Suzlon Energy Ltd · NSE:SUZLON
Suzlon Energy — 9M FY2017 Earnings Presentation
39 slides from Suzlon Energy's earnings presentation, Feb 10, 2017
Slide 1: Suzlon Energy Limited Q3 & 9M FY17
Suzlon Energy Limited Q3 & 9M FY17 10 Feb 2017
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: Agenda: Q3 & 9M FY17 Highlights
Agenda Q3 & 9M FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 3
Slide 4: Q3 FY17 Financial Performance Highlights
Q3 FY17 Financial Performance Highlights Rs. 304 Crs. (9.2% Margin) Delta: +350 Cr y-o-y Rs. 745 Crs. +99 Cr q-o-q (22.5% Margin) Growth: Net Profit 124% y-o-y 27% q-o-q Rs.3,307 Crs. EBITDA Growth: 76% y-o-y 20% q-o-q Revenues 4 Continuing strong growth and profitability Note: EBITDA and Net Profit
Slide 5: 9M FY17 Financial Performance Highlights
9M FY17 Financial Performance Highlights Rs. 296 Crs. (3.8% Margin) Delta: Rs. 1,502 Crs. +610 Cr y-o-y (19.5% Margin) Growth: Net Profit 70% y-o-y Rs.7,703 Crs. EBITDA Growth: 24% y-o-y Revenues 5 Operating leverage and favourable revenue mix enables strong financial performance Note: EBITDA and Ne
Slide 6: Quarterly Volume Trend
Quarterly Volume Trend (MW) Quarterly Revenue Recognition Volumes FY15: 454 MW FY16: 1,131 MW 9M FY17: 1,019 MW 443 462 353 256 221 205 227 204 138 60 35 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 FY15 FY16 FY17 6 Strong growth momentum continues
Slide 7: Result Snapshot (Consolidated)
Result Snapshot (Consolidated) (Rs. Crs.) Particulars Q3 FY17 Q2 FY17 Q3 FY16 9M FY17 9M FY16 Unaudited Unaudited Unaudited Unaudited Unaudited Revenue 3,307 2,746 1,883 7,703 6,216 Gross Profit 1,466 1,281 860 3,482 2,696 Gross Margin 44.3% 46.6% 45.7% 45.2% 43.4% Employee Expenses 256 259 202 774
Slide 8: Other Key Highlights
Other Key Highlights Net working capital reduced to 79 days as on Dec’16 compared to 86 days in Sep’16 Net term debt reduced to Rs. 6,538 Crs. (excluding FCCB) Credit rating upgraded from BBB- to BBB for Suzlon and its domestic subsidiaries as well as SE Forge • SGSL (India OMS Division) rated
Slide 9: Net Working Capital
Net Working Capital -7.2% 86 days 79 days 23.4% 21.8% Sep’16 Dec’16 NWC as on Sep’16 (Rs. Crs.) 2,232 Remarks Add: Inventories Build-up 294 Due to stronger expected Q4 Add: Increase in receivables 409 Increase due to 20% q-o-q Revenue Growth Add: Loans, Advances & Others 181 Due to increase in volum
Slide 10: Operation and Maintenance Service Business
Operation and Maintenance Service Business (Rs. Crs.) Service Revenues Growing into a sizeable & profitable business +4.8% ― ~12% external revenue share in Q3 FY17 1,314 1,254 ― ~16% external revenue share in 9M FY17 99 Internal 101 Annuity like business ― Non cyclical business in nature Externa
Slide 11: Surpasses 10 GW wind energy installations in India
Surpasses 10 GW wind energy installations in India Ranked No. 1 in Renewables Sector Largest fleet under Operation and Maintenance fold in India Ranked No. 4 in Power Sector # of Turbines MW <= 1 MW 1,751 850 >1 MW < 2 MW 4,195 5,701 =>2 MW 1,697 3,564 Total 7,643 10,115 2.0 GW • 35% - All India ins
Slide 12: Solar Bidding Status Update
Solar Bidding Status Update Rs. 5.36 340 MW 210 MW Divested Per unit PPA signed (49% Stake) average tariff Summary of Divestments Cash SPV Project Size State Investor Stake Divested Consideration SE Solar 100 MW TL CLP Wind Farms Rs. 73.5 Crs. 49% Prathmesh Solarfarms 50 MW TL Ostro Energy Rs. 49.0
Slide 13: Agenda: Order Book
Agenda Q3 & 9M FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 13
Slide 14: Strong Wind Order Backlog
Strong Wind Order Backlog (MW) Order Book Existing Products 557 -462 41% Rs. 7,523 Crs. 59% 1,231 1,136 New Products 14% Others (S97-120 / S111-90) 10% PSU Others 76% IPP 26% 74% Turnkey Sep’16 Q3 intake* Q3 RR Dec’16* Backlog for Operation and Maintenance Service, SE Forge and Solar is over and abo
Slide 15: Agenda: Debt Overview
Agenda Q3 & 9M FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 15
Slide 16: Enhancement in Credit Rating
Enhancement in Credit Rating Company Previous Rating Current Rating Remarks Suzlon • Suzlon Energy Limited and its domestic subsidiaries, except SE Forge BBB- BBB 1 Notch Upgrade • Pooled together under CDR for security purposes SE Forge Limited BBB- BBB 1 Notch Upgrade Suzlon Global Services Limite
Slide 17: Consolidated Debt Profile
Consolidated Debt Profile (Excluding FCCB) 31st Dec’16 5 year Maturity Profile Rs. 4,229 Crs. • Current bullet maturity of March 2018 SBLC Backed AERH Debt (US$ 626 M) • SBLC facility lenders consented to SBLC extension till 2023; Rs. 570 Crs. (Rs. Crs.) Other FX Term Debt (US$ 85 M) 764 572 387 134
Slide 18: July 2019 FCCB Series Overview
July 2019 FCCB Series Overview (US$ Mn) FCCB Principal Value 547 Current and Diluted No. of Shares (Crs.) Current Outstanding 502 299 Pending Conversion 97 248 Post Full Conversion 599 Conversion Details Price (Per Share) Rs. 15.46 July’14 Conversions till date Current Exchange Rate Rs. 60.225 18 Up
Slide 19: Agenda: Technology Update
Agenda Q3 & 9M FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 19
Slide 20: Globally Proven In-House R&D Capabilities
Globally Proven In-House R&D Capabilities Suzlon Technology Locations: Hamburg - Development & Integration Hamburg - Certification Germany - Development & Integration Rostock Rostock - Design & Product Engineering - Innovation & Strategic Research The Netherlands Hengelo - Blade Design and Integrati
Slide 21: 2.1 MW Series: Proven Platform with 100,000,000 Operating Hours
2.1 MW Series: Proven Platform with 100,000,000 Operating Hours Higher energy yield Lower cost of energy Higher returns ~65% Increase in Energy Yield S88-80 S9X – 80/90/100 S97-120 S111-90 S111-120 >5.7 GW >2.0 GW >1,200 MW sold >690 MW sold Installed till date Installed till date ~510 MW Installed
Slide 22: Hybrid Towers – Innovation at Work
Hybrid Towers – Innovation at Work Accessing higher wind speed at higher altitude, increasing energy output Advantage Hybrid • Enables to achieve higher hub height at optimized cost • Reduced steel requirement; reduced overall weight • Lower foundation cost • Simplified logistics and lower cost • 24
Slide 23: Global Coverage - Next Generation Products
Global Coverage - Next Generation Products ~20% reduction in Wind Levelized Cost Of Electricity (LCOE) 10% LCOE Reduction 10% LCOE Reduction Over S97 Over S111 S97 S111 S128 Product S128 – 2.6 MW S128 – 3.0 MW MW Rating 2,600 kW 3,000 kW Rotor Diameter 128 meters 128 meters Tower Height 120 m - 140
Slide 24: Agenda: Industry Opportunity
Agenda Q3 & 9M FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 24
Slide 25: India: Strong Growth Fundamentals for Renewables
India: Strong Growth Fundamentals for Renewables (Billion Units) (GW) Estimated India Power Demand Renewables Target 2022 Targets 100% rural electrification by 2022 +132 GW 175 >4000 Others +9% 40 Solar Rooftop 60 Solar Utility Scale 1108 43 60 Wind Utility Scale 2015 2030 Mar-16 2022 Source: Minist
Slide 26: Annual Wind Capacity Addition
Annual Wind Capacity Addition (MW) India Commissioning Volumes +26% 4,300 +48% 4,300 MW – 5,000 MW 3,415 3,179 -19% 900 1,161 2,312 2,077 1,721 442 403 415 2,515 2,018 1,870 1,674 1,306 FY12 FY13 FY14 FY15 FY16 FY17E* FY18E* Suzlon Others *Source: Internal Estimates 26 India now 4th largest market g
Slide 27: SECI Competitive Bidding Wind: Overview
SECI Competitive Bidding Wind: Overview Bidding Structure Incremental Demand Existing With ISTS Developers Awarded through transparent Current Bidding Volume: 2-stage bidding process 25 year PPA 4-5 GW p.a. 1.0 GW Capacity (MNRE Target PTC ISTS market) 25 year PSA Project Location 8 Windy States 8 W
Slide 28: SECI Wind Bidding: OEM Business Model
SECI Wind Bidding: OEM Business Model Customer Bidder OEM Direct Bidding + Tie-up with OEM Becomes a 3rd party order post bid Becomes a 3rd party order capacity won is sold immediately after the bid is won Capital Intensive Conservation of Capital • OEM to invest his capital until he finds buyer for
Slide 29: Stable Feed in Tariff (FiT) Regime and Revised RPO Trajectory
Stable Feed in Tariff (FiT) Regime and Revised RPO Trajectory State Control Period Non AD Tariff (Rs./Unit) Revised RPO Trajectory FY17 FY16 17.00% 14.25% AP 31st March 2020 4.84 4.83 11.50% 6.75% 4.75% Solar 2.75% GJ 31st March 2019 4.19 4.15 Non-Solar 8.75% 9.50% 10.25% KN 31st March 2018 4.50 4.5
Slide 30: India Wind Industry Growth Triggers
India Wind Industry Growth Triggers Infrastructure Improvement • Green Corridor: Improving Evacuation and Grid Infrastructure LCOE Reduction • UDAY: Improving financial Enables Absorbing health of DISCOMs Economies of Scale • Tariff Reduction (competitive bidding or otherwise) Demand Improvement • I
Slide 31: Suzlon Strengths in India Wind Market
Suzlon Strengths in India Wind Market Full Turnkey Solution Pan India Presence Provider Target Strong Customer Technology Leadership Relationship REGAIN 50%+ MARKET SHARE Best In Class Service 20+ Years Track Record Capabilities 31 End-to-end service provider with strong presence across value chain
Slide 32: International Market Roadmap
International Market Roadmap FY18 Europe FY19 North America Latin America FY20 Emerging APAC EMEA Markets Global Wind Industry Outlook (GW) 332 GW 74 69 70 58 61 19 17 17 16 13 America 16 16 15 13 16 EMEA 33 36 37 39 APAC 30 2016E 2017E 2018E 2019E 2020E Source: BENF Q2 2016 Wind Market Outlook 32 P
Slide 33: Agenda: Detailed Financials
Agenda Q3 & 9M FY17 Order Book Debt Overview Highlights Technology Update Industry Opportunity Detailed Financials 33
Slide 34: Consolidated Income Statement
Consolidated Income Statement (Rs. Crs.) Particulars Q3 FY17 Q2 FY17 Q3 FY16 9M FY17 9M FY16 FY16 Unaudited Unaudited Unaudited Unaudited Unaudited Unaudited Revenue from operations 3,307 2,746 1,883 7,703 6,216 9,461 Less: COGS 1,841 1,466 1,023 4,221 3,520 5,602 Gross Profit 1,466 1,281 860 3,482
Slide 35: Reconciliation between IND GAAP and IND AS – Income Statement
Reconciliation between IND GAAP and IND AS – Income Statement (Rs. Crs.) Net Profit Q3 FY16 9M FY16 FY16 Reported Consolidated Profit / (Loss) as per IND GAAP (113) 753 483 Effect of discounting long term liabilities (6) (17) (24) Acturial gain/ (loss) on defined benefit obligation recognised in oth
Slide 36: Consolidated Net Working Capital
Consolidated Net Working Capital (Rs. Crs.) 31st Dec’16 30th Sep’16 30th Jun’16 31st Mar’16 Inventories 3,769 3,475 3,078 2,554 Trade receivables 3,518 3,109 2,060 2,616 Loans & Advances and Others 1,917 1,667 1,675 1,481 Total (A) 9,204 8,251 6,814 6,651 Sundry Creditors 3,613 2,959 2,540 2,813 Adv
Slide 37: Key Accounting Policies – Revenue Recognition and Order Booking
Key Accounting Policies – Revenue Recognition and Order Booking Opening Order Book • Sales (WTG Revenue Recognition) (-) Sales during the period ‒ WTG revenue is recognised upon transfer of risks and rewards to the buyer of complete WTG viz: Nacelle, Blade and Tower. (+) Order Intake during the • Or
Slide 38: Key Accounting Policy: Maintenance Warranty Provisions
Key Accounting Policy: Maintenance Warranty Provisions Maintenance Warranty Provisions Accounting Policy: ― Comprise of provisions created against maintenance warranty issued in connection with WTG sale Created when revenue from sale of wind turbine is recognized ― Provisions estimated based on
Slide 39: Thank You
CIN of Suzlon Energy Ltd - L40100GJ1995PLC025447 THANK YOU 39