Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — 9M FY14 Earnings Presentation
32 slides from Suzlon Energy's earnings presentation, Feb 14, 2014
Slide 1: Suzlon Energy Limited 9M FY14 Results Presentation
Suzlon Energy Limited 9M FY14 Results Presentation 14th February 2014 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: Key Takeaways – 9M FY14
Key Takeaways – 9M FY14 Suzlon wind farm in Kutch, India 3 www.suzlon.com
Slide 4: Key highlights – 9M FY14
Key highlights – 9M FY14 Operations: • Consolidated revenues at Rs 13,631 Crs in 9M FY14; — Rs. 5,010 Crs in Q3 FY14 (25% YoY growth) • Suzlon wind volumes @ 546 MW in 9M FY14, 128% YOY growth • Order inflow of 913 MW in Q3; aggregating to order inflow of ~1.7 GW in 9M FY14 • Strong order book at ~$
Slide 5: Business Performance
Business Performance Suzlon wind farm in Minnesota, USA 5 www.suzlon.com
Slide 6: MW performance in Suzlon Wind
MW performance in Suzlon Wind: Constrained liquidity Focus on Liability Volume ramp up Management MW sold +183 MW 219 220 167 150 106 16 -77 1Q ’13 2Q ’13 3Q ’13 4Q ’13 1Q ’14 2Q ’14 3Q ’14 - $360mn FCCB - FCCB extension failed - Completed CDR process in Apr’13 payment - Filed for CDR - Execution ra
Slide 7: 9M FY14 Group financial snapshot
9M FY14 Group financial snapshot Rs Crs Particulars Q3 FY14 Q3 FY13 9M FY14 9M FY13 FY13 FY12 Revenue 5,010 4,014 13,631 14,463 18,743 21,082 EBITDA -137 -313 -469 -702 -1,296 1,821 EBIT -323 -516 -1034 -1,251 -2,037 1,160 Net working capital 1,490 4,311 1,490 4,311 2,543 4,861 Net debt 14,495 13,58
Slide 8: Trending towards EBITDA breakeven
Trending towards EBITDA breakeven Revenue (Rs. Crs) +25% 5,702 4,769 5,010 Improvement supported by: 4,014 4,281 3,851 Improving contribution margins Q2 FY13 Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Q3 FY14 — Geographic sales mix EBITDA before FX loss (Rs. Crs) — Continuous focus on cost 39 reduction Red
Slide 9: SENVION: Performance on track
SENVION : Performance on track SENVION revenues* (€M) Highlights of 9M FY14 Successful role out of new brand “SENVION” Performance on track despite adverse market dynamics 1,698 Substantial progress made on restructuring ― Likely to exceed the €100m cost saving target New Product launches: 1
Slide 10: Service Business: Growing revenues with stable margins
Service Business: Growing revenues with stable margins Revenues (Rs. Crs)* +34% Key Highlights 1,946 • 9M FY14 OMS revenue at ~Rs. 1,946 crs 1,455 979 — ~34% YoY growth 1,058 729 • High growth with stable and consistent 594 margins 967 726 464 • Near 100% renewal track record 9M FY12 9M FY13 9M FY14
Slide 11: Significant Order Intake Growth in Q3
Significant Order Intake Growth in Q3 Quarterly Order Intake (MW) Significant orders in Quarter 1,104 Bald Hills, Australia (106.6 MW) 913 836 GDF Suez , France (40 MW) 395 356 Cumulative Community Wind farm Orders, Germany (266 MW) Baidyanath, GACL, MSEDCL, India Q3 FY13 Q4 FY13 Q1 FY14 Q2 FY14 Q3
Slide 12: Robust order book position
Robust order book position Total value of US$7.7 bn Order book by geography – US$7.7bn RoW LatAm • Order book at ~5.5 GW 8% Australia 2% 6% • Order book value: US$ 7.7bn France 6% 42% Germany UK 6% - Onshore markets: Belgium 5% • Emerging : ~US$1.2bn (India, Brazil, Turkey & 12% Uruguay) Canada 14%
Slide 13: Project Transformation Update
Project Transformation Update Suzlon wind farm in Penamacor, Portugal 13 www.suzlon.com
Slide 14: Right-sizing across verticals continued in Q3 FY14
Right-sizing across verticals continued in Q3 FY14 Employee Headcount Suzlon* SENVION* *Ex SENVION *Permanent -2,053 -296^ -19% -1,574 -9% 11,004 3,316 -18% 3,095 3,041 8,951 3,020 8,179 7,791 7,377 2,795 Mar 12 Mar 13 Jun 13 Sep 13 Dec 13 Mar 12 Mar 13 Jun 13 Sep 13 Dec 13 Headcount reduced by ~1
Slide 15: Substantial progress achieved in fixed cost reduction
Substantial progress achieved in fixed cost reduction Consolidated operating expenses* (Rs. Crs) 3,031 Key actions taken: -17% • Stringent cost control measures in place 2,527 • Rationalizing travel and consulting expenses 1,998 • Rationalized office and factory space 1,726 Plan for further reductio
Slide 16: Continuing to optimize Working Capital ratio
Continuing to optimize Working Capital ratio Net Working Capital Ratio* Key actions underway: 25.1% • Leaner inventory cycle 20.4% • Liquidating inventory • Controlled procurement 13.6% 11.4% • Focus on realizations 9.9% 8.3% • Project prioritization, better receivables management • Clearing up comm
Slide 17: Strategic Initiatives
Strategic Initiatives Suzlon wind farm in Rajasthan, India 17 www.suzlon.com
Slide 18: REpower renamed as SENVION
REpower renamed as SENVION New name for engineering excellence Background to the name change Why SENVION • S – Sunstainability • “REpower” name was used under license since 2001 against royalty • EN – Energy • The rights belong to a Swiss company who is • VI – Vision now using the name itself • ON –
Slide 19: Offshore Product Portfolio Upgraded
Offshore Product Portfolio Upgraded 6.2M152: Setting new standards in cost effective Offshore energy generation Evolving offshore technology Key Features • Superior Technology — Bigger rotor diameter and larger drive train compared to 6.2M126 — Rotor sweeping area larger than 3 football pitches • Bu
Slide 20: Re-organizing the India service business
Re-organizing the India service business Proposed re-organization • Segment the India service business from its Independent focus on growing service WTG operations business while capturing scale benefits • Re-organizing into a separate and independent service company Focus on customer excellence
Slide 21: Comprehensive Liability Management Update
Comprehensive Liability Management Update Suzlon wind farm in Rajasthan, India 21 www.suzlon.com
Slide 22: 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 23: FCCB: Status update
FCCB: Status update • Paid the first tranche of FCCBs of $360mn in July 2012 after 45 days extension • Prior to maturity had officially sought four months extension for October series with intention to meet our obligations in their entirety - Extension did not achieve required super-majority, result
Slide 24: FCCBs: Status update
FCCBs: Status update Outstanding Conversion Coupon Maturity value with FCCBs Maturity date amount (US$ 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 25: Equity base evolution since March 13
Equity base evolution since March 13 Issuance to CDR Lenders – Rs 952 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 560 Crs in April 13 • R
Slide 26: Key Priorities for FY14
Key Priorities for FY14 Suzlon Manufacturing unit in Dhule, India 26 www.suzlon.com
Slide 27: 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 6M152 for offshore market Strategic Working capital optimization • Launched 3.0M122 for low wind onshore
Slide 28: Detailed Financials – 9M FY14
Detailed Financials – 9M FY14 Manufacturing unit in Daman, India 28 www.suzlon.com
Slide 29: Consolidated financial results
Consolidated financial results Rs Crs. Q3 FY14 Q3 FY13 9M FY14 9M FY13 FY13 FY 12 Particulars Unaudited Unaudited Unaudited Unaudited Audited Audited Revenue from operations 5,010 4,014 13,631 14,463 18,743 21,082 Less: COGS 3,430 2,673 9,695 10,454 -13,640 -14,074 Gross Profit 1,580 1,341 3,936 4,0
Slide 30: 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 31st 30th 30th 31st 31st 30th 30th Dec’13 Sept’13 June’13 Mar ’13 Dec ‘12 Sept’12 June’12 Inventories 5,016 5,274 5,386 5,264 5,928 5,421 5,960 Trade receivables 5,725 5,889 5,759 6,382 6,990 8,584 8,265 Sh
Slide 31: Financial leverage
Financial leverage(a) As on (Rs. Crs) Debt type Dec 13 Sept 13 Jun 13 Mar 13 Dec 12 Sep 12 Jun 12 Suzlon Wind Debt FX loans* 3,998 4,050 3,843 3,513 3,555 3,475 2,053 FCCBs 2,516 2,549 2,418 2,211 2,239 2,152 3,641 W.Cap, Capex and 9,567 9,541 9,218 8,701 8,383 8097 7,783 other loans Gross debt (A)
Slide 32: Thank you
Thank you Suzlon wind farm in Paracuru, Brazil 32 www.suzlon.com