Specialist
Former manager at GETEC Group
Agenda
- Competitive landscape, extent of fragmentation and consolidation scenarios
- Portfolio outline including CHP (combined heat and power), power-to-heat and decentralised energy
- Expansion opportunities across regions and technologies
- Potential service contract risks and post-carve-out key person risks
Questions
1.
Could you outline Getec’s business lines and competencies? What projects does it perform?
2.
Could you estimate the revenue contribution of Getec’s business units?
3.
Are there any meaningful synergies across Getec’s businesses or are they all run relatively separately?
4.
Does Getec have any IP in the contracting division across the architect designs or products it owns? Is this more of a project management business where it outsources the IP?
5.
Are there any meaningful differences in the margin and revenue profile depending on whether a contracting project is CHP [combined heat and power], power-to-heat, decentralised power or hydrogen? Does the profile depend on the technology used or is it quite constant?
6.
Does country-specific legislation impact Getec’s margin profile?
7.
Does Getec’s contract business generate margin during the maintenance and operation phase or design and building? Does the company realise recurring revenue where it wins new designs from the same customer, or is the recurring component only in the maintenance and operation?
8.
What’s the risk of losing a maintenance and operation contract to a competitor? Could Getec only do the design and build?
9.
Could you estimate churn to third-party businesses in the maintenance segment?
10.
Can a customer exit a contract before the agreed duration?
11.
Do customers ever pay the break clause? Is it ever economically beneficial for them to do so?
12.
How sticky are Getec’s industrial chemical park customers? What’s the risk of losing those customers?
13.
What pricing power does Getec have with the chemical park customers? Could it increase prices, given the customers are very sticky? Is the company quite keen to win new business, leading it to keep prices relatively stable?
14.
Where do you think are the growth opportunities within Getec’s industrial parks business?
15.
How large are the growth opportunities within the contracting business, given the several types of projects opening up amid the renewable energy transition? Where should Getec focus its attention?
16.
What growth rate do you think Getec can achieve over the next 3-5 years across it divisions? How much could it grow the top line?
17.
Do you think growth is becoming easier or harder for Getec? We’ve touched on the types of projects available, but also the competition in this market.
18.
How easy is it for a new competitor to enter the market? What competencies do they need to do this?
19.
Could you describe the impact of new entrants on the market? Are those players capturing significant market share and coming in at lower prices?
20.
Do you think a customer would rather work with a traditional energy company such as Vattenfall and Eon or a business such as Getec?
21.
How much market share are you expecting Vattenfall and Eon to gain over Getec in the next 3-5 years?
22.
Could you estimate the portion of the customer base within the contracting business that is insourcing vs outsourcing? How is this developing?
23.
How is Getec’s hit rate evolving? Would you say it is declining meaningfully?
24.
Do you think market growth will be large enough that the increase in competition will have a smaller impact on Getec, because the overall opportunity will grow in an outsized way? Could the company’s opportunities shrink if competition increases and insourcing remains high, meaning it struggles to win new business? How do you balance these two elements?
25.
Do you expect a significant amount of Getec’s business to roll off-contract and be won by Vattenfall or Eon, given the company’s age? You mentioned that the contracts are 5-50 years’ long, meaning the lock-in is quite high.
26.
Do you expect Getec to renegotiate contract pricing to retain ownership over maintenance and operation?
27.
Do you think Getec’s management team and culture is well-set-up to deal with the strong challenges, large competitors and big growth opportunities before the business?
28.
How could the management and cultural factors you discussed play out with the unique challenges facing Getec? How do you assess the importance of lateral thinking vs the high levels of drive and execution?
29.
Do you think Getec is missing out on international growth opportunities due to the German focus?
30.
How do you assess Getec’s opportunities in real estate and energy efficiency consultancy? We’ve talked almost exclusively about the contracting, which has increasing competitive pressures but big growth options, and the industry parks, which is a stable business that is hard to grow without significant capital.
31.
Would you say Getec’s consultancy team is particularly strong? Does it have any IP within the team? This segment seems predominantly driven by culture and the individuals working for it, as well as getting the right charge-out rates.
32.
Do you have any closing remarks on Getec? How do you expect the business to evolve in the next couple of years?
