Now that it is clear that Europe has made the political choice of the electric vehicle for its mobility from the next decade, we will have to work hard to adapt the infrastructures. Year after year, car manufacturers and their suppliers have begun to change. Energeticians are also getting involved. But there are few truly specialized players in the field of charging who are both mature and capable of carrying out complex projects. Which makes Alfen a unique company, in more ways than one.
To begin with, it is important to point out that the Dutch company was created in 1937 and that it was already working, in its early years, in the field of electrical equipment. A few thousand transformers later, Alfen launched an offer of charging stations for electric vehicles in 2008, then, in 2018, a mobile energy storage system. In March 2020, the company claimed 100,000 electric charging stations installed. It therefore has a long history and proven technologies, which it has been able to adapt over time to reorient itself on the most buoyant markets.
Alfen is still heavily exposed to the Netherlands, where it generates around 60% of its revenue. The remaining 40% is spread across the rest of Europe. The most dynamic branch is that of charging stations for electric vehicles, whose turnover doubled last year and which now accounts for 42% of activity. Solutions for smart grids, which are an extension of the historical activity, still generate 50% of revenues but their lower growth rate means that they will be overtaken this year by charging stations. The third branch of activity, energy storage, represents only 7% of the total, but it is easy to understand that it is a pole of the future, complementary to the other two.
A look at the financial ratios shows that Alfen is a “fashionable” value. In other words, investors are ready to pay quite a high price for their place in the capital: 60 times the expected results this year. To give an idea, the current median of the European market is 16 times and the major energy network players, such as Schneider or ABB, are valued at 18 to 20 times the expected profits for the current year. This fashion effect makes the company’s stock quite volatile. This does not prevent management from rolling out its development program by improving profitability. The operating margin increased from 1% in 2018, the year of the IPO, to 11% in 2021. It should continue its gradual ascent. Admittedly, not in the same proportions, but with great regularity.
On the balance sheet side, Alfen is not indebted and its cash generation is on an upward trend, which should enable it to meet the looming European demand. The electric vehicle charging market is expected to grow by 25 to 30% per year over the next ten years. In other words, it’s the right place at the right time to be the only truly integrated player in the specialty.
In order for the story not to be too good to be true, there are also headwinds to be cited – beyond the aforementioned rarity price. Alfen is relatively small (2.5 billion euros in market capitalization). On its original business and more broadly on the material part, the group rubs shoulders with sacred customers. Schneider for example, already mentioned above. Moreover, the other side of the coin of the strong growth of the sector is the arrival of many competitors, even if the seriousness of a certain number of them is debatable. But despite these elements, Alfen has a good head start on this solid and sustainable theme of the electrification of mobility.