Summary:

The purpose of thesis is to do a valuation of the Statkraft Group. Statkraft is Norwegians largest energy producer, generating its power mainly from hydropower. In 2020 the Group generated 65,4 TWh energy. (Statkraft, 2021) Statkrafts main market is in Norway, but the Group is planning to expand internationally. Increasing interest in clean energy throughout the last decades have led to growth opportunities in the clean energy sector. We see existing companies redefining their strategies to become more sustainable, and new established companies competing to take advantage of the increased demand.
The energy industry is dynamic and with the growth opportunities, Statkraft plans to position them self as one of the world’s leading clean energy providers (Statkraft, 2021). Entering new markets may yield higher returns but also expose the Group to new risks. Analysis of the industry shows that profitability is highly volatile and achieving strong and stable returns will require high quality risk management and smart investments.
Valuation of the Statkraft Group is done by forecasting future income, and discount future cash flows with the cost of capital. The present value of the cash flows yields the market value of equity. The forecasted future returns are based on historical figures and analysis of the company, industry, and the growth potentials.
The profitability analysis shows that the Statkraft Group yields positive returns to the equity owners, in line with the market average. The Groups financial leverage is below the market average indicating lower risk for the equity holders. The Groups financial position appears solid and the fundament for further growth is strong.
The Dividend-model is the main model used to estimate the market value of the equity. The model yields a market value of NOK 174 billion. The estimated value of the Groups equity is based on several assumptions regarding future growth, cost of capital and future power prices. The market value is compared to other firms in the energy sector listed on the stock exchange, using the Multiple P/E.