Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — Q1 FY15 Earnings Presentation
38 slides from Suzlon Energy's earnings presentation, Jul 25, 2014
Slide 1: Suzlon Energy Limited Q1 FY15 Earnings Presentation
Suzlon Energy Limited Q1 FY15 Earnings Presentation 25th July 2014 Senvion’s offshore windfarm in Ormonde, U.K. 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: Quarter Takeaways – Q1 FY15
Quarter Takeaways – Q1 FY15 Suzlon wind farm in Maharashtra, India 3 www.suzlon.com
Slide 4: Operating performance continues to improve
Operating performance continues to improve Revenue Trend (Rs. Crs) Gross Margin (%) EBITDA Trend (Rs. Crs) +21% 443 bps 73 4,747 4,643 33.5% 3,851 29.1% 25.1% Rs.375crs. -257 -302 Q1’13 Q1’14 Q1’15 Q1’13 Q1’14 Q1’15 Q1’13 Q1’14 Q1’15 Positive EBITDA for 2nd consecutive quarter • Achieved operating p
Slide 5: FCCB restructuring successfully completed
FCCB restructuring successfully completed Key Terms of New Bonds Bondholders across series supported restructuring • All 4 series restructured Issue Size $546.9 • ~100% positive votes across each series Coupon Non participating redemption overhang minimized First 18 months 3.25% • Only $28.8M left i
Slide 6: Performance Update
Performance Update Senvion’s 3XM turbine 6 www.suzlon.com
Slide 7: Financial snapshot
Financial snapshot Rs Crs Q1 FY15 Q4 FY14 Q1 FY14 FY14 FY13 Particulars Unaudited Audited Unaudited Audited Audited Consolidated Revenue 4,643 6,581 3,851 20,212 18,743 Consolidated EBITDA 73 328 -302 -141 -1,296 Consolidated EBIT -106 116 -482 -918 -2,037 Consolidated Net working capital 1,331 722
Slide 8: Suzlon Wind: Achieves volume growth
Suzlon Wind: Achieves volume growth MW Sold Increased profitability ― Minimal legacy orders 219 221 ― Favorable geographic and product mix 177 150 Restructuring efforts paying off ― Manpower expenses lower 19% since Q1FY12 ― Other Expense lower 18% since Q1FY12 1Q’13 1Q’14 4Q’14 1Q’15 1st Half
Slide 9: Senvion: Stable performance continues
Senvion: Stable performance continues Revenues (€M) Continued stable performance +8.5% ― 8.5% YoY growth 361 333 Marquee projects: ― 131 MW Mt Mercer wind farm: Installation of 64 turbines completed ― 295 MW Nordsee Ost Offshore wind farm: Installation kicked off ― 107 MW Bald Hills wind farm: I
Slide 10: Service: Growing business with stable revenues
Service: Growing business with stable revenues Revenues (Rs. Crs)* Key Highlights +29% CAGR 695 640 • Q1 FY15 OMS revenue at ~Rs. 695 crs — >8.5% higher than same quarter last year 342 345 418 • High growth with stable and consistent margins 258 352 295 • Near 100% renewal track record 160 Q1’13 Q1’
Slide 11: Robust order book position
Robust order book position Total value of US$7.0 bn Order book by geography – US$7.0bn Belgium ROW Austria • Order book at ~4.9 GW 4% 3% UK 4% 5% • Order book value: US$ 7.0bn France 5% Australia 6% 46% Germany - Onshore markets: • Emerging : ~US$1.1bn 13% Canada (India, Turkey and Uruguay) 14% Indi
Slide 12: R&D focus to better our products and improve yields
R&D focus to better our products and improve yields Expansive product portfolio covering all wind classes Class I Class II Class III S66 S86.5 S52 <1.5 MW S82 S89 MM100 MM100 MM82 S97 90 S111 1.5 – 2.5 MW S88 AEP 25% S97 120 (Vs S88) AEP 20% MM92 AEP 10% (Vs S97) S95 (Vs S97 90) 3.4M 3.4M 3.2M 3.2M
Slide 13: Moving towards newer and bigger turbines
Moving towards newer and bigger turbines Higher energy yield Lower cost of energy Higher returns • Better generation • Lower cost of energy • High profitability for customers S88 S9X S111 ~5.5 GW already ~900 MW already First agreement in US installed till date installed till date concluded • Better
Slide 14: Hybrid Towers: First of its kind
Hybrid Towers: First of its kind Hybrid Tower • Hybrid Tower Combination of lattice and tubular Saves costs • Higher Hub height – 120 mts (33% increase over current 90 mts) 4-5% better wind speed at higher height 12-15% increase in annual generation • Higher generation and lower costs result
Slide 15: India Wind Story – A Huge Opportunity
India Wind Story – A Huge Opportunity Suzlon wind farm in Rajasthan, India 15 www.suzlon.com
Slide 16: Triggers for growth
Triggers for growth Accelerated Overview and Policy Depreciation • Withdrawn in Mar 2012, reintroduced in July 2014 (AD) Impact: Brings back SME interest ,Captive demand Generation Overview and Policy Based Incentives • Withdrawn in March 2012, reintroduced in Mar 2013 and notified in Sep 2013 (GBI)
Slide 17: India market poised for strong growth
India market poised for strong growth FY11 & 12 FY13 & 14 FY15 & beyond Key Driver Incentives High tariff Incentives + High tariff GBI introduced Χ GBI withdrawn* GBI reintroduced* IPPs Emergence of IPP Installations based on high Demand ramping up preferential tariff alone AD Benefit Χ AD wit
Slide 18: Accelerated depreciation reinstated
Accelerated depreciation reinstated Annual Wind Installations (MW) - India Growing wind competitiveness and increasing preferential tariffs SME + Captive Only SME + Captive mostly IPP mostly Growing IPP (Improved GBI) Emergence of IPP SME + Captive minimal SME + Captive demand restored (AD) +24% +29
Slide 19: Comprehensive Liability Management Update
Comprehensive Liability Management Update Suzlon wind farm in Camocim, Brazil 19 www.suzlon.com
Slide 20: Comprehensive liability management completed
Comprehensive liability management completed CDR Overseas FX Facilities FCCB Restructuring • CDR approved and • Refinanced out of proceeds of • Cashless exchange into new 5 year implemented new credit enhanced bond bonds Extended maturity profile Bullet maturity in 2018 • New bonds of $546.9M is
Slide 21: Overview of outstanding FCCBs
Overview of outstanding FCCBs Pre-Restructuring – 4 series Principal Conversion Redemption FCCBs Coupon rate Maturity date YTM (US$ mn) price (Rs) premium October 2012 – Old 121.4 97.26 0% 144.88% October 2012 7.55% October 2012 – 20.8 76.68 7.5% 157.72% October 2012 20.00% Exchange July 2014 90.0 9
Slide 22: Sustainable solution to debt
Sustainable solution to debt As on 30th June 2014 Suzlon Wind Rupee Foreign Currency Denominated Denominated 1 FCCBs $578M 1 Secured Domestic Debt Rs. 8,742 Crs. Effective Interest Rate @ ~3.3% Effective Interest Rate @ ~11% Restructuring concluded 5 yr bullet maturity in FY2019-20 Restructured thro
Slide 23: Minimal repayment pressure for next 4 years for Suzlon Wind
Minimal repayment pressure for next 4 years for Suzlon Wind 5 year Debt Repayment Profile (Suzlon Wind) Rupee Denominated Term Debt (Rs. Crs.) FX debt ($mn) 647 547 ~10% of total rupee debt 699 699 FCCB SBLC Backed Bonds 466 350 117 31 0 0 FY15 FY16 FY17 FY18 FY19 FY15 FY16 FY17 FY18 FY19 • Next lar
Slide 24: Senvion
Senvion Clauen Onshore Wind Farm, Germany 24 www.suzlon.com
Slide 25: Higher profitability despite lower volume
Higher profitability despite lower volume Financial Performance (€M) Highlights of FY14 • Performance on track despite adverse market Revenue dynamics -19% 2,221 1,675 1,806 ~25% increase in profitability despite ~20% decline in revenue • Restructuring goal achieved FY12 FY13 FY14 Exceeded the €
Slide 26: Strengthening market position
Strengthening market position 3 3 2 Germany United Kingdom Poland 15.0% 11.0% 14.0% 11.0% 7.0% 5.0% 2012 2013 2012 2013 2012 2013 2 2 2 Canada France Austria 30.0% 20.0% 18.0% 17.0% 10.0% 11.0% 2012 2013 2012 2013 2012 2013 Source: MAKE consult report 2013 Market Position Strengthened position in co
Slide 27: Gaining strength in offshore
Gaining strength in offshore • Proven product technology Largest commercially proven offshore turbine – 6.2 MW Evolving Product Technology Large rotor diameter with sweeping area larger than 3 football pitches – 152 mts 2014 Prototype Sold Nacelle alone is as big as two detached houses • >10 y
Slide 28: Offshore track record and success story
Offshore track record and success story Beatrice Thornton Alpha Ormonde Thornton Nordsee Bank I ventus Bank II/III Ost 2006-2007 2008-2009 2009-2010 2011 2012-2013 2014* *under installation 28 www.suzlon.com
Slide 29: Completed its largest offshore wind farm in FY14
Completed its largest offshore wind farm in FY14 325 MW Thornton Bank project with 6M • Project with largest fleet of 6M turbines • One of the largest project financed offshore wind farms in Europe (~€900mn) • Total project cost: ~€1.3bn • ~30KM off the coast & up to ~30 meters deep) • On time and w
Slide 30: Higher banking limits to support growth
Higher banking limits to support growth Existing facility refinanced Facility Size (Eur Mn) • Enhanced facility significant for growth Long Tenure: 3 year (Mar’17) +13% Timely refinancing: Existing facility maturing in Aug’14 850 30 Structure: Unchanged, Largely Non fund based 750 • Participat
Slide 31: Lot of value has been created since acquisition
Lot of value has been created since acquisition Senvion Performance (€M) • High Growth and Profitability Revenue 4x since acquisition, profitability Revenue 8 times +19% • Newer markets Entered new high growth markets such as 2,221 USA, Canada, Australia, Romania etc. 1,675 1,806 1,209 1,304 1,2
Slide 32: FY15 Outlook and Next Steps
FY15 Outlook and Next Steps Suzlon Manufacturing unit in Dhule, India 32 www.suzlon.com
Slide 33: Suzlon Group: Improving business environment
Suzlon Group: Improving business environment Factors Past 2 years Current Impact / Change • GBI + AD re-introduced • Market Size Halved • Lack of Incentives • Low cost fund from National India • Unfavorable policy shifts Clean Energy Fund Industry • Political Uncertainty • Strong renewable push from
Slide 34: FY15: Key priorities
FY15: Key priorities Specific Priorities for FY15 1 2 3 Volume Ramp up Focus on Business Efficiencies Optimizing Capital Structure • Suzlon Wind: • Improving Margins • Asset Sale Program Thrust on India market Focus on profitable orders Focus on monetizing India based non critical assets C
Slide 35: Detailed Financials – Q1 FY15
Detailed Financials – Q1 FY15 Suzlon Wind farm in Cookhouse, South Africa 35 www.suzlon.com
Slide 36: Consolidated financial results
Consolidated financial results Rs Crs. Q1 FY15 Q1 FY14 Q4 FY14 FY14 FY13 Particulars Unaudited Unaudited Audited Audited Audited Revenue from operations 4,643 3,851 6,581 20,212 18,743 Less: COGS -3,087 -2,731 -4,741 -14,435 -13,640 Gross Profit 1,556 1,120 1,840 5,776 5,104 Gross Profit % 33.5% 29.
Slide 37: 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 Jun’14 31st Mar’14 31st Dec’13 30th Sept’13 30th June’13 31st Mar ’13 31st Dec ‘12 Inventories 4,104 4,033 5,016 5,274 5,386 5,264 5,928 Trade receivables 5,953 5,946 5,725 5,889 5,759 6,382 6,990 Loan
Slide 38: Thank you
Thank you Suzlon wind farm in Paracuru, Brazil 38 www.suzlon.com