. The thesis starts out by analyzing the wind turbine industry divided into the European-, American and Asian Pacific markets in terms of installed capacity on- and offshore, expected growth, and the competitive environment. It showed that Asia, especially China, has been the main driver for installed onshore capacity in 2014, Europe takes the lead when it comes to offshore capacity, and future growth will mainly be driven by the Asian- and Latin American markets. The strategic analysis included an external analysis of Vestas, where models such as PESTEL and Porters Five Forces were applied. The analysis revealed a company highly influenced by the political environment, the rising demand of sustainable sources of energy, and an increased competition from alternative sources such as solar power. However, the analysis also identified strengths such as Vestas’ market leading position, global presence, and well proven product- and service offerings based on accumulated know-how. It also showed that the competitive landscape in general is subject to high rivalry, since the industry is dominated by a handful of large players accounting for 53% of the installed capacity globally, which all are striving to become the world’s leading wind turbine manufacturer. The financial analysis showed improvement since the downturn in 2012, and that Vestas is superior to its European competitor Gamesa when it comes to key figures such as ROE, ROIC, profitability and asset turnover rates for the year 2014. Vestas has throughout the period tied considerably less money in the core operating assets, reflecting a better management of the invested- and working capital, which resulted in the highest levels of key figures in the period analyzed. All of the abovementioned analyses established a basis that made budgeting possible in order to estimate the future free cash flows and thereby be value of Vestas. When applying the DCF model, the share price yields a value of DKK 409,24 which is DKK 41,64 more than the share price on the cut-off date, suggesting the share being undervalued. The sensitivity analysis exhibited how a minor increase in WACC of 0,5% resulted in a 8,5% decrease in the share price, which indicates the importance of a thorough estimation of the input variables when determining WACC. A multiple analysis was lastly conducted, mainly through comparable listed companies, to triangulate the results, and showed a value range of DKK 425,6 to 440,7 using both EBITDA and EBIT multiples, which confirms the thesis’ conclusion about the share being undervalued.

EducationsMSc in Finance and Accounting, (Graduate Programme) Final Thesis
Publication date2015
Number of pages116