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Sif Holding (AMS: SIFG)

Last close As at 23/11/2024

EUR12.10

▲ 0.26 (2.20%)

Market capitalisation

EUR362m

Sif Holding is a Dutch company specialising in the manufacturing of large steel tubular structures for offshore wind farms and the oil and gas industry.

Equity proposition

Sif Holding produces parts of offshore wind foundations, mostly monopiles, but also transition pieces for the fast-growing offshore wind market. The increasing size of wind turbines puts increasing demand on the size of the foundations, both in terms of the diameter of the monopiles and the thickness of the steel. These changing requirements are why Sif also offers design, engineering and logistics services. Sif produces monopiles and transition pieces in its original plant in Roermond and in a much bigger, relatively new facility near Rotterdam, close to the Netherlands’ coastline. The location in Rotterdam has been further expanded given increased demand.

There are five compelling reasons why Sif could represent an attractive investment opportunity:

  • First, Sif offers great exposure to the fast-growing wind farm market at a time when countries want to be independent in meeting their energy needs while also reducing fossil fuel dependency. As such, Sif has a strong ESG profile.
  • Second, as the largest producer of monopiles for offshore wind farms, together with German producer EEW, it has developed difficult-to-copy technology to produce monopiles according to specifications. As a subcontractor it has less exposure to the large project risks that offshore wind operators have, as orders include guarantees for Sif.
  • Third, Sif’s production capacity for 2024 and 2025 is fully utilised and large orders are currently being booked or are in exclusive negotiations for 2026 and beyond.
  • Fourth, Sif expects to realise adjusted EBITDA of €35m in FY24. However, once the company’s expanded facilities, partly financed by clients, start producing, EBITDA is expected to increase to at least €160m in 2026 and the years beyond, according to the company.
  • Finally, Sif’s market capitalisation of around €420m and enterprise value of around €600m at 11 November 2024 certainly do not look demanding as they represent an FY25e P/E of ~12x and an FY25e EV/EBITDA of <5x, compared to an FY25e P/E of 16.1x for Vestas (EV/EBITDA 6.7x) and 53.7x for Siemens Energy (EV/EBITDA 9.8x).

A European market leader in producing large monopiles for offshore wind farms, Sif offers exposure to the fast-growing wind farm market while also having a technological edge and proximity to new offshore wind developments. Strong execution is reflected in increasing earnings and cash flows metrics. The company has high ESG ratings from agencies like MSCI and ISS and trades at undemanding multiples.

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Sector

Industrials

Key Management

  • Ben Meijer

    CFO

  • Fred van Beers

    CEO

Share Price Performance

Price Performance
% 1M 3M 12M
Actual (15.7) (0.8) 36.6
Relative (11.3) 4.3 20.8
52 week high/low €15.6/€8.8

Financials

Sif Holding produces parts of offshore wind foundations – mostly monopiles, but also transition pieces for the fast-growing offshore wind market. The increasing size of wind turbines and rotor blades affects the foundation, both in terms of the monopile diameter and the thickness of the steel. These changing requirements are another reason why Sif offers design, engineering and logistics services. It produces monopiles and transition pieces in its original plant in Roermond, as well as in a much bigger relatively new facility near Rotterdam, close to the Netherlands’ coastline. The location in Rotterdam will be further expanded given demand developments.

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