Veni, vidi, vici - conquering the next niche market

7C Solarparken (CDAX, Renewables, HRPK GR)

A n a l y s t

Jan Bauer [email protected]

+49 40 309537-155

CO M M E N T Published 09.04.2021 08:15 1

RESEARCH

Buy

EUR 5.20

Price EUR 4.15

Upside 25.3 %

Value Indicators: EUR Warburg ESG Risk Score: 2.8 Description:

DCF: 5.17

ESG Score (MSCI based): 3.0 Balance Sheet Score: 4.5 Market Liquidity Score: 1.0

7C Solarparken is an independent owner and operator of photovoltaic power plants

Market Snapshot: EUR m Shareholders: Key Figures (WRe): 2020e

Market cap: 288.1

No. of shares (m): 69.4

EV: 461.3

Freefloat MC: 221.8

Ø Trad. Vol. (30d): 284.38 th

Freefloat 77.0 %

Rodolphe de Spoelberch 7.3 %

Vlaamse Energieholding CVBA 5.8 %

Librae Holdings Limited 5.0 %

Distri Beheer 21 CVBA 4.9 %

Beta: 0.6

Price / Book: 1.6 x

Equity Ratio: 35 %

Net Fin. Debt / EBITDA: 4.5 x

Net Debt / EBITDA: 4.5 x

Veni, vidi, vici - conquering the next niche market

Stated Figures FY/2020: Comment on Figures:

Key figures (EBITDA & CFPS) slightly exceeded our expectations as service sales were higher than expected by us.

EBIT fell short of our estimate as a result of extraordinary depreciation costs for project rights and the EnerVest Beglium acquisition (goodwill).

Our CFPS calculation differs from the company´s calculation which results in a difference of EUR 0.03 per share. The residual difference can be traced back to the higher margin generation.

7C has published its FY 2020 figures, which were slightly better than expected by us. Supportive irradiation conditions led to specific yields

similar to 2019, which was already a record year. However, the icing on the cake was the major portfolio growth to 275 MWp, which was clearly

ahead of the former 220 MWp target and reflects the strong momentum of the company.

Outlook seems cautious: For 2021, 7C expects sales of EUR 53m, EBITDA of EUR 42.5m and CFPS of EUR 0.50, taking adverse weather

effects in Q1/2021 into consideration and no major capacity additions. We expect slightly higher specific yields in our forecast and expect 7C to

gain more traction in Belgium, which should result in capacity additions, supporting sales and margin generation. The growth target of 295

MWp by the end of the year already implies some 20 MWp of capacity additions which should contribute to this year’s EBITDA.

All eyes on 2023: 7C has confirmed its 2023 target (combined capacity of 500 MWp) in which Belgium will play a bigger role. 7C concluded its

first acquisition in Q1/21 and we expect the Belgian share in overall growth to increase, backed by the in-house development team. Belgium

seems to be very promising in the context of 7C’s niche-market approach which should result in superior returns. To reach its target, 7C

expects to need a further EUR 35m in equity until 2023, which should then lead to an increase in CFPS generation.

Valuation set to increase: The positive effect of the model roll-over is offset by the reduction in our expectations for FY 2021. However, 7C

has considerable firepower from its recent capital increases for the portfolio expansion, which we expect to be highly profitable in Belgium

(WRe: equity IRRs 7-10%). Accordingly, the value per share should increase in the course of the year. We deem current share price levels as

an attractive investment opportunity and clearly reiterate our Buy rating.

in EUR m 2020 2020e 2019 yoy

Sales 50.6 49.2 43.1 17.3%

EBITDA 42.9 41.8 38.1 12.6%

margin 84.9% 85.0% 88.4%

EBIT 13.2 17.1 14.5 -8.4%

margin 26.2% 34.8% 33.5%

CFPS 0.57 0.53 0.12 3.6%

Changes in Estimates: Comment on Changes:

FY End: 31.12. in EUR m

2021e (old)

+ / - 2022e (old)

+ / - 2023e (old)

+ / -

Sales 56.4 -2.6 % 59.3 0.0 % 59.5 -0.2 %

EBITDA 46.8 -2.2 % 49.4 -0.2 % 50.8 -2.4 %

EBIT 21.4 -4.8 % 24.1 -0.3 % 25.4 -4.7 %

We have adjusted our estimates for adverse irradiation conditions in Q1, slightly higher operating expenses, and we have postponed the COD of parks under construction to Q3/Q4.

In line with the company´s reporting, we have increased financial expenses and depreciation costs.

FY End: 31.12. in EUR m

CAGR (20-23e) 2017 2018 2019 2020 2021e 2022e 2023e

Sales 5.5 % 33.0 40.3 43.1 50.6 54.9 59.3 59.4

Change Sales yoy 8.9 % 22.2 % 6.9 % 17.3 % 8.5 % 8.0 % 0.1 %

Gross profit margin 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 %

EBITDA 4.9 % 29.9 35.1 38.1 42.9 45.7 49.3 49.6

Margin 90.5 % 87.0 % 88.4 % 84.9 % 83.3 % 83.2 % 83.5 %

EBIT 22.3 % 12.5 15.2 14.5 13.2 20.4 24.0 24.2

Margin 37.9 % 37.7 % 33.5 % 26.2 % 37.1 % 40.4 % 40.8 %

Net income 44.7 % 6.0 5.8 7.9 5.2 11.7 15.3 15.9

EPS 42.2 % 0.13 0.12 0.14 0.08 0.17 0.22 0.23

EPS adj. 42.2 % 0.13 0.12 0.14 0.08 0.17 0.22 0.23

DPS 2.9 % 0.10 0.10 0.11 0.11 0.12 0.12 0.12

Dividend Yield 4.2 % 3.9 % 3.6 % 3.0 % 2.9 % 2.9 % 2.9 %

FCFPS 0.37 0.27 0.25 0.47 0.27 0.59 0.59

FCF / Market cap 15.4 % 10.4 % 8.3 % 12.9 % 6.5 % 14.1 % 14.2 %

EV / Sales 7.9 x 7.2 x 8.2 x 8.7 x 8.4 x 7.2 x 6.7 x

EV / EBITDA 8.7 x 8.2 x 9.2 x 10.2 x 10.1 x 8.7 x 8.0 x

EV / EBIT 20.7 x 19.1 x 24.4 x 33.1 x 22.6 x 17.9 x 16.4 x

P / E 18.5 x 21.4 x 22.0 x 45.7 x 24.4 x 18.9 x 18.0 x

FCF Potential Yield 11.0 % 11.4 % 10.6 % 9.4 % 9.3 % 10.7 % 11.7 %

Net Debt 146.6 161.7 177.9 191.8 172.7 140.4 107.7

ROCE (NOPAT) 4.4 % 4.4 % 4.7 % 3.0 % 4.7 % 5.9 % 6.6 % Guidance: EBITDA EUR 42.5m; CFPS EUR 0.50 per share

Rel. Performance vs CDAX:

1 month: -7.2 %

6 months: -0.1 %

Year to date: -19.3 %

Trailing 12 months: -14.0 %

Company events:

14.04.21 Warburg Renewables Conference

7C Solarparken

CO M M E N T Publ ished 09 .04 .2021 2

RESEARCH

Sales development in EUR m

Source: Warburg Research

Book value per share in EUR


EBIT development in EUR m


Company Background

7C Solarparken is an independent owner and operator of PV and wind parks in Germany. The company has a portfolio of 275 MW.

The parks in the portfolio have a strong geographic focus on Germany, i.e. 97% of the total portfolio capacity is installed in Germany.

The portfolio includes rooftop plants as well as ground-mounted plants and, to some extent, part-ownership of the land where the

parks are built (156ha)

For external investors, 7C provides asset management for PV parks (currently 75 MW).

7C Solarparken has been developing parks in-house since the acquisition of a pipeline in 2019 and 2020.

Competitive Quality

7C Solarparken focuses its acquisitions on smaller PV parks which is a less competitive market segment and includes FITs, which

secure long-term income for at least 20 years.

The PV portfolio is predominantly in Germany which offers a stable and reliable political and legislative environment for renewable

energy.

Land ownership at certain portfolio parks provides the company with planning flexibility for the time when subsidies expire and a

potential repowering.

Fast growing portfolio with a target size of 400 MW in 2023 increases the company´s value and secures an attractive dividend yield.

In-house project development enhances growth opportunities and reduces costs, whilst asset management solutions increase

utilisation of the existing platform.

FCF development in EUR m


Net cash flow per share in EUR


Portfolio capacity in MWp


7C Solarparken


RESEARCH

DCF model

Our estimates reflect the buildup of the portfolio to 275 MW in 2021 and no further acquisitions afterwards.

For our DCF-valuation, we estimate an average lifetime of the PV parks of 35 years and 30 years for onshore wind.

We do not assume any repowering or releveraging. In consequence the TV of the portfolio is zero.

After the termination of FiTs, we calculate with power price forecasts.

Our beta and WACC reflect the high visibility of the business model.

Detailed forecast period

Figures in EUR m 2021e 2022e 2023e 2024e 2025e 2026e 2027e 2028e 2029e 2030e 2031e 2032e 2033e 2034e 2035e 2036e 2037e

Sales 54.9 59.3 59.4 60.7 60.7 60.7 60.7 60.1 54.3 47.2 41.9 35.6 32.5 30.5 30.4 28.1 28.1

Sales change 8.5 % 8.0 % 0.1 % 2.3 % 0.0 % 0.0 % 0.0 % -1.0 % -9.6 % -13.1 % -11.3 % -15.0 % -8.6 % -6.2 % -0.5 % -7.5 % 0.0 %

EBIT 44.1 23.3 23.5 25.4 25.5 24.5 24.5 23.9 18.5 11.9 6.9 1.0 -1.9 -3.7 7.9 19.7 19.7

EBIT-margin 80.2 % 39.2 % 39.6 % 41.8 % 42.0 % 40.3 % 40.3 % 39.8 % 34.0 % 25.1 % 16.4 % 2.7 % -5.7 % -12.3 % 25.9 % 69.9 % 69.9 %

Tax rate (EBT) 19.2 % 17.9 % 15.6 % 15.0 % 15.0 % 18.0 % 20.0 % 22.0 % 25.0 % 25.0 % 25.0 % 25.0 % 0.0 % 0.0 % 25.0 % 25.0 % 25.0 %

NOPAT 35.6 19.1 19.8 21.6 21.7 20.1 19.6 18.6 13.9 8.9 5.1 0.7 -1.9 -3.7 5.9 14.7 14.7

Depreciation 0.0 26.1 26.1 26.0 25.9 25.9 25.9 25.9 25.9 25.9 25.9 25.9 25.9 25.9 14.2 1.4 1.4

in % of Sales 0.0 % 44.0 % 43.9 % 42.9 % 42.7 % 42.7 % 42.7 % 43.2 % 47.8 % 55.0 % 62.0 % 72.9 % 79.8 % 85.0 % 46.8 % 5.1 % 5.1 %

Change in provisions 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Change in liquidity from

- Working Capital 1.4 -0.1 0.3 -0.3 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

- Capex 16.9 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Capex in % of Sales 30.7 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %

Other 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

17.4 45.3 45.6 48.0 47.6 46.0 45.5 44.6 39.8 34.9 31.1 26.7 24.1 22.2 20.1 16.2 16.2

PV of FCF 17.0 42.9 41.8 42.6 41.0 38.3 36.7 34.8 30.1 25.5 22.0 18.3 16.0 14.3 12.5 9.8 9.4

share of PVs 18.4 % 81.6 %

Free Cash Flow (WACC-model)

Transitional period

Term. Value

2038e 2039e 2040e 2041e 2042e 2043e 2044e 2045e 2046e 2047e 2048e 2049e 2050e 2051e 2052e 2053e 2054e 2055e 2056e

28.7 28.7 29.2 29.8 30.2 28.8 25.9 23.3 20.7 18.5 16.4 16.0 15.6 15.6 13.1 11.9 9.3 7.2 1.6

2.0 % 0.2 % 1.6 % 2.1 % 1.2 % -4.4 % -10.3 % -10.1 % -11.0 % -10.7 % -11.4 % -2.1 % -2.7 % 0.0 % -16.0 % -8.9 % -22.4 % -22.5 % -77.6 % 0.0 %

20.2 21.1 22.0 22.5 22.9 21.9 19.7 17.8 15.8 14.2 12.6 12.4 12.1 12.1 10.2 9.3 7.3 5.8 1.2

70.4 % 73.5 % 75.1 % 75.5 % 75.8 % 76.1 % 76.0 % 76.4 % 76.4 % 76.5 % 77.2 % 77.3 % 77.3 % 77.3 % 77.5 % 77.6 % 78.4 % 80.3 % 75.6 %

25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 % 25.0 %

15.1 15.8 16.5 16.9 17.2 16.5 14.8 13.3 11.9 10.6 9.5 9.3 9.0 9.0 7.6 6.9 5.5 4.3 0.9

1.4 0.6 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1

5.0 % 2.0 % 0.6 % 0.6 % 0.6 % 0.6 % 0.6 % 0.4 % 0.4 % 0.5 % 0.5 % 0.5 % 0.6 % 0.6 % 0.7 % 0.7 % 0.9 % 1.2 % 5.4 %

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 100.0 % 0.0 % 0.0 %

0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 1.0 0.0 -7.7

16.6 16.4 16.6 17.1 17.3 16.6 14.9 13.4 12.0 10.7 9.6 9.4 9.1 9.1 7.7 7.0 4.5 4.4 8.8

9.4 9.0 8.8 8.7 8.6 8.0 7.0 6.1 5.2 4.5 3.9 3.7 3.5 3.4 2.8 2.5 1.5 1.4 2.8 0.0

0.0 %

Transitional period

81.6 %

Model parameter Valuation (m)

Derivation of WACC: Derivation of Beta: Present values until 2033e 554.0

Terminal Value 0.0

Debt ratio 45.0 % Financial Strength 0.60 Financial liabilities 254.0

Cost of debt 1.9 % Liquidity 0.60 Pension liabilities 0.0

Market return 7.0 % Cyclicality 0.50 Hybrid capital 0.0

Risk free rate 1.5 % Transparency 0.50 Minority interest 11.4

Risk premium 5.5 % Others 0.80 Market val. of investments 0.0

Cost of equity 4.8 % Liquidity 70.1 No. of shares (m) 69.4

WACC 3.28 % Beta 0.60 Equity Value 358.7 5.17

Sensitivity Value per share (EUR)

Terminal Growth Delta EBIT-margin

Beta (WACC) -0.75 % -0.50 % -0.25 % 0.00 % 0.25 % 0.50 % 0.75 % -1.50 pp -1.00 pp -0.50 pp 0.0 0.50 pp 1.00 pp 1.50 pp

0.93 (4.3 %) 4.45 4.45 4.45 4.45 4.45 4.45 4.45 4.33 4.37 4.41 4.45 4.50 4.54 4.58

0.77 (3.8 %) 4.80 4.80 4.80 4.80 4.80 4.80 4.80 4.66 4.71 4.75 4.80 4.84 4.89 4.93

0.68 (3.5 %) 4.98 4.98 4.98 4.98 4.98 4.98 4.98 4.84 4.89 4.93 4.98 5.02 5.07 5.11

0.60 (3.3 %) 5.17 5.17 5.17 5.17 5.17 5.17 5.17 5.03 5.07 5.12 5.17 5.21 5.26 5.31

0.52 (3.0 %) 5.36 5.36 5.36 5.36 5.36 5.36 5.36 5.22 5.27 5.32 5.36 5.41 5.46 5.51

0.43 (2.8 %) 5.57 5.57 5.57 5.57 5.57 5.57 5.57 5.42 5.47 5.52 5.57 5.62 5.67 5.72

0.27 (2.3 %) 6.01 6.01 6.01 6.01 6.01 6.01 6.01 5.85 5.90 5.96 6.01 6.06 6.11 6.16

Value per share

(EUR)

7C Solarparken


RESEARCH

Valuation

2017 2018 2019 2020 2021e 2022e 2023e

Price / Book 1.3 x 1.2 x 1.3 x 1.6 x 1.8 x 1.7 x 1.6 x

Book value per share ex intangibles 1.83 1.88 2.01 2.12 2.29 2.39 2.50

EV / Sales 7.9 x 7.2 x 8.2 x 8.7 x 8.4 x 7.2 x 6.7 x

EV / EBITDA 8.7 x 8.2 x 9.2 x 10.2 x 10.1 x 8.7 x 8.0 x

EV / EBIT 20.7 x 19.1 x 24.4 x 33.1 x 22.6 x 17.9 x 16.4 x

EV / EBIT adj.* 20.7 x 19.1 x 24.4 x 33.1 x 22.6 x 17.9 x 16.4 x

P / FCF 6.5 x 9.6 x 12.1 x 7.7 x 15.3 x 7.1 x 7.0 x

P / E 18.5 x 21.4 x 22.0 x 45.7 x 24.4 x 18.9 x 18.0 x

P / E adj.* 18.5 x 21.4 x 22.0 x 45.7 x 24.4 x 18.9 x 18.0 x

Dividend Yield 4.2 % 3.9 % 3.6 % 3.0 % 2.9 % 2.9 % 2.9 %

FCF Potential Yield (on market EV) 11.0 % 11.4 % 10.6 % 9.4 % 9.3 % 10.7 % 11.7 %

*Adjustments made for: -

Company Specific Items

2017 2018 2019 2020 2021e 2022e 2023e

Portfolio capacity (MWp) 118.0 152.8 194.0 265.0 265.0 265.0 265.0 Net cash flow per share 0.43 0.48 0.56 0.51 0.54 0.59 0.60

7C Solarparken


RESEARCH

Consolidated profit & loss In EUR m 2017 2018 2019 2020 2021e 2022e 2023e

Sales 33.0 40.3 43.1 50.6 54.9 59.3 59.4

Change Sales yoy 8.9 % 22.2 % 6.9 % 17.3 % 8.5 % 8.0 % 0.1 % Increase / decrease in inventory 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Own work capitalised 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Sales 33.0 40.3 43.1 50.6 54.9 59.3 59.4

Material expenses 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Gross profit 33.0 40.3 43.1 50.6 54.9 59.3 59.4

Gross profit margin 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % 100.0 % Personnel expenses 1.2 1.6 1.6 1.7 2.1 2.7 2.9

Other operating income 3.3 2.1 2.9 1.9 1.3 0.5 0.7

Other operating expenses 5.2 5.8 6.3 7.8 8.4 7.8 7.6

Unfrequent items 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EBITDA 29.9 35.1 38.1 42.9 45.7 49.3 49.6

Margin 90.5 % 87.0 % 88.4 % 84.9 % 83.3 % 83.2 % 83.5 %

Depreciation of fixed assets 17.3 19.8 23.7 29.7 25.4 25.4 25.4

EBITA 12.6 15.3 14.5 13.2 20.4 24.0 24.2

Amortisation of intangible assets 0.1 0.1 0.0 0.0 0.0 0.0 0.0

Goodwill amortisation 0.0 0.0 0.0 0.0 0.0 0.0 0.0

EBIT 12.5 15.2 14.5 13.2 20.4 24.0 24.2

Margin 37.9 % 37.7 % 33.5 % 26.2 % 37.1 % 40.4 % 40.8 %

EBIT adj. 12.5 15.2 14.5 13.2 20.4 24.0 24.2

Interest income 1.0 0.1 0.7 1.0 0.5 0.5 0.0

Interest expenses 6.1 7.2 6.5 7.0 5.8 5.3 4.8

Other financial income (loss) 0.0 0.0 0.0 0.2 0.0 0.0 0.0

EBT 7.4 8.1 8.6 7.4 15.1 19.2 19.4

Margin 22.4 % 20.1 % 20.0 % 14.6 % 27.4 % 32.4 % 32.8 % Total taxes 1.4 2.2 0.7 1.8 2.9 3.4 3.0

Net income from continuing operations 6.0 5.9 8.0 5.6 12.2 15.8 16.4

Income from discontinued operations (net of tax) 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Net income before minorities 6.0 5.9 8.0 5.6 12.2 15.8 16.4

Minority interest 0.0 0.1 0.1 0.4 0.5 0.5 0.5

Net income 6.0 5.8 7.9 5.2 11.7 15.3 15.9

Margin 18.1 % 14.4 % 18.3 % 10.4 % 21.2 % 25.7 % 26.8 %

Number of shares, average 46.8 49.5 56.5 67.5 69.4 69.4 69.4

EPS 0.13 0.12 0.14 0.08 0.17 0.22 0.23

EPS adj. 0.13 0.12 0.14 0.08 0.17 0.22 0.23

*Adjustments made for:

Guidance: EBITDA EUR 42.5m; CFPS EUR 0.50 per share

Financial Ratios 2017 2018 2019 2020 2021e 2022e 2023e

Total Operating Costs / Sales 9.5 % 13.0 % 11.6 % 15.1 % 16.7 % 16.8 % 16.5 %

Operating Leverage 0.5 x 1.0 x -0.7 x -0.5 x 6.3 x 2.2 x 9.4 x

EBITDA / Interest expenses 4.9 x 4.9 x 5.8 x 6.1 x 7.9 x 9.3 x 10.4 x

Tax rate (EBT) 19.2 % 27.5 % 7.6 % 24.3 % 19.2 % 17.9 % 15.6 %

Dividend Payout Ratio 78.3 % 84.4 % 77.8 % 132.4 % 68.5 % 52.9 % 50.8 %

Sales per Employee n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Sales, EBITDA in EUR m


Operating Performance in %


Performance per Share


7C Solarparken


RESEARCH

Consolidated balance sheet In EUR m 2017 2018 2019 2020 2021e 2022e 2023e

Assets

Goodwill and other intangible assets 0.6 3.7 5.5 3.2 3.2 3.2 3.2

thereof other intangible assets 0.6 3.1 4.2 1.9 1.9 1.9 1.9

thereof Goodwill 0.0 0.7 1.3 1.3 1.3 1.3 1.3

Property, plant and equipment 249.0 279.5 316.5 371.6 363.1 337.7 312.4

Financial assets 0.0 0.5 3.1 1.6 1.6 1.6 1.6

Other long-term assets 0.5 1.1 0.4 0.2 0.2 0.2 0.2

Fixed assets 250.1 284.9 325.6 376.5 368.0 342.6 317.3

Inventories 1.6 0.9 3.2 2.7 1.3 1.2 1.2

Accounts receivable 0.8 1.0 2.4 1.7 1.4 1.5 1.8

Liquid assets 34.1 49.6 59.0 62.2 90.9 121.4 152.1

Other short-term assets 7.8 8.6 11.1 15.5 15.5 15.5 15.5

Current assets 44.3 60.1 75.7 82.0 109.1 139.5 170.5

Total Assets 294.4 345.0 401.3 458.5 477.1 482.2 487.8

Liabilities and shareholders' equity

Subscribed capital 46.8 53.4 61.4 67.5 69.4 69.4 69.4

Capital reserve 16.5 26.6 41.6 58.2 64.1 64.1 64.1

Retained earnings 23.1 24.2 26.2 24.7 28.8 35.7 43.3

Other equity components -0.1 -0.1 0.0 0.0 0.0 0.0 0.0

Shareholders' equity 86.4 104.2 129.2 150.4 162.3 169.2 176.8

Minority interest 0.5 0.5 0.6 11.4 11.4 11.4 11.4

Total equity 86.9 104.7 129.8 161.8 173.7 180.7 188.2

Provisions 8.9 11.9 14.4 18.4 18.4 18.4 18.4

thereof provisions for pensions and similar obligations 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Financial liabilities (total) 180.7 211.3 236.9 254.0 263.7 261.8 259.8

thereof short-term financial liabilities 19.0 24.3 20.8 29.4 29.4 29.4 29.4

Accounts payable 5.0 1.7 3.0 5.4 2.3 2.4 2.4

Other liabilities 12.9 15.2 17.2 19.0 19.0 19.0 19.0

Liabilities 207.5 240.2 271.5 296.7 303.3 301.5 299.6

Total liabilities and shareholders' equity 294.4 345.0 401.3 458.5 477.1 482.2 487.8


Efficiency of Capital Employment

Operating Assets Turnover 0.1 x 0.1 x 0.1 x 0.1 x 0.2 x 0.2 x 0.2 x

Capital Employed Turnover 0.1 x 0.2 x 0.1 x 0.1 x 0.2 x 0.2 x 0.2 x

ROA 2.4 % 2.0 % 2.4 % 1.4 % 3.2 % 4.5 % 5.0 %

Return on Capital

ROCE (NOPAT) 4.4 % 4.4 % 4.7 % 3.0 % 4.7 % 5.9 % 6.6 %

ROE 7.6 % 6.1 % 6.8 % 3.8 % 7.5 % 9.2 % 9.2 %

Adj. ROE 7.6 % 6.1 % 6.8 % 3.8 % 7.5 % 9.2 % 9.2 %

Balance sheet quality

Net Debt 146.6 161.7 177.9 191.8 172.7 140.4 107.7

Net Financial Debt 146.6 161.7 177.9 191.8 172.7 140.4 107.7

Net Gearing 168.8 % 154.4 % 137.1 % 118.5 % 99.4 % 77.7 % 57.2 %

Net Fin. Debt / EBITDA 491.1 % 461.0 % 466.7 % 446.8 % 377.8 % 284.5 % 217.4 %

Book Value / Share 1.8 2.0 2.1 2.2 2.3 2.4 2.5

Book value per share ex intangibles 1.8 1.9 2.0 2.1 2.3 2.4 2.5

ROCE Development


Net debt in EUR m


Book Value per Share in EUR


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Consolidated cash flow statement In EUR m 2017 2018 2019 2020 2021e 2022e 2023e

Net income 6.0 5.9 7.9 5.6 11.7 15.3 15.9

Depreciation of fixed assets 17.3 19.8 22.8 26.3 25.4 25.4 25.4

Amortisation of goodwill 0.0 0.0 0.8 3.4 0.0 0.0 0.0

Amortisation of intangible assets 0.1 0.1 0.0 0.0 0.0 0.0 0.0

Increase/decrease in long-term provisions 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Other non-cash income and expenses 0.0 0.3 -0.1 0.6 0.0 0.0 0.0

Cash Flow before NWC change 23.3 26.1 31.4 35.9 37.0 40.6 41.3

Increase / decrease in inventory -1.2 0.7 -2.7 0.5 1.4 0.1 0.0

Increase / decrease in accounts receivable 0.5 0.8 -0.8 3.5 0.3 -0.1 -0.3

Increase / decrease in accounts payable -2.6 -5.0 1.1 -1.8 -3.1 0.1 0.0

Increase / decrease in other working capital positions 0.0 0.0 -1.1 -0.5 0.0 0.0 0.0

Increase / decrease in working capital (total) -3.3 -3.5 -3.6 1.7 -1.4 0.1 -0.3

Net cash provided by operating activities [1] 20.0 22.6 27.8 37.6 35.6 40.7 41.0

Investments in intangible assets 0.0 -0.4 -0.1 0.0 0.0 0.0 0.0

Investments in property, plant and equipment -2.8 -9.0 -13.4 -5.6 -16.9 0.0 0.0

Payments for acquisitions -9.6 -16.6 -12.5 -30.3 0.0 0.0 0.0

Financial investments 0.0 0.4 2.3 2.6 0.0 0.0 0.0

Income from asset disposals 0.8 0.4 0.3 1.3 0.0 0.0 0.0

Net cash provided by investing activities [2] -11.6 -26.1 -28.0 -37.2 -16.9 0.0 0.0

Change in financial liabilities -13.7 7.4 -7.2 -12.1 9.7 -1.9 -1.9

Dividends paid 0.0 -4.7 -5.9 -7.1 -7.6 -8.3 -8.3

Purchase of own shares 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Capital measures 9.8 16.9 23.2 23.2 7.9 0.0 0.0

Other -0.5 -0.7 -0.5 -1.3 0.0 0.0 0.0

Net cash provided by financing activities [3] -4.3 18.9 9.6 2.8 10.0 -10.3 -10.3

Change in liquid funds [1]+[2]+[3] 4.2 15.4 9.5 3.1 28.8 30.4 30.7

Effects of exchange-rate changes on cash 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Cash and cash equivalent at end of period 34.1 49.5 59.1 62.1 90.9 121.4 152.1


Cash Flow

FCF 17.3 13.2 14.3 31.9 18.8 40.7 41.0

Free Cash Flow / Sales 52.3 % 32.8 % 33.3 % 63.1 % 34.2 % 68.6 % 69.0 %

Free Cash Flow Potential 28.4 32.9 37.5 41.1 42.8 45.9 46.5

Free Cash Flow / Net Profit 289.6 % 227.7 % 181.9 % 608.0 % 161.0 % 266.8 % 257.5 %

Interest Received / Avg. Cash 3.1 % 0.3 % 1.3 % 1.6 % 0.7 % 0.5 % 0.0 %

Interest Paid / Avg. Debt 3.3 % 3.7 % 2.9 % 2.9 % 2.2 % 2.0 % 1.8 %

Management of Funds

Investment ratio 8.4 % 23.3 % 31.3 % 11.2 % 30.7 % 0.0 % 0.0 %

Maint. Capex / Sales 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 % 0.0 %

Capex / Dep 15.9 % 47.2 % 57.1 % 19.0 % 66.5 % 0.0 % 0.0 %

Avg. Working Capital / Sales -12.8 % -2.9 % 3.3 % 1.6 % -0.6 % 0.6 % 0.7 %

Trade Debtors / Trade Creditors 15.8 % 59.4 % 79.5 % 31.8 % 59.7 % 61.8 % 74.2 %

Inventory Turnover 0.0 x 0.0 x 0.0 x 0.0 x 0.0 x 0.0 x 0.0 x

Receivables collection period (days) 9 9 20 12 9 9 11

Payables payment period (days) n.a. n.a. n.a. n.a. n.a. n.a. n.a.

Cash conversion cycle (Days) n.a. n.a. n.a. n.a. n.a. n.a. n.a.

CAPEX and Cash Flow in EUR m


Free Cash Flow Generation


Working Capital


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LEGAL DISCLAIMER

This research report (“investment recommendation”) was prepared by the Warburg Research GmbH, a fully owned subsidiary of the M.M.Warburg &

CO (AG & Co.) KGaA and is passed on by the M.M.Warburg & CO (AG & Co.) KGaA. It is intended solely for the recipient and may not be passed on

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The valuation underlying the investment recommendation for the company analysed here is based on generally accepted and widely used methods of

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http://www.mmwarburg.de/disclaimer/disclaimer.htm#Valuation

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RESEARCH

SOURCES

All data and consensus estimates have been obtained from FactSet except where stated otherwise.

The Warburg ESG Risk Score is based on information © 2020 MSCI ESG Research LLC. Reproduced by permission. Although Warburg Research’s

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7C Solarparken


RESEARCH

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Reference in accordance with section 85 of the German Securities Trading Act (WpHG) and Art. 20 MAR regarding possible conflicts of interest with companies analysed:

-1- Warburg Research, or an affiliated company, or an employee of one of these companies responsible for the compilation of the research, hold

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-2-

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-7- The company preparing the analysis as well as its affiliated companies and employees have other important interests in relation to the

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This report has been made accessible to the company analysed.

Company Disclosure Link to the historical price targets and rating changes (last 12 months)

7C Solarparken 4, 5 http://www.mmwarburg.com/disclaimer/disclaimer_en/DE000A11QW68.htm

http://www.mmwarburg.com/disclaimer/disclaimer_en/DE000A11QW68.htm

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RESEARCH

INVESTMENT RECOMMENDATION

Investment recommendation: expected direction of the share price development of the financial instrument up to the given price target in the opinion of

the analyst who covers this financial instrument.

-B- Buy: The price of the analysed financial instrument is expected to rise over the next 12 months.

-H- Hold: The price of the analysed financial instrument is expected to remain mostly flat over the next 12

months.

-S- Sell: The price of the analysed financial instrument is expected to fall over the next 12 months.

“-“ Rating suspended: The available information currently does not permit an evaluation of the company.

WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING

Rating Number of stocks % of Universe

Buy 135 65

Hold 62 30

Sell 5 2

Rating suspended 5 2

Total 207 100

WARBURG RESEARCH GMBH – ANALYSED RESEARCH UNIVERSE BY RATING …

… taking into account only those companies which were provided with major investment services in the last twelve months.

Rating Number of stocks % of Universe

Buy 38 79

Hold 7 15

Sell 0 0

Rating suspended 3 6

Total 48 100

PRICE AND RATING HISTORY 7C SOLARPARKEN AS OF 09.04.2021

Markings in the chart show rating changes by Warburg Research

GmbH in the last 12 months. Every marking details the date and

closing price on the day of the rating change.

7C Solarparken


RESEARCH

EQUITIES Matthias Rode +49 40 3282-2678 Head of Equities [email protected] RESEARCH Michael Heider +49 40 309537-280 Philipp Kaiser +49 40 309537-260 Head of Research [email protected] Real Estate [email protected]

Henner Rüschmeier +49 40 309537-270 Thilo Kleibauer +49 40 309537-257 Head of Research [email protected] Retail, Consumer Goods [email protected]

Stefan Augustin +49 40 309537-168 Eggert Kuls +49 40 309537-256 Cap. Goods, Engineering [email protected] Engineering [email protected]

Jan Bauer +49 40 309537-155 Andreas Pläsier +49 40 309537-246 Renewables [email protected] Banks, Financial Services [email protected]

Jonas Blum +49 40 309537-240 Malte Schaumann +49 40 309537-170 Telco, Media, Construction [email protected] Technology [email protected]

Christian Cohrs +49 40 309537-175 Oliver Schwarz +49 40 309537-250 Industrials & Transportation [email protected] Chemicals, Agriculture [email protected]

Dr. Christian Ehmann +49 40 309537-167 Simon Stippig +49 40 309537-265 BioTech, Life Science [email protected] Real Estate [email protected]

Felix Ellmann +49 40 309537-120 Cansu Tatar +49 40 309537-248 Software, IT [email protected] Cap. Goods, Engineering [email protected]

Jörg Philipp Frey +49 40 309537-258 Marc-René Tonn +49 40 309537-259 Retail, Consumer Goods [email protected] Automobiles, Car Suppliers [email protected]

Marius Fuhrberg +49 40 309537-185 Robert-Jan van der Horst +49 40 309537-290 Financial Services [email protected] Technology [email protected]

Mustafa Hidir +49 40 309537-230 Andreas Wolf +49 40 309537-140 Automobiles, Car Suppliers [email protected] Software, IT [email protected]

Ulrich Huwald +49 40 309537-255 Health Care, Pharma [email protected]

INSTITUTIONAL EQUITY SALES Marc Niemann +49 40 3282-2660 Maximilian Martin +49 69 5050-7413 Head of Equity Sales, Germany [email protected] Austria, Poland [email protected]

Klaus Schilling +49 40 3282-2664 Christopher Seedorf +49 69 5050-7414 Head of Equity Sales, Germany [email protected] Switzerland [email protected]

Tim Beckmann +49 40 3282-2665 United Kingdom [email protected]

Lea Bogdanova +49 69 5050-7411 United Kingdom, Ireland [email protected]

Jens Buchmüller +49 69 5050-7415 Scandinavia, Austria [email protected]

Alexander Eschweiler +49 40 3282-2669 Sophie Hauer +49 69 5050-7417 Germany, Luxembourg [email protected] Roadshow/Marketing [email protected]

Matthias Fritsch +49 40 3282-2696 Juliane Niemann +49 40 3282-2694 United Kingdom [email protected] Roadshow/Marketing [email protected]

SALES TRADING Oliver Merckel +49 40 3282-2634 Marcel Magiera +49 40 3282-2662 Head of Sales Trading [email protected] Sales Trading [email protected] Elyaz Dust +49 40 3282-2702 Bastian Quast +49 40 3282-2701 Sales Trading [email protected] Sales Trading [email protected] Michael Ilgenstein +49 40 3282-2700 Jörg Treptow +49 40 3282-2658 Sales Trading [email protected] Sales Trading [email protected] MACRO RESEARCH Carsten Klude +49 40 3282-2572 Dr. Christian Jasperneite +49 40 3282-2439 Macro Research [email protected] Investment Strategy [email protected] Our research can be found under: Warburg Research http://research.mmwarburg.com/en/index.html Thomson Reuters www.thomsonreuters.com Bloomberg RESP MMWA GO Capital IQ www.capitaliq.com FactSet www.factset.com For access please contact:

Andrea Schaper +49 40 3282-2632 Kerstin Muthig +49 40 3282-2703 Sales Assistance [email protected] Sales Assistance [email protected]

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