Strategic Analysis and Valuation of Bonheur ASA

Erlend Ludvig Alvsvåg & Håkon Borhaug

Student thesis: Master thesis


There are few Norwegian companies that can match the long and multiple industry track record of the company today known as Bonheur ASA. With a newly established focus on the wind energy sector, the stock price has risen over the last five years. The objective of this thesis is to determine the correct trading recommendation for Bonheur ASA as of 01. March 2021. To produce a correct trading recommendation, the discounted cash flow valuation approach has been relied on to determine the fair value of Bonheur. A strategic analysis looked at the companies two focus segments with largest growth, Renewable Energy and Offshore Wind and Shipping. The macroeconomic environment was thoroughly examined utilizing the PESTEL framework. Bonheurs main market’s ambitious goals for increasing renewable energy production combined with favourable conditions for wind energy, contributed to a positive outlook. Porter's Five Forces analysed the competitive environments, with the Offshore service sector having positive future outlooks, since deployment rate will soon outpace the growth in the service sector. A corporate governance review was conducted to determine potential risks and rewards of their ownership structure, finding an implied stock discount following their diversified business ventures and lack of governing mechanisms. The financial analysis looked at Bonheur in a holistic view, restating the balance sheet to remove noise from their deconsolidated offshore drilling company. Historical performance of their now four segments was analysed and compared to industry peers. The analysis found a large growth in revenue from their offshore wind service segment, with the highest profitability in onshore wind production. The corona virus negatively impacted their cruise segment, and their media focused segment had negative margins throughout the five-year period. Bonheur’s historical performance and strategic outlooks with significant future impact was summarized using the SWOT framework. The findings were discussed and considered, to produce a coherent future cash flow analysis. A positive outlook for the next 10 years was found, with an appertaining stock price of 254.48 NOK, 10% higher than the observed 229.5 NOK market price 1st March 2021. The calculated stock price was found to be sensitive to inputs, and several plausible future scenarios determined. Utilizing a relative valuation varying results for the stock price in comparison to industry peers was found, which concurred with the financial analysis. The concluding trading recommendation is HOLD, since the 10% upside is not seen as substantial for a diversified company with sub-optimal corporate governance.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2021
Number of pages149