Encavis AG - Sun and Wind Power

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Encavis AG is an independent power producer, which acquires and operates solar and onshore (on land) wind parks. Encavis operates 190 solar parks and 93 wind parks with an installed capacity of 2.9 gigawatts in Germany, Italy, France, the United Kingdom, Austria, Finland, Sweden, Denmark, Netherlands, and Spain. Besides providing commercial, technical, and other services to guarantee high availability and output, they also provide asset management services to institutional investors in the renewable energy sector. 

The company was just promoted from the German SDAX (Small-Cap) to the German MDAX (Mid-Cap) Index

The closing price was on Friday €15.08 and the 52-week high was €25.55 and the 52-week low was €11.33! Approximately in the middle at the moment! 

The 1-year development was +29%, and the 3-year and 5-year was +130% and +167% respectively.  Good sign ✅

The long-term chart (from 2014 onward) shows that in mid-January the stock started to climb and since then the trade volume is much higher than before. We see an upward trend with a peak in December 2020 at €22.50.

Owners of the company

 

The company was merged several times with different other companies in the sector in the last 10 years or so. The biggest owner, 19% is the Buell Family Office and you see Albert Büll from that family office as the Board Member of the Supervisory Board ("Aufsichtsratsmitglieder"). A strong owner (without a majority holding) active on the board is a good sign, similar to Cornelius Liedtke, who owns ~6% of the shares and is as well on the board, similar to Kreke Holding KG, Peter Heidecker - now we know where the power is at! I like that ✅

What does the Balance Sheet say us?

The Total Assets ("Summe Aktiva") have grown ~€500 million, roughly 20%, the last 5-years, mainly from an increase in Property, Plant and Equipment ("Sachanlagen") of €600 million and an increased cash balance of €230 million!

How did they fund the growth in assets, we find it on the other side:

The debt ratio has been stable at around 70-75%, the long-term debt increased ~€300 million while the shareholder's equity stayed the same, which means that they have funded the expanded asset with debt, which is good in low-interest-rate times and with keeping the Balance Sheet in "balance", i.e. enough Equity compared to Debt! ✅

Income Statement

The Revenue ("Umsatz") has doubled in the last 5-years, so has the EBIT ("Operatives Ergebnis") and the company has been positive on the bottom-line for the last 5 years! 

Even though the company grew 23% a year in the last 10 years (CAGR = 23.6%), the company held its Gross Margin high at or over 80% - amazing! ✅

Encavis is paying a dividend, and the yield at the moment it is at 1.86%, the dividend has been increased by 20% every year since its inception in 2012!

Summary: It looks like this is an extremely well-managed company, with high gross margins, good historical growth, strong and active owners, and riding on the future ESG trend in renewable (clean) energy!