Senvion SA – Value Analysis (XETRA:SEN) : December 26, 2017

Capitalcube gives Senvion SA a score of 30.

Our analysis is based on comparing Senvion SA with the following peers – SolarWorld AG, Siemens Gamesa Renewable Energy, S.A., Shanghai Electric Group Co., Ltd. Class H and Vestas Wind Systems A/S (SWVK-DE, SGRE-ES, USR-DE and VWS-DE).

Investment Outlook

Senvion SA has a fundamental score of 30 and has a relative valuation of UNDERVALUED.

Fundamental Score

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Company Overview

  • Taking peer performance into consideration, relative performance over the last month and last year is around the peer median.
  • It currently trades at a Price/Book ratio of (2.90).
  • SEN-DE‘s EBITDA-based price multiple implies slower growth than its peers despite its current comparatively high EBITDA-based returns.
  • SEN-DE has relatively low profit margins and median asset efficiency.
  • Change in the company’s annual revenues seems to be coming at the expense of earnings.
  • The company’s relatively low gross and pre-tax margins suggest a non-differentiated product portfolio and not much control on operating costs relative to peers.
  • SEN-DE‘s operating performance may not allow it to raise additional debt.

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Leverage & Liquidity

SEN-DE would seem to have a hard time raising additional debt.

  • With debt at a relatively low 1.56% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 9.99%), and relatively tight interest coverage level of -0.68x, SEN-DE would have a hard time raising much additional debt. Thus, the company is classified as having Limited Flexibility when it comes to raising more debt.
  • All 4 peers for the company have an outstanding debt balance.

SEN-DE has moved to a Constrained from a Limited Flexibility profile at the recent year-end.

  • SEN-DE‘s interest coverage is similar to last year’s high of -0.42x, which compares to a low of -0.90x in 2015.
  • Though its interest coverage has remained relatively stable at -0.68x compared to 2016, its peer median has decreased to 5.79x from 8.43x during this period.
  • Interest coverage rose 2.38 points relative to peers. It is also below the 2.50x coverage benchmark unlike the peer median.
  • SEN-DE‘s debt-EV is its lowest relative to the last five years and compares to a high of 54.31% in 2016.
  • The decrease in its debt-EV to 1.56% from 54.31% (in 2016) was also accompanied by a decrease in its peer median during this period to 9.99% from 54.31%.
  • Relative to peers, debt-EV fell 8.44 percentage points.

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Key Liquidity Items

Company Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%)
SolarWorld AG 122.53 1.9 -2.83 -7.85
Siemens Gamesa Renewable Energy, S.A. 9.99 1.05 12.9 75.53
Shanghai Electric Group Co., Ltd. Class H 66.74 1.3 5.79 36.77
Vestas Wind Systems A/S 3.57 1.24 35.34 336.56
Senvion SA 1.56 0.95 -0.68 2.41
Peer Median 9.99 1.24 5.79 36.77
Best In Class 1.56 1.9 35.34 336.56

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Company Profile

Senvion SA engages in developing, producing, and marketing of wind turbines. It operates through the following segments: Onshore, Offshore, and Service and Maintenance. The Onshore segment offers domestic and international business resulting from the sale, production, project management, and installation of onshore wind turbines. The Offshore segment includes domestic and international business activities in the area of offshore wind farms. The Service and Maintenance segment involves in planned maintenance and the rectification of technical faults in wind turbines. The company was founded in 2001 and is headquartered in Luxembourg.

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