Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q2 FY2014 Earnings Presentation
31 slides from Suzlon Energy's earnings presentation, Oct 30, 2013
Slide 1: Suzlon Energy Limited Q2 FY14 Earnings Presentation
Suzlon Energy Limited Q2 FY14 Earnings Presentation 30th October 2013 Thornton Bank Offshore Wind Farm, Belgium 1 www.suzlon.com
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 do not constitute any offer, recommendation or invitation to purchase or subscribe for any securi
Slide 3: Second Quarter Takeaways – Q2 FY14
Second Quarter Takeaways – Q2 FY14 Suzlon wind farm in Kutch, India 3 www.suzlon.com
Slide 4: Key highlights – 2Q FY14
Key highlights – 2Q FY14 Operations: • Total revenues at Rs 4,769 Crs in Q2 FY14; 23.8% QoQ growth – Suzlon wind volumes @ 220 MW; First half volumes at @ 440 MW • Group EBITDA excluding FX positive @ Rs 39 Crs • Order inflow of 395 MW in 2Q; aggregating to order inflow of 751 MW in H1 • Launched 3.
Slide 5: Operation ramp up at Suzlon Wind
Operation ramp up at Suzlon Wind: Constrained liquidity Focus on Liability Volume ramp up Management MW sold +32% +46% 219 220 167 FY14 & 150 Beyond 16 -77 1Q ’13 2Q ’13 3Q ’13 4Q ’13 1Q ’14 2Q ’14 - $360mn FCCB - FCCB extension failed - Completed CDR process in Apr’13 payment - Filed for CDR - Exec
Slide 6: China JV – Meets dual objective
China JV – Meets dual objective Deal Overview Benefits • Monetization Regaining foothold in China — Divested 75% in the China based — China is the largest wind market in the world manufacturing facility — Maintaining a presence in the market is of — Total realization - $28M (Rs. ~173 crs) strategi
Slide 7: First order in Uruguay market – 65 MW
First order in Uruguay market – 65 MW High Potential Market Suzlon Presence Wind Market Outlook (MW) +110% Entered Uruguay with a marquee order 440 — Won its first order for 65 MW 265 210 — 31 units of S9X turbines — Responsible for full EPC scope 10 2 — Scheduled to be completed in Sep 2014 2011
Slide 8: 3.0M122 – Product for low wind sites
3.0M 122 –Product for low wind sites Moving proven 3MW into 60Hz markets 3.0M122 for Class III: Lower Wind Sites Key Features Launched 60 Hz variant for Canada market; Brings successful 3XM platform to North America, built on proven 50Hz design, having sold over 250 turbines since launch Cold cl
Slide 9: Business Performance
Business Performance Suzlon wind farm in Minnesota, USA 9 www.suzlon.com
Slide 10: Q2 FY14 Group financial snapshot
Q2 FY14 Group financial snapshot Rs Crs Particulars Q2 FY14 Q2 FY13 Q1 FY14 H1 FY14 H1 FY13 FY13 FY12 Revenue 4,769 5,702 3,851 8,621 10,449 18,743 21,082 EBITDA (before FX loss) 39 -108 -147 -108 -274 -990 1,880 EBITDA -31 -132 -302 -333 -390 -1,296 1,821 EBIT -229 -300 -482 -711 -735 -2,037 1,160
Slide 11: Moving towards positive EBITDA
Moving towards positive EBITDA Revenue (Rs. Crs) +24% 5,702 4,769 4,014 4,281 3,851 Improvement supported by: Improving contribution margins Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 — Geographic sales mix EBITDA before FX loss (Rs. Crs) — Continuous focus on cost 39 reduction Reducing fixed cost
Slide 12: REpower: Performance on track
REpower : Performance on track REpower revenues* (€M) Highlights of 1H FY14 Performance on track despite adverse market 1,158 dynamics ― Decline in revenues mainly due to lower demand in US and lumpy execution cycle in offshore ― H1 FY14 offshore revenues at €56m 721 Substantial progress made on
Slide 13: Service Business: Growing revenues with stable margins
Service Business: Growing revenues with stable margins Revenues (Rs. Crs)* +49% Key Highlights 1,312 880 672 • H1 FY14 OMS revenue at ~Rs. 1,312 crs 667 505 384 — ~50% YoY growth 640 283 375 H1 FY12 H1 FY13 H1 FY14 • High growth with stable and consistent *External only Suzlon REpower margins Servic
Slide 14: Robust order book position
Robust order book position Total value of US$7.1 bn Order book by geography – US$7.1bn RoW Series LatAm • Order book at ~5.1 GW 6% Australia 4% 3% France 1% • Order book value: US$ 7.1bn 6% Germany 40% UK 7% - Onshore markets: Belgium 5% • Emerging : ~US$1.4bn (India, Brazil, Uruguay and 13% South A
Slide 15: Project Transformation Update
Project Transformation Update Suzlon wind farm in Penamacor, Portugal 15 www.suzlon.com
Slide 16: Right-sizing across verticals continued in Q2 FY14
Right-sizing across verticals continued in Q2 FY14 Employee Headcount Suzlon* REpower* *Ex REpower *Permanent 2,000+ 221^ -18% -7% 54^ 11,093 778 3,316 391 -2% -9% 3,095 -5% 3,041 9,050 8,272 7,881 2,795 Mar 12 Mar 13 Jun 13 Sep 13 Mar 12 Mar 13 Jun 13 Sep 13 Headcount reduced by ~1,200 in H1, ove
Slide 17: Further reduction in fixed costs achieved
Further reduction in fixed costs achieved Consolidated operating expenses* (Rs. Crs) 1,097 1,090 1,100 Key actions taken: • Stringent cost control measures in place -38% • Rationalizing travel and consulting 758 expenses 709 747 759 684 • Rationalized office and factory space 539 443 Plan for furthe
Slide 18: Continuing to optimize Working Capital ratio
Continuing to optimize Working Capital ratio Net Working Capital Ratio* Key actions underway: 23.9% 23.8% • Leaner inventory cycle • Make vs Buy analysis • Controlled procurement 13.6% • Focus on realizations 11.4% 9.9% • Project prioritization, better receivables management • Expediting order execu
Slide 19: Comprehensive Liability Management Update
Comprehensive Liability Management Update Suzlon wind farm in Rajasthan, India 19 www.suzlon.com
Slide 20: Liability Management in place
Liability Management in place CDR: Back-ended maturity profile & Interest Rate reduced to 11%… CDR* Credit enhanced Bonds / FX Loans Debt Under CDR Pre-Restructuring Mn USD 818 246 258 206 Liability Credit 146 118 Management Enhanced Bond 0 H2FY13 FY14 FY15 FY16 FY17 FY18 Beyond Post-Restructuring 7
Slide 21: FCCB: Status update
FCCB: Status update • Paid the first tranche of FCCBs of $360mn in July 2012 after 45 days extension • Prior to maturity had officially sought four months extension for October series with intention to meet our obligations in their entirety - Extension did not achieve required super-majority, result
Slide 22: FCCBs: Status update
FCCBs: Status update Outstanding Conversion Coupon Maturity value with FCCBs Maturity date amount (US$ mn) price (Rs) rate redemption premium October 2012 – Old 121.4 97.26 October 2012 0% 144.88% October 2012 – 20.8 76.68 October 2012 7.5% 157.72% Exchange July 2014 – New 90.0 90.38 July 2014 0% 13
Slide 23: Equity base evolution since March 13
Equity base evolution since March 13 Issuance to CDR Lenders – Rs 820 Crs Promoters & others – Rs 225 Crs Current Share base breakup Following cumulative obligations were • Rs 22 Crs in Apr 13* converted to equity pursuant to CDR scheme • Rs. 103 crs conversion in Oct 13 • Rs 423 Crs in April 13 • R
Slide 24: Key Priorities for FY14
Key Priorities for FY14 Suzlon Manufacturing unit in Dhule, India 24 www.suzlon.com
Slide 25: FY14 priorities
FY14 priorities Asset light / Debt light Products / Orders Asset sales Continued R&D focus to optimize yield and reduce cost of energy • ~$400mn targeted from non-critical assets • Launched 3.0M122 for low wind sites in developed Strategic market Working capital optimization Investing in pro
Slide 26: Detailed Financials – Q2 FY14
Detailed Financials – Q2 FY14 Manufacturing unit in Daman, India 26 www.suzlon.com
Slide 27: Consolidated financial results
Consolidated financial results Rs Crs. Q2 FY14 Q2 FY13 Q1 FY14 H1 FY14 H1 FY13 FY13 FY 12 Particulars Unaudited Unaudited Unaudited Unaudited Unaudited Audited Audited Revenue from operations 4,769 5,702 3,851 8621 10449 18,743 21,082 Less: COGS -3,533 -4,226 -2,731 -6264 -7781 -13,640 -14,074 Gross
Slide 28: Consolidated net working capital
Consolidated net working capital Rs Crs As on As on As on As on As on As on As on Particulars 30th 30th 31st 31st 30th 30th 31st Sept’13 June’13 Mar ’13 Dec ‘12 Sept’12 June’12 Mar’12 Inventories 5,274 5,386 5,264 5,928 5,421 5,960 5,580 Trade receivables 5,889 5,759 6,382 6,990 8,584 8,265 8,201 Sh
Slide 29: Financial leverage
Financial leverage(a) As on (Rs. Crs) Debt type Sept 13 Jun 13 Mar 13 Dec 12 Sep 12 Jun 12 Mar 12 Suzlon Wind Debt FX loans* 4,050 3,843 3,513 3,555 3,475 2,053 1,920 FCCBs 2,549 2,418 2,211 2,239 2,152 3,641 3,327 W.Cap, Capex and 9,541 9,218 8,701 8,383 8097 7,783 7,895 other loans Gross debt (A)
Slide 30: Suzlon Consolidated Balance sheet
Suzlon Consolidated Balance sheet (As per new Schedule VI format) Rs Crs. Liabilities Sep’13 Mar’13 Assets Sep’13 Mar’13 Shareholders' Fund Non Current Assets a)Share Capital 432 355 b) Reserves and Surplus 495 -35 a) Fixed Assets 14,516 12,382 928 320 b) Non Current Investments 88 36 Share applicat
Slide 31: Thank you
Thank you Suzlon wind farm in Paracuru, Brazil 31 www.suzlon.com