Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — H1 FY2013 Earnings Presentation
39 slides from Suzlon Energy's earnings presentation, Nov 9, 2012
Slide 1: Suzlon Energy Limited H1FY13 earnings presentation
Suzlon Energy Limited H1FY13 earnings presentation 09 November, 2012 REpower offshore project Alpha Ventus 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: Contents
Contents • H1FY13 update – Key highlights − Comprehensive liability management process initiated with domestic lenders − Constructively engaging with the FCCB holders for a resolution − Continue to expand product portfolio with the latest 3XM offering − Financial snapshot − Guidance suspended • Indu
Slide 4: Suzlon Group - Key highlights: H1FY13
Suzlon Group ‐ Key highlights : H1FY13 Suzlon windfarm at Arataci, Brazil 4 www.suzlon.com
Slide 5: H1FY13 – Key takeaways
H1FY13 – Key takeaways Financial • Comprehensive liability management through Corporate Debt Restructuring (CDR) mechanism − Reference made to CDR cell after consultation with our senior secured lenders − Proposal include requests for moratorium moratorium, longer repayment profile and interest conc
Slide 6: Debt restructuring through CDR mechanism
Debt restructuring through “CDR” mechanism Background: Outcome: • ‘Stand‐still’ with respect to all secured debt • Entire domestic debt from secured obligations, enabling use of operational cash flow lenders proposed to be restructured for business through CDR mechanism • Senior secured lenders cont
Slide 7: FCCB: Status update
FCCB: Status update (US$ mn) FCCBs due Principal Redemption in FY13 amount amount Jun 2012 • June FCCB fullyy redeemed in cash after successful 211 307 extension by 45 days (old) - Funded by domestic bank loan, asset sales and internal Jun 2012 36 53 cash flows (new) Total 247 360 • Sought four mont
Slide 8: Debt restructuring: Path to sustainability
Debt restructuring: Path to sustainability FCCBs likely to be structurally resolved: • Constructive discussions with the bondholders ongoing • Bondholders continue to be supportive to preserve value in the interest of all stakeholders and find a consensual long term solution Liquidity to improve
Slide 9: Expanded our successful 3XM offering
Expanded our successful 3XM offering Standardization of platforms 3.XM series expanded – Two existing models upgraded and one new model introduced Class II: Medium wind Class III: Lower ower wind Cl II: Hi Class High h wind i d sites it sites sites 3 4M104 3.4M104 3 2M114 3.2M114 3 0M122 3.0M122 • N
Slide 10: Financial snapshot
Financial snapshot Rs Crs H1FY13 H1FY12 FY12 FY11 Particulars Unaudited Unaudited Audited Audited Consolidated revenue 10,449 9,397 21,082 17,879 Consolidated EBITDA (390) 1,011 1,821 1,047 Consolidated EBIT (735) 722 1,160 390 Consolidated net working capital* 5,278 5,043 4,861 3,788 Consolidated n
Slide 11: Identified key priorities to improve performance
Identified key priorities to improve performance ONGOING PRIORITIES Progress 1. Enhanced a ced working o g capital cap ta facilities ac t es 1. Requested equested banks ba s for o US$400M US$ 00 of o working capital facilities as part of CDR package 2. Successful debt management 2. Holistic Liabilit
Slide 12: REpower: Robust growth continues
REpower : Robust growth continues REpower revenues (€M) • Continues to grow at a healthy pace +85% — with continuous support pp from Suzlon on markets and project execution synergies 1,159 • Margin M i profile fil continues ti to t bbe above b par +26% — Synergies with Suzlon to improve margins furt
Slide 13: Optimizing Working Capital
Optimizing Working Capital Net Working Capital Ratio* • Working Capital to further improve by: -12.2% Execution of orders and generating 27.1% cash flows 23.8% 20.0% Clearing Cl i up off commissioning i i i pipeline Realization of sticky receivables Better inventory management Q1FY13 Q2FY13 T
Slide 14: Order intake momentum continues in Q2
Order intake momentum continues in Q2 Quarterly order intake (MW) H1FY12 : 1,354 1 354 MW H1FY13 : 1,527 1 527 MW +38% • Order from large utilities and IPPs 1,490 in Q2 FY13 1,071 973 • Includes 332 MW of offshore order 774 580 456 • Robust order pipeline * Q1FY12 Q2FY12 Q3FY12 Q4FY12 Q1FY13 Q2FY13
Slide 15: Robust order book position
Robust order book position Total value of US$6.8 bn Order book by geography ‐ US$6.8bn $ • Orderbook at ~5.4 GW (up 13% YoY) ROW India 13% 20% Belgium • Order book value: US$6.8bn 9% ― Onshore markets: Brazil 5% • Emerging : US$1.7bn 6% (India and Brazil) Canada 7% 31% • Developed : US$3.5bn 4% Germ
Slide 16: Announced framework contracts of ~4.7 GW
Announced framework contracts of ~4.7 GW Developed markets 3.6 GW 1. RWE Innogy for up to 250 units of 5 MW / 6 MW offshore turbines 1 500 MW 1,500 • 657 MW already converted to firm orders 2. g Nouvelles for onshore turbines Frame contract with EDF Energies 954 MW • Total 543 MW converted to orders
Slide 17: Announced framework contracts of ~4.7 GW
Announced framework contracts of ~4.7 GW Emerging markets 1.1 GW 1. Frame agreement for up to 200 wind turbines in South Africa with 420 MW ‘Af i ‘African Cl Clean EEnergy D Developments’ l t ’ • South African Dept of Energy awarded PPA for 138 MW to the client in December 11 2. Business agreement w
Slide 18: Suzlon Group: Well positioned as 4th largest
Suzlon Group: Well positioned as 4th largest Ranking 2010 Ranking 2011 Strengthened global position # 4 in the global wind market # 2 in offshore # 4 in Asia # 1 in India 4 # 1 Australia 5 # 4 in Americas # 4 in USA # 5 in Europe # 2 in Italy & France # 3 in Germany & UK # 4 in Portugal & Spain (1)
Slide 19: H1FY13 industry update and outlook
H1FY13 iindustry d t update d t and d outlook tl k Suzlon windfarm at Jaisalmer, India 19 www.suzlon.com
Slide 20: Wind market to recover after a blip in 2013
Wind market to recover after a blip in 2013 Industry estimates for annual installations (GW) CAGR (2011 (2011‐16): 16): 5.5% 5 5% 52.9 53.1 51.0 48.0 45.7 40.6 21.1 25.5 27.1 27.7 23.2 20.9 12.2 12.4 13.3 14.1 10.6 11.9 14.2 11.7 11.0 9.0 9.9 10.1 CY11 CY12e CY13e CY3e CY14e CY15e CY16e Source: Make
Slide 21: Offshore to lead next wave of growth in wind
Offshore to lead next wave of growth in wind Grid connected installation in Global annual offshore outlook (MW) Europe (MW) Y-o-Y: 50% CAGR (2011-16): 46% 6,044 Source: Make Consulting 523.2 5,167 4,046 348.1 2,851 1,558 920 H1'11 H1'12 CY11 CY12e CY13e CY14e CY15e CY16e The UK and Germany will cont
Slide 22: IPP + REC: Elevated Indian market
IPP + REC: Elevated Indian market Expanding p g IPP activityy to ensure sector growth g Fig. in MW Mytrah 5,000 Techno Electric 1,250 Green Infra 1,000 Renew Power 1,000 Greenko 1,000 NSL Power 816 CLP 793 ~15 GW of installation Tata Power 486 Orient Green 450 plans from IPPs Reliance Power 400 Pana
Slide 23: South Africa: Emerging market
South Africa: Emerging market New target for 2020 Two rounds of auction completed (1.2 GW): MW • PPAs signed for Round 1 bids – 634 MW 6,925 • Financial closure for the second round scheduled on Mar 13 – 562 MW Third round likely in May 13 – Likely 654 MW 3 200 3,200 • Three auctions together compri
Slide 24: Wind competitively placed compared to other energy sources
Wind competitively placed compared to other energy sources Life cycle cost of energy, $/MWh, Q4’12 STEG ‐ Parabolic Trough 128 438 PV ‐ c‐Si 91 411 Wind ‐ Offshore 135 332 Small Hydro 19 314 STEG ‐ Tower & Heliostat w/storage 114 246 Biomass ‐ Gasification 83 210 Biomass ‐ Anaerobic Digestion 87 195
Slide 25: Focus areas for FY13
Focus areas for FY13 Suzlon wind farm in Paracuru, Brazil 25 www.suzlon.com
Slide 26: Focus areas: Specific priorities for FY13
Focus areas Specific priorities for FY13 1 2 REpower Strengthening balance sheet • Capitalize p on market synergies y g • Comprehensive p liabilityy management • Accelerate realisation of operating synergies • Debt rebalancing across Group • L Leverage Asian A i supply l chain h i • R d Reduce worki
Slide 27: Synergy realization and consolidation with REpower on accelerated track
1 Synergy realization and consolidation with REpower on accelerated track Key initiatives being executed/targeted Markets • Streamline market SBUs – One organization, one team & one product portfolio • Suzlon Australia and Europe operations realigned with REpower Key outcomes in FY13: • C t regional
Slide 28: Strengthening balance sheet
2 Strengthening balance sheet Optimizing capital structure Debt restructuring/ Working Capital De‐leverage rebalancing optimization • Reduce debt through • Comprehensive liability • Reduce Working — Ongoing assets sale management initiated Capital intensity to — Equity infusion under CDR 20% — Inter
Slide 29: Guidance for FY13: Suspended
Guidance for FY13: Suspended • The management team has decided to suspend guidance for the current fiscal • Rationale: Despite p strongg business fundamentals and a US$6.8bn $ orderbook, performance will continue to be impacted, due to : — Volatile external environment — Slow working capital financi
Slide 30: Detailed financials – H1 FY13
Detailed financials – H1 FY13 REpower wind farm in Hudong, China 30 www.suzlon.com
Slide 31: Consolidated financial results
Consolidated financial results (New Schedule VI format) Rs Crs. H1FY13 H1FY12 FY12 FY11 Particulars Unaudited Unaudited Audited Audited Revenue from operations 10449 9397 21082 17879 Less: COGS 7781 6117 14074 12454 Gross Profit 2668 3280 7008 5425 Gross Profit % 26% 35% 33% 30% Employee benefits ex
Slide 32: Consolidated financial results
Consolidated financial results (New Schedule VI format) Rs Crs. Q2FY13 Q2FY12 Q1 FY13 Particulars Unaudited Unaudited Unaudited Revenue from operations 5702 5071 4747 Less: COGS 4226 3304 3555 Gross Profit 1476 1767 1191 Gross Profit % 26% 35% 25% Employee benefits expense 541 485 537 Other expenses
Slide 33: Consolidated Net Working Capital
Consolidated Net Working Capital (New Schedule VI format) Rs Crs. As on As on As on Particulars 30st Sep’ 12 30th June’ 12 31st Mar’ 12 Current investments 0 0 64 Inventories 5,421 5,960 5,580 Trade receivables 4,976 4,799 5,315 Short‐term loans and advances 1,949 2,227 1,912 Due from customers 3 60
Slide 34: Consolidated Net Working Capital
Consolidated Net Working Capital (Old Schedule VI format) Rs Crs As on As on As on As on As on Particulars 30th Sept Sept’12 12 30th June June’12 12 31st Mar Mar’12 12 31st Dec Dec’11 11 30th Sept Sept’11 11 Inventories 5,421 5,960 5,580 6,152 5,907 Receivables 8,584 8,265 8,201 7,323 6,332 Advances
Slide 35: Group Financial Leverage
Group Financial Leverage(a) Rs Crs. As at As at As at As at As at 30th Sept. p 2012 30th Jun. 2012 31st Mar. 2012 31st Dec. 2011 30th Sept. p 2011 Particulars SEL SEL SEL SEL Consol. SEL Consol. Consol. Consol. Consol. Wind Wind Wind Wind Group Wind Group (a) Group (a) Group (a) Group (a) (a) (a) (a
Slide 36: Suzlon Wind: Financial leverage
Suzlon Wind: Financial leverage(a) Rs Crs. Balance as on Balance as on Balance as on Balance as on Balance as on Debt type 30th Sept. 30th Jun. 31st Dec. 30th Sept. 31st Mar. Mar 2012 2012 2012 2011 2011 FX term loans* 3,475 2,053 1,920 2,004 2,277 FCCBs 2,152 3,641 3,327 3,473 3,203 W.Cap, Capex an
Slide 37: 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 38: Suzlon Consolidated Balance sheet
Suzlon Consolidated Balance sheet (As per new Schedule VI format) Rs Crs. Liabilities H1 FY13 H1FY12 Assets H1 FY13 H1 FY12 Shareholders' Fund Non Current Assets a)Share Capital 355 355 a) Fixed Assets 12,505 12,602 b) Reserves and Surplus 3,083 4,825 b) Non Current Investments 35 33 3,439 5,181 c)
Slide 39: Thank you
Thank you Suzlon windfarm at Snowtown, Australia 39 www.suzlon.com