Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — FY2016 Earnings Presentation
48 slides from Suzlon Energy's earnings presentation, May 30, 2016
Slide 1: Suzlon Energy Limited FY16 Earnings Presentation
Suzlon Energy Limited FY16 Earnings Presentation 30th May 2016
Slide 2: Disclaimer
Disclaimer • This presentation and the accompanying slides (the “Presentation”), which have been prepared by Suzlon Energy Limited (the “Company”), have been prepared solely for information purposes and DOES not constitute any offer, recommendation or invitation to purchase or subscribe for any secu
Slide 3: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 3
Slide 4: Sustainable Turnaround Achieved
Sustainable Turnaround Achieved • Tighter control on NWC and Fixed Cost • Strategic initiatives to address debt Back to Profitability • Interest optimization • Execution focus • Strong risk management Technology & Service • Focus on reducing LCOE • Offering best in class service Customer Focus Conso
Slide 5: FY16 Performance Highlights
FY16 Performance Highlights 1,131 MW Rs. 8,259 Crs Rs. 1,295 Crs 149% y-o-y 69% y-o-y Margin 15.7% Volume Revenues EBITDA(2) Rs. 212 Crs Rs. 1,096 Crs Rs. 6,767 Crs +2,180 Crs y-o-y (41%) y-o-y 31st March (y-o-y) Cash Profit(3) Net Interest Net Debt Reduction Note: (1) All Information pertains to Su
Slide 6: Q4 FY16 Performance Highlights
Q4 FY16 Performance Highlights Key Takeaways Quarterly Trend Volume (MW) and Growth (%) +73% +11% +13% 443 MW – Sales Volume; 227 256 443 205 Normalized EBITDA (Rs. Crs.) & Margins (%) 1,243 MW – Order Book 487 318 336 237 15% 18% 18% 15% 15.0% - Normalized EBITDA Margin Normalized EBIT (Rs. C
Slide 7: Strong Volume Ramp-Up
Strong Volume Ramp-Up Fig. in MW India State Wise Commissioning Break-up Deliveries Commissioning (India) Others MH 7% AP 2.5x 2.0x 5% 23% TL 1,131 900 9% 21 11% GJ 442 454 1,110 31% 95 14% RJ 359 MP FY15 FY16 FY15 FY16 FY16 New Product Share – 32% (288 MW) Overseas Domestic (S97-120, S111-90, S111-
Slide 8: Efficient NWC Despite Higher Volume
Efficient NWC Despite Higher Volume Consolidated Net Working Capital Despite 73% volume increase QoQ Working Capital Days Full Year Q4 Annualized 8+% reduction (On Revenue) FY16 (Q4 FY16 X 4) ~23% Inventory ~110 Days 72 Days Debtors ~116 Days 76 Days ~ 14% Rs. 1,441 crs Creditors ~121 Days 79 Days R
Slide 9: Net Working Capital Bridge
Net Working Capital Bridge Consolidated Net Working Capital (Rs. Crs.) Due to high volumes in Q4 (~39% of full year volumes) Due to strong order inflow 477 655 1,441 318 Partially already recovered in 1,214 87 April & May 2016 Dec’15 Debtors Creditors Customer Advance Others Mar’16 9
Slide 10: Stable Service Business
Stable Service Business External Service Revenues (Rs. Crs.) Growing into a sizeable & highly profitable business ― ~18% revenue share in FY16 Annuity like business ― Non cyclical business in nature 1,355 1,454 1,474 ― Steady cash flow generation 100% renewal track record in India FY14 FY15 FY
Slide 11: Global Cumulative Installations Cross 15GW
Global Cumulative Installations Cross 15GW World Wide Asia Europe As on 31st March 2016 10,477 Spain (Figures in MW) N. America 2,716 233 S. America 869 Turkey 109 Australia 764 Portugal 103 Europe 508 Others 63 Africa 139 Total 508 Total 15,473 Turkey China N. America USA 2,685 Portugal & Spain Can
Slide 12: Provision Policy
Provision Policy Suzlon Guarantee and Warranty Provisions Accounting Policy: (Average calculated as % of Revenue) ― Comprise of provisions created against guarantee and warranty issued in connection with WTG sale 3.5% Created when revenue from sale of wind turbine is recognized 3.3% 2.6% ― Provi
Slide 13: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 13
Slide 14: Order Intake Up 3 Fold
Order Intake Up 3 Fold Order Intake Product Mix: New Products gaining share Existing Products (Fig. in MW) 31% 3.3x 69% 1,251 New Products (S97-120, S111-90) Customer Mix: IPP continue to dominate Others 375 17% 14% PSU 68% FY15 FY16 IPP Traction across customer segments and for new technology 14
Slide 15: Strong Wind Order Backlog
Strong Wind Order Backlog Order Book (Fig. in MW) Higher share of newer products Rs. 6.43 crs Rs. 6.16 crs (Avg. Per MW) (Avg. Per MW) 790 -443 Rs. 7,989 crs Rs. 5,527 crs 1,243 9% PSU 897 89% IPP Dec’15 Net Intake Q4 Sales Volume Mar’16 Backlog for Service, SE Forge and Solar is over and above Firm
Slide 16: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 16
Slide 17: Solar Foray: Turnkey Solution Provider
Solar Foray: Turnkey Solution Provider Demonstrated Capabilities in Renewables 1 STRONG BRAND IN PAN-INDIA PRESENCE 1700+ CUSTOMER LEADER FOR 20 YEARS IN RENEWABLE SPACE ACROSS 9 STATES IN INDIA RELATIONSHIPS INDIA MARKET (IPP + PSU + SME) Presence Across Value Chain, A Key Advantage End-to-End Expe
Slide 18: Solar Foray: Value Chain Presence
Solar Foray: Value Chain Presence Asset Light Approach; No in-house manufacturing OEM Vendors ― Equipment Supply outsourced to OEM vendors Turnkey Solution to Customers ― Site Identification ― Technology Designing & Selection ― EPC (Construction for Solar Parks) ― System integration Customers
Slide 19: Solar Foray: Business Model
Solar Foray: Business Model Business Model Direct Bidding Turnkey & EPC solution for + IPP/Corporate/PSU In-house Turnkey Construction To establish track record in solar Similar to our wind business 280 MW PPA won and signed Focus to increase post initial track To be divested in full recor
Slide 20: Solar Foray: Details of Solar Projects Won
Solar Foray: Details of Solar Projects Won # of Cumulative Tariff State Counter Party Status Projects Size (MW) (~Rs/unit) Telangana 6 210 MW 5.58 TSSPDCL PPA Signed 4.43 + Maharashtra 1 70 MW SECI PPA Signed VGF Rs. 54 Lacs Total 7 280 MW 5.38 Rationale Bidding ― Not participating in aggressive b
Slide 21: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 21
Slide 22: Debt Profile
Debt Profile (As on 31st Mar 2016) Consol. Debt (Excluding FCCBs) 5 Year’s Maturity Profile (excluding FCCBs) Rupee Term Debt (A) Rs. 3,033 crs For FX Term Debt (US$ Mn) 657 * Credit Enhanced Debt US$ 647 M* Rs. 4,287 crs 11 11 (SBLC Backed) 9 7 Others US$ 54 M Rs. 361 crs FY17 FY18 FY19 FY20 FY21 F
Slide 23: Debt Profile Optimized
Debt Profile Optimized Out of $647M @ 5% SBLC backed Bonds ― $590.4M of these bonds now stand redeemed ― New loan of $590.4M raised @3.3%; ― Backed by the same SBLC Loan and SBLC has a current bullet maturity of March 2018 SBLC has been agreed to be extended to March 2023; subject to procedura
Slide 24: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview FCCB Principal Value (US$ M) 547 Current and Diluted No. of Shares (Crs) Current Outstanding 502 298 Pending Conversion 97 249 Post Full Conversion 599 Conversion Details Price (Per Share) Rs. 15.46 July’14 Conversions til date Current Exchange Rate Rs. 60.225 Upon con
Slide 25: Net Interest Cost
Net Interest Cost Y-o-Y Net Interest (Rs. Crs.) -41% -43% 1,868 501 1,096 287 (1) (1) (2) (2) FY15 FY16 Q4 FY15 Q4 FY16 Significant savings in interest cost achieved Note: (1) FY15 / FY16 and Q4 FY15 information pertains to Suzlon Wind + SE Forge; 25 (2) Q4 FY16 information pertains to Consolidated
Slide 26: Outlook with Financial Institutions Improving
Outlook with Financial Institutions Improving Strong confidence of Lenders ― Reduced debt ― Improved liquidity position Suzlon & Domestic Subsidiaries CARE Rating ― Turnaround in operations (other than SE Forge) ― Robust industry outlook Long Term Facilities BBB- Short Term Facilities A3 Additio
Slide 27: Substantial Financial Backing for Growth
Substantial Financial Backing for Growth Domestic Working Capital Facilities (Rs. Crs.) Fund Based Non Fund Based 3,950 11,344 800 2,908 3,150 2,367 192 2,175 5,027 1,916 8,436 3,111 Existing From Banks Through DSA Total Available Additional Limits Available Strong working capital lines available 27
Slide 28: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 28
Slide 29: S111: Moving Towards Bigger Turbines and Better Yields
S111: Moving Towards Bigger Turbines and Better Yields 2MW Series Evolution Higher energy yield Lower cost of energy Higher returns ~65% Increase in Energy Yield S88-80 S9X-90 S97-120 S111-90 S111-120 5.5 GW >1.8 GW >800 MW sold >300 MW sold Prototype Installed till date Installed till date ~325 MW
Slide 30: Hybrid Tower: First of its Kind
Hybrid Tower: First of its Kind Hybrid Tower: Combination of Lattice And Tubular Higher hub height (120 M) at optimized cost ― Reduced LOCE due to higher AEP ― Reduced steel requirement ― Lower foundation cost ― Logistic friendly – access to sites that were earlier logistically challenging Avail
Slide 31: Strong In-House R&D Capabilities
Strong In-House R&D Capabilities 15+ Years of Global R&D Set-up Annual R&D Spend 350+ R&D Experience ~2% of Revenue Employee strength Country Activities Key R&D Focus Areas: • Product Development & System Integration • Drive Train Technology • Design & Product Engineering New Product Development •
Slide 32: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 32
Slide 33: Globally Renewables are Preferred
Globally Renewables are Preferred Record Clean Energy Investments Despite Fuel Price Crash Global Clean Energy Investment Trend Majority of Investments came from emerging market (US$ bn) Increasing pie in generation mix ― Capacity Added in 2015 318 297 316 329 274 272 Wind (64 GW) Solar (57
Slide 34: India: Huge Focus on Renewables
India: Huge Focus on Renewables Government Target : 2022 Policy (GW) RE eligible investment under CSR Proposed amendment in EA 2003; RE Act; Recent supreme court 175 judgment to lead to RGO and better RPO compliance 15 Other CERC finalized forecasting & scheduling of wind projects for inter-st
Slide 35: Highest Annual Capacity Addition in Decades
Highest Annual Capacity Addition in 2 Decades India Commissioning Volumes (MW) +26% 4,300 +48% 3,415 3,179 -19% 900 1,161 2,312 2,077 442 1,721 403 415 2,515 2,018 1,870 1,674 1,306 FY12A FY13A FY14A FY15A FY16A FY17E* Suzlon Others *FY17 E – Source: Internal Estimates Suzlon regaining market share
Slide 36: State Wise FiT and RPO Details
State Wise FiT and RPO Details Non AD Tariff (Rs./Unit) RPO Target (Non Solar) FY17 FY16 FY17 FY16 TN 4.16 3.96 9.00% 9.00% KN 4.50 4.50 11.00% 10.00% GJ 4.68* 4.15 8.25% 7.00% MP 4.78 5.92 6.50% 6.00% AP 4.84 4.83 4.75% 4.75% MH 5.56-3.82 5.71-3.92 10.00% 8.50% RJ 6.04*-5.76* 5.74-6.02 8.90% 8.20%
Slide 37: US Wind Market: Multi Year PTC Extension
US Wind Market: Multi Year PTC Extension Typically a Boom & Bust Market Due to PTC Uncertainty Boom in years PTC was scheduled to expire Capacity Addition (GW) Extended till 2012 Extended till 2015 Suzlon Strengths in USA 12.9 9.9 8.5 ~15 Years of Strong Presence 5.6 6.7 4.8 1.1 ~2.7 GW of Cumul
Slide 38: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 38
Slide 39: Strengthened Management Team
Strengthened Management Team Kirti Vagadia Group CFO Since Inception Vinod Tanti COO Founding Member Tulsi Tanti J.P.Chalasani CMD Group CEO Founder DOJ – 2016 Rakesh Sarin CEO – Intl. Business DOJ – 2016 & Global Service Duncan Koerbel CTO DOJ - 2008 39
Slide 40: Team Details
Team Details Brief Biography Key Roles and Responsibility • Total Experience: >30 years • Founder of India’s largest renewable • Group Strategy and Vision Tulsi Tanti, company • Product & Technology Strategy CMD • Conceptualized “end-to-end” solution model in wind • Stakeholder Relationship • Total
Slide 41: Team Details
Team Details Brief Biography Key Roles and Responsibility • Total Experience: >30 years • Core Expertise • Supply Chain Management Vinod Tanti, ‒ Project planning, wind mapping and • Project Execution COO – SWIL micro-siting • Global QSHE • Focuses on deriving synergy within & between value chain co
Slide 42: Contents
Contents Business Performance Order Book Solar Vertical Debt Overview Technology Update Industry Opportunity Leadership Team Detailed Financials 42
Slide 43: Income Statement
Income Statement Q4 FY16 Q3 FY16 Q4 FY15 FY16 FY15 Fig. in Rs. Crs. (Consol) (Consol) (Wind) (Wind) (Wind) Revenue from operations 3,244 1,889 926 8,259 4,883 Less: COGS 2,077 1,026 662 4,881 3,138 Gross Profit 1,168 864 264 3,378 1,745 Margin % 36.0% 45.7% 28.5% 40.9% 35.7% Employee benefits expens
Slide 44: Exceptional Items
Exceptional Items Particulars Amount Explanation Foreign Currency Translation Reserve (FCTR) was getting accumulated in reserve and surplus Release of FCTR allowed only on loss of control on Senvion Transaction Related +ve Rs. 1,322crs subsidiary Loss of control was established upon sale of Senvion
Slide 45: Consolidated Working Capital
Consolidated Working Capital Rs Crs. Fig. in Rs. Crs. 31st Mar’16 31st Dec’15 30th Sep’15 30th Jun’15 Inventories 2,565 2,523 2,088 1,786 Trade receivables 2,697 2,042 2,030 1,692 Loans & Advances and Others 1,535 1,709 1,679 1,640 Total (A) 6,797 6,274 5,797 5,118 Sundry Creditors 2,805 2,328 2,447
Slide 46: Reported Income Statement (As per Regulation 33)
Reported Income Statement (As per Regulation 33) Fig. in Rs. Crs. Q4 FY16 Q3 FY16 Q4 FY15 FY16 FY15 Revenue from operations 3,244 1,889 4,909 9,508 19,837 Less: COGS 2,077 1,026 3,494 5,604 13,619 Gross Profit 1,168 864 1,414 3,904 6,218 Margin % 36.0% 45.7% 28.8% 41.1% 31.3% Employee benefits expen
Slide 47: Consolidated Balance Sheet (As per Regulation 33)
Consolidated Balance Sheet (As per Regulation 33) (Fig. in Rs. Crs.) Liabilities Mar-16 Mar-15 Assets Mar-16 Mar-15 Shareholders' Fund -7,083 -7,322 Non Current Assets Preference Shares 3 6 a) Fixed Assets 1,925 6,200 Minority Interest 3 64 b) Non Current Investments 45 15 -7,077 -7,253 c) Long Term
Slide 48: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 48